ASSIGNMENT 8.1 – SEGMENTATION & BRAND EQUITY

Tuan Duong

Vo Thi

SEGMENTATION

Dividing the total market into smaller groups of buyers with

distinct needs, characteristics, or behavior who might require

separate products or marketing mixes

Definition

Segmentation

Divide the total market

into smaller segments

Targeting

Select the segment or

segments to enter

Differentiation

Differentiate the market offering to

create superior customer value

Positioning

Position the market offering in the

minds of target customers

Select customers to serve Decide on a value proposition

Create value

for targeted

customers

SEGMENTATION Variables used for segmentation

Geographic segmentation

Demographic segmentation

Psychographic segmentation

Behavioral segmentation

Divides the market

into different

geographical units

such as nations,

regions, states,

counties, or cities

Divides the market into

groups based on variables

such as age, gender,

family size, income,

occupation and

education

Divides buyers into

groups based on their

knowledge, attitudes,

uses, or responses to a

product

Divides buyers into

different groups

based on social

class, lifestyle, or

personality traits

Mid-high

Income

Office

Workers

Central

Business

district

Small-

Medium

Business

District

Standalone

Offices

Brought in

themselvesEat

in

Intense

workload

Occasionally

intense

workload

Quick

dinning

Fine

Dining

Eat in

Eat

out

Controlable

workload

Brought

in maids

Fine

Dinning

Brought in

maids

Brought in

themselvesEat

inQuick

dinning

Eat

out

Brought in

maids

From nearly

shops

From home

SEGMENTATION Example

From nearly

shops

From home

Fine

Dining

Eat

out

Brought in

maids

From nearly

shops

From home

From nearly

shops

From home

Demographic

(Base on income)

Geographic (rough

market size & degree

of competition)

Behavioral (amounts of their workload which can identify

how they spend their time during lunch break)

Dining behaviors office workers

SEGMENTATION Example Tourism behaviors in travel agent

High mobility

Low mobility

Commercial Touristic

AdventurersHigh mobility

Spotted on Rural

Area cells

Extreme TouristsVery high mobility

Spotted on Various

city cells

Multi PurposesHigh Mobility

Spotted on Com

& Tourists cells

Mobile BusinessmanMedium to High Mobility

Spotted on Variety

Commercial Area cells

Standing BusinessmanLow Mobility

Spotted on

Commercial/hotel cells

Tourists based on ResortLimited Mobility

Spotted on resort/all-in-

package cells

Segments base on high/low mobility (life style – psychology segmentation)

purposes of touristic/commercial (uses of product – behavioral segmentation)

Share of budget

Purchase frequency

Retail coverage

Quality

Perceived cost

Level of recommendation

Understand my needs

Preference

Differentiator

Future purchase intent+ +

For the consumer: The attraction & attachment to a brand from the results of

their past experiences with the value proposition represented by brand itself.

For the company: The incremental sales contribution per year obtained by the

brand in comparison to the product or services with no brand-building efforts.

Nike charged premium prices for its sneakers as the consequences of a high

brand preference or attachment. Apple charger very premium prices for its

phone & laptop just because of its innovation promises.

BRAND EQUITY Definition

Example

BRAND EQUITY Component

1. To understand drivers of Brand’s strength in order to

support strategic decision making.

2. To evaluate Brand Management’s performance in

increasing equity over time.

3. To evaluate efficacy of brand building programs.

4. To assess the value of the brand for purposes of M&A.

Measuring brand equity is the research about consumers’ mindset, thoughts or feelings either positive

or negative about a specific brand. There are 5 models for measuring brand equity:

1. Financial metrics: Market share, price sensitivity, Profitability, Revenues, Marketing Investments,

Grow rate, Cost to acquire new customers, Cost to retain customers.

2. Strength metrics: Accessibility, Awareness and knowledge of the brand, Loyalty, Licensing

potential, Retention, Aided & unaided recall, Buzz.

3. Consumer metrics: Relevance, Emotional connection, Differentiators, Value, Perceptions.

4. Ten metrics: Differentiation, Satisfaction, Perceived Quality, Leadership, Perceived value, Brand

personality, Organizational Associations, Brand awareness, Market share, Distribution coverage.

5. Sharing tiering metrics: Market share, Top box contribution, Loyalty contribution, Equity share,

Leveragability index.

BRAND EQUITY

Brand Awareness: HP’s score is only 15% above average &

take position 3rd.

Technological leadership: HP is higher than the base 24% but

still take 3rd position.

Worldwide presence: HP has 40% higher score than the base

to take 2nd position.

Willingness to pay a premium: Due to the strength of Apple,

HP and the rest take the score under the base.

Willingness to recommend: This parameter is for testing the

consumer satisfaction toward the brand, HP fails significantly as

it compares with Dell & Apple.

Reliability of the brand: HP gets the reliable level lower than

the industry average.

Value for money: In this parameter, once again, HP has the

lowest score and take 4th position.

Innovative: HP fails significantly compare to Dell & Apple. It just

only has higher score than IBM.

Quality: In this pillar for determining brand equity, HP continues

to fails directly to Apple & Dell.

Customer services Quality: In this pillar, Dell is the clear winner with

43% higher than the base. HP is the 3rd one.

Differentiated: For this parameter, HP has a positive variance about

15% higher than the base to take 2nd position.

Overall experience: Consolidated those experiences above, HP fails

completely while gain negative variance about 8% from the base.

Source: Brand tracker HP, 2012

BRAND EQUITY ExampleTEN metrics method

HP BRAND equity measurement

Consumer believes that Ragu & Prego are similar but why share of Ragu is dominant the

market over others.

Share tiering showed that Ragu takes more volume sales from its core customers who

think it is superior & worth the price

BRAND EQUITY ExampleSharing tiering method

Spaghetti sauce

Key findings & direction:

1. Share of Prego is mostly come from non-loyal consumer which make the brand become

vulnerable.

2. Prego should focus on Loyal consumer to drive volume by using the claim toward Quality

worth the price.

BRAND EQUITY ExampleSharing tiering method

Spaghetti sauce