Week FOUR: Market Segmentation & Brand Positioning

Question 1

What is a market segment and what is market segmentation?

Answer 1

Market segment = a group of customers who share a similar set of needs and wants

Market segmentation = dividing a market into distinct groups of customers who have different needs (for products/marketing mixes)

Question 2

Explain some of the benefits of segmentation

Answer 2

• Ensure a target segment has measurable, accessible, profitable and actionable characteristics
• Effectively define and deliver your message (to target)
• Choose appropriate elements (to communicate to target)
• Choose appropriate channels (to find target)
• Save resources (not wasting resources on non-targets)

Question 3

Outline the steps for needs-based segmentation

and behavioural segmentation

Answer 3

1. Marketplace and their needs/what you offer
   - Functional, symbolic, experiential needs/benefits
2. identify consumers based on specific needs
   - Eg. mobile camera for instagram vs chatting with family
3. group consumers
   Eg. demographics, psychographics, values
4. determine which groups are large enough to support customised marketing communications
5. Behavioural segmentation
   - Never bought, occasion, usage rates, loyalty
6. determine underlying reasons for differences
   - Awareness, trial, attitudes
7. group consumers
   - Demographic, psychographic, values
8. Determine which groups are large enough to support customised marketing communications (TARGET)

Question 4

Segmentation can occur based on a few variables . Outline geo-demographic, values and behavioural segmentation

Answer 4

Geo-demographics
- Segmenting based on location and the assumption that those living near each other are likely to have similar demographic, socioeconomic and lifestyle characteristics
BUT may be inefficient

Values/lifestyles

• Meaningful segmentation and targeting is the result of messaging and positioning aligning with the values of the target consumer to create synergy
• Stems from understanding consumers based on;
• > Activities eg. hobbies, holiday, entertainment, community, shopping, sport
• > Interests eg. family, home, job, community, recreation, fashion, food, media
• > Opinions eg. about themselves, social issues, business, education, products, culture
• > Values

Behaviour

• Selected based on internet search history and keywords, websites visit -> implies something about who you are
• Eg. ad might imply a social label -> purchase intentions change according to the identity implied by the label

Question 5

Explain the undifferentiated, differentiated and focused targeting strategies

Answer 5

Undifferentiated
= sending the same promotional message to everyone
- Mass marketing, no segmentation
- Mass advertising (billboard, POS, sales promotion)

Differentiated
= two or more segments
- Efforts focused on two or more well-defined markets
- Caution needed to make sure messages not inconsistent

Focused
= niche marketing
- Efforts on a single tightly defined market
- Direct marketing (digital, specific magazine)

Question 6

What is brand positioning, what can you position by and what is the key to successful positioning

Answer 6

Brand positioning
= key feature, benefit or image that a brand stands for in the target audience’s mind
- How the focal brand is positioned in the consumers’ mind
- How the competitor brands are positioned in the consumers mind

Can position via benefits (functional, symbolic, experiential) or attributes (product/non-product related) to create brand associations

Successful positioning requires a communication strategy that satisfies a consumer need

• Focused on one or two core benefits/attributes eg. positioning map
• Focus on more than one attribute should correspond with correlated values of the target market eg. luxury and quality, environmental and local, cheap and convenient

Question 7

What is value proposition

Answer 7

= statement about the core positioning of the brand

• Represents how the marketer wants customers to think and feel about the brand
• > Defines;
• What benefits exist from the brand
• What the brand differentiates and positions itself through
• > Good ones;
• Reflect brands competitive advantage
• Motivates customers to action

Question 8

What are some of the issues with differentiated positioning across segments

Answer 8

• > Different positoning among different segments is risky
• Message should never be in conflict
• Differences are a function of context, emphasis or attributes/benefits/specific product being communicated
• Marketing travel - example of how similar products can use different attributes and benefits to differentiate
• > Freedom with friends
• > Rewarding
• > Expand your mind
• > Status and luxury
• > Scenery and heritage