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MGMA01H3 (184)
Chapter 8

Week 6 - Chapter 8

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University of Toronto Scarborough
Management (MGM)
Alison Jing Xu

1 P a g e M G T B 0 4 W e e k 6 Chapter 8 Customer-Driven Marketing Strategy: Creating Value for Target Customers (pg. 240 267) - Since companies cannot appeal to all buyers in the marketplace, they must design customer- driven marketing strategies that build the right relationships with the right customers - Most companies are moving away from mass marketing and toward target marketing which is identifying market segments and developing products and marketing programs tailored to each :8L3J7L1O0,5574,.K>9,7J09L3J(7,9K079K,38K49J:3,5574,.K>8.,9907L3J0114798( - There are four major steps in designing a customer-driven marketing strategy: - Selects the customers that it will serve o Market segmentation involves dividing a market into smaller groups with distinct needs, characteristics, or behaviours that might require separate marketing strategies o Market targeting (or targeting .438L898410;,O:,9L3J0,.K2,7N0980J20398 attractiveness and selecting one or more segments to enter - Decide on a value proposition (how to create value for target customers) o Differentiation L3;4O;08,.9:,OOL1107039L,9L3J9K01L7282,7N0941107L3J94.70,90 superior customer value o 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 customers Market Segmentation - Through market segmentation, companies can divide large markets into smaller segments that can be reached more efficiently and effectively with productsservices that match their needs - There are four important segmentation topics: segmenting consumer markets, business markets, international markets, and requirements for effective segmentation Segmenting Consumer Markets - There are many ways to segment a market and a marketer has to try different segmentation variable, alone and in combination for the best way to view the market structure: - Geographic Segmentation o Geographic segmentation is dividing a market into different geographical units such as nations, regions, provinces, countries, cities, or neighbourhoods o Many companies are localizing their products, advertising, promotion, and sales efforts to fit the needs of individual areas o E.g. video game companies create different versions of their games depending on the world region in which the game is sold o As well, some companies are fleeing the fiercely competitive major cities and suburbs and seeking to tap into smaller towns - Demographic Segmentation o 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 o Demographic factors are the most popular bases for segmenting customer groups since consumer needs, wants, and usage rates often vary closely with demographic and it is also an easier measure than most other types of variables Age and Life-Cycle Stage N Age and life-cycle segmentation divides a market into different age and life-cycle groups www.notesolution.com
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