“Chia để trị”

France’s strategy in colonizing Vietnam,1887

Pham Van Khai Mai Van Bang

AGENDA

What is segmentation? Good segmentation?

Why segmentation?

Criteria of segmentation

Our theory & example

Brand Equity

Example

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Segment&

Brand Equity

Segmentation? GOOD segmentation must be CAMA

The process of defining and subdividing a large general market into clearly identifiable groups having common characteristics.

CLEAR identification of the segment

MEASURABLE effective size

APPROPRIATE to the strategy, policies and resources of the brand or company

ACCESSIBLE through marketing effort

*Common characteristics: 1) Demographics, geography, lifestyle2) Behavior3) Needs – wants - demands, or fear-hope-belief-dream

Why

segmentation?

Marketing Ultimate Goal

To design a marketing strategy that precisely matches the

expectations of customers in the targeted segment

Business Ultimate Goal

so we can better satisfy the consumer with less

expenditures

More revenue & ProfitLess cost

Criteria of

segmentation

Who What

Why

Geography

RegionType of settlement

MediaConsumption

Demographics

Gender, ageType of household

No. of children

Socio-economics

EducationIncome

Occupation

Psychographics

Attitude, valueInterest

ActivitiesLifestyle

BehaviorShare of customer

Frequency of purchase/usage

Patterns of usage

NeedNeed-want-demand

Fear-hope-belief-dream

The one that is overused recently. Let’s see this segmentation

2 Dimensional Segmentation

Weakness:1. Only can reflect a part of the whole market,

especially very developed market (automotive, computer…): In this example, just “High-end automotive”, not “Automotive”

2. If be used to reflect the whole market, each segment will be over generic, because of the 4-segments limit & 2-dimension limit

3. Can’t reflect market development through time

Business

Personal life

Outsideworld

Inner self

The Success EnjoymentEx: Mercedes

The PerformerEx: BMW

The ExplorerEx: Land Rover

The FashionistaEx: Audi

HIGH-END AUTOMOTIVE SEGMENTATION

Khai & Bang would like to introduce: The Cell SegmentationBig thank to Maslow. Patent pending

We believe that: the Needs evolve through time, so does the Market.

When a segment is satisfied enough, members of this segment start to develop higher & different needs. This inner conflict will split it into 2 or more new segments.

So the more developed the market is, the more cells it has.

For example: Automotive market

1) Let’s take a look at “Automotive segmentation” in 1900Market was not developed. Only Ford manufactured & sold car.Only 2 segment, grouped by Income. The Unaffordable & Affordable

The cell segmentation

The AffordableThe Unaffordable

Low income High income

Automotive market segmentation in 1900

How the markets look like now?

By income, it is divided into 4 big segments

No car – Normal /Cheap Car – High-end Car – Super Car1) In Normal car, they are further divided by purpose of usage

(For family – For just me)2) In High end car, they are further divided by “The care about

expressing” (To the world – To the inner self) and “The care of life” (Career – Personal life)

3) In Super car, they are further divided by “The care about expressing” (To the world – To the inner self)

So, as we see, 4 segments & 2 dimensions are not always enough.If we want to see the big picture, let find something both detail & sufficient enough.

How automotive will change years from now?Will more cell divide into more segment?Let’s wait and see.

The cell segmentation

The Affordable

Extremely high income(Super car)

Low (No car)

The Unaffordable

MediumIncome(Normal car)

High income(High end car)

The simple mover

Ex: KIA, DAEWOO

The family mover

Ex: Toyota Innova

The success enjoymentEx: Mercedes

The performer

Ex: BMW

The Fashionista

Ex: Audi

The Explorer

Ex: Land Rover

The Noble

Ex: Roll-Royce

The super star

Ex: Lamborghini, Ferrari

WHAT IS BRAND EQUITY ?

• Understand drivers of brand strength in order to support strategic decision –making.

• To evaluate performance of brand management in increasing equity over time.

• To evaluate efficacy of brand building• To assess the value of the brand for

purposes of licensing or sale.

Reasons to Measure Brand Equity

• Interpretation/Processing of information.

• Confidence in the Purchase decision.

• Use satisfaction.

Value to Customers

• Efficiency & Effectiveness of marketing programs.

• Brand Loyalty.• Prices / Margins.• Brand Extensions.• Trade Leverage.• Competitive Advantage.

Value to Company

Brand Equity is a set of brand assets and liabilities linked to a brand, its symbol, that adds

to or subtracts from the value provided by a product or services to a firm and / or to that

firms customers.David Aaker, University of California

PerceivedQuality

How brand equity generates value (David Aaker’s Model)

Brand Equity

PerceivedValue

Brand Awareness

BrandAssociations

OtherProprietary

Brand Assets

Reduced Marketing costsTrade Leverage (influence)Create awareness etc.

Anchor to which other can be attachedFamiliarity likingSignal of substance/ commitment

Reason-to-buyDifferentiate / positionPrice the brandBuild extensions

Help process / retrieve informationDifferentiate / positionReason-to-buyCreate positive attitude / feelingsExtensions

Competitive Advantage

Provides value toCustomer by Enhancing customer’s:• Interpretation/ processingof information• Confidence in the purchase• Decision• Use satisfaction

Provides value to firm By enhancing:• Efficiency & effectivenessof marketing programs• Brand loyalty• Prices / margins• Brand extensions• Trade leverage• Competitive advantage

Indicators/Effects Future performanceCategory

Aaker formed his brand equity model around the five categories of brand assets

Aaker determines the five categories as the main determinants of brand equity which deliver positive or negative value to the customer and organization.

Each category can be seen as a brand asset that creates value.

It’s of vital importance to understand the source that creates value and the way it creates value

Elements of brand equity

We have 10 brand equity measurement variables, based on the first four primarily categories of his equity model

The measures should reflect brand equity and forces that drive the market. Next to that, the measures should be sensitive and it should be applicable across brands, product lines and markets

BRAND EQUITY MEASUREMENT VARIABLES

This tool measure brand equity by looking at the brand as a blend of the rational and emotional which are measured in terms of brand performance and imagery.

Customer’s relationship to a brand is then plotted in terms of their attitude on the pyramid of engagement and their relative bias towards a rationally dominant or emotionally dominant relationship is established

EXAMPLE ABOUT VICTORIA SECRET

THANK YOU

Pham Van Khai Mai Van Bang

Brand equity is very much like an onion. It has layers and a core. The core is the user who will stick with you until the very end.