58
Chapter 8: Customer-Driven Marketing Strategy: Creating Value for Target
Customers
Chapter Objectives
1. Define the major steps in designing a customer-driven marketing strategy: market
segmentation, targeting, and positioning.
Teaching Suggestions
The following explanations and suggestions are outlined based on the Chapter Objectives.
1. Define the major steps in designing a customer-driven marketing strategy: market
segmentation, targeting, and positioning.
(1) Market segmentation: dividing a market into distinct groups who might require
separate products and/or marketing mixes
2. List and distinguish among the requirements for effective segmentation:
measurability, accessibility, substantiality, and actionability.
Although there are many ways to segment a market, all are not equally effective. To be
useful, market segments must have the following characteristics:
Accessibility: the degree to which segments can be accessed and served
59
Substantiality: the degree to which segments are large or profitable enough to
3. Explain how companies identify attractive market segments and choose a market–
targeting strategy.
A firm must look at three factors when evaluating market segments:
Segment size and growth
Segment structural attractiveness (ex. Supermarkets offering takeaway meals;
4. Illustrate the concept of positioning for competitive advantage by offering specific
examples.
Marketers need to position their companies by creating value for the segments that are
chosen. In other words, the differentiating features of a company, product or service must
60
Chapter Outline
I. Market. A market is the set of all actual and potential buyers of a product.
II. Three Steps of the Target Marketing Process [Slide 8-3]
A. Market segmentation is the process of dividing a market into distinct groups of
III. Market Segmentation [Slide 8-4]
A. Bases for segmenting a market. There is no single way to segment a market. A
marketer has to try different segmentation variables, alone and in combination,
hoping to find the best way to view the market structure.
1.Geographic segmentation calls for dividing the market into different
2.Demographic segmentation consists of dividing the market into groups
3.Psychographic segmentation divides buyers into different groups based on
B. Requirements for Effective Segmentation [Slide 8-7]
2.Accessibility. The degree to which segments can be accessed and served.
IV. Evaluating Market Segments [Slide 8-8]
A. Segment size and growth. Companies analyze the segment size and growth and
choose the segment that provides the best opportunity.
B. Segment structural attractiveness. A company must examine major structural
V. Selecting Market Segments. Segmentation reveals market opportunities available to a
firm. The company then selects the most attractive segment or segments to serve as
targets for marketing strategies to achieve desired objectives. [Slide 8-9]
A. Market-coverage alternatives
1.Undifferentiated marketing strategy. An undifferentiated marketing
2.Differentiated marketing strategy. The firm targets several market
segments and designs separate offers for each.
3.Concentrated marketing strategy. Concentrated marketing strategy is
4.Micromarketing. The practice of tailoring products and marketing
5.Choosing a market-coverage strategy. Companies need to consider several
factors in choosing a market-coverage strategy.
a.
concentrated marketing makes the most sense.
b. Degree of product homogeneity. Undifferentiated marketing is
6.Socially responsible target marketing. As marketers gain more information
on customers, they must use this information responsibly.
VI. Market positioning. A produ nsumers
on important attributes the place
competing products.
A. Positioning strategies [Slide 8-10]
2.Needs products fill or benefits products offer. Marketers can position
62
B. Choosing and implementing a positioning strategy. The positioning task consists
C. Product differentiation [Slide 8-11]
1.Physical Attributes
3.Personnel
5.Image
D. Choosing the right competitive advantage
1.How many differences?
2.Which differences? [Slide 8-13]
E. Communicating and delivering the chosen position. Once having chosen
Answers to Discussion Questions
1. Explain the process of market segmentation, market targeting, and market
positioning.
Segmenting (or dividing) the general public into viable markets helps identify
63
2. Choose a hospitality business, for example, a hotel or restaurant. Explain some of
the segments in their overall market (in this case, the hotel market or restaurant
market), one of these markets that it targeted, and how it differentiated itself from
its competitors to position itself in the market.
3. Identify a restaurant or hotel market segment in your community that you feel
would be a good market segment to target. Explain the marketing mix you would
put together to go after this market segment.
This is another great in-class activity. For example, if a restaurant decided to target
students, some important elements of the marketing mix might be:
Product: quantity of food may be more important than quality
4. Some restaurateurs want to develop a restaurant with something for everyone. Why
is this idea a dangerous policy?
64
5. What roles do product attributes and perceptions of attributes play in the
positioning of a product? Can an attribute common to several competing brands
contribute to a successful positioning strategy?
Ask your students to think of shared attributes among competitors. Are these companies
still able to use this attribute to contribute to a successful positioning strategy? A good
6. Provide an example (other than one given in this chapter) of the use of SoLoMo
marketing by a hospitality company.
Again, this is a good in-class activity or an assignment. Increasingly, location-based