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Homework
Field trip Next week
Hotel tour at Marriott Marquis
Punctuality: 12 pm – 2 pm
Address: 1535 Broadway, New York, NY 10036
Faculty Contact: 616-580-4121
Professional dress
Homework due on Nov 19
Take VALS Survey & Bring the survey results
http://www.strategicbusinessinsights.com/vals/presurvey.
shtml
Customer-Driven
Marketing Strategy:
Creating Value for
Target Customers
HMGT 2405│Hospitality Marketing
http://www.strategicbusinessinsights.com/vals/presurvey.shtml
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Outline
! Define the major steps in designing a customer-
driven marketing strategy: market segmentation,
targeting, and positioning.
! List and distinguish among the requirements for
effective segmentation.
! Explain how companies identify attractive market
segments and choose a market-targeting strategy.
! Illustrate the concept of positioning for competitive
advantage.
Market
It is a place where….
potential buyers and sellers meet
to exchange goods and services.
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What is Market Segmentation
Coca Cola Brands
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Market Segmentation
Market Segmentation is
pursuing a marketing
strategy whereby the total
potential market is divided
into homogeneous subsets
of customers, each of which
responds differently to the
marketing mix of the
organization.
Target Marketing
Market
Segmentation
Market
Targeting
Market
Positioning
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Positioning, Segmentation &
Differentiation
Market Segmentation
Group A
Group B
Group C
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Market Segmentation
Variables
• country, region, state, zip codeGeographic
• age, income, occupation, family
sizeDemographic
• AIO (attitudes-interests-opinions),
lifestyle, hobbies, knowledge,Psychographic
• occasion, benefits sought, user
status, usage rate, loyalty statusBehavioral
Criteria for
Effective Market Segmentation
Substantiality – large enough to warrant attention
Measurability – potential demand and purchasing
power
Accessibility – can reach segments with a variety
of communications
Actionability – consumers in same segment should
react similarly to marketing program
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Market Segmentation Decision
Process
Identify segmentation bases
Develop profiles for each segment
Forecast potential demand
Select specific target market segments
Market Segmentation Strategies
Mass-market strategy – one product-services
mix for all potential customers
Differentiated strategy – more than one market
segment with a separate marketing program
for each
Concentrated strategy – one (or a few) market
segments with limited changes in the
marketing program
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Evaluating Market Segments
Size & Growth
Structural
Attractive-
ness
Company
Objectives &
Resources
Micromarketing:
Local & Niche MKT.
Concentrated
Selecting Market Segments
Undifferentiated Differentiated
Marketing
Strategies
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Niche Market
What is Positioning?
The term ‘positioning’ refers to the consumer’s
perception of a product or service in relation to its
competitors. You need to ask yourself, what is the
position of the product in the mind of the
consumer?
The process of determining how
to differentiate a firm’s product
offerings from those of its
competitors in the minds of
consumers
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High
Perceived Price Four Seasons
Hilton
Sheraton Marriott
Holiday Inn
Low High
Perceived Quality Hampton Inn
Days Inn
Econolodge
Motel 6
Low
Figure 4.4 Perceptual Map for Hotel Service
The Positioning Process
Four Steps in the Positioning Process
wDetermine the ideal mix for consumers
wMeasure consumer perceptions of available
services
wLook for gaps in coverage and select a desired
position
wDevelop a strategy for obtaining the desired
position
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Step 1 -
Determine the ideal mix for consumers
Type of Firm List of Attributes
Restaurant Price, value, quality of food, type of food, service quality, menu
variety, employee friendliness, location, atmosphere, speed of
service, cleanliness, parking
Hotel Price, value, room quality, restaurant quality, location, number
and types of restaurants, other facilities (e.g., pool and fitness
center), cleanliness, atmosphere, employee friendliness, speed
of check-in and check-out, amenities (e.g., valet parking and
room service), service quality
Airline Price, value, service quality, employee friendliness, on-time
performance, baggage handling, direct routes, cities served,
scheduled flights, frequent flyer programs
Rental Car
Company
Price. value, service quality, convenience, location, types of cars,
condition of cars, speed of service, pick-up and drop-off policies
Step 2 -
Measure consumer perceptions
Potential benefits Our Operation Competitor A Competitor B
Value for price
Quality of food
Quality of service
Atmosphere
Location
Menu variety
Perceptual mapping - A technique used to
construct a graphic representation of how
consumers in a market perceive a competing set
of products relative to each other
Table 4.3 Competitive Benefit Matrix
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Step 3 -
Look for gaps in coverage and select a desired position
Positioning statement - Results from consumer
research and perceptual mapping enable firms to
develop a positioning statement. The positioning
statement should differentiate the organization’s
product–service mix from that of the competition
Unique selling proposition (USP) - Promoting a
unique element of the product–service mix
Step 4 -
Develop a strategy for obtaining the desired position
Guidelines for Developing Positioning Strategies
wWhat position do you own?
wWhat position do you want?
wWho must you outgun?
wDo you have enough money?
wCan you stick it out?
wDo you match your position?
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Positioning Strategy
Identifying
Competitive
Advantages
Selecting
Competitive
Advantages
Effectively
Communicate
Chosen
Position
Differentiating
Competitive Advantages
Management
Orientations
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Positioning Errors
Underpositioning
Over-
Positioning
Confused
Positioning
