Tutorial Session

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Tutorial Session

• January 17, 2007
• Art Ilano

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QUIZ

• Write on the papers.
• 15 minutes.

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Q A

• Review of previous topics.
• Other nifty things to keep in mind.

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Q A

• Competitive positioning
• Points of Parity (POP)
• Points of Difference (POD)
• First-mover advantage
• Market shares

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UK Confectionary brands
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7. Please encircle the number that to you best
represents where Brand X falls under 1 2 3 4 5 6
7 8 9 Young and Hip Neutral Mature
and Stately
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iPod vs. Zune

• Weight 4.8 ounces
• Colors white, black
• Ports USB 2.0
• Battery 14 hours
• Others accessories

• Weight 5.6 ounces
• Colors white, black, brown
• Ports USB 2.0,Wi-Fi
• Battery 12 hours
• Others wireless music sharing

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First-mover advantages

• Economies of scale
• Price dictation
• EDUCATION OF THE MARKET

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Typical Market Shares

• Market leader 40 percent
• Market challenger 20 percent
• Market follower 10 percent

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Segmentation by Example

• Three case stories.

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Story 1. Peugeot in the Philippines

• Peugeot enters Philippines in 2003. The
  challenge How to position their vehicles?

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2002 Car Sales (CAMPI)

• Passenger vehicles 21,769
• Commercial vehicles 63,818
• Industry Total 85,587

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2002. Key Passenger Vehicle Sales (CAMPI)

• Toyota Corolla 8,161
• Mitsubishi Lancer 1,523
• Honda City 2,843
• Honda Civic 3,103
• Ford Lynx 1,313
• Nissan Sentra 1,255
• Opel Vectra 312
• Volvo 260

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Peugeot issue

• What is a high end vehicle?

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Two types of car buyers

• The Practical Buyer
• Family-oriented
• Functional uses
• Family is consulted
• The Emotional Buyer
• Me-oriented
• Emotional uses
• Family is not consulted

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Story 2. Coke vs. Pepsi

• Pepsi-Cola created in 1893 by Caleb Bradham
• By 1931, Pepsi on its 3rd bankruptcy
• Out of desperation, new strategy
• Coke in 6.5 oz., so Pepsi went for 12 oz.
• Coke was 10 cents, so Pepsi sold for 5 cents

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Pepsi vs. Coke The first Jingle

• Pepsi-Cola hits the spot
• Twelve full ounces, thats a lot
• Twice as much for a nickel, too
• Pepsi-Cola is the drink for you.
• In two years, jingle was broadcast 296,426 times.

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Problem Cost of production eventually rose

• In 1940s, market share fell from 22.7 percent to
  15.7 percent
• Coke rose from 77.3 percent to 84.3 percent

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Turning point The Pepsi Generation

• In 1958, Pepsi positioned as The Light
  Refreshment
• Used young, slim models and rock music
• Coke became positioned as heavy and
  old-fashioned
• In 1963, Youre in the Pepsi Generation

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Story 3. ABS-CBN The Star Network

• In 1986, ABS-CBN TV network was relaunched
• By end of 1986, ABS-CBN was last place among five
  networks
• Management decided to take drastic action

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1987 Transformation

• Two possible markets
• IBC-13 Low end, broad market (CDE)
• GMA-7 Middle-class market (ABC)
• SWOT Analysis
• GMA too strong financially, but IBC had lots of
  weaknesses

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1987 Strategies

• Pirated marketing team of GMA-7
• Decided on segment IBCs mass market
• Identified what people looked for in TV shows.
  Answer the stars.
• Positioning The Star Network
• Pirated all the most popular stars from IBC-13

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ABS-CBN triumphs

• By end of 1987, ABS-CBN is the number two network
• By 1988, ABS-CBN becomes number one

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Break Time

• 15 minutes

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VALS Assessment

• Whats your profile?

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Premise

• Different personality profiles equals different
  consumption patterns
• Each profile becomes potential target market

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Critique

• What are the possible problems with VALS (and
  other related studies) methodology?

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Statistical Segmentation

• The way the pros do it!

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Segmentation by Survey

• Survey of
• Attributes their importance ratings
• Brand awareness brand ratings
• Product usage patterns
• Attitudes towards product category
• Demographic, psychographic, mediagraphic
• Analysis of Data Cluster Analysis
• Profiling

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Principles of Market Segmentation

• Things you need to know

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Principle 1. Segregate em

• Dont segment just for the sake of segmenting the
  market!
• Market segments should have different needs
• Example San Miguels Lagerlite beer

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Principle 2. You MAY mix and match (but make sure
it works)
MALE
FEMALE
OUTGOING
TEENAGER
HOMEBODY
TWENTY/THIRTY-SOMETHING
MIDDLE-AGED
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Principle 3. All products eventually fragment

• Product categories eventually break up into
  different sub-categories
• You have a chance of dominating specific
  sub-categories as a sub first-mover

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Personal Computers
Desktop PCs
Laptops
Standard Laptops
Small form factor
Tower PCs
Tablets
Sub-notebooks
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Principle 4. Dont take your segment at face value

• Just because your product targets teenagers
  doesnt mean it wont appeal to 20-somethings!
• Example Pepsi Cola

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Exercise

• Segment a yet-to-be-segmented product category.
  Define your product.

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Product ideas

• Active seniors sedentary seniors diapers cold
  warm climate diapers
• High-end pens for family
• Travel/tours for people who want to see lots in
  limited time
• Vitamin clothes
• Watch that does bio measurements spa service at
  home
• Multi-functional shampoo for variety-seekers
• Odorless fish sauce for younger generation