Session 2: What did we learn?

Managing Marketing What are the

How do we generate different approaches What is consumer
Information to Gain Customer consumer insights? to consumer behavior?
Insights insights?

What’s happening in
Consumer Markets and Buyer What are the models
your mind that
How consumer
Behavior used in deciphering decision journey
makes you behave in
consumer behavior? works?
a certain way?

How can you use

Business Markets and Business consumer What are the models What are some
insights/market used in deciphering examples of B2B
Buyer Behavior research to map consumer behavior? buyer journeys?
consumer journeys?
Our Marketing Management Learning Journey
Session 1 Session 2 Session 3 Session 4
Marketing: Creating Customer Managing Marketing Customer Value–Driven Group assignment I presentations
Value and engagement Information to Gain Customer Marketing Strategy: Creating
Insights Value for target Customers
Company and Marketing
Strategy: partnering to Build Consumer Markets and Buyer Products, Services, and Brands:
Customer engagement, Value, Behavior Building Customer Value
and relationships
Business Markets and
Analyzing the Marketing Business Buyer Behavior
environment

Session 8 Session 7 Session 6 Session 5

Creating Competitive advantage Integrated Marketing Marketing Channels: Delivering
Communication Strategy Customer Value Developing New products and
The Global Marketplace Managing the product Life Cycle
Advertising and public relations Retailing and Wholesaling
Sustainable Marketing: Social Pricing: Understanding and
responsibility and ethics Personal Selling and Sales Capturing Customer Value
promotion
Pricing Strategies: additional
Direct, Online, Social Media, and Considerations
Mobile Marketing
Session 3

Customer Value–Driven Marketing Strategy: Creating Value for

target Customers

Products, Services, and Brands: Building Customer Value

Customer Value–Driven Marketing
Strategy: Creating Value for target
Customers

Session 3
How do we design a customer-
driven marketing strategy?

Customer Value–Driven Marketing Strategy: Creating Value for target

Customers
Customer-Driven Marketing Strategy
Figure 1.2 A Modern Marketing System
Market-Targeting Strategies
Figure 1.2 A Modern Marketing System
Choosing a Differentiation and Positioning Strategy
Figure 1.2 A Modern Marketing System
 How do we segment the most
profitable customers?

Customer Value–Driven Marketing Strategy: Creating Value for target

Customers
Customer Segmentation
Customer Segmentation is the subdivision of a market into discrete customer groups
that share similar characteristics.

Customer Segmentation can be a powerful means to identify unmet customer needs.

Companies that identify underserved segments can then outperform the competition
by developing uniquely appealing products and services.

In the auto market, some consumers demand speed and performance, while others are
much more concerned about roominess and safety.

In general, it holds true that “You can’t be all things to all people,” and experience has
demonstrated that firms that specialize in meeting the needs of one group of
consumers over another tend to be more profitable.
Customer Segmentation
Customer Segmentation is most effective when a company tailors offerings to segments that are the most profitable and
serves them with distinct competitive advantages.

This prioritization can help companies develop marketing campaigns and pricing strategies to extract maximum value from
both high- and low-profit customers.

A company can use Customer Segmentation as the principal basis for allocating resources to product development,
marketing, service and delivery programs.
Segmentation calls for some tough choices
There may be many variables that can be used to differentiate consumers of a given product category; yet, in practice, it
becomes impossibly cumbersome to work with more than a few at a time.

Thus, we need to determine which variables will be most useful in distinguishing different groups of consumers.

We might thus decide, for example, that the variables that are most relevant in separating different kinds of soft drink
consumers are

(1) preference for taste vs. low calories, (2) preference for Cola vs. non-cola taste, (3) price sensitivity—willingness to
pay for brand names; and (4) heavy vs. light consumers. We now put these variables together to arrive at various
combinations.
Several different kinds of variables
can be used for segmentation

Demographic variables essentially refer to personal

statistics such as income, gender, education, location (rural vs. urban, East vs.
West), ethnicity, and family size. Campbell’s soup, for instance, has found that
Western U.S. consumers on the average prefer spicier soups—thus, you get a
different product in the same cans at the East and West coasts. Facing flat sales of
guns in the traditional male dominated market, a manufacturer came out with the
Lady Remmington, a more compact, handier gun more attractive to women.
Taking this a step farther, it is also possible to segment on lifestyle and values.”

Some consumers want to be seen as similar to others, while a different segment

wants to stand apart from the crowd.
Another basis for
segmentation is behavior

Some consumers are “brand loyal”—i.e., they tend to stick with their
preferred brands even when a competing one is on sale.

Some consumers are “heavy” users while others are “light” users.

For example, research conducted by the wine industry shows that some 80%
of the product is consumed by 20% of the consumers—presumably a rather
intoxicated group.
One can also segment on
benefits sought
Essentially bypassing demographic explanatory variables.

Some consumers, for example, like scented soap (a segment likely to be attracted to brands such as Irish Spring), while
others prefer the “clean” feeling of unscented soap (the “Ivory” segment).

Some consumers use toothpaste primarily to promote oral health, while another segment is more interested in breath
freshening.
Customer Segmentation Effectiveness
Customer Segmentation is most effective when a company tailors offerings to segments that are the most profitable and
serves them with distinct competitive advantages.

This prioritization can help companies develop marketing campaigns and pricing strategies to extract maximum value from
both high- and low-profit customers.

A company can use Customer Segmentation as the principal basis for allocating resources to product development,
marketing, service and delivery programs.
 Once chosen, how would you
target these consumers?

Customer Value–Driven Marketing Strategy: Creating Value for target

Customers
Customer Targeting
Customer targeting is the business process that defines which customers to market to.

Choose specific demographics to target: Figure out not only who has a need for your product or service, but also who is
most likely to buy it. Think about the following factors: Age, Location, Gender, Income level, Education, Marital or family
status, Occupation, Ethnicity

Consider the psychographics of your target: Psychographics are the more personal characteristics of a person, including:
Personality, Attitudes, Values, Interests/hobbies, Lifestyles, Behavior

Evaluate your decision: Once you've decided on a target market, be sure to consider these questions:

Are there enough people who fit my criteria?

Will my target really benefit from my product/service? Will they see a need for it?
Do I understand what drives my target to make decisions?
Can they afford my product/service?
Can I reach them with my message? Are they easily accessible?
How do you position your brand in
the minds of the target customers?

Customer Value–Driven Marketing Strategy: Creating Value for target

Customers
Customer Positioning
The act of designing the company’s offer and image so that it occupies a distinct and valued place in the target customers’
minds

 Finding the proper “location” in the minds of consumers or market segment

 Allows consumers to think about a product or service in the “right”

perspective

 Good brand positioning helps to guide marketing strategy by clarifying what a

brand is all about, how it is unique and how it is similar to competitive brands,
and why consumers should purchase and use it’

 Brand position refers to ‘the standing of a brand in comparison with its

competitors in the minds of customers, prospects, and other stakeholders’
(Duncan, 2008: 75)
Challenging the bigwigs with great positioning

Vs.
Gillette has become one of the most recognized brands built on the pillars of professional and masculine razors.
Dollar Shave Club entered the market attacking Gillette on price.

The name alone shows that they are pushing consumers towards low cost.
– However, DSC also competes on quality.
– They further differentiated by creating messaging that is far from Gillete's professional advertisements – a
humorous take that has made the company a major player in the grooming industry.
https://www.youtube.com/watch?v=ZUG9qYTJMsI
Customer Segmentation, Targeting and Positioning
Customer Segmentation, Targeting and Positioning
Points-of-Difference
and Points-of-Parity
Points of difference:
Attributes/benefits that consumers strongly associate with a brand, positively evaluate, and believe they could not find to
the same extent with a competitive brand. But is it: Desirable, Deliverable, and Differentiating

Points of parity:
Attribute/benefit associations that are not necessarily unique to the brand but may in fact be shared with other brands.
These are: Category-related, correlational
Points-of-Difference
and Points-of-Parity
A category point of parity means that the brand offers necessary category features.
A bank will not be suitable, for example, unless it offers adequate ATM service.
At first, some German car manufacturers resisted adding cup holders, believing that car purists would not want such
distractions in their car. But this became a “must have” for many and they eventually had to add them.

A competitive point of parity is designed to negate a competitor’s point of difference. A common brand problem is when
the quality of the offering is not adequate in comparison to competition.
In the 90s, Hyundai made inferior quality cars. But even in 2000, after fixing their quality problem, people still shunned
the brand because of the bad quality perception. It took years, but through a variety of programs and communication
channels, Hyundai found ways to communicate their increased quality levels and gained quality parity. Their quality was
perceived to be good enough that attention could turn to points of difference such as price, styling, gas mileage and
warranty.
Points-of-Difference
and Points-of-Parity
Case in point: McDonalds
McDonald’s had a competitive parity problem when it began losing customers concerned with healthy eating.
They were vetoing the brand altogether.
So, they began to offer grilled chicken sandwiches, a variety of salads, fruit smoothies, a choice of apples in the kids’ Happy Meals, and
started making their signature fries with dramatically reduced “bad” fat.
The goal was not to make McDonalds a destination for the healthy-eating segment, but to create enough parity to reduce the number of
customers who wouldn’t even consider the brand.
Points-of-Difference
and Points-of-Parity
Case in point: McDonalds
They then ran into another competitive parity problem.
The success of Starbucks was a serious threat to their breakfast and other off-hours business. But it was also an opportunity. The advent of
McCafé in 2007, with a line that included cappuccinos and lattés, changed the competitive landscape. McDonald’s was not aspiring to be
better than Starbucks; the goal was to be close enough to the Starbucks experience to create a point of parity with respect to quality.
The result was that a segment of the Starbucks base started to include McDonald’s in their consideration set.
Points-of-Difference
and Points-of-Parity
Consider whether your brand lacks a point of parity on key dimensions. Unless parity is achieved, the most compelling
point of difference will not win.

“80 percent of success is just showing up.”

Without points of parity, your brand will not be showing up. It will not be seen as relevant, and it will not be considered.
So, in order to maintain points of parity and
difference, how would you monitor competition
 Market Share = Firm’s Sales / Total Market Sales. 

 Mind share is calculated by the percentage of consumers who identified the

competitor when responding to a question asking them to name the first
company they think of when thinking of a specific industry. 

 Heart share is calculated by the percentage of consumers who identified the

competitor when responding to a question asking them to name a company
from whom they would prefer to buy a product. 

REAL IMPACT

MAY IMPACT – CAN BE CONSIDERED IN FUTURE

 How to write
a positioning statement?

Customer Value–Driven Marketing Strategy: Creating Value for target

Customers
7-Step Brand Positioning Strategy Process

In order to create a position strategy, you must first identify your brand’s uniqueness and determine what differentiates you
from your competition.

There are 7 key steps to effectively clarify your positioning in the marketplace:

1. Determine how your brand is currently positioning itself

2. Identify your direct competitors
3. Understand how each competitor is positioning their brand
4. Compare your positioning to your competitors to identify your uniqueness
5. Develop a distinct and value-based positioning idea
6. Craft a brand positioning statement

There are four essential elements of a best-in-class positioning statement:

Target Customer:
What is a concise summary of the attitudinal and demographic description of the target group of customers your
brand is attempting to appeal to and attract?
Market Definition:
What category is your brand competing in and in what context does your brand have relevance to your customers?
Brand Promise:
What is the most compelling (emotional/rational) benefit to your target customers that your brand can own relative to
your competition?
Reason to Believe:
What is the most compelling evidence that your brand delivers on its brand promise?
For [target customers],
[company name] is the [market definition] that
delivers [brand promise]
because only [company name]
is [reason to believe].
Amazon.com used the following positioning statement in 2001
(when it almost exclusively sold books):

For World Wide Web users who enjoy books,

Amazon.com is the retail bookseller that provides instant access to
over 1.1 million books.
Unlike traditional book retailers, Amazon.com provides a
combination of extraordinary convenience, low prices, and
comprehensive selection.
For Anyone just about anywhere with a credit card and
smartphone who needs a local ride,

UBER is the Next-generation taxi service that provides a simpler,

more convenient and higher quality transportation experience
than conventional taxis.

Because, only UBER makes hailing and paying for a ride easy,
convenient and reliable and our personal vehicles feel less
commercial/industrial.
7. Test the efficacy of your brand
positioning statement (15 criteria)
1. Does it differentiate your brand?
2. Does it match customer perceptions of your brand?
3. Does it enable growth?
4. Does it identify your brand’s unique value to your customers?
5. Does it produce a clear picture in your mind that’s different from your competitors?
6. Is it focused on your core customers?
7. Is it memorable and motivating?
8. Is it consistent in all areas of your business?
9. Is it easy to understand?
10. Is it difficult to copy?
11. Is It positioned for long-term success?
12. Is your brand promise believable and credible?
13. Can your brand own it?
14. Will it withstand counterattacks from your competitors?
15. Will it help you make more effective marketing and branding decisions?
Products, Services, and Brands:
Building Customer Value

Session 3
How do we build strong brands?

Products, Services, and Brands: Building Customer Value

https://youtu.be/TOcoPof2Sxk
https://youtu.be/Rrrsm3zfb8A
Needscope understands the drivers

Figure 1.2 A Modern Marketing System

Using a database of 5,000+ brands, Needscope has identified 8 drivers of irresistible brands.

All are important but at the heart is Emotion. This also links to Symbolism, Nexus, Differentiation etc .
Mapping consumer needs with brand image
• It recognises the layers of needs and brand image with emotion at the core.
• Unravelling the relationship ensures you manage every layer of the brand to
meet real needs.
CONSUMER NEEDS

Outer layer Functional

Product and service features satisfy our functional
needs. Identity

Middle layer
Emotive
The social values of a brand let consumers identify
with particular groups in society. Symbology

Inner layer Social

values
Consumers aren’t conscious of their emotive needs,
Product
satisfied by the brand’s symbology. features

BRAND IMAGE
NeedScope navigates emotion
Two human dimensions underlie the NeedScope model. They apply across different
categories, geographies and cultures.
Universal dynamics: Six core needs:
 The vertical divides the model into  We define six core emotive needs that
extroverted and introverted needs are instinctual and universal
 From left to right is the need to belong
vs the need to stand out
There are different sides to emotion
Research in a category reveals if gratification or expressive needs are stronger.
This guides how you build emotion into your brand.
Gratification markets : Expressive markets :
 In gratification markets brands help  In other categories, brands help
change a mood or feeling consumers express a personality
aspiration
Colour is a powerful symbolic cue
Yellow Red
YELLOW is the colour of the sun, bright and RED is the colour of fire and blood, life’s primal
uplifting. It symbolises hope, fun and optimism forces. RED is associated with energy, war,
like sunshine on a spring day. danger, strength, passion and desire.

Orange Purple
ORANGE combines the energy of yellow PURPLE is special, rarely seen in nature, and
with the stability of brown. It glows like difficult to create. PURPLE has always
the harvest sunshine, symbolising signified nobility and power – the colour of
genuine warmth and happiness. royalty, luxury and privilege.

Brown Blue
BROWN is the colour of earth, wood and stone – BLUE is the colour of the ocean – cool and
natural, solid and real. It symbolises stability, entrancing, with hidden depths. This colour
support, comfort and wholesome nature. symbolises strength, serenity, loyalty and
authority.
We can find the needstates all around us
Needscope Examples: Stories/Movies with emotion
Needscope Examples: Food with emotion
Needscope Examples: Sports with emotion
Needscope Examples: Brand logos evoking the right emotion
Needscope Examples: Packaging strong symbolic cues
Needscope Examples: Communication using emotion
32
Needscope: The model changes by category

NeedScope qualitative reveals how the needs are expressed in your category. Quantitative defines and measures their
exact nature. Measurement can define more or less than six needstates.

Female fragrance: Pharmaceutical:

 Female fragrance choices are driven by  Pharmaceutical brand choice is driven
what type of woman you want to be by the consumer relationship with illness
Needscope: Consumers move around the model

As moods, situations and aspirations change so do emotive needs. Across markets, and even within a market, consumers
can have different needs.

Different needs in different categories: Different needs in one category:

 Because consumers have many sides to  Even within a category, one consumer can
their personalities they move between have many different needs satisfied by
categories as their emotive needs change different brands, as these beverage needs
show
Needscope: Each needstate has many dimensions

A category study will reveal

the unique subdimensions
within your category.
Understanding these will
help you carve out a unique
territory.
Session 3: Our readings
Case study: Brand Singapore: Capturing the Spirit of a Nation by Srinivas K. Reddy and CW Chan
https://store.hbr.org/product/brand-singapore-capturing-the-spirit-of-a-nation/smu060?sku=SMU060-
PDF-ENG

How do strong brands lose their equity? Watch: How Mercedes-Benz Is Losing Its Prestige Image
https://youtu.be/mErdVnlmERM

To understand disruptive new product development mindset – Watch: The Tesla Bot: Explained!
https://youtu.be/Wk1oClYJE58

A new way to categorize and launch services - Watch The Airbnb 2022 Summer Release: A new
Airbnb for a new world of travel | Airbnb
https://youtu.be/doczmXmQcP4
Session 3: What did we learn?

Customer Value–Driven How do we design How do we

a customer-driven segment the most
Marketing Strategy: marketing profitable
Creating Value for target strategy? customers?
Customers
How do you
Once chosen, how position your
would you target brand in the minds
Products, Services, and these consumers? of the target
customers?
Brands: Building
Customer Value How to write a
How do we build
positioning
strong brands?
statement?
Our Marketing Management Learning Journey
Session 1 Session 2 Session 3 Session 4
Marketing: Creating Customer Managing Marketing Customer Value–Driven Group assignment I presentations
Value and engagement Information to Gain Customer Marketing Strategy: Creating
Insights Value for target Customers
Company and Marketing
Strategy: partnering to Build Consumer Markets and Buyer Products, Services, and Brands:
Customer engagement, Value, Behavior Building Customer Value
and relationships
Business Markets and
Analyzing the Marketing Business Buyer Behavior
environment

Session 8 Session 7 Session 6 Session 5

Creating Competitive advantage Integrated Marketing Marketing Channels: Delivering
Communication Strategy Customer Value Developing New products and
The Global Marketplace Managing the product Life Cycle
Advertising and public relations Retailing and Wholesaling
Sustainable Marketing: Social Pricing: Understanding and
responsibility and ethics Personal Selling and Sales Capturing Customer Value
promotion
Pricing Strategies: additional
Direct, Online, Social Media, and Considerations
Mobile Marketing