Identifying Market

Segments and Targets

2 MARKS

Q1.What is Marketing segmentation?

Ans: Marketing segmentation is the process of dividing up the mass markets into groups with
similar needs and wants .The rationale for market segmentation is that in order to achieve
competitive advantages and superior performance.

Q2. What are the activities including target marketing?

Ans: >Market segmentation

>Market targeting

>Market positioning

Q3. What are the components to be used in market segments?

Ans: Market segments must be measurable, substantial, accessible, differentiable, and

actionable.

Q4. Which are the main levels to target market?

Ans: Mass ,Multiple segments, Single segments , and Individuals.

5 MARKS

Q1.What is the best audience segmentation tools for this analysis?

Ans: 1.Demographics covers age, gender, race, location, education and more.

2.Psychographics parameters include customers interest, attitudes, values, and personality

traits.

3.Geographic segmentation identifies market segments based on location and borders.

4.Product benefits can also be used to differentiate audience segments. E.g. car dealership
messaging might address its luxury brand to those with desire for social status, on incomes,
while touting the roominess of a wagon to young families on channels during prime
commuting time.
Q2.What are audience segmentation needs?

Ans: Analyzing the available data, the media planner can gain more insight into audience
behaviours. Based on a researched, nuanced understanding of the customers, the planner or
buyer can better perform audience segmentation that takes into consideration consumer
demand to determine strategic approach

Q3. What do we want target audience segments to do?

Ans: Each audience segments will have different attributes, but you may also want audiences
to act differently too. Customize communications accordingly and track campaign success for
each segmentation to determine what strategies are working or need to be retooled.

Q4. How segmented should we go in our approach?

Ans: Segmenting campaigns to respond to particular target audiences demands attention to

particular sub-targets wants and needs. This can be a more costly and time-consuming
approach and may net a resulting segment that is too small to be valuable.

Carefully subdividing several mutually exclusive segments can also hurt messaging as what
you say to one group could be confusing to another targeted segment if there is spill over
across channels.

Q5. What is the dollar value of audience segment?

Ans: When looking at multivariate analysis, the strategist can find answer to hundreds of
question. Yet it can be too easy to overlook the basic. For instance, a market segment may
represent a large percentage of the market. Look at dollar potential as well as the number of
people.

In segment analysis, the media planner and buyer need to ask the questions that help identify
measurable, actionable and substantial targets. Using segments analysis and powerful media
targeting software, media planners are equipped with the ability to construct substantial
plans without having to play a guessing game, After all, all this data analysis is only useful if
the end result is targeted, attracted, and serviced with the marketing mix

12 MARKS

Q1.What is the 4 types of segmentation in market research Analysis?

Ans: 1. A priori(most commonly used) : a priori is defined as relating to knowledge that

proceeds from theoretical deduction rather than from observation or experience. For
purposes of market research analysis this means making certain assumptions about different
groups that are generally accepted as pertaining to that group.

Ex: Deducing that adults over 50 are not as tech savvy as twenty some things is a safe
assumption based on the reasoning that high tech devices were not as widely available to the
older generation than they are to the younger. However, be careful to check your
assumptions since they can change over time. In 30 years, that statement may no longer be
true.

2. Usage Segmentation (also used frequently) :Usage segmentation is completed either by

deciles or pereto analysis. The former splits the groups into ten equal parts and the latter
distributes according to the top 20% and the remaining 80%. Usage segmentation helps to
drill down more deeply than a priori because it indicated which priori group is the heaviest
user of your product.

3. Attitudinal (Cluster analysis): Using cluster analysis to create customer psychological

profiles is difficult because it is limited by the input data base used. Demographic data is the
least helpful, whereas preference data is better suited towards this type of analysis.

However, once usage segmentation is created, it’s exceptionally helpful to know the
motivating factors behind the purchasing decisions of the heaviest users of your product.

4. Needs Based Segmentation: Needs based segmentation is the concept that the market can
be divided based on customer need.

This type of analysis is used to develop products that sell rather than trying to sell products a
business developed.

Needs based segmentation uses conjoint analysis to separate the groups according to
functional performance .Using cluster analysis, it’s goal is it determine the driving forces
behind the performance data.

Knowing which segmentation to use is often as critical as the analysis is itself as critical it is
driven by the cost and the stated business goals of the decision makers.

Q2: How to identify a target market and prepare a customer profile?

Ans: 1. What to except: This Business Builder will take you though step-by-step processes
that will help you identify specific target markets within your industry and provide you with
the know-how to create a customer profile.

2. What you should know before getting started: In order to market your product or service,
it is imperative that you tailor your marketing and sales efforts to specifically reach the
segment of population that will most likely buy your product or service. It is critical that you
first determine or clearly identify your primary market. Your energies and founds then can be
spent more efficiently.

If you don’t know who your customers are, how will you be able to assess whether you are
meeting their need? Since success depends on your being able to meet customer’s needs and
desires, you must know who your customers are, what they want, where they live and what
they can afford.

We have all heard a business owner say, “My product is terrific! It appeals to everyone. “Many
of us have also seen small businesses that try to be all things to all people. This is a difficult, if
not impossible, bridge to cross.

Targeting your market is simply defining who your primary customer will be. The market
should be measurable, sufficiently large and reachable.

3. Types of Markets: A market is simply any group of actual or potential buyers of a product.
There are three major types of markets.

>The consumer market: Individuals and households who buy goods for their own use or
benefits are part of the consumer market. Drug and grocery items are the most common types
of consumer products.

>The industrial market: Individuals, groups or organization that purchase your product or
service for direct use in producing other products or for use in their day-to-day operations.

>The reseller market: Middlemen or intermediaries, such as wholesalers and retailers, who
buy finished goods and resell them for a profit.

4. Indentifying your market: Here are three steps to follow when identifying your market:

>identify why a customer would want to buy your product/service.

>segment your overall market

>Research your market.

Q3: What are four groups with high resource and low resource in segmentation system?

Ans: High resource:

1. Innovators: Successful, sophisticated, active, “take-charge” people with high self-esteem.

Purchases often reflect cultivated tastes for relatively upscale, niche-oriented products and
services.

2. Thinkers: Mature, satisfies, and reflective people motivated by ideas and who vale order,
knowledge, and responsibility. They seek durability, functionality, and value in products.
3. Achievers: Successful, goal-oriented people who focus on career and family. They favour
premium products that demonstrate success to their peers.

4. Experiences: Young, enthusiastic, impulsive people who seek variety and entertainment.
They spend a comparatively high proportion on fashion, entertainment, and socializing.

>Low resource:

1. Believers: Conservative, conventional, and traditional people with concrete beliefs. They
prefer familiar, U.S.- made products and are loyal to established brands.

2. Strivers: Trendy and fun-loving people who are resource-constrained. They favour stylish
products that emulate the purchases of those with greater material wealth.

3. Makers: Practical, down-to-earth, self-sufficient people who like to work with their hands.
They seek U.S –made products with a particular or functional purpose.

4. Survivors: Elderly, passive people concerned about change and loyal to their favourite
brands.

Q4. Write the flow chart of Behavioural Segmentation Breakdown?

Ans:
Target Market

Unaware Aware

Not Tried Tried

Negative Favourable
Neutral Opinion Rejecter Not yet Repeated
Opinion repeated

Light
user
Loyal to Switcher Loyal to
Regular brand other
user brand

Heavy
user
Bases for Segmenting Business Markets

Q1. What are the steps in segmentation process?

Ans: 1. Needs- Based segments: Group customers into segments based on similar needs and
benefits sought by customers in solving a particular consumption problem.

2. Segment identification: For each needs-based segment, determine which

demographics, lifestyle, and usage behaviours make the segment distinct and identifiable
(actionable).

3. Segment Attractiveness: Using predetermines segment attractiveness criteria (such

as market growth, competitive intensity and market access) determine the overall
attractiveness of each segment.

4. Segment Profitability: Determine segment profitability.

5. Segment positioning: For each segment, create a “value proposition” and product-
price positioning strategy based on that segment’s unique customer needs and
characteristics.

6. Segment “Acid Test”: Create “segment storyboard” to test the attractiveness of each
segment’s positioning strategy.

7. Marketing-Mix Strategy: Expand segment positioning strategy to include all aspects

of the marketing mix product, price, promotions and place.

Q2. Determine the 5 forces identified by Michael Porter.

Ans: 1. Threats of intense segment rivalry: A segment is unattractive if it already contains
numerous, strong, or aggressive competitors. It’s even more unattractive if it’s stable or
declining, if plant capacity must be added in large increments, if fixed costs or exit barriers
are high, or if competitors have high stakes in staying in the segments. These conditions will
lead to frequent price wars, advertising battles, and new-product introductions and will make
it expensive to compete. The cellular phone market has seen fierce competitions due to
segment rivalry.
 2. Threat of new entrants: The most attractive segments are one in which entry barriers
are high and exit. Few new firms can enter the industry, and poorly performing firms can
easily exit. When both entry and exit barriers are high, profit potential is high, but firms face
more risk because poorer-performing firms stay in and fight it out. When both entry and exits
barriers are low, firms easily enter and leave the industry and returns are stable but lowing
good times but find it hard to leave during bad times. The result is chronic overcapacity and
depressed earnings for all. This airline industry has low entry barriers but high exit barriers,
leaving all carriers struggling during economic downturns.

3. Threat of substitute products: A segment is unattractive when there are actual or

potential substitutes for the product. Substitutes place a limit on prices and on profits. If
technology advances or competition increases in these substitute industries, price and profits
are likely to fall. Air travel has severely challenged profitability for Greyhound and Amtrak.

4. Threat of buyer’s growing bargaining power: A segment is unattractive if buyers

possess strong or growing bargaining power. The rise of retail giants such as Walmart has led
some analysis to conclude that the potential profitability of packaged-goods companies or
organised, when the product represents a significant fraction of their costs, when the product
is undifferentiated, when buyer’s switching costs are low, when buyers are price-sensitive
because of low profits, or when they can integrate upstream. To protect themselves, sellers
might select buyers who have the least power to negotiate or switch suppliers. A better
defence is developing superior offers that strong buyers cannot refuse.

5. Threat of supplier’s growing bargaining power: A segment is unattractive if the

company’s suppliers are able to raise price or reduce quantity supplied. Suppliers tend to be
powerful when they are concentrated or organized, when they can integrate downstream,
when there are few substitutes, when the supplied products is an important input and when
the cost of switching suppliers are high. The best defences are build win-win relationship with
suppliers or use multiple supply sources.

QUITY, BRAND IDENTITY, BRAND IMAGE AND BRAND PERSONALITY

Malavika Sylajan Sec
E JU2019MBA8142
1. Building a strong Brand is a never-ending process. Discuss using the example of
Gatorade’s branding evolution. (5M)

ANSWER: The product Gatorade was first developed by researchers at the University
of Florida to help school athletes to cope with weakening effects of the hot and humid
climate. Following its success as pioneers in the sports drink category, PepsiCo acquired
its parent company, Quaker Oats, in 2001 for $13.4 billion in stock. The brand
flourished due to PepsiCo’s massive distribution system and a slew of new product and
 packaging introductions. But when the market share dropped from 80% to 75%, the
brand seemed tired. Then PepsiCo decided to return the brand to its roots, focusing
more on athletes.
Their goal- go beyond the $7 billion a year sports drink market and become a major
player in the $20 billion a year sports nutrition market. As a result three new lines
were introduced for pre-, during-,

and post-workout, respectively. Three different markets were targeted. The G Series
line aimed at
“Performance” athletes, the G Series Fit line targeted less competitive 18-34year olds
and the G Series Pro line targeted professional athletes. A new advertising tagline, ”Win
From Within “ was introduced which reflected the new Gatorade brand strategy. There
was also a significant change in the brand’s communication budget from 90%
advertising to include a 30% digital component.

2. What are the main four steps in creating a successful 21 st

century brand?(2M)

ANSWER: >Identifying and establishing brand Positioning

>Planning and implementing brand marketing
>Measuring and interpreting brand performance
 Growing and sustaining brand value

3. Define Brand according to The American Marketing Association

(2M)

ANSWER: According to The American Marketing Association a brand is ”a name,

term, sign, symbol, or design, or a combination of them, intended to identify the
goods and services of one seller or group of sellers and to differentiate them from
those of competitors”.

4. What is a brand? (2M)

ANSWER: A brand is a product or service whose dimensions differentiate it in some

way from other products or services designed to satisfy the same need.
5. What is the role of brands? (12M)

ANSWER: Brands perform a number of functions for both consumers and firms.
Brands role for Consumers- A brand is a promise between the firm and the
consumer. It is a means means to set consumers expectations and reduce their risk.
A brand may even be “ predictably
unpredictable” but the key factor is that it fulfills or exceeds customer
expectations in satisfying

their needs and wants. The consumers learn about the brands through past
experiences with the product and its marketing program, finding out which brand
satisfy their needs and which do not.
Brands also take on personal meaning to Consumers and become an important part
of their Identity. They can express who consumers are or Who they would like to be
and for some consumers Brands can even take on human like characteristics

Brands role for Firms- Brands simplify product Handling by helping organize inventory
and accounting records. A brand also offers the firm legal protection for unique
features or aspects of the product. Brand loyalty provides predictability and security of
demand for the firm, and it creates barriers to entry that make it difficult for other firms
to enter the market. Loyalty also prompts customers to pay a higher price than
competing brands.

6. What is branding? (2M)

ANSWER: Branding is the process of endowing products and services with the
power of a brand.

7. What are the commodities that can be branded?(2M)

ANSWER: It is possible to brand a physical good( Ford Focus Automobile or Lipitor

Cholesterol Medication), a service( Singapore Airlines or Blue Cross and Blue Shield
Insurance), a store (
 Nordstrom or Dick’s Sporting Goods), a person (actress Angelina Jolie or tennis
player Roger Federer), a place ( The City of Sydney or The Country of Ireland), an
organization (U2 or The American Automobile Association), or an idea (Abortion
rights or free trade)

8. What is Brand Equity?(2M)

ANSWER: Brand equity is the added value endowed to products and services with
consumers.

It is reflected in the way the consumers think, feel, and act with respect to the brand
as well as in the prices , market share , and profitability it commands.

9. What is consumer-based brand equity?(2M)

ANSWER: Customer-based brand equity is the differential effect brand knowledge has
on consumer response to the marketing of that brand.

10. Differentiate between positive customer-based brand equity and negative

customer-based brand equity?(2M)

ANSWER: A brand has positive customer-based brand equity when consumers react more
favorably to a product and the way it is marketed when the brand is identified than when
it is not identified. A brand has negative customer-based brand equity if consumers react
less favorably to marketing activity for the brand under the same circumstances.

11. What are the three key ingredients of customer- based brand
equity?(2M)

SWER: > Brand equity arises from differences in consumer response. If no differences occur, the brand-name
product is essentially a commodity, and competition will probably

be based on price.
 > Differences in response are a result of consumers’ brand knowledge,
all the thoughts, feelings, images, experiences, and beliefs associated
with the brand.
 Brand equity is reflected in perceptions, preferences, and
behavior related to all aspects of the marketing of a brand.
Stronger brands earn greater revenue.

12. Summarize some of the key benefits of brand equity / Mention the
marketing advantages of strong brands?(5M)

SWER: > Improved perceptions of product performance

 Greater trade cooperation and support


Greater loyalty Increased marketing communications
effectiveness
 Less vulnerability to competitive marketing Actions
 Possible licensing opportunities

 Less vulnerability to marketing crises

 Additional brand extension opportunities

 Larger margins

 Improved employee recruiting and retention

 More inelastic consumer response to price Increases

 Greater financial market returns

 More elastic consumer response to price decreases(2M)

13. What is brand promise?

ANSWER: A brand promise is the marketer’s vision of what the brand must be and do for
consumers.

14. What are the three main sets of brand equity drivers?(2M)

WER: > The initial choices for the brand elements or identities making up the band (band names, URLs,
Logos, Symbols, characters, spokespeople, slogans, jingles, packages, and signage)
 The product and service and all
 accompanying marketing activities and supporting marketing
programs.
 Other associations indirectly transferred to the brand by linking it to
some other entity (a person, place, or thing)

15. What are brand elements? (2M)

ANSWER: Brand elements are devices, which can be trademarked, that identify and
differentiate the brand. Most strong brands employ multiple brand elements.

16. What are the brand element choice criteria?(5M)

ANSWER: There are six criteria for choosing brand elements. The first three—memorable,
meaningful, and likable—are brand building. The latter three— transferable, adaptable,
and protectable—are defensive and help leverage and preserve brand equity against
challenges.

>Memorable – how easily consumers recall and recognize the brand elements and when
(purchase or consumption)

 Meaningful – Is the brand element credible?

>Likable- how aesthetically appealing is the brand element

>Transferable- can brand element introduce new products in the same or different
category?

 Adaptable- how adaptable and updatable is the brand element

>Protectable-how legally protectable is the brand element? How competitively

protectable?

17. What is brand personality? (2M)

ANSWER: The specific mix of human traits that are attributed to a particular brand is known
as brand personality. Consumers are more likely to choose brands whose personalities
match with their own.
18. What are the traits of brand personality according to Stanford’s Jennifer Aaker? (2M)

ANSWER: The following are the traits of brand personalities

 Sincerity

 Excitement

 Competence

 Sophistication

 Ruggedness

20. Explain the BAV brand equity model in detail?(5M)

ANSWER: BrandAsset Valuator Advertising agency Young and Rubicam (Y&R) developed the
model of brand equity called the BrandAsset Valuator (BAV). BAV compares the brand
equity of thousands of brands across hundreds of different categories. The four key
components/pillars of brand equity, according to BAV are > Energized Differentiation: It
measures the degree

to which a brand is seen as different from others as well as its pricing power.

 Relevance: It measures the appropriateness and breadth of a brand’s appeal

 Esteem: It measures perceptions of quality and loyalty or how well the brand is
regarded and respected.

 knowledge: It measures how aware and familiar consumers are with the brand
and the depth of their experience

Energized differentiation and Relevance combine to determine Brand Strength (Leading

indicator that predicts future growth value)

Esteem and Knowledge create the Brand Stature (The report card of past performance and
a lagging indicator of current operating value)
 Brand Strength and Brand Stature combine to form the Power Grid which depicts the stages
in the cycle of brand development.

Module 3 part 3

Aishwarya R

JU2019MBA1825

Targeting and Evaluation of Segments

2 Marks

1) What is Targeting?

Targeting is a strategy of choosing segments of the market that is appropriate for a particular
product. It is a streamlined process of selecting customers for a product.

2) What is deep segmentation?

It is a type of segmentation of the market where the customer base is very clearly defined
and narrow. Deep segmentation helps in tailoring the market strategy and ensures its success.

3) What are the two main factors in evaluation and selection of market segments?

The two main factors in selection of market segments are i) The segment’s overall
attractiveness, that is how likely is growth going to occur in that segment and ii) The
company’s objectives and resources, depending upon the company’s resources decisions are
made about which segments will be the most effective targets to make profit.

4) What is a super segment?

A super segment is a group of segments that have some similarities that can be used to sell a
product to a large group of customers with varied taste. This helps the firm diversify its risk,
so loss of segment won’t affect the sales too badly. For example, Loreal has come up with an
antiaging line called skin perfect, but the segment that is usually interest in this product in the
35-45-year-old females but loreal manages to sell this product to even college going girls by
pivoting on the fear of aging that all women have. The two segments have in common is their
fear of ageing.

5) What is a niche?
Niche is a narrowly defined market that is small, specialized market only for a product or
service. For example, cat nip is a niche market product as it serves only those who want and
as opposed to for everyone who has cats.

6) What is customerization?

Customerization is the customization of products by interaction between the company and

its customers. For example, Vedix is an ayurvedic hair care brand that used mass marketing
to make the consumer aware of the product but uses customization to make a product that
fits the consumers requirements.

5 Marks

1) What are the Characteristics of an effective segment?

An effective segment is one that can maximise profits by targeting most people within that
segment, here are a few characteristics of an effective segment

● Identifiable- The segment should be easily recognised.

● Distinct- It should have clear cut boundaries from another segment. E.g. The customer
segment for women’s make up is clearly different that that of kids clothing.
● Measurable – the effect of the marketing strategy on them should be measurable.
● Accessible- the strategies that firm make should be able to be implement in the
segment, it shouldn’t be too remote.
● Sizeable – only if the segment is large enough is it going to be able to generate profits.
● Growing – a segment that is growing has more potential than one that is stagnant.
● Profitable- the whole process of segmentation is pointless if the it isn’t profitable.
● Compatible with the firm’s resources – if a segment has been located that is highly
profitable but the firm cannot afford to market to that segment then again, the
segmentation is useless.
● Actionable – the firm must be able to take calculated actions in order to serve the
segment well.

2) What are the steps involved in choosing an effective segment?

I. Identification of segments.
II. Each segment must be looked at as a marketing capability and understand what makes
a segment unique.
III. The characteristics or profile traits of each of the segment must be identified e.g.
Needs, preferences, buying behaviour etc,
 IV. The worth of each segment should be evaluated based on segment size and segment
growth rate.
V. The segment is evaluated to see if it is an effective segment. The segment or segments
that most favourable to the firm are chosen.
VI. Estimated the firm’s unique capability and resources in serving that segment, and gaps
that the firm can fill with its new product or strategy.
VII. The best segment or segments are chosen for the firm to service.
3) How can wrong targeting affect a company? Explain with an example.

There are many ways in which a company can wrongly target segments and their
marketing strategies can fail. I) Improper segmentation is one of the main causes for
failure of a marketing strategies. ii) wrong assumptions about the segment iii) wrong
segment selection- when companies don’t successfully analyse the utility of a product to
the customer segment and instead target it to another one it can lead to losses.

● Many companies despite putting in efforts to segment the market very carefully can
still go wrong in their targeting approach. Taking the example of large MNCs like
Reebok in India trying to enter the Indian market as an example.
● Reebok entered the Indian market aiming to target the segment with Rs. 5,00,000
annual income. Reebok wrongly assumed that this segment would be willing to send
around Rs.6500 on a pair of shoes.
● However, Reebok later adjusted its price range to about Rs.900 and subsequently sales
started picking up.
● Reebok’s oversight of the spending power of their segment lead to a targeting disaster
but thankfully no lasting damage had happened.

12 Marks

1) Describe Porters Five Forces and the threats these forces pose that determine the
intrinsic long-term attractiveness of a market or market segment.

According to Michael Porter there are five forces that determine the long-term attractiveness
of a market, they are- i) Industry competitors, potential entrants, substitutes, buyers and
suppliers.

I) Industry competitors- A segment can be unattractive if there is already intense

competition in it, this makes it difficult to enter the segment and difficult to leave
which may lead to price wars an expensive ad campaigns between rivals. For
example; the Indian telecom industry is a great example before the entry of Jio,
the telecom business was smooth sailing once Jio slashed the prices the other
telecom companies had no option but to follow suit, making it hared to make
profits and impossible for a new entrant to survive.
 II) Potential entrants-The segments that are the most attractive are the one in which
it’s difficult to enter but easy to leave, the easy of entering or leaving a segment is
called Barriers, this way new firms can enter, and old firms can leave. When both
entry and exit barriers are high, here high risk and high profit are involved, due to
this even non performing firms can stay. When both entry and exit barriers are low
then the results are small but stable. The worst is when entry barriers are low but
exit barriers are high, these have high and stable returns, but it’s difficult to leave,
the airline industry is a good example of this.
III) Substitutes- A substitute product at a cheaper rate and mean decreased profits.
For example in the Indian scenario the only key players in the biscuit
manufacturing were Britannia and ParleG but the ITC brand SunFest emerging it
has significantly eaten into the market share of both these companies.
IV) Bargaining power of buyers- When buyers have too much power, they tend to
gravitate towards options that are more cost effective. This can pressure the firm
to produce higher quality products and sell them at lower prices, in order to
protect themselves firms must offer deals that the buyers simply can’t refuse.
V) Bargaining Power of suppliers- when suppliers are organised then they are
increase the prices of raw materials and can control prices, this situation is not
ideal, and this can also make switching suppliers very expensive which isn’t ideal.
Therefore, firms must ensure that they maintain good relationships with their
suppliers.

2) Explain the selection of the target market based on levels of segmentation.

Marketers have come up with a range in which there are four possible approaches to targeting
it ranges from Mass market coverage to Individual coverage.

I) Full Market coverage -very large firms try to serve all the consumers within the
market, Coco cola is one company that does this. They cover the whole market by
using two different types of marketing one is Undifferentiated or mass marketing
and the other is differentiated marketing.

Undifferentiated marketing- here a marketing strategy is devised such that it is appealing

to many people in the market. It markets one product to all segments. The strategies are
applicable to a large group of people irrespective of their segment, for example thirst is a
universal need irrespective of your segments which is what coco cola targets. Methods of
mass communication are used to communicate the strategy to the public. Mass marketing
is cheaper and increases profit margins because it reaches many people with a single
strategy. It also has its disadvantages because many other channels are far more effective
in reaching a single segment than mass marketing with reaching such a large segment.

Differentiated marketing- here a company sells different products to different segments

based on their needs. For example, Horlicks used to initially be marketed for only children,
 but the company now serves different needs they have women’s Horlicks and they also
have Horlicks protein plus to target men and gym going segment. The way each product
is marketed to fit the specific need of that segments is responsible for the success of
differentiated marketing.

II) Multiple segment specialization- In specialized segment selection the firm chooses
to serve more than one segment, but the segments all have some common
denominator, this helps the firm broaden its consumer base and maximise profits.
There are two ways in which a firm can do this.

With product specialization-The firms sells the same product to multiple buyers.

With market specialization- the firms sell multiple products to a customer group to gain a
strong reputation and create a channel for the entry of new products into the same
customer group.

III) Single segment specialization-a niche market is a specialized market with

specialized needs. In niche markets the consumers need are meet so well that they
often are willing to pay a premium for it, for this reason even though niches maybe
small they are often very profitable. For example, Truffles are a type of mushroom
that very expensive it is a niche market product that often only French cuisine
enthusiasts prefer eating and paying such a heavy price for.
IV) Individual Marketing -this is the ultimate level of segmentation where the
customer can customize a product for themselves. This is called customerization.
Custom products cannot be offered by every firm and the cost involved in
customerization may not be suitable for all segments.

Brand Image and Brand Positioning

2 marks

1) What is Positioning?

Positioning is the act of defining a company’s offering and image in such a way that it occupies
a distinctive place in the minds of the target market.

2) What is value proposition?

Value proposition is an innovation in service or a product feature that make it more appealing
and attractive to the customers.

3) What is brand Image?

Brand image is the level of trust or the popular opinion about the brand the in-people’s
perception. For example – Apple’s brand image is associated with innovation and high-quality
products.

5 Marks
 1) What is the criteria for devising brand mantra and what is its importance?

A brand mantra is used to creatively engage the minds of customers. There are three main
criteria for selecting a brand mantra

i) Communicate it should define the category of the brand and show what is
distinctly unique about it.
ii) Simplify an effective brand mantra is memorable, it is also short and crisp.
iii) Inspire The mantra should be meaningful and resonate with as many employees
as possible.

Brand mantras help the customer identify with the sentiments of the brand, it creates an
emotional connection with the company, this is the why its so important to have an effective
brand mantra that not only lasts in the memory but also communicates the unique aspects of
the brand.

Devising Brand strategy

2 marks

1) What is brand dilution?

Brand dilution is the weakening of a brand by its overuse, such that the consumer no longer
associates the brand with a product or a group of similar products but don’t think about the
brand anymore.

2) What is cannibalisation?

It is the reduction in sales volume within the same company, the parent brand may lose out
on its consumer base due to cannibalisation.

3) What is Brand extension?

Brand extension is the addition of new products to a company under the same brand name.
this is called brand extension. Brand extension is favourable for the company as they can pivot
on customer sentiments to sell new products.

4) What is a parent brand and a family brand?

When an existing brand introduces a new brand, it is called a parent brand and when the
same parent brand has multiple brands already under its belt it is called a family rand or a
master brand.

5) What are the two types of brand extension?

Brand extension can be of two types a) a line extension into a category that it already serves
and b) category extension where the parent brand introduces a product in a completely new
category under the same brand name.
 6) What is a licenced product?

Its is used by brand owners to extend its brand name to a certain product that it does not
directly produce. For example, Marvel licences its superheroes to other companies that
makes toys of them.

5 marks

1) Explain the general branding strategies.

I) Individual or separate family brand names- Companies use different brand names
for each or their different type of products and prefer to keep each one separate.
This way the failure of the product line does not affect the entire brand and the
company can just as easily introduce new brands for the new products they
introduce.
II) Corporate Umbrella or company brand name – Large firms usually introduce new
products under the same name. This reduces the cost that is going to go into
creating a new brand and it also increases trust among customers.
III) Sub Brand name- it is a mixture of the two or more names in the same product.
Kellogg’s follows this type of branding. The corporate name creates trust in the
product and the family name defines it.

12 marks

1) What is brand Portfolio? Describe the various roles played by a brand.

Brand portfolio is a collection of many brands that operate under one single corporate
umbrella, each of the brands are separate entities they benefit from shared resources and
cross promotion. The need for developing multiple brands:

i) One brand can only be stretched so far, and it cannot serve multiple segments in
order to more segments there is a need for more brands.
ii) Increased shelf space means increased profits.
iii) Attracting customers with variety.
iv) Increasing the internal competition within the firm.

The main idea behind developing a brand portfolio is to increase market coverage. The brand
should be large enough to gain consumer attention, and the segment targeted should be large
enough to justify the production and marketing cost.

Careful consideration of brands in a portfolio need to be maintained and the brands that are
not performing are supposed to be pruned. Too many brands within a portfolio can lead to
cannibalisation and confusion for customers in terms of choice.

Brands within a portfolio have a specific role to play, for example,

Flanker-it is a fighter brand that is positioned against all the competitors so that the key
brands can remain profitable is called a flanker.
Cash cows-these are brands that have very bad sales numbers but are still profitable with no
marketing support are called cash cows. For example, Gillette has much better technology
than its Mach3, but it does not pull the product from the shelf because it isn’t sure if the
consumer will move on to another Gillette brand.

Low end entry level- this is a brand that is introduced to introduce the customer to the
franchise with cheap products and slowly the customers are introduced to higher end
products from the franchise.

High End Prestige brand- the role of such kind of a brand is to be high priced and add prestige
to the whole company.

2)What is Brand Extension? Describe the advantages and disadvantages of brand extension.

Brand Extension is the use of an already existing brand to market a new product. For example,
Patanjali was a well-established brand in the FMCG sector and to introduce a new product
which was their jeans they leveraged on their brand name to do it.

Advantages of brand extension

I) Improved odds of new product success- customers have some presuppositions of

what they expect out of a brand, because of this positive expectation there is less
chance for a product to fail. Because of the existing brand the marketing campaign
does not need to focus on building the brand and the product it can just focus on
the product. It is also a cost-effective option when compared to launching a new
brand altogether.
II) Positive feedback Effects- when a brand extends its product line it also increases
customer loyalty by showing commitment to its mission statement, for example,
Crayola has so many products under its belt, but it still stands by its colour and fun
for children motto. Brand extension can also renew customer interest in the brand
itself and keep it more interesting.

Disadvantages of brand extension

I) Line extensions may cause a brand name to be less likely to be associated with one
product. It can cause brand dilution, it occurs when a customer no longer
associates a product or a set of products with a brand and instead doesn’t think
about the brand at all.
II) When a firm launches brands that are inadequate it brings into question the entire
brand line rather than just the product. For example, in 2015 when there was a lot
of controversy surrounding Maggie it not only lost out on the instant noodles
market but other products like its coconut milk also took a hit.
III) Brand extension can also lead to cannibalisation.
IV) The major disadvantage the a firm faces with brand extension is the missed
opportunity to create a new brand, while extending a brand line may increase
 profits in the short-term, the addition of new brands strengthens the portfolio of
the company.

Jain University

CMS Business School

Batch 2019-21, Semester 1

Topic: Assignment I – Notes

Subject: Marketing Management

Submitted by:

Manasi A Gokarn

JU2019MBA8100

Section E

CHAPTER 3

SEGMENTATION, TARGETING AND POSITIONING

1. What is positioning? (2 Marks)

Positioning is the act of designing a company’s offering and image to occupy a distinctive place
in the minds of the target market. The goal is to locate the brand in the minds of consumers
to maximize the potential benefit to the firm.
Examples:
 ● Colgate is positioned as protective.
● Patanjali can be trusted as it is fully organic.

2. What are positioning requirements? (5 Marks)

Positioning requires that marketers define and communicate similarities and differences
between their brand and its competitors. Specifically, deciding on a positioning requires:
(1) Determining a frame of reference by identifying the
target market and relevant competition.
(2) Identifying the optimal points of parity and points of difference brand associations given
that frame of reference.
(3) Creating a brand mantra to summarize the positioning and essence of the brand.

3. Explain the positioning requirements. (12 Marks)

i) Determining a frame of reference by identifying the target market and relevant competition

● Competitive frame of reference defines which other brands a brand competes with
and therefore which brands should be the focus of competitive analysis.
● Identifying competitors—Pepsi (Aquafina) and Coca-Cola (Dasani), Citigroup knows
Bank of America is a major banking competitor.
● Ex: Sensodyne carved out profitable share through its focused positioning strategy in
the oral care market dominated by CP and Hindustan Unilever. Sensodyne identified
the GAP for toothpaste appropriate for sensitive teeth.
● We can examine competition from both an industry and a market point of view.
● Marketers classify industries according to number of sellers; degree of product
differentiation; presence or absence of entry, mobility, and exit barriers; cost
structure; degree of vertical integration and degree of globalization.
● Thus, competitive frame of reference = defining customer target market + nature of
competition.

ii) Identifying the optimal points of parity and points of difference brand
associations given that frame of reference

a. POINTS-OF-DIFFERENCE

b. POINTS-OF-PARITY

c. POINTS-OF-PARITYVs POINTS-OF-DIFFERENCE

d. MULTIPLE FRAMES OF REFERENCE

 e. STRADDLE POSITIONING

a. POINTS-OF-DIFFERENCE

Points-of-difference (PODs) are attributes or benefits that consumers strongly associate with
a brand, positively evaluate, and believe they could not find to the same extent with a
competitive brand.
Three criteria determine whether a brand association can truly function as a point-
of-difference: desirability (personal association, say; anti-ageing crème),
deliverability (communicate the desired association) and differentiability (brand
association as distinctive and superior)

b. POINTS-OF-PARITY
Points-of-parity (POPs), are attributes or benefit associations that are not necessarily
unique to the brand but may in fact be shared with other brands.
● Two basic forms: category POPs (necessary but not sufficient—ex: travel)and
competitive POPs ( to overcome perceived weakness of the brand) (ex: Savlon Vs
Dettol)
These types of associations come in three basic forms: category, correlational, and
competitive.

c. POP VS POD― For an offering to achieve a point-of-parity

on a particular attribute or benefit, a sufficient number of consumers must believe the brand
is “good enough” on that dimension.
Example: Visa versus American Express
Visa’s point-of-difference in the credit card category is that it is the most widely available card,
which underscores the category’s main benefit of convenience.
American Express, on the other hand, has built the equity of its brand by highlighting the
prestige associated with the use of its card. Visa and American Express now compete to create
points-of-parity by attempting to blunt each other’s advantage.

d. Multiple frames of reference (competitors)

It is not uncommon for a brand to identify more than one actual or potential competitive
frame of reference, if competition widens or the firm plans to expand into new categories.
Ex: CCD

1. Quick-serve restaurant and convenience shops (McD)-PODs quality, image,

experience, and variety; POPs convenience and value like brand essence and ―
 core brand promise are short, 3 to 5 word phrases. Mc D ―Food, Folks and Fun

2. Supermarket brands for home consumption(NESCAFE); PODs quality, image,

experience, variety and freshness ; POPs convenience and value

3. Local cafe PODs might be convenience and service quality; POPs might be product
quality, variety, price, and community.

e. Straddle positioning
Occasionally, a company will be able to straddle two frames of reference with one set of
points-of-difference and points-of-parity.

Example:
● Subway restaurants are positioned as offering healthy, good tasting sandwiches. This
positioning allows the brand to create a POP on taste and a POD on health with respect
to quick-serve restaurants such as McDonald’s and Burger King and, at the same time,
a POP on health and a POD on taste with respect to health food restaurants and cafes.
● Again Domino's pizza has the similar kind of positioning i.e. by Product
attribute and Desirable benefit. Product attribute by promoting fresh pizza
and Desirable benefit by home delivery service.

iii) Creating a brand mantra to summarize the positioning and essence of the brand.

• A brand mantra is an articulation of the heart and soul of the brand

and is closely related to other branding concepts like brand essence
and ― core brand promise are short, 3 to 5 word phrases. Mc D
―Food, Folks and Fun
• Nike ―authentic, athletic performance
• Brand mantras are designed with internal purpose in mind. A brand slogan is an
external translation that attempts to creatively engage consumers. Nike‘s
internal mantra is ―authentic, athletic performance, while external slogan was
―Just Do It.

4. What are the key criteria for brand mantras? (5 Marks)

 ● Communicate: A good brand mantra should define the category (or categories) of
business for the brand and set the brand boundaries. It should also clarify what is
unique about the brand.
● Simplify: An effective brand mantra should be memorable. For that, it should be short,
crisp, and vivid in meaning.
● Inspire: Ideally, the brand mantra should also stake out ground that is personally
meaningful and relevant to as many employees as possible.

5. What is emotional branding? (2 Marks)

● Marketing experts believe a brand positioning should have both rational and
emotional components. In other words, it should contain points-of-difference and
points-of-parity that appeal to both the head and the heart.
● Strong brands often seek to build on their performance advantages to strike an
emotional chord with customers.
When research on scar-treatment product Mederma found that women were buying
it not just for the physical treatment but also to increase their self-esteem, the
marketers of the brand added emotional messaging to what had traditionally been a
practical message that stressed physician recommendations: “What we have done is
supplement the rational with the emotional”.

6. How to establish brand positioning and what are the ways to convey a brand’s category
membership? (5 Marks)

● Once the strategy is determined, marketers should communicate it to

everyone in the organizations so it guides their words and action.
● Target customers are aware that Maybelline is a leading brand of cosmetics, Cheerios
is a leading brand of cereal,
Accenture is a leading consulting firm, and so on. When a product is new, marketers
must inform consumers of the brand’s category membership.
● There are three main ways to convey a brand’s category membership:
1. Announcing category benefits—To reassure consumers that a brand will deliver
on the fundamental reason for using a category, marketers frequently use benefits to
announce category membership. Thus, industrial tools might claim to have durability,
and antacids might announce their efficacy. A brownie mix might attain
membership in the baked desserts category by claiming the benefit of great taste and
support this claim by including high-quality ingredients (performance) or by showing
users delighting in its consumption(imagery).
 2. Comparing to exemplars—Well-known, noteworthy brands in a category can also
help a brand specify its category membership. When Tommy Hilfiger was an unknown,
advertising announced his status as a great U.S.
designer by associating him with Geoffrey Beene, Stanley Blacker, Calvin Klein, and
Perry Ellis, recognize members of that category.
3. Relying on the product descriptor—The product descriptor that follows the brand name is
often a concise means of conveying category origin.

7. What are differentiation strategies and means of differentiation?

(12 Marks)
Differentiation strategy is one of the most important marketing strategies in today’s
business environment. With so many brands and so many varieties of products and so much
advertising noise, it becomes very difficult but ultimately very necessary to differentiate
your brand from competition. Thus, Differentiation strategy is being used by all top
companies for their products. There are various ways to differentiate your product.
MEANS OF DIFFERENTIATION: The obvious means of differentiation, and often the ones most
compelling to consumers, relate to aspects of the product and service. These are the other
dimensions, among the many that a company can use to differentiate its market offerings:
• Employee differentiation. Companies can have better-trained employees who provide
superior customer service. Singapore Airlines is well regarded in large part because of its flight
attendants.
• Channel differentiation: Companies can more effectively and efficiently design their
distribution channels’ coverage, expertise, and performance to make buying the product
easier and more enjoyable and rewarding. Back in 1946, pet food was cheap, not too
nutritious, and available exclusively in supermarkets and the occasional feed store.
• Image differentiation. Companies can craft powerful, compelling images that appeal to
consumers’ social and psychological needs. The primary explanation for Marlboro’s
extraordinary worldwide market share (around 30 percent) is that its “macho cowboy” image
has struck a responsive chord with much of the cigarette-smoking public. Wine and liquor
companies also work hard to develop distinctive images for their brands. Even a seller’s
physical space can be a powerful image generator. Hyatt Regency hotels developed a
distinctive image through its atrium lobbies.
• Services differentiation. A service company can differentiate itself by designing a better and
faster delivery system that provides more effective and efficient solutions to consumers.

8. What are three levels of differentiation? (5 Marks)

There are three levels of differentiation.
i) Reliability: Some suppliers are more reliable in their on-time delivery, order completeness,
and order-cycle time.
ii) Resilience: Some suppliers are better at handling emergencies, product recalls, and
inquiries.
iii) Innovativeness: Some suppliers create better information systems, introduce bar coding
and mixed pallets, and in other ways help the customer.