Part 3: Designing a Customer Value-Driven Strategy and Mix (Chapters 717)

7 Customer Value–Driven Marketing Strategy: Creating Value for Target Customers

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So far, you’ve learned what marketing is and about the importance of understanding consumers and the marketplace. With that as a background, we now delve deeper into marketing strategy and tactics. This chapterlooks further into key customer value–driven marketing strategy decisions—dividing up markets into meaningful customer groups (segmentation), choosing which customer groups to serve (targeting), creating market offerings that best serve targeted customers (differentiation), and positioning the offerings in the minds of consumers (positioning). The chapters that follow explore the tactical marketing tools—the four Ps—by which marketers bring these strategies to life.

To open our discussion of segmentation, targeting, differentiation, and positioning, let’s look at Dunkin’ Donuts. Dunkin’ has expanded rapidly in recent years into a national powerhouse, on par with Starbucks. But Dunkin’ is no Starbucks. In fact, it doesn’t want to be. It targets a very different kind of customer with a very different value proposition. Grab yourself a cup of coffee and read on.

Photo shows a Dunkin Donuts cup along with a paper bag.

Dunkin’ Donuts targets everyday Joes who just don’t get what Starbucks is all about. Its targeting and positioning are pretty well summed up in its long-running ad slogan “America Runs on Dunkin’.”

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Objectives Outline

  1. Objective 7-1 Define the major steps in designing a customer value–driven marketing strategy: market segmentation, targeting, differentiation, and positioning.

  2. Objective 7-2 List and discuss the major bases for segmenting consumer and business markets.

  3. Objective 7-3 Explain how companies identify attractive market segments and choose a market-targeting strategy.

  4. Objective 7-4 Discuss how companies differentiate and position their products for maximum competitive advantage.

COMPANIES TODAY RECOGNIZE THAT they cannot appeal to all buyers in the marketplace—or at least not to all buyers in the same way. Buyers are too numerous, widely scattered, and varied in their needs and buying practices. Moreover, companies themselves vary widely in their abilities to serve different market segments. Instead, like Dunkin’ Donuts, companies must identify the parts of the market they can serve best and most profitably. They must design customer-driven marketing strategies that build the right relationships with the right customers. Thus, most companies have moved away from mass marketing and toward target marketing: identifying market segments, selecting one or more of them, and developing products and marketing programs tailored to each.

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