MT 219 Marketing Unit Four Segmentation and Targeting Products and Branding Note: This seminar will be recorded by the instructor.

MT 219 Marketing Unit Four

Segmentation and Targeting

Products and Branding

Note: This seminar will be recorded by the instructor.

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Before we get started:

If you have any troubles in seminar, please do call Tech Support at:

1-866-522-7747

They can assist if you get “bumped” from the seminar room or experience other difficulties.

Review of Unit Three• We examined the area of consumer buying behavior and the

psychological and social underpinning of that behavior.

• There are many conscious and unconscious reasons why we consume what we do.

• We also looked at how organizations and businesses purchase. Business buying behavior differs considerably from the reasons consumers buy and is focused on reselling or renting products to others at a profit.

• Questions?

Unit 4 Objectives

• In this unit, we are going to look at market segmentation and how marketers use it to effectively target groups of consumers who are likely to want their products.

• After that, we will look at how marketers classify products.

• We will also examine the important differences between goods and services and why those differences make the marketing of services challenging.

Reading Assignment

• Chapter 6 & 7

• This week's reading assignment is available in Doc Sharing. It is called "kaplan_marketing_unit04.pdf".

• Watch the tutorials for this unit’s assignments:

• Market Segmentation

• http://khe2.acrobat.com/p64vkiqxltu/

Customer Driven Marketing Strategy

• Four stage process that segments, targets, differentiates and positions a product

• Segmentation- Basic Process: Heterogeneous Market Segmentation Homogeneous Sub-Markets

• Targeting- Selecting the best segments to focus on• Differentiating- Create unique benefits for target segments

• Positioning- Placing product into customer’s minds compared to

competition.

Target Market Segmentation

1. Identify appropriate strategy

2. Determine segmentation variables

3. Develop segment variables

4. Evaluate segments

5. Select specific segments

Geographic Variable

• Climate• Terrain• City size• Urban/rural values• Market Density• Geo-demographic Segmentation• Micromarketing

Demographic Variables – closely related to needs and measurable

• Age• Gender• Race• Ethnicity• Income• Education

• Occupation• Family size• Family life cycle• Religion• Social class• Sexual orientation

Psychographic Variables

• Social class• Lifestyle

- Achievers

- Strivers

- Survivors

• Personality- Compulsive

- Romantic

- Authoritarian

- Enthusiastic

Behavioral Segmentation Variables

• Most Powerful Variables• Underlies all other segmentation variables• These relate most directly to consumer desires• How the product benefits the consumer directly• Examples-

- Occasions

- Loyalty

- Usage rates

Which Segment Variables to Use?

• Marketers are not likely to use just one segment variable

• Market segments often combine multiple variables together to create a desirable target segment

• Which variables might be combined to create a segment for-

- Harley Davidson Motorcycles/

- Prada Shoes?

Criteria for Effective Segmentation

1. Measurable- Must be quantifiable

2. Accessible- You must be able to reach them

3. Substantial- Must be large enough so company benefits

4. Differentiable- Segment must respond differently

5. Actionable- Company must be capable of marketing to identified

segments

Major Segmentation Strategies

• Undifferentiated – Single product and single strategy for entire market – requires homogeneous market.

• Differentiated- Two or more segments each with its own marketing mix

• Concentrated – Single segment , one strategy

• Micromarketing- products tailored to individuals or smaller local areas

Positioning

• Where the product lives in the mind of the consumer as it relates to the competition

• Identify and select appropriate competitive advantages for the product

• Combine competitive advantages to develop an overall positioning strategy

- More for More

- More for the same

- More for less

- The same for less

- Less for much less

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© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Goods and/or Services Are the Product

Classifying Consumer Products

• Convenience – relatively inexpensive, frequently purchased items with many substitutes. Don’t confuse with a convenience store.

• Shopping – items for which buyers are willing to spend considerable effort to compare and purchase. Don’t confuse with what you buy when just shopping

• Specialty - products with unique characteristics for which consumers are willing to expend effort

• Unsought – items people do not know of or do not think about buying. Many times due to emergency needs. Also, many impulse items.

Services

Intangible products involving a deed, performance, or effort that cannot be physically possessed

-Haircuts-Concerts-Tax preparation-Annual doctors’ physicals

Nature of Services

• Intangibility• Inseparability• Variability• Perishability

Let’s look at these individually

Issues related to service intangibility

• Difficult for customers to evaluate• No physical possession• Difficult to advertise and display• Pricing is problematical and subjective• Service process not always protected by patents

Issues related to service inseparability

• Does not allow for mass production• Customer participation required• Other customers can affect process• Difficult to distribute

Issues related to variability

• Quality difficult to control• Standardization is a problem• Services vary from provider to provider• Services can vary from the same provider• Reputation is crucial• Franchises try to emphasize service homogeneity• Reason for grading rubrics

Issues related to service perishability

• Services cannot be stored or inventoried• Unused capacity is lost forever• Demand may be time sensitive• Balancing supply and demand is difficult

Branding- Brand Equity

The marketing and financial value associated with a brand’s strength in a market

brand name awarenessbrand loyaltyperceived brand qualitybrand associations

Selecting a Brand Name

• Easy to pronounce, spell and remember• Trademarkable• Distinctive• Conveys brand benefits• Travels globally- Big concern today

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Short & SimpleShort & Simple

Easy to Spell & ReadEasy to Spell & Read

Easy to Recognize & RememberEasy to Recognize & Remember

Easy to PronounceEasy to Pronounce

Can Pronounce in Only One WayCan Pronounce in Only One Way

Can Pronounce in All LanguagesCan Pronounce in All Languages

Suggests Product BenefitsSuggests Product Benefits

Meets Packaging/Labeling NeedsMeets Packaging/Labeling Needs

No Undesirable ImageryNo Undesirable Imagery

Always TimelyAlways Timely

Adapts to Any Advertising MediumAdapts to Any Advertising Medium

Legally Available for Use

The Right Brand Name Can Help

Types of Brands

• National (Manufacturer’s) brands

• Store (Private) brands

• Licensing

Brand Development

Line extensions- new forms, sizes, fragrances, etc are created in existing product line

Brand extensions – use of existing brand on a new category, such as extending from a rock singer into acting

Multibrands- use of different brand names by one company. Nestle or Proctor and Gamble

New Brands- Creating entirely new brands

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Questions

Unit 4 Assignment: Umpqua Bank Watch the "Umpqua Bank" Video Case. The video will take approximately 5 minutes to view. You can also visit Umpqua Bank at www.umpquabank.com if you would like.

Should you need an audio script of the video, there is an audio script for the video located below. When you are done viewing the material on Umpqua Bank, answer the following questions in a double spaced paper, no more than three pages long, and submit it to the Dropbox.

This Assignment must be completed in Microsoft Word format. For some of the questions in this Assignment, you will have to review your reading from Unit 3. Click the Assignment Directions icon for complete directions.

Unit 4 Assignment: Umpqua Bank

Graded Concept Check: Segmentation Variables

In this Unit, you were introduced to the different variables that marketers use to create groups of consumers with similar wants and needs from the diverse population of all consumers. There are four types of segmentation groupings that were introduced in this Unit’s readings, geographic, demographic, psychographic and behavioral. Within each grouping there are different variables that may further segment a consumer group. In this simulation, you need to select the segmentation variable or variables that are being used in each situation. As you will see, sometimes only one is being used, but there are sometimes multiple variables that need to be selected. While marketers may segment on the basis of just one segmentation type or based on one segmentation variable, segments are often created by using different segmentation variables that cut across different segmentation types. You will be using this knowledge in your Research Project in Unit 6 when you segment the market for the brand you selected in Unit 2.

Select the segmentation variables that apply to the situations from the options you are given in the Simulation.

This must be competed within week 4, it closes midnight Tuesday.

I appreciate your time and attention during our 1 hour seminar today. If you have questions, feel free to contact me: [email protected] and I’ll be happy to help!

See you in Class!

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Thank you