marketing chapter 7[1]
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Ch 7 -1 Copyright © 2011 Pearson Education
Principles of Marketing, Arab World Edition
Philip Kotler, Gary Armstrong, Anwar Habib, Ahmed Tolba
Presentation prepared by Annelie Moukaddem Baalbaki
CHAPTER SEVENCustomer-Driven Marketing Strategy: Segmentation, Targeting & Positioning
Lecturer: Insert your name here
Ch 7 -2 Copyright © 2011 Pearson Education
Chapter Learning Outcomes
7.1 Customer-Driven Marketing Strategy
7.2 Market Segmentation
7.3 Market Targeting
7.4 Differentiation and Positioning
Ch 7 -3 Copyright © 2011 Pearson Education
Topic Outline
Segmentation, Targeting and Positioning
Market segmentation is the process that companies use to divide large heterogeneous markets into small markets that can be reached more efficiently and effectively with products and services that match their unique needs.
Market targeting (targeting) is the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.
Segmentation and Targeting
Ch 7 -4 Copyright © 2011 Pearson Education
Segmentation, Targeting and Positioning
Differentiation involves actually differentiating the 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 Differentiation and Positioning
Ch 7 -5 Copyright © 2011 Pearson Education
Market Segmentation
Ch 7 -6 Copyright © 2011 Pearson Education
Market Segmentation
• Segmenting consumer markets
• Segmenting business markets
• Segmenting international markets
• Requirements for effective segmentation
Ch 7 -7 Copyright © 2011 Pearson Education
Market Segmentation
Segmenting Consumer Markets
Ch 7 -8 Copyright © 2011 Pearson Education
Market Segmentation
Geographic segmentation divides the market into different geographical units such as nations, regions, provinces, parishes, cities, or even neighborhoods.
Segmenting Consumer Market
Ch 7 -9 Copyright © 2011 Pearson Education
Market 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.
Segmenting Consumer Markets
Ch 7 -10 Copyright © 2011 Pearson Education
Market Segmentation
Age and life-cycle stage segmentation is the process of offering different products or using different marketing approaches for different age and life-cycle groups.
Gender segmentation divides the market based on sex (male or female).
Income segmentation divides the market into affluent or low-income consumers.
Demographic Segmentation
Ch 7 -11 Copyright © 2011 Pearson Education
Market Segmentation
Psychographic segmentation divides buyers into different groups based on social class, lifestyle, or personality characteristics.
Psychographic Segmentation
Ch 7 -12 Copyright © 2011 Pearson Education
Market Segmentation
Behavioral segmentation divides buyers into groups based on their knowledge, attitudes, uses, or responses to a product.
• Occasions
• Benefits sought
• User status
• Usage rate
• Loyalty status
Behavioral Segmentation
Ch 7 -13 Copyright © 2011 Pearson Education
Market Segmentation
Multiple segmentation is used to identify smaller, better-defined target groups.
Using Multiple Segmentation Bases
Ch 7 -14 Copyright © 2011 Pearson Education
Market Segmentation
Segmenting Business Markets
Ch 7 -15 Copyright © 2011 Pearson Education
Market SegmentationSegmenting International markets
Ch 7 -16 Copyright © 2011 Pearson Education
Market Segmentation
Inter-market segmentation divides consumers into groups with similar needs and buying behaviors even though they are located in different countries.
Segmenting International Markets
Ch 7 -17 Copyright © 2011 Pearson Education
Market Segmentation
To be useful, market segments must be:
Requirements for Effective Segmentation
Ch 7 -18 Copyright © 2011 Pearson Education
Market Targeting
Target market consists of a set of buyers who share common needs or characteristics that the company decides to serve.
Target Market
Ch 7 -19 Copyright © 2011 Pearson Education
Market Targeting
• Segment size and growth
• Segment structural attractiveness
• Company objectives and resources
Evaluating Market Segments
Ch 7 -20 Copyright © 2011 Pearson Education
Market Targeting
Ch 7 -21 Copyright © 2011 Pearson Education
Market Targeting
Undifferentiated marketing targets the whole market with one offer
• Mass marketing
• Focuses on common needs rather than what’s different
Selecting Target Marketing Segments
Ch 7 -22 Copyright © 2011 Pearson Education
Market Targeting
Differentiated marketing targets several different market segments and designs separate offers for each.
• Goal is to achieve higher sales and a stronger position
• More expensive than undifferentiated marketing
Selecting Target Marketing Segments
Ch 7 -23 Copyright © 2011 Pearson Education
Market Targeting
Concentrated marketing targets a large share of one or a few smaller segments or niches.
• Limited company resources
• Knowledge of the market
• More effective and efficient
Selecting Target Marketing Segments
Ch 7 -24 Copyright © 2011 Pearson Education
Market Targeting
Micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations.
• Local marketing
• Individual marketing
Selecting Target Marketing Segments
Ch 7 -25 Copyright © 2011 Pearson Education
Market Targeting
Local marketing involves tailoring brands and promotion to the needs and wants of local customer groups
• Cities
• Neighborhoods
• Stores
Selecting Target Marketing Segments
Ch 7 -26 Copyright © 2011 Pearson Education
Market Targeting
Individual marketing involves tailoring products and marketing programs to the needs and preferences of individual customers.
Also known as:
• One-to-one marketing
• Customized marketing or mass customization
• Markets-of-one marketing
Target Market Strategies
Ch 7 -27 Copyright © 2011 Pearson Education
Market Targeting
Depends on:
• Company resources
• Product variability
• Product life-cycle stage
• Market variability
• Competitor’s marketing strategies
Choosing a Targeting Strategy
Ch 7 -28 Copyright © 2011 Pearson Education
Market Targeting
Concern for vulnerable segments (Children) with controversial or potentially harmful products.
• Cigarettes
• Internet abuses
Socially Responsible Target Marketing
Ch 7 -29 Copyright © 2011 Pearson Education
Differentiation and Positioning
Product position is the way the product is defined by consumers on important attributes—the place the product occupies in consumers’ minds relative to competing products.
• Perceptions
• Impressions
• Feelings
Positioning
Ch 7 -30 Copyright © 2011 Pearson Education
Differentiation and Positioning
Ch 7 -31 Copyright © 2011 Pearson Education
Differentiation and Positioning
• Identifying a set of possible competitive advantages to build a position
• Choosing the right competitive advantages
• Selecting an overall positioning strategy
Choosing a Differentiation and Positioning Strategy
Ch 7 -32 Copyright © 2011 Pearson Education
Differentiation and Positioning
Competitive advantage is an advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits that justify higher prices.
Choosing a Differentiation and Positioning Strategy
Ch 7 -33 Copyright © 2011 Pearson Education
Differentiation and Positioning
Identifying a set of possible competitive advantages to build a position by providing superior value from:
Identifying Possible Value Differences and Competitive Advantages
Ch 7 -34 Copyright © 2011 Pearson Education
Differentiation and Positioning
Difference to promote should be:
Choosing the Right Competitive Advantage
Ch 7 -35 Copyright © 2011 Pearson Education
Differentiation and Positioning
Ch 7 -36 Copyright © 2011 Pearson Education
Differentiation and Positioning
To (target segment and need) our (brand) is (concept) that (point of difference).
Developing a Positioning Statement
Ch 7 -37 Copyright © 2011 Pearson Education
Communication and Delivering the Chosen
Position
A company must take steps to deliver and communicate the desired position to target consumers.
Choosing the positioning is often easier than implementing the position.
Delivering the chosen position
Ch 7 -38 Copyright © 2011 Pearson Education
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Ch 7 -39 Copyright © 2011 Pearson Education