reflection of lecture

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24736_Spr2020_week4_targetaudience.pdf

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24736 Marcoms_ Lecture 4 20/08/2020

KC Spr 2020 1

UTS CRICOS 00099F

24736 Marketing Communications

Target Audience Selection

Week 4, Spring 2020 Kaye Chan

UTS CRICOS 00099F

Review of last week’s lecture

• Partitioning

• Relationship of partitioning to marketing objective of market share

• Competitive frame

• Budgeting

• Objective & task method

• How does advertising contribute to profit?

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Partitioning

Note: it is related to marketing objectives & market share

Beverages

Competitive frame: where partitioning diagram ends & where ‘true’ competition occurs

UTS CRICOS 00099F

Target audience selection

24736, Week 4, Spring 2017

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24736 Marcoms_ Lecture 4 20/08/2020

KC Spr 2020 3

Overview of this week

• Target audience selection

• Target audience action objectives

• Communication objectives (introduction)

Campaign planning process

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Target audience selection

• Customer markets -> segmentation

• Method for selecting target audience

• Product markets -> partitioning

• Segmentation methods

• A combination of • Demographic | Psychographic | Geographic | Usage/Behavioural

Time to think

• When is a purchaser different to user

• What examples can you think of?

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Target audience positioning decision

• Who is the brand for?

• General stakeholder types

• End customers (Business or Consumer)

• Other publics

• Trade customers

• Media

• Specific campaign target audiences

• Behavioural segmentation

• Social-demographic segmentation etc

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Conceptualising our market

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Customer Flow Framework D

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Brand A (yr brand) (MS %)

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Leverage Points

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Customer flow leverage points

1. Public awareness/behaviour

2. Innovation/education

3. Competitor activities

4. Consumer behaviour

• Market Opportunities

• 1-2: shape market

• 3. penetrate market

• 4. maximise usage of brand

Behavioural segmentation

a. Brand’s current customers

b. Competitor brand’s customers • Who could in principle try or re-try our brand, but don’t

c. Non-users of the category • Who could in principle try the category via our brand

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Behavioural segmentation

1. NCU – new category users

2. BL – brand loyals

3. BS – brand switchers

4. OBL – other brand loyals

Behavioural segmentation

1. NCU

2. BL

3. BS

4. OBL

Required for assignment 1 & 2

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Out brands customers

a. Brand loyals

b. Favourable brand switchers

A. Our brand’s current customers

a. Brand Loyals (BLs)

Those who prefer to buy our brand

1. Single-brand loyals (monogamous)

2. Multi-brand loyals (polygamous)

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Divided loyalty – Polygamy is rife!

• Occurs in markets

• Where brands are not heavily differentiated • Where consumer choice was constrained, but has now opened

up to competition • Where consumer choice was limited, but where alternatives are

more accessible/convenient • That were characterised by habit/inertia, but where switching

costs have fallen

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Our brand’s current customers

b. Favourable Brand Switchers (FBSs) Those who occasionally buy our brand & also buy other brands

3. Experimental favourable brand switchers

4. Routinised favourable brand switchers

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B. Other brands’ customers

c. Other-Brand Switchers (OBSs)

d. Other-Brand Loyals (OBLs)

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B. Other brands’ customers

c. Other-Brand Switchers (OBSs)

Those who buy other brands, but not ours

5. Favourable other-brand switchers

6. Neutral other-brand switchers

7. Unfavourable other-brand switchers

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B. Other brands’ customers

d. Other-Brand Loyals (OBLs)

Those who prefer to buy a brand other than ours

8. Favourable other-brand loyals

9. Neutral other-brand loyals

10. Unfavourable other-brand loyals

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C. non-users of the category

New category users (NCUs)

Those who might enter the category, if they see a need to do so

11. Positive new category users 12. Unaware new category users 13. Negative new category users

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Summary - Four (main) buyer groups

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Brand Loyals (BL)

New Category

Users (NCU)

Other Brand loyals (OBL)

Brand Switchers

(BS)

Non-users

Category users

Other brands

Our brand

How do multi-brand loyals (MBLs) differ from Brand

Switchers (BS)?

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How do multi-brand loyals (MBLs) differ from Brand Switchers (BS)?

Audience # brands Loyalty level

Sensitivity to price & promotion deals

MBLS

BS sometimes called promiscuous consumers MBLS sometimes called polygamous consumers

How do multi-brand loyals (MBLs) differ from Brand Switchers (BS)?

Audience # brands Loyalty level

Sensitivity to price & promotion deals

MBLS Switch among 2-3 brands

Loyal to a few brands

Not influenced for brands outside “loyalty” set

BS Switch among more brands

Non-loyal Are influenced

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How do you determine which buyer group is

being targeted?

How do you determine which buyer group is being targeted?

Look to ad for clues in language

i. “switch” to our product => BS or OBL

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How do you determine which buyer group is being targeted?

Look to ad for clues in language

i. “switch” to our product => BS or OBL

ii. “try our” product; “test drive”; trial; sample => NCU, OBS

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Life cycle clues – introductory/growth stages

Focus on:

• NCU -> enter category by buying your brand as it offers something to them

• BL -> build this group quickly • BS -> focus -> can you make them BL?

Experimental & routinized BS typical in early PLC • OBL -> could target, but if they have tried brand and

didn’t buy it they offer limited sales potential

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Life cycle clues – growth maintenance

• Focus on:

• NCU -> X , unless enticing with sales promotion; generally aware & would have tried it by now

• BL ->  : get them to buy more or more often • FBS ->  : shifted from experimental to routinized

BS, get them to switch to your brand more often/ switch out less often

• OBL -> X

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Managing switching costs

• Increase switching costs to competing brands - reward cards

• Decrease switching costs from competing brands - consolidating bank accounts

• E.g. one energy supplier: can now merge gas & electricity

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Managing switching costs

• Management difficulties

• Not all competitors can simultaneously increase switching costs to competing brands and decrease switching costs from competing brands

• Winners & losers

• Competitive parity

• Not all consumers want to be switched

• It remains convenient to keep a repertoire

• A repertoire helps to spread risk

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Who to focus on

• Target audience that offers greatest sales potential

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Specific campaign target audiences

Other bases of segmentation

• Geographic coverage

• Geo-demographic & socio-demographic delineation

• Psychographic or lifestyle delineation

• Personality traits

• etc,…

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Assessing target audience potential

Leverage

• Determine the leverage from each group & use this to focus communication efforts

• Leverage is (# buyers in prospect group x $ sales increase per capita less $ cost of marcoms campaign)

• Or use CLV for buyers in each prospect group

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Leverage

BLs – single-brand loyals

(monogamous buyers)

• “lock-in” customers with increasing amounts of service & rewards/benefits

• Establish databases of customers, use DM/email etc to get them to buy more &/or cross-sell other related products/services

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Leverage

BLs – multi-brand loyals

(Polygamous buyers)

• Tend to be larger buyers (brand & category) -> greater sales contribution

• Scope to buy more from you and less from someone else

• & vv!!

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Target audience positioning decision

To simplify: describe two levels of audience

1. Primary target audience greatest leverage – i.e., most of sales increase comes from

2. Secondary target audience ongoing & supplementary sales comes from

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UTS CRICOS 00099F

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Target audience action

1. Trial

a. NCU b. OBL c. OBS

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Customer acquisition i.e. getting new users to your brand from other brands or new entrants to the category

Target audience action

2. Usage

a. Repeat -> BL b. Switching -> BS

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Retention of loyal brand users / getting more of the frequent users of brand

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Communication objectives

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Communication Effect

Definition

Category Need Buyer’s perception of requiring something (product or service) to remove or satisfy a perceived discrepancy between the current motivational state & the desired motivational state

Brand Awareness Buyer’s ability to identify (recognise or recall) the brand within the category in sufficient detail to make a purchase

Communication objectives

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Communicatio n Effect

Definition

Brand Attitude Buyer’s overall evaluation of the brand with respect to its perceived ability to meet a currently relevant motivation (consists of an “emotional” or affective motivation-related component which energises brand choice & a “logical” or cognitive component which directs choice toward the particular brand)

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Communication objectives

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Communication Effect

Definition

Brand Purchase Intention

Buyer’s self-instruction to purchase the brand or take purchase-related actions

Purchase Facilitation

Buyer’s perception of other marketing factors (the “4P’s” that can hinder or stimulate purchase)

Summary – target audience selection

1. Define the target audience in terms of its behaviour (i.e. routinized FBSs)

2. Delineate the target audience with reference to additional factors (eg. geographical coverage)

3. Fine-tune by taking account of involvement, media & behavioural sequence model (eg low-involvement category for buyers & influencers, with limited decision-making)

4. Feed this information into later stages of marcom planning, especially positioning & target audience action objectives

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