7. Customer Value-Driven Marketing Strategy: Creating Value for Target Customers

Question 1

Market segmentation

Answer 1

Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate marketing strategies or mixes.

Question 2

Market targeting (targeting)

Answer 2

Evaluating each market segment’s attractiveness and selecting one or more segments to serve.

Question 3

Differentiation

Answer 3

Actually differentiating the market offering to create superior customer value.

Question 4

Positioning

Answer 4

Arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

Question 5

Segmenting Consumer Markets (geographic, demographic, psychographic, behaviorial)

Answer 5

1. Geographic segmentation
2. Demographic segmentation
3. Psychographic segmentation
4. Behavioral segmentation

Question 6

Geographic segmentation

Answer 6

Dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods.

Question 7

Demographic (nhân khẩu học) segmentation

Answer 7

• age, life-cycle stage
• gender
• income
• occupation
• education
• religion
• ethnicity
• generation.

Question 8

Psychographic segmentation

Answer 8

1. lifestyle

2. personality characteristics.

Question 9

Behavioral segmentation

Answer 9

1. consumer knowledge
2. attitudes
3. uses of a product
4. responses to a product.

(Behavioral Segmentation:

1. Occasions
2. Benefits sought
3. User status
4. Usage rate
5. Loyalty status)

Question 10

Occasion segmentation

Answer 10

(Dividing the market into segments according to occasions) when buyers get the idea to buy, actually make their purchase, or use the purchased item.

Question 11

Benefit segmentation

Answer 11

(Dividing the market into segments according to the) different benefits that consumers seek from the product.

Question 12

using multiple segmentation bases to…

Answer 12

identify smaller, better-defined target groups

Question 13

Consumer and business marketers use many of the same variables to segment their markets. (T/F)

Answer 13

T

Question 14

business marketers also use some additional variables, such as…

Answer 14

1. customer operating characteristics,
2. purchasing approaches,
3. situational factors,
4. personal characteristics.

Question 15

Segmenting International Markets (4 factors)

Answer 15

1. Geographic location
2. Economic factors
3. Political and legal factors
4. Cultural factors

Question 16

intermarket (cross-market) segmentation

Answer 16

Forming segments of consumers who have similar needs and buying behaviors even though they are located in different countries.

Question 17

Requirements for Effective Segmentation (5) - MASDA

Answer 17

1. Measurable: The size, purchasing power, and profiles of the segments can be measured.
2. Accessible: The market segments can be effectively reached and served.
3. Substantial: The market segments are “large or profitable enough” to serve.
4. Differentiable: The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs.
5. Actionable: Effective “programs” can be designed for “attracting and serving the segments”.

Question 18

Evaluating Market Segments (3 factors)

Answer 18

1. Segment size and growth
   (The largest, fastest-growing segments are not always the most attractive ones for every company. Smaller companies may target segments that are smaller and less attractive, in an absolute sense, but that are potentially more profitable for them.)
2. Segment structural attractiveness
   (Structural factors that affect long-run segment attractiveness include strong and aggressive competitors, new entrants, substitute products, power of buyers relative to sellers, and powerful suppliers who can control prices, quality, or quantity of ordered goods and services.)
3. Company objectives and resources
   (Some attractive segments can be dismissed quickly because they do not mesh with the company’s long-run objectives. Or the company may lack the skills and resources needed to succeed in an attractive segment. A company should only enter segments in which it can create superior customer value and gain advantages over its competitors.)

Question 19

target market

Answer 19

A set of buyers who share common needs or characteristics that a company decides to serve.

Question 20

undifferentiated (mass) marketing

Answer 20

A market-coverage strategy in which a firm decides to

“ignore market segment differences” and go after the “whole market with one offer.”

Question 21

Differentiated (segmented) marketing

Answer 21

A market-coverage strategy in which a firm targets “several market segments” and designs separate offers for each.

Question 22

Concentrated (niche) marketing

Answer 22

A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches.

Question 23

Micromarketing

Answer 23

Tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments; it includes local marketing and individual marketing.

Question 24

Local marketing

Answer 24

Tailoring brands and promotion to the needs and wants of local customer segments.

• Cities
• Neighborhoods
• Stores

Question 25

individual marketing

Answer 25

Tailoring products and marketing programs to the needs and preferences of individual customers. Also known as: One-to-one marketing Mass customization

Question 26

Choosing a targeting strategy depends on (5) - CPPMC

Answer 26

1. Company resources 2. Product variability 3. Product life-cycle stage 4. Market variability 5. Competitor’s marketing strategies

Question 27

product position (important attributes)

Answer 27

The way a product is defined by consumers on important attributes—the place it occupies in consumers’ minds relative to competing products.

Question 28

Competitive advantage

Answer 28

An advantage over competitors gained by offering greater customer value either by having lower prices or providing more benefits that justify higher prices.

Question 29

Positioning maps show...

Answer 29

consumer perceptions of marketer’s brands versus competing products on important buying dimensions.

Question 30

Choosing a Differentiation and Positioning Strategy

Answer 30

1. Identifying Possible Value Differences and Competitive Advantages 2. Choosing the right competitive advantages 3. Selecting an overall positioning strategy 4. Communicating and delivering the chosen position to the market

Question 31

Identifying possible competitive advantages to differentiate... (5)

Answer 31

product, service, channel, people, image

Question 32

A competitive advantage should be/A difference is worth establishing to the extent that it satisfies the following criteria (7) - IDSCPAP

Answer 32

1. Important: The difference delivers a highly valued benefit to target buyers. 2. Distinctive: Competitors do not offer the difference, or the company can offer it in a more distinctive way. 3. Superior: The difference is superior to other ways that customers might obtain the same benefit. 4. Communicable: The difference is communicable and visible to buyers. 5. Preemptive: Competitors cannot easily copy the difference. 6. Affordable: Buyers can afford to pay for the difference. 7. Profitable: The company can introduce the difference profitably.

Question 33

Value proposition

Answer 33

The full positioning of a brand—the full mix of benefits on which it is positioned.

Question 34

More (benefit) for more (price)

Answer 34

This positioning involves providing the most upscale product or service and charging a higher price to cover the higher costs. Although more for more can be profitable, this strategy can also be vulnerable. It often invites imitators who claim the same quality but at a lower price.

Question 35

More (benefit) for the same (price)

Answer 35

Companies can attack a competitor’s more for more positioning by introducing a brand offering comparable quality at a lower price. For example, Toyota introduced its Lexus line with a more for the same value proposition versus Mercedes and BMW.

Question 36

The same (benefit) for less (price)

Answer 36

Offering the same for less can be a powerful value proposition—everyone likes a good deal. Discount stores such as Walmart and “category killers” such as Best Buy, PetSmart, David’s Bridal, and DSW Shoes use this positioning.

Question 37

Less for much less

Answer 37

A market almost always exists for products that offer less and therefore cost less. Few people need, want, or can afford “the very best” in everything they buy. In many cases, consumers will gladly settle for less than optimal performance or give up some of the bells and whistles in exchange for a lower price. For example, Family Dollar and Dollar General stores offer more affordable goods at very low prices.

Question 38

More for less

Answer 38

Of course, the winning value proposition would be to offer more for less. Many companies claim to do this. And, in the short run, some companies can actually achieve such lofty positions. For example, when it first opened for business, Home Depot had arguably the best product selection, the best service, and the lowest prices compared to local hardware stores and other home improvement chains. Offering more usually costs more, making it difficult to deliver on the “for less” promise in the long run.

Question 39

positioning statement

Answer 39

A statement that summarizes company or brand positioning using this form: To (target segment and need) our (brand) is (concept) that (point of difference). Evernote: “To (busy multitaskers who need help remembering things), (Evernote) is a (digital content management application) that (makes it easy to capture and remember moments and ideas from your everyday life using your computer, phone, tablet, and the web).”

Question 40

Communicating and Delivering the Chosen Position

Answer 40

- Choosing the positioning is often easier than implementing the position. - Establishing a position or changing one usually takes a long time. - Maintaining the position requires consistent performance and communication.