Kotlerchapter7-2025 2.pptx marketing ppt

Principles of Marketing
Eighteenth Edition, Global Edition
Chapter 7
Customer Value-Driven Marketing
Strategy: Creating Value for Target
Customers
Copyright © 2021 Pearson Education Ltd.

HENKEL’S PERSIL IN SAUDI ARABIA
LOCAL AND REGIONAL MARKETING
STRATEGY
• Market Research
• Men-wear thobes, whiteness and
fabric firmness is important, they
wash with bleach &detergent, but
the product get ruined in the long
run
Persil White & Persil Starch Spray
• Women-wear abaya; fabric care and
blackness is important
Persil Abaya Shampoo
Results: sales 90 % above forecast

UNILEVER RINSO IN TURKEY
• Market Research
• 444mEuro market (detergents), 92% market penetration when compared to 45% deodorant market
• Flagship brand Omo fights with Ariel for market leadership
• Low brand loyalty, sensitivity to price promotions
• What are the customer expectations?
Good fragnance (42%), stain removal (41%, down from 80%), easy& fast wash (36%), fabric care (16.4%), low cost per wash (21%), whiteness (13.25%)
• What do consumers wash?
Dark colors (44%), White (9%), colors (25%), light colors (17%)
Overall, people expect
Nice fragnance
Stain removal
Low prices
Color protection& Fabric Care
Whiteness is no longer a need, consumption society and low prices makes it easy to buy 3 T-shirts at once
In the market,
Whiteness &stain removal – OMO
Fragnance- RINSO

POSITIONING OF RINSO
• Heavy Duty: Stain Removal & Whitening
• Light Duty: Fast Wash, Fabric Care &Nice Fragnance (promising
market)
Kusursuz Siyahlar Capcanlı Renkler Narin Bakım

COMPETITOR: PERWOLL

Customer-Driven Marketing Strategy

Market Segmentation (1 of 14)
Market segmentation requires dividing a market into smaller
segments with distinct needs, characteristics, or behaviors
that might require separate marketing strategies or mixes.

• Segmenting consumer markets
• Segmenting business markets
• Segmenting international markets
• Requirements for effective segmentation

Segmenting Consumer Markets
• Geographic segmentation
• Demographic segmentation
• Psychographic segmentation
• Behavioral segmentation

Geographic segmentation divides the market into different
geographical units such as nations, regions, states,
counties, cities, or even neighborhoods.

P&G INTERNATIONAL TARGET MARKETS
• Asia: Strengthening Thin, Brittle Hair
• Hair Concern: In humid climates, hair tends to
become thin, brittle, and prone to breakage due to
moisture and frizz.
• Product Solution: Pantene developed formulas
enriched with Pro-Vitamin B5 and Keratin Repair
System to strengthen the hair shaft and reduce
breakage caused by environmental stressors like
humidity.
• Example Products:
• Pantene Pro-V Total Damage Care.
• Pantene Pro-V Smooth & Silky.
• Marketing Angle: "Stronger Hair with Every Wash"
and "Frizz-free Hair, Even in Humid Weather."

Demographic segmentation divides the market into
segments based on variables such as age, life-cycle stage,
gender, income, occupation, education, religion, ethnicity,
and generation.

Age and life-cycle stage segmentation divides a market
into different age and life-cycle groups.
Gender segmentation divides a market into different
segments based on gender.
Income segmentation divides a market into different
income segments.

AGE & LIFE-CYCLE STAGE
SEGMENTATION
• Focuses on the stage of life, such as single, married, parents, or retirees.
• Example: Baby product brands like Pampers target new parents, while cruise
lines target retirees.

GENDER SEGMENTATION
• Gender segmentation divides
the market based on the
needs, preferences, and
behaviors of different genders
(e.g., men, women, and non-
binary individuals). It enables
companies to tailor products,
services, and marketing
messages to specific gender
groups.
Clothing and Fashion
•Women:
• Brands: Victoria's Secret, Zara
Women, ASOS Women.
• Products: Dresses, high heels,
handbags, tailored for trends and
style.
•Men:
• Brands: Hugo Boss, Levi’s Men,
Nike Men.
• Products: Suits, sportswear,
functional designs with a focus on
durability.
•Non-Binary/Unisex:
• Brands: Uniqlo, Patagonia.
• Products: Neutral designs that
appeal to all genders.

INCOME SEGMENTATION
• L’Oréal Group
• Low-Income Segment: Garnier
• Affordable skincare and haircare
products targeting price-sensitive
consumers.
• Middle-Income Segment: L’Oréal
Paris
• Offers premium but accessible
beauty and personal care
products for middle-income
consumers.
• High-Income Segment: Lancôme
• High-end cosmetics and
skincare designed for wealthy
customers seeking luxury and
exclusivity.

Psychographic segmentation divides a market into different segments
based on social class, lifestyle, or personality characteristics.

NIKE’S TARGET MARKETS
Segment 1: Athletes: High-Performance Footwear with
Cutting-Edge Technology
Target Segment: Professional and amateur athletes
seeking advanced performance gear.
Product Example: Nike ZoomX Vaporfly Next%:
Designed for marathon runners to improve endurance and
speed.
Segment 2: 2. Fashion-Focused: Stylish Lifestyle
Sneakers
Target Segment: Youth and trend-conscious consumers
who prioritize style over performance.
Product Example: Air Jordan Retro Line, Nike Air Force
1, limited-edition releases and collaborations with
designers (e.g., Off-White, Travis Scott)
Segment 3: Women-Specific: Inclusivity and
Practicality
Target Segment: Women athletes, including those in
Muslim-majority markets.
Products: Nike Pro Hijab, Nike Yoga Collection

Segmenting Consumer
Markets
Behavioral Segmentation
• Occasions
• Benefits sought
• User status
• Usage rate
• Loyalty status
Benefit segmentation: Schwinn
makes bikes for every benefit
segment. For example, its e-
bikes “help make the morning
commute or ride around town a
little bit easier.”
Behavioral segmentation divides a market into segments
based on consumer knowledge, attitudes, uses of a product,
or responses to a product.

OCCASIONS

OCCASIONS-Starbucks for Christmas
Pumpkin Spice Latte

USER STATUS
Non-users
Ex-users
Potential users
First-time
users
Regular users

NON-USER SEGMENTATION
JITTERBURG
Smartphone Adoption by Seniors - Jitterbug
•Challenge: Many seniors resisted adopting smartphones,
perceiving them as too complex or unnecessary.
•Strategy:
• Simplified Features:large buttons, simplified menus,
and voice-assisted navigation tailored to seniors.
• Education and Support: Offered free tech support
and setup services to guide seniors through the
adoption process.
• Incentives:Bundled the phones with affordable, no-
contract plans to remove financial barriers.
•Result: Jitterbug saw a surge in adoption among resistant
non-users, becoming one of the leading smartphone brands
for seniors in the U.S.

SPOTIFY’S RE-ENGAGEMENT of EX-USERS
•Challenge: Spotify identified that many users canceled their subscriptions or
stopped using the platform, often due to cost concerns, lack of perceived value, or
switching to competitors like Apple Music or YouTube Music.
1. Understand Why They Left (surveys and data analysis)
• Price sensitivity.
• Preference for competitors.
• Lack of engaging content or dissatisfaction with recommendations.
2. Personalized Offers to Re-Engage
•Discount Campaigns: promotional offers like “3 months of Premium for $9.99” to
lower the cost barrier for ex-users.
•Exclusive Features: unique features like curated playlists (e.g., Discover
Weekly), podcasts, and offline downloads.
•Free Access with Upselling: a free tier with ads to keep users within the Spotify
ecosystem and upsell them later.
3. Improved User Experience
•Improved algorithms to offer better music recommendations, addressing
complaints about playlist irrelevance.
•Added podcasts and audiobook options to diversify content and appeal to ex-
users who sought more variety.
4. Email Marketing and Retargeting
•Sent personalized emails to ex-users, highlighting new features and
improvements since they left.
•Used retargeting ads to remind ex-users of the benefits of returning to Spotify.

Airbnb’s TARGETING OF POTENTIAL
CUSTOMERS
•
Target Group: Travelers who have never used Airbnb, often loyal to
hotels.
•
Strategy:
•
Education on Benefits:
•
Highlighted advantages of staying in local homes for authentic travel
experiences through advertising campaigns like "Live There."
•
Incentives:
•
Offered first-time user discounts to encourage trial.
•
Partnerships:
•
Partnered with airlines and travel agencies to reach traditional hotel
users.
•
Social Proof:
•
Showcased reviews and testimonials from satisfied customers to build
trust.
•
Result: Airbnb attracted millions of new users and grew its market
share significantly in both urban and rural travel sectors.

REGULAR USERS
•
Regular users are individuals who actively
and consistently use a product or service.
Segmenting regular users helps companies
understand their behavior, preferences, and
value to the business. This allows brands to
tailor their marketing strategies to enhance
user retention, satisfaction, and lifetime value
•
Airlines segment frequent travelers into
economy, business, and first-class flyers
based on ticket purchases.
•
Netflix segments users who primarily watch
movies, series, or kids' content and
recommends content tailored to their viewing
habits.
•
Spotify segments daily users (music
streamers) from occasional users (podcast
listeners).

LOYALTY STATUS
LOYAL APPLE CONSUMERS 
Loyalty status segmentation involves dividing users based on their
level of commitment or loyalty to a brand. This segmentation helps
businesses identify their most loyal customers, occasional buyers,
and those at risk of switching to competitors. By understanding these
groups, companies can design targeted retention and reward
strategies.

THY LOYALTY PROGRAM
Turkish Airlines (THY) operates its Miles&Smiles loyalty program to
segment and reward its customers based on their travel frequency,
spending, and loyalty.
How THY Targets Segments with Miles&Smiles:
1.Occasional Flyers (Classic Members):
1. Promotions for discounted tickets and bonus miles to encourage
future bookings.
2. Email reminders about how close they are to the next tier.
2.Frequent Flyers (Classic Plus and Elite):
1. Offers for exclusive experiences (e.g., discounts on business
class upgrades).
2. Access to premium services like priority check-in and lounges to
enhance satisfaction.
3.Top-Tier Customers (Elite Plus):
1. Personal relationship management with dedicated customer
service.
2. Invitations to VIP events, such as Turkish Airlines-sponsored
sports or cultural events.

BENEFITS SOUGHT
•Benefit Sought: Skin Moisturization
• Example: NIVEA offers creams and
lotions designed specifically for dry skin,
emphasizing long-lasting hydration.
•Benefit Sought: Anti-Aging
• Example: Olay’s Regenerist line targets
consumers seeking to reduce wrinkles
and improve skin elasticity.

BENEFITS SOUGHT

Segmenting International Markets
• Geographic location
• Economic factors
• Political and legal factors
• Cultural factors

• Coca-Cola adapts its products to suit
regional tastes.
• Japan: Launched Coca-Cola Plus,
a fiber-enriched soda targeting
health-conscious consumers.
• India: Introduced Thums Up, a
stronger cola flavor (hint of spice
or tang in the aftertaste) tailored
to local preferences.
• Results: Thums Up became the best-
selling soft drink in India, capturing
more than 40% market share in the cola
category.
COCA COLA MARKETING IN JAPAN
AND INDIA

Segmenting International Markets
Intermarket segmentation involves forming segments of
consumers who have similar needs and buying behaviors
even though they are located in different countries.

Requirements for Effective Segmentation
Measurable:
• The size, purchasing power, and characteristics of the segment can be quantified
and assessed.
Accessible:
• The segment can be effectively reached and served through communication and
distribution channels.
Substantial:
• The segment is large and profitable enough to justify targeted marketing efforts.
Differentiable:
• The segments are distinct in terms of needs, preferences, or behavior, and
respond differently to marketing strategies.
Actionable:
• The organization can design practical and effective marketing programs to attract
and serve the segment.

Market Targeting (1 of 10)
Evaluating Market Segments
Segment Size and Growth:
• Assess whether the segment is large enough and growing at a rate that
makes it worth targeting. Consider current sales, potential growth rates,
and future profitability.
Segment Structural Attractiveness:
• Evaluate factors such as competition, substitute products, power of
buyers and suppliers, and barriers to entry. Attractive segments have
fewer competitive pressures and higher profit potential.
Company Objectives and Resources:
• Determine if the segment aligns with the company’s goals and whether
the organization has the resources (financial, technological, or human)
to effectively serve the segment.

Selecting Target Market
Segments
A target market is a set of
buyers who share common
needs or characteristics that the
company decides to serve.

Figure 7.2 Market-Targeting Strategies

Selecting Target Market Segments
Undifferentiated marketing targets the whole market with
one offer.
• Mass marketing
• Focuses on common needs rather than what’s different

UNDIFFERENTIATED MARKETING

Target Markets
Market Offerings
A
B
C
1
2
3
4
5
Örn: Zara
DIFFERENTIATED MARKETING

Differentiated marketing targets several
different market segments and designs
separate offers for each.
• Goal is to achieve higher sales and
stronger position
• More expensive than undifferentiated
marketing
• Differentiated marketing: With more
than 30 differentiated hotel brands,
Marriott International dominates the
hotel industry, capturing a much larger
share of the travel and hospitality
market than it could with any single
brand alone.

DIFFERENTIATED MARKETING

PINAR SÜT

ALIBABA-ELDERLY POPULATION
The online retail company Taobao, owned by
Alibaba, shifted its focus to China's rapidly
growing elderly population.
By 2020, people over the age of 60 are expected
to account for one-fifth of the country's total
population. The Chinese company Taobao has
also released a special application that can be
easily used by elder users to access this
naturally growing consumer base. Elderly users'
accounts can be linked directly to their children's
accounts and Pay for Me option allows their
children to pay for their purchases.
APPLE GRANDPAD

SPOTIFY
Spotify enhances the Family pack
experience with Spotify Kids, a brand new
app developed specifically for the next
generation of audio enthusiasts. All content
consists of records carefully prepared by
experienced Spotify editors and their main
priorities are to ensure that all existing
content is suitable for children, parents can
choose between “Audio for Younger Kids”
or “Audio for Older Kids”, which they think
would be best suited for their children.

INDITEX GROUP

Selecting Target Markets
Concentrated marketing targets a
large share of a smaller market.
• Limited company resources
• Knowledge of the market
• More effective and efficient
Concentrated marketing: Fila owes
its resurgence not only to the retro
wave but the brand’s ability to
create a narrative about its
products.

CONCENTRATED/ NICHE
MARKETING

Micromarketing is the practice of tailoring products and
marketing programs to suit the tastes of specific individuals
and locations.
• Local marketing
• Individual marketing

Local Marketing
Local marketing involves tailoring brands and promotion to
the needs and wants of local customer segments.
1. Cities:
1. Starbucks "City Mugs" Collection:
1. Starbucks creates city-specific merchandise, like mugs and tumblers featuring
iconic landmarks or cultural elements of that city.
2. Example: A New York City mug showcasing the Statue of Liberty.
2. Neighborhoods:
1. Target Neighborhood Promotions:
1. Target adjusts its product assortment based on the demographics of
neighborhoods.
2. Example: In a Hispanic-majority area, Target might stock more Latin American
foods and bilingual signage.
3. Stores:
1. McDonald’s Store-Level Marketing:
1. Menu adjustments to fit store locations:
1. Example: Lobster Rolls in McDonald's stores in coastal areas of Maine
and Massachusetts.

Selecting Target Markets
Individual marketing
involves tailoring products
and marketing programs to
the needs and preferences of
individual customers.
Also known as:
• One-to-one marketing
• Mass customization
Individual marketing: The
Rolls-Royce Bespoke design
team works closely with
individual customers to help
them create their own unique
Rolls-Royces.

MICROMARKETING

Choosing a targeting strategy depends on
• Company resources: Limited resources may lead a company to focus on a single
market segment (concentrated marketing) rather than multiple segments. Companies with
abundant resources can pursue differentiated or mass marketing strategies.
• Product variability: Products with little variability (e.g., salt or basic commodities) are
better suited for mass marketing. Highly variable products, such as fashion items or
customizable technology, may require differentiated or concentrated targeting.
• Product life-cycle stage:
Introduction Stage: Target early adopters or niche markets.
Growth Stage: Expand targeting to broader segments.
Maturity Stage: Focus on differentiation and retaining loyal customers.Decline Stage:
Concentrate on the most profitable segments.
• Market variability: If consumer needs and preferences are diverse, a
differentiated marketing strategy may be more effective.
• Competitor’s marketing strategies: If competitors are targeting broadly, a
company might differentiate itself by focusing on a niche (concentrated marketing).If
competitors are targeting specific segments, a company may compete head-to-head
or choose underserved segments.

Differentiation and Positioning (2 of 9)
Positioning maps show consumer perceptions of
marketer’s brands versus competing products on important
buying dimensions.
Figure 7.3 Positioning map: Large luxury SU Vs
The size of each circle
indicates the brand’s relative
market share in the
segment.

Cadillac Escalade
Infiniti QX
Lexus LX570
Lincoln Navigator
Toyota Land Cruiser
Land Rover Range Rover

Destek-Kanıt
Fiziksel Fayda Duygusal Fayda Kişisel Fayda
VALUE PROPOSITION

Choosing a Differentiation and Positioning Strategy
• Identifying a set of possible competitive advantages to
build a position
• Choosing the right competitive advantages
• Selecting an overall positioning strategy
• Communicating and delivering the chosen position to the
market

Competitive advantage is an advantage over competitors
gained by offering consumers greater value, either through
lower prices or by providing more benefits that justify higher
prices.
Important Distinctive Superior
Communicable Preemptive Affordable
Profitable

Choosing a Differentiation
and Positioning Strategy
Identifying a set of possible
competitive advantages to
differentiate along the lines of:
• Product
• Services
• Channels
• People
• Image
Services differentiation:
Quicken Loans’ Rocket
Mortgage doesn’t just offer
mortgage loans; its online-
only interface lets users get
a loan decision in only
minutes.

TESLA VS. TOYOTA
Tesla decided to break into the
electric vehicle (EV) marketplace
with a luxury sports model. At this
time, the electric vehicle market
valued economy over form and
function. Tesla decided not to
compete with the Chevy Volt or
Toyota hybrids and instead go after
the high-end market.
PRODUCT
DIFFERENTIATION

DELTA VS. JETBLUE
As airlines like Delta stopped
serving peanuts and reduced leg
room Jetblue entered the market
touting their gourmet snacks and
extensive leg room. Though they
did not have international flights or
an extensive frequent flier
program, they broke into the
market focusing friendly service,
snacks, and legroom. Every part of
their branding pushed to
communicate the hospitality and
fun of flying, while big airlines like
Delta continued to push their
message towards business
travelers.
SERVICE DIFFERENTIATION

SERVICE DIFFERENTIATION

UBER VS LYFT
Uber pioneered their market. They started with just black executive Lincoln Towncars. With their jet
black branding and sleek logo. They were exclusive, cold, and luxurious. Over time their offerings
became more diversified and products like Uberx and Uberpool allowed anyone to call a ride and get
picked up for a few dollars by a Prius.
On the opposite side of the spectrum came Lyft. Originally cars were adorned with a bright pink fuzzy
mustache. Riders were told to sit in the front and make conversation with their drivers. And drivers
were billed as being “fun and interesting”
PEOPLE DIFFERENTIATION

PEOPLE DIFFERENTIATION

CHANNEL DIFFERENTIATION
Amazon Prime offers a suite of services—
including Prime Music, Prime Reading, and
Prime Gaming—each accessible through
different channels but unified under the
Prime membership. This ecosystem caters
to varied customer interests, enhancing the
overall value proposition.

AIRBNB- Belong Anywhere
Why stay in a hotel when you can stay somewhere, with someone, that makes
you feel like you truly belong to the area? Unlike hotels, Airbnb gives you a true
taste of place, creating an experience all the more exciting and enriching.
Airbnb completely changed the game by legitimizing couchsurfing, providing
an authentic alternative to traditional lodging options.
CHANNEL
DIFFERENTIATION

IMAGE DIFFERENTIATION

A competitive advantage should be:
• Important
• Distinctive
• Superior
• Communicable
• Preemptive
• Affordable
• Profitable

Value proposition is the full mix of benefits upon which a
brand is positioned.
Figure 7.4 Possible Value Propositions

More for more More for the
same
Same for less
More for less
Less for much
less

Why should I buy from you?
Positioning statement summarizes company or brand
positioning using this form: To (target segment and need)
our (brand) is (concept) that (point of difference)
• To athletes and fitness enthusiasts who seek high-performance and
stylish sportswear, Nike is a leading athletic brand that inspires and
empowers people to push their limits.
• To creative individuals and tech-savvy consumers who value
simplicity, design, and innovation, Appleis a premium technology
companythat provides seamless, user-friendly, and safe technology
into everyday life.

Product position is the way the product is defined by
consumers on important attributes.
Positioning: Sonos does more than just sell speakers; it
unleashes “All the music on earth, in every room of your
house, wirelessly.”

Communicating and Delivering the Chosen Position
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.

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