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

Review of Unit 3 How did Unit 3 go? Questions or concerns? Instructor suggestions for Unit 4- Pay particular attention to segmentation for the Unit 6 Research Project Questions?

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

What is a Product? Anything that is offered to a market to fulfill a need or want good service idea place person

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 awareness brand loyalty perceived brand quality brand associations

Selecting a Brand Name Easy to pronounce, spell and remember Trademarkable Distinctive Conveys brand benefits Travels globally- Big concern today

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

Any Questions? Thank you for attending! See you next week!

Final Project Directions for Submitting Part A and Part B of your Final Project: Write your responses in complete sentences; provide specific examples when applicable. As with all material you submit to your instructor, check for correct spelling, grammar, punctuation, mechanics, and usage. Make sure to provide a cover sheet and reference list in your paper. Make sure to use the concepts you have learned from the text and that you have answered the questions thoroughly. Before you submit the two parts of your assignment, you should save your work on your computer in a location and with a name that you will remember. Make sure both parts of the Final Project isare in the appropriate format (Excel for Part A and Word for Part B), then, when you are ready, you may submit BOTH on the Dropbox page at the same time. Make sure to provide two attachments so the instructor knows you have submitted both.

Final Project Notes on APA in a Formal Assignment (Margins must be 1” all around, make them your default.) (Use Times New Roman 12 point font and make sure to double space) Do not place a heading called Introduction. APA format assumes the introduction begins the paper, so a heading is not needed. (APA, p. 16). Paragraphs should be over one sentence long, but not longer than one page (APA, p. 36). Very seldom use Italics (APA, p. 100). No underline, No bold. Beginning paragraphs indent 5 – 7 spaces. Do not use personal pronouns, such as “I”. Use the template (found in the site at ‘Final Project’) for each of the sections in your paper. Be sure to replace all of the text in this template with your own writing. This entire first page can be deleted after you review the suggestions. The paper should begin with your cover page.

MT219 FINAL PROJECT PART A: Apply the concepts of segmentation, targeting and positioning 1. Brand Segmentation: What is your brand? 2. TARGETING your MARKET: Use the five steps below to select your target market and then position your brand. STEP 1: Identify whether the strategy should be Undifferentiated, Differentiated or Homogeneous and discuss why STEP 2: Which specific segmentation variables of the four segmentation categories shown above should be used? (location, age, gender, or rate of usage for ex. See chart in Unit 4 reading) You may not have variables in all the categories. Explain why. STEP 3: Develop at least three Market Segment Profiles for your brand which describes what your potential customers have in common in a particular segment (from previously determined variables) STEP 4: Evaluate the relevant Market Segments: Which segments do you believe will yield the greatest sales, cost the least to target, and have the least competition from other companies. Explain why. STEP 5: Now prioritize the target markets based on the information in step #4. In other words, rank the segments you will pursue first, second, third, etc

MT219 FINAL PROJECT PART A: Apply the concepts of segmentation, targeting and positioning 3. Position your brand Which of these position bases you will use and how will you position your brand specifically? Explain your decision: a) Attribute- product feature or customer benefit b)Price and Quality c) Use: Is there some special use of this brand? d)Personality/Type of user: e)Product association or not with a category: f) Competitor: positioned as the opposite of a competitor? g) Emotion: positioned according to how it makes customers feel

MT219 FINAL PROJECT PART B: In no more than three and no less than two double- spaced pages in 12 point font (Times New Roman), analyze the components of your brand’s marketing mix in the following order; Product, Price, Place (Distribution) Promotion (include the four components of the promotion mix), In developing your paper, Your Final Project (Part B) will be Microsoft Word format. DO NOT merge it with Part A of your Final Project.

MT219 FINAL PROJECT PART B: Be as clear and as concise as possible since there are probably many things that you are going to want to say about your brand’s marketing mix. However, a two to three page paper will allow you to provide a lot of great information if you plan carefully. In your paper, be sure to include at least three references and appropriate citations for them. To help you with your paper, you can download a template for this paper.