Marketing The Core Canadian 4th

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 SEGMENTATION, TARGETING AND POSITIONING

PAGE
STUDENT LEARNING OBJECTIVES ................................................................................ 6-2
KEY TERMS, CONCEPTS & MARKETING TIP ............................................................. 6-2
LECTURE NOTES & ANSWERS TO IN-TEXT QUESTIONS
 Opening Vignette: HEAD skis ....................................................................................... 6-3
 Market Segmentation ..................................................................................................... 6-4
 Target Markets and Personas ......................................................................................... 6-5
 Segmentation Analytics ................................................................................................. 6-6
 Product Positioning ....................................................................................................... 6-7
 Steps in Market Segmentation ...................................................................................... 6-7
QUESTIONS AND ANSWERS TO END-OF CHAPTER MATERIAL ........................... 6-9
QUESTIONS AND ANSWERS TO ON-LINE ACTIVITIES
 Applying Marketing Concepts and Perspectives ......................................................... 6-11
 Discussion Forum ........................................................................................................ 6-12
 Internet Exercise .......................................................................................................... 6-12
BRING IT TO LIFE
VIDEO - MOST INFLUENTIAL BRANDS STUDY - GOOGLE
 Synopsis & Teaching Suggestions ................................................................................ 6-13
 Video Case – Printout and Worksheets ........................................................................ 6-14
 Answers to Questions ................................................................................................... 6-17
NEWSFLASHES – AIMIA / BURBERRY
 Synopsis and Discussion Questions .............................................................................. 6-19
 NewsFlashes – Printouts and Worksheets .................................................................... 6-20
IN-CLASS ACTIVITY – TARGET MARKETS & POSITIONING STATEMENTS
3M’S POST-IT® FLAG HIGHLIGHTER
 Instructions, Handout, and Worksheet .......................................................................... 6-23
METRICS ASSIGNMENT
 P&L: Lunch Bags ......................................................................................................... 6-29

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 STUDENT LEARNING OBJECTIVES
After reading this chapter students should be able to:

 Explain market segmentation and its relevance to marketing.

 Detail the different forms of market segmentation
 Describe the elements included in target market profiles and personas.
 Have insight into the scope of segmentation analytics
 Understand the concept of product positioning
 Outline the steps involved in segmenting a market

KEY TERMS AND CONCEPTS

behaviouristics positioning maps
business market positioning statement
consumer market product differentiation
demographics product positioning
geographics psychographics
individualized marketing repositioning
RFM analysis
market segmentation segment marketing
mass marketing SWOT analysis
niche marketing target market
personas target market profile

MARKETING TIP
For this chapter we look to Rob Morash, managing director HEAD Canada for his
MARKETING TIP on what he considers it is important for students to understand. You may
wish to use these at the start of a class, after a break, or to summarize the material at the end of a
session. The quote for this chapter is as follows:

“Products are carefully designed to appeal to market segments and must deliver revenues that
turn into profits.”

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 LECTURE NOTES
CHAPTER 6 OPENING VIGNETTE – ATOMIC SKIS
Chapter 6 opens with a vignette on HEAD Canada and reviews how it uses elite athlete to market
its products and how it segments the ski market. The vignette is summarized as follows:
HEAD segments the ski market into clusters with common lifestyle, demographic, and product
needs. There are three main segments (1) freestyle skiers, (2) racers, and (3) recreational skiers.
 Freestyle skiers: This growth segments accounts for about 15 percent of the market and
consists of teenagers/ young adults who live life on the edge. They are passionate about
freestyle skiing, music, and sports. HEAD sponsors elite athletes and uses product placement,
social media, online ads, and in-store merchandising to market to this segment.
 Racers: This small declining segment of 5- 35 year old downhill skiers accounts for about 10
percent of the market and includes high performance athletes as well as higher income young
families. HEAD sponsors elite athlete ski racers to market to this segment.
Recreational skiers: This segment accounts for about 75 percent of the market and consists of 5
- 55 year old casual skiers that are conservative, higher income young families. Marketing
programs focus on in-store merchandising, tradeshows, retail employee incentives, and signage
and demos at ski resorts.
An example of how HEAD markets its skis can be seen with the freestyle skiing segment where
it sponsors Canadian elite athlete Kaya Turski by providing funds, skis, and ski boots. She then
competes in highly televised sporting events, attends press conferences, appears in YouTube
clips, and is profiled on the HEAD website, in the media, and in ski films. She also attends retail
store openings, company sales meetings, and is encouraged to use social media. HEAD also uses
its own social media, online ads, and in-store merchandizing to reach consumers.

Reality Check
As you read Chapter 6, refer back to the HEAD skis vignette to answer the following questions:

• What market segmentation strategy is HEAD using: mass marketing, segment marketing, niche
marketing, or individualized marketing?
Answer: HEAD uses a segment marketing strategy
• What is the demographic profile of HEAD’s freestyle skier segment?
Answer: Demographically, the freestyle skiing segment consists of teenagers and young adults.
• What is the psychographic profile of HEAD’s freestyle skier segment?
Answer: Psychographically, the freestyle skiing segment consists of free spirited and fearless
sports lovers. They use social media and the Internet for information, updates and entertainment.
They never read a hardcopy newspaper, rarely pick up magazines, and spend very little time
watching TV.
• What is the behavioural profile of HEAD’s freestyle skier segment?
Answer: Behaviourally, the freestyle segment consists of people who get an adrenaline-rush
doing back flips and spins in terrain parks, thrills from skiing down half pipes and over jumps,

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and enjoyment from skiing down rails. They enjoy watching their favourite skiers compete in
world class events.

I. MARKET SEGMENTATION
Segmentation, targeting, and positioning are fundamental concepts in marketing that work
together to create and reinforce a product’s image to consumers. Marketers include target market
profiles, personas, and positioning statements in their strategic plans to guide marketers as they
craft program to strengthen brands and ensure products stay fresh, relevant, and focused.

The key to successful product differentiation and market segmentation is in finding the right
balance between satisfying a customer’s individual wants and being able to do so profitably.

The basis of market segmentation, target markets, and product positioning is based on three
important facts:

 Consumers have diverse needs and a single product cannot satisfy everyone.
 Companies have finite amounts of money.
 Companies channel marketing programs towards consumers who are most likely to purchase
products.

This has resulted in marketers following a strategy of product differentiation to position their
products as distinct from competitive offerings.

A market segment is a piece of the market. Market segmentation involves aggregating

prospective buyers into groups that have common needs and who respond similarly to marketing
programs. They are similar in their consumption behaviour, attitudes, and target market profiles.

In the marketing world there are two main market segments:

 The consumer market – goods and services that a person purchases for personal use.
 The business market – products purchased to either run a business, or to be used as a
component in another product or service.

A. Forms of Market Segmentation

There are four different strategies that companies can take to segment the market:

 Mass marketing strategy: Marketing a product with a broad appeal to the entire market
without any product or marketing differentiation This is uncommon and can be seen with
utility companies.
 Segment marketing strategy: Marketing a range of different products and brands to
specifically meet the needs of an organization’s varied target markets. This is common
with large companies such as car manufacturers and packaged goods companies

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  Niche marketing strategy: Marketing a limited product line to a narrow but profitable
segment of the market that is of marginal interest to major competitors. This is seen with
smaller companies that manufacturer or sell specialty goods.
 Individualized marketing strategy: One-to-one marketing that involves customizing
offers and in some cases, products to fit individual needs.

Ask Yourself

1. What are the advantages of a segment marketing approach to market segmentation?

Answer: The advantages of segment marketing are that products and programs are designed
to appeal to specific market segments, and meet specific consumer needs. Being competitive
in the market should result in sales and profits.

2. Does Kashi still use a niche market segmentation approach?

Answer: The fact that Kashi is now owned by Kellogg’s, means that it is now part of
Kellogg’s segment marketing strategy. This healthy breakfast category is also quite main
stream, and is therefore no longer a niche category.

3. What are the disadvantages of individualized market segmentation?

Answer: Individualized marketing can be costly, time consuming and ineffective unless
consumer databases are up-to-date and well maintained.

II. TARGET MARKETS AND PERSONAS

Target Markets
A target market is the specific group of existing and potential consumers to which marketers
direct their marketing efforts. Developing an accurate target market profile is fundamental to
marketing success as it drives all elements of the marketing mix.

A target market profile describes a target market using four key variables - geographics,
demographics, psychographics, and behaviouristics:

 Geographics; Where a target market lives using elements such as country, region,
province, city size, and types of location such as urban, suburban or rural
 Demographics; Age, gender, family composition, income, occupation, education, ethnic
background, and home ownership
 Psychographics; Consumer attitudes to life, their values, personalities, general interests,
opinions, and activities
 Behaviouristics; How and why consumers use a product, why it is purchased, its desired
product benefits, how often it is purchased and used, and whether consumers are brand
loyal.

Personas
Personas take target market data and simplify and synthesize it, adding a few fictional details
such as name and image, so that human traits and characteristics become memorable for

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marketers. They bring target market data alive in one page descriptions or snapshots of a typical
consumer.

Personas are character descriptions of a typical customer in the form of fictional character
narrative, complete with images that capture the personalities, values, attitudes, beliefs,
demographics, and expected interactions of a typical user with a brand.

Ask Yourself

1. What elements are included in demographics?

Answer: Demographics includes gender, age, income, family life-cycle, education,
occupation, ethnicity background, and home ownership.

2. What is the difference between psychographics and behaviouristics?

Answer: Psychographics refers to general attitudes to life, personality and general
preferences. Behaviouristics takes a more specific view of these attitudes as they relate to
the product, its benefits and usage.

3. In what ways are personas useful to marketers?

Answer: Personas create vivid narratives about a person that typifies the target market.

III. SEMENTATION ANALYTICS

Various research companies such as Nielsen or Euromonitor provide data on the size and growth
of markets to assist in segmentation analysis. Separately, various segmentation analytics
companies provide more granular data on populations that assist marketers. Environics, Pitney
Bowes, and SuperDemographics are three segmentation analytics companies that detail
demographic, psychographic, and behavioural consumer information by postal code and provide
interactive software for detailed analyses.

 Navigate to the Prizm Lifestyle Lookup section of the Environics website at

http://www.environicsanalytics.ca/prizm-c2-cluster-lookup and enter a postal code to see an
overview of the cluster information.
 Navigate to the Psyte HD Cluster Index at
http://www.utahbluemedia.com/pbbi/psyte/psyteCanada.html and enter a postal code to view
a cluster overview as well as a detailed breakdown of the cluster’s demographics,
geographics, media habits, leisure activities, and shopping activities.
 Navigate to the SuperDemographics website at http://www.superdemographics.com/, and try
their free trade report area. Follow the steps and fill in the postal code to view the clusters
within the area and its demographic break-down.

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 IV. PRODUCT POSITIONING
Product Positioning and Repositioning
Marketers position products in the market to appeal to certain target groups and to present a
particular image relative to the competition. Product positioning is the image of a branded
product from a consumer perspective, relative to the competition. Marketers create positioning
statements to outline the positioning of a product and then manage the marketing mix to meet
this image. Companies reposition products when long-term consumer attitudes and interests have
changed.

There are three basic factors that tend to surface in product positioning:
1. Image: Products are often positioned as leaders, contenders, or rebels in the market also
taking on roles such as trusted, prestigious, or thrifty.
2. Product Attribute: Products with features that differentiate them from the competition are
often positioned on this platform bringing their product claims to the forefront.
3. Price: Products with brand parity and little product differentiation position themselves on a
price platform.

Positioning Maps
Positioning maps are visual representations of how products/product groups/categories are
positioned in the market. They are used by marketers to identify gaps in the market and to review
the competitive nature of the market. They can identify new product opportunities.

V. STEPS IN MARKET SEGMENTATION

The steps in market segmentation are sequentially followed as outlined below:

1. Review strategic company objectives – these must be clear and quantifiable.

2. Identify specific business unit objectives – these need to outline specific sales, market
share, and profit targets for the business unit.
3. Identify consumer/customer needs and common characteristics in the market – review
trends and driving forces in the category and identify common interests and concerns.
4. Cluster common consumer/customer variables to create meaningful market segments –
identify segments in the market by grouping common interests, usage patterns and prevailing
attitudes.
5. Conduct SWOT analyses on the segments to determine strengths, weaknesses,
opportunities and threats.
6. Identify the segment that best meets strategic company objectives – a marketer sifts
through the facts and ideas from the SWOT analysis and assesses the opportunities and
threats relative to company objectives.
7. Identify Marketing Programs and Budget Requirements Needed for this Segment –
conduct a financial evaluation of the market assessing the costs of doing business, and the
programs and resources needed to market the product.
8. Create a sales forecast for this segment.
9. Conduct a profit and loss financial analysis for this segment.

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10. Check financial forecasts against specific business unit objectives.

Ask Yourself

1. What are the steps involved in market segmentation?

Answer: There are 8 steps involved in market segmentation are follows;(1) review strategic
company objectives, (2) identify specific business unit objectives, (3) identify
consumer/customer needs and common characteristics in the market, (4) cluster common
consumer/customer variables to create meaningful market segments, (5) conduct SWOT
analyses on the segments to determine strengths, weaknesses, opportunities and threats, (6)
identify the segment which best meets strategic company objectives, (7) identify marketing
programs and budget requirements needed for this segment, (8) create a sales forecast for this
segment, (9) conduct a Profit and Loss financial analysis for this segment, and (10) check
financial forecasts against specific business unit objectives.

2. What is product positioning and what is the purpose of a positioning statement?

Answer: Product positioning is the image of a product from a consumer perspective relative
to the competition. A positioning statement formalizes the product’s positioning and serves
as a point of reference when creating marketing programs for the product.

3. Why do marketers use positioning maps?

Answer: Positioning maps are used to identify gaps in the market for potential new products
and to highlight the competitive nature of the market.

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 QUESTIONS AND ANSWERS TO END-OF-CHAPTER MATERIAL

adAlyze

1. What demographic is this ad targeting?

Answer: The ad is targeting male and female teenagers and young adults who are in
relatively high income families. They tend to be single and well educated.

2. What psychographic interests can you determine about the target market from this ad?
Answer: The target market is probably out going, social, energetic, likes to live life on the
edge, and loves sports.

3. What behavioural insights can you determine about the target market?
Answer: The target market likes to ski and particularly enjoys the thrill of freestyle skiing.

Hands-on…apply your knowledge

Positioning Assignment
HEAD targets its ski products to three distinct market segments: freestyle skiers, recreational
skiers, and racers. Carefully read the sections on Product Positioning, Positioning Maps, and the
chapter’s opening vignette for HEAD Canada and take note of the interests of the target markets.
Determine which variables you think should be used for the two axes in a positioning map for
the ski market and create a positioning map for the ski market that plots these categories.
Answer: These assignments give students the opportunity to apply chapter material to a real-life
example, using the chapter’s opening vignette as a foundation. There are no specific answers.

Video Clip…Questions
Review the video Influential Brands - Google from CONNECT to understand how Google
Canada focuses on behavioural and psychographic information to build its businesses. Answer
the following questions:
 What over-riding benefit does Google, as a company, attempt to provide its users?
Answer: Google tries to provide products that make users’ lives easier and better in some way.
 What element does Google foster to increase brand loyalty?
Answer: Google tries to increase brand loyalty by building trust between its users and Google.
 What psychographic changes has Google noted about consumers in Canada?
Answer: Google has noted that consumers are using more devices and in particular purchasing
more Android products. There is also an increasingly high level of expectations from consumers.
 What challenge is Google facing with its business partners?
Answer: Google is facing the challenge of helping its business partners understand changes in
the market and how to use new platforms.

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 Infographic ... Data Analysis

Review the infographic that compares two clusters from Pitney Bowes Psyte HD segmentation
analytics. Navigate to its website at http://www.utahbluemedia.com/pbbi/psyte/psyteCanada.html
and compare two other clusters to create a new infographic. (Infographic tip: use Excel and
Word to create charts and place them in a single PowerPoint slide to combine the visuals).

Answer: Psyte HD has segmented the population of Canada into 59 clusters. Clicking on each of
the clusters under the Cluster Index reveals interesting data. You are advised to demonstrate how
this website works by typing the postal code of your college or university into the search bar and
showing the depth of data that is revealed.

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 QUESTIONS AND ANSWERS TO ONLINE ACTIVITIES:
APPLYING MARKETING CONCEPTS & PERSPECTIVES

1. What clusters might be used to segment these consumer markets? (a) Cellphones, (b)
automobiles, and (c) radio stations

Answer: The clusters may be as follows:

a. Cellphones - teenagers who want to stay connected at all times
- adults who need to stay in touch with work
- families who want to stay in touch with their children
b. Automobiles - single young adults looking for trendy, inexpensive transportation
- older adults looking for prestige
- families looking for comfortable transportation for their families
c. Radio Stations - teenagers looking for the latest music hits
- adults looking for news, traffic and weather
- adults looking for talk radio
- adults looking for a specific music mix
2. What variables might be used to segment these business/industrial markets? (a)
industrial vacuum cleaners, (b) photocopiers, and (c) car rental agencies
Answers: The variables used to segment these markets may be as follows:
a. Industrial Vacuum Cleaners
− the size of the area to vacuum
− the type of dirt to vacuum
− the type of building that requires vacuuming (factory, mall, office tower, residence)

b. Photocopiers
− average number of copies per day
− clarity of image and need for colour
− usage (copying, reduction, enlargement)

c. Car rental agencies

− use of vehicle (personal, business, vacation)
− price range
− size car required

3. Create a current positioning statement for McDonald’s Canada taking into

consideration its recent repositioning.
Answer: McDonald’s positioning statement could be: “McDonald’s is positioned in the fast-
food industry as a restaurant that provides a wide range of product choices and eating options
to suit different tastes, nutritional needs, and comfort requirements.”
4. Create a positioning map for the chocolate bar market by visiting a store and reviewing
all the product offerings.
Answer: Answers will vary depending upon the products chosen and the store visited.

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5. Create a target market profile for a soft drink of your choice by reviewing all the
elements of the marketing mix.
Answer: Answers will vary depending upon the product chosen.
6. Which step in the market segmentation process do you think is the most complex?
Justify your answer.
Answer: In general the most complex areas involve sales forecasting and creating profit and
loss statements. The difficultly lies in estimating consumer purchase rates, competitive
reactions, market growth rates, and forecasting changes in costs.

QUESTIONS AND ANSWERS TO ONLINE ACTIVITIES:

DISCUSSION FORUM
As a marketing assistant for a sports company you have been asked to analyze the market
for a local hockey team. You need to create:
• A target market profile for the hockey team
• A positioning statement for the team
• A positioning map for the team
Note: These discussions are meant to generate class discussion and a lively debate of issues
raised, as well as a general review of the concepts discussed within the chapter. There are no
correct or incorrect answers.

QUESTIONS AND ANSWERS TO ONLINE ACTIVITIES:

INTERNET EXERCISE
In its 50-year history, Tim Hortons has become an iconic Canadian brand. Navigate to its
website at http://www.timhortons.com/ca/en/ and identify its positioning.
Answer: The Tim Hortons website includes a FAQ page where it identifies its mission as, “Our
guiding mission is to deliver superior quality products and services for our guests and
communities through leadership, innovation and partnerships. Our vision is to be the quality
leader in everything we do.” This mission is also its positioning statement and includes both its
basic and competitive stance.

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 BRING IT TO LIFE: VIDEO SYNOPSIS & TEACHING SUGGESTIONS
MOST INFLUENTIAL BRANDS STUDY - GOOGLE
Synopsis

The research company Ipsos conducts an annual Most Influential Brands study with consumers
in Canada to determine the most influential brands in Canada. The study looks at five key
dimensions that are considered crucial for an influential brand: trust, corporate citizenship,
presence, engagement, and being leading edge. Both the 2012 and 2013 studies ranked Google as
the most influential brand in Canada. This video shares Google’s insight into why its brand is so
highly rated and what factors it considers the most critical in its positioning - trust and making
people’s lives easier and better.

Teaching Suggestions

This video profiles the Google brand by interviewing Chris O’Neil, its managing director in
Canada who discusses the strength of this brand. Students will be familiar with Google and this
video-case is therefore a good example for discussing brand positioning and positioning maps.

If you have an Internet-capable classroom, showing Google and its various products will be a
good starting point. Students will be familiar with Google search, Google maps, Google Earth,
Gmail, Google play, and Google+. They may not be familiar with Google trends, Google
AdWords, or Google person finder (a humanitarian service from Google that helps people
reconnect with friends and loved ones after natural and humanitarian disasters such as
earthquakes, floods, and hurricanes.)

You may wish to contrast Google search with BING and Yahoo! search services by bringing up
their interfaces on the screen and then reveal that currently Google’s market share in Canada is
89.1 percent, followed by BING at 7 percent, and Yahoo at 3 percent.

You can gather the latest market shares for the search engines at StatsCounter Global Stats at
http://gs.statcounter.com/ where country data is available. This is an interesting exercise for
students as Google does not enjoy such a strong following in many countries such as China
where Baidu leads the search engines with 65.1 percent market share, followed by 360 Search at
21.5, Google at 9.5, Soguo Search at 1.8, and BING at I.1 percent.

Once you have set the stage for the search engine in Canada, distribute the case for students to
read without answering the questions. Then show the video and ask the students to answer the
questions.

(Note: Internet links change from time to time, so be sure to check whether this link above is still
available.)

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 BRING IT TO LIFE: VIDEO CASE – PRINTOUT
MOST INFLUENTIAL BRANDS STUDY - GOOGLE
The Most Influential Brands study is an annual study conducted by Ipsos, an independent market
research company with offices in 84 countries including Canada. Ipsos specializes in research
that relates to advertising, customer loyalty, marketing, media, public affairs research, and
survey management. Its perspective is that brands have meaning, personality, attitude, and
influence. It conducts its annual Most Influential Brands study looking at five key dimensions
considered crucial for an influential brand: trust, corporate citizenship, presence, engagement and
being leading edge. The 2013 study was conducted online with 5,008 adult residents in Canada.
Statistically, the study is considered accurate within +/- 1.6 percentage points, 19 times out of 20.
The top ten influential brands in Canada in 2013 were:

Most Influential Brands in Canada 2013

Rank Brand Consumer Attitudes and Opinions

1 Google - Part of our everyday language - just Google it

2 Facebook - Influential in how we communicate and interact
3 Microsoft - Has a strong future
4 Apple - Consumers want to hear from Apple
5 Visa - A brand that is seen everywhere
6 Tim Hortons - Consumers can identify with the brand
7 YouTube - Important in the world today
8 President’s Choice - Helps people make smarter/better choices
9 Walmart - Understands consumer needs
10 MasterCard - Shapes consumer behaviour
Ipsos notes that when drilling down into the data some differences exist between generations,
gender, and regions of Canada. For example digital media brands rank highly with millennials
(YouTube, Netflix, and Pinterest), generation X rate the Weather Network higher than most,
people in Ontario rate Tim Hortons as very influential, and men are very keen on the CBC.
The top ten most influential brands all portray consistently strong brand images with consumers.
Their brand positioning does not waver. Let’s look at what Chris O’Neil, managing director of
Google Canada tells us about Google, the top ranked influential brand for 2012 and 2013:
The Google brand
Google fosters two important ingredients to make it successful: (1) it focuses on user-needs,
trying to make users, lives easier and better in some meaningful way, and (2) it works to earn and
sustain user-trust. Whether a person is using Google search, Google maps, Google Chrome, or
any other Google platform, this is what Google does. This focus started with it cofounder and
CEO, Larry Page who said from the start, “Focus on the user and all else will follow.”

YouTube is a Google product that also follows Google’s brand approach. It provides an easy tool
for self-expression, and for people to discover, engage, and share new things. It is also an easy
platform for businesses to use video to engage consumers and advertise. YouTube is a successful

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story, particularly in Canada where people watch more online videos than in any other country
and create content that is watched and shared around the world.
When looking at the five factors that go into an influential brand, two elements stand out for
Google; trust and being leading edge:
- Trust is critical because in Canada people conduct over 5 billion searches per month on
Google, knowing that Google will help find information quickly and easily. People keep
coming back to use Google because they trust it, and it delivers every time.
- Innovation is crucial for Google and this ties into being leading edge. At Google the focus is
on what is coming around the corner and what Google can do to make consumers’ lives and
business interactions easier and better. Consumer expectations are high in the digital space
and Google works to deliver on being at the forefront of this area and leading the way with
relevant new elements that make consumers’ lives (and business platforms) easier and
better; whether this be with driverless cars, wearable devices, or superfast downloads.
Google has its eye on the future and staying ahead of the curve is paramount.
The challenge for Google is to stay relevant and ahead of the curve by predicting what is next in
the digital world and translating this into products and services that continue to make things
easier and better. Google tells us to expect the unexpected from Google.
Questions
1. Create a positioning statement for Google as a consumer brand in the search market.
2. Create a positioning map for Google in the search market versus BING and Yahoo!.
3. What approach to market segmentation is Google search taking – mass marketing, segment
marketing, niche marketing, or individualized marketing? Explain your answer.

Sources:
News release, “Two new brands join Top 10 Most Influential Brands in Canada: Ipsos Reid,” CNW, Jan. 28, 2014,
accessed at, http://www.newswire.ca/en/story/1296301/two-new-brands-join-top-10-most-influential-brands-in-
canada-ipsos-reid
Wing Sze Tang, “Canada’s Most Influential Brands: Ipsos Reid,” Marketing magazine, January 28, 2014, accessed
at, http://www.marketingmag.ca/news/marketer-news/canadas-most-influential-brands-ipsos-reid-99316
ICA, “Most Influential Brands Study - Google,” YouTube video, uploaded February 2, 2013, accessed at,
http://youtu.be/NLEqKC61l7s

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 BRING IT TO LIFE: VIDEO CASE WORKSHEET
MOST INFLUENTIAL BRANDS STUDY - GOOGLE

Name:
Section:
The video will review the Google brand and how it positions itself in the market. Please answer
the following questions once you have watched the video and read the case:
1. Create a positioning statement for Google as a consumer brand in the search market.
Basic stance:

Competitive stance:

2. Create a positioning map for Google in the search market versus BING.

3. What approach to market segmentation is Google search taking – mass marketing,

segment marketing, niche marketing, or individualized marketing? Explain your answer.

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 BRING IT TO LIFE: VIDEO CASE – ANSWERS TO QUESTIONS
MOST INFLUENTIAL BRANDS STUDY - GOOGLE
1. Create a positioning statement for Google as a consumer brand in the search market.

Answer:
Basic stance:
Google is poisoned in the search market as the most trusted brand to deliver fast and accurate
online search results.
Competitive stance:
Google’s search engine results can be trusted to be consistently better than those from
competitive search engines.

2. Create a positioning map for Google in the search market versus BING.

Answer: Students will use different axis for this question - the terms chosen should be
measurable. Selections may include accuracy, speed, or quality of results. Some may wish to use
the terms trust, reputation, or influential which can prompt a discussion on how these elements
can be measured, something that Ipsos has done with its annual brand study. An example of a
positioning map is outlined below.
Accuracy of results (high)
Google

BING

Trusted brand (low) Trusted brand (high)

Accuracy of results (low)

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3. What approach to market segmentation is Google search taking – mass marketing,
segment marketing, niche marketing, or individualized marketing? Explain your answer.

Answer: There may be some debate on whether Google is using mass marketing or
individualized marketing. It is using individualized marketing as its search engine results will
vary depending the location of the user and the results will deliver pay-per-click ads along the
top and side of many search results that are tailored to the specific search term, and therefore
user-need.

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 BRING IT TO LIFE: NEWSFLASHES
SYNOPSIS AND DISCUSSION QUESTIONS
The NewsFlashes for this chapter are on the loyalty management company AIMIA and on the
fashion house Burberry. Discussing these NewsFlashes in class can bring the material to life for
the students in an interesting, relevant, and timely fashion. They can be used as ice-breakers to
launch into a relevant subject. Many of the topics are interesting to students and may be familiar.

A. AIMIA ANNOUNCES SOCIAL MEDIA SEGMENTATION

AIMIA conducted a social media segmentation study to understand the motivation and behaviour
behind social media interactions, and to better understand how marketers can engage customers
on social networks. The study revealed five segments: passive single network users, passive
multi-network users, active single network users, active multi-network users, and non-users.

Questions
1. Which social network segments apply to you and your family? Review the social media
behaviour of 3 family members and determine which segments apply.
2. How can this information on the segmentation of social networks help marketers?

Answers:
1. The results of this activity will vary depending on the family member chosen by students.
2. This segmentation data can help marketers determine whether and what type of social media
programs can be used to reach target consumers.

B. BURBERRY CEMENTS POSITIONING WITH FLAGSHIP STORE

The luxury clothing brand Burberry was losing is lustre to illegal knock-offs, promotional
discounts, and inconsistent licensing agreements. It reclaimed its brand as a luxury celebration of
British design by reducing its reliance on discounts, purging and evolving its product lines, and
connecting through a revamped website and social media. It also trained its salespeople to be
better informed on the Burberry brand and used its iconic and uniquely Burberry trench coat to
showcase the Burberry brand in its advertising campaigns.

Questions
1. What two elements do you think most helped to reposition the Burberry brand and why?
2. Navigate to the BESPOKE section of the Burberry website to research the customization of
the Burberry trench coat. What elements can be customized and what is the price tag of a
customized Burberry trench coat?
Answers:
1. The two elements that were central to the repositioning of Burberry were its website and its
flagship store in London. These elements allowed people to easily visualize the brand and all that
it represents.
2. The BESPOKE section of the Burberry website allows website users to customize a Burberry
trench coat. This includes customizing the fabric, colour, lining, buttons, length, and style of its
collar, sleeves, buttons, and belts. The prices hover around $1,800!

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 BRING IT TO LIFE: NEWSFLASH
PRINTOUT AND WORKSHEET
Name:
Section:

AIMIA Announces Social Media Segmentation

Canadian loyalty-management leader AIMIA, operating in over 20 countries around the world
and owner of Aeroplan, announced the results of a segmentation study that analyzed people in
the social media space. The study’s purpose, to determine and understand the motivation and
purchase behaviours behind social media interactions, points to how marketers can engage
customers on social networks and focus on what adds value to consumers, rather than just count
likes, followers, and interactions. It buckets social media users into five different market
segments and creates engaging personas to help marketers focus on their target market needs.

Although the study uses U.S. data, its emotional parameters are common to the Canadian social
network user, which makes the segments useful for Canadian marketers. The research looks at
the level of trust people have with their social media as well as how much control they feel they
have over the information they share. In brief, the more trust and control that people have over
their social networking activity, the greater their engagement and participation.

Five distinct market segments surfaced:

- Passive single-network users: Those who reluctantly join a social network so as to not feel
left out, they have little trust and limited involvement with social networks.
- Passive multi-network users: Those who like to use social networks to gather information
but rarely share personal information due to a lack of trust in social networks.
- Active single network users: Those who limit their social network of friends and share
information only with the most trusted friends.
- Active multi-network users: Those who freely share personal information and create
content that they readily share across social networks.
- Non-users: Those who have never used a social network or have not used one in the last
month.

Questions
1. Which social network segments apply to you and your family? Review the social media
behaviour of 3 family members and determine which segments apply.

2. How can this information on the segmentation of social networks help marketers?

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 BRING IT TO LIFE: NEWSFLASH
PRINTOUT AND WORKSHEET
Name:
Section:

Burberry Cements Positioning with Flagship Store

Do you remember Burberry knock-offs—cheap imitations of the expensive camel, black, red,
and white checkered brand that typifies Burberry clothing and accessories? So did Burberry, and
took note that illegal knock-offs, promotional discounts, and inconsistent licensing agreements
around the world cheapened and weakened the brand.

Over the next few years, from 2006 to 2013, Burberry etched a path to reclaim its brand as a
luxury celebration of British design. It pulled on its U.K. heritage, which dates back to 1856, and
appointed brand champion Christopher Bailey, chief creative officer, to ensure consistent
imagery for all things Burberry, and to help reinvent the brand to embody digital hipness and
cool, vintage British style.

The brand reduced its discounting, purged and evolved its product lines, embraced the digital
web, connected on social media, and trained its salespeople to be better informed on the
Burberry brand. It used its iconic and uniquely Burberry trench coat to showcase Burberry’s
heritage and to present a consistent and uniquely Burberry image to the fashion industry. Its edgy
advertising campaigns featured only hip young British actors and models such as Eddie
Redmayne (Les Misérables and My Week with Marilyn), Romeo Beckham (10-year-old son of
soccer star David Beckham), and supermodel Cara Delevingne. It reduced its reliance on
licensing and strategically opened new stores in high-end international luxury markets, including
upscale locations in Canada.

The Burberry brand evolved beyond stores and runways into the digital space with an e-
commerce website at Burberry.com that reached millions of consumers. It also used a social
media program that connected with consumers on Facebook, Twitter, YouTube, Pinterest, and
Instagram. Burberry is the leading luxury fashion brand on social media, with vast followings on
Facebook (+15 million fans), Twitter (+2 million followers), YouTube (+24 million lifetime
views), Pinterest (+56 thousand followers), and Instagram (+1 million followers).

Burberry.com contains breathtaking images, video, and an extensive product line that dwarfs its
in-store merchandise. It allows visitors to select standard items, made-to-order runway products,
and customized trench coats. Up-and-coming unsigned British music artists and celebrity
advertising images grace the website to add a cool lustre to the brand.

In order to cement its revitalization, in September 2012, Burberry launched a 44,000-square-foot,

four-story, global flagship store on Regent Street in London, England, as a tangible and digital
representation of the reinvented Burberry brand. It fused the digital website experience with
breathtaking retail design, allowing people to experience the brand as they do online and in
person. By entering the store, visitors enter a physical representation of the website, complete
with the digital ability to customize trench coats, order engraved name plates, or select Runway

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Made to Order items from Burberry fashion shows. In the store, visitors live within the brand,
admiring displays of vintage trench coats that date back to the early 1900s and browsing current
merchandise.

The Burberry flagship store features over 500 speakers, 100 digital screens, and a 22-foot movie-
theatre backdrop. When chip-enabled Burberry products are shown in the store in front of full-
length mirrors, the mirrors transform into digital screens that play runway footage of the product
or show video on how the product was made. At synchronized times during the day, the entire
store momentarily morphs into a virtual raincloud with beautiful rain shower footage playing on
every screen and heard on every speaker, emphasizing the importance of the Burberry trench
coat to the Burberry brand. The store is home to exclusive, invitation-only music events of
unsigned British bands and live screening events of Burberry runway shows. In support of the
Burberry Foundation, 1 percent of Regent Street store purchases support the Burberry
Foundation, which invests in charities that support needy and creative young people.
Around the world, Burberry now speaks with one voice and owns its positioning as an iconic,
cool, vintage British luxury brand. Its vision is to protect, explore, and inspire.

Questions
1. What two elements do you think most helped to reposition the Burberry brand and
why?

2. Navigate to the BESPOKE section of the Burberry website to research the

customization of the Burberry trench coat. What elements can be customized and what
is the price tag of a customized Burberry trench coat?

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 BRING IT TO LIFE: IN-CLASS ACTIVITY
INSTRUCTIONS – 3M’S POST-IT® FLAG HIGHLIGHTER

Learning Objectives

1. To understand how to create a target market profile

2. To learn write positioning statements
Description of In-Class Activity

 Provide students with a visual of 3m’s Post-It® Flag Highlighter and ask them to create a
target market profile and positioning statement for the product.
 Once students have completed the activity, complete a review of the target market profile and
positioning statement with the class by asking for their input as you complete it on the board.
 This activity can be completed individually or in pairs. The estimated class time is 45
minutes.
Preparation before Class

Review 3m’s Post-It® Flag Highlighter with the class. This can be done by showing the product
and if you have an Internet capable classroom, you can navigate to its website at
http://www.3m.com/intl/ca/english/ to locate an image or find an image on Google Images.
In-Class Implementation

 Relevant Chapter Content - Prior to conducting this in-class activity you will need to
review the following chapter material with your students:

 Explain the concept of a target market profile and all the areas used to describe a target
market. Using figure 6-1 from chapter 6 is very useful for this activity. In brief in it shows
the following:

Geographic descriptors – this look at where a target market lives using variables such as
country, region, province, city size, and type of location such as urban, suburban, or rural

Demographic descriptors – this identifies ranges for age, gender, marital status, income,
occupation, education, and home ownership

Psychographic descriptors – this involves an understanding consumer attitudes to life, their

personalities, general interests, opinions, and activities

Behaviouristic descriptors – this looks at why consumers buy a product, the product benefit,
and how the product is used. It also examines whether consumers are brand loyal in their
purchase behaviour and their frequency of product usage

 Ensure students understand the following factors:

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 Product positioning – this refers to the image of the product relative to the competition

Positioning statements – this crystallizes the product image for marketers in a short
paragraph. Positioning statements are simple, clear, and focused. They identify the main
reasons the target market buys the product and what sets it apart in the market. They
identify four elements: (1) the product name, (2) the category in which the product
competes, (3) one or two main reasons that the target market buys the product (product
benefits), and (4) what sets the product apart from the competition. It has two sections, a
basic stance and a competitive stance.

An example of a positioning statement that was created by students for the Smart car2go
service is as follows:

Basic stance: “Smart car2go is positioned in the car-share market as a flexible and
affordable alternative to purchasing or renting a car, and as an extension of public
transportation in city centres.”
Competitive stance: “Unlike other options, this car can be picked-up and dropped-off at
different locations across the city that are easily located with an app or on its website.
The car can be rented by the minute, hour, or day.”

 In-Class Instructions – Show a visual of a 3m’s Post-It® Flag Highlighter. Showing the
product from the 3M website at this point may be helpful for the students to see. Briefly and
informally explain the activity and then ask students to get into groups of two people to
complete the task. Distribute the handout to each group and then formally review the activity.
Allocate 30 minutes for groups to complete the task and then another 15 minutes to complete
the task with class participation on the board.

 Handout – Distribute the handout and worksheet for students to complete.

 Evaluation – Collect the worksheets from this activity for evaluation purposes. They can be
evaluated for completion, or graded for quality of the work completed.

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 BRING IT TO LIFE: IN-CLASS ACTIVITY
3M’S POST-IT® FLAG HIGHLIGHTER – HANDOUT AND WORKSHEET
Name:
Section:

Review 3M’S post-it® flag highlighter and create a target market profile and positioning
statement for the product. Refer to the table presented in Figure 1 in chapter 6 of your text book
for examples of target market variables.

TARGET MARKET PROFILE

GEOGRAPHICS

 Region
 City or census metropolitan area
 Density

DEMOGRAPHICS

 Age
 Gender
 Marital status
 Income
 Occupation
 Education
 Home ownership

PSYCHOGRAPHICS

 Personality traits
 Lifestyle values and approaches
 Leisure activities, hobbies, and interests
 Media habits
 Technology uses

BEHAVIOURISTICS

 The main occasion for product use

 The main product benefit sought
 Primary and secondary product usage
 Frequency of use
 Frequency of purchase
 Product usage rate
 Product usage status
 Product loyalty status

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 PRODUCT POSITIONING

Basic stance: 3M’s Post-it® Flag Highlighter is positioned in the _________________ category
as a product that provides benefits of ___________________________ to it users.

Competitive stance: 3M’s Post-it® Flag Highlighter is different than competitive products in
that it _______________________________________________________________.

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 BRING IT TO LIFE: IN-CLASS ACTIVITY
3M’S POST-IT® FLAG HIGHLIGHTER – ANSWERS
While answers will vary, the following provides a guideline for answers to this in-class activity.

TARGET MARKET PROFILE

GEOGRAPHICS

 Region Canada-wide
 City or census metropolitan area All city sizes
 Density Urban, rural, and suburban areas

DEMOGRAPHICS

 Age 15-25 years (high school, college, and university students)

 Gender Male and female
 Marital status Single
 Income Under $24,999
 Occupation Students with a part-time jobs
 Education In high school, college, or university.
 Occupation Students
 Home ownership Live at home or rent

PSYCHOGRAPHICS

 Personality traits Students will select a range of options from figure 6-1
 Lifestyle values and approaches Students will select a range of options from figure 6-1
 Leisure activities, hobbies, and interests Music, sports, fashion, fitness, travel, cars, movies
 Media habits Internet and TV
 Technology uses Laptops, smartphones, tablets, and TVs

BEHAVIOURISTICS

 The main occasion for product use For studying

 The main product benefit sought To help study and get good grades
 Primary and secondary product usage No secondary uses
 Frequency of use Every few days
 Frequency of purchase At the start of the school year or semester
 Product usage rate Every few days
 Product usage status Medium to heavy users
 Product loyalty status Medium to high due to its uniqueness

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 PRODUCT POSITIONING
Basic stance: 3M’s Post-it® Flag Highlighter is positioned in the ‘highlighter pen’ category as a
product that provides students with the benefits of a highlighter and a flag-sticky-note in one so
they can get better grades.

Competitive stance: 3M’s Post-it® Flag Highlighter is different from the competition in that it
is the only highlighter that also has sticky notes to flag important pages.

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 BRING IT TO LIFE: METRICS ASSIGNMENT
P&L: LUNCH BAGS - WORKSHEET
Name:
Section:

Marketers are responsible for bringing in company profits. The programs marketers create to
drive business are evaluated against the financial results they generate. A Profit and Loss (P&L)
statement is a financial tool used to help assess and track a product or business’ financial
performance and to determine its profitability.

You are a marketing assistant working on a special back to school promotion for a new
environmentally friendly canvas lunch bag for children. The bag is being launched in August and
you have created a special back to school promotion to encourage retailers to display and support
the product, and for consumers to buy it. The promotion includes a merchandising rack that
retailers can use to display the products, a pamphlet on healthy school lunch ideas that is zipped
into the bag for parents, and a pack of miniature greeting cards that can be used by parents to
include fun and loving messages with their children’s lunches.

Your boss has called a meeting with you to discuss the financial projections for the lunch bag.
You need to create a monthly P&L for August, September, October, November, and December
and a total for this year’s financial forecast.

Task

1. Sales Projections
Forecast sales projections for August, September, October, November, and December, and a
total for the year. Based on previous years’ experience, data shows that sales should follow the
following pattern:

45% in August
45% in September
8% in October
2% in November
0% in December

Sales are expected to reach 8,000 units for the August-December (inclusive) period.

2. Marketing Expenditures
Project monthly marketing expenditures, assuming all expenditures will occur in August. Your
promotional plan includes the following items and costs:

Merchandising rack – 100 racks at $200 each

Pamphlets – 8,000 at $1 each
Greeting cards – 8,000 packs at $1 per pack

3. P&L
Create a P&L by month and a total for the August-December period (inclusive). Use the
following information:
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 Sales units – forecasted projections from above
Wholesale price - $9 per bag
Cost of goods (COG) - $5 per bag
Marketing expenditures - forecasted projections from above
Overheads - $1 per unit

Complete your tasks by using the following spreadsheet:

P&L Lunch Bags

August September October November December Total
Gross sales (units)
Gross sales ($)
Cost of Goods (COG)
Gross margin

Marketing Expenditures
Merchandising racks
Pamphlets
Greeting cards
Total Mktg Expenditures

Net Margin

Overheads

Net profit before taxes

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 BRING IT TO LIFE: METRICS ASSIGNMENT
P&L: LUNCH BAGS – TEACHING NOTE
This assignment familiarizes students with the importance of financial analyses and how to
create a simple P&L. To be successful, this assignment requires the instructor to first explain a
P&L. It is easier for students to understand a P&L if it is first explained by using a simple
example such as a small business which manufactures pencils. Conceptually explaining how a
P&L is structured without looking at numbers, generally helps students more clearly grasp the
concept. A concrete example, such as manufacturer of pencils then helps clarify the specific
details. Then students are ready to tackle the P&L assignment.

A P&L can be simply explained to students by structuring the explanation around the purpose,
the structure, and the flow of a P&L as follows:

A. The purpose of a P&L

Its purpose is to assess and track program, product, or business profitability.

B. The structure of a P&L

P&Ls identify 3 basic elements to help determine profitability:

1. The money that comes in the door (unit sales and revenues)
2. The money that goes out the door (costs and expenditures)
3. The money that is left in profits or losses (tracked at three check points – gross margin,
net margin, net profit before taxes)

C. The flow of a P&L

P&Ls are structured so that the money that comes in the door is first identified and then the
costs and expenditures required to run the business are subtracted in three stages. After each
of these stages the P&L keeps a running profit tally to allow analysts and marketers to focus
on problem areas.

The reason costs and expenditures are subtracted in three stages is that this allows analysts
and marketers to easily pinpoint financial issues and to drill down into the numbers to
identify solutions.

1. Money coming in the door

When a company sells a product, the money that comes in the door is identified as gross
sales. It is computed by multiplying the number of units sold, by the wholesale price per
unit. (For the lunch bag example, this is 8,000 units x $9 = $72,000).

2. Money going out the door

Cost of goods
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 The first area that is subtracted is the actual cost of buying or producing the good. This is
a sum of various elements such as production, warehousing, and distribution costs. This
allows an analyst or marketer to track the cost of the products and easily identify if there
is a costing problem. (For the lunch bag example, this is 8,000 units x $5 = $40,000).

Marketing expenditures
The second area that is subtracted is the one that identifies marketing expenditures. These
expenditures include elements such as consumer and trade promotions, coupon
redemption, advertising, market research, web design, and package design. This allows
an analyst or marketer to track marketing expenditures and easily identify if there is a
marketing spending issue. [For the lunch bag example, these expenditures are the
merchandising racks (100 units x $200 unit = $2,000), the pamphlets (8,000 pamphlets x
$1 unit = $8,000), and the greeting cards, (8,000 greeting card packs x $1 unit = $8,000).
This totals $18,000].

Overheads
The third area that is subtracted is the one that identified the overheads that a company
incurs regardless of its success. Examples of fixed costs are the costs incurred to run the
office such as heating, lighting, and rent. This allows a marketer to track these elements
to make sure they are not too high and are being covered by the business. (For the lunch
bag example, this has been set at $1/unit, or 8,000 units x $1/unit = $8,000).

3. Running tally of profits and loses

As the money flows through the P&L with the cost and expenditure subtractions as noted
above, a running tally is created to track profitability:

Gross margin
This is the computation of gross sales ($) minus cost of goods. (For the lunch bag
example, this is $72,400 – $40,000 = $32,000).

Net margin
This is the computation of gross margin minus marketing expenditures. (For the lunch
bag example, this is $32,000 - $18,000 = $14,000).

Net profit
This is the computation of net margin minus overheads. (For the lunch bag example, this
is $14,000 - $8,000 = $6,000).

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 BRING IT TO LIFE: METRICS ASSIGNMENT
P&L: LUNCH BAGS – ANSWERS
The correct P&L is outlined below. Once reviewed with the class, the instructor can explain how
gross margin percentages, net margin percentages, and net profit percentages can be used to
quickly flag deviations from previous reporting periods. These percentages are relative to gross
sales ($).

P&L Lunch Bags

August September October November December Total
Gross sales (units) 3,600 3,600 640 160 0 8,000
Gross sales ($) 32,400 32,400 5,760 1,440 0 72,000
Cost of Goods (COG) 18,000 18,000 3,200 800 0 40,000
Gross margin 14,400 14,400 2,560 640 0 32,000

Marketing Expenditures
Merchandising racks 2,000 0 0 0 0 2,000
Pamphlets 8,000 0 0 0 0 8,000
Greeting cards 8,000 0 0 0 0 8,000
Total Mktg Expenditures 18,000 0 0 0 0 18,000

Net Margin (3,600) 14,440 2,560 640 0 14,000

Overheads 3,600 3,600 640 160 0 8,000

Net profit before taxes (7,200) 10,800 1,920 480 0 6,000

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