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3.17. USING MKT RESEARCH TO SEGMENT MARKETS
1.Why use market segmentation?: is always more commercially effective than mass marketing. This is because:-Buyers are more inclined to select products and services-Companies can better ‘cut through’ (break) if their message resonate.-Companies can be selective chase parts of the market. -Choosing with whom to do business (or not) the most important principle of segmentation. -Segmentation drives innovation.
2.Types of segmentation:
-Geo-demographic segmentation: Based on location, capture observable or measurable characteristics about individuals or purchasing units that may have implications for how an offer might be perceived. These variables (age, gender, etc.) can be taken individually or combined together to form composite descriptions of a target audience. Within consumer marketing it is common for demographics to be used as a basis for defining life stage groups that correspond with specific requirements. Voting intentions are often linked with age and social class.So a political party campaigning will closely analyze the demographic composition of a specific electoral area.
-Behavioral segmentation: A buyer’s habits and observable behaviours can be very strong predictors of their underlying needs.The analysis of one’s behaviour is especially powerful because it can reveal insights that research respondents cannot recall or express through conventional surveys. Many supermarkets use loyalty cards. -Attitudinal and needs-based segmentation: Needs-based market segmentation challenging because the requirements or beliefs of an individual constantly change indeed they may even be different from one day to the next. The brand that is best able to appeal to the deeper-seated feelings + motivations + concerns of the market is the one that will frequently win out. A significant drawback of this approach is that it is possible for respondents to give similar answers to many of the statements limiting the scope for creating distinct segments.-Business segmentation: Many B2B organizations use similar principles in order to segment their markets too. Instead of demographics the B2B organization typically segments based on what are termed ‘firmographic’ characteristics such as the size of the company judged by number of employees, revenues, sales or profit margins.
3.Five tenets(principles) of successful segmentations: Segment distinctiveness. Each of the segments should have a clear and distinct ‘personality’. Segment recognition. If it is difficult to slot an existing or potential customer into one of the segments, then other, more easily recognizable segments should be developed instead.Segment durability. Segments must be valid for the long term, or at least as long as is required by the company’s marketing strategy, because segmentation frameworks can take years to bed in.Segment size. there should not be too many segments. It is an expensive exercise to define and implement a marketing plan for any more than six or seven distinct groups.
3.18. USING MARKET RESEARCH TO IMPROVE BRAND POSITIONING
1.Researching new visual identities, The evaluation of competing designs within a survey is typically set up in one of several ways: -Monadic testing. Each respondent is asked for his or her opinions on just 1 randomly chosen design option during the survey large, comparable sample for each design tested opinion can be measured. (use evaluate as in real life that we use 1 product at a time). -Sequential monadic testing. Back-to-back (consecutive) monadic tests for each respondent ie each design tested individually in turn to keep costs down since several designs are evaluated per respondent. (use evaluate + use evaluate). -Paired-comparison test. Research set-up in which 2 potential design are tested side by side among the entire sample. The winner is the one that gets the most favourable feedback. (use + use Choose 1 product from 2 options).-Proto-monadic testing. Combines a monadic (one at a time) test with a paired comparison later in the interview safety net in case one approach does not suggest a clear winner.
2.Defenitions: -Sequential Monadic Research Design: Sequential monadic designs are often used to reduce costs. In this design, each respondent evaluates two products. The sequential monadic design works reasonably well in most instances. -Paired-Comparison Test: Paired-comparison designs appeal to our common senseCriteria that might be measured as part of a logo/visual identity testing exercise include: overall favorability + likeability, extent to which the visual identity aligns with desired brand values; , whether the logo is associated with the brand + category,how the logo is perceived in context. eg. on product packaging + at point of sale + on a corporate website.
3.The funnel:
-Awareness: Respondents are first asked about spontaneous awareness involves naming, top of mind,… For self -completion surveys (such as online surveys) these responses are entered as free text and are then coded for analysis.Spontaneous awareness is seen to be a very good judge.
-Familiarity: This stage seeks to measure the ‘quality’ of one’s awareness of a brand from only having heard the name through to being ‘very familiar’.
-Consideration: Is the brand among those that the market would seriously consider buying? For many purchases only a maximum of 3 or 4 brands enter into the decision maker’s consideration set being within that number is vitally important.
-Usage: Although a brand could just measure their sales figures usage is a very important long-term metric to independently track. Understanding the dynamics of competitor brands that are being used and the relative market share that these command are two outputs that internal data alone will not answer.
-Advocacy: To understand how well a brand is delivering against its promises. This can be done either with recourse to a satisfaction question or the buyer’s likelihood to recommend a brand to others.
4.Other topics covered as part of brand tracking studies: -Advertising awareness: As the respondent is not aware of the sponsor of the study tracking changes in these measures is a good indicator of the effectiveness and reach of advertising.-Channel of purchase: When combined with information about the brands used this gives important intelligence about the channel strategies of competitors. -Behaviour during the purchase decision: For those making a recent purchase respondents may be asked to report on some of the actions they followed in the build up to the acquisition.-Swithching patterns: Regularly tracking this can be an early warning of impending defection to competitors. -Audiences profiling: Brand tracking is often strongly linked to an organization’s segmentation.
5.Research design of brand tracking studies: -Frecuency: The first of these is how frequently the survey should run. Tends to range from monthly to every two years. Scheduling of brand tracking research should be based upon when promotional activities are anticipated to fall. -Consistency: The next critical issue is that of methodological consistency. The questions asked from one wave (or iteration) of brand research to the next must either be the same or very similar. -Blindness: In many cases a brand tracking survey should be ‘blind’. In other words the sponsor of the study should not be disclosed to respondents. It should be hidden until the end of the survey. -Sample: For brand monitoring projects the sample size must be sufficient to statistically detect any changes from one wave to the next. If the margin of error for a tracking sample is larger than the expected change in the measures that are to be tracked then more interviews may be required.