“Chia để trị” France’s strategy in colonizing Vietnam,1887 Pham Van Khai Mai Van Bang
Jul 18, 2015
AGENDA
What is segmentation? Good segmentation?
Why segmentation?
Criteria of segmentation
Our theory & example
Brand Equity
Example
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Segment&
Brand Equity
Segmentation? GOOD segmentation must be CAMA
The process of defining and subdividing a large general market into clearly identifiable groups having common characteristics.
CLEAR identification of the segment
MEASURABLE effective size
APPROPRIATE to the strategy, policies and resources of the brand or company
ACCESSIBLE through marketing effort
*Common characteristics: 1) Demographics, geography, lifestyle2) Behavior3) Needs – wants - demands, or fear-hope-belief-dream
Why
segmentation?
Marketing Ultimate Goal
To design a marketing strategy that precisely matches the
expectations of customers in the targeted segment
Business Ultimate Goal
so we can better satisfy the consumer with less
expenditures
More revenue & ProfitLess cost
Criteria of
segmentation
Who What
Why
Geography
RegionType of settlement
MediaConsumption
Demographics
Gender, ageType of household
No. of children
Socio-economics
EducationIncome
Occupation
Psychographics
Attitude, valueInterest
ActivitiesLifestyle
BehaviorShare of customer
Frequency of purchase/usage
Patterns of usage
NeedNeed-want-demand
Fear-hope-belief-dream
The one that is overused recently. Let’s see this segmentation
2 Dimensional Segmentation
Weakness:1. Only can reflect a part of the whole market,
especially very developed market (automotive, computer…): In this example, just “High-end automotive”, not “Automotive”
2. If be used to reflect the whole market, each segment will be over generic, because of the 4-segments limit & 2-dimension limit
3. Can’t reflect market development through time
Business
Personal life
Outsideworld
Inner self
The Success EnjoymentEx: Mercedes
The PerformerEx: BMW
The ExplorerEx: Land Rover
The FashionistaEx: Audi
HIGH-END AUTOMOTIVE SEGMENTATION
Khai & Bang would like to introduce: The Cell SegmentationBig thank to Maslow. Patent pending
We believe that: the Needs evolve through time, so does the Market.
When a segment is satisfied enough, members of this segment start to develop higher & different needs. This inner conflict will split it into 2 or more new segments.
So the more developed the market is, the more cells it has.
For example: Automotive market
1) Let’s take a look at “Automotive segmentation” in 1900Market was not developed. Only Ford manufactured & sold car.Only 2 segment, grouped by Income. The Unaffordable & Affordable
The cell segmentation
The AffordableThe Unaffordable
Low income High income
Automotive market segmentation in 1900
How the markets look like now?
By income, it is divided into 4 big segments
No car – Normal /Cheap Car – High-end Car – Super Car1) In Normal car, they are further divided by purpose of usage
(For family – For just me)2) In High end car, they are further divided by “The care about
expressing” (To the world – To the inner self) and “The care of life” (Career – Personal life)
3) In Super car, they are further divided by “The care about expressing” (To the world – To the inner self)
So, as we see, 4 segments & 2 dimensions are not always enough.If we want to see the big picture, let find something both detail & sufficient enough.
How automotive will change years from now?Will more cell divide into more segment?Let’s wait and see.
The cell segmentation
The Affordable
Extremely high income(Super car)
Low (No car)
The Unaffordable
MediumIncome(Normal car)
High income(High end car)
The simple mover
Ex: KIA, DAEWOO
The family mover
Ex: Toyota Innova
The success enjoymentEx: Mercedes
The performer
Ex: BMW
The Fashionista
Ex: Audi
The Explorer
Ex: Land Rover
The Noble
Ex: Roll-Royce
The super star
Ex: Lamborghini, Ferrari
WHAT IS BRAND EQUITY ?
• Understand drivers of brand strength in order to support strategic decision –making.
• To evaluate performance of brand management in increasing equity over time.
• To evaluate efficacy of brand building• To assess the value of the brand for
purposes of licensing or sale.
Reasons to Measure Brand Equity
• Interpretation/Processing of information.
• Confidence in the Purchase decision.
• Use satisfaction.
Value to Customers
• Efficiency & Effectiveness of marketing programs.
• Brand Loyalty.• Prices / Margins.• Brand Extensions.• Trade Leverage.• Competitive Advantage.
Value to Company
Brand Equity is a set of brand assets and liabilities linked to a brand, its symbol, that adds
to or subtracts from the value provided by a product or services to a firm and / or to that
firms customers.David Aaker, University of California
PerceivedQuality
How brand equity generates value (David Aaker’s Model)
Brand Equity
PerceivedValue
Brand Awareness
BrandAssociations
OtherProprietary
Brand Assets
Reduced Marketing costsTrade Leverage (influence)Create awareness etc.
Anchor to which other can be attachedFamiliarity likingSignal of substance/ commitment
Reason-to-buyDifferentiate / positionPrice the brandBuild extensions
Help process / retrieve informationDifferentiate / positionReason-to-buyCreate positive attitude / feelingsExtensions
Competitive Advantage
Provides value toCustomer by Enhancing customer’s:• Interpretation/ processingof information• Confidence in the purchase• Decision• Use satisfaction
Provides value to firm By enhancing:• Efficiency & effectivenessof marketing programs• Brand loyalty• Prices / margins• Brand extensions• Trade leverage• Competitive advantage
Indicators/Effects Future performanceCategory
Aaker formed his brand equity model around the five categories of brand assets
Aaker determines the five categories as the main determinants of brand equity which deliver positive or negative value to the customer and organization.
Each category can be seen as a brand asset that creates value.
It’s of vital importance to understand the source that creates value and the way it creates value
Elements of brand equity
We have 10 brand equity measurement variables, based on the first four primarily categories of his equity model
The measures should reflect brand equity and forces that drive the market. Next to that, the measures should be sensitive and it should be applicable across brands, product lines and markets
BRAND EQUITY MEASUREMENT VARIABLES
This tool measure brand equity by looking at the brand as a blend of the rational and emotional which are measured in terms of brand performance and imagery.
Customer’s relationship to a brand is then plotted in terms of their attitude on the pyramid of engagement and their relative bias towards a rationally dominant or emotionally dominant relationship is established
EXAMPLE ABOUT VICTORIA SECRET