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Advertising and Brand Promotion,

Sixth Edition

Thomas C. O’Guinn, Chris T. Allen,

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After reading and thinking about this chapter, you will be able to do the following:

1 Explain the process known as STP marketing.

Describe different bases that marketers use to identify target

2 segments.

© Haywiremedia/Shutterstock

Introductory Scenario:

How Well Do You “Tolerate Mornings”?

You know by now that advertising in its many forms is always sponsored for a reason. Generally that reason has something to do with winning new customers or reinforcing the habits of existing customers.1 However, advertising has no chance of producing a desired result if we are unclear about who we want to reach. We need a target audience.

One special problem that most companies face is reaching potential custom- ers just as they are experimenting in a product category for the first time. This is a pivotal time when one wants the consumer to have a great experience with your brand. So, for example, if we are Gillette and seek to market anything and every- thing associated with shaving, we will want one of our shavers in the hands of the consumer the first time he or she shaves. First-time users are not heavy users, but they represent the future. If we don

are out of business. Developing advertising campaigns to win with first-time users is often referred to as point-of-entry marketing. More on that later. . .

Folgers does a huge business in the coffee category but can take nothing for granted when it comes to new users. Thus, the marketers of Folgers must launch campaigns to appeal specifically to the next generation of coffee drinkers. These of course would be young people just learning the coffee habit. Attracted by coffee titans like Starbucks and Dunkin

to start brewing coffee at home, Folgers sees its big chance to get in your cupboard. To illustrate, the Folgers brand team launched an advertising initiative to attract

just-graduated 20-somethings. When young adults move into the “real world” and take that first job with a new apartment in a strange city, they are primed to develop the coffee habit. Folgers aspires to be the brand of choice for this target as they potentially commit to a morning brew-it-yourself coffee ritual. We all know that mornings are tough, so Folgers just wants to make them tolerable. But how does Folgers, your grandparents brand, make a connection with a new generation of cof- fee drinkers? Tried and true slogans (“The best part of waking up is Folgers in your cup”) and 30-second TV spots just wont do.

Working with its ad agency Saatchi & Saatchi, the Folgers brand team found another way. It started with the premise that mornings are hard, filled with emails and bosses making demands and those darn “morning people” (who for some bizarre reason seem to love sunrises). Folgers exists to help a person tolerate morn- ings, and especially to toler- ate those morning people.

A short film, titled some- thing like “Happy Mornings: The Revenge of the Yellow People,” was produced to show Folgers as your first line of defense when the fanatical Yellow People try to invade your space first thing in the morning (that

out of the sunrise and across the lake in Exhibit 6.1).

1. Christie L. Nordhielm, Marketing Management:The Big Picture (Hoboken, NJ: John Wiley & Sons, Inc., 2006).

© Procter & Gamble. Used by permission

© Procter & Gamble. Used by permission

1

Exhibit 6.2 Your best defense when the Yellow People show up unannounced.

(per Exhibit 6.2) where other tools (boss-tracker, auto emails, wake-up calls, screen- saver) for making mornings go better were available. The campaign also included print ads code-named “Dreamscapes,” reflecting that frightful moment just before dawn when the creepy Yellow People are planning their attack.

The provocative aspect of the Yellow People film is that zero dollars were spent on media. That

(Adcritic, BestadsonTV.com, and Boards) where 20-somethings had their way with it. Chatter quickly spread across the blogosphere, website hits increased, and the film was soon posted on YouTube (receiving 4 out of 5 stars and more than 300,000 viewings). This little sample of YouTube comments suggests that the Folgers team was on the right track in their effort to engage new users:

“I now watch this every morning to wake up, cause it’s just so damn funny and awe- some that it wakes me right up. If I ever get rich I’m going to hire a bunch of people to dress like happy yellow people and come wake me up with that song every morning.” “I am without speech at the sheer brilliance. If commercials were like this. . . I

wouldn’t skip them on the DVR.”

“I took one look at that video and went straight into the kitchen and made a cup of coffee at 9:30 pm, because after all, I can sleep when I am dead!”

Many companies large and small share the problem we see embedded in the Folgers example. Simply stated, we must be clear on who we are trying to reach and then on what we can say that will resonate with them. Companies address this challenge through a process referred to as STP marketing. It is a critical process from our stand- point because it leads to decisions about who we need to advertise to, what value propo- sition we want to present to them, and how we plan to reach them with our message.

STP Marketing and the Evolution of Marketing Strategies.

The Folgers example illustrates the process that marketers use to decide who to advertise to and what to say. The Folgers brand team started with the diverse market of all possible coffee drinkers, and broke the market down by age segments. They then selected just-graduated 20-somethings as their target segment. The target seg- ment is the subgroup (of the larger market) chosen as the focal point for the market- ing program and advertising campaign.

212

Exhibit 6.3 Laying the foundation for effective advertising campaigns through STP marketing.

Part 2: Analyzing the Environment for Advertising and Integrated Brand Promotion

Segmenting

Breaking down diverse markets into manageable segments

Targeting

Choosing speciic segments as the focal point for marketing efforts

Positioning

Aligning the marketing mix to yield distinctive appeal for the target segment

Markets are segmented; products are positioned. To pursue the target segment, a firm organizes its marketing and advertising efforts around a coherent positioning strategy. Positioning is the process of designing and representing one

service so that it will occupy a distinct and valued place in the target consumer mind. Positioning strategy involves the selection of key themes or concepts that the organization will feature when communicating this distinctiveness to the target segment. In Folgers

it

that just-graduated 20-somethings can relate. Folks on the Folgers team assumed that they would not convert this segment with an old-fashioned slogan like “The best part of waking up is Folgers in your cup.” And of course we see in this exam- ple a skillful, low-cost approach to getting the message in front of the target: Let YouTube do it!

Notice the specific sequence illustrated in Exhibit 6.3 that was played out in the Folgers example: The marketing strategy evolved as a result of segmenting, targeting, and positioning. This sequence of activities is often referred to as STP marketing, and it represents a sound basis for generating effective advertising.2 Although no for- mulas or models guarantee success, the STP approach is strongly recommended for markets characterized by diversity in consumers

with any significant degree of diversity, it is impossible to design one product that will appeal to everyone, or one advertising campaign that will communicate with everyone. Organizations that lose sight of this simple premise run into trouble.

Indeed, in most product categories one finds that different consumers are look- ing for different things, and the only way for a company to take advantage of the sales potential represented by different customer segments is to develop and market a different brand for each segment. No company has done this better than cosmetics juggernaut Estée Lauder.3 Lauder has more than a dozen cosmetic brands, each devel- oped for a different target segment. For example, there is the original Estée Lauder brand, for women with conservative values and upscale tastes. Then there is Clinique, a no-nonsense brand that represents functional grooming for Middle America. Bobbi Brown is for the working mom who skillfully manages a career and her family and manages to look good in the process, just like the real Bobbi Brown.4 M.A.C. is a brand for those who want to make a bolder statement: Its spokespersons have been

2.For more on STP marketing, see Philip Kotler, Marketing Management (Upper Saddle River, NJ: Prentice Hall, 2003), chs. 10, 11.

3.Nina Munk, “Why Women Find Lauder Mesmerizing,” Fortune, May 25, 1998, 96–106.

4.Athena Schindelheim, “Bobbi Brown: How I Did It,” Inc. Magazine, November 2007, 110–112.

Defense has approved, endorsed, or authorized this product; Courtesy, Hard Candy

Exhibit 6.4 The U.S. Armed Forces, including the Marines, are very aggressive and sophisticated advertisers. Note how they position themselves with their advertising slogan: The Few, The Proud, The Marines (www.marines.com).

RuPaul, a 6-foot-7-inch drag queen; Boy George; Missy Elliot; Linda Evangelista; and a host of others. Prescriptives is marketed to a hip, urban, multiethnic target segment, and Origins, with its earthy packaging and natural ingredients, celebrates the connection between Mother Nature and human nature. These are just some of the cosmetics brands that Estée Lauder has marketed to appeal to diverse target segments. Check out the

companywww.elcompanies.com.

We offer the Estée Lauder example to make two key points before moving on. First, the Folgers case may have made things seem too simple: STP marketing is a lot more complicated than just deciding to target a particular age group. Age alone is rarely specific enough to serve as a complete identifier of a target segment. Second, the cosmetics

ple shows that many factors beyond demographics can come into play when trying to identify valid target segments. For these diverse cosmetics brands, we see that considerations such as attitudes, lifestyles, and basic values all may play a role in identifying and describing customer segments.

To reinforce these points, examine the two ads in Exhibits 6.4 and

6.5.Both ran in Seventeen magazine, so it is safe to say that in each case the advertiser was trying to reach adolescent females. But as you compare these exhibits, it should be pretty obvious that the advertisers were really trying to reach out to very different segments of adolescent females. To put it bluntly, it is hard to imagine a marine captain wearing Hard Candy lip gloss. These ads were designed to appeal to different target segments, even though the people in these segments would seem the same if we considered only their age and gender.

Neither the United States Marine Corps nor any other component of the Department of

Exhibit 6.5 Hard Candy comes by its hip style perhaps in large part because of its uninhibitedly energetic founding by Gen-Xer Dineh Mohajer, who was unhappy with the choices traditional cosmetics firms offered her and her market demographic (www.hardcandy.com). There must be something in that California air. Internet technology company Cisco co-founder Sandy Lerner created Urban Decay (www.urbandecay.com)—another alternative for the fashion-mad—out of a similar dissatisfaction with the offerings of companies like Lancôme (www.lancome.com).

Beyond STP Marketing.

If an organization uses STP marketing as its framework for strategy development, at some point it will find the right strategy, develop the right advertising, make a lot of money, and live happily ever after. Right? As you might expect, it

STP marketing yields profitable outcomes, one must presume that suc- cess will not last indefinitely. Indeed, an important feature of marketing and advertising—a feature that can make these professions both ter- ribly interesting and terribly frustrating—is their dynamic nature. To paraphrase a popular saying, shifts happen—consumer preferences shift. Competitors improve their marketing strategies, or technology changes and makes a popular product obsolete. Successful marketing strategies need to be modified or may even need to be reinvented as shifts occur in the organization

To maintain the vitality and profitability of its products or services, an organization has two options. The first entails reassessment of the segmentation strategy. This may come through a more detailed exami- nation of the current target segment to develop new and better ways of meeting its needs, or it may be necessary to adopt new targets and posi- tion new brands for them, as illustrated by the Estée Lauder example.

The second option is to pursue a product differentiation strategy. Product differentiation focuses the firm

creating differences for its brands to distinguish them from competitors offerings. Advertising plays a critical role as part of the product differenti- ation strategy because often the consumer will have to be convinced that the intended difference is meaningful. For example, Schick

Gillette

of three. But does that fourth blade really deliver a better shave? How

www.wellsfargo.com, Used with permission. Ad no longer valid as an offer of product.

creamer every week. (Yes, thats more than 200 jars a year!) Now thats a heavy user. Conventional marketing thought holds that it is in Coffee-mates best interest to get to know heavy users like Paula in great depth and make them a focal point of the companys marketing strategy. On a side note that the Folgers brand team would love, Baumgartner explained that she got her start as a regular coffee drinker at age 21 in her first full-time job (i.e., she was a just-graduated 20-something.) Dont know if she now brews Folgers…

Although being the standard wisdom, the heavy-user focus has some potential downsides. For one, devoted users may need no encouragement at all to keep consum- ing. In addition, a heavy-user focus takes attention and resources away from those who do need encouragement to purchase the marketer

heavy users may differ significantly from average or infrequent users in terms of their motivations to consume, their approach to the brand, or their image of the brand.

Another segmentation option combines prior usage patterns with commitment levels to identify four fundamental segment types—brand-loyal customers, switchers (or variety seekers), nonusers, and emergent consumers.7 Each segment represents a unique opportunity for the advertiser. Nonusers offer the lowest level of opportunity relative to the other three groups. Brand-loyal users are a tremendous asset if they are the advertisers customers, but they are difficult to convert if they are loyal to a competitor.

Switchers or variety seekers often buy what is on sale or choose brands that offer discount-coupons or other price incentives. Whether they are pursued through price incentives, high-profile advertising campaigns, or both, switchers turn out to be a costly target segment. Much can be spent in getting their business merely to have it

disappear just as quickly as it was won.

Emergent consumers offer the organization an important business opportunity. In most product categories there is a gradual but constant influx of first-time buyers. The reasons for this influx vary by product category and include purchase triggers such as puberty, college gradua- tion, marriage, a new baby, divorce, a new job, a big raise, or retirement. Immigration can also be a source of numerous new customers in many product categories. Generation X attracted the attention of marketers and advertisers because it was a large group of emergent adult consumers. But inevitably, Generation X lost its emergent status and was replaced by a new age cohort—Generation Y—who took their turn as advertisers darlings. 8

Emergent consumers are motivated by many different fac- tors, but they share one notable characteristic: Their brand preferences are still under development. Targeting emergents with messages that fit their age or social circumstances may produce modest effects in the short run, but it eventually may yield a brand loyalty that pays handsome rewards for the dis- cerning organization. Developing advertising campaigns to win with first-time users is often referred to as point-of- entry marketing. Sound familiar? This was exactly Folgers rationale in targeting just-graduated 20-somethings. As another case in point, banks actively recruit college students who have limited financial resources in the short term, but excellent potential as long-term customers. Exhibit 6.6 shows an ad from Wells Fargo Bank with an appeal to emergent consum- ers at the University of Arizona.

7.This four-way scheme is detailed in David W. Stewart, “Advertising in Slow-Growth Economies,” American Demographics (September 1994), 40–46.

8.Bonnie Tsui, “Generation Next,” Advertising Age, January 15, 2001, 14, 16.