Consistent Consumer Segmentation Execution

• What is your current segmentation approach and model?
• Do you leverage different segmentation type – value, behavior and needs – based segmentation – in conjunction?
• Do you understand how the segmentation aligns with your strategy and value creation?
• Are you refreshing your sight on regular basis, to reflect changing customer needs and feedback?
• Do you have the right segmentation skills and modeling tools in place?
• Are you able to create an integrated view for customers that incorporate all relevant customer data?
• Do you have the analytic capability to translate customer segmentation into actionable elements with predictable outcomes?
• Do you design and deliver a segmented experience along the entire customer lifecycle?
• Who owns segmentation activities? How are other departments involved?
• Do your frontline employees understand your segmentation model and how to treat individual segments?
   
  

What are the chances of you managing to live up to that oath you took in the most important moment of your life? The answer that comes from a study by the Johns Hopkins School of Medicine will startle you. The study shows that only one out of nine people actually change their lifestyle post their bypass surgery.

Yes, even in life and death situations, a high level of awareness of a fact does not translate into any real action based on that fact. This is an important information for any professional who is involved in behavioral change, more so for marketers who spend a lot of money on brand awareness building communication.

While visiting some exclusive outlets of a consumer durables company and a cement manufacturer I was shocked to find the shelf stickers and danglers in the shop with just the company’s name on it. “Why reinforce the company name, inside the company’s exclusive outlet?. “Sir, this is what I get from my headquarters” was the reply I got from the dealer. Despite the fact that most of the leading brands have achieved very high awareness scores, the only mantra many marketers have is to continue spending more and more money on increasing brand saliency, in the hope that increases in brand awareness will lead to actual sales. At the retail outlet, the consumer is standing with your brand in one hand and your competitor’s brand in the other hand. It is the ultimate moment of truth for all the brand building activities you have done for your brand. As a marketer do you have any intervention other than price discounts to influence the consumer at this critical moment of your brand? What communication can be used to make sure that your brand is actually the one that is dropped into the shopping cart?

To improve the ROI on marketing spends, more so of established brands, marketers will have to clearly shift their focus from further increasing awareness to creating action orientation—making sure that the consumer who is well aware of your brand while standing in front of all the other brands in her consideration set, reaches out to your brand and only your brand. Our studies have shown that this is not an easy task. Majority of the shoppers are not brand loyal and much of the brand flirting is happening at the retail outlet in the last few seconds before the purchase. Definitely a shelf sticker with your brand name and the mug shot of the celebrity from the awareness campaign won’t be of much help at this moment.

New knowledge from fields such as neurology and behavioral economics is giving us new handles to this problem. The discovery that human brain many a time does not do elaborate processing of information but instead takes several cognitive short cuts will help the creation of action-oriented communication at the retail outlet. Conscious part of the human cannot do two things at the same time. So the human brain cannot do a good job of watching the cricket match and absorbing the numerous ad messages that prop up between the overs. The only place where the consumer’s conscious brain is actively seeking information on the brand is when she is at the retail outlet. Any memory is not a single point in the brain but connections between millions of neurons and in turn numerous other memories. This knowledge allows the marketer to discard the age-old USP theory in the dustbin outside the retail outlet and communicate multiple selling points(MSP) to the consumer while she is in the retail outlet. With the focus on conversion
marketing, retail outlet will soon become one of the, if not the most important medium of brand communication.

But the biggest change will be that the primary focus of marketing activities will no more be on intangible factors like brand awareness and brand preference scores, but will be on conversion at the retail outlet—actual sales at the retail outlet.

price line

Minimum break-even

Is your break-even pricing and if you have done you work right it will be a slope on a graph showing your fixed costs and then the ones that vary according to the amount of product you sell.

Maximum Price

Is the top price anyone is charging for a competitive product as you have defined it. Penetration pricing.Is a small increase over break even. You make a small profit per unit sold in return for the prospect of selling higher volumes of product. It isn’t quite that simple of course but it is a starting point.

Skimming

Is setting the price as high as you think the market will pay in the hope of recouping your costs as quickly as possible.

Long term pricing - Sustaining

Could fall anywhere between penetration and skimming. If you have some flexibility in your product or service you may choose to have several offerings that adopt different price points. Computer manufacturers tend to have a range of prices at which they will be offering a product.

There will be the £2100 product sporting the best processor on the market, lots of RAM, a large hard disk etc. Then there will be the budget special at around £300. In between there will be a variety of other models. To charge the premium price they have to offer something special, something that may very well be next year’s mid or even low range model.

You may have an entry level product or service which can be added to, this is a good way of advertising a low price but rarely selling at that price as customers see what else they can have.

When you have narrowed your target price down to a range and you cannot decide where in that range to set your price; choose nearer the top of the range. Except in a few market areas customers do not buy on price alone. If you have a good ‘value’ story then you will have no problem selling at a higher price.

The campaign, a little over a week old, has already created quite a buzz. 'Stripey the Cub', the face of the initiative, has over 96,400 fans on popular social networking website, Facebook; and the official Twitter page has 3,027 followers already.

Rahul Saighal, chief marketing officer, Aircel says, "Aircel sees itself as having strong social responsibilities. This is a cause that cuts across all sections of the population and something we believe in and are passionate about."

"The response has been overwhelming from all sections of society, be it school children or adults. It has proved to be a very engaging campaign. As a brand, it is important to engage with consumers at multiple levels," he adds.

A dedicated website has been designed for the initiative (www.saveourtigers.com), where over 96,000 visitors have pledged their support.

Save Our Tigers is part of the corporate social responsibility activities of the brand; and Aircel has been associated with the cause for about a year with WWF.

"As a service provider, we are in the realm of communication, where we can connect and create awareness with the audience. This project has a direct impact on the environment and is close to our heart. Therefore, we are a part of this," an Aircel executive says.

Dentsu Communications, the creative agency behind the campaign, has created four television commercials, which that involve three production houses -- Cutting Edge, Keroscene and Tellywise, and three film directors -- Rickii Kapoor, Rajesh Saathi and Shiva. The logo for the campaign has been designed by Wham, a London-based agency.

The main film focuses on the helplessness and vulnerability of a small tiger cub, Stripey, who is lost, hungry, and is looking for his mother. The viewer then realises that the tigress may never return to the cub, as poachers could have killed her. The voiceovers in the film are by actors Kabir Bedi and Shernaz Patel.

In the three other films, cricketer Mahendra Singh Dhoni, footballer Baichung Bhutia and South Indian actor Suriya, pledge their support to the cause.

The campaign has been conceptualised by Shivanand Mohanty, national creative director; Sangeeta Velegar, creative director; and Samson Samuel, art director. Velegar, Mohanarangan K and Harish Arora, executive creative director are the copywriters.

An emotional approach runs strong through the campaign and with good reason. The creative idea comes from the 1994 Walt Disney classic, The Lion King.

"When watching The Lion King, why do our eyes well up when Mufasa dies? Not because a majestic animal has been killed, but because a father died trying to save his son. A tiger is beautiful, majestic and dangerous; but a six-month-old cub is just another baby that needs his mother to survive," says Mohanty.

"The seriousness of the crisis may not be at the top of the mind. So, instead of just mentioning, one must feel the cause, highlight it," he adds.

The brief to the agency was to structure a long term, all-encompassing 360-degree public communication campaign, which informs people about the seriousness of the threat, and the urgent need for action.

Besides the TVCs and the activity on the internet, there are ongoing radio spots, outdoor campaigns and on-ground activation across the country.

Mohanty mentions that the internet forms an important platform for the campaign, because it is the best place for interaction and an ideal tool to build awareness.

The campaign is being planned on a long-term basis. Both Dentsu and Aircel confirm that this is the "launch phase" of the programme, which focuses on building awareness. "As the first phase ends, we will study the results of the campaign and decide on the way forward," says Mohanty.

Throughout the campaign, the fact that only 1,411 Royal Bengal Tigers are left, is emphasised upon.

"Though people are aware that few tigers are left in the country, not everyone has an exact idea of how many. So we wanted to highlight the number, 1,411, in the communication. We want people to register this number. This will, in turn, generate further buzz around saving tigers," says Ameen Ahmed, communications in-charge-species, WWF-India.

Ad men speak

Within the fraternity, the campaign receives a pat on the back simply for the cause. However, a stronger cry and a more definite plan of action have been called for.

Ambar Chakravarty, executive creative director, Publicis Ambience thinks it is a noble cause and the TVCs are touching. However, he says that a clear point of view is needed. He cites Tata Tea's Jaago Re campaign as an example, wherein the brand offered a solution after presenting its perspective.

"The awareness is already there. Yes, maybe the exact number was not known. However, in a campaign such as this, one would appreciate a definite plan of action. I do not find a unique message that would set the campaign apart from other such similar initiatives," Chakravarty says.

Santosh Padhi, chief creative officer and chairman, Taproot India is of the view that anything done to preserve nature is a great initiative and contributes to the well-being of society.
However, he adds that the initiative is not well woven with the brand.

"Imagine if a few more big brands like this can come together for various such causes! However, from a marketing point of view, it looks just like 'Brought to you by Aircel'. If the cause allows the brand to strongly associate with it, it is a win-win situation," he says.

Padhi thinks that there could be stronger and more effective ways to hammer the problem with lesser money.

"I, too, think that the way tigers are disappearing is a disaster. But then, I do not know how one could save them from vanishing from one corner of the country. This is an issue every state government could handle, if they really feel like, and brands should seriously get in touch with higher authorities to nail down such issues," he says, raising a similar doubt as Chakravarty.

One, people tend to forget over time what works and what does not. Jack Trout, the man who invented the concept of positioning in 1969, writes that this is a phenomenon that affects many corporations once they become successful. He calls it The FWMTF ( Forget What Made Them Famous ) Syndrome.

Just look around and u can trace their success down to a USP that they had in the beginning. Example: Ford is a company that is in lot of trouble today that’s because according to me they forgot what made them famous in first place.

Ford was the first company in the worked to mass-produce cars in an efficient, low-cost manner for the masses. Once it became famous, it forgot that. It got complacent, and that allowed the Japanese and now the Koreans- to catch up.

Ford’s problem is not that people are migrating from mass-market to premium brands as many analysts have suggested. Sure, premium brands like BMW and Audi and now outselling Ford in many markets (Particularly in the mid sized segment ), but mass cars have not lost their footing and are still very much in demand. Those made by Toyota sell in the millions, so much so that Toyota  has now become the No.1 care manufacture in the world, overtaking GM.

So Ford’s problem is one of differentiation. What Ford’s USP? That is hard to pin down. Toyota is very clearly differentiated by its reliability. Without a USP Ford is vulnerable. It becomes the same as other car brands, and today’s hypercompetitive market, sameness is the equivalent of a death sentence for the brand.

The Second reason is that people are always exited by what is new. Setting up a new category can always boost your presence. Its some thing similar to what TATA NANO did – created a new segment for a 1 lac car. People are also brand and they want to be famous too. Rosser Reeves became a famous brand because he invented the USP. If you want to  be famous in field of Marketing what will you do? Create a better USP? That would not work. You would need some thing new. So, academics and consultants came up with new concepts all the time, to make names for themselves. Do a search in Google and see how many you can find. Trust me, there will be more than you can even remember, or use.

The fault is not just with the academics and consultants general people are to be blamed. They feel if the concept is old its outdated or useless. But they think this way. They become exited every time a new fangled concept comes along. After a while, the buzz and the hype surrounding that concept dies down and it becomes less relevant. And then what do people do? They look for the next big thing the next Buzzz….

Therefore there is no surprise that the good old concept USP is dead ( as a Business ). Well you dismiss it as your own risk. Without a USP you will not have a strong brand. Its in oldie is the the goodie. Don’t dismiss it just yet.

The third reason why USP is not given the importance these days is that its hard to find a Unique Selling Proposition. Finding a USP is hard but hanging on to the USP is harder.

Sitting at the headquarters of Mont Blanc at Hamburg, Germany it must have seemed like a good idea. Like most other luxury companies, the manufacturer of expensive pens is keen to increase sales in India, seen as a vital market for the future. So how better to do that than to make one of Mont Blanc’s Limited Edition pens in honour of the most famous and recognisable Indian of all – Mahatma Gandhi.

Mont Blanc is a commercial company, but they knew it was important not to seem crassly commercial here. This again is where Tushar Gandhi was useful. It’s not clear who, if anyone, ‘owns’ the Gandhi brand, but by donating a substantial amount tothe Mahatma Gandhi Foundation run by Tushar Gandhi Mont Blanc could make its good intentions clear, and still use the brand. The money would go to a project with impeccable credentials – a home and school in Kolhapur for rescued child labourers – and would be substantial. 

At the launch of the Gandhi Limited Edition (LE) pen in September of this year, Lutz  Bethge, the CEO of Mont Blanc handed over a cheque for Euros 101,000 (over Rs 70 lakh) to Tushar Gandhi. In addition, Entrack, Mont Blanc’s local partner committed to giving Rs 10,000 from each sale of the Memorial Edition pan, and Rs 50,000 from each Retail Edition. Assuming the former are the 6,000 cheaper pens, and the latter the 241 expensive ones that’s a possible income, if all are sold, of over seven crore rupees. This is possibly less or on par with how muchMont Blanc would have had to pay a really big celebrity endorser, but it’s certainly a decent amount to pay a NGO.

So why is it that the idea of a Gandhi LE pen strikes so many people as deeply dubious? Commentators bemoaned the way it seemed, with it’s over Rs11 lakh price tag, to endorse a culture of greed in the name of a man who would have scorned it. The Centre for Consumer Education in Kottayam went further and filed a petition with the Kerala High Court asking for a ban on the pen, alleging that it contravened the Emblems and Names (Prevention of Improper Use) Act, 1950. Tushar Gandhi came in for special criticism, with epithets like ‘racketeer’ and ‘opportunist’ being hurled against him.

He has been here before. In 2002 a controversy broke out with the news that Tushar Gandhi had apparently sold rights to the Gandhi brand to CMG Worldwide, a firm engaged in celebrity image management. (To contrast with theMont Blanc deal, CMG was to pay $ 60,000 a year). Then as now, Tushar Gandhi points out that the money was not for him personally, but for public works related to maintaining Gandhi’s legacy. He also contends that he never claimed to have ‘rights’ over the Gandhi name, but just felt some level of control was needed to prevent its misuse.

At the time of that controversy it was alleged that CMG could licence the Gandhi brand to unsuitable products. The outcry over this prevented the deal going through, but speaking to Brand Equity Tushar Gandhi points out that the same people who protested never do anything to prevent actual inappropriate usages of the Gandhi brand. For example there was an Australian restaurant that promoted their Handi Ghandi brand which included beef curry, or an American magazine that did a spoof exercise routine based on beating up Gandhi. “Who protested about this then?” asked Tushar Gandhi.
The other point he makes is that anger over putting a value on the Gandhi brand is misplaced, because Gandhi himself was well aware of his brand value. “He would sell his autograph for Rs 5 which he gave to the khadi fund,” says Tushar Gandhi.

Be The Brand

This argument also points to how Gandhi differentiated his appeal from other leaders, using ways of operation (fasts, silent days) that were uniquely his own and developed a unique visual identity. By wearing his dhoti and shawls even in the cold of England, Gandhi demonstrated the importance of brand consistency, even at the risk of his own inconvenience. 

Gandhi knew his difference meant that the British could not treat him as just another protestor, so what was this if not use of a unique brand identity towards a political goal? The success of this can be seen not just in his political victories, but in the way his brand has endured and come to be recognised across the world. Gandhi’s image is instantly recognisable even in its most basic form (band head, glasses, stick), and there is also some understanding, however stereotyped, of what he stood for. This in fact is what makes him so attractive to companies likeMont Blanc (or Apple, which used him for a campaign that met few protests). What then, asks Tushar Gandhi, and others who feel like him, is so wrong in using the Gandhi brand

for charitable causes of which he would have approved?
But there is a problem, and it cuts to the heart of what makes the Gandhi brand so different. William Mazzarella, professor of anthropology at the University of Chicago, who has studied Indian advertising, points to this difference in Branding the Mahatma: the Untimely Provocation of Gandhian Publicity. In this essay, forthcoming in the journal Cultural Anthropology, but which he shared with Brand Equity, Mazzarella accepts Tushar Gandhi’s contention that Gandhi consciously built his brand, but suggests that a brand means something unsettlingly different in a Gandhian context – it is something meant not just for product communication, but it is the product itself. A Gandhian brand cannot just be taken as a sales pitch for a separate product, but it the sales pitch itself which has to be consumed.

To understand why this is unsettling consider a certain cola’s ads. These routinely suggest that using a particular brand will make you more daring, more dashing, able to run up walls and perform amazing physical feats. Consumers accepts this as hyperbole and buy the brand without expecting to break out into a sweat – but if it was a Gandhian brand you might have to. Of course, no Gandhian brand would be anything as trivial as a cola, but the point is that a Gandhian product demands a certainconsumer response. Vegetarianism, for example, was part of the Gandhi brand, not because he insisted on it, but because he insisted on you believing his reasons for it. Gandhi once told a husband whose wife resisted going vegetarian that it was his duty to buy meat for her as long, because it was only when she went voluntarily vegetarian would it be real. “If branding appears to offer us our innermost selves in a pre-planned package, then Gandhian publicity demands of every participant in public culture that they not allow themselves to be lulled by selective identifications but rather take responsibility for the ideological complicities of their desires,” writes Mazzarella. From this perspective it’s clear that there is simply no way that Gandhi’s commitment to austerity, his abhorrence of luxury and his preference for simple village products over manufactured products –especially imported ones – would allow his brand to extend to the Mont Blanc LE pen. There are too many examples of Gandhi refusing rich presents, insisting on a commitment to austerity and, for that matter, many injunctions againstfountain pens in particular, in favour of pencils or simple reed pens, for such a pen to pass. 

Tushar Gandhi’s response to this is point to Gandhi’s inconsistencies. “He didn’t like fountain pens, but he used one to write Hind Swaraj,” he tells us. This is a bit disingenuous since Hind Swaraj was written in 1908, before he developed his swadeshi ideas in full, but in any case, it hardly means he would use such a luxury pen (Gandhi did accept a fountain pen made by the Ratnam pen factory since it was entirely Indian made). Tushar Gandhi’s real position seems to be a nihilistic one: the ideals that were part of Gandhi’s brand no longer matter, since modernIndia has long abandoned them, except for some forgotten Gandhians. And this being the case, perhaps the best one can do is use Gandhi’s brand for a good cause like theMont Blanc financed ashram. 

This is a logical, if depressing, position, but the problem is that it’s also exactly the opposite of Mont Blanc’s stated reasons for using Gandhi, with its rhetoric about his inspiring ideals. The company declined to respond to this story, other than to say it was pleased with the response to the pen, yet one wonders how accurate this could be. From Mazzarella’s analysis, no one who really believes in Gandhi could buy such a pen; but why would someone who doesn’t believe in Gandhi buy one anyway? The scepticism this pen has been greeted with even on Internet forums for pen collectors, like www.fountainpennetwork.com, and the derision it has received from Indian commentators, suggests he’s correct about how Gandhi branding works itself out.

Source: Marketing Resource Hub

Such groups can be worked on by heavy investments as they are worth the money and time. They cannot only retain such customers and make new customers in this group but they can go to the very extent of turning back customers who don’t belong to this group. Understanding the needs makes customer’s expectations to be met per their satisfaction, better than the competitors, which will lead to higher sales and obvious profit.

Marketing management involves choosing target markets that not only get new customers but also retain the existing ones. It is a business subject, which is based on research and study of practical applications of marketing techniques and management of the marketing resources. The one who excels in this field is known as marketing manager. The job of the marketing manager is to influence the timing and level of customer demand so as to help the sales. It actually depends on the size of the business and environment in the corporate industry. Like if he is working in a huge production company, he will be the general manager of a particular product category assigned to him and he will be responsible for profit and loss with respect to the product. And in small business there is no marketing manager as his job is taken over by the partners of the company.

Creating and communicating best customer values can increase the number of customers. The steps taken and resources utilized to maintain existing customers and get new customers fall under marketing management. The scope is quite large because it not only consists of developing a product, but also retaining it. The term marketing management has many definitions. It actually depends on individual firms and how the marketing department functions and activities of other departments like operations finance, pricing and sales.

Before deciding about a marketing strategy, the company must do an in-depth study about their business, and the market. This is where marketing management merges with strategic planning. Usually the marketing strategies are of three types, customer analysis, company analysis and competitor analysis. Using the customer analysis, the market is broken down into different types of customers.

Company analysis highlights the cost structure and resources of the company and cost position when compared to competitors. The accounting executives use it to learn about the profit earned by a particular product. From time to time, audits are conducted to study about the strengths of various brands of the company.

Marketers using competitor analysis build detail customer profiles. It gives a clear picture about the strengths and weaknesses of the firm, when compared to a competitor. The competitor’s cost structure, resources, competitive positioning, degree of vertical integration, product differentiation, and profits are studied in detail and are compared to what company is doing in those regards.

The marketing management to do marketing analysis carries out marketing research. The most common of such researches are qualitative marketing research, quantitative marketing research, experimental techniques and observational techniques.

After all the studies and researches are conducted, its easier for the marketing manager to make strategic decisions and they then can design a marketing strategy to increase the profits and revenues of their company. The other goals can be profit over the long run, market share, and revenue growth.

Please understand Customers tent to be more profitable over a period of time. so during the first year your Acquisition cost will be more than the the revenue generated. This is natural as customer tends to be cautious while using and trying out your brand and compare it with others that it might be using now or might be willing to use soon.  As you tend to get a bit of inclination from customers towards your brand they tend to add value to the revenue. As the time moves (would say customers life time ) customer gets more familiar to your brands and starts loving it. This is when your year on year revenue starts increasing.