Marketing I
Lecture 4
Winter Semester 2023/2024
Course Lecturers: Dr. Sara El-Deeb
Dr. Hagar Adib
Chapter 7:
Customer-Driven Marketing
Strategy: Segmentation,
Targeting and Positioning
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Agenda
Define the customer- Understand the Discuss how companies
driven strategy Targeting strategies communicate their position
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2 4
Explain the Understand the
Segmentation process Positioning strategies
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Les Exclusive stores high net worth consumers
Semi-Exclusive stores upper-middle income
consumers
Damas 22K stores middle income consumers4
How much?
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Handmade in Colombia
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Celebrities!
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Customer-driven Marketing Strategy
Companies recognize that they can’t appeal to all customers in the marketplace.
The companies themselves vary in their abilities to serve different segments of
the market.
Instead, a company must identify the parts of the market that it can serve best
and most profitably.
Companies focus on the buyers who have the greatest interest in the values they
create.
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Customer-driven Marketing Strategy
Two questions must be answered:
1. What customers will we serve? “Select customers to serve”
2. How can we best serve these customers? “Decide on Value Proposition”
By trying to serve all customers, marketers may not serve any customers well!
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Segmentation, Targeting and Positioning
STP Process
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Segmentation, Targeting and Positioning
STP Process
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Segmentation, Targeting and Positioning
Segmentation and Targeting
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.
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Segmentation, Targeting and Positioning
Differentiation 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.
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Segmentation, Targeting and Positioning
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Market Segmentation
Segmenting Consumer Markets
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Market Segmentation
Segmenting Consumer Markets
Geographic segmentation divides the market into different geographical
units such as nations, regions, provinces, parishes, cities, or even
neighborhoods.
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Market Segmentation
Example: Geographic Segmentation
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Market Segmentation
Example: Geographic Segmentation
Africa
India
Australia
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Market Segmentation
Segmenting Consumer Markets
Demographic segmentation divides the market into groups based on
variables such as age, gender, family size, family life cycle, income,
occupation, education, generation, and nationality.
Demographic factors are the most popular bases for segmenting
customer groups.
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Market Segmentation
Demographic 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.
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Market Segmentation
Example: Demographic Segmentation- Age
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Market Segmentation
Example: Demographic Segmentation- Age
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Market Segmentation
Example: Demographic Segmentation- life cycle
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Market Segmentation
Example: Demographic Segmentation- Gender
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Market Segmentation
Example: Demographic Segmentation- Gender
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Market Segmentation
Example: Demographic Segmentation- Gender
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Market Segmentation
Example: Demographic Segmentation- Income
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Market Segmentation
Segmenting Consumer Markets
Psychographic segmentation divides buyers into different groups based on
social class, lifestyle, or personality characteristics.
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Market Segmentation
Example: Psychographic Segmentation
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Market Segmentation
Segmenting Consumer Markets
Behavioral segmentation divides buyers into groups based on their
knowledge, attitudes, uses, or responses to a product.
- Occasions: according to occasions when buyers get the idea to buy or make their
purchase.
- Benefits sought: according to the benefits consumers seek from the products.
- User status: segmenting market into non-user, potential users, regular users, first
time users
- Usage rate: light users, medium users and heavy product users
- Loyalty status: loyal consumers and unloyal consumers.
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Market Segmentation
Example: Behavioral Segmentation- Occasions
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Market Segmentation
Example: Behavioral Segmentation- Occasions
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Market Segmentation
Example: Behavioral Segmentation- Occasions
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Market Segmentation
Example: Behavioral Segmentation- Occasions
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Market Segmentation
Example: Behavioral Segmentation- Occasions
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Market Segmentation
Example: Behavioral Segmentation- Benefits Sought
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Market Segmentation
Example: Behavioral Segmentation- Benefits Sought
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Market Segmentation
Example: Behavioral Segmentation- Usage Rate
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Market Segmentation
Multiple Segmentation Bases
Multiple segmentation is used to identify smaller, better-defined target
groups.
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Market Segmentation
Segmenting International Markets
Inter-market segmentation divides consumers into groups with similar
needs and buying behaviors even though they are located in different
countries.
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Market Segmentation
Segmenting International Markets
Inter-market segmentation divides consumers into groups with similar
needs and buying behaviors even though they are located in different
countries.
Examples:
World’s Teens
Global Elite
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Market Segmentation
Segmenting International Markets
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Market Segmentation
Segmenting International Markets
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Market Segmentation
Requirements for Effective Segmentation
To be useful, market segments must be:
Measurable Size, profiles of segments can be measured
Accessible Segments must be effectively reached and served
Substantial Segments must be large or profitable enough to serve
Differentiable Worthy to separate segments
Actionable Possible to develop separate marketing programs
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Market Segmentation
Requirements for Effective Segmentation
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Market Targeting
Evaluating Market Segments
Segment size and growth – large, fast growing segment vs. small and less
attractive
Segment structural attractiveness – aggressive competitors, substitute
products, power of buyer, powerful suppliers
Company objectives and resources – skills and resources
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Market Targeting
Target Market
Market targeting (targeting) is the process of evaluating each market
segment’s attractiveness and selecting one or more segments to enter.
Target market consists of a set of buyers who share common needs or
characteristics that the company decides to serve.
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Market Targeting
Market Targeting Strategies
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Market Targeting
Selecting Target Marketing Segments
Undifferentiated marketing targets the whole market with one offer
₋One product for the whole population
₋ Mass marketing
₋ Focuses on common needs rather than what’s different
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Market Targeting
Selecting Target Marketing Segments
Do you think undifferentiated marketing is a good strategy?
Which product categories can work with undifferentiated marketing?
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Market Targeting
Selecting Target Marketing Segments
Differentiated marketing targets several different market segments and designs
separate offers for each.
₋Different products to different segments
₋ Goal is to achieve higher sales and a stronger position
₋ More expensive than undifferentiated marketing
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Market Targeting
Example: Differentiatied Marketing
30 EGP 5 EGP
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Market Targeting
Example: Differentiated Marketing
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Market Targeting
Selecting Target Marketing Segments
Concentrated (niche) 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
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Market Targeting
Selecting Target Marketing Segments
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Market Targeting
Example:Concentrated Marketing
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Market Targeting
Selecting Target Marketing Segments
Micromarketing is the practice of tailoring products and marketing programs to
suit the tastes of specific individuals and locations.
• Local marketing
• Individual marketing
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Market Targeting
Selecting Target Marketing Segments
Local marketing involves tailoring brands and promotion to the needs and wants of
local customer groups
₋ Cities
₋ Neighborhoods
₋ Stores
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Market Targeting
Example: Local Marketing
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Market Targeting
Selecting Target Marketing Segments
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
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Market Targeting
Example: Individual Marketing
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Market Targeting
Example: Individual Marketing
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Differentatition and Positioning
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.
Positioning maps show consumer perceptions of a company’s brands versus
competing products on important buying dimensions.
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Differentatition and Positioning
Positioning Maps
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Differentatition and Positioning
Positioning Maps
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Differentatition and Positioning
Choosing a Differentiation and Positioning Strategy
1. Identifying a set of possible competitive advantages to build a position
2.Choosing the right competitive advantages
3.Selecting an overall positioning strategy
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Differentatition and Positioning
Choosing a Differentiation and Positioning Strategy
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.
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Differentatition and Positioning
Possible Value Differences and Competitive Advantages
Identifying a set of possible competitive advantages to build a position by providing
superior value from:
Product differentiation
Service differentiation
Channel differentiation
People differentiation
Image differentiation
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Differentatition and Positioning
Choosing the right Competitive Advantages
Criteria for which differentiation to promote:
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 differences is superior to other ways that customers might obtain the
same benefit.
Communicable The differences 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.
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Differentiation and Positioning
Selecting an overall Positioning Strategy
Ch 7 - Copyright © 2011 Pearson Education
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Value Propositions
1. More Benefits for More Price
Value Propositions
2. More Benefits For Less Price
Value Propositions
3. Same Benefits For Less Price
Value Propositions
4. Less Benefits for Less Price
Differentatition and Positioning
Develop a Positioning Statement
To (target segment and need) our (brand) is (concept) that (point of difference).
Example: Sante’ Cookie
To (youth of age groups between 25-35 who wants to take good care of their
health) (Sante’ Cookie) is (a healthy snack) that (gives you the best tasting yet
guilt free pleasure so you can stay in control of your weight and health)
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Differentatition and Positioning
Delivering the chosen value Proposition
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.
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Thanks!
Any questions?
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