Written by: Imran Raza
Photo by Ivan Bertolazzi on Pexels.com
MRKT2401 IMC and MRKT2333 Strategic Marketing Management Updated Jan. 2024
Segmentation post Covid-19: For a marketer segmentation is one of the most critical aspects of their marketing planning and strategy, mistakes would lead to disastrous outcomes for the firm. Through covid-19 and post covid-19 firms need to identify emerging and potential segments, and relevant target markets or risk losing a sizeable number of customers in the future. It’s therefore imperative to identify these emerging non-users and finding what are the reasons they are no longer customers post pandemic. Companies need to create newer offerings based on consumers reluctance to buy and identify their reasons for leaving, in essence adding a crease or a wrinkle to their segmentation strategy.
With Covid-19 being brought under control through 2022 in Canada things were getting back to pre-pandemic times for business, as indicated by the huge surge in travel and tourism this past summer. The economy seemed to be doing pretty well, with economic indicators like the TSX and the real estate market all booming through 2021. Suddenly, all started to slow and then stagnate with the start of the Russian, Ukaraine war in February 2022. With the war in Europe along with huge consumer spending during the pandemic years of 2021 and 2022, inflation rose rapidly to 7 percent levels and the Bank of Canada increased overnight interest rates to a high of 4.25 percent by December 2022, to curb inflation. Add to that the pandemic taking off in China causing concern in Canada, with the Government reimposing restrictions on visitors from China, how would all this dent consumer confidence in 2023. Would companies reassess their business strategy, would their approach to segmenting their markets change in light of increasing inflation, interest rate hikes and an inevitable recession looming.
Coming back to post pandemic segments companies can target profitably. These segments would be a mixed bag, based on worries about their health and safety, social reasons to financial security concerns, resulting in careful spending. So segments could be based on economic reasons, companies could come up with more affordable versions of their products. Consumers could be avoiding services because of accessibility/safety concerns as well as socializing in groups may turn many consumers away from group events. So there are lots of opportunities post pandemic for existing companies as well as new companies to cater to these post pandemic segments, which we will discuss in class on Wednesday.
The Difference Between Segmentation and Differentiation: Many of my marketing students even so practitioners in industry find it hard to differentiate (no pun intended) between differentiation and segmentation often wondering which to go about first in devising their marketing strategy. To many it is not clear if whether they can be used together, mean the same thing or to be chosen between. Very much akin to the chicken or the egg causality dilemma, commonly stated as,” which came first, the chicken or the egg.” The dilemma stems from the fact that all chickens come from eggs, and all chicken eggs are laid by chickens. Aristotle took the easy way out, and concluded that both the chicken and the eggs must have always existed, Darwin would have cited quite plainly that species evolve over time through evolutionary biology, and that chickens had ancestors that were not chickens.
I quite prefer Aristotle’s view and would say that “market segmentation” and “product differentiation” exist simultaneously and work hand in hand. The view of some marketers that they are alternative strategies and a firm picks one over the other just seems so illogical and possibly outdated.
So product differentiation and market segmentation are two distinct strategies used by marketers. With product differentiation aiming to have product attributes, qualities and features that set your brand apart from the competition. Whereas market segmentation is the process of breaking down into smaller groups or segments from the total market of potential customers thus forming a target market on which a company can now aim its efforts. Like Tide develops different detergents with with different attributes (product differentiation) keeping in mind consumers (market segments) with different needs and benefits, for example, Tide Febreeze, Tide Delicate, Cold Tide for the environmentally conscious consumer etc. What follows after a marketer has chosen a target market from the different market segments available is know as positioning. Positioning is conveying the image of the brand across in the mind of the consumer or target market that is desired by the brand and matches the consumers expectations. Positioning is achieved by fine tuning the 4 p’s so that the brand has the features, price, is available at the right location and is advertised in the the correct media space in relationship to the chosen target market.
So for the purpose of this course lets just reconcile the relationship between the two strategies and understand that, segmentation requires and depends on differentiation and vice-versa. Unless of course you decide to make your product different but without appealing to any specific segment of the market aka know as a mass marketing strategy, employed by brands like Coca-Cola, Tide regular etc.
The Criteria for Effective Segmentation: I always tell my students when teaching a marketing course, that if I were told, “Imran you can only teach one topic from marketing to this class” I would without hesitation pick segmentation, differentiation and positioning, and it’s critical importance in selecting a target market and positioning a brand.
Now in order to ensure you have picked the right segment to pursue as your target market, it’s highly important to match that segment against several criteria in order to be sure you picked the right segment to allocate resources to, and increasing the probability of success once it forms your target market.
Lets list down the criteria that could very well impact the decision of a marketer in selecting a particular segment to aim at. In order to be viable a market segment should be:
- Identifiable and Homogeneous: The segment should posses some unique characteristics so the individuals may be identified on the basis of having similarity of needs or being homogeneous. In the case discussion in class on “The HIV-AIDS market” we will be able to see if this is a possibility for individuals infected
- Differentiable and Heterogeneous: The segment you choose should be different from other segments being catered to in the same market, so heterogeneous in determinant attributes. This will be evident in the case on HIV being discussed in class today.
- Measurable or Countable: Are statistics or data available for members that fall in the segment that a fairly reliable count can be made of segment size, enabling to estimate total market potential and also possible usage. We will be able to see if this is possible in the case we discuss in class.
- Reachable and Accessible: Is the selected segment reachable in terms of communication and promotion, are the intended media and scheduling you choose accessible to them. Distribution is also an aspect here, can the product get to them or they get to the product fairly easily physically or order online. The case we study today highlights this criteria as well.
- Substantial or Large: Is the chosen segment large enough to be able to generate a decent profit for the company. With bigger firms looking for a sizeable segment and smaller firms content with a niche or smaller segment size. In the HIV case study you would be able to calculate the market potential and size of the segment in dollar terms with the usage data provided.
- Actionable and responsive: Will the firm be responsive to the needs of the segment, and is the segment actionable on the part of the company, do they have sufficient resources, capability and the right people to do the job effectively. This criteria will be amply highlighted in our case study today.
- Stability and Growth Potential: Does the segment exhibit stability and the potential for future growth or is it a shrinking demographic, an analysis of the available data would be needed to forecast the numbers. Some segments might be shrinking in size but may still be feasible for the company as a market to aim at.
- Appropriate and Attainable: Are the chosen segments appropriate and in line with corporate objectives, vision and philosophy, and are those segments attainable keeping in view matching company resources and management philosophy.
CONCLUSION: Matching up to all the above criteria for can be a hard ask for a marketing manager to employ in practice. But these criteria can prove to be very useful in formulating your marketing strategy and lowering the chances of failure while choosing your market segment. Its use would lead to successful targeting of a company’s products to relevant segments with a minimal waste of resources and lead to better results and a profitable outcome. You don’t necessarily have to say yes to all the criteria in order to adopt a segment to market to, but as the number of nays increases it would be wise to stay away from that segment.
Questions for MRKT2401 IMC and MRKT2333 Strategic Marketing Management.
- How does a marketing manager take into consideration segmentation and differentiation into their advertising strategy for their brands. Explain, and also illustrate with an example.
- Should companies approach to segmenting their markets, and differentiating their products change in light of increasing inflation, interest rate hikes and a looming recession in 2023/24.
- In your view, should marketers cut back on marketing communication spending during a recession, if so, by how much and in which areas of the promotional mix.
- Pick your favorite car or clothing brand. Work out how the brand manager would have gone about segmenting and choosing their target market, and positioning the brands image in the market place.
Imranraza's Blog 
Chun Wai Wong (Eugene)
MRKT 2340 R10
Assignment 1 – Segmentation, Targeting and Positioning
How does a marketing manager take into consideration segmentation and differentiation into their advertising strategy for their brands. Explain, and also illustrate with an example.
Marketing segmentation means splitting a group of people into a smaller groups or segments, based on the common characteristics such as demographics, geographic location, behavioural and psychographics. By identifying the segments and understanding the needs of your target segment, a marketing manager can convey the target message to the audience, choose the appropriate channel, and implement different marketing strategies into their advertising strategy for their brand. For instance, Louis Vuitton targets the fashion followers. Instead of giving discount flyers in the shopping mall, LV presents its high-fashion ads in fashion magazines. The ad conveys the brand’s image as luxury, exclusivity, quality, and personalization, which aligns with their target customers, who are in a relatively higher income group. Differentiations mean the brands develop unique features, or at least better, that stand out in the company’s products or services. For example, some skincare brands have various beauty care products that focus on different skin groups. The company will promote the unique ingredients that can reduce wrinkles in an anti-aging ad, which stands out how the brand’s product is different from other competitors.
Should companies approach to segmenting their markets, and differentiating their products change in light of increasing inflation, interest rate hikes and a looming recession in 2023/24.
Yes, during the increasing inflation, interest rate hikes and economic recession, companies should review their target customer groups in order to understand how the current economic status impacts them through behaviour, concern and so on. As long as the consumers might value the money in a totally different way. Companies should focus on providing value-driven feature products or services to maintain competitiveness in the market. Companies can also offer different deals and promotions to show product differentiation.
In your view, should marketers cut back on marketing communication spending during a recession, if so, by how much and in which areas of the promotional mix.
In my opinion, marketers should not cut back on marketing communication spending during a recession because marketing communication can help companies create an opportunity to increase brand awareness and market share. If the economy recovers, then this can yield a tremendous return when it comes time to sell.
Pick your favorite car or clothing brand. Work out how the brand manager would have gone about segmenting and choosing their target market, and positioning the brands image in the market place.
I will choose Audi as an example. Audi’s segmentation includes young professionals, executives, and affluent families with various ranges of models. Their demographic age group is between 2x-5x, with a relatively higher income group. Audi also positions themselves as a modern company that draws the attention of those who are looking forward to sophistication and innovative design. Moreover, Audi’s brand image in the marketplace is that of a luxury brand with high performance. In recent years, Audi has also developed an eco-friendly model, such as a hybrid, to reach out to the green-conscious crowd.
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1. How does a marketing manager take into consideration segmentation and differentiation into their advertising strategy for their bands. Explain, and also illustrate with an example.
A marketing manager take into consideration segmentation and differentiation into their advertising strategy based on a group of customers who have the same needs and objectives. When a company take a consideration of the customer’s needs. It causes a long-term engagement with the customers and brings a good value for the company. For example, when a company sells the athletic products. The products should be diverse for customers’ needs and preferences, such as: Nike or Adidas has tries to collect their customers with general sport products.
2. Should company approach to segmenting their markets, and differentiating their products change in light of increasing inflation, interest rate hikes and a looming recession in 2023/24.
I think companies may need to approach segmenting their markets, and differentiating their products change while increasing inflation, interest rate hikes and looming recession. During a recession, customers might become more price-sensitive and value their needs before buying products. Therefore, it is necessary to adjust to segmenting their market, and differentiating their products change during increasing inflation. Companies should target customer on their price position and diversification. During the recession, price position for customer is priority strategy that companies should approach. In order to defend pricing points, emphasize the value proposition or look at reasonably priced product changes.
3. In your view, should marketers cut back on marketing communication spending during a recession? If so, by how much and in which areas on the promotional mix
There are some factors that it is difficult to decide whether to reduce marketing communication investment while the economy is struggling. To increase marketing spending is to maintain brand reputation. Brand exposure might be lost if marketing communication is drastically reduced. Keeping the brand in the market guarantees that when things go better, people will still think of it first. Therefore, maintaining brand reputation is to lower spending on marketing communications while the economy is weak. For the promotional mix, companies should focus on cost-effective channel. In hard economic circumstances, communicating the value proposition becomes essential. A product or service’s ability to meet customer demands and provide affordable solutions may be highlighted via good marketing.
4. Pick your favorite car or clothing brand. Work out how the brand manager would have gone about segmenting and choosing their target market, and positioning the brand’s image in the marketplace.
My overall favorite thing in cars. I will be choosing my favorite car brand which is Honda. When the segmenting market in Honda. This company has divided different segmenting such as: age, lifestyle, income, cars model for customers to choose. Mostly, Honda’s market is for people who like a car is more valuable and affordable. Therefore, Honda Civic becomes a most popular car in Honda because it is safe, affordable, comfortable, and valuable. If people who are chasing the speed. They can choose Honda Civic type R. This car is kind of a sport car, and people are easy to afford this car. As for target for market, most customer based on the value of this brand. Finally, Honda positioning the brand’s image in the marketplace is promoting different cars of performance in the showroom. It is showing that people can choose their available car at Honda.
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