marketing management session 12
DESCRIPTION
TRANSCRIPT
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Identifying Market
Segments and Targets
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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.
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Four Levels of Micromarketing
Segments Niches Local areas Individuals
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Segment Marketing
Targeting a group of customerswho share a similar set of
needs and wants.
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Flexible Marketing Offerings
Naked solutionProduct and
service elements that all segment members value
Discretionary optionsSome segment
members valueOptions may carry
additional charges
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The Experience Economy
Experience Services Goods Commodity
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Customerization
Combines operationally drivenmass customization with customizedmarketing in a way that empowers
consumers to design theproduct and service offering
of their choice.
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Segmenting Consumer Markets
Geographic Demographic Psychographic Behavioral
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Market Segmentation
Occupation
SEGMENTATION BASESEGMENTATION BASE SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLESGeographic Segmentation
Climate
Density of area
City Size
Region Karnataka, Punjab, Haryana, Rajasthan
Major metropolitan areas, small cities, towns
Urban, suburban, exurban, rural
Temperate, hot, humid, rainy
Demographic Segmentation
Income
Marital statusSexAge Under 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+
Male, femaleSingle, married, divorced, living together, widowed
Under $25,000, $25,000-$34,999, $35,000-$49,999, $50,000-$74,999, $75,000-$99,999, $100,000 and over
Education Some high school, high school graduate, some college, college graduate, postgraduate
Professional, blue-collar, white-collar, agricultural, military
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SEGMENTATION BASESEGMENTATION BASE SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLESPsychological Segmentation
Learning-involvement
Perception
Personality
Needs-motivation Shelter, safety, security, affection, sense of self-worth
Extroverts, novelty seeker, aggressive
Low-risk, moderate-risk, high-risk
Low-involvement, high-involvement
Psychographic
Subcultures (Race/ethnic)
Religion
Cultures
(Lifestyle) Segmentation Economy-minded, couch potatoes, outdoors enthusiasts, status seekers
American, Italian,Indian, Chinese, Mexican, French, PakistaniCatholic, Protestant, Jewish,Hindu, Muslim, other
African-American, Caucasian, Asian, Hispanic
Family life cycle
Social class Lower, middle, upper
Bachelors, young married, full nesters, empty nesters
Attitudes Positive attitude, negative attitude
Sociocultural Segmentation
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SEGMENTATION BASESEGMENTATION BASE SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLESUse-Related Segmentation
Brand loyalty
Awareness status
Usage rate Heavy users, medium users, light users, non users
Unaware, aware, interested, enthusiastic
None, some, strong
Use-Situation Segmentation
Location
Objective
Time Leisure, work, rush, morning, night
Personal, gift, snack, fun, achievement
Home, work, friend’s home, in-store
Person Self, family members, friends, boss, peers
Benefit Segmentation Convenience, social acceptance, long lasting, economy, value-for-the-money
Geodemographics Based on geography and demography
Demographic/Psychographics
Combination of demographic and psychographic profiles of consumer segments profiles
SRI VALSTM Actualizer, fulfilled, believer, achiever, striver, experiencer, maker, struggler
Hybrid Segmentation
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Psychographic Segmentation
VALS Four groups with higher resources
Innovators- Successful, sophisticated, active, take charge people with high self esteem.
Thinkers-Mature, satisfied and reflective people who are motivated by ideals and value order, knowledge, and responsibility.
Achievers-Successful goal-oriented people who focus on career and family.
Experiencers- Young, enthusiastic, impulsive people who seek variety and excitement.
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Four groups with lower resources Believers – Conservative, Conventional, and
traditional people with concrete beliefs. Strivers -Trendy and fun loving people who are
resource constrained. Makers – Practical, down-to-earth, self sufficient
people who like to work with their hands. Survivors – Elderly passive people who are
concerned about change.
(www.sric-bi.com)
Psychographic Segmentation
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Behavioral Segmentation
Decision Roles Initiator Influencer Decider Buyer User
Behavioral Variables Occasions Benefits User Status Usage Rate Buyer-Readiness Loyalty Status Attitude
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Steps in Segmentation Process
Needs-based segmentation Segment identification Segment attractiveness Segment profitability Segment positioning Segment acid test Marketing mix strategy
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Effective Segmentation Criteria
Measurable Substantial Accessible Differentiable Actionable
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DISCUSSION
Is Mass Marketing dead?
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DISCUSSION
Think of various product categories. How would you classify yourself in terms of the various segmentation schemes? How would marketing be more or less effective for you depending on the segment involved? How would you contrast demographic versus behavioral segment schemes? Which ones do you think would be most effective for marketers trying to sell to you?
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HSBC
HSBC is known as world’s local bank. Established in 1865 to finance the trade
between China and the United Kingdom. Second largest bank in the world. Serves 100 million customers through
9,500 branches in 79 countries.
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HSBC
The company is organised by business line:Personal financial servicesConsumer financeCommercial bankingCorporate investment banking and marketsPrivate banking
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HSBC
HSBC is organized by the geographic segment:Asia-PacificUK/EurozoneNorth America/NAFTASouth AmericaMiddle East
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HSBC
Sir John Bond in November 2003:Our position as the world’s local bank enables
us to approach each country uniquely, blending local knowledge with a world wide operating platform.
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HSBC in New York
HSBC held a “New York City’s most knowledgeable Cabbie” contest. The winning cabbie gets paid to drive full time for HSBC for the year and HSBC’s customers win too. And they get a free ride in the HSBC branded Bankcab.
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HSBC in Hong Kong
During the Severe Acute Respiratory Syndrome(SARS) outbreak, HSBC launched a program to revitalise the local economy.
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HSBC’s niche marketing venture
Proides Pet Insurance which in 2003 was growing at the rate of 125% per year.
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Dealing with Competition
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Five Forces Determining Segment Structural Attractiveness
Potential entrants Suppliers Buyers Industry competitors Substitutes
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Industry Concept of Competition
Number of sellers and degree of differentiation
Entry, mobility, and exit barriers Cost structure Degree of vertical integration Degree of globalization
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Industry Concept of Competition
Pure monopoly Oligopoly Monopolistic competition Pure competition
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Analyzing Competitors
Share of market Share of mind Share of heart
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Expanding the Total Market
New customers More usage
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Six Types of Defense Strategies Defender Flank Preemptive Counteroffensive Mobile Contraction
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Other Competitive Strategies
Market challengers Market followers Market nichers
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Market Challenger Strategies
Define the strategic objective and opponents
Choose a general attack strategy Choose a specific attack strategy
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General Attack Strategies
Frontal attack Flank attack Encirclement attack Bypass attack Guerrilla warfare
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Specific Attack Strategies
Price discounts Lower-priced goods Value-priced goods Prestige goods Product proliferation
Product innovation Improved services Distribution innovation Manufacturing-cost
reduction Intensive advertising
promotion
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Market Follower Strategies
Counterfeiter Cloner Imitator Adaptor
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EXERCISE
Pick an industry. Classify firms according to the four different roles they might play: leader, challenger, follower and nicher. How would you characterize the nature of competition? Do the firms follow the principles described above?
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ACCENTURE
Stareted as the consulting arm of the accounting firm Arthur Andersen.
They were called “Administrative Accouting Group” and then became Management Information Consulting Division.
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ACCENTURE
In 1989, Andersen Consulting separated from Arthur Andersen in order to position itself against its IT services competitors. At the time Andersen Consulting already doing a $1 billion a year in business, but it was mistakenly associated with accounting.
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ACCENTURE
The IT consulting marketplace was crowded with competitors ranging from nuts-and-bolts hardware/software providers like IBM to leading strategy firms like Mckinsey and Boston Consulting Group.
Came out with an advertising campaign.
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ACCENTURE
In 2000, following arbitration against its former parent, Andersen Consulting was granted full independence. It had three months to find, implement, and introduce the world to a new corporate name. This effort went on to become one of the largest and most successful re-branding campaigns in corporate history.
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ACCENTURE
A consultant from the Oslo office coined the Accenture name because it rhymed with adventure and connoted an “accent on the future”. The name emerged as the winner because it was catchy and distinctive and embodied bold growth and innovation.
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ACCENTURE
In 2002, Accenture launched the “Innovation Delivered” campaign to distinguish itself from the commpetition. Competitors in the IT arena, such as IBM lacked broader business consulting expertise and weren’t seen as knowledgeable in business strategies and processes. They tended the firms from the IT level. Competitors like McKinsey had brand strength associated with strategic thinking.
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ACCENTURE
Accenture saw its differentiator as the ability to provide both innovative ideas and execute them too.
“Unless you can provide both transformational consulting and outsourcing capability, you are not going to win”
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ACCENTURE
“Innovation Delivered” campaign. “from innovation to execution, Accenture helps accelerate your vision”.
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ACCENTURE
In 2002, the climate changed, after the dot-com crash and the economic downturn, innovation was no longer enough. “High performance Delivered” campaign with Tiger Woods as the spokesperson.