Sunday, January 23, 2011

Event Recap: (Part 2) VALS Presentation "Getting the Right Message to the Right People"

Defining consumers based on level of segmentation

(Broadest) Demographics, Psychological Traits
Activities, Interests, Opinions
Evaluation of Product Benefits
Product or Brand Preferences
(Most Specific) Intent to Purchase
Marketers can make the most impact by connecting consumers' activities, interests, and opinions and evaluation of product benefit.

What happens statistically? Marketers want high level of statistical correlation in predicting purchase.
·       Best predictor: Intent to purchase
·       Worst predictor: Demographics/psychographics (very broad)
o   Different points of ground differentiation go away.
o   Less interested in predicting any given purchase for a product.
·       In truth, most brands’ marketing strategy falls in the middle of the above chart… not too broad and not too specific.

Dividing people by demographics: Marketers can make inferences based on this, but the data can be misleading. For example, can you make inferences based on these information?
37 years old
$100,000 household income
Graduated college
Professional career (manager)

Dividing people by behaviors: Are Bob and Bill in the same segment? They both:
Work out
Own a cell phone
Go on vacation
Spend similar amounts of discretionary income
Interested in the news

Dividing people by behavior AND motivation: motivation differs between people. Take for example Bob and Bill:

Works out to stay healthy


Works out to look good


Owns cell phone for emergencies


Owns cell phone for productivity


Goes on vacation to learn about different cultures


Goes on vacation to relax with family


Spends after careful research


Spends based on recommendations


Reads the New York Times


Catches CNN headline news (while shaving)

·       Within each layer of information hides interesting, important information
·       Companies that assume people fall within the same category will most likely fail at reaching their target audiences
·       People (different demographics/psychographics) are motivated by different reasons.
·       Often times people don’t know why they do different things, which creates a hurdle for researchers
o   Hard to identify causes of action
o   Solution: researchers are forced to infer why people do things. For example, people who buy toothpaste with no fluoride must have some health concerns. Inferences are not always accurate, and it could be hard to make them at times.
·       “Things people do are access point to their thoughts” – David Sleeth-Keppler

Saturday, January 22, 2011

Event Recap: (Part 1) VALS Presentation "Getting the Right Message to the Right People"

Hey GGUAMA members! In case you missed the VALS presentation by David Sleeth-Keppler, here are some highlights:

Issues marketing professionals face:
·      Businesses have great products to offer, but marketers are sending the message to the wrong consumer.
·      The turnover rate in brand management is very high (brands change their images all the time).
·      How can marketers craft the right message and get it to the right people?

Why do these issues persist?
·      There’s a lot of diversity among people, and it’s hard for marketers to keep track of people’s activities and preferences.
o   Marketing guru provides insights to different types of consumers.
·      Brands have different personalities:
o   Brands that are energetic and exciting make it in American market, and marketing gurus encourage their clients to create exciting brands.
o   However, statistics show that only 12.7% of consumers want excitement, and 22% want energetic brands. Thanks a lot, gurus!
·      There’s a disconnect between facts about what consumers want and the fiction that marketers believe. This is why marketers need good data in order to make good decisions.

Solution: develop specific markets for their products/services.
This is where segmentation comes in.

Segmentation: smaller chunks of the market, easier to control, more manageable. There are different types of segmentation, which will be covered later in the presentation.
·      These segments are identified by similarities shared by consumers within the market. Consumers in a particular group maintain similar interests and behave more like each other in comparison to the rest of the country.
·      Key to segmentation: know what you’re selling.
o   Marketers must analyze product characteristics and find consumers for whom the product is a good fit
o   By knowing your product (value proposition, what’s good about your product) you can predict which group of consumers may be interested in the product.
o   Marketers can develop the right message to convey about the product by knowing the right information to talk about.
o   Marketers cannot assume that the product has a universal appeal.

Developing the markets (segmentation):
·      Three steps:
1.     Identify the benefits derived from a product and purchasing barriers, which vary from person to person.
2.     Target identification must be based on understanding your audience.
3.     Advertising the product to the desired audience.
*ISSUE: Marketers may follow step 1 and 2, but the message does NOT get to the right people (step 3) because there is a disconnect between businesses (who understand their products) and ad agencies (who execute creatively based on a loose focus on what the product is all about)
·      Useful/effective segmentation should:
o   Describe groups of people
o   Estimate the sizes of these segments
o   Cover population of interest (your product hasn’t reached everyone you want to cover)