Chapter 7

Question 1

4 steps in designing customer-driven marketing strategy

Answer 1

Segmentation/Targeting/differentiation/positioning

Question 2

Market segmentation

Answer 2

Geographic segmentation(countries,provinces,cities..)
Demographic segmentation:
*Age and life-cycle segmentation: dividing a market into different age and life cycle groups
*Gender segmentation
*household income segmentation
*ethnic or cultural group
psychographic segmentation: lifestyle or personality characteristics
Behavioral Segmentation: Consumer knowledge, attitudes, uses or responses to a product
Occasion segmentation: Christmas Halloween Canada Day)
Benefits segmentation: different benefits consumer sees from product(town bikes are people seeking fitness, recreation)
Markets can be segmented in non-users,ex-users, potential users, first-time users, and regular users of a product
segmented into usage rate: light, medium, and heavy product users
segmented by customer loyalty
Using Multiple segmentation bases: use of multiple segmentation bases in an effort to identify smaller, better-defined target groups. ex: the LGBT market is a large segment containing many sub-segments such as demographic and psychographic.
Segmenting Business markets: geographic, demographics benefits sought, user status, usage rate, and loyalty status.
Segmenting International Markets: geographic locations, economic factors, political & legal factors, and cultural factors
Intermarket (cross-market) segmentation: consumers who have similar needs and buying behaviors even though they are located in different countries

Question 3

Requirements for Effective Segmentation

Answer 3

Measurable/accessible/substantial/differentiable(segments should be conceptually different and respond differently to different marketing mix elements)/ Actionable( can marketing programs be designed effectively to attract and serve the segments?)

Question 4

Market Targeting

Answer 4

Evaluating Market segments.
-Find the right segment size and growth.
-Determine long-run segment attractiveness by
analyzing porters 5 forces to see company ability to
compete in a particular area: (1)competitors (2) barriers
to entry (3) substitute products (4) power of buyers and
(5) power of suppliers
Selecting Target Markets:
-Target market: a set of buyers sharing common needs
or characteristics that a company decides to serve
- Market targeting can be carried out at different levels:
Undifferentiated(Mass) Marketing, Differentiated
marketing, concentrated marketing, micromarketing
Undifferentiated marketing: ignore market segments
and go after whole market with one offer
Differentiated (segmented) marketing:firm decides
to target several market segments and designs
separate offers for each. **its expensive
Concentrated (niche) marketing:firm goes after a large
share of one or a few segments or niches.
Micromarketing: the practice of tailoring products and
marketing programs to the needs and wants of specific
individuals and local customer segments -
Local marketing: Small group of people in same city or
neighborhood who shop at the same store
Indv marketing: tailoring products and marketing
programs to the needs and preferences of individual
customers (Nike ID)
-factors for choosing target strategy:
company resources/product variability (undifferentiated marketing is most suited for products such as fruits) /product’s life-cycle stage (if its a new product, launch only 1 version)/ market variability/ competitor’s marketing strategies
-socially responsible target Marketing
Target marketing can create controversy
do not target vulnerable and disadvantaged consumers

Question 5

Differentiation and Positioning

Answer 5

Product Proposition: The way the product is defined by consumers on important attributes. Place it occupies in consumers minds relative to competing products
-Products are created in factory but brands in minds
-The less differentiated the product is the more
important positioning becomes
Positioning Maps: Show consumers’ perception of their brand vs competing products
Choosing a Differentiation and Positioning Strategy: what competitve advantage can you build on?
- Product differentiation: features, performance, or style and design
- Service differentiation: speedy, convenient pr careful delivery
- Channel differentiation: channel coverage, expertise, and performance
- People differentiation: hiring and training people better
- Image differentiation: strong, distinctive image conveying the product’s distinctive benefits and positioning
Selecting an overall positioning strategy:
More for more:providing the most upscale product or
service and charging a higher price to cover the higher
costs
More the same: attack a competitors more-for0more by
introducing brand offering comparable quality but lower
price
The Same for Less: everyone likes a good deal (Wal-
Mart, Payless Shoes)
Less for Much Less: in many cases, consumers will
gladly settle for less in exchange for a lower price\
More for Less: the winning proposition value. Many
companies claim to do this, and in the short run some
actually achieve this.
Developing a Positioning Statement: a statement that summarizes a company or brand positioning - it takes this form: To (target segment and need) our (brand) is (concept) that (point of difference)
ex: To always online, socially connected Millennials, the Apple iWatch is a whole new kind of conversation that not only helps you send and receive messages, but lets you express yourself in new, fun, and more personal ways.