case study
johnnys996
5.MktgSegmentation-Diff-Pos.pptxMarketing Planning Process
Analyze the Marketing Environment
Analyze Company Strengths & Weaknesses
Analyze the Competitive
Environment
Analyze Customers (Behavior)
Segment customers.
Target segments with unmet needs or weak competitors.
Differentiate and Position your brand
Design an integrated Marketing Mix: 4Ps.
Product, Price, Promotion, Place.
How will it change over the PLC
Implementation Plan, Roll-out
Control
Performance Metrics and Measurement Plan Evaluation
Corrective Action
Start
Recording
So where are we in our master framework of the Marketing Planning process ?
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SEGMENTATION, TARGETING, DIFFERENTIATION, POSITIONING
Chapter 9: Identifying Market Segments and Targets
Chapter 10: Crafting the Brand Positioning
Divide the total market into homogenous preferences
Select segments with unmet needs or weak competitors
Distinguish your offerings from competitors
Positioning
Segmentation
Targeting
Create the brand image and position in consumers’ minds
Differentiation
Value
Proposition
E
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How do you divided the market into homogenous preferences ?
Segmentation
1. Effective Criteria
2. Variables (Bases)
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Effective Segmentation Criteria
Segment size, purchasing
power, profiles, can be
measured.
Communication media,
distribution.
Segments are large or
profitable enough to serve.
Measurable
Accessible
Substantial
Differentiable
Actionable
Effective programs can be
designed to attract/serve
the segments.
Segments respond
differently to different
marketing mixes.
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Most Imp.: Differential. Segments must have different preference structures, different shopping and media habits, and respond differently to different communications and promotional mixes.
2. Sometimes a degree of market separation may be necessary to implement targeted strategies.
Bases for Segmenting Consumer Markets
Geographic
Demographic
Age, gender, ethnicity
Income, education, occupation
Family size/ life cycle, Social class
Psychographic
Lifestyles
Motives
Personality
Behavioral
Benefits sought, Occasions. User status, usage rate. Loyalty, price sensitivity.
Nations, states, regions Cities, suburbs, rural
Climate, terrain
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A large part of Database marketing today is based on a new twist to the old emphasis on Usage Rate—the RFM model=Recency, Frequency, Monetary Value.
What is a Lifestyle?
Activities: Clubs, community, entertainment, hobbies,
shopping, sports, vacation, work.
Interests: Degree of involvement in community, family,
fashion, food, home, recreation.
Opinions: Beliefs about, society, culture, business,
economy, technology, self and social issues.
AIO, VALS, PRIZM, PERSONIX
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Clustering
8%
11%
13%
12%
13%
14%
13%
16%
Lifestyles
VALS- 2
Values &
Personality
SRI International
Stanford Research Institute (SRI) International
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VALS
Multiple Segmentation Bases
Acxiom’s Personix Lifestage System
PRIZM: Geodemographics
PRIZM cluster analyzes 35,600 ZIP areas into 66
homogenous segments based on 39 variables:
- Demographics from Census of P&H
- Lifestyle data from regional surveys
- Media data from Mediamark Research
Profiles brand preferences for 1000 products, e.g.
autos, health insurance, detergents.
* PRIZM was developed by Claritas Corp. Now owned by market research giant Nielsen.
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PRIZM was developed by Claritas Corp. Now owned by market research giant Nielsen.
Elite Suburbs: Exurban Blues:
Blue Blood Estates Middle America
Pools & Patios Military Quarters
Kids & Cul-de-Sacs Country Families:
Urban Uptown: Shotgun & Pickups
Money & Brains Urban Cores:
Young Literati Hispanic Mix
Second City Society: Heartlanders:
Gray Power Grain Belt
Second City Centers: Rustic Living:
Towns & Gowns Back Country Folks
Sunset City Blues Hard Scrabble
Blue Blood
Estates
Shotguns
& Pickups
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All 66 PRIZM segments are grouped into 14 broader Social Groups
0.8% of US hh
Primary age: 35-54
Hh income: $113K
Home value: $452K
Predominant white
& Asian
Mod Republicans
Sample ZIPs:
Potomac MD
Saddle River NJ
Old Westbury NY
Rolling Hills CA
PRIZM: Blue Blood Estates
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Blue Blood Estates: Consumer Profile
Lifestyle Products
What’s Hot:
Country Clubs 471
1st Class travel 323
Tennis 317
Investments>50K 316
Price Club 280
Housekeepers 244
What’s Not:
Burger King 80
Power Tools 71
Kmart 58
Chiropractors 56
Food/Drink
Pita bread 261
Imported wine 260
CF Diet Coke 154
Dominos’ Pizza
Soy sauce 131
Mags/Newspapers
Wall St. Jl. 607
Longevity 481
Architectural Digest 425
Fortune 424
TV/Radio
Classical radio 509
Masterpiece Theatre 258
Wall Street Week 240
Pay-per-view Concerts 225
Cars/Trucks
Ferrari 2146
Land Rover 1816
Jaguar 1582
Infiniti 1455
Mercedes 1359
Lexus 1124
Saab 1124
Dodge Viper 1025
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1.7% of US hh
Primary age: 35-54
Hh income: $33.3K
Home value: $58.4K
Predominant white
Blue collar
Ed: High School
Cons. Republicans
Sample ZIPs:
Lynchburg TN
Iron City NC
Dallas, GA
Hager City, WI
PRIZM: Shotguns & Pickups
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Shotguns & Pickups: Consumer Profile
Lifestyle Products
What’s Hot:
Chewing tobacco 265
Tractor pulls 240
Auto races 197
Hunting 172
Fishing 163
What’s Not:
Bowling 45
Foreign Videos 42
Costco 15
Online services 0
Food/Drink
Spam 163
Diet Rite cola 154
Grits 153
Pasta 140
Mags/Newspapers
Woman’s World 231
Bassmaster 216
Modern Bride 197
Guns & Ammo 183
Country Living 182
TV/Radio
Bold & the Beautiful 267
Young & the Restless 212
CBS this Morning 191
Rush Limbaugh 182
Cars/Trucks
Dodge 3500 pickup 251
Chevy 4x4 pickup 246
Dodge 4x4 pickup 232
Ford 4x4 pickup 224
Pontiac Sunbird 177
Chevy Berettas 176
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Targeting
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TARGET MARKET STRATEGIES
Undifferentiated Marketing
Multiple Segment Marketing
Concentrated Segment Marketing
Micromarketing (Individuals)
Diffused Preferences
Appeal to what is
common in prefs (price)
Clustered Preferences
Distinct Mktg Mix
Unique large segment, or
underserved preference,
(high-end or ignored)
Personal mktg, customized
Super premium, INTERNET
Marketing
Expense
Low
High
When
Suitable?
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You book treats targeting in this manner.
Undifferentiated or Mass marketing: Diffused/fickle preferences—Appeal to what is common among preferences (usually price). Or: Variety strategy (Seiko). C
Differentiated or Segment: Clustered Preferences
Concentrated or Niche: Small/underserved segments. Usually very high end (RR/ Ferrari); very unique/individualistic (Apple); ignored (Auto insurance, finance).
Micromarketing: Regional assortments/promos; Dell; National Bicycle/Levy’s. Extent feasible due to new electronic channels.
Targeting Criteria
Segment(s) with unmet or poorly served needs
Segments with high levels of customer dissatisfaction
Market evolution: changes in consumer tastes/values,
or in market structure (distribution channels)
Weak competitors
- with older technologies,
- poor marketing programs,
- not engaged in the new media
New technology or business model that disrupt the market
Differentiation
& Positioning
(Chapter 10)
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But Differentiation is not that simple. Where does one start? NEXT SLIDE
Product Differentiation
Form
Features
Quality
Performance Quality
Precision Quality
Durability
Reliability
Reparability
Design: The Integrating Force
Differentiation Variables
Product
Services
Personnel
Distribution Channel
Image
Consumer’s model of Quality
As your book lays out for you there are many variables you can differentiate with.
Let us take the most natural one—PRODUCT differentiation. CLICK. But here too there are many dimensions, CLICK and then dimensions within dimensions CLICK.
So what is your answer ??? Exactly, as marketers our answer always is “how the customer sees it”
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Quality Segments
Positioning
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POINTS OF PARITY
Differentiation & Positioning
POINTS OF DIFFERENCE
Key is a Unique Selling Proposition (USP), or a few, that are:
important to consumers,
distinctive vis-à-vis competitors’ positioning,
highlights an attribute of the firm on which it has superior capabilities, and
The United Airlines slogan, which debuted in 1965. United Airlines
The United Airlines slogan, which debuted in 1965. United Airlines
(4) communicates in powerful ways (“Brand Mantras”).
Communicates in powerful ways—Just do it, Think Different
Text also mentions Preemptive, Affordable and Profitable, but these are not the driving concepts
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Price Positioning
- High - Medium - Low
Q: Benefit/Attribute positioning--Price
Would you appeal
to price advantage?
No—affordable quality
or value
Would you position
on quality?
?
No—use social status
or ego
Benefit and attribute positioning are hard to maintain in a dynamic market (e.g. tech products.
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Q: So How do you market to the middle ?
Most “popular” brand
Brand symbols, mascots
Points of parity with premium brands
Positioning by associations: lifestyle, peer effects, reference group effects
Tony the Tiger, Kellogg cereals
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Brand Mascots
The misery of Sears and Kmart
Sears could not find a way to market to the middles class. But it never tried to develop a unique Brand identity. Like may be developing a powerful, likeable Mascot. Even Target has been able to differentiate itself in the Discount retailing market with a mascot.
Compare McDonald’s likeable Ronald McDonald with Burger Kings creepy King ? Bk retired the King in 2011 but I think they have brought him back ! Do you think he resonates with Gens X Y or Z?
P.S. Walmart is slowly killing its POD—friendly service. If Amazon gobbles up the bulk of its market, then the only viable physical discount retailing chain may well become Target.
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Brand Associations: Disney--Magic Kingdom
Budweiser--Just Regular Guys
POSITIONING PITFALLS
Under positioning
Over positioning
Confused positioning
Doubtful positioning
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USP: Perception of expertise that comes from specialization. KFC
Double: Appeals to dual segments. LR Discovery
Triple: Aquafresh
Under: Poor or vague positioning. But necessary for mass market appeal.
Over: Too powerful & narrow an image. Sears. Cadillac.
Brand becomes synonymous with a product. Kleenex, Xerox, Roller Blades.
Confused: Too many images, too frequent changes, too many overlapping product lines.
Doubtful. To tall a claim. Smallest/most powerful; fastest/most gas efficient.
Pepsi clear, clear gasoline.
Q: Rate these
Brand positions
Under positioning
Over positioning
Confused positioning
Doubtful positioning
Doubtful
Over
Confused
Under
Used to be well positioned
Pepsi-doubtful
Burger King-confused. Too many advertising themes/mascot is weird and outdated
Sears—0verposition in middle class image
Chevy—under positioning
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Video: Repositioning your Competitor
Embedded video
Jack Trout on Repositioning the Competition. Trout is well known authority on positioning for 4 decades. In 1972 he and Al Ries wrote the book on Positioning.
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Positioning or Perceptual Maps - Segmenting - Targeting - Differentiating - Positioning
Positioning maps can do it all for you—segmenting, differentiating and positioning in a very visual way.
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Blue Collar
Full Bodied
Popular
with Men
Special
Occasions
Dinning Out
Popular with
Women
Less Filling
Pale Color
Low in
Alcohol
On a
Budget
Old Milwaukee Light
Meister Brau
Old Milwaukee
Miller Lite
Coors Light
Michelob
Budweiser
Beck’s
Heineken
Miller
Coors
Regional Beer Market
Rate each brand on the above features
Rate your preferences for each feature
Chicago market, 1993 data
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Blue Collar
Full Bodied
Heavy
Popular
with Men
Special
Occasions
Dinning Out
Premium
Popular with
Women
Less
Filling
Light
Pale
Color
Low in
Alcohol
On a
Budget
Correlation Space
Local
Brewery
Length of vector = importance of variable in forming the dimensional linear combination.
Angle between vectors = correlation between variables Note length and angle are in multidimensional space
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Blue Collar
Full Bodied
Heavy
Popular
with Men
Special
Occasions
Dinning Out
Premium
Popular with
Women
Less
Filling
Light
Pale
Color
Low in
Alcohol
On a
Budget
Dimenisional Space
HEAVY
LIGHT
PREMIUM
BUDGET
Local
Brewery
Blue Collar
Full Bodied
Heavy
HEAVY
LIGHT
PREMIUM
BUDGET
Popular
with Men
Special
Occasions
Dinning Out
Premium
Popular with
Women
Less
Filling
Light
Pale
Color
Low in
Alcohol
On a
Budget
Old
Milwaukee
Light
Meister
Brau
Old
Milwaukee
Miller
Lite
Coors
Light
Michelob
Budweiser
Beck’s
Heineken
Miller
Coors
Brand Positions
Local
Brewery
Blue Collar
Full Bodied
Heavy
Popular
with Men
Special
Occasions
Dinning Out
Premium
Popular with
Women
Less
Filling
Light
Pale
Color
Low in
Alcohol
On a
Budget
Preference Space
1
4
2
3
5
HEAVY
LIGHT
PREMIUM
BUDGET
Local
Brewery
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1
4
2
3
5
Blue Collar
Full Bodied
Heavy
HEAVY
LIGHT
PREMIUM
BUDGET
Popular
with Men
Special
Occasions
Dinning Out
Premium
Popular with
Women
Less
Filling
Light
Pale
Color
Low in
Alcohol
On a
Budget
Old Milwaukee
Light
Meister
Brau
Old
Milwaukee
Miller
Lite
Coors
Light
Michelob
Budweiser
Beck’s
Heineken
Miller
Coors
Perceptual Map
Local
Brewery
More recent Perceptual Map of the Beer Market shows:
Perceptual Map have been applied to many markets:
Perceptual mapping sensitive to variables used. Requires careful selection of measurement variables
… and it is not very useful if we don’t’ map preference segments
… and Company Brands show little separation on variables used (individual brands may show better discrimination)
… in this study only luxury brands showed meaningful “corporate” brand identities
In this study only BMW and Volvo were found to have meaningful corporate brand identities (like Apple has).
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Divide the total market into homogenous preferences
Select segments with unmet needs or weak competitors
Distinguish your offerings from competitors
Positioning
Segmentation
Targeting
Create the brand image and position in consumers’ minds
Differentiation
Value
Proposition
43
Experience
Barista
Starbuck’s has connections to Moby Dick and Nordic fables. The founders wanted a logo which evoked Seattle's maritime history. They found a 15 th century old sketch of a two-tailed mermaid in an old nautical book. The two tails (on either side) are not emphasized now.
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Note on POSITIONING MAPS
The next slide pictures a map of a regional beer market. Two major
dimensions (red) define this space– Heavy-Light, Budget-Premium
[he variables underlying these dimensions are the white arrows,
known as vectors. They are positioned in the map by their correlations
in the data].
The consumer preference segments in this space are shown as
red circles reflecting the size of the segment.
The position of the major brands are shown as black squares.
The map shows which segments each brand is primarily serving (the
closest circle) and which attributes it is most associated with (nearby
vectors) .
An especially valuable research technique for analyzing the segment
structure of markets and positioning brands, is “Perceptual Maps”.
They use advanced statistical methods to identify (1) the important
dimensions describing the perceptual space in which consumers see
brands, (2) where competing brands are seen as positioned in this
space, and (3) where customers preferences (segments) are clustered
in this space.
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