English_broi_4_2013.indd

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Elena Kostadinova*
1. Introduction
Summary:
Segmentation has been a central fundamental to traditional marketing for concept in marketing theory and practice decades. It is believed that these three for decades. Since F.B. Evans` controversial activities, performed in that order, describe article "Psychological and objective factors the content of strategic marketing. Two main in the prediction of brand choice: Ford versus ideas underlie the STP concept: first, markets Chevrolet" (1959) several studies have been are not homogeneous but "differentiated" conducted in attempt to capture meaningful relationships between brand choice and second, the needs of individual segments psychographic, demographic and behavioral should be met by developing an appropriate variables. The idea that different brands appeal to different profiles of customers concept of product differentiation). With is intuitively adopted by practitioners and the rise of the concept of positioning in the academics as conventional marketing interpretation of Ries and Trout, emphasis emphasizes the importance of segmentation, brand differentiation and positioning concept of market segmentation to the to marketing success. But does brand idea of brand segmentation and the idea of preference really discriminates between product differentiation moved to the idea of customers? The purpose of this paper is to image (imaginary) differentiation. This idea present the results of an empirical study of inspires a natural tendency of managers to the Bulgarian market for 1) four categories divide customers into "ours" and "others", of fast moving consumer goods and 2) three which in turn involves the search of different categories of durable products. The main positioning lines in order to differentiate their objective of the study is to examine the brand from that of their competitors. But is existence of brand level segmentation of the brand segmentation not just a manifestation of market segmentation? And if we find significant differences in the client bases Key words: segmentation, brand
of Mercedes and Volkswagen, for instance, can we attribute those differences to the brands themselves or to their belonging to JEL classification: M3
* Senior Assistant Professor, Department of Marketing and Strategic planning, University of National and World economy, Bulgaria, 1700 Sofia, email address: ekostadinova@unwe.bg Articles
The first study to draw attention to the paper presents the results of a study of the Bulgarian markets of four widely used variables in predicting brand choice categories of fast moving consumer goods was made by Franklin B. Evans, who in – beer, yogurt, sausages and toothpaste and three categories of durable products automobile brand image of two of the most – mobile phones, laptops and cars. The popular brands by that time – Ford and following principles underlie the selection of Chevrolet and their owners` personality. these particular categories: 1) maturity of The study compared the abilities of the market (the presence of multiple and psychological and objective variables to established brands, free competition); 2) predict automobile brand choice showing that experience of the customers (knowledge of measures, whether separately or combined, the category, clear preferences); 3) variety were only weakly related to the ownership (the categories should be representative of the market); 4) involvement (the categories strong debate as by that time the purchase selected should have different levels of of a car had a deeper symbolic meaning to customer involvement); 5) the presence of Americans and companies strived to build strong marketing efforts for positioning and distinctive images of their brands. Since differentiation of the brands. The markets of these categories in Bulgaria have mostly existence of predictive relationship between brand choice and different sets of variables, previous research focuses on stable, well- the USA. One of the purposes of the study the data of BMRB International’s Target is to examine if previous findings about Group Index for 42 varied industries in the United Kingdom, the results of which testify to the lack of brand segmentation. Other studies on the subject include Geraldine 2. Main Hypothesis
Fennel, Greg Allenby et al. presented in their articles "The Effectiveness of that there is no brand level segmentation for Explaining Brand and Product Category – brands` profiles do not differ in ways Use" (2003) concluding that demographics and general descriptors are not appropriate for explaining relative brand preference as existence of brand level segmentation is they describe what type of person is more whether a manifestation of hidden market likely to use a certain product category segmentation or an exception to the rule.
but do not provide information about the motivating conditions that lie behind the with the help of the following supporting preference of a particular brand. "No brand level segmentation? Let us not rush into segmentation - similar brands in terms of judgment" (Marketing research, 2002). This price, brand penetration and market share Articles
would have similar demographic profiles of brand) for each variable. The magnitude of their customers; H2: There is no brand level the differences between the profiles was segmentation - similar brands in terms of estimated by calculating the mean absolute price, brand penetration and market share deviation (MAD) which was preferred to the would have similar psychographic profiles of traditional standard deviation as a more stable indicator of dispersion for non-normal 3. Methodology
distributed data. The psychographic profiles of the brands were outlined through the The MSoD1 (Many Sets of Data) system for psychographic segmentation approach was adopted for the purposes of this study. The MSoD approach requires the Jelev and which is based on the following three dimensions: 1) Buyer power (Low – integration and comparison of several sets of data, drawn from different populations. goods); 3) Orientation (Saving - Spending). This approach contrasts with the traditional The system includes 30 variables, such as "I like trying out the new things on the market, "I which lead to instant resolutions but do not budget well when I go shopping", "I consider contribute to theory building or have any myself financially sound", measured on 5-point Likert agree-disagree scales. The analysis also included a set of 18 variables comprised the use of several samples which studied the respondents` lifestyles, of data for seven categories of products beliefs and consumer behavior such as "I collected in three waves. The analysis of the try to live healthy", "The opinions of others data was separated into two parts – analysis of the psychographic profiles of each brand and analysis of the demographic profiles of through personal face-to-face interviews. the brands. Since the markets of the four categories of fast moving consumer goods following the age and gender distribution can be seen as repertoire, the subsamples of of the adult population in Sofia and major users of each brand consist of respondents cities in Bulgaria. The sizes of the samples who have indicated that 1) the brand is the for the two categories of FMCG and durable one that they use most frequently or 2) is products are accordingly 1082 and 870. Both among the brands the respondent uses most samples consist of different respondents frequently. The study of the three categories and data collection is sufficiently remote of durable products included current users of in time, which makes them suitable for the each brand. The study data was processed implementation of the research approach.
by the methods of descriptive statistics. 4. Results
Both demographic and psychographic profiles of each brand were compared to In summary, the results were positive and the average percentage profile (the average supported the hypotheses. The profiles of 1 See Ehrenberg A. and Bound J., "Turning data into knowledge", Chuck Chakrapani (Ed.) "Marketing research – state of the art perspectives", 2000 Articles
the users of competing brands did not differ relatively small. In both studies, most of significantly. The deviations from the average the significant differences were found for psychographic profile larger than five above- and below-average priced brands. percentage points were 16% for the durable Logically, the users of expensive brands products and 26% for the FMCGs. Although in general few differences were found to financially reasonable, more open to trying expose the existence of meaningful brand new products, eager to pay more for quality segmentation, some grouping was observed items and bring more entertainment. Users of cheaper brands on the other hand, tend Bulgaria. At first, it appears that the profiles to prefer the old established brands to the of the German Volkswagen and Opel new ones and deprive themselves of many brands are in tune with their popular image things to live. They do not tend to buy things that is being imposed by their advertising they do not need. Similar brands in terms campaigns – according to the results of our study, two brand owners are more likely to share were not found to have significantly be conservative and less inclined to take different psychographic profiles of their risks than the owners of another popular users. These relationships can be seen in brand in Bulgaria – Peugeot. However, figure 1 which compares the user profiles these differences cannot be attributed to of 8 popular beer brands along Dimension the brands` differentiation and segmentation 1 (Openness). Similar groupings were found but to some specifics of the Bulgarian car with the toothpaste category where origin- market, in which only a small portion of the population buys new cars and German brands are known for their durability and reliability. French cars on the other hand are perceived brands – for the FMCGs category only 15% as too fragile and non-suitable for Bulgarian of the deviations from the average profile French cars buy mostly newer cars. To sum and 12% for the durable products. It is also up the situation, the car park of Volkswagen consists of older and respectively cheaper penetration in the higher income groups and vise versa. Table 1 summarizes the results for though the two brands are competing in the six psychographic variables for the users of same class. So, we may assume that behind seven beer brands and Table 2 compares the brands` demographic profiles against each lies a well known demographic and market other and against the average brand. Zagorka, priced (standard class) national brands and users of the more expensive foreign Ariana is a cheaper mass brand (economy brands of beer and users of national class). Table 3 and 4 summarize the results average and low-priced brands although for the same variables for the category of the absolute monetary difference between laptop computers. Differences higher than five the prices of the two groups of brands is percentage points have been highlighted.
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Fig. 1. Percentage of beer users who have agreed or completely agreed with the statements reflecting Dimension 1 (Openness) Table 1. Deviations from the average profile for six psychographic and lifestyle variables (Beer) When a new
I usually
I consider
product comes
uncommon
I spend too opinion of
Beer brand
out I am among
much time
others is
financially
the first to
buy things I
important
shopping
don`t need
Average
MAD
(All brands)
Becks has 11% more users than the average brand who have agreed with the statement "It is not uncommon for me to buy things I don`t need". Kamenitza has 6% less of the users of Heineken belong to the low users than the average brand. The mean absolute deviation for the statement "I consider myself financially sound" for all brands is 2. between the profiles of competing brands is consists of 53% male users and 47% female also evidenced by the low values of the mean users. Zagorka has 51% male users and absolute deviation as shown in Table 5.
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Table 2. Brand profiles by gender, age and income (Beer) Gender (%)
Income (%)
Beer brand
The average
Table 3. Deviations from the average profile for six psychographic variables (Laptop computers) Table 4. Brand profiles by gender, age and income (Laptop computers) Gender (%)
Income (%)
The average
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Table 5. Mean absolute deviations for the seven product categories Demographic variables
Psychographic variables
Product category
Lifestyle variables (MAD)
All categories
5. Conclusions
might have customers which significantly differ in terms of social class, lifestyle and personal features and demographic differ mostly by their size and market characteristics does not necessarily penetration2 and users are usually split-suggest that we can predict consumer loyal to a set of brands3. It is also known that most customers do not perceive their thing as "our customers"? Competing preferred brands as "unique", nor do they bases and are perceived as substitutable type of association4; the users of small brands have similar attitudes against the segmentation, e.g. brands from different 2 See Ehrenberg, A.; Goodhardt, G.; Barwise, P. (1990) "Double Jeopardy Revisited", Journal of Marketing, Vol.54, no. July, p.82-91. 3 See Brown G. (1952-1953) "Brand Loyalty – Fact or Fiction", Advertising Age, 23 June 1952 – January 1953 (series).
4 See Romaniuk, J.; Gaillard, E.; "The relationship between unique brand associations, brand usage and brand performance: analysis across eight categories", Journal of Marketing Management, Volume 23, Issue 3-4, 2007.
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than their competitors but to be regarded 6. Scope of the Study and Possible
as a good example of their category. We Follow-Up Research
can no longer "put a golden stripe and One of the limitations of the study is the said, therefore creative advertising and consolidate the results achieved so far. no longer need to restrict their efforts included – only seven. Further research should cover services markets, financial vast and attractive mass market is being products, powerful advertising, more markets for example, as those are not stable and fully structured, products vary That`s why, it is recommendable be tested for the existence of brand that companies: 1) define the most segmentation – such economic situation important attributes that customers seek in a product; 2) deliver these attributes, meeting and where it is possible, more intelligent and resourceful buyers exceeding customers` expectations looking for better value for their money, about the product itself 3) examine often overcoming their habitual shopping and follow closely the dynamics of behavior. Other variables might also be consumers` priorities – the mass market is more volatile and difficult to predict and things that are most important sought by the customers, motivating References:
so they can include them in their buying Brown, G. (1952-1953) Brand Loyalty – Fact repertoire; 5) do not impose unnecessary or Fiction, Advertising Age, 23 June 1952 – Articles
Cohen, J., Toward an Interpersonal Katrandjiev, H., Media planning of the ad- Theory of Consumer Behavior, California Ehrenberg, A., Goodhardt, J., Barwise, Mladenova, G., Strategichesko Marketin- T., Double Jeopardy Revisited, Journal of govo Planirane, Universitetsko Izdatelstvo Marketing, Vol. 54, p. 82-91, July, 1990.
Evans, F., Ford Versus Chevrolet, Journal of Romaniuk, J.; Gaillard, E.; The relationship between unique brand associations, brand Evans, F., Psychological and objective across eight categories, Journal of factors in the prediction of brand choice, Marketing Management, Volume 23, Issue Fennell, G., Allenby, G.M. (2002), No Sharp, B., How brands grow – what brand level segmentation? Let’s not rush to judgment, Marketing Research, Vol. 14 Fennell, G., et al., The Effectiveness of B., А differentiated brand should appeal Demographic and Psychographic Variables for Explaining Brand and Product Category Use, but it doesn’t!, Australian & New Zealand Quantitative Marketing and Economics, 2003.
Jelev, S., Pozitsioniraneto - mezhdu zhelanoto, vuzhmozhnoto i deistvitelnoto, Universitetsko Izdatelstvo "Stopanstvo", 2008.
Brand Preference: The Roles of Objective Jelev, S., Marketingovi izsledvaniya, Environment and Motivating Conditions, Universitetsko Izdatelstvo "Stopanstvo", 2008.

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