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Question 1

Using a real life example of a company outline the key components of acustomer driven marketing strategy. Illustrate how these components areutilized by your selected company in implementing a customer drivenmarketing strategy.

cQuestion 2

Outline and discuss the relevant management orientation that is relevant toyour selected company.

Answer:

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Customer driven marketing strategy

No attempt has been made to outline and discuss relevant components of acustomer driven marketing strategy. No real life company has been selected.

An inadequate attempt has been made to outline and discuss components of acustomer driven marketing strategy in relation to a real life company.

While components of a customer driven marketing strategy have been outlined,there is limited discussion on their application to the selected real lifecompany.

A comprehensive coverage of a customer driven marketing strategy withevidence of application to a real life company has been undertaken.

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5-6

Management orientation

There is no demonstration of understanding of management orientations.

There is limited demonstration of understanding of management orientations.Discussion is limited, usually to no more than one or two sentences.

While an orientation has been listed, the discussion remains patchy andlacks detail. No justification or defence is made for itsapplication/relevance to the selected company.

A comprehensive discussion of the applicable management orientation isundertaken accompanied by a detailed justification of its relevance to theselected company.

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References and presentation

No effort visible in referencing.

Hand-written piece of work; poorly presented with no cover-sheet.

Minimal effort in using academic references

Spelling errors and/or grammatical mistakes make it difficult to comprehendthe main arguments.

Some form of referencing undertaken, however the style and formatting needsto be improved.

A few spelling and grammatical errors; however, these do not create an issuein understanding the main arguments of the writer.

A visible effort has been made to use the Harvard referencing style andrelevant academic references have been used.

The assignment is neat, well-presented, and typed; accompanied with anassignment coversheet; on-time submission; page numbering undertaken; etc.

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Elements of a Customer-Driven Marketing Strategyby Chris Joseph, Demand Media

In a highly competitive business environment, focusing on the needs of your customers can give you an edge over your competition. As such, your marketing strategy should be geared toward reaching those who would benefit the most from your product or service. A customer-driven marketing strategy includes elements like identifying your target market and reacting to their needs. It should also detail ways to retain customers and use them to help you gain additional business.

Targeting Your MarketA customer-driven marketing strategy targets a specific market segment. Use marketing research to identify common demographic characteristics within your customer base, such as age, gender, occupation and income level. The more you know about your customer base, the easier it is to develop a strategy that will appeal to these characteristics. As a result, you waste less time and money trying to reach unlikely prospects.

Meeting NeedsA customer-driven marketing strategy focuses on meeting the needs of your customers and examines how your products or services can meet those needs. For example, your initial research may tell you that your customers are extremely interested in receiving a high level of service. You may be able to meet this need by offering free deliveries or extended hours of operation.

Building LoyaltyCustomer-driven marketing helps to build loyalty, which can lead to repeat sales as well as referral business. One method used by marketers is the implementation of a rewards program where customers receive points each time they make a purchase. The accumulation of points leads to free or discounted products or services.

Using Customer FeedbackUse feedback from your customers to make changes or improvements to help you continue to meet customer needs in the future. For example, your customers may indicate that they want a cleaner store, a different product mix or a better customer return policy. Make any necessary changes and use your marketing strategy to get the word out to show that you're focused on serving your customers.

Gaining ReferralsMake generating referrals a part of your customer-driven marketing strategy. Encourage your existing customers to spread the word about your business to gain new customers. Implement a referral program where customers are rewarded for sending new business your way by giving them additional discounts or free merchandise. You could even hold a contest to see which customer can send you the most referrals in a specific amount of time.

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References BusinessKnowledgeSource.com: How to Make Your Marketing Plan More Customer-Driven Marketing Insights: Enhancing Business Products and Services with Customer-Driven Marketing

Strategy

About the AuthorChris Joseph is a freelance writer residing in Pennsylvania. He has written numerous articles for newspapers and the Internet on a variety of topics, including several on golf. He holds a Bachelor of Science degree in marketing from York College of Pennsylvania.

Photo Credits marketing image by dead_account from Fotolia.com

Customer Driven Marketing Strategy: Creating Value for Target Customersby MICHAEL CLOKE

4Share

Overview

This chapter looks further into key customer-driven marketing strategy decisions—how

to divide up markets into meaningful customer groups (segmentation), choose which

customer groups to serve (targeting), create market offerings that best serve targeted

customers (differentiation), and positioning the offerings in the minds of consumers

(positioning).

Then, the chapters that follow explore the tactical marketing tools—the Four Ps—by

which marketers bring these strategies to life.

OBJECTIVES

1. Define the four major steps in designing a customer-driven marketing strategy:

market segmentation, market targeting, differentiation, and positioning

2. List and discuss the major bases for segmenting consumer and business markets

3. Explain how companies identify attractive market segments and choose a market

targeting strategy

4. Discuss how companies differentiate and position their products for maximum

competitive advantage in the marketplace.

INTRODUCTIONOne of Procter & Gamble’s fastest-growing brands, odor fighter Febreze, is not

targeting a new lifestyle segment: college students. The brand recently kicked off

“What Stinks,” an online and viral campaign for its fabric-refresher spray aimed at this

sometimes hard to reach, fickle segment.

For most of the brand’s existence, it has been directed toward working adults and

soccer moms, positioning itself as a “Breath of Fresh Air.” However, P&G realized that

this targeting was leaving out an entire group of customers – Millennials, which

includes college students.

Why is Febreze a natural for college students? “Washing is not a convenient part of the

lifestyle at college,” says Martin Hertich, North American marketing direction for

Febreze. In recent years, P&G has launched a movement to help students find ways to

rewear unwashed clothes.

For example, it recently introduced a new Swash line of dewrinkling sprays, stain-

removing pens, and odor-removing sprays. Febreze is a natural extension.

A traditional, mainstream marketing approach would probably fail to reach this college

student-segment. So, Febreze opted for an online and viral approach, built around an

interactive website, www.WhatStinks.com, linked directly through Facebook.

The student-targeted Febreze What Stinks campaign, along with P&G’s other skillful

targeting and positioning efforts for the brand, have helped make Febreze the world’s

leading fabric freshener and deodorizer. It’s also one of P&G’s fastest growing brands.

Most companies have moved away from mass marketing and toward target

marketing—identifying market segments, selecting one or more of them, and

developing products and marketing programs tailored to each.

Figure 7.1 shows the four major steps in designing a customer-driven marketing

strategy.

Market segmentation involves dividing a market into smaller groups of buyers with

distinct needs, characteristics, or behaviors that might require separate marketing

strategies or mixes.

Market targeting (or targeting) consists of evaluating each market segment’s

attractiveness and selecting one or more market segments to enter.

Differentiation involves actually differentiating the firm’s market offering to create

superior customer value.

Positioning consists of arranging for a market offering to occupy a clear, distinctive,

and desirable place relative to competing products in the minds of target consumers.

MARKET SEGMENTATION

Through market segmentation, companies divide large, heterogeneous markets into

smaller segments that can be reached more efficiently and effectively with products

and services that match their unique needs.

Segmenting Consumer Markets

Table 7.1 outlines the major variables that might be used in segmenting consumer

markets.

Geographic Segmentation

Geographic segmentation calls for dividing the market into different geographical

units such as nations, regions, states, counties, cities, or even neighborhoods.

Demographic Segmentation

Demographic segmentation divides the market into groups based on variables such

as age, gender, family size, family life cycle, income, occupation, education, religion,

race, generation, and nationality.

Demographic factors are the most popular bases for segmenting customer groups.

Age and Life-Cycle Stage is offering different products or using different marketing

approaches for different age and life-cycle groups.

Gender segmentation has long been used in clothing, cosmetics, toiletries, and

magazines.

Income segmentation has long been used by the marketers of products and services

such as

automobiles, clothing, cosmetics, financial services, and travel.

Psychographic Segmentation

Psychographic segmentation divides buyers into different groups based on social

class, lifestyle, or personality characteristics.

Marketers use personality variables to segment markets.

Behavioral Segmentation

Behavioral segmentation divides buyers into groups based on their knowledge,

attitudes, uses, or responses to a product.

Occasion segmentation is grouping buyers according to occasions when they get the

idea to buy, actually make their purchase, or use the purchased item.

Benefit segmentation is grouping buyers according to the different benefits that they

seek from the product.

User Status is segmenting markets into nonusers, ex-users, potential users, first-time

users, and regular users of a product.

Usage Rate is grouping markets into light, medium, and heavy product users.

Loyalty Status is dividing buyers into groups according to their degree of loyalty.

Using Multiple Segmentation Bases

Marketers rarely limit their segmentation analysis to only one or a few variables.

PRIZM NE (one of the leading segmentation systems) classifies every American

household based on a host of demographic factors.

Segmenting Business Markets

Consumer and business marketers use many of the same variables to segment their

markets.

Business marketers also use some additional variables, such as customeroperating

characteristics, purchasing approaches, situational factors, andpersonal

characteristics.

Many marketers believe that buying behavior and benefits provide the best basis for

segmenting business markets.

Segmenting International Markets

Companies can segment international markets using one or a combination of several

variables.

Geographic factors: Nations close to one another will have many common traits

and behaviors.

Economic factors: Countries may be grouped by population income levels or by

their overall level of economic development.

Political and legal factors: Type and stability of government, receptivity to

foreign firms, monetary regulations, and the amount of bureaucracy.

Cultural factors: Grouping markets according to common languages, religions,

values and attitudes, customs, and behavioral patterns.

Intermarket segmentation is segmenting of consumers who have similar needs and

buying behavior even though they are located in different countries.

Socially Responsible Target Marketing

Target marketing sometimes generates controversy and concern. Issues usually

involve the targeting of vulnerable or disadvantaged consumers with controversial or

potentially harmful products.

Problems arise when marketing adult products to kids, whether intentionally or

unintentionally.

The growth of the Internet and other carefully targeted direct media has raised

concerns about potential targeting abuses.

The issue is not so much who is targeted, but how and for what. Controversies arise

when marketers attempt to profit when they unfairly target vulnerable segments or

target them with questionable products or tactics.

Socially responsible marketing calls for segmentation and targeting that serve not just

the interests of the company, but also the interests of those targeted.

DIFFERENTIATION AND POSITIONINGValue proposition: How a company will create differentiated value for targeted

segments and what positions it wants to occupy in those segments.

A product’s position is the way the product is defined by consumers on important

attributes.

Positioning Maps

Perceptual positioning map show consumer perceptions of their brands versus

competing products on important buying dimensions.

Choosing a Differentiation and Positioning Strategy

The differentiation and positioning task consists of three steps:

1. Identifying a set of differentiating competitive advantages upon which to build a

position,

2. Choosing the right competitive advantages, and

3. Selecting an overall positioning strategy.

Identifying Possible Value Differences and Competitive Advantages

To the extent that a company can differentiate and position itself as providing superior

customer value, it gains competitive advantage.

It can differentiate along the lines of product, services, channels, people, orimage.

Choosing the Right Competitive Advantages

How Many Differences to Promote

Requirements for Effective Segmentation

To be useful, market segments must be:

Measurable: The size, purchasing power, and profiles of the segments can be

measured.

Accessible: The market segments can be effectively reached and served.

Substantial: The market segments are large or profitable enough to serve.

Differentiable: The segments are conceptually distinguishable and respond differently

to different marketing mix elements and programs.

Actionable: Effective programs can be designed for attracting and serving the

segments.

Ad man Rosser Reeves believes a company should develop a unique selling

proposition (USP) for each brand and stick to it.

Other marketers think that companies should position themselves on more than one

differentiator.

Which Differences to Promote

A difference is worth establishing to the extent that it satisfies the following criteria:

Important: The difference delivers a highly valued benefit to target buyers.

Distinctive: Competitors do not offer the difference, or the company can offer it in a

more distinctive way.

Superior: The difference is superior to other ways that customers might obtain the

same benefit.

Communicable: The difference is communicable and visible to buyers.

Preemptive: Competitors cannot easily copy the difference.

Affordable: Buyers can afford to pay for the difference.

Profitable: The company can introduce the difference profitably.

Selecting an Overall Positioning Strategy

The full positioning of a brand is called the brand’s value proposition. (See Figure

7.4)

More for More positioning involves providing the most upscale product or service and

charging a higher price to cover the higher costs.

More for the Same positioning involves introducing a brand offering comparable

quality but at a lower price.

The Same for Less positioning can be a powerful value proposition—everyone likes a

good deal.

Less for Much Less positioning is offering products that offer less and therefore cost

less.

“Less-for-much-less” positioning involves meeting consumers’ lower performance or

quality requirements at a much lower price.

More for Less positioning is the winning value proposition.

In the long run, companies will find it very difficult to sustain such best-of-both

positioning.

Developing a Positioning Statement

Company and brand positioning should be summed up in a positioning statement.

The statement should follow the form: To (target segment and need) our (brand) is

(concept) that (point of difference).

Communicating and Delivering the Chosen Position

Once it has chosen a position, the company must take strong steps to deliver and

communicate the desired position to target consumers. All the company’s marketing

mix efforts must support the positioning strategy.

MARKET TARGETINGEvaluating Market Segments

In evaluating different market segments, a firm must look at three factors:

1. Segment size and growth,

2. Segment structural attractiveness, and

3. Company objectives and resources.

The largest, fastest-growing segments are not always the most attractive ones for

every company.

The company also needs to examine major structural factors that affect long-run

segment attractiveness.

A segment is less attractive if it already contains many strong and

aggressivecompetitors.

The existence of many actual or potential substitute products may limit prices

and the profits.

The relative power of buyers also affects segment attractiveness.

A segment may be less attractive if it contains powerful suppliers who can control

prices.

Selecting Target Market Segments

A target market consists of a set of buyers who share common needs or

characteristics that the company decides to serve. (Figure 7.2)

Undifferentiated Marketing

Using an undifferentiated marketing (or mass-marketing) strategy, a firm might

decide to ignore market segment differences and target the whole market with one

offer.

This mass-marketing strategy focuses on what is common in the needs of consumers

rather than on what is different.

Differentiated Marketing

Using a differentiated marketing (or segmented marketing) strategy, a firm

decides to target several market segments and designs separate offers for each.

Concentrated Marketing

Using a concentrated marketing (or niche marketing) strategy, instead of going

after a small share of a large market, the firm goes after a large share of one or a few

smaller segments or niches.

It can market more effectively by fine-tuning its products, prices, and programs to the

needs of carefully defined segments.

It can market more efficiently, targeting its products or services, channels, and

communications programs toward only consumers that it can serve best and most

profitably.

Micromarketing

Micromarketing is the practice of tailoring products and marketing programs to suit

the tastes of specific individuals and locations.

Micromarketing includes local marketing and individual marketing.

Local marketing involves tailoring brands and promotions to the needs and wants of

local customer groups—cities, neighborhoods, and even specific stores.

Local marketing has drawbacks.

It can drive up manufacturing and marketing costs by reducing economies of scale.

It can create logistics problems.

The brand’s overall image might be diluted if the product and message vary too

much in different localities.

Individual marketing is the tailoring of products and marketing programs to the needs

and preferences of individual customers.

Individual marketing has also been labeled one-to-one marketing, mass customization,

and markets-of-one marketing.

Choosing a Targeting Strategy

Which strategy is best depends on:

Company resources.

Product variability.

Product’s life-cycle stage.

Market variability.

Competitors’ marketing strategies.

Source: Principles of Marketing Kotler/Armstrong

Your Marketing Partner,

Describe Four Major Steps in Designing a Customer Driven Marketing StrategyBy Claire Yurdin, eHow Contributor

 

 

 

Print this articleIn designing a customer-driven marketing strategy, you will probably want to direct your efforts toward a small specialized public or "niche." Niche marketing can provide a start-up with an opportunity to launch a business successfully even in today's crowded arena, according to marketing experts Dr. Afarin Bellisario and Peter Geisheker. For example, the successful Swiss company Laurastar has targeted people who want to press clothes at home to professional-level quality, selling them a high-end home pressing system.

1. Figure Out Who Your Customers Areo If you do not already have a clear idea of who your customer is, you need to figure this out. Do not

try to be everything to everybody. You are looking for a group of consumers or businesses that share a very specific need or want, according to Geisheker. Look around you, read magazines and trade publications, talk to people and study existing businesses and products to find a void that you can fill.

If you already have a product, you'll need to "find the people who stay up at night worrying about the problem your product or service solves, and you have just found your niche market," Geisheker said. For example, if you have invented a new ergonomic chair that helps with lower back pain, your customers will be people with pain in their lower backs.

2. Get to Know Your Customers Wello Find out they live, as well as their habits, needs and desires. Go out and meet and observe your

customers wherever you can find them. Talk to them, observe them, ask them about what they want and need, and listen very carefully. Do not assume that you know already. For example, the owner of a shop selling clothes for the over-40 woman might go to restaurants and bars in her town and observe over-40 women to see what they are wearing. English retail expert Mary Portas takes her clients, who are all boutique owners losing money, out to meet their identified customers on her BBC TV show "Mary Queen of Shops."

Figure Out How to Reach Your Customerso Where do they live? What publications do they read? Where do they congregate? What TV shows

do they watch? What websites do they visit? Who is serving this customer now, and how effectively? Once you know, you can figure out where to place advertising or where to go in person. The inventor of the ergonomic chair, for example, might put sample chairs in chiropractors' offices or assisted-living residences.

Focus Your Efforts and Promotionso Get rid of any stock or service you have that does not apply to your targeted customer. Have a sale

or sell it off at a flea market or outlet store, whichever is appropriate. This will get you some money for product development and promotion (although you may have sold the old product at a loss). Get in your new stock, or organize your service and redecorate if needed, to appeal to the taste of your newly identified customer. Target your promotion toward that buyer. Continue to listen to and observe your customer and further refine your approach, continuing to give him what he needs and wants. Set yourself off from your competition. Show your customer why he or she should buy from you.

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References Mary, Queen of Shops (TV show on BBC America) How to Greatly Increase Your Odds of Business Success by Using a Niche Marketing

Strategy, by Peter Geisheker Why Serve a Niche Market? by Dr. Afarin Bellisario

Resources Rubies in the Orchard: How to Uncover the Hidden Gems in Your Business, by Lynda Resnick

& Francis Wilkinson Niche Selling: How to Find Your Customer in a Crowded Marketplace, by William T. Brooks Niche Marketing, by Robert B. Schwart, Dean McCorkle, & David Anderson