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Marketing Chapter 7

Chapter Seven discusses customer-driven marketing strategies, emphasizing the importance of market segmentation to effectively reach target customers. It outlines the requirements for effective segmentation, such as measurability and accessibility, and evaluates market segments based on size, growth, and structural attractiveness. The chapter also explores various targeting strategies, including undifferentiated, differentiated, concentrated, and micromarketing, and factors influencing the choice of strategy.

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35 views10 pages

Marketing Chapter 7

Chapter Seven discusses customer-driven marketing strategies, emphasizing the importance of market segmentation to effectively reach target customers. It outlines the requirements for effective segmentation, such as measurability and accessibility, and evaluates market segments based on size, growth, and structural attractiveness. The chapter also explores various targeting strategies, including undifferentiated, differentiated, concentrated, and micromarketing, and factors influencing the choice of strategy.

Uploaded by

2254012288thu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd

Chapter Seven

Customer-Driven Marketing
Strategy: Creating Value for Target
Customers

Copyright © 2009 Pearson Education, Inc.


Chapter 7- slide 1
Publishing as Prentice Hall
Market Segmentation
The process that companies use to divide large, heterogeneous markets into small markets
that can be reached more efficiently and effectively with products and services that
match their unique needs
Requirements for Effective
Segmentation
To be useful, market segments must be:
• 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. A segment should be the largest possible
homogeneous group worth pursuing with a tailored marketing
program.
• 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
• Target market consists of a set of buyers who share common
needs or characteristics that the company decides to serve

Evaluating Market Segments

1. Segment size and growth: The company must first collect


and analyze data on current segment sales, growth rates, and
the expected profitability for various segments.
2. Segment structural attractiveness: strong & aggressive
competitors, actual or potential substitute products, power of
buyers, powerful suppliers
3. Company objectives and resources
Target Marketing Strategies

Undifferentiated marketing…
– Mass marketing; targets the whole market with one offer
– Focuses on common needs rather than what’s different

Differentiated marketing…
-- Goal is to achieve higher sales and stronger position
-- More expensive than undifferentiated marketing
• Concentrated marketing targets a small share of a
large market
o Limited company resources
o Knowledge of the market
o More effective and efficient

Micromarketing is the practice of tailoring products and


marketing programs to suit the tastes of specific
individuals and locations
o Local marketing
o Individual marketing
Choosing a Targeting Strategy
Depends on:
Company resources; When the firm’s resources are limited, concentrated
marketing makes the most sense.
Product variability; Undifferentiated marketing is more suited for uniform
products
Product life-cycle stage; When a firm introduces a new product, it may be
practical to launch one version only, and undifferentiated marketing or
concentrated marketing may make the most sense. In the mature stage of the
product life cycle (PLC), however, differentiated marketing often makes more
sense.
Market variability; If most buyers have the same tastes, buy the same
amounts, and react the same way to marketing efforts, undifferentiated
marketing is appropriate.
Competitor’s marketing strategies; When competitors use differentiated or
concentrated marketing, undifferentiated marketing can be suicidal.
Conversely, when competitors use undifferentiated marketing, a firm can gain
an advantage by using differentiated or concentrated marketing, focusing on
the needs of buyers in specific segments.

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