In the business field, marketing is one of the activities assisting in profiting a single company. The buyers are too many, greatly dispersed, and different in their needs. Therefore, customer driven marketing strategy is being used to see the products or services from the customer’s perspective and communicating the message in customer’s language (Schade, 2007). Basically, customer driven marketing strategy is divided into four major steps: market segmentation, market targeting, positioning and differentiating (Refer to Appendix 1, Figure 1).
The first step is market segmentation. According to Cravens and Piercy (2009), segmenting markets is a foundation for superior performance and it is important to understand buyer’s needs and wants in designing marketing strategy. It is a process of placing the buyers in a product-market into subgroups and it needs to be considered early in the development of marketing-driven strategy (Cravens & Piercy, 2009). Besides that, Cravens and Piercy also stated that segmentation is a recognized process targeted at finding subgroups of buyers within total market. Dickson and Ginter (1987) claimed that “the opportunity for segmentation occurs when differences in buyers’ demand functions allow market demand to be divided into segments, each with a distinct demand function” (pp. 1-10). Moreover, Kotler and Armstrong (2012) maintained that there are four major segmentation variables for customer markets which are geographic segmentation, demographic segmentation, psychographic segmentation and behavioral segmentation. Coincidently, in Dickson and Ginter’s (2009) and Kotler and Armstrong’s (2012) study, the requirement for an effective segmentation must be actionable, substantial and benefit, identifiab...
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Once segments of customers have been defined, marketers need to select and evaluate which segments will be worth targeting. Cui and Choudhury (2003) define market targeting as marketing a product to a segment of customers due to the magnetism, for example size or growth, of the group. Marketers are able to select segments using undifferentiated, differentiated and concentrated marketing. By ignoring segment differences ...
Proper marketing management is one of the major determinants of business success. Amongst the methods of marketing management, segmentation, target marketing, and positioning are of utmost importance. Market segmentation deals with the identification of the market constituents into different groups or segments based on specific profiles (Kotler and Keller, 2012). Target marketing deals with the selection of segments and development of the measures to attract the selected consumer groups (Kotler and Keller, 2012). Ultimately, business positioning deals with the ways in which the business remembers and distinguishes the brand of the company with the competing products by means of unique attributes and benefits (Kotler and Keller, 2012). Although there are some associated drawbacks related to target marketing, segmentation, and positioning such as ethical issues, inhibited popularity due to cynicism to discrimination practices in these strategies, as well as waste of resources. Most firms still utilize these mechanisms due to the benefits offered such as improved operation efficiencies, better product positioning accuracy, and increased possibilities for opportunity identification (Kotler and Keller, 2012).