1. BUS7450 Strategic Marketing Management Week 5 Dr. Jenne Meyer

2. BUS7500  Article reviews

3. 8 Identifying Market Segments and Targets

4. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-4 Effective Targeting Requires…  Identify and profile distinct groups of buyers who differ in their needs and preferences  Select one or more market segments to enter  Establish and communicate the distinctive benefits of the market offering

5. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-5 What is a Market Segment? A market segment consists of a group of customers who share a similar set of needs and wants.

6. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-6 Segmenting Consumer Markets Geographic Demographic Psychographic Behavioral

7. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-7 Demographic Segmentation  Age and life cycle  Life stage  Gender  Income  Generation  Social class  Race and Culture

8. Age and Lifecycle Stage Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-8

9. Gender and Income Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-9

10. Generational Influences Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-10

11. Psychographic Segmentation and The VALS Framework Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-11

12. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-12 Behavioral Segmentation: Decision Roles Initiator Influencer Decider Buyer User

13. Behavioral Segmentation: Behavioral Variables  Occasions  Benefits  User Status  Usage Rate  Buyer-Readiness  Loyalty Status  Attitude Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-13

14. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-14 Loyalty Status  Hard-core  Split loyals  Shifting loyals  Switchers

15. Figure 8.3 Behavioral Segmentation Breakdown Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-15

16. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-16 Segmenting for Business Markets  Demographic  Operating variable  Purchasing approaches  Situational factors  Personal characteristics

17. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-17 Steps in Segmentation Process  Need-based segmentation  Segment identification  Segment attractiveness  Segment profitability  Segment positioning  Segment acid test  Market mix strategy

18. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-18 Effective Segmentation Criteria  Measurable  Substantial  Accessible  Differentiable  Actionable

19. 9 Creating Brand Equity

20. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-20 Steps in Strategic Brand Management  Identifying and establishing brand positioning  Planning and implementing brand marketing  Measuring and interpreting brand performance  Growing and sustaining brand value

21. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-21 What is a Brand? A brand is a name, term, sign, symbol or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

22. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-22 The Role of Brands  Identify the maker  Simplify product handling  Organize accounting  Offer legal protection  Signify quality  Create barriers to entry  Serve as a competitive advantage  Secure price premium

23. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-23 What is Brand Equity? Brand equity is the added value endowed on products and services, which may be reflected in the way consumers, think, feel, and act with respect to the brand.

24. Advantages of Strong Brands  Improved perceptions of product performance  Greater loyalty  Less vulnerability to competitive marketing actions  Less vulnerability to crises  Larger margins  More inelastic consumer response  Greater trade cooperation  Increased marketing communications effectiveness  Possible licensing opportunities Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-24

25. Virgin Atlantic’s Brand Promise Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-25

26. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-26 What is a Brand Promise? A brand promise is the marketer’s vision of what the brand must be and do for consumers.

27. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-27 Brand Equity Models Brand Asset Valuator (BAV) Brandz Brand Resonance

28. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-28 Figure 9.1 BAV Model

29. Figure 9.2 Universe of Brand Performance Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-29

30. Figure 9.3 Brand Dynamics Pyramid Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-30

31. Figure 9.4 Brand Resonance Pyramid Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-31

32. Brand Building Blocks Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-32

33. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-33 Brand Elements  Brand names  Slogans  Characters  Symbols  Logos  URLs

34. Brand Element Choice Criteria Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-34 Memorable Meaningful Likeable Transferable Adaptable Protectable

35. Slogans  Like a good neighbor, State Farm is there  Just do it  Nothing runs like a Deere  Save 15% or more in 15 minutes or less  We try harder  We’ll pick you up  Nextel – Done  Zoom Zoom  I’m lovin’ it  Innovation at work  This Bud’s for you  Always low prices Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-35

36. Figure 9.5 Secondary Sources of Brand Knowledge Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-36

37. Table 9.4 The 10 Most Valuable Brands Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-37

38. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-38 Devising a Branding Strategy  Develop new brand elements  Apply existing brand elements  Use a combination of old and new

39. Branding Terms  Brand line  Brand mix  Brand extension  Sub-brand  Parent brand  Family brand  Line extension  Category extension  Branded variants  Licensed product Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-39

40. Reasons for Brand Portfolios Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-40

41. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-41 Brand Roles in a Brand Portfolio  Flankers  Cash cows  Low-end, entry-level  High-end prestige

42. Brand Extensions Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9-42

43. 10 Crafting the Brand Positioning

44. What is Positioning? Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10-44

45. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10-45 Value Propositions  Perdue Chicken  More tender golden chicken at a moderate premium price  Domino’s  A good hot pizza, delivered to your door within 30 minutes of ordering, at a moderate price

46. Competitive Frame of Reference Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10-46

47. Table 10.2 Customer Ratings of Competitors Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10-47

48. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10-48 Defining Associations Points-of-difference Attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand Points-of-parity Associations that are not necessarily unique to the brand but may be shared with other brands

49. Point-of-Difference Criteria Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10-49 Desirable Deliverable Differentiating

50. Figure 10.1a Perceptual Map: Current Perceptions Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10-50

51. Figure 10.1b Perceptual Map: Possibilities Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10-51

52. Designing a Brand Mantra Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10-52 Communicate Simplify Inspire

53. Constructing a Brand Positioning Bull’s-Eye Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10-53

54. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10-54 Conveying Category Membership  Announcing category benefits  Comparing to exemplars  Relying on the product descriptor

55. Examples of Negatively Correlated Attributes and Benefits  Low-price vs. High quality  Taste vs. Low calories  Nutritious vs. Good tasting  Efficacious vs. Mild  Powerful vs. Safe  Strong vs. Refined  Ubiquitous vs. Exclusive  Varied vs. Simple Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10-55

56. Differentiation Strategies Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10-56

57. Means of Differentiation Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10-57 Employee Channel Image Services

58. Emotional Branding Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10-58 Strong culture Communication style Emotional hook

59. Brand Narratives and Storytelling Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10-59

60. Class wrap up  What is due for next week