1. CUSTOMER-DRIVEN MARKETING STRATEGY, CREATING
VALUE FOR TARGET CUSTOMERS

2. TOPICS TO BE COVERED
• Define target
market, segmentation
• Differentiation, positio
ning
• Segmenting
consumer markets,
business markets
• Inter-market
segmentation
• Evaluating market
segments, selecting

3. • Target marketing includes three activities:
market segmentation, market targeting, and
market positioning.
We can target markets at four levels:
• segments
• Niches
• local areas and
• Individuals
Market segments are large, identifiable
groups within a market.
Globalization and the Internet have made
niche marketing more feasible to many.

4. Levels of Market Segmentation
• In mass marketing: the seller engages in the
mass production, mass distribution, and mass
promotion of one product for all buyers.
• Segment Marketing: A market segment
consists of a group of customers who share a
similar set of needs and wants.
• Niche Marketing:
• A niche is a more narrowly defined customer group seeking a distinctive mix
of benefits.
• Marketers usually identify niches by dividing a segment into sub-segments.
• Niche marketers presumably understand their customers’ needs so well that
the customers willingly pay a premium.
• Globalization has facilitated niche marketing.

5. • Local Marketing: Target marketing is leading
to marketing programs tailored to the needs
and wants of local customer groups. Local
marketing reflects a growing trend called
grassroots marketing
• Individual Marketing: The ultimate level of
segmentation leads to “segments of one”,
“customized marketing”, or “one-to-one
marketing”.
Customerization combines operationally driven mass
customization with customized marketing in a way that empowers
consumers to design the product and service offering of their
choice.

6. The Himalaya
Drug Company
serves a growing
niche market by
focusing on
ayurvedic
medicines and
health
supplements

7. customization is certainly not for every company
because it may be very difficult to implement for complex
products, can also raise the cost of goods.
• Mostly applicable in personal care products,
paints co.'s, subway, dominos, McDonald's,
recent launch of Starbucks in India

8. Bases for segmenting consumer
market
Two broad groups of variables are used to
segment consumer markets.
A) Descriptive characteristics:
geographic, demographics, and psycho-graphic.
B) Behavioral considerations: such as consumer
responses to benefits, use occasions, or brands

9. • Geographic Segmentation: Geographic segmentation calls for dividing the market into
different geographical units.
• More and more, regional marketing means marketing right down to a specific zip code.
• calls for dividing the market into different geographical units such as
nations, regions, states, counties, cities, or even neighborhoods.
• 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.
factors that 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.

11. • Psychographic Segmentation: divides
buyers into different groups based on social
class, lifestyle, or personality characteristics.
• Marketers use personality variables to
segment markets.
Titan(executive); Fastrack (youth);
Sonata( affordable prices) positioning and
repositioning, Halal and Jhatka meat in South
Asian food chains for Muslim consumer, Femina
target “women of substance”

12. The VALS
("Values, Attitudes and
Lifestyles“)
Segmentation System

13. Consulting Business Intelligence’s
1) The major tendencies of the four groups with high
resources are:
• Innovators
• Thinkers
• Achievers
• Experiencers
2) The major tendencies of the four groups with lower
resources are:
• Believers
• Strivers
• Makers
• Survivors

14. • 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.

15. Loyalty Status
Switchers
Shifting loyals
Split loyals
Hard-core

16. BASIS FOR SEGMENTING
BUSINESS MARKETS
• Consumer and business marketers use many of the
same vari-ables to segment their markets.
• Business marketers also use some additional
variables, such as customer operating
characteristics, purchasing approaches, situational
factors, and personal characteristics.
• Many marketers believe that buying behavior and
benefits provide the best basis for segmenting
business markets.

17. Segmenting International
Markets
• Inter-market segmentation is segmenting of consumers who have similar
needs and buying behavior even though they are located in different
countries.
 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.

18. MARKET TARGETING

19. Segmenting for Business Markets
Demographic
Operating Variable
Purchasing Approaches
Situational Factors
Personal
Characteristics

20. Effective Segmentation Criteria
Steps in Segmentation Process
Needs-based segmentation
Segment identification
Segment attractiveness
Segment profitability
Segment positioning
Segment acid test
Marketing-Mix
Strategy

21. • Market segments must rate favorable on five
key criteria:
– Measurable: The size, purchasing power, and profiles of the segments
can be measured.
– Substantial: The market segments are large or profitable enough to
serve.
– Accessible: The market segments can be effectively reached and
served.
– 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.
EVALUATING AND SELECTING
MARKET SEGMENTS

22. Evaluating Market Segments
• In evaluating different market segments, a firm must look at three factors:
 Segment size and growth,
 Segment structu-ral attractiveness, and
 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
aggressive competitors.
• The existence of many actual or potential substitute products may limit
prices and the profits.
• The relative power of buyers also affects segment attractiveness.

23. 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.
1. Single segment: FMCG products only on low income group
segment
2. Selective segment
3. Product segment: Such as Volvo which targets only safety
conscious people.
4. Market specialization: Such as Mahindra and Mahindra
which targets mainly the government sector.
5. Full market coverage: undifferentiated(firm ignores segment
difference) & differentiated (serves the whole market with its
different designs)

24. Case study of Target marketing – Titan watches
• Segment selection – Titan mainly targets multiple segments based on their
income, social standing as well as behavioural attributes. Thus it targets
customers who have low incomes along with customers with high income.
• Marketing mix – Titan does not offer the same product to different
customers. In fact it has a new product for each segment thereby micro
managing its target marketing efforts. Thus a Sonata will be offered to the
low income group whereas a Tommy Hilfiger will be offered to the high
purchasing power individual
• Positioning – Each product of Titan is positioned separately. Furthermore
when you walk into the retail store of Titan (World of titan) you will find that
there are separate sections for each class of customers depending on their
income groups.
• Customer life cycle marketing – Another example of target marketing
is having every product in the kitty for each level of a customers life cycle.
Thus by having brands like Fast track, raga and others, Titan ensures that it
has a product whether its customer is a college going individual, a working
women or a high income professional.

25. DIFFERENTIATION AND
POSITIONING
• Value 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.
• 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

26. example
• An expensive TV, what comes first to your mind
probably will be A Sony or A Samsung TV whereas if
a cheaper or VFM TV (value for money TV) you might
think of an Onida or a Videocon. That’s positioning.
Why is it that you have called out these respective
names only? That is because how the brands are
positioned in your mind in terms of awareness.
• Positioning is the final part of the SEGMENT –
TARGET – POSTION or STP process

27. (a) Prospectively profitable: the segment’s characteristics (e.g. price
levels, growth rate) and competitive environment (e.g. number of
competitors, basis of competition) are conducive to a growing pool of profits.
(b) Homogeneous within the segment, i.e. members are relatively similar with
respect to attitudes, buying criteria, media habits, etc.
(c) Heterogeneous across segments, i.e. members in different segments have
fundamental differences and act accordingly.
(d) Accessible: members can be reached effectively with communications, and
shop in outlets through which products can be efficiently distributed.
(e) Winnable: the company’s distinctive strengths match the segment’s
requirements and provide an advantage versus competition, so the company
can reasonably expect an acceptable share of the industry profits.
The most attractive positioning that can be targeted
in general is:

28. • Perceptual Mapping: it is basically a technique to represent
what people think about products or services, people or ideas.
• Positioning a product to specific segments:
• Communication Process: Communication helps the marketer
to builds up image of the product. Image build up is influenced
more by the effectiveness of the communication than by the
communication budget
• Positioning Map: show consumer perceptions of their brands
versus competing products on important buying dimensions.
Marketers decide upon a competitive position, which enables
them to distinguish their own products from the offerings of their
competition.
Positioning techniques

29. 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, or image.

30. MARKETING MIX