Marketing Campaign analysis

Session 3 Segmentation

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Segmentation, targeting, Differentiation and Positioning

Segmentation Strategies

Products of Segmentation

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Why Segmentation?

• Facilitates efficient resource utilization

• Allows effective targeting of new customers

• Facilitates competitive advantage

• Directors the marketing mix

• Enhances customer satisfaction

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Art and Science

Art

• Analytical skills and resources

• Commercial judgment

• Creative insight

Science

• Measurability

• Profitability

• Accessibility

• Relevance

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• Customer-oriented segmentation • Geo-demographics (Demographics, socio-economic and geographical information)

• MOSAIC (Experian), ACORN (CACI) • Life stage • Multivariable approach • B2B

Capital One

https://www.youtube.com/watch?v=XSxA3uuY3Cg

Experian HK (29 types, 10 groups)

COM5407 8Source: Experian MOSAIC HK

Experian application

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Source: Experian MOSAIC HK

Financial Acorn

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Financial Mosaic % UK pop

A – Wealthy Investors 8.4

B – Prospering Families 7.1

C – Traditional Money 8.4

D – Young Urbanites 5.3

E – Middle Aged Comfort 12.0

F – Contented Pensioners 4.3

G – Settling Down 6.5

H – Moderate Living 13.0

I – Meagre Means 12.0

J – Inner City Existence 7.6

K – Impoverished Pensioners 14.7

Source: http://www.caci.co.uk/financialacorn.aspx

ACORN

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These are overwhelmingly professional areas with many people educated to degree level. The largest age group is 30-34 and there are equal proportions of single and two person households. *Accommodation tends to be converted flats and people are taking out high value mortgages in order to purchase these * Income levels are extremely high with above average activity in all types of financial services * High internet, credit card and personal pension plan activity

Source: http://www.caci.co.uk/financialacorn.aspx

Life stage banking • https://www.youtube.com/watch?v=7hfTJSOti

II

Life stages and product needs

Single full time education

• Current a/c, deposit a/c

Single Working

• Current a/c, credit card, travel & car ins, Loans, Deposit a/c, MPF

Married

• Current a/c, credit card, travel & car ins, Loans, mortgage, Deposit a/c, building ins, MPF, life ins, investments (higher risks)

Young Married with Kids

• Current a/c, credit card, travel & car ins, Loans, mortgage, Deposit a/c, building ins, MPF, Life ins, investments (moderate risks)

Married Mid- aged w Kids

• Current a/c, credit card, travel & car ins, Loans, mortgage, Deposit a/c, building ins, MPF, Life ins, investments (higher risks)

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Financial Services Marketing, An International Guide to Principles and Practice, p154

Married Mid- aged w Kids

• Current a/c, credit card, travel & car ins, Loans, mortgage, Deposit a/c, building ins, MPF, Life ins, investments (higher risks)

Empty nesters

• Current a/c, credit card, travel & car ins, Loans, mortgage, Deposit a/c, building ins, MPF, Life ins, investments (moderate risks)

Married Retired

• Current a/c, credit card, travel & car ins, Deposit a/c, building ins, MPF, Life ins, investments (low risks), annunities

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Segmentation consideration

Market potential: What is the total size of the segment in dollars or units? • Sales potential: What market share percentage of this segment can you reasonably expect to develop (over one or more years)? • Competition: Who are the market leaders? What strengths and vulnerabilities make this an attractive segment? • Ease of reach: How will you reach this segment? Are there identifi able media that match key variables? • Cost: How much will it cost to reach this market? Can you afford it? • Other resources: Do you have products that appeal to this market segment? Suffi cient marketing resources and expertise? • Fit: Does this segment fi t with your organization’s objectives? Are there confl icts or synergies with other client segments? Are there changes in the environment that will make this segment more or less desirable in the future?

Segmentation Checklist

Use the checklist below to identify the important characteristics of your own markets— ❑ current and targeted for development. ❑ Demographic variables ❑ Financial variables (such as total investable assets, size of payroll) ❑ Geographic variables ❑ Life-cycle variables ❑ Product/service needs ❑ Attitudes toward product/service ❑ Buying behavior ❑ Behavioral variables ❑ Belong to (social/professional groups/networks) ❑ Media (specific reading/viewing/online habits) ❑ Responsive to (type of marketing approach) ❑ Market potential

B2B

• Industrial sector

• Co size

• Ownership

• Geography

• Business processes

– Purchasing

– Decision-making

– Choice criteria

• Business performance

• Markets served

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Positioning and Differentiation

• Examine strengths (For example, experience in international hedging strategies.)

• Determine target market need. (Is there a need in the marketplace that is not adequately being met? Would a fund of hedge funds be interested in adding an international specialist to its roster?)

• Analyze the competition. (Who else is offering international hedging strategies? What are each group’s strengths and weaknesses?)

Positioning Maps

Source: https://rwconnect.esomar.org/tangible-meanings-in- intangible-categories-semiotics-of-banking-brands/

Perceptual mapping

• Consumer perceptions of your company and competitors

– Clarity

– Credibility

– Consistency

– Competitiveness

– Distinctive?

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Excellent Service

Poor Service

High Reputation

Low reputation

Positioning Statements

• How would you describe our company? If you were charged with selling the company,

• What are the highlights of the story you would tell? • How would you describe the business the company is in? • What are the benefits we provide to our clients? • What are the most important factors accounting for our success? • Who are our competitors? • What is the firm’s greatest differential advantage over the

competition? • What are our firm’s strengths and weaknesses? • How would you describe the personality of the of the firm in three

adjectives? • What is your view of the company’s mission?

Positioning

“the world’s local bank”

“Leading the way in Asia, Africa and Middle-East”

“Citi never sleeps”

“理財創富, 專注為你”

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Positioning products and organisations

• To generate a clear value proposition to customers

• Creating distinctive place in market

• Relevant to target segment?

• Achieve differentiation?

• Can it be clearly communicated?

• Can it be sustained?

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Creating a Brand Identity

• Positioning defines a company or product in relation to its markets and competitors.

• Branding attempts to create a unique perception, an emotional or intellectual bond between product and end user.

Why branding

• Brand image translates into profits because a branded product can command a • higher price than an equivalent generic product. • Many banks offer free credit cards, but because American Express is a preferred

brand name, it can command a premium. • A brand image provides a shorthand way of letting constituents know what to

expect from the company. A brand image has a personality, and a perceived level of quality is associated with particular brands. Sales staff, recruiters, or investor relations managers will have a far easier time getting an audience if their target markets are already familiar with the brand image. When an American Express account manager calls up a new prospect, it will be easier to get an appointment than if that same salesperson were representing an unknown company.

• It is much cheaper to introduce a new product, or brand extension, if it is attached to a familiar brand name, such as the American Express plum card, successfully introduced in 2007.

• Most important of all, a brand name is unique. It is one characteristic of your product that cannot be copied by your competitors.

Steps to branding

• Creating a brand image

• Borrowing a brand image

• Supporting a brand image

• Defending the brand

Repositioning

Image repositioning Product repositioning

Intangible repositioning Tangible repositioning

27

Same Different

Product

Same

Different

Jobber, extracted from Ennew, C, Waite, N, 2007

Image Repositioning: Hong Kong & Shanghai Banking Corporation to HSBC Merger:

Brand