This document discusses market segmentation and brand value. It begins by defining market segmentation as dividing markets into smaller segments based on unique needs. It then lists common segmentation techniques like demographic, geographic, and behavioral segmentation. The document also discusses targeting options like undifferentiated, differentiated, focused, and one-to-one targeting. It provides examples of new segmentation ideas like socio-economic groups and generational cohorts. The document concludes by defining brand value in terms of customer perceptions, market performance, and shareholder value.

1. Report G: Customer Groups
BUS 5001 Contemporary Business

2. We shall be looking at:
1 Segmentation strategy
2 New developments in segmentation
3 Brand Value

3. Report Outcome One:
Segments addressed and
segmentation strategy

4. What is segmentation?
Market segmentation involves dividing large,
heterogeneous markets into smaller
segments that can be reached more
efficiently and effectively with products and
services that match their unique needs.
Kotler

5. Segmentation techniques

6. Segmentation techniques
i. Demographic
ii. Geographic
iii. Geodemographic
iv. Psychographic
v. Behavioural
vi. Usage
vii. Customer Benefit
viii. Loyalty
ix. Buyer Readiness
x. Adoption Model

7. Targeting Options:
Undifferentiated
Supplier
Segment 1
Segment 2
Segment 3
Segment 4
Segment 5
One product / brand
for all customer
segments

10. Targeting Options:
Differentiated
Supplier
Segment 1
Segment 2
Segment 3
Segment 4
Segment 5
Differentiated
products for
targeted segments

12. Targeting Options:
Focused
Supplier
Segment 1
Segment 2
Segment 3
Segment 4
Segment 5
Single product /
brand for a
single segment

14. Targeting Options:
One-to-one
Supplier
Modified marketing mix for each individual
customer (Customisation /
Individualisation / ‘Mass Customisation’)

16. Report Outcomes One and Three:
New ideas in customer
segmentation

17. Socio-Economic Groups
A: ‘Upper Middle Class’
Higher managerial, administrative and
professional
B: ‘Middle Class’
Intermediate managerial, administrative
and professional
C1: ‘Lower Middle Class’
Supervisory or clerical, junior managerial,
administrative and professional
C2: ‘Skilled Working Class’
Skilled manual workers
D: ‘ Working Class’
Semi-skilled or unskilled manual workers
E: Subsistence
Pensioner, widowed, casual and lowest
grade workers

18. The Family Life Cycle
Young singles Few financial burdens. Focus on
recreation
Young married Financially strong. Focus on home.
Full Nest: Young couple, child < 6yrs Financially burdened. Credit users, child
focused.
Full Nest: Young couple, child > 6yrs Financially stronger. Child focus.
Full Nest: Older couple, dependent child Better financial position. School focus.
Empty Nest: Children left home, working Financially strong. Focus on travel &
leisure
Empty Nest: Children left home, retired Financially weaker. Focus on health.
Solitary survivor Reduced spending. Focus on health,
hobbies, care.

19. A classification of Residential Neighbourhoods (http://www.caci.co.uk)
‘Wealthy Achievers’ Affluent suburbs, achievers,
prosperous retirement areas
25% of UK
households
‘Urban Prosperity’ Affluent professionals 11% of UK
households
‘Comfortably Off’ ‘Starters’, secure and settled families,
prudent pensioners
26% of UK
households
‘Moderate Means’ Older families, ethnic communities,
‘blue collar roots’
15% of UK
households
‘Hard Pressed’ Council housing, inner city, high
unemployment
23% of UK
households

20. A new look at segmentation

21. Generations X, Y and Z

23. Veterans
Born prior to 1946.
Tend to be disciplined,
respect law and order
and they like consistency.
This generation is not
comfortable with
change.
They have fixed views on
the role of each gender,
and in the workplace are
comfortable with a
directive, command and
control management
style.

24. Baby
Boomers
Born between 1946 and
1964. The largest
population of any
generation.
Open-minded and
rebellious youth, but
more conservative in
their 30’s and 40’s.
Job status and social
standing conscious.
Tend to be optimistic,
ambitious, and loyal, and
believe that employment
is for life.

25. Generation
X
Born between 1965 and
1979. Exposed to daycare
and divorce.
Well-educated , many
having tertiary
qualifications.
Resourceful,
individualistic, self
reliant and sceptical of
authority.
Focused on relationships,
their rights and skills.
Tend to change jobs and
careers.

26. Generation
Y
Born between 1980 and
1995 (Millennium or Net
Generation.)
Very technology wise
and are comfortable with
ethnically diverse groups.
Optimistic, confident,
sociable, and have strong
morals and a sense of
civic duty.
Not brand loyal , flexible,
style consciousness,
likely to change
employers.

27. Generation
Z
Born after 1995. (Digital
Natives)
Used to instant action
and satisfaction.
Children of Generation X
and are born into smaller
families with older
mums.
Communication is mainly
through online
communities and social
media – join large scale
online groups.
May not perform well in
public speaking.

28. Tribal marketing:

29. THE TIME OF THE TRIBES

30. (POSTMODERN) TRIBES
A tribe, in the postmodern
sense of the term, is a group of
individuals
•who are not necessarily
homogenous (in terms of
objective social characteristics),
•but are inter-linked by the
same subjectivity, the same
passion,
•and capable of taking collective
action, short-lived but intense.

31. “Brand Tribe: A group of people
who share their interest in a
specific brand and create a parallel
social universe ripe with its own
values, rituals, vocabulary and
hierarchy”
Wipperfürth, 2005
BRAND TRIBES/COMMUNITIES

32. DIFFICULT TO IDENTIFY
“Tribes are not easy to identify.
They are fuzzy: more societal sparkles
than socioeconomic certainty.
They are shifting aggregations of
emotionally bonded people, open systems
to which a person belongs and yet doesn't
quite belong.
Their underlying logic is made up of
shared experience, interpretations and
representations”
Le Quéau, 1998

33. From segments of consumers
With feedback effect
• Consumer
• Client
• User
• Buyer
• Members
• Fanatics
• Adepts
• Connoisseurs
• ....
• ....
To tribes of enthusiasts
THE LOGIC OF TRIBAL MARKETING

34. • Focus on customer-
company relationship
• The company as a
pole of the
relationship
• Loyalty cards, bulletin
boards…
• Mainly cognitive loyalty
Individualistic approach
to consumer loyalty
Tribal approach to
consumer loyalty
• Focus on customer-
customer relationship
• The company as a support
of the relationship
• Rituals, brandfests, sacred
places…
• Mainly affective loyalty
TRIBAL LOYALTY

38. It can go wrong…
This who Burberry would like their
customers to be…

39. It can go wrong…
But this is who the brand has become
associated with…

40. Report Outcome Three: Identifying
new market segments

41. Ethnic Minority Segments
http://www.hispanic-advertising-agency.com/

43. Only 5% of ads on UK TV in 2010
featured actors from ethnic
minority backgrounds

44. LGBT Segments

47. Identifying International Market
Segments
http://www.gapminder.org/labs
http://www.oecd.org/statistics/
http://www.imf.org/external
http://www.guardian.co.uk/global-
development/datablog/2012/nov/09/developing-economies-
overtake-west-2050-oecd-forecasts?intcmp=239#data

50. Report Outcome Two: Brand Value

51. Definitions of ‘brand value’ or
‘brand equity’
“A brand has positive customer-based brand equity
when consumers react more favourably to a product and
the way it is marketed when the brand is identified than
when it is not”. Keller (2008)
“The set of assets and liabilities linked to a brand’s
name and symbol that adds to or subtracts from the
value provided by a product or service to a firm and/or
that firm’s customers” Aaker (1996)

52. How is brand value measured?

53. In the mind of the customer
In market performance
In shareholder value

54. In the mind of the customer:
• Awareness
– Brand recall and recognition
• Associations
– Brand benefits and uniqueness
• Attitudes
– Perceptions of quality and satisfaction
• Attachment
– Brand loyalty
• Activity
– Purchase, information search, word-of-mouth

55. In market performance:
• Price premiums
• Price elasticities
– Inelastic to increase, elastic to decreases
• Market share
• Expansion success
– Success in line and brand extensions
• Cost structure
– Ability to save in marketing costs
• Profitability

56. In shareholder value:
• Stock price
• Price to Earnings multiple
– Market price of share divided by the annual
Earnings per Share
• Market capitalisation
– Total value of all shares outstanding

57. Brand evaluation consultants:
http://bavconsulting.com/
http://www.wpp.com/wpp/marketing/brand

58. Sources:
Aaker, D., 1996. Building Strong Brands,
Free Press
Keller, K.L., 2008. Strategic Brand
Management. Pearson Press