1.

Define the major steps in designing a customer-driven marketing strategy: market segmentation,
targeting, differentiation, and positioning.

A customer-driven marketing strategy means creating values for target customer by using customer centric
approach.

 Begins with selecting the customers to serve and determining a value proposition that best serves the
targeted customers. It consists of four steps.
 Market segmentation; - is the act of dividing a market into distinct segments of buyers with different
needs, characteristics, or behaviors who might require separate products or marketing mixes.
 Market targeting: - evaluates each market segment’s attractiveness and selects one or more segments to
serve. It consists of designing strategies to build the right relationships with the right customers.
 Differentiation; - involves actually differentiating the market offering to create superior customer value.
 Positioning; - consists of positioning the market offering in the minds of target customers.
2. List and discuss the major bases for segmenting consumer and business markets.
For consumer marketing, the major segmentation variables are geographic, demographic,
psychographic, and behavioral.
Geographic segmentation, the market is divided into different geographical units, such as nations,
regions, states, countries, cities, or even neighborhoods.
Demographic segmentation, the market is divided into groups based on demographic variables,
including age, gender, family size, family life cycle, income, occupation, education, religion, race,
generation, and nationality.
Psychographic segmentation, the market is divided into different groups based on social class, lifestyle,
or personality characteristics.
 Behavioral segmentation, the market is divided into groups based on consumers’ knowledge, attitudes,
uses, or responses to a product.
 Business marketers use many of the same variables to segment their markets. But business markets also
can business.

-demographics (industry, company size), - purchasing approaches, - operating characteristics,

 The effectiveness of the segmentation analysis depends on finding segments that are measurable,
accessible, substantial, differentiable, and actionable.
 3. Explain how companies identify attractive market segments and choose a market targeting
strategy.
To target the best market segments, the company first evaluates each segment’s size and growth
characteristics, structural attractiveness, and compatibility with company objectives and resources.
It then chooses one of four market-targeting strategies—ranging from very broad to very narrow
targeting.
1. undifferentiated (or mass) marketing involves mass producing, mass distributing, and mass
promoting about the same product in about the same way to all consumers
2. . differentiated marketing—developing different market offers for several segments.
3. Concentrated marketing (or niche marketing) involves focusing on one or a few market segments
only.
4. micromarketing is the practice of tailoring products and marketing programs to suit the tastes of
specific individuals and locations.
 it includes local marketing and individual marketing.
 To select the best targeting strategy it depends on company resources, product variability, the PLC
stage, market variability, and competitive marketing strategies.

4. Discuss how companies differentiate and position their products for maximum competitive advantage.

Once a company has decided which segments to enter, it must decide on its differentiation and positioning
strategy. The differentiation and positioning task consist of three steps:

1. identifying a set of possible differentiations that create competitive advantage,

In general, there are five winning value propositions/BIG 5 positioning strategy/ on which to
position their products:
1. More for more,:- more benefits for much higher price(more money)
 2. More for the same, :- more benefits for the same price.
3. More for less. :- More benefits for less money or cheaper price
4. The same for less, :- The same benefits for less money
5. less for much less, :- Less benefits for much less money
 Company and brand positioning are summarized in positioning statements that state the target segment
and need, the positioning concept, and specific points of difference.
 The company must then effectively communicate and deliver the chosen position to
the market.

5. Explain how companies find and develop new-product ideas.

Companies find and develop new-product ideas from a variety of sources.

1. internal sources. Companies conduct formal R&D Or pick the brains of their employees, and develop
new-product ideas.
2. from external sources. Companies track competitors’ offerings and obtain ideas from distributors and
suppliers who are close to the market
 Perhaps the most important source of new-product ideas are customers themselves. Companies observe
customers, invite their ideas and suggestions, or even involve customers in the new product development
process.
 Many companies are now developing crowdsourcing or open-innovation new-product idea programs,
which invite broad communities of people, customers, employees, independent scientists and researchers,
and even the general public into the new-product innovation process.

6. List and define the steps in the new-product development process and the major considerations in
managing this process.

The new-product development process consists of eight sequential stages.

1. Idea generation.

2.Idea screening, which reduces the number of ideas based on the company’s own criteria.

3. Concept development and testing in which a detailed version of the new-product idea is stated in meaningful
consumer terms.
4. marketing strategy development, in which an initial marketing strategy for the new product is developed from
the product concept.

5. business-analysis stage, a review of the sales, costs, and profit projections for a new product .

6. product development

7. test marketing

8.commercialization.

Successful new-product development requires a customer-centered, team-based, systematic effort.

8. Describe the stages of the product life cycle (PLC) and how marketing strategies change

during the PLC.

Each product has a life cycle marked by a changing set of problems and opportunities. The sales of the typical
product follow an S-shaped curve made up of five stages.

A. the product development stage; - company finds and develops a new-product idea.
B. The introduction stage is marked by slow growth and low profits as the product is distributed to the
market.
C. growth stage, which offers rapid sales growth and increasing profits.
D. maturity stage in which the product’s sales growth slows down and profits stabilize.
E. decline stage in which sales and profits dwindle. The company’s task during this stage is to recognize the
decline and decide whether it should maintain, harvest, or drop the product.

9. Discuss two additional product issues: socially responsible product decisions and international product
and services marketing

Marketers must consider two additional product issues.

1. social responsibility which includes public policy issues and regulations involving acquiring or dropping
products, patent protection, product quality and safety, and product warranties.
2. The special challenges facing international product and services marketers. International marketers must
decide how much to standardize or adapt their offerings for world market.
9. Answer the question “What is a price?” and discuss the importance of pricing in today’s fast-changing
environment.

 Price is the amount of money charged for a product or service. Or the sum of the values that consumers
exchange for the benefits of having and using the product or service.
 price is an important element in the marketing mix. that produces revenue; all other elements represent
costs.
 More importantly, price plays a key role in creating customer value and building customer relationships.
 Smart managers treat pricing as a key strategic tool for creating and capturing customer value.

10. Identify the three major pricing strategies and discuss the importance of understanding customer-
value perceptions, company costs, and competitor strategies when setting prices.

 Companies can use three major pricing strategies: customer value-based pricing, cost-based pricing, and
competition-based pricing.
 Customer value-based pricing uses buyers’ perceptions of value as the basis for setting price and.

set the ceiling for prices. If customers perceive that a product’s price is greater than its value, they will not
buy the product.

 Companies can use two types of value-based pricing. Good-value pricing involves offering just the right
combination of quality and good service at a fair price.

Value-added pricing involves attaching a added features and services to differentiate the company’s offers
and support charging higher prices.

 Cost-based pricing involves setting prices based on the costs for producing, distributing, and selling
products plus a fair rate of return for effort and risk
 . Company and product costs are an important consideration in setting prices.
 customer value perceptions set the price ceiling; costs set the floor for pricing.
However, cost-based pricing is product driven rather than customer driven. The company designs what it
considers to be a good product and sets a price that covers costs plus a target profit. If the
price turns out to be too high, the company must settle for lower markups or lower sales, both resulting in
disappointing profits. If the company prices the product below its costs, its profits will also suffer.
 Cost-based pricing approaches include cost-plus pricing and break-even pricing (or target profit
pricing).
 Competition-based pricing involves setting prices based on competitors’ strategies, costs, prices, and
market offerings.
 Consumers base their judgments of a product’s value on the prices that competitors charge for similar
products. If consumers perceive that the company’s product or service provides greater value, the
company can charge a higher price. If consumers perceive less value relative to competing products,
the company must either charge a lower price or change customer perceptions to justify a
11. Identify and define the other important internal and external factors affecting
a firm’s pricing decisions.
 internal factors that influence pricing decisions include the
company’s overall marketing strategy,
objectives, and marketing mix,
organizational considerations.
 Price is only one element of the company’s broader marketing strategy. If the company has selected its
target market and positioning carefully, then its marketing mix strategy, including price, will be fairly
straightforward. Some companies position their products on price and
then tailor other marketing mix decisions to the prices they want to charge. Other companies
deemphasize price and use other marketing mix tools to create nonprice positions.
 Other external pricing considerations include the nature of the market and demand and
environmental factors such as the economy, reseller needs, and government actions. The seller’s
pricing freedom varies with different types of markets. Ultimately, the customer decides whether the
company has set the right price. The customer weighs price against the perceived values of using the

product:

 Economic conditions can also have a major impact on pricing decisions. The Great Recession caused
consumers to rethink the price-value equation. Marketers have responded by increasing
their emphasis on value-for-the-money pricing strategies. Even in
tough economic times, however, consumers do not buy based on
prices alone. Thus, no matter what price they charge—low or
high—companies need to offer superior value for the money