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Process of identifying distinct, relevant, market needs that can be best served separately than through
a generic strategy
Brand Market Analysis and Strategic Segmentation
Process
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More commonly known as STPSegmentation Targeting and
Positioning
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What is the definition of segmentationProcess of dividing the market in fragments
or parts that have similar needsThese segments are deemed to be better
served separately rather than by one product or strategy
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The Marketing Management ProcessAssessment ends and where Segmentation
begins for new products getting into the new category
For old products, a review of the current market and an assessment of the product range that covers each relevant segment. (conduct the usual market audit)
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Demystifying all the myths about this process
How does segmentation REALLY EVOLVE
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Once upon a time in LaLa LandThe guru discovered, during a hot
summer day, that by placing dark colored cellophane in his eyes, it made his eyes.
So he went back to his lab and tinkered and placed colored cellophane on his glasses…. And viola!!!! Sunglasses!!!!
Am I a genius or what…. =) - Guru
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Business person yata si guruHe made one model and sold the model to
everyone in the market.Everybody loved the product and
everybody bought the new GURU shades (me tagline pa…. To be a guru, you have to look like one =P – naks!)
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The sales were brisk and Guru made a fortune…Next time makita nyo si Guru palibre
kayo…. =DBut there were greedy people from the
LaLa Land and is envious of Guru Shades. One of them is Mr.Clean
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Mr. Clean was studying carefullyI have two optionsTo come up with a better designed pair of
shadesOr to come up with a shades that is
cheaper.
He went up to 5th floor library for two years and thought about his idea.
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But lo and beholdFairy Godmother Ming was joyfully flying
through the halls of LaLa Land and saw Mr. Clean, problematic, pragmatic and in deep thought.
FGM landed and asked MC what his problem is.
FGM simply said that in a market with a new product, there would always be space for everyone.
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MC is now enlightened
BLING!
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MC decided to attackTarget the same market as Guru shades
but I would price my product a bit lower. This would enable MC to capture market
share
Naks low price strategy si MC me lahing Chinese din pala
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Guru Shades is left with 65%…
MC did earn his share…. He is the owner of 35% the market
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And the plot thickens…MC is aggressiveGuru is upset …. (umuusok ang ilong at
umiitim ulit ang buhok)And more people are looking into the
category as the summer heats up!!!
New player comes in… with lots of cash to dispense and lots of wits…..
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How did Sister Shades got the idea?
Sister Shades!!!!!!
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SimpleGuru Shades and Clean Shades looks the
same. With minimal marketing strategy know how, they thought one product could fit all…
Sister Shades tried the Guru shades and Clean shades and she was disappointed. Hindi sya beauty sa shades na yun…. =P
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CheCheng!!!Idea came from her own that there is a
space in the market that would appreciate better looking shades and this would be the female market
Mas kikayMas beauty
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And then there were othersShades for the eliteShades for the yuppiesShades for babiesShades for oldies (mataas ang grado at
baduy) wehehehe
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Guru’s share is now only 2% and the shades market is cluttered by as
much as 500 market players
The end of it all….
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Segmentation Process EXISTING PRODUCTSIntegrate ideas in Consumer Behavior
Analysis.Draw out market sizing and existing
competitor profile in each segment Formulate a SWOT analysis based on the
relevant market segments
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Three Approaches in Market driven strategyMass Marketing
Cater to allTarget Marketing
Select segment or group of segments that has the same needs and wants
Niche MarketingSelect one segment and choose to compete
strongly (usually a very small segment)
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Corned Beef ExampleArgentina caters to the mass marketClass A, B, C and DThe product and the brand appeals to a
very broad range of consumersMarketing efforts are concentrated in
appealing to the masses And below the line efforts are used to
target specific segments
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Niche Marketing Choosing a segment and specializing in
itKink Cakes chose to specialize on
special event pastriesGoldilocks and Red Ribbon competes for
the mass market specifically A, B and CJoni’s goes for the C and DJulia’s Bakeshop targets and lower C and
D
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ProfilingProcess of identifying market segment user
characteristicsUser segment can be DESCRIBED IN 3
WAYSDEMOGRAPHICBEHAVIORALPSYCHOGRAPHIC
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Demographic Segmentation based on their personal
statisticsAgeGenderSocial economic classOccupation
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ExampleGun market
HuntersPoliceHobbyists
Hobbyist could further be segmented into the followingYoungOldRichRicher
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Behavioral SegmentsHow the consumers use the product or the
rate they use it.
Rate of usageUser statePlace of usageType of industry
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ExampleSmokerDrinkers
Heavy drinkersSocial drinkersNon drinkers
SmokersChain smokersSocial smokersPretending to be smokers
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PsychographicWhat they think of themselves when they
use the productWhat are they thinking prior to purchaseWhat they think of themselves in relation to
the product
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ExamplesWeight consciousHealth conscious Critical“In” Discriminate taste
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Example of a Market Driven Segmentation Approach
Entry level drinkers
Teenagers Adventurous, individuality search
Advanced drinkers
Yuppies More money to spend, pre disposed to try. Social Drinker
Sophisticated Executives Care about image.Ego
Health Drinkers Retirees Want to enjoy life with good health through healthy lifestyle
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Market Segmentation Process for NEW PRODUCTS Find the most dominant segmentation base
driversCars = Socio economic segmentationClothes = demographics -> economic
Description of segments through other brand segmentation basesDemographic => Behavioral / Psychographic
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Step #2: SWOT for eachAnalyze the segments by formulating a
SWOT analysis for each segmentImplement a CPM for each segment
Brand
A
B
C
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Next Steps Choose the segments where you would
have the best chance of winningTarget that segment for the following
reasonsBest chance to winMost profitableMost strategicStop gap measure
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Targeting is a decision….Market Targeting is a process of
allocation of company effort and resources towards a certain market segment.
Targeting is a match between the company’s products and services and the inherent NEEDS AND WANTS characteristics of the target segment
WRONG TARGET…. LOW PROBABILITY OF SUCCESS….
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Types of target marketMultiple segments
Especially if the needs are homogenousSingle segmentPrimary target market (PTM)
Main focal point of all marketing programsSecondary target market (STM)
Used only as a consideration for marketing programs
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After Targeting…..POSITIONING!!!!!!!!!!!!
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Positioning PrefaceConjoint Analysis
Measurement of importance attributes relative to category
Competitive Importance Attributes AnalysisDrawing of perceptual map per product
attribute analysisPositioning
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Conjoint Analysis ExampleBallpens
Attributes deemed as importantPoint – sharpnessSmoothness in writingInk color – how dark is the inkBarrel and design
Positioning should be based on an attribute that is solely your brand’s
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Main strategic point of the marketing management process
Positioning
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Promil? – GiftedColgate = Flouride
Polo = Mint with a holeKFC = ChickenVolvo = Safety
Own a word in the consumer’s mind……
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How is positioning doneAfter choosing the target segmentEvaluate competitionChoose a USP (Unique Selling Proposition)
- the difference you choose to communicate to your market.
Missing word is Sustainable Coin this into a positioning statementGenerate a slogan (work of the ad agency)
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Why is Positioning important?Create a distinction between our brand and
its competitorsReason for buyingServes as a guide for marketing mix
execution
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Examples:
Flouride and healthy teeth for the family
White teeth, fresh breath for the young
Cheap
Global brand
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What happens if you are not differentiated?
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What happens if you are too differentiated?
Not mass marketDifferentiated and focused market
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What is Positioning?Creating a distinct and relevant
differentiation between the brand and it’s competitors
Key wordsDistinct – being differentRelevant – difference being important
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Distinct
Does not resemble another brand’s positionBased on actual product or corporate
differentiation and core competenceAdvantage should be sustainable and cannot
be copied by competitorsAdvantage means that the company can do
it best….”NO OTHER BRAND CAN DO IT BETTER”
Not based on a basic product promiseLasang Orange Talaga – tagline for Orange juiceNatural…… -- BETTER!
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RELEVANCEThe advantage / positioning should be:
Important to the target marketWanted by your target marketIt is would be bought by your target segment
due to this positioningIntention to buy is important
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Positioning alternativesPrice – We are cheaperProduct attribute – What the product has or
what they can do (Colgate with 2 flouride)Product category – We’re a different animalProduct Source – coming from a place where
it is known (Pampanga Tocino)User Segment – we belong to a different
market (Gatorade – Sports Drink)Benefit – what they can get from the productAgainst competition
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Cheaper Positioning
Not necessarily cheaper but best value for money
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Product Attribute
At first it was differentiated according to the beer having less calories…Then… all the brands followed….
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Product Category
Now it is differentiated as a whole new category
But within this category, they still have to position among themselves
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Product Source
Or you brands that gloats with New Zealand Milk, American made, German sausages, Batangas beef etc
The Philippines has a very strong Ice Cream equity
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User Segment
Where celebrities work out
For the people who know….Sa mga nag tagumpayCan be used as a snob appeal
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Benefit
Whiter Skin
Younger Skin
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MinteeMint Candy (obvious ba)Last for 16 hours in your mouthDries fast (recyclable) No sugarGood for your teeth – dental supplement
attributesSlogan making contest
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SamplesIts mint to bePwedeng ibulsa hanggang bukasMintee … Ngayon at Bukas
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Slogan winning entriesG. Alfaro and J. Santos Laquian and CarandangCabrera and Ong – Sexy, Fresh, Have it
AllHuang and Eia Santos, Impossible to be
RealDator and Javier – Sinless Mint
Complete with justification and rationaleNot the correctness of the positioning
but the route towards the correct slogan
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The right positioning routeSegment the market y studying consumers
extensivelyAnalyze the competition and the
environmentChoose a position that is unique and valued
by competitionCommunicate this differentiation
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Top 5 answers are on the board Each pertains to the brand with various
associationsBased on a survey conducted on 100
peopleHere are the results
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SPRITE
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Clear 54Sweet 39Fun 17
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Sunsilk
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Girl 52Power / Success 35Affordale / Cheap10
Black / Colored 7
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Assumption / Assumptionista
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Sosyal / rich 27English Speaking 25Smart / Intimidating 20Party / Fun 15Fashionista / Pretty 13
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Products: Turon
BibingkaPutoEtc
Case: Assumption Natives
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Consumer Segments and descriptionCollege
Looks sosyal and snobishAge range from 17 to 23Budget is not a concernGood taste and patronizes the products that
taste good rather than the brandPrice conscious
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High schoolImpulse buyersRich kidsBrand consciousLimited time to go to canteen and eatUsed to grand lifestyleFun lovingQuite proud of being Assumptionistas
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Grade SchoolLimited budgetLimited timeRich kidsProduct loyal and brand loyalFriends are the best influencers
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Task….. Provide the target market and positioning
of this product Name your product - BrandMake a product description of your brandStudy the competitors of your target
segmentMake a positioning proposal