Market Segmentation Strategies

Under Amour: A Case Study

The University of Virginia conducted a case study on Under Amour. This case study focuses on the risk Under Amour took by identifying a market segment within the sportswear industry that under-performed and creating a campaign that spoke volumes to that segment, resulting in a competitive market segment advantage and increased company sales. In the article, Under Amour identified the active female market segment as one that needed to be conquered, after their rival, Adidas, failed to reach the market segment with their “Unite All Originals” campaign (University of Virgina, 2016). Under Amour saw the untapped potential and launched its own campaign. Titled “I Will What I Want,” the campaign focused on empowering women and celebrating those who choose to defy the negative external pressures placed on them. This attempt to appeal the substantially smaller market of women is considered niche segmentation. Social media was at the core of Under Armour’s segmentation strategies, as well as celebrity endorsements (University of Virginia, 2016). Under Armour chose unlikely “athletes” like ballerina Misty Copeland and supermodel Gisele Bundchen to star in their ads, which were created for TV, print, and web. These strategies proved to be effective, stirring viral engagement via social media.

Key Points to Remember When Implementing Segmentation Strategies

Having read the Under Armour article, there are a few key points that stick out when it comes to implementing segmentation strategies. The first is brand association. Brand is everything, and customers or potential buyers need a reason to remember your brand. Give them one! Secondly, consider the risks of brand ambassadors. While for some companies, like Under Amour, celebrity endorsers worked out great, there is always the possibility that an ambassador might make a mistake, and this could negatively impact your brand because the two are “associated.” Always be prepared and have plans to overcome adversity. The third important thing to remember when implementing segmentation strategies is to consider your audience. Under Armour chose to use social media as the heart of its campaign; they understood that this was the most effective means of reaching their intended female audience, which allowed for viral conversations via the web. What else should you do with segmentation strategies? Draw attention. Word-of-mouth and viral marketing play a large role in spreading brand awareness, and work well in today’s increasingly connected world (University of Virginia, 2016). If you can get people talking about your product or service through your segmentation strategies, your campaign will be golden. The Final Tip: storytelling and emotions. People like to connect with brands and advertisements that trigger an emotional reaction. They like to see a story behind a brand or product. This strategy makes it easier to relate one’s personal life to the brand and creates interest. Brand loyalty will follow. Follow these tips, and you will be effectively using segmentation strategies.

New Market Segments and Segmentation Strategies

There are always new market segments on the rise. Self-driving cars were always thought to be a reality only in dreams. However, many companies like Google’s Waymo have taken matters into their own hands and begun pursuing the market segment of the self-driving car owner. For Waymo, this market segment is the elderly and disabled, and those in need of mobility. This is a fascinating, brand new market and thus, new market segments are forming. In order to reach this market segment, companies like Waymo may utilize emotional appeal in their ads, focusing on the freedom that mobility brings to individuals. An effective segmentation strategy that Waymo might benefit from is using real-life testimonials of those in need of mobility, focusing on what the Waymo self-driving car has done for them: gave them their freedom back. This would be Waymo effectively utilizing story-telling, emotional appeals, and reinforcing a positive brand image. There is sure to be a lot of talk around self-driving cars as it is, but if you add in effective advertising and segmentation strategies, their ads would have the potential to go viral.

 

References

University of Virginia. (27 Jul 2016). Under Amour’s Willful Digital Moves. VA: Darden Business of Publishing. Retrieved from https://cb.hbsp.harvard.edu/cbmp/content/64495275

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Consumer Who? Buying Behavior and Decision Making

consumer_behavior

As consumers, we have a lot of power. We have the ability to shape the world through our consumer behavior, or  “consumer activities associated with the purchase, use, and disposal of goods and services, including the consumer’s emotional, mental, and behavioral responses that precede, determine, or follow these activities” (Kardes, 2015). It is imperative for companies to understand consumer behavior in order to: identify and meet customer needs with product and services, better inform their customers and aid in decision-making, and keep customers satisfied. Thus, identifying types of consumers, consumer activities, and consumer responses play an integral part in the marketing/sale process, as well as our everyday lives.

Types of Consumers

There are many different “types” of consumers. Depending on how you look at it, there are a number of different ways to decide what type of consumer you are—this could mean consumer personality or buying behaviors. Here is my take: I identify as a conscientious shopper and a brand loyalist. I love to shop for deals! Sales and discounts catch my eye, though I still tend to shop for well-known, well-trusted brands over generic brands. For me, the type of item that I am purchasing will depend on whether or not I am willing to spend a little more money for a non-generic brand. But, once I find a “decently priced” item whose brand I feel I can trust, I will become a repeat customer. I hate change (there are too many prospective products to have to decide from!), so I stick to what I know—unless the deal is really good. Then, I may be tempted to experiment, which will typically lead to new brand loyalty.

How Buying Decisions are Influenced

When it comes to making a decision on purchasing, there are many different factors which influence our decisions. Researcher Dr. Frank Kardes (2015) deduces that purchasing decisions are influenced by “emotional, mental, and behavioral responses to goods and their marketing.” These influencers often depend on the item being purchased and when it is being purchased. I find that my buying decisions are heavily influenced by the type of purchase I am making and how I feel at the time of purchase. For example, the larger the purchase, the more time and effort I will put into researching because of the risk associated with making the purchase. I need to make sure I am making the right purchase and might feel anxious about making the decision. Like many people, I need to be able to envision myself making using the item if I made the purchase. I also consider factors like price, or if an item fits my lifestyle. I would even say I am influenced by social aspects as well. Everyone wants to be accepted in the eyes of others, so naturally, we try to make decisions based off of what others might think. Even if I really like a particular product, reading bad reviews might sway me from purchasing it because of the public perception that the product is no good.

Stages to Purchasing Decisions

So, we know that different types of consumers exist, and we know that different factors influence purchasing decisions. But what are the stages to purchasing decisions? University of Delaware marketing professor Alex Brown explains that the six stages of purchasing decisions consist of: problem recognition, information search, evaluation of alternatives, purchase decision, purchase, and post-purchase evaluation. Typically, the stage the leads up to purchasing decisions is evaluation of alternatives, which is characterized establishing criteria for evaluation. For example, if I am trying to decide to buy a specific product, I would frame what exactly it is I am seeking in a product—maybe specific features, certain pricing, packaging, etc., and then, I would weigh my different choices. This helps uncover what is most likely to fit my needs. At this point, I still have not made my decision.

The Influence of Marketing Research and Marketing Design on Purchasing Decisions

When making a buying decision, marketing research and marketing design influence people like you and I through product features like packaging and product design. They can even trigger need recognition through marketing campaigns. Consumers also are given a plethora of information from marketing that allows them to make decisions. Each aspect of a product and its marketing plan have been carefully crafted to have optimal appeal to consumers. Marketers are able to influence consumer decisions by conducting research, which allows them to “identify the criteria consumers use to evaluate brand superiority, provide information that resonates with the consumers decision, foster accurate consumer expectations through honest advertising, and present relevant contrast between the current and future choice scenarios” (DeVault, 2016). Then, coordinating marketing campaigns can be designed. Every time I have filled out a company survey while shopping, I know it is aimed at researching my buying behaviors so improvements can be made to better appeal to me specifically. For example, I work in retail as a manager, and in my department, the private label brands we carry are constantly rebranding. The packaging and merchandise appeals to certain market segments, but as styles and trends change, so does the merchandise we carry and the appearance of packaging for specific brands. The brands geared towards younger consumers, like myself, are the ones I see rebranding most often, and also the ones I see selling the best. I would even be inclined to buy them because the brands “keep up with market trends.”

Post-purchase behavior

Last, but not least, is post-purchase behavior. Everyone experiences dissatisfaction or satisfaction after purchasing a product. I would like to think that, most of the time, I am satisfied with my purchases. There have been the occasional bad purchase decision—the toilet paper that feels like sandpaper, the self-tanner that turns people orange—each of which results in negative post-purchase behavior. However, these behaviors help us as consumers to make future purchasing decisions, and in some cases, help companies to improve their products that left us feeling so dissatisfied in the first place!

 

References

Brown, A. (n.d.) Chapter Six Notes. Retrieved from https://www1.udel.edu/alex/chapt6.html

DeVault, G. (15 Sep 2016). How Market Research Influences Consumer Decisions. Retrieved from https://www.thebalance.com/how-market-research-influences-consumer-decisions-2296693

Kardes, F. (2015). Consumer Behavior, 2nd Edition. [Bookshelf Online]. Retrieved from https://bookshelf.vitalsource.com/#/books/9781305161689/