Ch 7 -Copyright © 2011 Pearson EducationPrinciple.docx

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Copyright © 2011 Pearson Education
Principles of Marketing,
Arab World Edition
Philip Kotler, Gary Armstrong, Anwar Habib, Ahmed Tolba
Presentation prepared by Annelie Moukaddem Baalbaki
CHAPTER SEVEN
Customer-Driven Marketing Strategy: Segmentation, Targeting
& Positioning
Lecturer: Insert your name here
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Chapter Learning Outcomes
7.1 Customer-Driven Marketing Strategy
7.2 Market Segmentation
7.3 Market Targeting
7.4 Differentiation and Positioning

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Topic Outline
Segmentation, Targeting and Positioning
Market segmentation is the process that companies use to divide
large heterogeneous markets into small markets that can be
reached more efficiently and effectively with products and
services that match their unique needs.
Market targeting (targeting) is the process of evaluating each
market segment’s attractiveness and selecting one or more
segments to enter.
Segmentation and Targeting
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Note to Instructor
This weblink directs you to Boecker’s homepage. “Boeker
Public Health is the Middle East largest Pest Management group
providing World Class pest control, pest management,
professional disinfecting, and pest control equipment &
chemicals.
Founded in 1993, Boecker provides World Class quality
services for commercial & residential clients including Pest
management, Food Safety Training & Consulting, Fumigation &
Heat Treatment as well as professional disinfecting services”.
Boecker’s offices are active in Lebanon, United Arab Emirates,
Kuwait, Qatar and Nigeria. It is interesting to browse through
their website and see the different services they offer for their

various segments and targets.
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Segmentation, Targeting and Positioning
Differentiation involves actually differentiating the market
offering to create superior customer value.
Positioning consists of arranging for a market offering to
occupy a clear, distinctive, and desirable place relative to
competing products in the minds of target consumers.
Market Differentiation and Positioning
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Market Segmentation
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Market SegmentationSegmenting consumer marketsSegmenting
business marketsSegmenting international marketsRequirements
for effective segmentation

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Market Segmentation
Segmenting Consumer Markets
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Market Segmentation
Geographic segmentation divides the market into different
geographical units such as nations, regions, provinces, parishes,
cities, or even neighborhoods.
Segmenting Consumer Market
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Note to Instructor
Protrac Online is an Egyptian company that specializes in
providing the latest technologies in geo-marketing research and
services by employing researchers, data analysts, and geo-
professionals, and a large scale of data maps and tools. Protrac
refers to geo-marketing as a sophisticated marketing science

that uses geographical information for analyzing distribution
channels of products. Protrac provides insight into the
competition and target segments surrounding a specific
distribution point. Hence, this allows companies to understand
the specific changes needed in terms of distributing products so
as to better serve the targeted consumers.
Protrac offers three types of products: Geographical Digital
Maps, Socio-Demographic Data, and Trade Channels Census
and Survey Data. Hossam Ragheb, CEO of Protrac, said that
using digital maps for marketing purposes is crucial, especially
for Fast-Moving Consumer Goods companies (FMCGs), such as
Coca-Cola, Proctor and Gamble, and Unilever. Ragheb added
that “[for suppliers] to know where to sell the products... and
where this outlet is, not only in terms of address, but the
demographics] of the area—[for example] how many people
bove 15 years [of age] are living in this area— gives them a sort
of direction to know which products should go where.”
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Market Segmentation
Demographic segmentation divides the market into groups based
on variables such as age, gender, family size, family life cycle,
income, occupation, education, religion, race, generation, and
nationality.
Segmenting Consumer Markets
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Market Segmentation
Age and life-cycle stage segmentation is the process of offering
different products or using different marketing approaches for
different age and life-cycle groups.
Gender segmentation divides the market based on sex (male or
female).
Income segmentation divides the market into affluent or low-
income consumers.
Demographic Segmentation
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Note to Instructor
This weblink takes you to Atlantis, the Palm in Dubai.
Specifically to the kids and teens page where you can see that
special services are offered to this segment.
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Market Segmentation
Psychographic segmentation divides buyers into different
groups based on social class, lifestyle, or personality
characteristics.
Psychographic Segmentation
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Market Segmentation
Behavioral segmentation divides buyers into groups based on
their knowledge, attitudes, uses, or responses to a product.
Occasions Benefits sought User status Usage rate Loyalty status
Behavioral Segmentation
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Note to Instructor
Consumer loyalty: ‘Mac fanatics’—fanatically loyal Apple
Computer users—helped keep Apple afloat during the lean
years, and they are now at the forefront of Apple’s burgeoning
iPod and iTunes empire.
Students often get confused with the difference between
behavioral and psychographic segmentation. Behavior is more
tied into how consumers use the product. Real Marketing 7.1
discusses how consumers behave during the holy month of
Ramadan.
According to a study conducted by Maktoob Research regarding
Ramadan in the region, 71 percent of respondents believe that
the month inables them to experience a feeling of “solidarity
and brotherhood with fellow Muslims.” It was discovered that
most of the respondents enjoyed having Iftar (breaking their
fasting) with their families at home compared with the
significant portion, but not a majority, who said that they liked
to have Iftar in restaurants. Muslim people rush to make
Mawa’ed Rahaman (free public eateries), where poor people are
offered free food at Iftar time. Accordingly, it is a good chance
for businesses to show their support in corporate social
responsibility (CSR) and to promote the Ramadan spirit.
Special types of foods that are demanded during ramadan. For

example, stores selling Eastern desserts, such as Konafa ,
Basbousa , and the like experience a substantial increase in
demand during Ramadan, and they face the challenge of
satisfying the large number of customers queuing in lines,
particularly right before Iftar time.
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Market Segmentation
Multiple segmentation is used to identify smaller, better-defined
target groups.
Using Multiple Segmentation Bases
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Market Segmentation
Segmenting Business Markets
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Market Segmentation
Segmenting International markets
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Market Segmentation
Inter-market segmentation divides consumers into groups with
similar needs and buying behaviors even though they are
located in different countries.
Segmenting International Markets
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Market Segmentation
To be useful, market segments must be:
Requirements for Effective Segmentation
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Note to Instructor

There are many left-handed people in the world. Yet few
products are targeted toward this left-handed segment. The
major problem may be that the segment is hard to identify and
measure. There is little data on the demographics of ‘lefties.’
Private data companies keep reams of statistics on other
demographic segments but not on left-handers.
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Market Targeting
Target market consists of a set of buyers who share common
needs or characteristics that the company decides to serve.
Target Market
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Market TargetingSegment size and growthSegment structural
attractivenessCompany objectives and resources
Evaluating Market Segments
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Note to Instructor
Structural attractiveness includes factors that affect long-run

attractiveness. These factors might include strong and
aggressive competitors, substitute products, and high power of
buyers or powerful suppliers.
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Market Targeting
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Market Targeting
Undifferentiated marketing targets the whole market with one
offer
Mass marketing
Focuses on common needs rather than what’s different
Selecting Target Marketing Segments
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Market Targeting
Differentiated marketing targets several different market
segments and designs separate offers for each. Goal is to
achieve higher sales and a stronger position More expensive

than undifferentiated marketing
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Note to Instructor
Differentiated marketing: Procter & Gamble markets six
different laundry detergents, including Tide—each with
multiple forms and formulations— that compete with each other
on store shelves.
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Market Targeting
Concentrated marketing targets a large share of one or a few
smaller segments or niches. Limited company resources
Knowledge of the market More effective and efficient
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Note to Instructor
Aramex offers new services such as “Shop and Ship” for the
customers in the Arab world willing to buy products from online
shops in the United States and Europe, in order to differentiate
itself from large competitors such as DHL, UPS, and FedEx.
Real Marketing 7.2 highlights the concept of Islamic banking
and its application in the Arab world. Islamic banking has
gained a strong reputation in the past few years, especially after
the financial crisis in 2008 as it showed the defects in the
international banking systems. As a result, a variety of banks,
led by HSBC, introduced Islamic banking initiatives in the

region.
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Market Targeting
Micromarketing is the practice of tailoring products and
marketing programs to suit the tastes of specific individuals and
locations. Local marketing Individual marketing
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Market Targeting
Local marketing involves tailoring brands and promotion to the
needs and wants of local customer groups Cities Neighborhoods
Stores
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Note to Instructor
Advances in communications technology have given rise to a
new high-tech version of location-based marketing. By coupling
mobile phone services with GPS devices, many marketers are
now targeting customers wherever they are with what they want.
This might include marketers reaching people near their stores,
looking to make a decision.

Discussion Question
What are the drawbacks of local marketing?
It can drive up manufacturing and marketing costs by reducing
economies of scale. It can also create logistics problems as
companies try to meet the varied requirements of different
regional and local markets. Further, a brand’s overall image
might be diluted if the product and message vary too much in
different localities.
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Market Targeting
Individual marketing involves tailoring products and marketing
programs to the needs and preferences of individual customers.
Also known as:
One-to-one marketing
Customized marketing or mass customization
Markets-of-one marketing
Target Market Strategies
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Note to Instructor
Mass customization is the process through which firms interact
one-to-one with masses of customers to design products and
services tailor-made to meet individual needs. Has made
relationships with customers important in the new economy.
Provides a way to distinguish the company against competitors.
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Market Targeting
Depends on: Company resources Product variability Product
life-cycle stage Market variability Competitor’s marketing
strategies
Choosing a Targeting Strategy
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Market Targeting
Concern for vulnerable segments (Children) with controversial
or potentially harmful products.
Cigarettes
Internet abuses
Socially Responsible Target Marketing
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Note to instructor
Not all attempts to target children, minorities, or other special
segments draw criticism. In fact, most provide benefits to
targeted consumers. For example Samsung markets the Jitterbug
phone directly to seniors who need a simpler cellphone that is
bigger and has a louder speaker.
Another example is Colgate. It makes a large selection of
toothbrush shapes and toothpaste flavors for children. Such

products help make tooth brushing more fun and get children to
brush longer and more often. Thus, in target marketing, the
issue is not really who is targeted but rather how and for what .
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Differentiation and Positioning
Product position is the way the product is defined by consumers
on important attributes—the place the product occupies in
consumers’ minds relative to competing products.
Perceptions
Impressions
Feelings
Positioning
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Note to Instructor
Tide is positioned as a powerful, all-purpose family detergent.
At Subway restaurants, you “Eat Fresh”.
In the automobile market Mercedes and Cadillac are positioned
on luxury, and Porsche and BMW on performance. Volvo
positions powerfully on safety. And Toyota positions its fuel
efficient, hybrid Prius as a high-tech solution to the energy
shortage. “How far will you go to save the planet?” it asks.
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Differentiation and PositioningIdentifying a set of possible
competitive advantages to build a positionChoosing the right
competitive advantagesSelecting an overall positioning strategy
Choosing a Differentiation and Positioning Strategy
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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.
Choosing a Differentiation and Positioning Strategy
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Note to Instructor
Toughbook by Panasonic is positioned as the durable, reliable,
wireless notebook that can protect the customer’s work even in
the toughest environments.

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Identifying a set of possible competitive advantages to build a
position by providing superior value from:
Identifying Possible Value Differences and Competitive
Advantages
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Difference to promote should be:
Choosing the Right Competitive Advantage
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To (target segment and need) our (brand) is (concept) that
(point of difference).
Developing a Positioning Statement
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Note to Instructor
The book provides the following example: “To busy, mobile
professionals who need to always be in the loop, BlackBerry is
a wireless connectivity solution that gives you an easier, more
reliable way to stay connected to data, people, and resources
while on the go.”
Note that the positioning first states the product’s membership
in a category (wireless connectivity solution) and then shows its
point-of-difference from other members of the category (easier,
more reliable connections to data, people, and resources).
Placing a brand in a specific category suggests similarities that
it might share with other products in the
category. But the case for the brand’s superiority is made on its
points of difference.
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Communication and Delivering the Chosen Position
A company must take steps to deliver and communicate the
desired position to target consumers.

Choosing the positioning is often easier than implementing the
position.
Delivering the chosen position
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Ch 7 -*
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Arab World Edition
CHAPTER FIVE
Consumer Behavior
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Chapter Learning Outcomes
Topic Outline
5.1 Model of Consumer Behavior
5.2 Characteristics Affecting Consumer Behavior
5.3 Types of Buying Decision Behavior
5.4 The Buyer Decision Process
5.5 The Buyer Decision Process for New Products
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Consumer buyer behavior refers to the buying behavior of final

consumers—individuals and households who buy goods and
services for personal consumption.
Consumer market refers to all of the personal consumption of
final consumers.
Consumer Behavior
Consumer Buyer Behavior and Consumer Market
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Note to Instructor
Discussion Question
What have you recently purchased that cost over $100? Write
down all the reasons you purchased this particular item.
Because students are all consumers—it is interesting to start the
class with a discussion of products they have recently
purchased. When you ask them why they purchased a particular
item or product, you can bring them through many topics in this
chapter including the characteristics that affect consumer
behavior (cultural, social, personal, and psychological). You
can also try to determine the process they went through
including how and where they searched for information and how
they evaluated their alternatives. Finally, ask them how they
feel about their purchase (postpurchase behavior). This
discussion will lead nicely to the next slide which is the Model
of Buyer Behavior.
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Model of Consumer Behavior
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Characteristics Affecting Consumer Behavior
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Culture is the set of basic values, perceptions, wants, and
behavior learned from family and other important institutions.
Subculture are groups of people within a culture with shared
value systems based on common life experiences and situations.
Cultural Factors
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Note to Instructor
Real Marketing 5.1 discusses McDonald’s challenges in the
Arab world. McDonald’s is currently operating in 14 Arab
countries. A key element in McDonald’s strategy is to adapt its
traditional American approach to local culture, food habits, and

lifestyles.
For example, in some countries of the Arab world, McDonald’s
outlets are divided along male and female lines in accordance
with local custom. As well as adapting the restaurants
themselves, McDonald’s tailors its menu to meet the food
culture or preferences of different countries. The McDonald’s
menu varies widely in different parts of the world. In the Arab
world, for example, the company launched ‘McArabia,’ a
product that McDonald’s intended to match regional tastes and
preferences.
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Prof. Hofstede defined five dimensions to analyze and compare
cultures across the world. Using research conducted in Egypt,
Iraq, Kuwait, Lebanon, Libya, Saudi Arabia, and the UAE, he
developed a measure of the Arab world. The 5 dimensions
are:Power Distance IndexUncertainty Avoidance
IndexIndividualismMasculinityLong-Term Orientation.
Cultural Factors
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Note to Instructor
This weblink directs you to the homepage of professor Geert
Hofstede’s Cultural Dimensions in the Arab World.
Hofstede identified a high Power Distance Index (PDI) ranking
in the Arab world. This indicates high levels of inequality of
power and wealth. People expect and accept that leaders will
separate themselves from the majority. Hofstede also

identified a high Uncertainty Avoidance Index (UAI). This
indicates that people are uncomfortable with uncertainty. Strict
rules, laws, policies, and regulations are put in place to
minimize or reduce this level of uncertainty.
Large PDI and UAI scores, 80 and 68 respectively, suggest that
people in Arab world societies are likely to follow a
hierarchical system in which there is little social mobility.
According to Hofstede, the combination of these two
dimensions produces a situation in which leaders have ultimate
power and authority, and allows them to set laws and
regulations
that reinforce their leadership and control.
The Masculinity Index (MAS) is the Arab world’s third
highest dimension, though at 52 it is only slightly higher than
the 50.2 world average. This score suggests that women in the
Arab world have limited rights. However, it is not clear whether
this is due to cultural or religious factors. The lowest Hofstede
dimension for the Arab world is for Individualism (IDV). With
a score of 38, it is significantly below the world average of 64.
This shows the existence of a Collectivist society rather than an
Individualist culture. In a Collectivist culture, there is a close
long-term commitment to the member ’group,’ in other words to
the family, extended family,
or extended relationships. In this culture, loyalty is vital and
overrides most other societal rules.
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Social classes are society’s relatively permanent and ordered
divisions whose members share similar values, interests, and
behaviors.
Measured by a combination of occupation, income, education,
wealth, and other variables.

Cultural Factors
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An Arab Example : Social Classes in the UAE
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Copyright © 2011 Pearson EducationNationals
Al-MuwateneenForeign immigrants
Al-WafedeenRuling Sheikhly Families
The Merchant Class
New Middle Class
Low Income Groups
Top Professionals and International Contractors
Middle Range Professionals
Low-paid, Semi-skilled and Unskilled workers

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Social Factors
Groups and Social Networks
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Note to Instructor
Discussion Question
What groups are you a member of and what are your
aspirational groups. How does this influence you as a
consumers?
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Opinion leaders are people within a reference group who exert
social influence on others
Also called influentials or leading adopters
Marketers identify them to use as brand ambassadors
Social Factors
Word-of-mouth influence and buzz marketing
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Note to Instructor
It is a great idea to click through to the BuzzParadise Web site.
It is an excellent example of Buzz marketing. Ask students if
they tend to have a “go to” person when they want to purchase.
Would they consider themselves opinion leaders? A great group
to ask about is middle school aged kids. Who are the opinion
leaders here? What qualities do they possess?
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Online Social Networks are online communities where people
socialize or exchange information and opinions: Blogs Social
networking sites (facebook) Virtual worlds (second life)
Social Factors
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Note to Instructor:
Discussion Question
How can marketers use these networks?
This slide should provide a lively discussion for students
because they all are users of social networks. Ask students for
examples they have seen or experienced. Then be sure to ask if
they think the marketing efforts were effective for the marketer
and why? P&G for example set up
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Family is the most important consumer-buying organization in
society.
Social roles and status are the groups, family, clubs, and
organizations that a person belongs to that can define role and
social status.
Social Factors
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Note to Instructor
Discussion Question
What brands do you purchase because it is what your parents
used? Why do you think this occurs?
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Age and life-cycle stage: People change the goods and services
they buy over their lifetimes Tastes in food, clothes, furniture,
and recreation are often age related Buying is also shaped by
the stage of the family life-cycle—the stages through which
families might pass as they mature over time
Personal Factors
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Occupation affects the goods and services bought by consumers.
Economic situation includes trends in:
Personal Factors
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Lifestyle is a person’s pattern of living as expressed in his or
her psychographics.
Measures a consumer’s AIOs (activities, interests, opinions) to
capture information about a person’s pattern of acting and
interacting in the environment.
Personal Factors
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Note to Instructor
Lifestyle: BlackBerry has achieved initial success by attracting
consumers with an interest in a cool lifestyle and social
networking.

Discussion Question
What categories of products seem to be targeted to consumer’s
lifestyles?
They will realize many products in addition to cars including
food, cosmetics, shampoo also appeal to a consumer’s lifestyles.
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Personality and self-concept
Personality refers to the unique psychological characteristics
that lead to consistent and lasting responses to the consumer’s
environment: Self-confidence, Sociability, Autonomy,
Defensiveness, Adaptability, Aggressiveness.
Self-concept or self-image premise is that people’s possessions
contribute to and reflect their identities—that is, ‘we are what
we have’.
Personal Factors
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Brand Personalities
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Copyright © 2011 Pearson EducationSincerity: Down-to-earth,
honest, wholesome, and cheerfulExcitement: Daring, spirited,
imaginative, and up-to-date
Competence: Reliable, intelligent, and successful

Sophistication: Upper class and charming
Ruggedness: Outdoorsy and tough
Note to Instructor
It is interesting to talk about brand personalities and ask
students the personality of several brands:
A brand personality is the specific mix of human traits that may
be attributed to a particular brand.
One researcher identified five brand personality traits
1. Sincerity (down-to-earth, honest, wholesome, and cheerful)
2. Excitement (daring, spirited, imaginative, and up-to-date)
3. Competence (reliable, intelligent, and successful)
4. Sophistication (upper class and charming)
5. Ruggedness (outdoorsy and tough)
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Psychological Factors
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Motivation
A motive is a need that is sufficiently pressing to direct the
person to seek satisfaction.
Motivation research refers to qualitative research designed to
probe consumers’ hidden, subconscious motivations.
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Note to Instructor
An aging consumer who buys a sporty convertible might explain
that he or she simply likes the feel of the wind in his or her
thinning hair. At a deeper level, the person may be buying the
car to feel young and independent again.
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Perception is the process by which people select, organize, and
interpret information to form a meaningful picture of the world
from three perceptual processes.
Selective attention
Selective distortion
Selective retention
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Note to Instructor
Selective perception: It’s impossible for people to pay attention
to the thousands of ads they’re exposed to every day, so they
screen most of them out.
Discussion Question
If you watched television last night, what ads do you remember
seeing?
Probe to find out why they remember certain ads—was it that
they broke through the clutter, that they saw them many times,
or that they are in the market for that certain product?
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Selective attention is the tendency for people to screen out most
of the information to which they are exposed.
Selective distortion is the tendency for people to interpret
information in a way that will support what they already

believe.
Selective retention is the tendency to remember good points
made about a brand they favor and forget good points about
competing brands.
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Learning is the change in an individual’s behavior arising from
experience and occurs through interplay of:
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Beliefs and Attitudes
Belief is a descriptive thought that a person has about
something based on: Knowledge Opinion Faith

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Beliefs and Attitudes
Attitudes describe a person’s relatively consistent evaluations,
feelings, and tendencies toward an object or idea.
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Types of Buying Decision Behavior
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Types of Buying Decision Behavior

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The Buyer Decision Process
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Occurs when the buyer recognizes a problem or need triggered
by:
Internal stimuli
External stimuli
Need Recognition
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Note to Instructor
This innovative ad from Clorox clothing detergent reminds
parents that “This is how babies see the world. Keep it clean.”
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Sources of Information
Personal sources—family and friends
Commercial sources—advertising, Internet
Public sources—mass media, consumer organizations
Experiential sources—handling, examining, using the product
Information Search
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How the consumer processes information to arrive at brand
choices.
Depends on the individual consumer and the specific buying
situation.
Evaluation of Alternatives
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Note to Instructor
This Web link brings you to PriceGrabber—an online
comparison shopping site. What is interesting on this site is on
the left hand side, you can search by features. These features
help a consumer know how to evaluate a product. For instance,

this example is laptop computers and one can search by
processing speed, processor type, screen size, etc.
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The act by the consumer to buy the most preferred brand
The purchase decision can be affected by:
Attitudes of others
Unexpected situational factors.
Purchase Decision
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The satisfaction or dissatisfaction that the consumer feels about
the purchase.
Relationship between:
Consumer’s expectations
Product’s perceived performance
The larger the gap between expectation and performance, the
greater the consumer’s dissatisfaction.
Post-Purchase Decision
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Cognitive dissonance is the discomfort caused by a post-
purchase conflict.
Customer satisfaction is a key to building profitable
relationships with consumers—to keeping and growing
consumers and reaping their customer lifetime value.
Post-Purchase Decision
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The Buyer Decision Process for New Products
A New Product is a good, service, or idea that is perceived by
some potential customers as new.
Adoption process is the mental process an individual goes
through from first learning about an innovation to final regular
use.
New Product and Adoption Process
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Stages in the Adoption Process
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Individual Differences in Innovativeness
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Influence of Product Characteristics on Rate of Adoption
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materials.
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Ch 2 -0
CHAPTER TWO
Company and Marketing Strategy:

Partnering to Build Customer Relationships
Ch 1 -*
Arab World Edition
Ch 2 -1
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Company and Marketing Strategy
2.1 Companywide Strategic Planning: Defining Marketing’s
Role
2.2 Designing the Business Portfolio
2.3 Planning Marketing: Partnering to Build Customer
Relationships
2.4 Marketing Strategy and the Marketing Mix
2.5 Managing the Marketing Effort
2.6 Measuring and Managing Return on Marketing Investment
Topic Outline
Ch 2 -2

Companywide Strategic Planning
Strategic planning is the process of developing and maintaining
a strategic fit between the organization’s goals and capabilities
and its changing marketing opportunities.
Strategic Planning
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Note to Instructor
Strategic planning sets the stage for the rest of the planning in
the firm. This weblink directs you to the strategic planning page
in the Office of Strategy Management at the American
University of Beirut (AUB).
Discussion Question
How might the strategic plan of the college or university
influence decisions in the schools programs and offerings. How
might it influence decisions in food services, dormitories,
executive education, and undergraduate versus graduate
programs.
Ch 2 -4
The mission statement is the organization’s purpose; what it

wants to accomplish in the larger environment.
A market-oriented mission statement defines the business in
terms of satisfying basic customer needs.
Defining a Market-Oriented Mission
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Note to Instructor
A mission statement should:Not be myopic in product
termsMeaningful and specificMotivatingEmphasize the
company’s strengthsContain specific workable guidelinesNot be
stated as making sales or profits
Ch 2 -6
The company needs to turn its mission statement into detailed
supporting objectives for each level of management.
Setting Company Objectives and Goals
Ch 2 -7

Designing the Business Portfolio
The business portfolio is the collection of businesses and
products that make up the company.
Portfolio analysis is a major activity in strategic planning,
whereby management evaluates the products and businesses that
make up the company.
Ch 2 -8
Designing The Business Portfolio
Strategic business unit (SBU) is a unit of the company that has
a separate mission, and objectives that can be planned
separately from other company businesses. Company division
Product line within a division Single product or brand
Analyzing the Current Business Portfolio
Ch 2 -9
Note to Instructor
This Web link is to Procter & Gamble is an interesting site to
explore with the students. Click on the Family of products.
Discussion Question
Which product categories might be growing markets, slower
markets, and emerging markets. This site can be explored again

when viewing Figure 2.2—the BCG grid.
Analyzing the Current Business Portfolio
Ch 2 -10
Companywide Strategic Planning:
The Boston Consulting Group Approach
Ch 2 -11
Note to Instructor
Stars are high-growth, high-share businesses or products
requiring heavy investment to finance rapid growth. They will
eventually turn into cash cows.
Cash cows are low-growth, high-share businesses or products
that are established and successful SBUs requiring less
investment to maintain market share.
Question marks are low-share business units in high-growth
markets requiring a lot of cash to hold their share.
Dogs are low-growth, low-share businesses and products that
may generate enough cash to maintain themselves but do not
promise to be large sources of cash.
Companywide Strategic PlanningDifficulty in defining SBUs

and measuring market share and growthTime
consumingExpensiveFocus on current businesses, not future
planning
Problems with Matrix Approaches
Ch 2 -12
Product/market expansion grid is a portfolio planning tool for
identifying company growth opportunities through: market
penetration market development product development
diversification
Developing Strategies for Growth and Downsizing
Ch 2 -13
Note to Instructor
Real Marketing 2.1 provides a good example about a Mo’men
Sandwich, a company that grew with an objective of managing
“profitable growth.” Mo’men sandwich launched its first branch
in 1988 as a family-run business for sandwich takeaway and
delivery. Today, Mo’men is the third biggest player in Egypt’s
fast-food market and has the third biggest market share, serving
over 9.5 million customers a year. This transformation from a
small family business to one of Egypt’s leading fast-food
players did not happen overnight; it is the result of a
combination of ingredients which, when put together, created
the perfect recipe for success. Simply, it has had to manage its
growth strategy carefully in order to maintain its high quality
standards.

Market penetration is a growth strategy increasing sales to
current market segments without changing the product.
Market development is a growth strategy identifying and
developing new market segments for current products.
Ch 2 -14
Product development is a growth strategy through offering new
or modified products to current market segments.
Diversification is a growth strategy through starting up or
acquiring businesses outside the company’s current products
and markets.
Ch 2 -15
Note to Instructor
This Web link leads to the hompage for Alrifai. This is a good
website that provides examples of growth strategies. The
homepage lists their products, markets, branches…

Downsizing is the reducing of the business portfolio by
eliminating products or business units that are not profitable or
that no longer fit the company’s overall strategy.
Ch 2 -16
Planning Marketing: Partnering to Build Customer
Relationships
Partnering with Other Company Departments
Value chain is a series of departments that carry out value-
creating activities to design, produce, market, deliver, and
support a firm’s products.
Ch 2 -17
Note to Instructor
The value chain: Carrefour’s promise to provide lower prices
(“Thanks to our massive buying power, we guarantee to cut
costs and keep our prices low”) depends on the contributions of
people in all of the company’s departments.
Planning Marketing
Partnering with Others in the Marketing System

Value delivery network is made up of the company, suppliers,
distributors, and ultimately the customers who partner with each
other to improve performance of the entire system.
Ch 2 -18
Note to Instructor
Toyota partners with its suppliers and helps them meet its very
high expectations. Creating satisfied suppliers helps Toyota
produce lowercost, higher-quality cars, which in turn result in
more satisfied customers.
Marketing Strategy and the Marketing Mix
Ch 2 -19
Note to Instructor
Consumers stand in the center. The goal is to create value for
customers and build profitable customer relationships. Next
comes marketing strategy—the marketing logic by which the
company hopes to create this customer value and achieve these
profitable relationships. The company decides which customers
it will serve (segmentation and targeting) and how
(differentiation and positioning). It identifies the total market,
then divides it into smaller segments, selects the most
promising segments, and focuses on serving and satisfying the
customers in these segments. Guided by marketing strategy, the
company designs an integrated marketing mix made up of
factors under its control—product, price, place, and promotion
(the four Ps). To find the best marketing strategy and mix, the

company engages in marketing analysis, planning,
implementation, and control. Through these activities, the
company watches and adapts to the actors and forces in the
marketing environment.
Market segmentation is the division of a market into distinct
groups of buyers who have distinct needs, characteristics, or
behavior and who might require separate products or marketing
mixes.
Market segment is a group of consumers who respond in a
similar way to a given set of marketing efforts.
Customer-Driven Marketing Strategy
Ch 2 -20
Market targeting is the process of evaluating each market
segment’s attractiveness and selecting one or more segments to
enter.
Market positioning is the arranging for a product to occupy a
clear, distinctive, and desirable place relative to competing
products in the minds of the target consumer.
Customer-Driven Marketing Strategy
Ch 2 -21

Note to Instructor
This link goes to the nike.com site. Explore with the students
the different segments including gender Nike Women,
psychographics (sports centric including football), and age.
Discussion Questions (can include the topic of positioning
which is on the following slide).
Specific questions for the students:How does Nike segment their
market?What appears to be their most important segments?How
does Nike position their products in the marketplace?
Marketing mix is the set of controllable tactical marketing
tools—product, price, place, and promotion—that the firm
blends to produce the response it wants in the target market.
Developing an Integrated Marketing Mix
Ch 2 -22
Developing an Integrated Marketing Mix
Ch 2 -23
Note to Instructor
It is interesting to ask how to make the 4Ps more customer
centric? This leads to a redefining of the 4Ps to the 4Cs as
follows:Product—Customer solutionPrice—Customer

costPlace—ConveniencePromotion—Communication
Managing the Marketing Effort
Ch 2 -24
Ch 2 -25
Market Planning
Parts of a Marketing Plan
Ch 2 -26
Implementing is the process that turns marketing plans into
marketing actions to accomplish strategic marketing objectives.
Successful implementation depends on how well the company
blends its people, organizational structure, its decision and

reward system, and company culture into a cohesive action plan
that supports its strategies.
Marketing Implementation
Ch 2 -27
Marketing Department Organization
Ch 2 -28
Note to Instructor
Functional organization: This is the most common form of
marketing organization with different marketing functions
headed by a functional specialist.
Geographic organization: Useful for companies that sell across
the country or internationally. Managers are responsible for
developing strategies and plans for a specific region.
Product management: Useful for companies with different
products or brands. Managers are responsible for developing
strategies and plans for a specific product or brand.
Market or customer management organization: Useful for
companies with one product line sold to many different markets
and customers. Managers are responsible for developing
strategies and plans for their specific markets or customers.
Customer management involves a customer focus and not a
product focus for managing customer profitability and customer
equity.

Marketing Control is the process of measuring and evaluating
the results of marketing strategies and plans and taking
corrective action to ensure that objectives are achieved.
Operating control Strategic control
Marketing Control
Ch 2 -29
Note to Instructor
Marketers must continually plan their analysis, implementation,
and control activities.
Operating control involves checking ongoing performance
against an annual plan and taking corrective action as needed.
Strategic control involves looking at whether the company’s
basic strategies are well matched to its opportunities.
Measuring and Managing Return on Marketing Investment
Return on Marketing Investment (Marketing ROI)
Return on marketing investment (Marketing ROI) is the net
return from a marketing investment divided by the costs of the
marketing investment.
Marketing ROI provides a measurement of the profits generated
by investments in marketing activities.
Ch 2 -30

materials.
Ch 2 -31
Ch 1 -*
Arab World Edition
CHAPTER ONE
Marketing: Creating and Capturing Customer Value
Ch 1 -*

*
Creating and Capturing Customer Value
1.1 What Is Marketing?
1.2 Understand the Marketplace and Customer Needs
1.3 Designing a Customer-Driven Marketing Strategy
1.4 Preparing an Integrated Marketing Plan and Program
1.5 Building Customer Relationships
1.6 Capturing Value from Customers
1.7 The Changing Marketing Landscape
1.8 So, What is Marketing? Pulling It All Together
Topic Outline
Ch 1 -*
*
What Is Marketing?
Marketing is a process by which companies create value for
customers and build strong customer relationships to capture
value from customers in return.
Marketing Defined
Ch 1 -*

*
Note to Instructor:
The text gives some excellent examples of companies that are
successful in marketing. These examples include: Wal-Mart
which has become the world’s largest retailer—and the world’s
largest company—by delivering on its promise, “Save money.
Live Better.” At Disney theme parks, “imagineers” work
wonders in their quest to “make a dream come true today.”
Apple fulfills its motto to “Think Different” with dazzling,
customer-driven innovation that captures customer imaginations
and loyalty. Its wildly successful iPod grabs more than 70
percent of the music player market; its iTunes music store
captures nearly 90 percent of the song download business.
Discussion Question
Ask students for other examples of either national or local
companies who are excellent at marketing and ask how they
reflect the definition given in this slide.
What Is Marketing?
The Marketing Process
Ch 1 -*
*
Understanding the Marketplace and Customer Needs
Customer Needs, Wants, and Demands

Ch 1 -*
*
Market offerings are some combination of products, services,
information, or experiences offered to a market to satisfy its
needs or wants.
Marketing myopia is focusing only on existing wants and losing
sight of underlying consumer needs.
Market Offerings: Products, Services and Experiences
Ch 1 -*
*
Customer Value and Satisfaction
Ch 1 -*
*
Discussion Question
Why do marketer’s not always understand customer needs? How
can they better identify customer needs?

Marketer’s often work in a vacuum and do not consider the
customer’s needs as much as they should. Future chapters will
talk about market research and marketing information,
important tools for understanding customer’s needs. Students
might be familiar with survey research or focus groups as
techniques for gathering information or they might be asked for
their zip code when they purchase in certain retailers
Exchange is the act of obtaining a desired object from someone
by offering something in return.
Marketers aim at building strong relationships by consistently
delivering superior customer value.
Exchanges and relationships
Ch 1 -*
*
Note to Instructor
Marketing consists of actions taken to build and maintain
desirable exchange relationships with target audiences
involving a product, service, idea, or other object.
Beyond simply attracting new customers and creating
transactions, the goal is to retain customers and grow their
business with the company.

A market is the set of actual and potential buyers of a product.
Ch 1 -*
*
Designing a Customer-Driven Marketing Strategy
Marketing management is the art and science of choosing target
markets and building profitable relationships with them.What
customers will we serve?How can we best serve these
customers?
Marketing Management
Ch 1 -*
*
Note to Instructor
By trying to serve all customers, marketers may not serve any
customers well. Instead, the company wants to select only
customers that it can serve well and profitably. For example,
Jashanmal stores, which sell some of the world’s top brands,
profitably target affluent professionals; the 5–10 Riyal/Dirham
stores profitably target families with lower incomes.

Market segmentation refers to dividing the markets into
segments of customers.
Target marketing refers to which segments to go after.
Demarketing is marketing to reduce demand temporarily or
permanently; the aim is not to destroy demand but to reduce or
shift it.
Selecting Customers to Serve
Ch 1 -*
*
Note to Instructor:
This weblink directs you to Almarai homepage. You can click
through it and show the students the different targets they have.
They have a product line specifically targeting kids.
Choosing a Value Proposition
The value proposition is the set of benefits or values a company
promises to deliver to customers to satisfy their needs.
Ch 1 -*
*
Note to Instructor
Value propositions: Land Rover lets you “Go Beyond”—to “get
a taste of adventure, whatever your tastes.”

Marketing Management Orientations
Ch 1 -*
*
Production concept is the idea that consumers will favor
products that are available and highly affordable.
Ch 1 -*
*
Product concept is the idea that consumers will favor products
that offer the most quality, performance, and features. An
organization should therefore devote its energy to making
continuous product improvements.
Ch 1 -*

*
Selling concept is the idea that consumers will not buy enough
of the firm’s products unless it undertakes a large scale selling
and promotion effort.
Ch 1 -*
*
Marketing concept is the idea that achieving organizational
goals depends on knowing the needs and wants of the target
markets and delivering the desired satisfactions better than
competitors do.
Ch 1 -*
*
Note to Instructor
Customer-driven companies research current customers deeply
to learn about their desires, gather new product and service
ideas, and test proposed product improvements. Such customer-
driven marketing usually works well when a clear need exists

and when customers know what they want. In many cases,
however, customers don’t know what they want or even what is
possible. For example, even 20 years ago, how many consumers
would have thought to ask for now-commonplace products
such as cellphones, notebook computers, iPods, digital cameras,
24-hour online buying, and satellite navigation systems? Such
situations call for customer-driving marketing—understanding
customer needs even better than customers themselves do and
creating products and services that meet existing and latent
needs, now and in the future.
As an executive at 3M puts it, “Our goal is to lead customers
where they want to go before they know where they want to
go.”
The Selling and Marketing Concepts Contrasted
Ch 1 -*
*
The societal marketing concept is the idea that a company’s
marketing decisions should consider consumers’ wants, the
company’s requirements, consumers’ long-term interests, and
society’s long-term interests.
Ch 1 -*

*
Discussion Questions
What companies can you identify with social Marketing?
What do these companies do that ties to the societal marketing
concept?
Students might be familiar with many different companies that
practice societal marketing through their Corporate Social
Responsibility (CSR) initiatives. Students might be familiar
with local retailers who are also involved in societal marketing.
They will note that these companies donate, contribute, or offer
services to charities and not-for-profit organizations. This
weblink is a youtube ad for bank Med which taps caring for the
environment and pollution.
Ch 1 -*
*
Note to Instructor
The National Bank of Kuwait (NBK) focuses both on making
profit and helping society by engaging in activities such as
feeding the poor in the month of Ramadan and arranging a
walkathon every year to increase health awareness. This
weblink takes you to NBK’s Corporate social responsibility
report.
Discussion Question

Ask students about other companies that have had serious
problems with their products? How have these companies
bounced back?
The marketing mix is the set of tools (four Ps) the firm uses to
implement its marketing strategy. It includes product, price,
promotion, and place.
Integrated marketing program is a comprehensive plan that
communicates and delivers the intended value to chosen
customers.
Preparing an Integrated Marketing Plan and Program
Ch 1 -*
*
Building Customer Relationships
Customer relationship management (CRM): The overall process
of building and maintaining profitable customer relationships by
delivering superior customer value and satisfaction.
Ch 1 -*
*
Smart companies aim to delight customers by promising only
what they can deliver, then delivering more than they promise.
Delighted customers not only make repeat purchases, they
become willing marketing partners and “customer

spokespersons” who spread the word about their good
experiences to others.
Real Marketing 1.1 presents Etisalat (weblink) as a company
that knows how to satisfy and delight it’s customers. Etisalat
was the winner of the Best in Dubai award for customer service.
This category was created to recognize those companies that
really care for the customer, and take efforts to exceed their
expectations time and again.
Relationship Building Blocks: Customer Value and Satisfaction
Ch 1 -*
*
Notes to Instructor
For example, consider why visitors may choose to stay at the
Burj Al Arab hotel in Dubai, given its prices are so much higher
than other hotels in the same area. In fact, it is one of the most
expensive hotels in the world, with the lowest priced suites
starting at AED 6,500 per night (US$1,750) and the most
expensive being the Royal Suite, which is so luxurious that it
includes its own cinema, marble bathrooms, and chauffeur-
driven Rolls Royce service, costing up to AED 100,000
(US$27,000) per night. The hotel is not just for the super rich—
it is also used by ordinary visitors. The reason they are willing
to pay such high prices is that they perceive a stay at the hotel
as the ultimate luxury treat, a once-in-a-lifetime experience.

Customer Relationship Levels and Tools
Ch 1 -*
*
Note to Instructor
Basic Relationships are often used by a company with many
low-margin customers For example, Coca-Cola does not phone
or call on all of its consumers to get to know them personally.
Instead, Coca-Cola creates relationships through brand-building
advertising, sales promotions, and its Web site (www.coca-
cola.com).
Full Partnerships are used in markets with few customers and
high margins, sellers want to create full partnerships with key
customers. For example, Coca-Cola customer teams work
closely with large distributors and retailers.
Discussion Question
Ask students what frequency or club marketing programs they
belong to and why?
Relating with more carefully selected customers uses selective
relationship management to target fewer, more profitable
customers.
Relating more deeply and interactively by incorporating more
interactive, two way relationships through blogs, websites,
online communities and social networks.
The Changing Nature of Customer Relationships
Ch 1 -*

*
Note to Instructor
Nike has recently shifted a bigger chunk of its media budget
toward new, more direct interactions with consumers. Nike’s
new media include not only the Internet, but also in-person
events and other activities designed to build brand community
and deeper customer relationships. In March 2010, Nike Middle
East ran a region-wide football initiative designed to give young
players the chance to train like their favorite stars. The scheme
was open to all young footballers, with regional competition
finals in Dubai. A select handful of winners from the
competition finals won the opportunity to go to Juventus FC in
Italy to continue their training.
Discussion Question
Ask students how marketers have used facebook, myspace,
linkedin or other social networks for marketing purposes. Ask
them about YouTube and how that has changed marketing.
Partner relationship management involves working closely with
partners in other company departments and outside the company
to jointly bring greater value to customers.
Partner Relationship Management
Ch 1 -*
*

Partners inside the company refer to every function area
interacting with customers:electronicallycross-functional teams
Partners outside the company refer to how marketers connect
with their suppliers, channel partners, and competitors by
developing partnerships.
Ch 1 -*
*
Supply chain is a channel that stretches from raw materials to
components to final products to final buyers: Supply
management Strategic partners Strategic alliances
Ch 1 -*
*
Capturing Value from Customers
Customer lifetime value is the value of the entire stream of

purchases that the customer would make over a lifetime of
patronage.
Creating Customer Loyalty and Retention
Ch 1 -*
*
Note to Instructor
Stew Leonard’s is an interesting example. Stew Leonard, who
operates a highly profitable four-store supermarket in
Connecticut and New York, says that he sees $50,000 flying out
of his store every time he sees a sulking customer. Why?
Because his average customer spends about $100 a week, shops
50 weeks a year, and remains in the area for about 10 years. If
the marketing process, the company creates value for target
customers and builds strong relationships with them. To keep
customers coming back, Stew Leonard’s has created the
“Disneyland of dairy stores.” Rule 1—the customer is always
right. Rule 2—If the customer is ever wrong, reread Rule 1.
You can find videos of Leonard’s stores on youtube.com which
will give the students an idea of the atmosphere.
Discussion Question
Ask students if they know of other retailers that build this kind
of exciting environment.
Share of Customer is the portion of the customer’s purchasing
that a company gets in its product categories.
Growing Share of Customer
Ch 1 -*

*
Customer equity is the total combined customer lifetime values
of all of the company’s customers.
Building Customer Equity
Ch 1 -*
*
Capturing Value from CustomersBuilding the right relationships
with the right customers involves treating customers as assets
that need to be managed and maximized.
Different types of customers require different relationship
management strategies.
Building Customer Equity
Ch 1 -*
*
Note to Instructor
A visit to the Coke Web site always offers examples of building
customer equity. They usually have a unique way of engaging
the customer whether it be online games, music studios, or

virtual worlds.
The Changing Marketing Landscape
Major Developments
Ch 1 -*
*
Notes to Instructor
This is a good slide to prompt discussion on personal
observations and experiences.
Discussion QuestionsAsk if students are from other countries
and how consumers and marketers differ in their country.Have
students reflect on how marketers are integrating social
responsibility in their marketing messages.Probe to see if
students believe there are differences in marketing for a not-for-
profit versus a for-profit company.
So, What Is Marketing? Pulling It All Together
Ch 1 -*
*

materials.
Ch 1 -*
To answer the questions, you need chapter 1, 2, 5 and 7… they
are attached.
Question 1: (Total of 400 words for part A and B together)
NIVEA VISAGE Young is a skincare range in the UK market
designed to enhance the skin and beauty of the teenage
consumer. It has created a clear position in the market. This
shows that NIVEA understands its consumers and has produced
this differentiated product range in order to meet their needs.
a- Elaborate a marketing mix for NIVEA taking into
consideration consumer behavior theories to be used, self-
identity and culture dimension in your analysis. (10 Marks)
b- Explain how NIVEA understood the personality traits,
culture and the UK society in order to succeed. (20 Marks)
((In this question you have to discuss in detail the fact that

NIVEA used ‘marketing orientation for customer’))
Question 2: (Total of 400 words for part A, B, C and D all
together)
Think of a purchase that you recently made from NIVEA;
a- What is the value that you received from that purchase?
b- What is the difference between a customer need, want, or
demand?
c- How many NIVEA brands do you feel you truly have a
relationship with? Describe them.
d- Among different marketing orientations discussed earlier,
which are/is mostly applied by NIVEA? Explain and try to show
the importance of societal marketing orientation in relation to
NIVEA products.

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