Brands matter. A recognized brand earns more revenue. This is due in large to the fact that once a brand is recognized, trusted and available, it’s so much easier to just pick it up and move on. No internal evaluation, no worrying about effectiveness, no decision tree – just pick it up and move on.
This is why marketers are so reluctant to change a winning logo, formula or packaging design, even when it’s clearly becoming dated.
If you’re thinking about your brand, here’s a handy reference I use when we consult to brands.
Understanding your Brand.
This is all about defining what role the brand will play in enhancing customers’ lives. There are three types of positioning concepts:
- Functional positions
- Solve problems
- Provide benefits to customers
- Get favorable perception by investors (stock profile) and lenders
- Symbolic positions
- Self-image enhancement
- Ego identification
- Belonging and social meaningfulness
- Experiential positions
- Provide sensory stimulation
- Provide cognitive stimulation
Understanding your Value Proposition
- What is the value that customers derive from using your brand / product?
- How are they better off doing business with you?
- What Characteristics make your brand distinct from competitors?
- Who is your Brand Targeting?
Look at the Psychographic & demographic profile of your consumer (country / urban / gender / age / bias / interest / association / habits / behavior)
What unique traits do your consumers possess?
- What motivates the consumer to associate with your brand?
- Which common traits do groups of distinct high value consumers possess that would identify them (audiophiles, moviebuffs, art lovers)
- How will your customers perceive key dimensions of your brand (ex. Price, Packaging, Feel,Taste) relative to competitors brands.
- What needs do your target audience wish to satisfy with your brand & how would you position your brand to communicate this to them?
The primary objective of segmentation is to identify specific customers with like attributes, and to find segments of customers that are attractive from a profit perspective. In plain English, figure out who your best customers are and find more people like them!
Generic Markets (Large Segments)
comprised of groups of customers who have a general need
A generic market is comprised of groups of customers who have a general need, but have many offerings to choose from to meet that need. For example: transportation is a generic market that can be met by many offerings: car, bus, train, subway, taxi, etc.
Product Markets (Small Segments)
comprised of groups of customers who have a very specific need
A product market is comprised of groups of customers who have a very specific need, with fewer offerings to choose from. For example: The Luxury Car market has only a few options to choose from: Bentley, Aston Martin, Ferrari, etc. Product market segments are similar within the specific segment (ex. Luxury Cars), and are different across segments (ex. Luxury, Mid-size, Economy); and each segment has very specific characteristics, which, when reflected in the product, can return higher profits to the organization.
Markets can be segmented by defining the goals of the customers in that market subset. For example, in the transportation market(The Generic Market), a group of customers who’s goals of transportation are to be able to travel in their own vehicle, feel comfortable/safe/fast relative to other transport options, and be able to show other people how “nice” their own vehicle is: this subset can be said to have goals which define them as a Luxury Car segment.
- Segment Dimensions = Impact on Marketing Mix Decisions
- Demographics = Affects consumer needs
- Geographic Location = Affects size of market
- Behavior and Consumption Patterns = Affects product and promotion variables
Urgency of Satisfaction = Affects Place and Price variables
Market segmentation is the process in marketing of dividing a market into distinct subsets (segments) that behave in the same way or have similar needs. Because each segment is fairly homogeneous in their needs and attitudes, they are likely to respond similarly to a given marketing strategy.
They are likely to have similar feeling and ideas about a marketing mix comprised of a given product or service, sold at a given price, distributed in a certain way, and promoted in a certain way.
Broadly, markets can be divided according to a number of general criteria, such as by industry or public versus private sector. Small segments are often termed niche markets or specialty markets. However, all segments fall into either consumer or industrial markets. Although it has similar objectives and it overlaps with consumer markets in many ways, the process of Industrial market segmentation is quite different.
The process of segmentation is distinct from targeting (choosing which segments to address) and positioning (designing an appropriate marketing mix for each segment). The overall intent is to identify groups of similar customers and potential customers; to prioritise the groups to address; to understand their behaviour; and to respond with appropriate marketing strategies that satisfy the different preferences of each chosen segment.
Improved segmentation can lead to significantly improved marketing effectiveness. With the right segmentation, the right lists can be purchased, advertising results can be improved and customer satisfaction can be increased.
Requirements for Successful segmentation are:
- S Substantial: the segment has to be large and profitable enough
- A Accessible: it must be possible to reach it efficiently
- D Differential: it must respond differently to a different marketing mix
- A Actionable: you must have a product for this segment
- M Measurable: size and purchasing power can be measured
Have I missed anything? Feel Free to Comment 😉