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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.

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Customer-Driven Marketing Strategy: Creating Value for Target Customers

HMGT 2405│Hospitality Marketing

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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 SegmentationGroup 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

StructuralAttractive-

ness

CompanyObjectives &Resources

Micromarketing: Local & Niche MKT.

Concentrated

Selecting Market Segments

Undifferentiated DifferentiatedMarketing 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 ProcesswDetermine the ideal mix for consumerswMeasure consumer perceptions of available

serviceswLook for gaps in coverage and select a desired

positionwDevelop a strategy for obtaining the desired

position

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Step 1 -Determine the ideal mix for consumers

Type of Firm List of AttributesRestaurant 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 BValue 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

ManagementOrientations

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Positioning Errors

Underpositioning

Over-Positioning

ConfusedPositioning