MKTG 360 1nd Edition Lecture 9 Outline of Last Lecture 1. Key differences in business vs consumer market2. Business to business demand3. The business marketplace4. B2B E-Commerce and social media5. Elements of the buy class framework6. Professional buyers and buying centers Outline of Current Lecture 1. Steps in Target Marketing Process2. Creating the Brand Personality3. 5 Major Dimensions of Brand Personality Current Lecture1. Steps in Target Marketing Processa. Segmentationi. Segmentation1. Dividing larger market into smaller segments based on meaningfulshared characteristics and describe market segmentsii. Hybrid segmentation1. Segmenting the market based on more than one segmentation variable (e.g., age and ethnicity, rather than just age)2. Most segmentation is hybrid segmentationiii. Segmentation variables1. Dimensions that divide the market into fairly homogenous groups,each with its own needs and wants2. Figure 3.3 breaks them down into four categories àThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.iv. 4 key categories of segmentation variablesv. Demographic segmentation1. Demographicsa. Statistics on observable characteristics (age, sex, ethnicity, income, education)2. Most segmentation involves demographics3. Demographic segmentation has several advantagesa. Demographics drive much of consumer behaviorb. Demographics can be accurately measuredc. Most cost-efficient approach to reaching people (e.g., secondary demographic data are easy to obtain)d. Can be used to anticipate changes in a segment’s needs over time (e.g., aging baby boomers will soon need…)vi. Age/generational segmentation1. Marketing to members of a generation who tend to share same outlook/prioritiesvii. Gender Segmentation1. Womena. Take care of 75% of family financesb. 80% consumer purchases, 65% of new cars, 51% electronicsc. Variety of companies stereotypically masculine now tailoring marketing to women (e.g., Home Depot, Gillette, Reebok)2. Mena. Companies used to target women now targeting menb. Princess Resort, Scottsdale, AZc. Darker wood, TVs in locker room, “Keep your shorts on” package, and European facial à Barber facialviii. Geodemographic segmentation1. Combination of geographic and demographic information2. Creates classifications of actual, addressable, mapable neighborhoods where consumers live and shop3. Looking for clusters of similar people4. Assumes “people of a feather flock together”5. PRIZM by Claritas – 66 clusters by Zip codeix. Psychographic segmentation 1. Psychographicsa. Uses psychological, sociological, anthropological factors to develop segments2. Examplesa. Motives (status)b. Personality (sensation seeking)c. Culture/Subculture (interdependent)d. Lifestyles (activities, interests, opinions)3. VALS2 (Values + Lifestyles) Systema. Based on psychological characteristics that relate to consumer behaviorb. Can Identify Prevalence of 8 Types by Zip Codex. Usage rate segmentation1. Segment based on how frequently people use a producta. Former, potential, 1st time, low, med., heavy users2. Companies often target heavy usersa. 80/20 Principle: 20% of customers = 80% of demandb. Less costly to advertise to and more loyal3. Brand loyalty programs are populara. Need to know what consumers expect from their relationship with you (e.g., personal greeting when entering Starbucks?)b. Loyal customers are great, but don’t make them mad, b/c they will respond more negatively to a service failureb. Targetingi. Decide if Market Segment is Likely to be Successfulii. Describe the Segment Profile (typical customer)iii. Choose Targeting Strategy1. Undifferentiated (appeal to masses)2. Differentiated (different strokes for different folks)3. Concentrated (go after just one segment)4. Individualized (even more narrow than concentrated)a. One-to-One Marketing (tailored to individual; build relationship)b. Microtargeting and narrowcasting (e.g., during an election deliver tailored messages based on voters’ specific concerns)c. Behavioral targeting (e.g., deliver specific ads based on thewebsites an individual has visited)5. Countersegmentationa. Over time, 2 segments may merge into 1 with similar needsb. May require adopting a broader target with the same productiv. Criteria for successful targeting1. Sizeablea. Large enough to justify its own marketing mix2. Identifiable and Measurablea. If not, can not determine whether it’s sustainable3. Stablea. Easier to predict and anticipate needsb. Products won’t be out of date too quickly4. Accessiblea. Must be able to reach segment with marketing mix5. Responsivea. The segment responds differently than another segmentb. If not, no need to develop unique marketing mix6. In Line with Company’s Goals and Resourcesa. A company may not want to go after all segmentsc. Positioningi. 4 steps in positioning1. Evaluate (direct and indirect) competitiona. Direct: Starbucks vs. Tully’sb. Indirect: Starbucks vs. McDonald’s2. Create product/service with competitive advantagea. Unique selling/value proposition3. Develop marketing mix to appeal to target segmenta. Product, price, promotion, place of distributionb. Develop a ‘brand personality’ for the product4. Measure response and adapt strategy if neededa. May need to reposition product/serviceb. May involve introducing a ‘retro brand’2. Creating the Brand Personalitya. Brand Personalityi. A distinctive image that captures a product’s or service’s essence (character, benefits)b. Where does my brand stand?i. Ask customers what characteristics are importantii. Measure your brand and competition on those dimensionsiii. Plot and evaluate your brand’s location in a perceptual ma3. 5 major dimensions of brand personalitya. Sincerityi. Down-to-earthii. Honestiii. Wholesomeiv. Cheerfulb. Excitementi. Daring ii. Spiritediii. Imaginativeiv. Up-to-datec. Competencei. Reliable ii. Intelligentiii. Successfuld. Sophisticationi. Upper classii. Charminge. Ruggednessi. Outdoorsyii.