Giving Them What They Want Branding and Positioning for Your Targeted Segment

1. Giving Them What They WantBranding and Positioning for Your Targeted Segment Dr. Judy K. Frels Robert H. Smith School of Business University of Maryland jfrels@rhsmith.umd.edu

2. ? What do you think of when you think of marketing? Not exactly…

3. T S P (Segment) (Target) (Position) Developing Marketing Strategy 5 C’s Context Collaborators Customer Competitor Company Market Sensing 4 P’s Product Price Place Promotion

4. Why do We do “Marketing”? • The purpose of marketing is to make selling superfluous. Peter Drucker, 1973 • There is only one valid definition of business purpose: to create a customer. Peter Drucker • Marketing means solving customers’ problems profitably.Randall G. Chapman, PhD

5. Choosing the Right Customer If marketing means solving customers’ problems profitably, then exactly whose problems can wesolve profitably?

6. T S P (Segment) (Target) (Position) Developing Marketing Strategy 5 C’s Context Collaborators Customer Competitor Company Market Sensing 4 P’s Product Price Place Promotion

7. T S P (Segment) (Target) (Position) Choosing the Right Customer Customer Market Sensing

8. Demographic Age, Life-cycle Income, Occupation Gender Education Psychographic Social Class Lifestyle Behavioral Benefits Usage Rate Usage Occasion Buyer Readiness Loyalty Attitudes Geographic National / International Regional Consumer Segmentation Options

9. Example:The VALSFramework http://www.sric-bi.com/

10. Let’s Talk about Customers

11. Same Segment? • Working Person at Home • Spice needs? • Other needs? • “Gourmet Chef” at Home • Spice needs? • Other needs?

12. Different Segment?Different Offerings… • Working Person at Home • Spice needs? • Other needs? • “Gourmet Chef” at Home • Spice needs? • Other needs?

13. Let’s Talk about Customers

14. Same Segment? • D-I-Y / “weekend warrior” • Heavy user? • Tool needs? • Other needs? • Independent contractor • Heavy user? • Tool needs? • Other needs?

15. Different Segment?Different Offerings… • D-I-Y / “weekend warrior” • Heavy user? • Tool needs? • Other needs? • Independent contractor • Heavy user? • Tool needs? • Other needs?

16. M1 M2 M3 P1 P2 P3 Targeting • Select segments likely to be profitable • Select segment(s) whose needs can be better met by your company than by competitors • Segments for which you have a competitive advantage

17. Who are They Targeting?

18. $ Purchase Per Use Frequency of Use Who are They Targeting?

19. PositioningThe Core of Marketing

20. What do we mean by positioning? Creating distinct and valued physical and perceptual differences between one’s product and its competitors, as perceived by the target customer.

21. What do we mean by positioning? Creating distinct and valuedphysical and perceptual differencesbetween one’s product and its competitors, as perceived by the target customer.

22. 4 P’s Product Price Place Promotion P (Position) Positioning • What is your Value Proposition? • How do you Position yourself vis-à-vis your competitors • What is your Promise and how will you Deliver?

23. Positioning / Benefit Selection

24. Quicken Basic • Is the easiest system to get up and running • Among all personal finance programs • Because it has the most intuitive interface and offers 24/7 support for three months. • Quicken Deluxe • Is the most advanced and integrated • Among all personal finance programs • Because it has the sophisticated financial tools, integrated features, and is web-enabled. Different Segments Warrant Different Positions Otherwise, they’re probably not different segments! M1 M2 M3 P1 P2 P3

25. Why Bother? • Different segments • …have different needs • …and will pay different prices!

26. 60 50 40 30 20 10 0 Price 60 50 40 30 20 10 0 Price 60 50 40 30 20 10 0 Price 1 2 3 Quantity 1 2 3 Quantity 1 2 3 Quantity Use Quicken to its limits Value its many features Use checkbook feature only Different products, Different prices  Maximize profit Quicken High, Low, and Differential Pricing From Varian and Shapiro, 1999, p. 38

27. Quicken Basic • Is the easiest system to get up and running • Among all personal finance programs • Because it has the most intuitive interface and offers 24/7 support for three months. • Microsoft Money • Is the most advanced and integrated • Among all personal finance programs • Because it has the sophisticated financial tools, integrated features, and is web-enabled. Another Way to Approach It? Tell Microsoft you’ll take the two million low-end customers and they can have the 1m high-demand folks…less work, more focused marketing! M1 M2 M3 P1 P2 P3 What’s the Legal Issue Here?

28. Core Product / Service Positioned Differently for Different Segments

29. Purchase productsfrom REALTOR VIP® Alliance Partners and leverage NAR's group buying power. Core Product / Service Positioned Differently for Different Segments +

30. Core Product / Service Positioned Differently for Different Segments • News alerts • Monitor qualifying laps • Download NASCAR’s new theme song • NASCAR wallpaper • Monitor radio conversations between driver and crew chief • Streaming video of driver behind the wheel +

31. Compare that to the Positioning for Another Segment…

32. Core Product / Service Positioned Differently for Different Segments + http://www.boostmobile.com/blounge_media_commercial_party_wm_hi.html

33. Positioning • Creating distinct and valuedphysical and perceptualdifferences between one’s product and its competitors, as perceived by the target customer.

34. What’s positioning’s role, once a product’s positioning has been determined? It is the foundation from which all marketing mix decisions are made.

35. T S P (Segment) (Target) (Position) Developing Marketing Strategy 5 C’s Context Collaborators Customer Competitor Company Market Sensing 4 P’s Product Price Place Promotion

36. A brand is a company’s promise to its customers. Brands are not about logic and reason; they are about emotion, feeling, and perception. What is a Brand? More and more, that promise is about an experience.

37. Essential character of brand “Value” for typical loyal customer Psychological, emotional rewards; feelings Benefits to the customer; solutions Tangible, verifiable, objective, measurable characteristics How High-Tech Brands Build Equityand not a bad model for other industries… © Ward, Light, Goldstine 1999

38. Drivers of Brand Equity Do potential customers know who you are? Customer Brand Awareness What do they think about you? Brand Equity Customer Attitude Toward The Brand Microsoft? Google? Martha Stewart? Customer Perception Of Brand Ethics © Rust, Zeithaml, Lemon 2000

39. Attitude Toward the Brand • What’s your brand personality? • Warm? • Tough? • Durable? • Friendly? • Caring? • Hip?

40. What is the Personality of These Brands?

41. …but Dell is Working on It

42. Essential character of brand “Value” for typical loyal customer Psychological, emotional rewards; feelings Benefits to the customer; solutions Tangible, verifiable, objective, measurable characteristics How High-Tech Brands Build Equity Brand Competition Product Competition © Ward, Light, Goldstine 1999

43. Black and Decker Power Tools Black and Decker Commercials

44. What Level does the “Bulls Eye” Commercial Target?

45. Contrast that with this from DeWalt’s Web Site

46. What Level does the DeWalt “Infomercial” Target?

47. How do we Create Brand Equity? Communications Mix Media Message Customer Brand Awareness Communications Msg Special Events Brand Extensions Brand Partners Product Placement & Celebrity Endorse Not Just Advertising! Customer Attitude Toward The Brand Community Events Privacy Policy Environmental Record Hiring Practices Guarantees Customer Perception Of Brand Ethics

48. Product Placement & Talladega Nights Sony sold the rights to be in the movie... Except for one brand  Which one?

49. What’s Wrong (Today) with This Type of Celebrity Endorsement?

50. Sprint Nextel -- Why Spend $750m on NASCAR?  What is Sprint Nextel’s motivation?  At what level of the pyramid does it operate?