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Chapter 7
CUSTOMER-DRIVEN MARKETING STRATEGY:
CREATING VALUE FOR TARGET CUSTOMERS
MARKETING STARTER: CHAPTER 7
Henkel’s Persil: A “Glocal” Marketing Success
Synopsis
Since its foundation, Henkel Saudi Arabia has enjoyed tremendous growth. The introduction of Persil Abaya
Shampoo for women, Persil White liquid detergent, and Persil Starch Spray for men was based on extensive market
research on regional consumer insights and preferences. Persil White and Persil Starch Spray were the first range of
laundry products aimed at GCC men. they achieved an enormous market share and sales 90 percent above forecasts
within only four months after their launch. Persil Abaya Shampoo was developed to offer perfect retention of the
black color of abayas. It was launched in the Gulf States through a mix of TV commercials and a successful online
viral campaign. An interactive Web site was set up, and Henkel also sponsored a reality TV designer competition.
The abaya had thus been transformed into an individual fashion and personality statement.
Discussion Objective
A focused discussion of the opening Henkel story will illustrate the basics of segmentation, targeting, differentiation,
and positioning. Henkel has segmented its market carefully and concentrated on serving men and women’s needs
separately. The discussion should emphasize that Henkel not only knows which customers it wants but also knows
what those customers want.
Starting the Discussion
To get a feel for Henkel’s product offerings, go to its website (http://www.henkel-gcc.com). Begin by looking at the
Local Presence tab, then explore the Strategy page. Finally, look at the products on the Brands and Business page.
Discussion Questions
1. How would you describe Henkel’s approach to market segmentation? (As with most marketers, Henkel
uses a combination of different segmentation variables. Discuss how the company might draw upon
geographic, demographic, psychographic, and behavioral variables in determining its market structure. Ask
students to provide examples of each type. As a class, try to determine which variables appear to be most
important to Henkel in targeting its customers. Look at its expansion plan. What variables will play into its
expansion?
2. Look at the range of Henkel’s detergent brands. How does this range compare to popular brands in your
country or region? Are there any downsides to having a more limited range of offerings? Speculate on the
reasoning behind the range.
3. How does the chapter-opening story relate to the segmentation and positioning concepts that follow in
Chapter 7? (Henkel knows that it can’t serve every kind of customer, or every customer in the same way. It
doesn’t even want to try to appeal to all possible customers. It succeeds by segmenting its market, targeting
the best segments for it, and differentiating and positioning itself to best serve the needs of target
consumers. That’s pretty much what this chapter is all about.)
CHAPTER OVERVIEW
Use Power Point Slide 7-1 Here
This chapter looks further into key customer-driven marketing strategy decisions—how to divide
markets into meaningful customer groups (segmentation), choose which customer groups to
serve (targeting), create market offerings that best serve targeted customers (differentiation), and
position the offerings in the minds of consumers (positioning).
Then, the chapters that follow explore the tactical marketing tools—the Four Ps—by which
marketers bring these strategies to life.
CHAPTER OBJECTIVES
Use Power Point Slide 7-2 here
1. Define the major steps in designing a customer value-driven marketing strategy:
market segmentation, targeting, differentiation, and positioning.
2. List and discuss the major bases for segmenting consumer and business markets.
3. Explain how companies identify attractive market segments and choose a market-
targeting strategy.
4. Discuss how companies differentiate and position their products for maximum
competitive advantage.
CHAPTER OUTLINE
p. 210
INTRODUCTION
Henkel has made great strides in the Middle Eastern market.
It knows who its customers are and what they want from
their detergents.
It requires careful market segmentation and positioning to
succeed with this strategy and to offer something valuable
to consumers in each group.
Henkel has managed to successfully capitalize on its
consumer driven “glocal” marketing strategy, blending
global understanding with local implementation.
P. 211
Photo: Henkel
Opening Vignette Questions
1. Which detergent brand do you use? Is it a
“glocal” brand? What keeps you coming back to
it?
2. Do people check around and try various different
detergent brands? What makes them choose their
favorite, the one that keeps them coming back?
3. Henkel has expanded its product line so that its
detergents can cater to specific kinds of
traditional clothing. What are the benefits and
risks of offering such specialized offerings?
PPT 7-3
p. 212
PPT 7-4
Define the major steps in designing a customer
value-driven marketing strategy: market segmentation,
targeting, differentiation, and positioning.
Most companies have moved away from mass marketing
and toward target marketing—identifying market segments,
selecting one or more of them, and developing products and
marketing programs tailored to each.
Marketing Strategy
Figure 7.1 shows the four major steps in designing a
customer value-driven marketing strategy.
Market segmentation involves dividing a market into
smaller groups of buyers with distinct needs, characteristics,
or behaviors that might require separate marketing
strategies or mixes.
Market targeting (or targeting) consists of evaluating
each market segment’s attractiveness and selecting one or
more market segments to enter.
Differentiation involves actually differentiating the firm’s
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.
Review Learning Objective 1: Define the major steps in
designing a customer value-driven marketing strategy:
market segmentation, targeting, differentiation, and
positioning.
Learning Objective
1
p. 212
Key Terms: Market
segmentation,
Market targeting
(targeting),
Differentiation
p. 212
Figure 7.1
Designing a
Customer-Driven
Marketing Strategy
p. 213
Key Term:
Positioning
Assignments, Resources
Use Discussion Question 7-1 here
Use Think-Pair-Share 1 here
PPT 7-5
p. 213
PPT 7-6
List and discuss the major bases for segmenting
consumer and business markets.
MARKET SEGMENTATION
Through market segmentation, companies divide large,
heterogeneous markets into smaller segments that can be
Learning Objective
2
PPT 7-7
p. 213
PPT 7-8
PPT 7-9
p. 214
PPT 7-10
PPT 7-11
p. 215
p. 215
PPT 7-12
reached more efficiently and effectively with products and
services that match their unique needs. They may require
separate marketing strategies or mixes.
Segmenting consumer markets
Segmenting business markets
Segmenting international markets
Requirements for effective segmentation
Segmenting Consumer Markets
Table 7.1 outlines the major variables that might be used in
segmenting consumer markets.
Geographic Segmentation
Geographic segmentation calls for dividing the
market into different geographical units such as nations,
regions, states, counties, cities, or even neighborhoods.
Demographic 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.
Demographic factors are the most popular bases for
segmenting customer groups.
Age and life-cycle segmentation means 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.
Psychographic Segmentation
Psychographic segmentation divides buyers into different
groups based on social class, lifestyle, or personality
characteristics.
p. 213
Table 7.1: Major
Segmentation
Variables for
Consumer Markets
p. 213
Key Term:
Geographic
segmentation
p. 214
Key Terms:
Demographic
segmentation, Age
and life-cycle
segmentation,
Gender
segmentation
p. 214
Ad: Dick’s Sporting
Goods
p. 215
Key Term: Income
segmentation
p. 215
Ad: Panera
p. 215
Key Term:
Psychographic
segmentation
p. 216
PPT 7-13
PPT 7-14
p. 217
PPT 7-15
p. 220
PPT 7-16
p. 220
Marketers also use personality variables to segment
markets.
Behavioral Segmentation
Behavioral segmentation divides buyers into groups based
on their knowledge, attitudes, uses, or responses to a
product.
Occasion segmentation means grouping buyers according
to occasions when they get the idea to buy, actually make
their purchase, or use the purchased item.
Benefit segmentation means grouping buyers according to
the different benefits that they seek from the product.
User status involves segmenting markets into nonusers,
ex-users, potential users, first-time users, and regular users
of a product.
Usage rate means grouping markets into light, medium,
and heavy product users.
Loyalty status means dividing buyers into groups
according to their degree of loyalty.
Using Multiple Segmentation Bases
Marketers rarely limit their segmentation analysis to only
one or a few variables.
Experian’s Mosaic USA is a leading segmentation system
that classifies every American household based on a host of
demographic factors.
Segmenting Business Markets
Consumer and business marketers use many of the same
variables to segment markets.
Business marketers also use some additional variables, such
as customer operating characteristics, purchasing
approaches, situational factors, and personal character-
istics.
p. 216
Key Terms:
Behavioral
segmentation,
Occasion
segmentation,
Benefit
segmentation
p. 216
Photo: Fitbit
p. 217
Photo: Hardee’s and
Carl’s Jr.
p. 218
Photo: Mountain
Dew
p. 219
Photo: Market
segmentation
PPT 7-17
PPT 7-18
Segmenting International Markets
Companies can segment international markets using one or
a combination of several variables.
Geographic location: 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.
Intermarket segmentation involves segmenting
consumers with similar needs and buying behavior even
though they are located in different countries.
p. 220
Key Term:
Intermarket
(Cross-market)
segmentation
p. 221
Ad: Coca-Cola
Assignments, Resources
Use Real Marketing 7.1 here
Use Discussion Questions 7-2 and 7-3 here
Use Critical Thinking Exercise 7-6 here
Use Additional Projects 1, 2 and 3 here
Use Small Group Assignment 1 here
Use Outside Example 2 here
Troubleshooting Tip
Understanding the concept of a market segment can
be difficult for students. Breaking down a market,
such as their own university, into separate groups
can help tremendously, as can drawing a big box on
the board, and then breaking the box down into
separate sections to represent pieces of a larger
market.
