Actions for the week
This week, I read the two coursepack articles about TFC and the post title. I found it very interesting to ready how The Fashion Channel advertisements work. It makes complete sense that the more segmented their viewing audience is, the more valuable the time is for advertisers since they will be able to target more specific viewers.
I found this very similar to the way Google adwords works. Google charges a different amount for different search terms you want based on market demand for them. This market demand is affected by others that want their ads to show up when someone searches for that term. For example, if I have an ad campaign for tablet computers and want to use the search term, "Best business tablet PC", the cost per click would be around $6.27. Each time someone search that phrase and clicked on my ad, Google would charge me $6.27. Insurance search terms like "buy car insurance online" are pushing $70 per click right now. That is high price to pay for a click on your advertisement!
Questions for the Week
How does segmentation facilitate consumer obsession?
Customer obsession seems to come from the right customers having good interactions with the firm. Segmentation facilitates this by helping the firm focus it's energy on the right customers. For example, if Harley can focus energy and interactions on the right people, these people will become obsessed or even more obsessed. The right people means that they will value the interactions/advertisements/brand building exercises and increase their consumer activity or spread their obsession with others.
When a firm chooses a particular segment for targeting what are its primary considerations?
The primary considerations should be to ensure that the benefit of the firm's product or service is seen as valuable to those in the segment. For example, if an insurance company pays $70 per click on their ad when someone searches for "buy car insurance online", they better be sure that their web page and insurance services will meet the needs of the type of people that are using this search term. If those people look at the web page and the products offered are not valuable, they will not purchase anything and the insurance company is out $70 (Of course, Google makes money no matter what the outcome of the click is).
What is positioning? Where does a firm's position reside.
Positioning is when marketers try to show a products value in the minds of customer by creating an image. A great positioning statement that comes to mind is L'Oreal's "Because you're worth it". The marketers at this firm are positioning L'Oreal's products as superior and worth the price because the buyer is worth paying the extra money for high quality products. The position resides in the positioning statement. In the book Crossing the Chasm. by Geoffrey Moore, the positioning statement should be:
Think about a couple of companies competing in the same space with different segment focuses. Discuss these firms and their various approaches. Why are they different?
Two firms that offer similar products but with different segment focus are Apple (iPad) and Amazon (Kindle Fire). The iPad and Kindle fire are both tablet computers with applications, internet access, media provided by firm, color touch screens and web browsing. There are some very similar aspects of both, but the differentiation between the two is where the segments are divided. The iPad has all the features, and is the best on the market right now, but the cost is prohibitive to many people. Amazon's target segment is for those that want all the capabilities of an iPad, but want to pay less.
This week, I read the two coursepack articles about TFC and the post title. I found it very interesting to ready how The Fashion Channel advertisements work. It makes complete sense that the more segmented their viewing audience is, the more valuable the time is for advertisers since they will be able to target more specific viewers.
I found this very similar to the way Google adwords works. Google charges a different amount for different search terms you want based on market demand for them. This market demand is affected by others that want their ads to show up when someone searches for that term. For example, if I have an ad campaign for tablet computers and want to use the search term, "Best business tablet PC", the cost per click would be around $6.27. Each time someone search that phrase and clicked on my ad, Google would charge me $6.27. Insurance search terms like "buy car insurance online" are pushing $70 per click right now. That is high price to pay for a click on your advertisement!
Questions for the Week
How does segmentation facilitate consumer obsession?
Customer obsession seems to come from the right customers having good interactions with the firm. Segmentation facilitates this by helping the firm focus it's energy on the right customers. For example, if Harley can focus energy and interactions on the right people, these people will become obsessed or even more obsessed. The right people means that they will value the interactions/advertisements/brand building exercises and increase their consumer activity or spread their obsession with others.
When a firm chooses a particular segment for targeting what are its primary considerations?
The primary considerations should be to ensure that the benefit of the firm's product or service is seen as valuable to those in the segment. For example, if an insurance company pays $70 per click on their ad when someone searches for "buy car insurance online", they better be sure that their web page and insurance services will meet the needs of the type of people that are using this search term. If those people look at the web page and the products offered are not valuable, they will not purchase anything and the insurance company is out $70 (Of course, Google makes money no matter what the outcome of the click is).
What is positioning? Where does a firm's position reside.
Positioning is when marketers try to show a products value in the minds of customer by creating an image. A great positioning statement that comes to mind is L'Oreal's "Because you're worth it". The marketers at this firm are positioning L'Oreal's products as superior and worth the price because the buyer is worth paying the extra money for high quality products. The position resides in the positioning statement. In the book Crossing the Chasm. by Geoffrey Moore, the positioning statement should be:
For (target customer) Who (statement of the need or opportunity) The (product name) is a (product category) That (statement of key benefit – that is, compelling reason to buy) Unlike (primary competitive alternative) Our product (statement of primary differentiation)
Think about a couple of companies competing in the same space with different segment focuses. Discuss these firms and their various approaches. Why are they different?
Two firms that offer similar products but with different segment focus are Apple (iPad) and Amazon (Kindle Fire). The iPad and Kindle fire are both tablet computers with applications, internet access, media provided by firm, color touch screens and web browsing. There are some very similar aspects of both, but the differentiation between the two is where the segments are divided. The iPad has all the features, and is the best on the market right now, but the cost is prohibitive to many people. Amazon's target segment is for those that want all the capabilities of an iPad, but want to pay less.