BMGT451 Targeting the Right Consumers Notes Segmenting and Targeting o Allocate resources more effectively o Design more effective marketing programs o Identify new product opportunities and new market opportunities e g Upgrade to Windows XP to reduce IT costs while securing your network and increasing your employees productivity o Targeted products e g Harmony cereal for women o Targeted media e g the Golf Channel o Targeted messages o Targeted distribution channel e g airport bookstores o Targeted pricing e g senior citizen discounts Targeting Strategies o Undifferentiated strategy Mass market strategy tape New products o Concentration strategy Everyone buys the product e g toilet paper Scotch Marketing effort is focused on a single segment for whom a specialized marketing mix is developed Airwalk o Multi segment strategy Johnson Johnson Distinct marketing mix for each segment May be able to charge more for uniquely appealing product features e g Kraft s fat free hot dogs Lifetime customer value Platinum tier most profitable heavy users not too price sensitive committed to company Gold tier less profitable e g want price discounts less o Customization strategy committed to company Iron tier lower spending less committed Lead tier cost the company money to serve Personalized marketing mix for each customer o Self selection strategy Consumers select their own segments Dell Computers NIKE iD Build a Bear Workshop Priceline com Package size Coupons Airline ticket pricing Product benefits Ethics of Target Marketing o Degree to which product can harm consumers e g cigarettes liquor o Vulnerability of the targeted group RJR s Uptown cigarettes Columbia Tristar s Disturbing Behavior Brand Preference o Customer decides on a product category o Brand wins by being superior on at least one attribute and as good as competitors on others Brand Relevance o Define a new category or subcategory o Convince customers to buy the new category in which most other brands are irrelevant Positioning o Differences must be relevant and desirable Core product features Incidental product features Intangibles o Product designed around a core idea safety central to the product itself o Association of the brand identical product intangible connection feel like the brand represents you well o Selling people on an idea Creating a Strong Brand Position o Who is the target customer o Who are the primary competitors o How is this brand different from its competitors points of difference o How is this brand similar to its competitors points of parity Identifying Competitors o Attribute based competition e g Baskin Robbins vs Ben Jerry s and Dairy Queen o Benefit based competition e g Baskin Robbins vs Starbucks Barnes Noble and Cinema 6 Creating a Frame of Reference o Broad category definition Crest is more than toothpaste it s a happy healthy smile o Gold standard comparisons Kraft s DiGiorno frozen pizza It s not delivery it s DiGiorno o I am what I m not comparisons HBO s It s not TV it s HBO Points of Difference POD o Consumers strongly associate this attribute benefit with the brand o Consumers evaluate this attribute benefit positively o Consumers believe this attribute benefit is not offered by competitors Points of Parity o Product category POP Associations consumers believe are necessary to be a legitimate offering in the category i e greens fees Especially critical for brand extensions o Competitive POP Designed to negate competitors POD Relationship of POD and POP o If POD and POP are perceived to be negatively correlated Separate attributes Leverage credibility of spokesperson Redefine relationship between attributes o How do you brand a dental practice POPs Friendly calm competent service Responsive staff Relaxing wait area POD Diversity Diverse staff Tagline International d cor