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Chapter 4 The IMC Planning Process CHAPTER OBJECTIVES

Students should be able to answer the following questions: 4.1 What makes marketing research critical to the IMC planning process? 4.2 What categories are used to identify consumer target markets or market

segments? 4.3 What categories are used to identify business-to-business market segments? 4.4 How do the various approaches to positioning influence the IMC planning

process? 4.5 How do the marketing communications objectives interact with the other elements

of an IMC planning process? 4.6 How are communications budgets established? 4.7 What elements are considered in developing an IMC program? OVERVIEW This chapter describes the nature of the integrated marketing communications planning process. An integrated marketing communications planning process requires careful oversight by the company’s marketing personnel and any agencies the firm employs. IMC Planning and McBreakfast The vignette describes how the management and marketing team at McDonalds’ sought to increase sales by serving breakfast all day. The huge rollout was countered by other chains seeking to blunt the impact by engaging in similar tactics. Questions for Students:

1. What consumer market segments does an all-day breakfast program serve? 2. Do you think the new tactic will keep working after the initial roll-out had success?

This chapter describes the nature of the IMC planning process (see Figure 4.1)

It begins with communications research that identifies potential target markets and positioning strategies that match brand offer. Next, communications objectives are specified. Finally, a budget designed to achieve the communication objectives is matched with the IMC components to be employed. International considerations are taken into account. Objective 4.1: What makes marketing research critical to the IMC planning

process? Communications Research Three primary research approaches include product-specific research, consumer-oriented research, and target-market research. Product-specific research involves identifying key product characteristics that become selling points, such as phone apps for various consumers. Product-specific research goes beyond understanding attributes or characteristics. It includes an understanding of benefits that a product provides Consumer-oriented research assists marketers in identifying the context of a product’s use.

• An anthropological approach involves direct observation of consumers using the good or service.

• A sociological analysis examines social class issues, trends, and family life cycle changes.

• The psychological approach looks at motives for product purchases, such as feeling sexy, powerful, or intelligent.

Target-market research identifies who will be the recipient of the planned communications campaign. A focus group consists of consumers who are retained to talk about a particular topic, product, or brand in front of a moderator or panel who tracks consumer comments and ideas. The insights gained can become crucial elements in the IMC planning process.

Objective 4.2: What categories are used to identify consumer target markets or market segments?

Market Segmentation by Consumer Groups Target markets are often carefully specified as part of the market segmentation process, which is discussed in detail later in this chapter. A market segment is a set of businesses or group of individual consumers with distinct characteristics. For a market segment to be considered a viable target, it should pass the following tests:

• The individuals or businesses within the market segment should be similar in nature, having the same needs, attitudes, interests, and opinions. This means persons or businesses within the segment are homogenous.

• The market segment differs from the population as a whole. Segments are distinct

from other segments and the general population.

• The market segment must be large enough to be financially viable to target with a separate marketing campaign.

• The market segment must be reachable through some type of media or marketing

communications method. Market segmentation consists of identifying specific groups based on their needs, attitudes, and interests. Figure 4.2 displays the methods of segmenting the consumer market. Segments Based on Demographics Gender Males and females purchase differing products, buy similar products with different features (e.g., deodorants for women versus men), buy the same products for dissimilar reasons (stereos, televisions), and buy the same products after being influenced by different kinds of appeals through different media. Figure 4.3 examines marketing to tweens.

Age Children, young adults, middle-aged grown-ups, and senior citizens are all targeted by different types of marketing campaigns. Often age-related factors are combined with other demographics such as gender. Children have a major impact on the purchasing decisions their parents make. Another age-based demographic group, which appeals to many firms, is seniors, defined as individuals over the age of 55. Income Spending is normally directed at three large categories of goods: necessities, sundries, and luxuries. The amount of goods in each category a consumer will purchase is highly dependent on their income. Ethnicity The three major ethnic groups in the United States are African Americans, Hispanics, and Asian Americans. Although different in many ways, there are several common threads among these ethnic groups. They all tend to be more brand loyal than their white counterparts. They value quality and are willing to pay a higher price for quality and brand identity. They value relationships with companies and are loyal to the companies that make the effort to establish a connection with them. In recent years, the ways in which marketing professionals approach ethnic marketing have changed. Rather than create separate campaigns for each ethnic group, agencies take a more holistic approach and that incorporates insights into various ethnic groups to help create stronger campaigns. Psychographics Psychographics emerge from patterns of responses, which reveal a person’s attitudes, interests, and opinions (AIO). These patterns can then be applied to other demographics, including gender, income, and education. Question for Students: Which demographics and psychographics match you? Your parents?

Segments Based on Generations Figure 4.4 identifies the characteristics of various generational segments. The idea behind generational segments is that each generation goes through similar events that create similar viewpoints and attitudes. Figure 4.5 looks at the millennial generation. Segmentation by Geographic Area Marketing appeals made to people in a geographic area or region is geo-targeting. This method is especially useful for retailers who want to limit marketing communication programs to specific areas and for companies conducting direct mail campaigns in target areas. Geodemographic Segmentation Geodemographics combines census data with psychographic information. An example would be PRIZM (Potential Rating Index by Zip Marketing), which is a company that specializes in geodemographics. PRIZM has identified 62 different market segments in the United States. Benefit Segmentation Benefit segmentation focuses on the advantages consumers receive from a product rather than the characteristics of consumers themselves. Demographics and psychographic information can be combined with benefit information to better identify segments. Usage Segmentation The goal of usage segmentation is to seek to provide the highest level of service to a firm’s low or casual, medium or heavy users. Many companies are able to identify heavy users by utilizing their own databases, using bar- code scanners, point-of-sale systems, and credit/debit transaction cards data. Objective 4.3: What categories are used to identify business-to-business market

segments? Business-to-Business Segmentation Figure 4.6 lists the various forms of business-to-business segmentation.

Segmentation by Industry Many firms use the NAICS (North America Industry Classification System) code. The NAICS code is replacing the SIC (Standard Industrial Classification) coding system. Firms can target specific industries such as construction (23) or wholesale trade (42). They can also segment within a specific category. Segmentation by Size The rationale for this method is that large firms have different needs than smaller companies and therefore should be contacted in a different manner. Segmentation by Geographic Location This approach is especially beneficial for businesses that have customers concentrated in geographic pockets such as the Silicon Valley area of California. Companies can also use geodemographics, combining geographic areas with demographic and psychographic data. Segmentation by Product Usage Business markets can be segmented by how the good or service is used. Many services (financial, transportation, shipping, etc.) have a variety of uses for distinct customers. Segmentation by Customer Value This method of segmentation is much easier for business-to-business firms to utilize than it is for consumer businesses, due to the availability of in-depth data about each business customer. A more precise value can be assigned to each individual business through sales records and other sources of data and information. Objective 4.4: How do the various approaches to positioning influence the IMC

planning process? Product Positioning Positioning is the perception created in the consumer’s mind regarding the nature of a company and its products relative to the competition.

Positioning features variables such as the quality of products, the price, methods of distribution, packaging, image, and other factors. Two elements stand out: (1) how the product is perceived by customers and (2) the product’s standing relative to the competition. Approaches to Positioning Various product positioning approaches are shown in Figure 4.7. Product Attributes Any product trait or characteristic that sets it apart from other products may be considered an attribute. Competitors Using competitors to establish position can be accomplished by contrasting the company’s product against others. Use or Application Positioning that involves creating a memorable set of uses for a product emphasizes the use or application approach (Arm & Hammer as a deodorizer). Price-Quality Relationship Businesses that offer products at the extremes of the price range may position by price– quality relationships. Product User This involves distinguishing a brand or product by clearly specifying who might use it. Product Class Position can be based on product class, such as an energy drink (Red Bull) versus soft drinks (Coke, Pepsi). Cultural Symbol Positioning a product as a cultural symbol is not easy. When the position is successfully achieved, the company holds a strong competitive advantage.

Question for Students: Are there any cultural symbols for your generation? What are they? Other Elements of Positioning A brand’s position is never completely fixed. It can be changed. Brand positioning applies to business-to-business marketing efforts. International Positioning In the international arena, effective positioning remains vitally important. Plans are made to establish an effective position when a firm expands into new countries. Effective positioning, by whatever method chosen, should increase sales and strengthen the long-term position of an individual product and the total organization. Objective 4.5: How do the various marketing communications objectives interact with the other elements of an IMC planning process? Marketing Communication Objectives Marketing objectives tend to be general because they are for entire company. Some examples of marketing objectives include the following: • Sales volume • Market share • Profits • Return on investment In contrast, a communications plan may emphasize a specific communications objective. Figure 4.8 lists some of the more common objectives present for profit-seeking organizations.

• Develop brand awareness • Increase product/service category demand • Change customer beliefs or attitudes • Enhance purchase actions • Encourage repeat purchases • Build customer traffic • Enhance firm image • Increase market share

• Increase sales • Reinforce purchase decisions

Benchmark measures, which consider a starting point in relation to a degree of change following a campaign, are useful to IMC programs. Objective 4.6: How are communications budgets established? Methods for determining marketing communications budgets appear in Figure 4.9. Types of Budgets Percentage of Sales Budgets can be based on sales from the previous year or anticipated sales for the next year. Meet-the-Competition Meet the competition seeks to prevent loss of market share by raising or lowering expenditures to match the competition. Figure 4.10 displays ad spending and market share of top credit card companies. “What We Can Afford”

This method sets the marketing budget after all of the company’s other budgets have been determined. Money is allocated based on what company leaders feel they can spend. Objective and Task This method begins with a list of all communication objectives to pursue during the year and then calculates the cost of accomplishing each objective.

Payout Planning This occurs when management establishes a ration of advertising to sales or market share. This method normally allocates greater amounts in early years to yield payouts in later years. Quantitative Models Quantitative models are simulations of relationships between advertising and sales or profits. They may be difficult to create accurately.

Communications Schedule A pulsating schedule involves continuous advertising and communications during the year with bursts of higher intensity at specific times (more ads in more media). Companies can also select a flighting schedule or approach, whereby communications are presented only during peak times, and not at all during other times of the year. Many marketing experts believe spending in level amounts keeps the brand name repetitively in front of consumers, which is a continuous campaign schedule for items such as durable goods. Objective 4.7: What elements are considered in developing an IMC program? IMC Components Advertising expenditures may not make up the major portion of a marketing communications budget. In terms of dollars spent, media advertising normally accounts for about 41 percent of a marketing communications budget. Trade promotions receive about 28 percent and consumer promotions average about 28 percent of overall marketing expenditures (see Figure 4.11). These percentages vary considerably from industry to industry Budgets also vary by product type Figure 4.12 shows ad spending as percent of sales for select industries. Figure 4.13 indicates global ad spending by media. International Implications Figure 4.13 identifies some of the tactics used by successful globally integrated marketing communications programs. It is important to make sure the company's products and marketing messages will be understood in the region and, when needed, tailored to an individual area. The goal is to create a borderless marketing plan that uses the same basic marketing approach for all of a company’s markets. This allows each subsidiary the freedom to determine how to implement that marketing plan, in essence, to think globally but act locally.

Another key is developing local partnerships. Local partners can be marketing research firms or advertising firms that are familiar with the local language and culture. These partnerships sometimes are formed by hiring a cultural assimilator, who has an understanding of the market and speaks both the language of the parent company and the local region. Communication segmentation means creating a communications package that effectively reaches all possible target markets in another country. A well-designed market communications analysis begins with the marketing team identifying strengths and weaknesses of local competitors and places in which opportunities exist. Finally, solid communication objectives should be established. INTEGRATED CAMPAIGNS IN ACTION: PROGRESSIVE BANK Banks operate in a competitive market. Making one standout can be difficult, especially through an advertising campaign. For a local bank, it becomes even more challenging. French Creative advertising agency accepted this challenge with Progressive Bank. The agency developed a unique campaign that not only highlighted some of the bank’s strengths but also brought a human into the campaign to make the bank personal. Important Note to Professors: The MyLab feature at Pearson will grant you access to the Integrated Campaigns in Action within the Instructor’s Resource section. The authors’ blog for professors and students may be found at http://blogclowbaack.net/. Both methods contain actual print materials produced for the campaign. Broadcasts material such as video ads, TV ads, and radio ads are embedded using YouTube and Pearson servers. These features bring to life the exciting process of building integrated advertising and marketing campaigns. Most important, you will have access to insights and background information from the agencies and the companies involved in how the campaigns were created.

IMPLICATIONS FOR BRAND AND PROMOTION MANAGERS (Note to professors—these materials are not in the text. They provide a method for you to summarize the chapter in a different way) Recognize the connection between planning processes and evaluation processes. In other words, planning should only begin after previous efforts have been reviewed and analyzed. This would lead the account executive to ask the following questions about previous marketing communications and campaigns.

• What was done right? • What was done wrong? • What are the company’s strengths and weaknesses? • Did the last campaign (or previous promotional efforts) change this company’s

strengths and weaknesses?

When conducting IMC planning process, the account executive should be aware of the following items:

• What the competition is doing (and plans to do, if that can be discovered) • What opportunities are present in the environment • How current company objectives can be integrated into the overall IMC

approach • What kinds of promotional strategies are in place • Alternative tactics that will help support the company’s strategies

As potential new market segments are being examined, consider the following criteria. • Contribution to sales • Contribution to profits, including how much should be spent in order to induce

sales and revenues from the segment • Potential for growth of the segment • Potential to build company and brand loyalty in the segment • Potential for competition from other firms seeking to capture the same segment • The ability to match the firm’s message to the particular attitudes and needs of

the segment • The possibility of combining segments or designing similar appeals to segments. • Other short- and long-term implications of designing promotional efforts toward

the segment Appraise global markets using the same criteria as were used for local target markets.

REVIEW QUESTIONS 4-1. What three forms of market research are used to develop marketing communications? Three primary research approaches include product-specific research, consumer- oriented research, and target-market research. 4-2. What functions are performed by focus groups? A focus group consists of consumers who are retained to talk about a particular topic, product, or brand in front of a moderator or panel who tracks consumer comments and ideas. 4-3. Define market segment and market segmentation. A market segment is a set of businesses or group of individual consumers with distinct characteristics. Market segmentation consists of identifying specific groups based on their needs, attitudes, and interests. 4-4. Define demographics. How are they used to segment consumer markets? Demographics are population characteristics. Target markets can be identified by gender, age, educational level, income, and ethnicity, as these are homogenous groups. 4-5. How can firms take advantage of target markets by gender? Segments for men and women can be combined with other demographics to create target markets, for example, teenage females and senior men. 4-6. How do firms use age to identify market segments? Children, young adults, middle-aged grown-ups, and senior citizens are all targeted by different types of marketing campaigns. Often age-related factors are combined with other demographics such as gender. Children have a major impact on the purchasing decisions their parents make. Another age-based demographic group, which appeals to many firms, is seniors, defined as individuals over the age of 55. 4-7. What role does ethnicity play in identifying market segments? The three major ethnic groups in the United States are African Americans,

Hispanics, and Asian Americans. Several threads are common threads among these ethnic groups. They all tend to be more brand loyal than their white counterparts,

value quality, and are willing to pay a higher price for quality and brand identity. They value relationships with companies and are loyal to the companies that make the effort to establish a connection with them.

In recent years, the ways in which marketing professionals approach ethnic marketing have changed. Rather than create separate campaigns for each ethnic group, agencies take a more holistic approach and that incorporates insights into various ethnic groups to help create stronger campaigns. 4-8. What problems are associated with markets segmented according to geographic areas?

The main problems associated with segmenting the market geographically are that everyone in the geographic area is targeted, with no focus on personal preferences or individual differences.

4-9. What are geodemographics? How can they be successfully used to define market segments?

Geodemographics is a combination of using census data with psychographic information. This approach can be successful because marketers can conclude that people in certain areas tend to have the same basic needs. Geodemographics segmentation goes a step further by suggesting common personal preferences in individual geographic areas.

4-10. Describe usage segmentation and benefit segmentation.

Usage segmentation is defining the market by usage or purchases. It is designed to maximize sales to all user groups. Companies then gather information from their most frequent customers and form their own database of customers describing their wants and needs. Benefit segmentation is focusing on the advantages consumers receive from a good or service rather than the characteristics of consumers themselves. Companies use this technique to understand the preferences of different groups of consumers.

4-11. What are the common business-to-business market segments?

The common business-to-business market segmentation concepts are by industry, business, and size. Segmentation by industry is utilizing the NAICS codes to identify a company’s potential of being a quality customer.

4-12. Describe the NAICS approach to business market segmentation.

The NAICS approach to segmentation is using the company’s business code to decipher what products the firm will need or purchase. It is better than the old SIC code because it broadens the product categories from 10 to 20. This allows for a more precise classification of businesses.

4-13. Describe a usage segmentation approach in a business-to-business setting.

An example of a usage segmentation approach in a business-to-business setting would be that although Xerox markets to most businesses, the company pays extra attention to schools because these organizations utilize so many copiers, allowing for both sales and service contracts. (Student answers will vary.)

4-14. Describe a segmentation approach based on company size. A segmentation approach based on company size would target companies within a certain range. For instance, an advertising agency may target firms that have sales from $3 million to $20 million. Another agency may target the small firms, with incomes less than $3 million. Another agency may go after extremely large international firms, with sales over $1 billion.

4-15. Define product positioning and identify the types of positioning approaches that can be used in the IMC planning process. Positioning is the perception created in the consumer’s mind regarding the nature of a company and its products relative to the competition. It includes the following:

• Product Attributes • Competitors • Use or Application • Price-Quality Relationship • Product User • Product Class • Cultural Symbol

4-16. What is a benchmark measure? A benchmark measure represents the starting point that has been established in relation to the degree of change following a promotional campaign. In other words, the benchmark is the baseline from which future outcomes can be assessed.

14-7. What common marketing communications objectives do firms establish? The most common marketing communications objectives that firms establish are the following: • Develop brand awareness • Increase product/service category demand • Change customer beliefs or attitudes • Enhance purchase actions • Encourage repeat purchases • Build customer traffic • Enhance firm image • Increase market share • Increase sales • Reinforce purchase decisions

4-18. Describe the methods that can be used to establish a communications budget.

The types of communications budgets are the following: • Percentage of sales method, which uses a percentage of the previous year’s sales

and a projection of the coming year’s sales • Meet the competition, which is designed to prevent a loss of market share • What we can afford, which establishes the marketing budget after all other

budgets have been set • Objective and task method, which allows management to set goals and ways to

achieve those goals through marketing dollars • Payout planning, which establishes a ratio of advertising to sales or market share

based on Nielsen ratings • Quantitative models use computer simulations to locate relationships between

advertising and promotional expenditures 4-19. Describe the three types of advertising schedules that may be used during the

course of a year. A pulsating schedule involves continuous advertising and communications during the year with bursts of higher intensity at specific times (more ads in more media). Companies can also select a flighting schedule or approach, whereby communications are presented only during peak times, and not at all during other times of the year. Level amounts of spending keeps the brand name repetitively in front of consumers, which is a continuous campaign schedule.

4-20. Which IMC components are more likely to be used in business-to-business marketing communications programs, as compared to consumer markets? Figure 4.14 indicates how business-to-business marketing monies are allocated.

Although telemarketing may be detested by consumers, it remains an important component of business-to-business marketing. Direct mail is used extensively along with noncatalog direct mail. Television advertising is a much smaller amount than for consumer products while internet marketing expenditures are much larger, used even more than television.

CRITICAL THINKING EXERCISES Discussion Questions 4-21. Assume you are a marketing intern for Lululemon and have been asked to

conduct some communications research around the brand’s leggings. Identify the three types of communication research and describe how you could use each to gather information that can be used in marketing Lululemon’s leggings.

The students should note product characteristics and what needs they serve (product

research), the types of customers who would be interested in the items and why (consumer research) based on sociological or psychological needs, and then state a target market based on demographics, age, usage, or some other (less likely) market segmentation approach.

4-22. Daniel Taylor Clothier has noticed a decline in the sales of men’s ties. Company

marketers believe they should focus advertising effort on the market segment most likely to purchase ties. Examine the segmentation variables identified in Figure 4.2. If you were responsible for the segmentation strategy for Daniel Taylor Clothier’s, which segmentation variables would you use? Justify your answer.

Age, gender, income, and psychographics are all possibilities. Student answers will

vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

4-23. Make a list of five consumer goods or services segmented on the basis of gender but sold to both genders. Are there any differences in the product or service attributes? Are there differences in how they are marketed? What are those differences? Do you think using a different marketing approach has worked?

Student responses will vary. They should note how each gender uses the product and

how companies advertise and promote the products. Refer to the MyLab for an

opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

4-24. Make a list of five consumer goods or services that are segmented on the basis of

age. Are there actual differences in the product or service attributes? Are there differences in how they are marketed? What are those differences? Do you think using a different marketing approach has worked?

Student answers will vary based on their personal response. Refer to the MyLab for

an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

4-25. Examine the list of demographic segmentation variables. For each demographic variable listed in the text, identify two products that are marketed to a specific demographic segment. Identify the specific demographic segment and explain why the product is aimed at that particular market segment. Identify one brand that has been especially successful at reaching a specific demographic segment. Student answers will depend on products chosen. 4-26. Examine the VALS psychographic groups presented in the chapter. For each of

the following goods or services, identify the VALS segment that would be the best to target. Justify your choice. Describe an advertisement or marketing communication that could be use for the VALS segment you identified for each product.

a. Seafood restaurant b. Home accounting software c. Optometrist or eye-care clinic d. Florida resort e. Home furniture Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board. Student answers will vary, but some suggested answers follow. a. A seafood restaurant is satisfying hunger needs, entertainment needs, and can be

marketed to be exotic, showing sea shores and people enjoying themselves at the beach. (Red Lobster)

b. Home accounting software saves time and gives the person a sense of control.

c. An optometrist or eye-care clinic sells the benefit that the consumer will see more clearly. Safety is also an issue, as well as a customer service. (Pearle) America’s Contacts and Eyeglasses markets to lower-income people through price.

d. A Florida resort offers relaxation and luxury (benefit) and may appeal to certain

age groups and income levels. e. Home furniture depends on the price and quality levels involved.

4-27. Millennials are an attractive generation for marketers. Examine the millennial segments described in the chapter. Which segment do you belog to? Why? Identify a friend or relative that would fit into each of the other millennial segments. Explain why you would put them into that particular millennial segment.

Student answers will depend on the friend or relative chosen and that person’s characteristics.

4-28. Usage segmentation targets heavy users, average users, light users or nonusers.

Describe campaigns for each of the usage segments for a tanning salon. In your discussion, identify the best communication objective for each of the campaigns and the product positioning strategy that you would use for each segment. Justify your decisions.

Student answers will vary based on their personal response. Refer to the MyLab for

an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Heavy users do not constitute the best target for a campaign. You can only tan so much. Average users can be encouraged to keep going, the objective being loyalty to the specific salon. Attempting to move light users to higher levels would involve some approach making increase tanning more attractive.

4-29. For each of the product-positioning strategies discussed in this chapter, identify two brands that feature the strategy and explain how the strategy is used to successfully market the brand. Student answers will vary by brands chosen.

INTEGRATED LEARNING EXERCISES 4-30. Use a search engine to locate five companies on the internet that sell swimwear.

For each of the companies, discuss the types of products sold and the types of promotional appeals used. Review each website. Describe the segmentation strategy you think the company is using and the specific market segments being targeted. For each company, which product-positioning strategy is being used? Justify your choice.

Student reports will vary. Promotions will probably feature fashion, sleek/sexiness, price, and quality. 4-31. A brand’s product-positioning strategy should be an integral part of the

company’s advertising and marketing strategy, including its website. Examine the following websites and identify the product-positioning strategy that you think is being used. Explain your choice.

a. Polaris (www.polarisindustries.com) b. Edgewater Beach & Golf Resort (www.edgewaterbeachresort.com) c. Celestial Seasonings (www.celestialseasonings.com) d. Sony (www.sony.com) e. Stetson cologne (www.stetsoncologne.com) Polaris highlights the benefits of using the product. It may also be viewed as a

cultural symbol form of positioning. Edgewater Beach positions itself as the only “full service” resort on Panama City

Beach, suggesting segmentation possibly based on income and possibility based on customer benefit.

Celestial Seasonings is represented as a healthy and natural product line, which

suggests psychographics or benefit segmentation. Sony emphasizes quality of its product lines. The company could target by

income, geodemographics, benefit, or usage segmentation. Stetson tends to emphasize cultural symbols in its marketing. It targets males. 4-32. VALS psychographic segmentation can be a valuable tool for marketers as

they prepare their marketing materials. Access VALS through the Strategic Business Insights (SBI) website at www.strategicbusinessinsights.com/vals and examine the characteristics of each of the groups. Then take the test to determine which group you belong to. How can VALS help marketers develop advertising messages?

Students will receive different group locations based on their answers. VALS2 can then target the individual groups with more specific messages.

4-33. A current trend for many companies is the development of marketing

messages for specific demographic, ethnic, or lifestyle groups. This allows for a more targeted message than is possible for the mass audience. Go to the following websites. What types of marketing messages are on each site? How could the information on these websites be used to develop integrated marketing communication plans?

a. Parents (http://www.pbs.org) b. Women (womensenews.org) c. African Americans (www.targetmarketnews.com) d. Gays and lesbians (http://www.gaycenter.org)

iVillage features sections on beauty and style, health and well-being, diet and fitness, love and sex, pregnancy and parenting, house and home, entertainment, and magazines. WomensNews.org features articles about items including gender, gender roles, babies, children for adoption, and other stories.Targetmarketnews.com has a wide list of media featuring black performers and participants. GayCenter.org features a he center that is the heart and home of NYC's LGBT community, providing programs for health, wellness and community connection.

4-34. For the following firms, examine the company’s website to determine what segmentation strategy is being used. Describe the intended target market for the website. What communication objective(s) do you think the company is trying to accomplish? What product positioning strategy is being used? Explain your responses.

a. Sara Lee Deserts (www.saraleedeserts.com) b. Skeeter boats (www.skeeterboats.com) c. Reynolds Protection (http://www.reynoldsprotection.com/protection.com) Student answers will vary depending what is on the website at the time the students

access them. 4-35. Go to the authors’ website at clowbaack.net/video/ads.html. Watch one of the

television ads for DuPage Medical Group, one of the television ads for Terrebonne General Medical Center, and one of the ads for St. Francis Medical Center. Identify which three ads you watched. For each ad describe who you think is being targeted using the methods of consumer segmentation described

in the chapter. Define each of the approaches to product positioning described in the chapter. For each of the three TV ads you picked, decide which positioning approach is being used. Justify your answer.

Student answers will vary. 4-36. Go to the authors’ website at clowbaack.net/video/ads.html. Watch one of the

television ads for Ouachita Independent Bank, one of the television ads for Progressive Bank, and one of the ads for Centric Federal Credit Union. Identify which three ads you watched. For each ad describe who you think is being targeted using the methods of consumer segmentation described in the chapter. Define each of the approaches to product positioning described in the chapter. For each of the three TV ads you picked, decide which positioning approach is being used. Justify your answer.

Student answers will vary. Blog Exercises Access the authors’ blog for this textbook at the URLs provided to complete these exercises. Answer the questions that are posed on the blog. 4-37. Motel 6: http://blogclowbaack.net/2014/05/05/motel-6-chapter-4/ 4-38. Carnival Cruise Line: http://blogclowbaack.net/2014/05/05/carnival-cruise-line-

chapter-4/ 4-39. Segmentation and positioning:

http://blogclowbaack.net/2014/05/05/segmentation-and-positioning-chapter-4/ These exercises provide you with an additional tool to engage your students. Student Project: Creative Corner This exercise is designed to help students create ads for Yamaha Boats using the VALS2 typology of segments. CASES Case 1 THE JAPANESE STEAKHOUSE EXPERIENCE 4-40. Which consumer market segments best match with Benihana?

Student answers should note age (probably more targeted toward teenagers and older), income (at least some disposable income), education (tied to income), and benefit (enjoyment, fun). Ethnicity answers could be interesting, as the company targets more than just Asians. 4-41. Explain the positioning approach used by Benihana. Product attributes include a unique dining experience. Product user includes people who enjoy dining out. Cultural symbol would be of Japan, not the United States. 4-42. If you were assigned to create a competitor restaurant that prepared and served Japanese-style hibachi meals, which colors would you choose for the restaurant? What type of music should be played? What other features should be key parts of the interior of the restaurant? How would you differentiate the restaurant from Benihana and other similar chains? Student answers will vary. The colors would be festive, the music probably Asian or “elevator music.” Other features would be unique cultural items that might somehow make the experience different, if Benihana has a restaurant in the city. 4-43. For the same competitor restaurant, assume that it has only one location in Seattle, Washington. Design an advertising campaign and identify the types of media that would reach your target market and create the right positioning. Local media might include a city-based magazine, newspaper, billboards or outdoor, and radio. The campaign should be based on the goal associated with reaching a target market (awareness versus loyalty for example). 4-44. The color red holds special meaning in Asian culture as a symbol of celebration. Consequently, red is featured in much of Benihana’s marketing materials. Which colors would match other restaurant types, such as fried chicken, fast food hamburgers, or pizza parlors? Would your answer be different if the food were to be sold in other countries? Why or why not? Student answers will vary widely. In class, note that certain colors represent somber elements, such as mourning or death. These should be avoided. Case 2 Phase 2 Fitness Center 4-45. Explain each of the types of research presented in the chapter in terms of the

Phase 2 Fitness Center. Which would you recommend? Why? Three primary research approaches include product-specific research, consumer- oriented research, and target-market research. Student choices will vary

4-46. Discuss the potential consumer market segments that Phase 2 Fitness Center

could serve using the information on consumer segmentation. Which segment or segments would you recommend? Why?

Student choices could include demographics (gender, age), psychographics (fitness enthusiasts, benefit (get in shape), or usage (low, medium, high users.

4-47. Are there any business-to-business segmentation opportunities present? Why or

why not? Definitely. The company could reach out to local firms and offer programs. 4-48. What positioning approach would be most valuable to Phase 2 Fitness Center?

Defend your answer

Choices include: • Product Attributes • Competitors • Use or Application • Price-Quality Relationship • Product User • Product Class • Cultural Symbol

Student answers will vary. 4-49. Explain the most viable marketing communications objectives for the opening of

the Phase 2 Fitness Center. Then note how those objectives might change over time.

Choices include:

• Reinforce purchase decisions Student answers will vary. MyMarketingLab

Go to mymktlab.com for the answers to the following Assisted-graded writing

questions:

4-50. A dog breeder recognizes the need for segmenting her advertising and marketing.

Discuss the merits of each of the methods of segmentation presented in the text (see

Figure 4.2). Based on your discussion of each method, which would you

recommend? Why? Define in your own words each of the product positioning

strategies. Based on your segmentation decision, which positioning strategy would

you use? Why?

4-51. Use a search engine to locate three companies on the internet that sell activewear. For

each website, discuss the types of clothing sold and the types of promotional appeals

used. For each website identify the market segmentation strategy you believe is being

used and the product positioning strategy that is being used. Justify your choice.

Bonus Case BOSE: HIGH-END SOUND REPRODUCTION

A case can be made that sound reproduction has become one of the areas in which

technological innovations have made the most profound leaps forward. Leading the way

are major competitors such as Sony, Philips, Tivoli Audio, and Bose. Many forms of

sound delivery exist, some featuring earphones and headphones, and others through

stand-alone speakers.

The Bose Corporation began operations in 1964. Amar G. Bose, a professor of

electrical engineering at the Massachusetts Institute of Technology, became frustrated

during his attempt to purchase a high-quality stereo system. He believed that the speakers

that were available had impressive technical specifications but failed to reproduce the

realism of a live performance.

Four years later, the first Bose product reached the market. In a very short time, Bose

has delivered a series of innovations in sound.

Currently, the Bose Wave products are at the forefront of quality sound, including the

Wave radio, Wave music system, and Acoustic Wave music system. Each is designed to

deliver the most realistic sound through a compact, attractive device that will fit in any

room in the home or office. The product can be linked with a dock that both plays and

recharges an iPod. Another product allows the user to wirelessly play and store music

from an internet radio station. Other Bose products include headphones, home theater

systems, speakers, and sound systems for various locations, including boats and

businesses.

Bose systems are on the high end in terms of price. For example, the most widely

purchased Wave music system had a list price of $499.95 in November 2009. To entice

buyers, product discounts are routinely offered, including a $100.00 price reduction when

the Wave is purchased with the accompanying multi-CD changer. Also, Bose offers one-

year, interest-free financing.

The Bose marketing program includes use of traditional media, most notably

television, newspaper, and magazine advertising. The company’s website allows buyers

to find and purchase all items online. The company employs a limited number of retail

stores that feature the Bose line. The primary marketing emphasis remains focused on

quality. For example, Fortune rated the Bose QuietComfort headset, which cancels

outside noise, as the best-quality option for headphones.

Although a company’s reputation for quality may help to drive sales, outside factors

can interfere. The recession that began in 2008 and continued into 2009 led many

shoppers to cut back purchases, especially for more expensive luxury items. Bose was not

immune to this trend. The company was forced to lay off nearly 1,000 workers, or 10

percent of its labor force, during the decline.

At the same time, Bose forged ahead, seeking to develop new technologies in areas

other than sound. As the economy continues to recover, business analysts expect Bose to

build on its core products while moving into new areas, furthering the growth of this

innovative, energetic organization.

(1) Explain how the IMC planning process would apply to future marketing efforts for Bose Wave products. All of the elements would apply including context, customers, competitors, and communications, market segments, product positioning, communication objectives, budgets, and IMC components. (2) Identify the market segments that the Bose Wave products should continue to maintain. Based on positioning, the target markets will be persons with higher incomes who enjoy high quality music.

(3) Should Bose continue to compete based on the high-price/high-quality positioning, or develop programs to reduce prices and entice a wider variety of shoppers? This is a discussion question, and student responses may vary. It may damage the brand to try to move to any other than the current position. (4) What should be the primary marketing communications objectives for Bose? Student answers will vary; however, the primary objective may be to keep the brand in the consumer’s mind when he or she is ready to make a new sound system purchase. The company may also wish to inspire action, especially during higher purchase seasons such as Christmas. (5) What type of budget should be used for the Bose promotional program? Student responses will vary; however, the objective and task may be best, given the choice or marketing objectives. (6) Which IMC components best match the target market, position, objectives, and budget for Bose products? Bose typically features television and magazine and Sunday supplement newspaper advertising.