Dr. Hassan Market Segmentation & Global Brand Strategy
Post on 07-Aug-2015
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Strategic Branding
Across World Markets
MKTG 6255: Strategic Brand Management
Prof. Salah S. Hassan
STAGE I: The term segmentation was first used by Wendell Smith in an article published in the Journal of Marketing in 1956. His idea was quite simple – divide your customers into categories and interact with them differently, then you’ll be able to supply products and services to various clients that perfectly meet their needs. STAGE II: As the world economy becomes more globalized, the number of opportunities for creating demand of universal goods keeps on increasing, implying the need for segmentation at the global level, a more complex method.
GLOBAL SEGMENTATION - the process of identifying specific segments of potential consumers in the form of a group of countries or groups of individual consumers with the similar demands and buying behavior patterns
According to Hassan and Craft (2005) there are four different approaches to global segmentation:
Identifying clusters of countries that demand similar goods
Identifying segments which are present in all of the countries
Targeting different segments in different countries with the same good
Focusing on similar segments that demand similar products.
Market activities
Organizational Structure
Strategic initiatives
Primary functioning
Primary functioning: Segmentation is used in developing strategic plans, in identifying and formulating objectives and creating competitive advantage Strategic initiatives: Segmentation is used in financial planning, development of new products and services, and during evaluation of various initiatives Organizational structure: Results of segmentation along with identified client needs are used to improve organizational structure with the goal of providing better client service Market activities: Segmentation is used to improve and refocus attention on client retention
Basis for segmentation Client #1 Client #2
Demographics •Woman •Over 40 years old •Married •$115,000 household income
•Woman •Over 40 years old •Married •$115,000 household income
Life Stage •Two kids •Working mother
•Two kids •Working mother
Needs •Seeks advise on menu planning (based on low fat and low cost) •Interested in culinary club
•Ready to use products •Prepared main meals •Home delivery
Choices •Price concerned during shopping •Preference for products with low fat content •Enjoys cooking
•Favors convenience during shopping •Enjoys organic food •Doesn’t like to cook
0
20
40
60
80
100
120
Client classification based on profitability
not profitable profitable very profitable
VERY PROFITABLE •What can we do to keep these clients so they continue spending their money on our goods and services? •How can we attract more clients of this type?
PROFITABLE •How can we make these clients spend their money in a way that most profitable clients do?
NOT PROFITABLE •How can we keep same of these clients while spending minimum
Real-time Every month/quarter Less frequent – every
quarter/once a year
Industry sector Financial Services Distribution companies of
specific goods, multinational
corporations, such as an
international leader in
pharmaceutical goods.
Distribution companies of
generic goods
Goal for
segmentation
Increasing market share
Taking clients to a more
profitable level
Identifying new targets
Retention of already
established client base
Taking clients to a more
profitable level
Development of the
optimal positioning
Identifying new target areas
Increasing market share
within established and
developing segments
Type of client
interaction
Based on systematic and
numerous contacts with
clients through bank branches,
online services, emails.
Based on visits to the store and
web-site for purchase of
needed goods or the ones of
an interest
Based on surveys
Data collected Personal data about the clients
through interaction,
demographical facts collected
through third party.
Personal client information
gathered through store cards.
General information from sales
data. Demographic
information through third
party.
Data gathered through
surveys. General
information from sales
data. Demographic
information through third
party.
• Brand is a method of differentiation in marketing
• Brand creation happens through development of unique product values that would distinguish it from competitors
• Consumers are rarely willing to pay a premium for general products or services, however, successful brands are those that provide additional value in addition to the basic benefit
• Positioning is the process of placing the image of the company in such a way that it takes a distinct and valued place in the mind of the consumer, as the idea is to differentiate specific product or service from that of the competitor
– developing certain product attributes
– through influence of advertising
There are two basic approaches to brand positioning based on segmentation:
1. Strengthening of the brand through increase of the product assortment based on current segmentations
2. Mastering of the new markets and segments based on client demands
High Quality
Low Quality
High Price Low Price
Brand A
Brand B
Brand C
Brand D
Global Brand Positioning Issues
Creating brand differentiation will be a key focus area to
set the brand apart from global competitors and to plan
for brand management based on:
Building original brand structures
Defining each brand's consumers and competitive set
Emphasizing innovative features
Dominating services & sales segments
Bringing each brand's positioning to life
In order for segmentation to be applied effectively, the approach should be integrated into all marketing activities. It cannot be limited to marketing communications. In other words, segmentation directly affects the structure of the company. It defines what business you do, what benefits you are going to remove, and then accurately determines how the benefits for customers may vary in different groups. Segmentation is created based on customer insights, and with brand positioning in mind is a powerful tool in marketing.
THANK YOU
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