How Should Business Markets Be Segmented?

We can segment business markets with some of the same variables we use in consumer markets, such as geog­raphy, benefits sought, and usage rate, but business marketers also use other variables. Table 9.5 shows one set of these. The demographic variables are the most important, followed by the operating variables—down to the personal characteristics

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Market Targeting

There are many statistical techniques for developing market segments.65 Once the firm has identified its market- segment opportunities, it must decide how many and which ones to target. Marketers are increasingly combining several variables in an effort to identify smaller, better-defined target groups. Thus, a bank may not only identify a group of wealthy

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Effective Segmentation Criteria

Not all segmentation schemes are useful. We could divide buyers of table salt into blond and brunette custom­ers, but hair color is undoubtedly irrelevant to the purchase of salt. Furthermore, if all salt buyers buy the same amount of salt each month, believe all salt is the same, and would pay only one price

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MARKETING EXCELLENCE HSBC

HSBC, originally known as the Hong Kong and Shanghai Banking Corporation Limited, was established in 1865 to finance the growing trade between China and the United Kingdom. Over the years, the bank has pioneered many modern banking practices in different countries. For ex­ample, it was the first bank in Thailand and printed the country’s

MARKETING EXCELLENCE BMW

BMW is the ultimate driving machine. Manufactured by the German company Bayerische Motoren Werke AG, BMW stands for both performance and luxury. The com­pany was founded in 1916 as an aircraft-engine manu­facturer and produced engines during World Wars I and It evolved into a motorcycle and automobile maker by the mid-20th century, and today

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Developing a Brand Positioning

All marketing strategy is built on segmentation, targeting, and positioning (STP). A company discovers differ­ent needs and groups of consumers in the marketplace, targets those it can satisfy in a superior way, and then positions its offerings so the target market recognizes its distinctive offerings and images. By building customer advantages, companies can deliver

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Choosing a Competitive Frame of Reference

The competitive frame of reference defines which other brands a brand competes with and which should thus be the focus of competitive analysis. Decisions about the competitive frame of reference are closely linked to target market decisions. Deciding to target a certain type of consumer can define the nature of competition because cer­tain firms

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Establishing a Brand Positioning

Once they have fashioned the brand positioning strategy, marketers should communicate it to everyone in the organization so it guides their words and actions. One helpful schematic with which to do so is a brand­positioning bull’s-eye. “Marketing Memo: Constructing a Brand Positioning Bull’s-eye” outlines one way marketers can formally express brand positioning without skipping

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Alternative Approaches to Positioning

The competitive brand positioning model we’ve reviewed in this chapter is a structured way to approach po­sitioning based on in-depth consumer, company, and competitive analysis. Some marketers have proposed other, less-structured approaches in recent years that offer provocative ideas on how to position a brand. We highlight a few of those here. 1. BRAND

MARKETING EXCELLENCE NESPRESSO

Nespresso was created in 1986 as a subsidiary of the Swiss group Nestle. It was initially supplier to the coffee machine market but it was only after its repositioning to the high-end segment of the consumer market that Nespresso became a global success. Today the Nespresso turnover totals close to $3 billion. As of

MARKETING EXCELLENCE PHILIPS

Royal Philips Electronics, established in 1891, is one of the world’s largest electronics companies and one of the most respected brands. Anton and Gerard Philips started that are known to focus on authenticity and quality. For example, this high-range machinery equips at least 25 percent of the French restaurants. The chefs, as customer influencers,

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How Does Branding Work?

Perhaps the most distinctive skill of professional marketers is their ability to create, maintain, enhance, and pro­tect brands, whether established brands such as Mercedes, Sony, and Nike or new ones like Pure Leaf Teas, Taste Nirvana Coconut Waters, and Alexia All Natural Foods. Some of the hottest brands in recent years have emerged online.

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Defining Brand Equity

Brand equity is the added value endowed to products and services with consumers. It may be reflected in the way consumers think, feel, and act with respect to the brand, as well as in the prices, market share, and profitability it commands. Marketers and researchers use various perspectives to study brand equity.24 Customer-based approaches

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Building Brand Equity

Marketers build brand equity by creating the right brand knowledge structures with the right consumers. The success of this process depends on all brand-related contacts—whether marketer-initiated or not.35 From a mar­keting management perspective, however, there are three main sets of brand equity drivers; The initial choices for the brand elements or identities making up

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Measuring Brand Equity

How do we measure brand equity? An indirect approach assesses potential sources of brand equity by identify­ing and tracking consumer brand knowledge structures.59 A direct approach assesses the actual impact of brand knowledge on consumer response to different aspects of the marketing. “Marketing Insight: The Brand Value Chain” shows how to link the two

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Managing Brand Equity

Because consumer responses to marketing activity depend on what they know and remember about a brand, as the brand value chain suggests, short-term marketing actions, by changing brand knowledge, necessarily increase or decrease the long-term success of future marketing actions. 1. BRAND REINFORCEMENT As a company’s major enduring asset, a brand needs to be

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Devising a Branding Strategy

A firm’s branding strategy—often called its brand architecture—reflects the number and nature of both com­mon and distinctive brand elements. Deciding how to brand new products is especially critical. A firm has three main choices: It can develop new brand elements for the new product. It can apply some of its existing brand elements. It

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Customer Equity

Achieving brand equity should be a top priority for any organization. “Marketing Memo: Twenty-First-Century Branding” offers some wise advice on continued brand success. Finally, we can relate brand equity to one other important marketing concept: customer equity. The aim of customer relationship management (CRM) is to produce high customer equity.106 Although we can calculate

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MARKETING EXCELLENCE McDonald’s

McDonald’s is the world’s leading hamburger fast-food chain with more than 34,000 restaurants in 119 coun­tries. More than 80 percent of McDonald’s restaurants are owned and operated by franchisees, which decreases the risk associated with expansion and ensures long-term tenants for the company. McDonald’s serves 70 million people each day and promises an easy

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MARKETING EXCELLENCE Procter & Gamble

Procter & Gamble (P&G) began in 1837 when brothers- in-law William Procter and James Gamble formed a small candle and soap company. Over the next 150 years, P&G innovated and launched scores of revolutionary products with superior quality and value, including Ivory soap in 1882, Tide laundry detergent in 1946, Crest toothpaste with fluoride

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