Mark Unsw Notes Chapter 5

Chapter 6 – Customer-Driven Marketing Strategy: Creating Value for Target Customers

Customer-driven marketing strategy

* Move away from mass marketing and towards target marketing

* Identifying market segments, selecting one or more, and developing products and marketing programs tailored to each

* Four main steps in customer driven marketing strategy

* Market segmentation involves dividing a market into smaller segments of buyers with distinct needs, characteristics or behaviours that might require separate marketing strategies or mixes

* Market targeting is evaluating each market segment’s attractiveness and selecting one or more market segments to enter

* Differentiation is 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

Market segmentation

Segmenting consumer markets

* Geographic segmentation

* Dividing the market into different geographical units such as nations, regions, states, counties cities or neighbourhoods

* Localisation of products

* Demographic segmentation

* Dividing the market into segments based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation and nationality

* Most popular bases for segmenting customer groups

* Needs want and usage rates vary closely with demographic variables

* Easy to measure

* Age and life-cycle stage

* Careful to guard against stereotypes

* Gender

* A neglected gender segment can offer new opportunities in markets

* Income segmentation

* Target affluent customers

* Conspicuous consumption

* Psychographic segmentation

* Divide byers into different segments based on social class, lifestyle or personality...