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Management Lite & Ezy 7 – Segmenting Consumer Markets

Market researchers segment the markets by looking at their descriptive characteristics, e.g. geographic and demographic. Alternatively, they may also form segments by looking at consumer buying behavior.

Geographic Segmentation – e.g. North America, Latin America, Japan, Asia-Pacific, EMEA (Europe, Middle East, Africa)

Demographic Segmentation

Demographic segmentation can be based on variables described below:

Age and life-cycle stage – e.g. apparels for babies, infants, kids, teenagers, adults

Life stage – e.g. products targeted at newlyweds

Gender – e.g. fashion, hairstyling, cosmetics, magazines

Income

Generation – In America, there are GI Generation, Silent Generation, Baby Boomers, Gen-X, Gen-Y, Millennial

Social Class

Behavioral Segmentation

Here consumers are grouped on the basis of their knowledge of, attitude toward, use of, or response to a product.

Decision roles – initiator, influencer, decider, buyer, user. Marketers can target one or more groups.

Occasions – Some products are sold year round, while others are available on special occasions such as Christmas, Chinese New Year, Valentine’s Day.

User status – nonusers, ex-users, potential users, first-time users, regular users

Usage rate – light users, medium users, heavy users

Loyalty status – hard-core loyals, split loyals, shifting loyals, switchers

Site note: I am perplexed as to how researchers identify the EMEA market. I prefer to see them as three different segments – Europe, Middle-East & North Africa, Sub-Sahara Africa.

Reference: Kotler & Keller, “Marketing Management”, 12^th edition

Dispelling the myth of American hostility against Muslims - Part II

[Part I is here]

Venerable Gunaratana, a Buddhist monk in West Virginia, wrote, “Although about 80% of Americans are Christians, and there are many fundamentalists and fanatics, there is great tolerance for other religions. I do not know of any other country in which there are so many fanatics among the majority religion, yet in which the law provides so much protection for diverse religions. Even if someone wants to start the one thing most horrifying to Christians, a devil-worshipping church, it can be done. The American Constitution is so generous, it allows anything.”

One may ask, “Why, then, does Washington not do enough to stop Israelis from encroaching the land of Palestinians?” There are many contributing factors, but I want to emphasize one – Palestinians do not vote in the US Presidential Election. US Government is more concerned in winning more votes than helping the people in a foreign land.

Muslims who are US citizens do have voting right. They make up about 3% of total US population. In fact, there are more Muslims than Jews in the States. They can influence American politics. Unfortunately, 9/11 put them on defensive. People like Zonneveld and Sheikh Omar are busy defending their faith rather than voicing out the plight of their co-religionists who suffer in the Holy Land.

Malaysian media has been bombarding us with images of injured or dead people in Palestine, Lebanon and Iraq, presumably ALL of them are victims of American atrocity. Few of us still remember the 1991 Gulf War and Balkan War. In the former US liberated Kuwait which was occupied by Iraq. In the latter Bosnian Muslims gained independence with the intervention of America. (And President Clinton got himself in trouble when US war planes bombed Chinese embassy.)

The media even used Cindy Sheheen's anti-war rally to prove their point - that Americans were 'cruel'. What they failed to mention was - the anti-war activists were peace-loving Americans!

Zonneveld tries to explain to the world that Islam is a peaceful religion. From her interview, it sounded like she had some success. I try to explain to America-haters that not all Americans are bad guys, and not all of them support the policies of their government. I do not expect to hold up against the media which is deeply anti-America. I do wish that some one may stumble across my posts, and has a better understanding of the truth.

Night at KLCC

Management Lite & Ezy 6 – Segmentation, Targeting & Positioning

Markets are not homogeneous. A company cannot serve all customers. It needs to identify which market segments it can serve effectively, and are profitable.

It Management Lite & Ezy 4, I described target marketing. An effective target marketing strategy involves the following steps:

1. Identify and profile distinct groups of buyers who differ in their needs and preferences (market segmentation).
2. Select one or more market segments to enter (market targeting).
3. For each target segment, establish and communicate the distinctive benefit(s) of the company’s market offering (market positioning).

These three steps are sometimes known as STP.

Reference: Kotler & Keller, “Marketing Management”, 12^th edition

Dispelling the myth of American hostility against Muslims - Part I

I live in an Islamic state. The United States of America has a rather negative image here. The media often portrays the US as being hostile towards Muslims.

This is a very inaccurate and irresponsible portrayal of America.

I worked in California in year 2000/01. As a Buddhist – yes, I am a minority in my country - I visited many Buddhist monasteries in the States. Some of them served single-ethnic – usually Asians. Others were multi-racial. My favorite monastery, Wat Metta, was established by Thais but now has a White abbot. Another monastery had a White abbess and most of its members were non-Asians.

I had not visited any mosque but I dare say that Muslims in the States enjoy more religious freedom than their counterparts in the Middle-east and perhaps even my country. There is no reason to believe that Washington persecuted Muslims while at the same time spared Buddhists, Hindus or Sikhs. (Some of my co-workers were Indians.)

Malaysia-born Muslim, Zuriani Zonneveld, now living in Los Angeles, told us her story when she was interviewed by a newspaper recently:

“…right after 9/11, the Friday, ICUJP (Interfaith Communities United for Justice and Peace) people went to the closest mosque which is the mosque that I attend and they circled it to protect the Friday prayer worshippers in case someone decided to harm the worshippers and in case somebody decided to bomb it, you know. And these are people of other faiths. It brings tears to your eyes. It really does. This is the America that I know. The compassionate.”

Malaysian journalist Foo Yee Ping recently interviewed an imam of Manhattan mosque. Sheikh Omar Saleem Abu-Namous, a Palestinian who has been on American soil since 1998, said, “Muslims here enjoy a great measure of freedom. There’s no interference from anyone when we go to work, worship or when we demonstrate against the attacks on Lebanon.” (SundayStar, "Not dancing to the T tune", Sep 10, 2006) Sheikh Omar also estimated that in New York City alone, there were about 100 mosques.

[Part II is here]

Simple Photography Tips

This is a photo of mine taken in Bali back in 2005 - about one month after the island was struck by terrorists. On the background is a magnificent valcano known as Gunung Batur (Mt. Batur). I requested a French tourist to take this picture for me.

People usually hold camera in horizontal position (landscape mode) when they take pictures. Additionally, they often place the 'subject' in the center of the frame. This is not always the best composition.

Back to the photo shown above. I asked the French man to compose the picture in a certain way. In turned out that he was a decent photographer and immediately understood what I wanted.

In this picture, the subject is me and the background is the valcano. The subject is on the left while the background is on the right. Should the French man placed the subject in the center, as most people would, the background would be blocked or squeezed to the edge, which isn't so great.

I also set the flash to On before passing the camera to the French man. If the flash was set to Auto, it would not have fired and the subject would be underexposed, i.e. dark.

How can this picture be improved? Well, the background is slightly overexposed, i.e. too bright. Many cameras have this function called Exposure Compensation or Exposure Value. Should I dial in a negative Exposure Value of say, -1/3, I would have got a better picture. I didn't retake the picture because I didn't want to give too much trouble to the kind French tourist.

Management Lite & Ezy 5 – Mass Marketing vs Target Marketing

In mass marketing, the seller engages in the mass production, mass distribution, and mass promotion of one product for all buyers. Kotler and Keller give two examples of mass marketing in their books – Henry Ford offered Model-T Ford in just one color – black, and Coca-Cola sold only one kind of Coke in a 6.5 ounce bottle.

Today, cars come in various sizes, designs, colors and price tags. Mass marketing is dead in auto industry and has been replaced by target marketing.

We all know that BMW and Mercedes-Benz sell only luxurious cars. Decades ago Japanese car makers sold mainly low-cost compact cars which were fuel-efficient, though today they offer wide ranges of models. Toyota, for example, sells compact Corolla and full size Camry, and it also has a luxury brand, Lexus. Each of these models appeals to different segments of customers.

We may also look at what is happening in fast food industry. MacDonald’s added salads in its menu to attract people who are concerned about their health. Burger King continues to offer high-calorie burgers and sandwiches which are targeted at different group of consumers.

Benefits of target marketing:

i. The company can presumably better design, price, disclose and deliver the product or service to satisfy the target market.

ii. The company can fine-tune the marketing program and activities to better reflect competitors' marketing.

Reference: Kotler & Keller, "Marketing Management", 12th edition

English vs Chinese

In year 2004, I was sent by my employer to Ho Chi Minh City, Vietnam. After I got my job done, I took one day off to join the Mekong River Delta tour. The tour guide was a gentleman named Pham. He told me that during colonial era, Vietnamese learned French. When the Communists took power, they learned Russian. In the past few years, however, more and more Vietnamese learn English.

Since China engaged in economic reform more than two decades ago, its GDP grows by nearly 10% every year, and is now a major economic power. Pundits predict that it will replace United States as the largest economy sometime around 2025.

The rise of China brings along the interest in learning the language of the Middle Kingdom, long considered the most difficult to master among Westerners. It is believed that proficiency of Chinese will give us advantage when doing business in China.

In my country, Malaysia, where about a quarter of the population is ethnic Chinese, conservative Chinese educationists welcome the rise of China. These people, who billed themselves as ‘Chinese education fighters’, has long lamented that younger generation did not have good command of their mother tongue. In reality, most Chinese Malaysians speak, read and write Chinese, but the educationists are less than impressed. Now, with the rise of China, they hope that younger generation will finally take initiative to master the language. One of them boldly predicted that by 2020, Chinese would be ‘on par’ with English as the most important languages of the world.

On par with English? I am afraid he will be disappointed.

There is no doubt Chinese is becoming more widely spoken, but the same goes for English. People in former French Indo-China now learn English as their second language. I haven’t been to Eastern Europe, but I believe the people of these former Communist states are also dropping Russian in favor of English. Even the residents of Beijing are busy learning to speak English as a preparation for the 2008 Beijing Olympiad!

We are now living in a globalized world. We need a lingua franca in order to communicate with people from all over the world. English fulfills the need.

The writing system of Chinese is its Achilles’ heel. It is difficult to learn, and typing characters on QWERTY keyboard is a hassle. Over the decades, a Romanization standard, known as Hanyu Pingyin has been developed. Under Hanyu Pingyin, Peking became Beijing and Canton became Guangzhou. But make no mistake – Hanyu Pingyin cannot replace Chinese characters. Many foreigners learn to speak Mandarin based on Hanyu Pingyin, but they can’t read or write characters. Mandarin is becoming more widely spoken, but the use of ‘written Chinese’ probably will still be limited to China, Taiwan and Chinese society elsewhere.

A lot of people are also unaware of the other rising giant – India. British magazine, The Economist, described India as what China was 15 years ago. (The Economist, June 3^rd – 9^th 2006 issue) Today parents want their children to study Chinese in anticipation that one day they may work in Shanghai. Don’t be surprised if they end up in Bangalore.

As a Chinese Malaysian, I encourage my fellows to learn their mother tongue. But I also remind them, “Don’t be handicapped by your English.”

My MBA Classmates

Management Lite & Ezy 4 - Mission Statement

Mission Statement

American Marketing Association defines mission statement as,

“An expression of a company’s history, managerial preferences, environmental concerns, available resources, and distinctive competencies to serve selected publics. It is used to guide the company’s decision making and strategic planning.”

Kotler & Keller state that good mission statements have three major characteristics:

i. They focus on a limited number of goals.

ii. They stress the company’s major policies and values.

iii. They define the major competitive spheres within which the companies will operate.

Let’s look at some examples.

eBay

“We help people trade practically anything on earth. We will continue to enhance the online trading experiences of all – collectors, dealers, small businesses, unique item seekers, bargain hunters, opportunity sellers, and browsers.”

Google

“Google’s mission is to organize the world’s information and make it universally accessible and useful.”

In my MBA class, I learned that mission statements are utmost import. They are the beginning of everything, much like Genesis or Big Bang. A company which does not have a good mission statement will fail. A company which does not follow closely its mission statement will also fail. However, I notice that Johnson & Johnson doesn’t have a mission statement. What it does have is, instead, our credo…

Our Credo

Dell is guided by Soul of Dell rather than a mission statement…

Soul of Dell

Likewise, Canon has the philosophy of Kyosei…

Kyosei

I also wonder if mission statement will become an obstacle when a company attempts to diversify.

So, is mission statement indispensable???

Reference: Kotler & Keller, "Marketing Management", 12th edition