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Marketing Class #2 August 6, 2009 John W. Huppertz, Ph.D. Associate Professor of Management Christie M. Griner, MBA Adjunct Instructor
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Page 1: Nyserda Week 2 06 Aug2009

Marketing

Class #2

August 6, 2009

John W. Huppertz, Ph.D.

Associate Professor of Management

Christie M. Griner, MBA

Adjunct Instructor

Page 2: Nyserda Week 2 06 Aug2009

Today’s Agenda

• Fill out 1-page survey• Quick review from last class• Where to, for Marketing?• Market data and analysis

Break

• Segmentation• Green marketing and social marketing• Framing

Page 3: Nyserda Week 2 06 Aug2009

Some key concepts from Week 1:

• Definition of Marketing, the Marketing Concept• Difference between marketing and selling, advertising• Different types of markets (consumer, business, government, etc.)• The four “P’s”• Disintermediation• Push and Pull marketing strategies

Page 4: Nyserda Week 2 06 Aug2009

Strategic Business Planning and Decision Making

• How marketing links to strategic business planning• Translating business goals to marketing strategy• From---To: Where are we now in terms of a marketing approach and

where do we want to be in terms of marketing at NYSERDA

Page 5: Nyserda Week 2 06 Aug2009

Translating business goals to marketing strategy

• NYSERDA ‘s business goals are intertwined with marketing.– How to get customers to change behavior?– How to get customers to care?– How to make sure that energy considerations get factored into their decisions?

• Choosing the right markets, the right products, the right messages.– That is what marketing strategy is all about.

Page 6: Nyserda Week 2 06 Aug2009

Strategic Business Planning and Decision Making

• From---To: Where are we now in terms of a marketing approach and where do we want to be in terms of marketing at NYSERDA – Where do we go now?

Page 7: Nyserda Week 2 06 Aug2009

QuizQuestion 1.

• Your friend comes to you, all excited about a great idea for a business, and she wants you to invest some money to help start it.

• If you were considering investing in her new business venture, what should you know before writing a check?

Page 8: Nyserda Week 2 06 Aug2009

QuizQuestion 2.

• You’re the Director of NYSERDA. The leader of the group in charge of new energy technologies comes to you, all excited about a great idea for a NYSERDA program, and wants your support and additional funding.

• If you were considering investing in this new idea, what should you know before writing a check?

Page 9: Nyserda Week 2 06 Aug2009

Category Development Index (CDI) CalculationExample: Foot-Joy Golf Shoes

Market Penetration =

Annual Golf Rounds / Population (1,000’s)

Golf Population Market Rounds (000's) Penetration

Dallas 61,800 5,221.8 11.8

Minneapolis 12,200 2,868.8 4.3

Orlando 78,100 1,644.6 47.5

Miami 66,200 3,876.4 17.1

Seattle 21,500 3,554.8 6.0

AVERAGE: 47,960 3,433.3 14.0

Page 10: Nyserda Week 2 06 Aug2009

Category Development Index (CDI) CalculationExample: Foot-Joy Golf Shoes

Market Penetration

AverageCDI = x 100 Golf Population Market

  Rounds (000's) Penetration CDI

Dallas 61,800 5,221.80 11.8 85

Minneapolis 12,200 2,868.80 4.3 30

Orlando 78,100 1,644.60 47.5 340

Miami 66,200 3,876.40 17.1 122

Seattle 21,500 3,554.80 6 43

AVERAGE: 47,960 3,433.30 14 100

Page 11: Nyserda Week 2 06 Aug2009

CDI Summary

CDI.Albany County,

New York

Allegany County,

New York

Bronx County,

New York

Broome County,

New York

Cattaraugus County, New York

Cayuga County,

New York

Chautauqua County, New York

Chemung County,

New York

Chenango County,

New York

Clinton County,

New York

Total: 100 100 100 100 100 100 100 100 100 100

Utility gas 132 114

85 131 110

98 143 148

30

4

Bottled, tank, or LP gas

57 233

68 119 263 287 165

90 245

63

Electricity 117

71

93

80

93

79

93

71

99 284

Fuel oil, kerosene, etc.

55

42 133

57

44

81

15

30 176 197

Coal or coke

21 332

77 128 132 228

38 373 334

23

Wood

41 621

1 114 502 259 255 155 572 268

Solar energy

57

22 157

39 -

19

7

84

59 -

Other fuel

22

48 153

37

62

45

93

46

48

8

No fuel used

22

9 176

16

8

15

3

22

23

23

Page 12: Nyserda Week 2 06 Aug2009

• Let’s apply this tool to energy.

Page 13: Nyserda Week 2 06 Aug2009

Census data: Consumers

• http://factfinder.census.gov/servlet/DatasetMainPageServlet?_program=DEC&_submenuId=&_lang=en&_ts=

• http://factfinder.census.gov/servlet/DTSubjectKeywordServlet?_ts=267529505781

Page 14: Nyserda Week 2 06 Aug2009

Census data: Businesses

• http://factfinder.census.gov/servlet/IBQTable?_bm=y&-ds_name=BE0200I101&-_lang=en

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Target Market

• Having a customer in mind when designing a product, advertising campaign, channel strategy, or price level.

• Which customer offers the greatest opportunity?

Page 16: Nyserda Week 2 06 Aug2009

Defining the Target Market

How would you define the target market for:• Solar water heating?• Geothermal wells?• Energy audits?• NYPA Power?• Compact fluorescent bulbs?• Co-generation?

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Target Market Segmentation

2000

% in Childbirth Classes,

70%

2005

% in Childbirth Classes

56%

Source: Childbirth Connection, survey of 1,600 new moms.

Page 18: Nyserda Week 2 06 Aug2009

Market Segmentation

In the Target Market Not In the Target Market

Page 19: Nyserda Week 2 06 Aug2009

Market Segmentation

O ne segm ent250 million Am ericans

*

* Ages 14+

Page 20: Nyserda Week 2 06 Aug2009

Market Segmentation

Or, 280 million segments with

N = 1

Page 21: Nyserda Week 2 06 Aug2009

Market Segmentation

F emale Am ericans M ale A m ericans

250 million Am ericans *

* Ages 14+

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D o g o w n e rs C a t o w n e rs P et- free

F e m a le A m er ica ns M ale A m er ica ns

2 5 0 m illio n A m er ica ns

Market Segmentation

*

* Ages 14+

Page 23: Nyserda Week 2 06 Aug2009

P aren ts N on -p aren ts

F em ale A m erican s M ale A m erican s

2 5 0 m illion A m erican s

Market Segmentation

*

* Ages 14+

Page 24: Nyserda Week 2 06 Aug2009

D og ow n ers C at ow n ers P et-free

P aren ts N on -p aren ts

F em ale A m erican s M ale A m erican s

2 5 0 m illion A m erican s

Market Segmentation

Page 25: Nyserda Week 2 06 Aug2009

Market Segmentation: Age

Under 18 72,293,812

  25.7%

18-24 27,143,454

  9.6%

25-34 39,891,724

  14.2%

35-44 45,148,527

  16.0%

45-54 37,677,952

  13.4%

55-64 24,274,684

  8.6%

65-74 18,390,986

  6.5%

75+ 16,600,767

  5.9%

Source:

Census 2000 Summary File 1 (SF 1) 100-Percent Data

Page 26: Nyserda Week 2 06 Aug2009

Who Wants to Be a Millennial?

What Age Do You Want to Be?

05

101520253035404550556065707580

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80

Current Age

Age You Want to Be

Source: Harris Interactive YouthPulse/The Harris Poll

Page 27: Nyserda Week 2 06 Aug2009

Market Segmentation

• You can create segments on almost any characteristic.– Demographics – Lifestyle – Buying habits– Behaviors– Health status– Benefits– ??

• Find those which are relevant.

Page 28: Nyserda Week 2 06 Aug2009

C ouch potatoes C asual w alkers R egular exerc isers E xerc ise nuts M arathon runnersP rofessional ath letes

250 million Am ericans

Market Segmentation

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Benefit Segmentation

• Segment customers based on the benefits they seek from a particular product.

• Group customers based on their needs.• EX: non-prescription pain relievers and exercise.

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If you have aches and pains, do you prefer:

  male female

aspirin 9% 4%

Tylenol 28% 27%

Advil 63% 69%

Page 31: Nyserda Week 2 06 Aug2009

Strongly agree

Agree somewhat

No opinion Disagree somewhat

Strongly disagree

I enjoy exercising whenever I get the chance. □ □ □ □ □

It is important to watch your caloric intake. □ □ □ □ □

When I exercise daily, I feel better. □ □ □ □ □

I get nervous when my physician isn’t fit.

□ □ □ □ □

I’m not sure exercising regularly really helps. □ □ □ □ □

Page 32: Nyserda Week 2 06 Aug2009

Strongly agree

Agree somewhat

No opinion Disagree somewhat

Strongly disagree

I enjoy exercising whenever I get the chance. □ □ □ □ □

It is important to watch your caloric intake. □ □ □ □ □

When I exercise daily, I feel better. □ □ □ □ □

I get nervous when my physician isn’t fit.

□ □ □ □ □

I’m not sure exercising regularly really helps. □ □ □ □ □

5

5

5

5

5

4

4

4

4

4

3

3

3

2

3

3

1

2

2

2

2

1

1

1

1

Page 33: Nyserda Week 2 06 Aug2009

Segmentation by Attitude

Page 34: Nyserda Week 2 06 Aug2009

Segmentation by Attitude

5-10 Couch potatoes

11-19 Casual exercisers

20-25 Exercise nuts

Page 35: Nyserda Week 2 06 Aug2009

If you have aches and pains, do you prefer:

  attitude toward exercise

 Couch

potatoesCasual

exercisersExercise

nuts

aspirin 0% 22% 0%

Tylenol 37% 22% 24%

Advil 63% 56% 76%

Page 36: Nyserda Week 2 06 Aug2009

If you have aches and pains, do you prefer:

  Hours exercising per week

  0-2 3-6 7+

aspirin 18% 0% 0%

Tylenol 27% 32% 20%

Advil 55% 68% 80%

Page 37: Nyserda Week 2 06 Aug2009

Green Marketing: Best Practices

Page 38: Nyserda Week 2 06 Aug2009

Shades of Green• Most adamant supporters• Engage in variety of green activities• Well-informed and actively involved, willing to pay more for eco-friendly productsEco-Centrics• Willing to pay more for green products• Community and culturally focused• Idealistic

Respectful Stewards

• Buy green to save money• Hard-working and focused on family, run environmentally responsible homes• Experiment with eco-friendly products

Proud Traditionalists

• Women who save money when possible and look for “wholesome good products”• Prudent, lower-income womenFrugal Earth Mothers

• Highly-educated, high income men who question benefits of green products• Not-community – or spiritually-focused• Skeptical about corporate green initiatives

Skeptical Individualists

• Young adults-see green as new and hip• Impulse buyers and early adopters• Like “the cause” but haven’t considered the state of the environment in-depthEco-Chic• Young, lower-income shoppers• Have not registered cause/effect of environmental responsibilityGreen Naives• Middle-income men, small/mid-sized metro areas• Black-and-white perspective• Have dismissed environmental concerns outright; do not seek eco-friendly productsEco-Villains

Page 39: Nyserda Week 2 06 Aug2009

Green Segmentation

Points of interest• Respectful Stewards: 86% Hispanic

• Eco-Villans are mostly middle income white males• Green Naivesmostly female

• Most Gen X’s are lighter green, reason?

Page 40: Nyserda Week 2 06 Aug2009

Why market to Millennial’s?

• Born early 80’s-late 90’s• Market Segmentation is critical

– Two segments-13-17; 18-29

– Most educated demographic

• 79% get info from web– Problem: Understand why but not how

– Must quantify not simply preach-give them instant gratification» If families recycle newspaper for 1 year saves half million trees» Cut shower time down by 2 minutes saves 10 gallons of water» Put a sweater on when cold, turn thermostat down save 500,000

barrels of oil/day

• Marketing technique Align marketing with corporate responsibility – Creates loyalty

Page 41: Nyserda Week 2 06 Aug2009

Commercial Case Study: Wal-Mart

• Does WMT market “green” to each segment? How?

Page 42: Nyserda Week 2 06 Aug2009

Who is this targeting?

Page 43: Nyserda Week 2 06 Aug2009

..and this?

Page 44: Nyserda Week 2 06 Aug2009

How is WMT reaching their audience?

Page 45: Nyserda Week 2 06 Aug2009

Wal-Mart’s LT Goals

1. To be supplied by 100% by renewable energy

2. To create zero waste

3. To sell products that sustain resources and environment

Are they attainable?

Page 46: Nyserda Week 2 06 Aug2009

The Power of Wal-Mart

• Choose Suppliers• Wal-Mart will list criteria and suppliers must adhere to

be part of the supplier list– Requests full-disclosure on products via supplier

Will it be worth it long-term for suppliers to alter their practices for one retailer?

Page 47: Nyserda Week 2 06 Aug2009

Supplier Survey

Page 48: Nyserda Week 2 06 Aug2009

Sustainability 360

Alternative Energy to Power Facilities Purchased Solar Power (22 CA&HI stores) Wind energy supplies 15% of power to run TX stores

Energy-Efficient Transportation Fleets Wants to improve by 25%

Overnight trucks have APUs to regulate temperature and communication Testing hybrid trucks and alternative fueled trucks

Sustainable Packaging Network Reduce packaging by 5% by 2013

Laundry liquid, private labels, digital media packaging

Plastic Bags Reduce by 33% by 2013

High-Efficiency Store Formats

Page 49: Nyserda Week 2 06 Aug2009

High-Efficiency Store Format

• HE.6- Western US-Sacramento, CA– Post HE.5 (Vegas)– 30% more energy efficient than the 2005 baseline –added

evaporative cooling and radiant flooring• Goal: Conserve energy, and reduce greenhouse gas emissions

through heating, cooling, refrigeration and lighting systems. – Cooling Towers reduces temperature– CO2 refrigerant system reduces the refrigerant charge in the

store by 90%

Page 50: Nyserda Week 2 06 Aug2009

Why does HE.6 matter?

• Market Pioneers– Skylights– LED lighting– Recycled cement– Low flow toilets/faucets

• Improved customer experience – Wider isles– Lower shelves– Improved sightlines– Service area

Page 51: Nyserda Week 2 06 Aug2009

NYSERDA implementation

• How can you get a local retailer to implement a high-efficiency store format?

Page 52: Nyserda Week 2 06 Aug2009

What goals has WMT achieved?

• Sold 100M compact fluorescent light bulbs in 2007– Effect: does away with the need for 100 million old-fashioned

bulbs to be manufactured, packaged, shipped, bought, and discarded next year--and every year until 2012 or beyond

• Most of WMT’s goals slated out 4-5yrs

Page 53: Nyserda Week 2 06 Aug2009

Do these companies “feel” green to you? Why?

Page 54: Nyserda Week 2 06 Aug2009

Industrial Case Study: HP

• In general, HP..1. Owns “e-waste” recycling plants that shred discarded,

obsolete computer products into raw materials that are reused in the industrial food chain

2. Takes back computer equipment of all brands

3. All HP products are 100% recyclable

4. Promises to lower energy consumption 20% by next year

Page 55: Nyserda Week 2 06 Aug2009

HP Campaign: Power to Change

Page 56: Nyserda Week 2 06 Aug2009

“Power to Change”

• HP Philosophy: industry leadership is about an ongoing contribution to society

• Launched 6/09 by Leo Burnett– Modern, stylish, innovative, colorful, results-driven– Gives consumer autonomy and purpose– Taps into behavioral changes

• Quantitative– Tracks cumulative energy savings if turning off idle PCs when

not in use

• Method– Widget

• Commitment: must enroll & install– Gathers demographic information

» Enables campaign success metrics

Page 57: Nyserda Week 2 06 Aug2009

Campaign Motives

• Small commitment yields large impact

– If 100,000 users shut down work computers each day, energy savings could total more than 2,680 kilowatts

– Reduce carbon emissions by 1,500 kilos/day

equivalent to removing 105 cars from the road/day

Page 58: Nyserda Week 2 06 Aug2009

HP Recycling Campaign

Page 59: Nyserda Week 2 06 Aug2009

Education at POS via Labeling

Energy Star labeling impacts Green Purchases 66%

Page 60: Nyserda Week 2 06 Aug2009

Ex: HP Labeling

Greater Variety + Eco-labeling = Increased sales + Customer Loyalty

Page 61: Nyserda Week 2 06 Aug2009

Recession

• Primary motivation– Save money in difficult times

• Consistent trends– Recycled paper– Green household cleaning products– Environmental safe laundry detergent

• This links to where people see the need but not know how to implement it

– Cloth grocery bags– Unplugging unused chargers

Page 62: Nyserda Week 2 06 Aug2009

Geodemographic Segmentation

• PRIZM (Claritas, Inc.)• Cluster-analysis based • Residential neighborhoods• “Birds of a feather flock together.”

Page 63: Nyserda Week 2 06 Aug2009

# Nickname HH's # Nickname HH's

1 Upper Crust 1,580,481 24 Up-and-Comers 1,386,087

2 Blueblood Estates 795,686 25 Country Casuals 1,473,101

3 Movers Shakers 1,835,521 26 The Cosmopolitans 1,087,462

4 YoungDigerati 1,309,575 27 Middleburg Managers 1,934,907

5 Country Squires 998,314 28 Traditional Times 2,872,735

6 Winner'sCircle 845,478 29 American Dreams 2,231,878

7 Money&Brains 1,888,898 30 Suburban Sprawl 1,623,648

8 ExecutiveSuites 1,268,469 31 Urban Achievers 1,951,203

9 BigFish,SmallPond 2,049,909 32 New Homesteaders 1,069,600

10 SecondCityElite 1,085,788 33 Big Sky Families 1,007,871

11 God's Country 1,352,638 34 White Picket Fences 1,121,855

12 Brite lites Li'l City 1,520,173 35 Boomtown Singles 1,537,145

13 Upward Bound 1,190,121 36 Blue-Chip Blues 1,173,086

14 New Empty Nests 1,046,019 37 Mayberry-ville 2,753,857

15 Pools & Patios 1,221,801 38 Simple Pleasures 2,621,647

16 Bohemian Mix 2,043,024 39 Domestic Duos 1,057,459

17 Beltway Boomers 754,924 40 Close-In Couples 1,139,269

18 Kids & Cul-de-sacs 1,341,192 41 Sunset City Blues 1,770,041

19 Home Sweet Home 1,947,149 42 Red White & Blues 2,146,003

20 Fast-Track Families 776,715 43 Heartlanders 2,097,708

21 Gray Power 1,059,216 44 New Beginnings 2,052,365

22 Young Influentials 1,856,004 45 Blue Highways 2,265,696

23 Greenbelt Sports 1,593,251 TOTAL: 107,748,645

Page 64: Nyserda Week 2 06 Aug2009
Page 65: Nyserda Week 2 06 Aug2009

Cohort Segmentation

• Simple age combination / aggregation into generational segments

• Message tailoring• Example of simplistic segmentation (Yankelovich and

Meer, 2006)

Page 66: Nyserda Week 2 06 Aug2009

Cohort Segmentation

Pre-boomer Boomer I Boomer II Gen X’er N-Gens / Millenials

Energy efficiency means...

Turning off the lights

Avoid long lines for gas

Generally good

Latest technology

Web-based information

Approach to message…

Page 67: Nyserda Week 2 06 Aug2009

Cohort Segmentation

Pre-boomer Boomer I Boomer II Gen X’er N-Gens / Millenials

Energy efficiency means...

Turning off the lights

Avoid long lines for gas

Generally good

Latest technology

Web-based information

Approach to message…

What can you do with this?

Page 68: Nyserda Week 2 06 Aug2009

Segmenting Business Markets

NAICS Sector Title

21 Mining

22 Utilities

23 Construction

31-33 Manufacturing

42 Wholesale Trade

44-45 Retail Trade

48-49 Transportation and Warehousing

51 Information

52 Finance and Insurance

53 Real Estate and Rental and Leasing

54 Professional, Scientific, and Technical Services

55 Management of Companies and Enterprises

56 Administrative and Support and Waste Management and Remediation Services

61 Educational Services

62 Health Care and Social Assistance

71 Arts, Entertainment, and Recreation

72 Accommodation and Food Services

81 Other Services (except Public Administration)

Note: SIC NAICS

Page 69: Nyserda Week 2 06 Aug2009

2002 NAICS code Meaning of 2002 NAICS code

Pur utilities, amount ($1,000)

Purch utilities, pct op ex (%)

Cost purch elect

($1,000)

Cost fuels ex motor ($1000)

444 Building material & garden equipment & supplies dealers S S S S

446 Health & personal care stores S S 739,631 S7213 Rooming & boarding houses S S S S7223 Special food services S S S 54,06072 Accommodation & food services 16,025,739 4.9 10,467,205 2,741,729722 Food services & drinking places 10,247,819 4.7 6,835,867 1,770,336445 Food & beverage stores 6,256,038 4.9 5,225,114 431,581721 Accommodation 5,777,921 5.4 3,631,338 971,3947211 Traveler accommodation 5,490,952 5.3 3,454,201 924,9677221 Full-service restaurants 5,041,593 5.1 3,220,361 988,0017222 Limited-service eating places 4,224,970 4.6 2,986,496 622,403452 General merchandise stores 3,107,606 3 2,677,861 205,100441 Motor vehicle & parts dealers 2,058,856 1.6 1,443,554 328,076447 Gasoline stations 1,890,742 5 1,483,551 105,753448 Clothing & clothing accessories stores 1,678,174 2.5 1,395,326 89,929453 Miscellaneous store retailers 971,225 2.4 712,375 130,804442 Furniture & home furnishings stores 881,288 2.3 645,623 101,676451 Sporting goods, hobby, book, & music stores

700,033 2.4 546,447 81,5687224 Drinking places (alcoholic beverages) 600,540 S 403,191 105,872454 Nonstore retailers 516,253 0.7 391,509 76,221443 Electronics & appliance stores 427,809 1.7 362,731 29,4077212 RV (recreational vehicle) parks & recreational camps

218,224 6.8 139,255 30,341

66,115,782 46,022,005 9,735,158

Page 70: Nyserda Week 2 06 Aug2009

2002 NAICS code Meaning of 2002 NAICS code

Pur utilities, amount ($1,000)

Purch utilities, pct op ex (%)

Cost purch elect

($1,000)

Cost fuels ex motor ($1000)

QUARTILE ANALYSIS

444 Building material & garden equipment & supplies dealers S S S S

446 Health & personal care stores S S 739,631 S 7213 Rooming & boarding houses S S S S 7223 Special food services S S S 54,060 72 Accommodation & food services 16,025,739 4.9 10,467,205 2,741,729 24.2%722 Food services & drinking places 10,247,819 4.7 6,835,867 1,770,336 39.7%445 Food & beverage stores 6,256,038 4.9 5,225,114 431,581 49.2%721 Accommodation 5,777,921 5.4 3,631,338 971,394 57.9%7211 Traveler accommodation 5,490,952 5.3 3,454,201 924,967 66.2%7221 Full-service restaurants 5,041,593 5.1 3,220,361 988,001 73.9%7222 Limited-service eating places 4,224,970 4.6 2,986,496 622,403 80.3%452 General merchandise stores 3,107,606 3 2,677,861 205,100 85.0%441 Motor vehicle & parts dealers 2,058,856 1.6 1,443,554 328,076 88.1%447 Gasoline stations 1,890,742 5 1,483,551 105,753 90.9%448 Clothing & clothing accessories stores 1,678,174 2.5 1,395,326 89,929 93.5%453 Miscellaneous store retailers 971,225 2.4 712,375 130,804 94.9%442 Furniture & home furnishings stores 881,288 2.3 645,623 101,676 96.3%451 Sporting goods, hobby, book, & music stores

700,033 2.4 546,447 81,568 97.3%7224 Drinking places (alcoholic beverages) 600,540 S 403,191 105,872 98.2%454 Nonstore retailers 516,253 0.7 391,509 76,221 99.0%443 Electronics & appliance stores 427,809 1.7 362,731 29,407 99.7%7212 RV (recreational vehicle) parks & recreational camps

218,224 6.8 139,255 30,341 100.0%

66,115,782 46,022,005 9,735,158

Page 71: Nyserda Week 2 06 Aug2009

Segmentation Conclusion:Three Reasons to Segment the Market

Better understand the customer

• Develop new products to meet needs of similar users.

• Create features that most segment members want.

• Message development: figure out what to say, so that they “get it” even if others don’t.

Reach customers more efficiently

• Get message to your customer with out wasting money on reaching others.

• Locate where your customers are.

Select the best target market

• Select customers with highest potential.

• Profitability (ability to buy)

• Loyalty – for long-term profitable relationship

Page 72: Nyserda Week 2 06 Aug2009

Web 2.0 is changing the dynamic

Better understand the customer

• Develop new products to meet needs of similar users.

• Create features that most segment members want.

• Message development: figure out what to say, so that they “get it” even if others don’t.

Reach customers more efficiently

• Get message to your customer with out wasting money on reaching others.

• Locate where your customers are.

Select the best target market

• Select customers with highest potential.

• Profitability (ability to buy)

• Loyalty – for long-term profitable relationship

Page 73: Nyserda Week 2 06 Aug2009

Things are changing

In politics: • 50% plus one. • Red states, Blue states

In marketing research:• Survey research• Sales analysis• Consumer testing, R&D cycle

In marketing plans:• Charge premium “Price”• More “Promotion”

In customer selection: • It’s easier to sell $10,000 to

one customer than to sell $1 to 10,000 customers.

• Some customers just aren't worth chasing.

Page 74: Nyserda Week 2 06 Aug2009

Things are changing

In politics: • 50% plus one. • Red states, Blue states

In marketing research:• Survey research• Sales analysis• Consumer testing, R&D cycle

In marketing plans:• Promotion to everyone

In customer selection: • It’s easier to sell $10,000 to

one customer than to sell $1 to 10,000 customers.

• Some customers just aren't worth chasing.

In politics: • Everyone counts. • United States

In marketing research:• Qualitative observation• Analytics• Quick prototyping

In marketing plans:• Promotion to those ready to

respond

In customer selection: • It’s becoming easier to sell $1 to

10,000 customers. (Think i-tunes).

• More customers than you think are worth chasing.

Page 75: Nyserda Week 2 06 Aug2009

Segmentation Conclusion:Three Reasons to Segment the Market

Better understand the customer

• Develop new products to meet needs of similar users.

• Create features that most segment members want.

• Message development: figure out what to say, so that they “get it” even if others don’t.

Reach customers more efficiently

• Get message to your customer with out wasting money on reaching others.

• Locate where your customers are.

Select the best target market

• Select customers with highest potential.

• Profitability (ability to buy)

• Loyalty – for long-term profitable relationship

Page 76: Nyserda Week 2 06 Aug2009

Framing

In politics:• Senator Moyer missed 14 critical opportunities to vote on matters of

importance to her constituents.• Senator Moyer had a “99% perfect voting attendance record.

See: Tversky, A., and Kahneman, D. (1981). The framing of decisions and the psychology of choice. Science, 211, 453-458.

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Framing

In retail promotion:• Hurry in and save $20.• Hurry in and save 20%.

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Framing

In energy:• Lower your energy use and save the environment.• If you don’t lower your energy use, you won’t have an environment to

save.

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Framing

In energy:• Lower your heating bill by 30% and save the environment.• Lower your heating bill by 30% and enjoy a vacation with the money

you save.

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Framing

In class strategy session:• Three teams, five minutes• Come up with two alternativesways of framing the following:

“You should buy compact fluorescent bulbs instead of incandescent bulbs because _________________________.”

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Assignment, due next class

• Marketing “best practices”

• Teams:1. Marketing Services

2. EES, EA, Clean Energy, REAP

3. Economic Development

4. New Technologies

•  10 pages, 10 minutes.

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Summary

What did we learn today?

– Some key take-aways?– Some things you won’t forget?