Marketing Segmentation, Targeting and Positioning

Brand Name Strategies Defined Combination

Family and individual brand names are combined. Capitalizes on the reputation of the company while allowing the individual brands to be distinguished and identified. Eg- Microsoft Windows 8 Name needs to convey positive associations. Also needs to be easy to pronounce and memorable.

What Consequences of "pester power"?

Increase in materialism, obesity, stereotypes, sexualisation of girls, economic hardship during gift-giving season.

Organziational Segmentation Criteria

Organizations usually require quantity discounts. This means that the sales force needs to be good at negotiating. By understanding each industry's unique needs in depth, a more effective marketing mix can be designed.

Definitions of EMAAP letter P

P- Profitable Segment needs to be large enough to make a profit. These days' micro segments can be profitable due to advances in technology and production.

Under product-based co-branding: Parallel co-branding Ingredient co-branding Definitions

Parallel co-branding- two independent brands join forces Ingredient co-branding: one supplier explicitly decides to position it's brand as an ingredient for the product.

Why is Positioning difficult?

Partially due to an over-communicated society. As few as 5% of the marketing messages may gain the attention of a target audience. Therefore the message needs to be simple, direct and resonate with the customer's needs.

The Classic PLC- Decline

When new technology or changes in consumer tastes work to reduce demand for the product. Sales and profits fall. Reduce product depth or production altogether. Budgets may be slashed.

What are some ethical dimensions involved with packaging?

"Slack packaging"- oversized packaging to portray more than the package actually contains eg chips

How much are children worth in the marketing spotlight?

$1 trillion per year

Define Undifferentiated Marketing

1 marketing mix for whole market. Absence of differentiation is call undifferentiated marketing. Can occur by default. No pronounced differences in customer characteristics. Alternatively the cost of developing a separate marketing mix for different segments may outweigh the potential gains for meeting customers needs more exactly.

Strength of a brand's positioning in the market place is built on: D, H, V, A, P, R

1- Brand Domain 2- Brand Heritage 3- Brand Values 4- Brand Assets 5- Brand Personality 6- Brand Reflection

Strength of a brand's positing defined: D, H, V, A, P, R

1- Brand Domain- where the brand competes, brand's target market 2- Brand Heritage- the background/life of the brand and its culture 3- Brand Values- the core values and characteristics of the brand 4- Brand Assets- What makes the brand distinctive from other competing brands (features, symbols, images, relationships etc) 5- Brand Personality- the character of the brand described in terms of other entities, such as people, subjects or objects. 6- Brand Reflection- how the brand relates to self-identity; how the customer perceives himself/herself as a result of buying/using the brand.

Successful Positioning requires: 4 C's

1- Clarity 2- Consistency 3- Credibility 4- Competitiveness

Total Product Concept Elements? 3

1- Core Product 2- Actual Product 3- Augmented Product

Total Product Concept Definitions and Example= Hotel

1- Core Product- wanting a good nights sleep, the core needs to be supplemented by other attributes that that it is acceptable to consumers (eg bed outside it could rain) 2- Actual Product- Putting other things around the product making it acceptable marketing offer- styling, features, packaging, quality 3- Augmented Product- Competitive advantage- additional attributes (technology, design, installation, guarantees, delivery, brand value, additional services) in order to make the product stand out from the marketplace.

The Benefits of Market Segmentation

1- Enhanced Opportunities for growth 2- Enhanced Profitability 3- More effective targeting of communications 4- Opportunities of segment dominance 5- Improved customer retention

3 Brand Name Strategies:

1- Family 2- Individual 3- Combination

Brand Name Strategies Defined Family

1- Family- umbrella branding. A name used for all products. Eg- Google, Heinz Use of the family name in advertising helps promote all brands under that umbrella. The risk is that if the family brand name receives a bad reputation then the whole range of brands can be tarnished.

Key steps in producing a perceptual map

1- Identify the competitive brands 2- Identify- using the a qualitative research (eg group discussions)- the important attributes that consumers use when choosing between brands 3- conduct qualitative marketing research where consumers score each brand on all key attributes 4- plot brands on a 2D map

The 4 stages of the Classic PLC I, G, M, D

1- Introduction 2- Growth 3- Maturity 4- Decline

4 Categories of New Products

1- Product replacements- 45% 2- Additions to existing lines- 25% 3- New Product Lines- 20% 4- New to the world products- 10%

What are the two types of Co-branding?

1- Product-based co-branding 2- Communications-based co-branding

BCG Matrix consists of 4 symbols. What are they?

1- Stars 2- Cash Cows 3- Question Marks 4- Dogs

Developing a Positioning strategy requires consideration of

1- The Customer's- what attributes matter to them. 2- The Competitor's- finding differential advantage that cannot be easily matched 3- The company itself- building a position based on its unique attributes (increases likelihood hat advantage can be sustained)

What are some issues with the BCG Matrix?

1- The Matrix is based on cash flow, perhaps should be based on profitability 2- Position of the product on the market relies on market-share, therefore creating unhealthy pre-occupation with market share. 3- The market ignores the interdependencies within markets. Markets relying on each other. 4- Market growth rate is not the only factor contributing to market attractiveness- oversimplified.

Four Generic Target Marketing Strategies: (U,D,F,C)

1- Undifferentiated Marketing 2- Differentiated Marketing 3- Focused Marketing 4- Customized Marketing

Benefits of product-based co-branding?

1. Capture multiple sources of brand equity 2. Add value 3. Provide points of differentiation 4. Can also reduce the cost of production introduction since two well-known brands are combined, accelerating awareness, acceptance and adoption.

Define: Market

A market contains people or institutions with sufficient purchasing power, authority, and willingness to buy

Define: Marketing Mix

A combination of factors that can be controlled by a company to influence consumers to purchase its products.

Define: Market Segement

A group of buyers with similar needs and wants who respond in a similar way to marketing actions

The Classic PLC- Growth

A period of faster sales and profit growth. Rapid market acceptance and repeat purchases. Profits start to decline at the later stage of growth. New rivals entering the market- attracted by rapid sales and high profit potential. Eg- Internet search engines. Competitive shake out- weaker suppliers cease production. Marketing Objective: Build sales and market share Brand Objective: Build brand preference (this can be done using differentiation)

Define: Economies of Scale

A saving in costs gained by an increased level of production.

Definitions of EMAAP letter A1

A- Accessible Company able to formulate effective marketing programs for the identified segment. Clarity of what promotional campaign works best for the segment, how products are distributed in order to reach the segment etc.

Definitions of EMAAP letter A2

A- Actionable Company must have the resources and/or knowledge to exploit the opportunities identified through segmentation scheme. Eg- international markets

Consumer Segmentation Criteria- Examples of Profile

Age- under 12, 12-18,19-25 etc Gender- Male, female, trans Social Class- young single, young couples, retired Terminal education age- 16, 18, 21 yrs Income Geographic- north vs south Geodemographic

What is a product?

Any form of value that is offered in exchange for money, votes or time.

Consumer Segmentation criteria (3)

Behavioral, Psychographic, Profile

Difference between Brand Extension and Brand Stretching

Brand Extension- the use of an establised brand name within the same broad market Brand Stretching- the use of an established brand name within an unrelated market

What is a brand?

Brands distinguish the offering of one company from those of others in a competitive environment. Due to products being very similar, differentiation is usually found in branding. Value is derived from brand associations.

Perks of Marketing Segmentation

By grouping together customers with similar needs, provides a commercially viable method for serving the customer. Forms the basis by which marketers understand their markets and develop strategies for serving their chosen customers better than the competition. By examining market segments, companies are able to examine growth opportunities and expand their product lines.

Define: Repositioning

Can be required due to ever-changing taste's of customers and sometimes poor sales performance. This involves changing the target markets, the differential advantage, or both.

What is one consideration that should take place when a brand internationalizes?

Can the brand be marketing in the same way across geographic boundaries?

Define: Decentralized vs Centralized Purchasing

Centralized Popular in things like grocery retailing. Buying a range of different products. Opportunity for volume buying and therefore they have more power to demand price concessions. Also found to have more influence in the Decision Making Unit (DMU) Decentralized- often lack specialist's status and expertise.

The Benefits of Brand to Consumers

Communicates features and benefits- consumers BUY benefits Reduces the risk in purchasing Simplifies the purchase decision Symbolic value (opportunity for self experession eg perfume) Makes it easier to identify the product

Segmenting Consumer Markets

Companies don't often compete effectively across the whole market divide up into segment, identify which one's most effectively competing in, develop strategies best suited to that segment.

The Benefits of Brands to Organizations

Company Value- brand equity Consumer preference and loyalty Barrier to competition High profits Base for brand extensions

What is "The Grey Market?"

Consumers over 50. Life expectancies rising and people becoming healthier. They are financially independent and have a lot of leisure time and this is why companies are focusing on this segment more.

Variables that influence Choice Criteria: (3)

Cost Product Performance Service Orientation 3 segments therefore 3 marketing mixes needed to cover all segments. Emphasis on different sales benefits would need to be discussed when communicating with people from different segments.

Why is it risky to change the product packaging?

Customers may no longer recognize the product or find it hard to find.

Downsides to branding...

Difficult, expensive, takes time

Brand Name Strategies Defined Individual

Does not identify the brand name with any particular company. Example: Pringles This is used when it may be necessary to create separate, unrelated identities for each product. Example: Toyota abandoning the company name when it launched it's new upmarket executive car, Lexus.

Definitions of EMAAP letter E

E- Effective The segments identified should consist of customers with similar needs, but considerably different from those in other segments. If different segments are similar then the segmentation strategy should be revised.

Criteria for successful segmentation (EMAAP)

E- Effective M- Measurable A- Accessible A- Actionable P- Profitable

Consumer Segmentation Criteria- Define Behavioural

Eg- Buying on occasions. Behavioral patterns that consumers display when making decisions. Divides the customers based on their knowledge, attitudes, uses and responses to the product. Benefits sought, purchase occasion, purchase behaviour, usage, perceptions and beliefs. Brand loyalty (variety seekers and brand switching vs full loyalty)

Advantages of Differentiated Marketing?

Exploits the differences between marketing segments by designing a specific marketing mix for each segment. Also enables firms to achieve a wide range of potential customer groups, achieving economies of scale in the process.

Define: Focused Marketing

Focusing on one segment because some segments may not be attractive or in-line with business strengths. Sensible to serve one segment then develop a single marketing mix aimed at one target (niche). Appropriate for companies with limited resources- don't overstretch. Allows research and development to be concentrated, meeting the needs of one set of customers.

Define: Geodemographic

Geography + Demographics. In countries that produce population census data, it is possible to classify customers on the basis of location and certain demographic/socio-economic information.

The Purpose of Marketing Segmentation:

Identify differences in behavior that have implications for marketing decisions.

New Product Development Note

Introduction of new products to the market is the key to corporate success. However also risky and failure has to be tolerated.

Why is the BCG Matrix good?

It is simple.

Example of repositioning strategies

Keeping the target market and the product the same but changing the image of the product. Eg- promoting the elderly as being lively and energetic instead of doddery old souls.

Define: Trademarks

Legal Protection for a brand name, brand character, brand mark is provided through the registration of a trademark.

Positioning note

Linking the product or service to the solutions that customers seek and ensuring that, when they think about their needs, your brand is one of the first that comes to mind.

Definitions of EMAAP letter M

M- Measurable Possible to identify the customer's in the proposed segment, and to understand their characteristics and behavioural patterns. Age/occupation clear-cut whereas introvert/extrovert more difficult.

Developing Brands note

Management must be prepared to provide a consistently high level of brand investment to establish and maintain the position of brand in the marketplace.

Consumer Segmentation Criteria- Define Profile Variables

Marketer needs to describe the people who exhibit differences. Eg- Groups of people who value low calorie soft drinks- attempt to profile them in terms of age, socioeconomic groupings, geographic location. Socioeconomic= your financial status within society. Socio-economic, Geographic, Demographic.

Segmenting Organizational Markets

Organizational markets contrast with consumer markets, tend to be characterized by relatively small number of buyers. However still sometimes appropriate to segment organizational markets.

Define: Positioning Statement

Memorable, image-enhancing, written summation of the product's desired stature.

Total Product Concept- Augmented product note

Most differentiation efforts take place on this level. Firms are constantly looking for features that can give them an advantage in the marketplace. By putting effort into improving intangible change, firms are less likely to be able to mimic the changes.

Total Product Concept- Core Product/ Differentiation note

Most radical product differentiation usually happens when there is significant technical breakthroughs. Also occurs with shifts in strategic thinking Eg- Jetstar focusing on the core product instead of additional features.

There are 4 Categories of New products. Product Replacements Additions to existing lines New Product Lines New to the world products Which creates the most risk and why?

New to the world products. This is because it is hard to predict consumer's reactions. There is nothing to compare it to.

Why use numerical brand naming?

Numerical brand naming benefits technological products because it means they don't have to be translated when they go overseas.

Total Product Concept- Actual product note

Occurs when organizations aim to compete on the basis of elemetns of the product- eg- quality, design, features, packaging. Hard to differentiate with features so many companies turn to design (eg. Apple) TQM- Total Quality Management

Define: Niche Production

One marketing mix aimed at one target

Why is marketing to children so controversial?

People believe that it represents the sinister/ugly face of capitalism. "Pester power" some parents can't afford. On the flip side people argue that it is important to expose children to marketing because we live in a consumer society and therefore they are making more-informed decisions.

Define: PLC

Product Life Cycle. Managing individual brands and product lines over time. Nothing lasts forever so companies must terminate and develop products.

Benefits of Consumer Segmentation

Provides an understanding of why people buy in a market, and can aid to the identification of opportunities. Provides customers with the benefits that they value. Eg- Colgate's sub-brands in order to provide benefits to a number of segments. Tooth decay, white, kids

Consumer segmentation Criteria Note

Psychographic and behavioural patterns change over time, so consumers may not stay in the same segments. Therefore, segmentation analyses need to be done with the most up-to-date information.

Company messages need to be...(3)

Simple, Direct, and resonate with the customer's needs.

Examples of Pure goods (tangible), Pure Services(intangible), and Hybrids?

Pure Good: buying food, clothes Pure Service: Massage, doctors appointment, Hybrid: Eating at a restaurant

Target Marketing Definition

Refers to the choice of specific segments to serve- is a key element in marketing strategy. What and how many markets to compete in.

The Classic PLC- Maturity

Sales peak and stabilize. Competitive shake-out hastens.

How do children affect marketing?

Significant role in the purchasing household. "Pester power"- subtle influences or overtly nag parents to purchase a product- sometimes even when they don't have the means to pay for it. Eg- Toyota including farm animals to attract children.

Define Differentiated Marketing

Specific marketing mixed developed. Very popular market target strategy. Specific marketing mixes are developed in order to appeal to one or more segments when market segmentation reveals several potential targets.

Risks of differentiated marketing? 2

Spreading resources too thinly. Creating confusion in the marketplace of the company's purpose.

When both product and target market are changed, a company is said to be practicing _____________

Tangible repositioning

Define: Customized Marketing

Targeting the unique requirements of customers. Personalization of custom-made products. Eg- architects, solicitors, market research agencies. NikeiD allows people to personalize shoes online and then they are delivered. Netflix, Spotify. CO-CREATION PROCESS= MODERN WAY OF MARKETING.

Define: Positioning

The act of designing the company's offering so tha it occupies a meaningful and distinct position in the target customer's mind.

Definition of Marketing Segmentation

The identification of individuals or organizations with similar characteristics that have significant implications for the determination of marketing strategy

Define: Marketing Segmentation

The identification of individuals or organizations with similar characteristics that have significant implications for the determination of marketing strategy. I.e divisions of markets into sub markets that have common features. Customers with similar requirements.

Product-based Co-branding Definition

The linking of two or more existing brands from different companies- both names visible to the consumer.

What's a target?

The segment you want to try and reach in the market.

PLC Note

The speed at which products move through the PLC can vary. Eg- cars outdate rapidly.

How can an organziation choose which marketing to target?

Use the criteria for successful segmentation (EMAAP). Companies generally focus on one or two segements

Consumer Segmentation Criteria- Define Psychographic

Used when researchers believe purchasing behavior correlated with personality or the lifestyle of consumers. Lifestyle + Personality.

The Classic PLC- Introduction

When a product is introduced into the market. Sales growth typically low and losses are incurred as a result of heavy development and promo costs. Brand Objective: To create awareness so that customers become familiar with the product. Product likely to be fairly basic with emphasis on reliability and functionality. Advertising effective at this point. Low level competition + heavy development = high price. Patchy distribution and companies wary to stock it until it succeeds.

Define: Communication co-branding

the linking of two or more existing brands from different companies or business units for the purpose of joint communications. Eg- one brand recommending another. Popular in sponsorship deals.