BRAND VALUE SEGMENTATION

When the term market segmentation is used, most of us immediately think of psychographics, lifestyles, values, behaviors, and multivariate cluster analysis routines. Market segmentation is a much broader concept, however, and pervades the practice of business throughout the world. What is market segmentation? At its most basic level, the term market segmentation refers to subdividing a market along some commonality, similarity, or kinship. That is, the members of a market segment share something in common. The purpose of segmentation is the concentration of marketing energy and force on the subdivision (or the market segment) to gain a competitive advantage within the segment. Its analogous to the military principle of concentration of force to overwhelm an enemy. Concentration of marketing energy (or force) is the essence of all marketing strategy, and market segmentation is the conceptual tool to help achieve this focus. The purpose of market segmentation is to identify the taxonomy of consumption patterns by dividing a market into several homogenous submarkets. Marketers can formulate product strategy, product position, tailored specifically to the demands of these homogenous sub markets. Homogenous sub-markets are defined by the predetermined segmentation variables. Traditional demographic Variables, such as age, gender, income and education, can be used to explain the characteristics of the sub-markets and clasify the key factor of a market segment. Traditional demographic variables, however, cannot identify the compelete characteristics of the sub markets because consumers in the same demographic group have very different psychographic makeup. Based on the differentiation of consumers brand preference, this study divides consumers into homogenous groups using psychographic variables through the classification in VALS(value and life styles) and LOV(list of values) systems and demographic variables and then compare the relative usefulness these two different segmentation variables to marketers.

Brand Preference and segmentation

Markets may be effectively segmented through statistical analysis of brand preference and selection. Single brand preference can be regarded as a measure of loyality, which also provides valuable information for customer management and market segmentation. Several researchers,

using the decision variables of consumersbrand preference, utilized a joint estimation approach to identifying sub markets. Consumer values give marketers a direction on how best to satisfy their customer needs and increase brand preference. What is crucial to the successful world-renowned brands is to segment customer groups and implement brand-based strategies for enhancing the company's competitiveness. Take South Korea Telecom for example, in the course of implementing its brand-based strategies, the company subdivides all customers into different groups by age (age groups with a five year span) and provides personalized and branding services accordingly: TTL, a mobile telephone service designed for the young and vibrant group aged from 19 to 24, TING for teenagers, UTO for professionals of 25 to 35 years old with high consuming capacity, and CARA customized for married females. This kind of market segmentation is really a big success, making all customers have a sense of belonging and enjoyment of their own brands.

Up until now, a single telecom product or service that can meet all customers' requirements and expectations has not been developed; therefore, customer churn, for whatever reason, is an inevitable outcome. As such, differentiated services emerge as the times require. The differentiated services, on the basis of customer requirements, are developed by splitting and assorting customers and products, giving full play to resource advantages and allocating Capex rationally. In such a case, market segmentation is playing a prominent role in molding a service brand.

For widely recognized companies such as P&G and Unilever, their practices of segmenting customer groups and implementing brand-based strategies for enhancing the company's competitiveness are noted as the "model of the industry". Although telecom service providers do not produce specific tangible products, satisfying diverse customer requirements is what they need to achieve in their operations. If they turn a blind eye to customer requirements and ignore the brand building, they will lose their advantages against the competition very quickly