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Chapter 8

Chapter 8 Notes

5 Pages

Management (MGM)
Course Code
Alison Jing Xu

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Chapter 8 Customer-Driven Marketing Strategy Creating Value for Target Customers Notes most companies have moved away from mass marketing and toward target marketingidentifying market segments, selecting one or more of them, and developing products and marketing programs tailored to each in the first two steps of customer-driven marketing strategy, the company selects the customers that it will serve market segmentation dividing a market into smaller groups of buyers with distinct needs, characteristics, or behaviours that might require separate marketing strategies or mixes the company identifies different ways to segment the market and develops profiles of the resulting market segments market targeting (targeting) evaluating each market segments attractiveness and selecting one or more segments to enter in the final two steps, the company decides on a value propositionhow it will create value for target customers differentiation actually differentiating the 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 customers; last step of the customer-driven marketing strategy Market Segmentation buyers in any market differ in their wants, resources, locations, buying attitudes, and buying practices through market segmentation, companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs Segmenting Consumer Markets a marketer has to try different segmentation variables, alone and in combination, to find the best way to view market structure Geographic Segmentation geographic segmentation dividing a market into different geographical units such as nations, regions, provinces, counties, cities, or even neighbourhoods; a company may decide to operate in one or a few geographical areas, or to operate in all areas but pay attention to geographical differences in needs and wants Demographic Segmentation demographic segmentation dividing 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 one reason is that consumer needs, wants, and usage rates often vary closely with demographic variables another is that demographic variables are easier to measure than most other types of variables even when marketers first define segments using other bases, such as benefits sought or behaviour, they must know segment demographic characteristics to assess the size of the target market and to reach it efficiently age and life-cycle segmentation dividing a market into different age and life-cycle groups marketers must be careful to guard against stereotypes when using age and life-cycle segmentation gender segmentation dividing a market into different groups based on gender a neglected gender segment can offer new opportunities in markets ranging from motorcycles to guitars income segmentation dividing a market into different income groups Psychographic Segmentation psychographic segmentation dividing market into diverse groups based on social class, lifestyle, or personality characteristics people in the same demographic group can have very different psychographic makeups Behavioural Segmentation behavioural segmentation dividing market into groups based on consumer knowledge, attitudes, uses, or responses to product many marketers believe that behaviour variables are the best starting point for building market segments occasion segmentation dividing the market into groups according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item; can help firms build up product usage benefit segmentation dividing the market into groups according to the different benefits that consumers seek from the product benefit segmentation requires finding the major benefits people look for in the product class, the kinds of people who look for each benefit, and the major brands that deliver each brand markets can be segmented into nonusers, ex-users, potential users, first-time users, and regular users of a product marketers want to reinforce and retain regular users, attract targeted nonusers, and reinvigorate relationships with ex-users markets can also be segmented into light, medium, and heavy product users heavy users are often a small percentage of the market but account for a high percentage of total consumption a market can also be segmented by consumer loyalty to brands, stores, and companies www.notesolution.com
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