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Overview
1. What is customer value?
2. Customer relationships
LECTURE 2 - CREATING AND CAPTURING VALUE
CUSTOMER DRIVEN STRATEGY 2
Valerie A. Loubat
OVERVIEW
OUTCOMES Understand what customer
value represents
Identify levels of customer
relationships
Know about current trends
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Valerie A. Loubat
1. WHAT IS CUSTOMER VALUE?
DEFINITION “The customer’s evaluation of the
difference between all the benefits
and all the costs of a marketing
offer relative to those of competing
offers.” (Kotler 2009:37)
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Valerie A. Loubat
1. WHAT IS CUSTOMER VALUE?
CUSTOMER
SATISFACTION
Product or
Service’s
Perceived
Performance
Buyer’s
Expectations
=
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Valerie A. Loubat
2. CUSTOMER RELATIONSHIP
CUSTOMER
RELATIONSHIP
LEVELS
Basic relationship
Many low margin customers
Used tools: brand building advertising, sales promotions and web site networking
Full partnerships
Few customers and high margins
Used tools: account management/trade marketing
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Valerie A. Loubat
2. CUSTOMER RELATIONSHIP
CURRENT
TRENDS
Relating with more carefully selected customers
Relating more deeply and interactively
Partner Relationship Management Partners inside the company
Marketing partners outside the firm
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Valerie A. Loubat
2. CUSTOMER RELATIONSHIP
CAPTURING
VALUE FROM
CUSTOMERS
CUSTOMER
RELATIONSHIP
GROUPS
Butterflies
True
Friends
Strangers
Barnacles
Potential
Profit
Projected Loyalty
High
Low
Short Term Long Term
Source: Kotler 2009:48
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Valerie A. Loubat
1. Market Segmentation
2. Target Marketing
3. Market Positioning
STP PROCESS 9
Valerie A. Loubat
MARKET SEGMENTATION
Valerie A. Loubat
10
DEFINITION The identification of individuals or
organizations with similar characteristics
that have significant implications for the
determination of marketing strategy.
(Jobber, 2010)
MARKET SEGMENTATION - CRITERIA
Geographic segments
- Continents
- Nations…
Demographic segmentation
- Age
- Gender
- Income…
Psychographic segmentation
- Pioneers
- Protesters
- Romantics
- Stricts
- Citizens
- Gentries…
- VALS ™
- Value, Attitude, LifeStyle
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Valerie A. Loubat
MARKET SEGMENTATION
Valerie A. Loubat
12
TRANSNATIONAL
SEGMENTATION Demographic: sex, age, income level, social class and
educational achievement
Psychographic: lifestyle factors - activities, interests and opinions
Behavioral: patterns of consumption, loyalty to product
category and brand
needs benefits occasion usage
MARKET SEGMENTATION
Valerie A. Loubat
13
SEGMENTATION
IN PRACTICE
EURO MOSAIC
Claims to be the first pan-European
segmentation system
Allows the classification of 500
million consumers across the
European Union on the basis of the
types of neighbourhood in which
they live.
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MARKET SEGMENTATION PROCESS
Take marketing actions to reach target segments.
Select the product segments toward which the firm directs its marketing actions.
Develop a market/product grid to relate the market segments to the firm’s products and actions.
Find ways to group marketing actions - usually the products offered - available to the organization.
Find ways to group consumers according to their needs.
MARKET SEGMENTATION
Valerie A. Loubat
15
HIERARCHICAL
COUNTRY-
CUSTOMER
SEGMENTATION
STAGES
1. Identify countries with the infrastructure
to support the product and are
accessible to the company
2. From these, select countries that meet
certain qualifying criteria
3. Develop mini-segments; e.g.
information search behavior
product characteristics required
MARKET SEGMENTATION
Valerie A. Loubat
16
HIERARCHICAL
COUNTRY-
CUSTOMER
SEGMENTATION
STAGES
4. Look for similarities across segments to
identify characteristics of demand for each
segment. They can then be rated in terms of
potential response
5. Use Cluster Analysis to identify meaningful
cross-national segments which would evoke a
similar response to any marketing mix
strategy
TARGET MARKETING
Valerie A. Loubat
17
DEFINITION
The identification of a set of potential buyers
who share a common need or want or a
common set of characteristics that the
business decides to serve.
Following the segmentation of the market the
organization must decide which segments to
‘target’ ie to which customers it is going to
market its product/service.
TARGET MARKETING
Valerie A. Loubat
18
EVALUATING
MARKET
SEGMENTS
Market Factors (size, growth, bargaining
power of customers/suppliers, barriers to
entry/exist
Competitive Factors (Nature of
competition, New entrants, competitive
differentiation)
Company Objectives & Resources
Political, Social and Environmental Factors
TARGET MARKETING
Valerie A. Loubat
19
STRATEGIES
Undifferentiated (mass) marketing
Differentiated (segmented) marketing
Focused (niche) marketing
Customized (local / individual marketing)
TARGETING STRATEGIES 20
Concentration on one segment
Selective specialization
Product specialization
Market specialization
Full market coverage
Valerie A. Loubat
MARKET POSITIONING
Valerie A. Loubat
21
DEFINITION
Positioning is defined as:
“Arranging for a product to occupy a clear,
distinctive and desirable place relative to
competing products in the minds of target
consumers.”
(Kotler 2009: Glossary G7)
MARKET POSITIONING
Valerie A. Loubat
22
PRODUCT
POSITIONING
…is influencing how consumers perceive a brand’s characteristics relative to those of competitive offerings
Specific Positioning
positioning a brand based creating linkages between brand and key attributes and benefits.
Competitive Positioning
positioning a brand in relation to competitors.
Psychological Positioning
positioning a brand based upon dominant personality characteristic of target market.
MARKET POSITIONING
Valerie A. Loubat
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PERCEPTUAL
MAPPING
SMARTPHONES
CHINA
DEVELOPING A POSITIONING STRATEGY
Valerie A. Loubat
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The position
What position do we have
now?
What position do we want to
own?
From whom must we win
this position?
Do we have the money to do the
job?
Do we have the tenacity to stay with
it?
Does our creative strategy match it?
MARKET POSITIONING
Valerie A. Loubat
25
VALUE
PROPOSITIONS
Full positioning of brand = brand’s
value proposition
Potential value propositions include:
More for More
More for the Same
The Same for Less
Less for Much Less
More for Less
