Customer Value–Driven

Marketing Strategy:
Creating Value for Target
Customers
Muhammad Iqbal Firdaus
Introduction
• Buyers are too numerous and companies themselves vary widely in
their abilities to serve different market segments.
• Companies must identify the parts of the market they can serve best
and most profitably
• Most companies have moved away from mass marketing and toward
target marketing.
Marketing Strategy
• Market segmentation: dividing a market into distinct groups of
buyers.
• Market targeting (or targeting): evaluating each market segment’s
attractiveness and selecting one or more market segments.
• Differentiation: differentiating the firm’s market offering to create
superior customer value.
• Positioning: 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
• Companies divide large, diverse markets into smaller segments that
can be reached more efficiently and effectively with products and
services that match their unique needs.
Segmenting Consumer Markets
Segmenting Business Markets
• Business buyers can be segmented geographically, demographically
(industry, company size), or by benefits sought, user status, usage
rate, and loyalty status.
• Business marketers also use some additional variables, such as
customer operating characteristics, purchasing approaches,
situational factors, and personal characteristics.
Segmenting International Markets
World market can be segmented based on:
• Geographic location
• Economic factors
• Political and legal factors
• Cultural factors can also be used
• Intermarket segmentation (also called cross-market segmentation),
form segments of consumers who have similar needs and buying
behaviors even though they are located in different countries
Requirements for Effective Segmentation
• 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.
Market Targeting
• The firm has to evaluate the various segments and decide how many
and which segments it can serve best
Evaluating Market Segments
• A firm must look at three factors: segment size and growth, segment
structural attractiveness, and company objectives and resources.
Selecting Target Market Segments
• A target market consists of a set of buyers who share common needs
or characteristics that a company decides to serve.
• Market targeting can be carried out at several different levels.
Choosing a Targeting Strategy
Companies need to consider many factors when choosing a market-
targeting strategy
• company’s resources
• the degree of product variability
• The product’s life-cycle stage
• Market variability
• Competitors’ marketing strategies
Socially Responsible Target Marketing
• Target marketing sometimes generates controversy and concern
• The biggest issues usually involve the targeting of vulnerable or
disadvantaged consumers with controversial or potentially harmful
products.
Differentiation and Positioning
• The company must decide on a value proposition—how it will create
differentiated value for targeted segments and what positions it
wants to occupy in those segments.
• A product position is the way a product is defined by consumers on
important attributes—the place the product occupies in consumers’
minds relative to competing products
Positioning Maps
Choosing a Differentiation and Positioning
Strategy
The differentiation and positioning task consists of three steps:
• identifying a set of differentiating competitive advantages on which to
build a position,
• choosing the right competitive advantages,
• and selecting an overall positioning strategy.
The company effectively communicate and deliver the chosen position
to the market.
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.
• A company differentiate itself or its market offer along the lines of
product, services, channels, people, or image
• Through product differentiation, brands can be differentiated on
features, performance, or style and design.
• Beyond differentiating its physical product, a firm can also
differentiate the services that accompany the product.
• Some companies gain services differentiation through speedy,
convenient service
• Firms that practice channel differentiation gain competitive advantage
through the way they design their channel’s coverage, expertise, and
performance
• Companies can also gain a strong competitive advantage through
people differentiation—hiring and training better people than their
competitors do
• Even when competing offers look the same, buyers may perceive a
difference based on company or brand image differentiation.
Selecting an Overall Positioning Strategy
• The full positioning of a brand is called the brand’s value
proposition—the full mix of benefits on which a brand is
differentiated and positioned.
• It is the answer to the customer’s question “Why should I buy your
brand?”
The Value Proposition
• 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. A company can attack a competitor’s value proposition
by positioning its brand as offering more for the same price
• The Same for Less. Offering the same for less can be a powerful value
proposition—everyone likes a good deal
• Less for Much Less. A market almost always exists for products that offer
less and therefore cost less
• More for Less. The winning value proposition would be to offer more for
less. Yes for short run, create problems in the long run.
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
• The company must take strong steps to deliver and communicate the
desired position to its target consumers.
• All the company’s marketing mix efforts must support the positioning
strategy.
• Positioning the company calls for concrete action, it must first deliver
that position.
• Designing the marketing mix—product, price, place, and promotion—
involves working out the tactical details of the positioning strategy.