Young marketers elite 2 - Segmentation & Brand Equity - Van Khai - Mai Bang

1. “Chia để trị”
France’s strategy in colonizing Vietnam,1887
Pham Van Khai Mai Van Bang

2. AGENDA
What is segmentation? Good segmentation?
Why segmentation?
Criteria of segmentation
Our theory & example
Brand Equity
Example
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5
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Segment
&
Brand Equity

3. 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, lifestyle
2) Behavior
3) Needs – wants - demands, or fear-hope-belief-dream

4. 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 & Profit
Less cost
Criteria of
segmentation
Who What
Why
Geography
Region
Type of settlement
Media
Consumption
Demographics
Gender, age
Type of household
No. of children
Socio-economics
Education
Income
Occupation
Psychographics
Attitude, value
Interest
Activities
Lifestyle
Behavior
Share of customer
Frequency of
purchase/usage
Patterns of usage
Need
Need-want-demand
Fear-hope-belief-
dream

5. 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
Outside
world
Inner self
The Success Enjoyment
Ex: Mercedes
The Performer
Ex: BMW
The Explorer
Ex: Land Rover
The Fashionista
Ex: Audi
HIGH-END AUTOMOTIVE SEGMENTATION

6. Khai & Bang would like to introduce: The Cell Segmentation
Big 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 1900
Market 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

7. How the markets look like now?
By income, it is divided into 4 big segments
No car – Normal /Cheap Car – High-end Car – Super Car
1) 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
Medium
Income
(Normal car)
High income
(High end car)
The simple mover
Ex: KIA, DAEWOO
The family mover
Ex: Toyota Innova
The success
enjoyment
Ex: 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

8. 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

9. Perceived
Quality
How brand equity generates value (David Aaker’s Model)
Brand
Equity
Perceived
Value
Brand
Awareness
Brand
Associations
Other
Proprietary
Brand Assets
Reduced Marketing costs
Trade Leverage (influence)
Create awareness etc.
Anchor to which other can be attached
Familiarity liking
Signal of substance/ commitment
Reason-to-buy
Differentiate / position
Price the brand
Build extensions
Help process / retrieve information
Differentiate / position
Reason-to-buy
Create positive attitude / feelings
Extensions
Competitive
Advantage
Provides value to
Customer by
Enhancing customer’s:
• Interpretation/ processing
of information
• Confidence in the purchase
• Decision
• Use satisfaction
Provides value to firm
By enhancing:
• Efficiency & effectiveness
of 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

10. 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

11. 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

12. 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.