The concept of marketing segmentation implies that the business or the company will evaluate the market and segment it in the groups of those who are most likely to become their customers. Compared to the mass-market strategies, marketing segmentation does not treat the whole market as potential clients (Weinstein 7). If a company chooses segmentation, it needs to develop unique techniques that will be used to attract the target market (Weinstein 7). In the case of HSCB, the bank needed to review their target market carefully, segment it according to variables in each country, choose the right techniques that would target the consumers efficiently, and position itself according to its slogan the worlds local bank .
HSBC is not the first company that adjusts itself to the local features and culture: other corporate giants such as Google, Starbucks, McDonalds, etc. have also used this approach to implement target marketing efficiently. Segmentation strategies can vary and include undifferentiation (no targeting), concentration or focus on a single niche, differentiation (several market arenas), and atomization (one-to-one marketing strategy) (Weinstein 8). It is evident that the company could not use undifferentiation because mass-marketing strategies would not apply to the specific local approach that the bank aimed to use. Therefore, marketing segmentation and targeting were the only options that the bank could use. Nevertheless, there is a risk in the HBSCs position as the worlds local bank as it has to deal with thousands of various markets in tens of different countries.
Segmentation of each market in every country where the bank operates can easily fail if the bank does not review the target market with the greatest attention. Moreover, each of the markets will require specific targeting strategies that can be completely opposite in two different countries. Moreover, even if the bank selects a successful strategy, it is quite possible that some consumers will find it unappealing. At last, market positioning of the company will also require serious investment and understanding of the local markets, which can be very challenging if one has to advertise its business in more than 85 countries. Nevertheless, the bank seems to have a profound approach to target market because it implements completely different strategies depending on the city (New York vs. Hong Kong).
As to the question about the HBSCs recent campaign, it can be said that it reflects the banks aim to establish close relations with its international customers and, at the same time, stress the multiple viewpoints that these customers might have. Nevertheless, the pictures printed as ads might not be as successful as it appears. Since the banks customers can only be citizens that are 16 years old (or older/younger, depending on the country), it seems unclear why the bank had decided to put a picture of a childs accomplishment. On the one hand, it seems that the bank tried to target children as their customers. On the other hand, this ad probably had focused on the customers who had children of the same age and saw the success of their children as their accomplishment as well. Other pictures that were also used had focused on different customers, including diesel heads, environmentalist, those interested in science or fashion, etc. Therefore, the banks recent campaign does resonate with the target audience, presenting different viewpoints and beliefs.
BMW the Ultimate Driving Machine
The German company BMW is a prominent example of successful market segmentation as it has created different types of cars for different consumers. Market segmentation implies that the company does not aim to use general mass-market strategies but rather segment the market into groups and decide, according to the consumers age, income, life cycle, local features, and other variables, what strategy is the best one and what product these customers are more likely to purchase (Akwetey 93). BMW has used segmentation in a particular way: it manufactured and advertised different types of cars according to the customers that it had segmented earlier. For example, yuppies of the 1990s were presented with excellent, fast, and sporty sedans that could reflect their life and approach to work. The 7 series, however, targeted the upper conservatives that were not interested in sporty cars but rather preferred comfortable and reliable vehicles.
Although BMW is a prestigious and luxury brand, it had also provided cars for the modern mainstream group people who would generally prefer other cheaper brands to BMWs cars. One could assume that the products offered by BMW are too different from each other and focus only on the specific target market. Nevertheless, one immediately recognizes a BMW car when one sees it; therefore, the company manages to find a particular approach to each of its markets, but at the same time, it never forgets to present its cars as the ultimate driving machines . These approaches are the pros of the BMWs selective target marketing. I do not believe that the companys strategies need to be improved. On the one hand, the company could provide more lower-priced cars to the customers with moderate income. On the other hand, BMW is a company that specializes in luxury and prestige cars, and it will seem strange if it decides to present simpler vehicles.
It seems unreasonable to blame BMW for too selective targeting during the global financial crisis of 2007-2008. The company was not the only one that had to face the decrease in revenues during this period. One should not forget that the corporation produces prestigious products that are mostly affordable for the members of the upper class only. The crises lead both to the decline in sales and revenues as well as stop or even reverse of the wealth grow. Therefore, those who could be described as BMWs potential customers probably regarded the cars of the company as too expensive to purchase during the recession.
Moreover, even the wealthiest customers would approach such purchase carefully because business investment usually declines during a financial crisis, also leading to a significant decrease in consumption (Akwetey 132). The drop in sales, however, was not as severe as one could predict. The segmentation strategy of the company remained the same during the recession years, but it is highly unlikely that it was the reason why BMW experienced a decline in its sales. It could have tried to retarget the market and manufacture vehicles that would be less luxurious and more affordable. However, if production of automobile series takes approximately several years, it would be entirely unreasonable to reframe the product lines due to the recession as it only lasted for two years. Therefore, BMW met a right decision, and the decrease in sales was connected to the global recession but not to their segmentation strategy.
Works Cited
Akwetey, Lawrence Mensah. Business Administration for Students & Managers. Trafford Publishing, 2011.
Weinstein, Art. Handbook of Market Segmentation: Strategic Targeting for Business and Technology Firms. Psychology Press, 2013.
The rules and laws of the business world differ from the laws that rule the lives of ordinary people. However, the unifying point in both is trying to benefit from one’s activities. This trying can be observed in individual people and in business companies. The latter implement various policies to attract more customers, to make their products more accessible and cheaper (Kotler & Keller, 2008). Some companies focus on segmentation as a means of achieving this goal (Hague, 2009; Kotler & Keller, 2008), while others keep to the point of view formulated by Henry Ford, who saw the future of business in mass production.
Thus, marketing segmentation is the process of bringing “the focus on to manageable groups of like-minded individuals who have a high disposition for a product” (Hague, 2009). In other words, companies like Coca-Cola try to reach every single customer in his or her preferences by offering products for those preferring cold and icy drinks, for people desiring cheap beverages, for those who like to drink refreshing substances at home or outside (Hague, 2009). Thus, focusing on several market segments, Coca-Cola tries to embrace so many possible areas of activity to increase its profits in such a comprehensive way (Hague, 2009).
However, the Fordist approach to the issue is opposite to the idea of segmentation (Willamette, 2009). Henry Ford expressed the idea that people want access to goods, and the way to give this access is to reduce prices and increase the wages of workers (Kotler & Keller, 2008). As price reduction is the result of mass production and generalization of product lines, Ford assumed that people, for instance, want to have cars while their colors or technical characteristics bother them at the last turn. The idea was later labeled as Fordism and the mass production initiatives received this name as well (Willamette, 2009).
Nowadays, Toyota implements this Fordist approach to expand its international markets and offer the widest range of products to the largest number of potential customers (Leaders, 2009). Although Toyota claims to leave Fordism behind, its mass production process and being the largest auto manufacturer in the world today prove the opposite (Leaders, 2009). Caring for the quality, Toyota also tries to make their cars cheap and accessible to attract new and new customers, and mass production allows reduction of the prices (Leaders, 2009).
The same is true about Samsung Electronics Company that launches mass-produced goods one by one into the market. The latest mass-produced innovation by Samsung is the 512Mb DDR SDRAM Using 90-Nanometer Processor that promises to be a new trend in the computer industry. Finally, McDonald’s proves to act according to its Fordist philosophy providing the bulk of customers with similar, mass-produced, and cheap products including hamburgers, cheeseburgers, potatoes free, etc (Willamette, 2009).
To conclude, the success that Toyota, Samsung Electronics, and Mcdonald’s have in the international markets proves the idea by Henry Ford that mass-produced goods for ‘average’ customers bring more clients to the company and accordingly more incomes. Segmentation might also be beneficial and the example of Coca-Cola proves this, but too much of it does not allow the company to focus on one or several areas of activity and succeed in them. Therefore, the Fordist idea of mass production may be the most profitable option for business companies.
Reference List
Hague, P 2009, Marketing Segmentation. B2B.
Kotler, P. & Keller, K 2008, Marketing Management. Pearson/Prentice Hall.
Leaders 2009, Will Toyotaoism Replace Fordism ? Leaderswedeserve.
Willamette 2009, Fordism, Post-Fordism, and the Flexible System of Production. Willamette.edu.
Marketing research plan for an international rental car company
Featuring prominently in this plan should be the knowledge of the customer base. This helps in knowing the customers that have to be retained, the services they value, and the incentives they ought to be given that would help motivate them. For this company to learn and know its customers, it has to interview customers about their level of satisfaction. A feedback mechanism has to be initiated.
The car rental company has to invest in market research where customers are asked to give their views on services that they are offered. The company must ensure that their customers are made aware of the good services they offer by creating a profile of customers they have to win and keep. The business should be looked at in a customer perspective.
Issues touching on communication to the customers should be perfected. Problems that arise should be used as an opportunity for showcasing the services the company offers. Customers must always be shown that they are very special and they ought to be kept informed about the services that are offered.
The company should make it a practice to retain its customers. Loyalty and retention can be promoted either by frequency or loyalty marketing. In frequency marketing the company can seek permission from their customers to market to them overtime and return make them feel appreciated for their loyalty.
An incentive would be given to customers to make the company track their purchases (Performance Improvement Council, n.d.). Finally, it is important that this company does budgeting and measurement in order to determine return on investment.
Watch and clock manufacturer
A clock and watch manufacturer who realizes that he is operating in the market for machines that measure time who has a desire to segment the market should embark on identifying the customer’s needs within the segments. The manufacturer should also profile the resulting market segments. The segments that have been put in place should be identifiable.
The attributes of the segments that kind of differ should be measurable to enable for ease of identification. The segments should also be accessible in terms of communication and also through the channels that are used in distribution. The segments have to be sizeable not very large yet not very small. They ought to be sufficiently large to be economically viable.
The segments must accrue profit for it would be worthless for them to be in place if they are not profitable. The segments also need to respond to unique needs of the different market mixes in their area of operation. When market segments are initiated it is pertinent that the cost of frequent changes is brought into perspective hence the need for their durability.
For purposes of ascertaining the potential of these segments in terms of how they would impact specific market mix it is important for this watch and clock manufacturing company to come up with a market segment whose potential can be measured.
It is also crucial for this manufacturing company to factor in resources that they have and their capabilities before coming up a market segment. This underscores the importance of compatibility.
Maserati’s positioning strategy
The positioning strategy for North American Company that has just introduced Maserati, the latest model of a sports car that would be competing with other established brands like Porsche, Ferrari, Jaguar, and the BMW Z8 would include identifying the market segment that Maserati would appeal to. Maserati would hope to appeal to sports car enthusiasts in basically their entire market niche.
The major challenge would of course be those people who practically adore a specific brand and would not give a second thought to that. Credence will be given to sports car lovers who would want some unique features to be part of the package that Maserati comes with that other sports cars do not have. This category may have the first time buyers or those who have hard experience with other brands.
Positioning strategy would also integrate the engine capacity of Maserati in comparison to other sports cars. The question here would be ‘I Maserati powerful enough? People who would want to be unique must be cared for in Maserati positioning strategy as there are people, especially the young generation who hates hanging out in things that everybody else has.
These people look for personality (FIAT, 2007). To actualize the positioning strategy that Maserati manufacturers have put into place, there is need for coming up with a working marketing mix to reinforce its advantages over other sports car brands. The new Maserati core values and positioning ought to be carefully reflected upon.
There is need for careful crafting of Maserati’s positioning statement that would convey its advantages over other brands to attract potential buyers in its target market.
Secondly, the manufactures of Maserati should contemplate taking the brand to the customer by first engaging in pre-publicity. Price that is set should reflect the company’s positioning strategy. Finally, intensive promotion like pre-publicity, test-driving, and holding open weekends should be initiated.
Role of the consumer in terms of the freedom of choice
Consumers know what to consume and what not to consume or shy away from as witnessed among the money and brainers cluster (Twitchell, 2002). This is actually the basis of culture occasioned by liberal arts education.
The views expressed in the article are not consistent with traditional marketing idea that emphasizes personal decision because the article talks of people consuming certain commodities to conform with the popular culture and not because they have made a personal decision to purchase them. Buying certain commodities would make you to be associated with a specific group of people.
Reference List
FIAT. (2007). Managing the Marketing Mix for the launch of new Fiat Panda. The Irish Times Business 7th Edition. Web.
Performance Improvement Council (n.d). Customer Retention: Keeping Your Best Customers for the Long Term. Executive white Paper.
Twitchell, J.B. (2002). Needing the Unnecessary: The democratization of luxury. Reason; Vol. 34 No. 4.
Segmentation variables will mainly focus on different characteristics of target customers. A multi-variable segmentation strategy will be used to market the product to different customer segments. The criteria to be used for the segmenting strategy will focus on how different aspects of the marketing mix can be achieved from heterogeneous customer segments that have different expectations and interests.
Demographic and lifestyles segmentation will be used by the firm to come up with an effective marketing strategy for the product. Since the product targets students and other general customer groups outside the university, demographic segmentation will be used to segment the market using income, occupation, age and gender as the main criteria.
Additionally, lifestyle segmentation will allow the firm to focus on consumers’ interests and other activities they engage in to determine how they influence their consumption patterns and purchasing decisions.
Differentiated target marketing strategies will be used to sell the product to targeted consumers. More importantly, the firm will focus on specific product attributes during the development phase to understand how they affect customers’ perceptions and attitudes. This strategy will be closely linked to the pricing strategy where the general market price will be 100 dollars while for university students the price will be about 60 dollars.
Since, the product will be sold mainly in Sydney, Nova Scotia; it needs to appeal to local conditions to ensure more customers appreciate its ability to serve their needs. Ease of use, high quality design, colour and other features of the product will be used to differentiate it in the market.
The product will be closely aligned with psychological factors to make it more appealing to customers. As a result, it offers unique value to customers which they cannot obtain from existing substitutes. It will be designed to appeal to young customers that are bold and willing to try out new concepts that change their lives. These consumers will be made aware of the convenience the product offers.
Other benefits of the product focus on its new technology which offers value that cannot be obtained from its substitutes currently being sold in the market. The positioning statement will be: ‘A revolutionary charger that caters to the needs and lifestyles of young mobile users offering an exclusive service.’ The overall positioning strategy will make customers feel they are paying a premium price for a valuable product because of its superior qualities.
Developing and Managing Products and Services
The product can be classified as a consumer product that serves special needs. Its unique selling proposition in the market is the convenience it offers because it uses new technology to convert sound into electric power. It also serves as an additional battery to smartphones and allows users to perform a variety functions on their mobile devices while on the move.
The product’s aesthetics appeal to people from different demographic backgrounds because it is sold in a wide array of colours such as blue, lilac, green, maroon and black. Additionally, its innovative qualities will make the product stand out in the market because it caters to diverse usage patterns. Therefore, the product allows customers to be in touch with other people at all times even when they move to areas without adequate electricity supply.
The product will be known as the ‘Refine Charger’; a name that communicates its original qualities accurately. This brand name was chosen because it speaks about innovative technologies that are used to develop the product to enhance its reputation in the industry. More importantly, this brand name has focused on gaining instant attention from customers to make them understand the high value they are likely to obtain by using it.
The firm will use biodegradable packaging materials for the product as part of its corporate responsibility to reduce environmental degradation. The package will contain instructions to make customers aware on how to use the product properly for them to get the value it offers.
This will help the firm to elicit positive perceptions about the product in the market. At different points of sale, consumer support staff will demonstrate to customers how the product is used and the benefits it brings to them.
New Product Development
The product idea originated from both internal and external sources, after a careful analysis of market needs and opportunities was conducted. Team members brainstormed and generated ideas about how the product was going to be developed to make it suitable for different usage patterns in the market. The product development process was taken through several stages as outlined below:
Idea Generation: Different business proposals by all team members were discussed and afterwards, constructive assessments were used to determine the viability of each individual proposal.
Idea Screening: All members were involved in vetting the ideas that had been discussed earlier to find out how they were going to be converted to long term product concepts that respond to dynamic market trends.
Concept Development and Testing: All members took time to understand the legal environment in which the concept is to be implemented. They also looked at challenges, risks and opportunities which the product was likely to experience in the industry.
The Marketing Strategy: This focuses on the competitive threat posed by existing products and other barriers a new product is likely to face in the industry. In addition, the marketing strategy will influence the pricing model used to market the product in the market.
Product Development: Information gathered from the market research will be used in research and development to find out additional features that need to be added to the product to make it more appropriate for the market.
Test Marketing: A small sample of potential customers drawn from the main target segments will be requested to use the firm’s prototypes for a specific period of time to measure the product’s performance.
Commercialization: The launch of the product will be done after a careful analysis of its viability has been done. Issues that relate to advertising, promotion and distribution formats to be used will also be catered for.
Product and Service Decisions
Product quality will be determined through internal and external checks to establish its suitability. The firm will be making constant improvements on product design and packaging to ensure it satisfies consumers’ expectations. Internal and external inspectors will also conduct constant checks to assess whether different operational systems conform to standards set by government agencies.
Brand Strategy and Management
The product will be known as ‘Refine Charger’ because of its innate qualities that make it stand out in the industry. This name is appropriate for the product because it communicates various aspects of brand value to customers in different market segments where the product is sold.
More importantly, the product name offers a unique value proposition to customers making them aware about the firm’s willingness to build a mutually beneficial relationship with them in the long run.
The logo of the brand will consist of a strong, blue coloured R symbol which will be used as part of the overall positioning strategy by the firm. The tagline will be used to elicit positive perceptions from customers towards the product. It will be: ‘embrace new possibilities.’ Likewise, the slogan chosen for the product will be instantaneous and direct. It will be; ‘exposing you to a new world’.
Pricing
Pricing Considerations
Internal factors such as costs incurred in the development of the product, marketing goals, innovative technologies used and its attributes will be used to estimate the value of the product in the market. These qualities will determine the pricing strategy the firm chooses for the product. Other considerations such as the distribution channels to be used to sell the product in the market will also influence pricing strategies.
External factors such as existing demand, power of substitutes, competition and the value of product technologies used will guide the firm’s pricing strategy for the new product. The firm will assess the market share it seeks to gain within a specific period of time by analysing behavioural as well as situational factors that influence consumers ‘ purchasing habits and choices.
The external legislative environment will also influence the firm’s pricing considerations because issues such as licensing, taxation and other regulations have a direct impact on the firm’s operations in the industry.
Price adjustment strategies will include
Discount and Allowance Pricing: The firm will reward customers and distributors who show interest in the product soon after its inception to encourage them to be more loyal. This strategy will be used to lock in customers from specific consumer segments it seeks to attract.
Segmented pricing: The price charged on university students will be different from the price charged on the product in the outside market. This is because test marketing results have shown there are different levels of demand for the product in the two markets. Therefore, within the university, the firm will be able to sell larger volumes of the product while in the outside market it will take time before high sales figures are attained.
Psychological pricing: The firm will use a pricing strategy that appeals to consumers ‘expenditure patterns, lifestyles and social conditions. Therefore, this will enable the firm to improve general perceptions about the product before consumers purchase it.
Promotional pricing: this pricing strategy will be adopted by the firm to stimulate consumers’ interest towards the product to encourage them to purchase them. The firm will rely on positive relationships it has with its distributors and retailers to engage more effectively with different consumers in the market.
Retailing and Wholesaling
The firm will develop partnerships with major retail stores to sell its products directly to customers in respective target markets. This approach will allow the firm to use its own sales staff who will interact directly with customers to make them aware about the product’s quality, features and other additional benefits.
Furthermore, other additional services that improve the manner in which customers use the product will be included in the retail strategy. This approach will allow sales staff to demonstrate technical functions of the product to consumers and how they enhance its quality. As a result, the firm will be in a position to combine both sales and customer service functions in one location.
This will enable sales employees to understand effective methods they can use to satisfy the needs and expectations of customers. The firm will also liaise with other online ecommerce websites to market its products outside the Nova Scotia region.
However, this is part of the mid-term expansion plan that will only be initiated if the firm attains its profit targets. As part of the future plan, the firm intends to offer consumers more convenience and value for money whenever they purchase its products.
The wholesaling strategy will allow the firm to come up with innovative ways of increasing its market share. The firm will encourage its distributors to partner with shops that deal in electrical and technological appliances in different parts of Nova Scotia by offering them different incentives.
Consequently, the firm will be able to establish new relationships with ambitious entrepreneurs who are willing to make sacrifices to ensure the product performs positively in the market. As a result, this will be one of the steps used to help the product to penetrate the market easily to increase its visibility in different market segments. This will boost the firm’s earnings in the long run.
In a nutshell, retail and wholesale strategies implemented by the firm will help to increase its brand value in the industry.
Advertising and Public Relations
The objective of the advertising strategy chosen by the firm will be to increase the product’s visibility in the industry. Therefore, the firm will use various commercials and adverts to appeal to consumers’ psyche by making them aware about various benefits they are going to get after using the product. In effect, catchy adverts will enable the firm to create a positive impression to different consumers in the industry to make them have positive attitudes. This will ensure different consumer segments understand unique qualities of the product in a simple manner.
The product’s advertising strategy, message and execution focuses mostly on remarkable results users of the product experience. Since TV serves as the main advertising medium, the message features catchy tunes in an environment where people are using their phones to perform different activities.
The advert features bright light displays which project a message of boldness, excitement and adventure. Therefore, it encourages users to have a more positive outlook because the product opens their mind to make them aware about new opportunities they have not yet exploited.
The television commercial will be done in two minutes. It will feature about five participants, who will communicate to different audiences about original qualities of the product. The message will use simple and descriptive language to encourage customers to change their inner thoughts and perceptions regarding the product.
As a result, this approach will help to strengthen the value of the brand in the market to help it compete effectively against other substitutes sold by the firm’s competitors. Therefore, the message will encourage customers to memorise important concepts that are related to the product and how they conform to their lifestyles and expectations.
Public relations will play a major role in shaping people’s attitudes and perceptions regarding the product. The firm will use PR strategies to engage with its publics to constantly make them aware about what it is doing and what it has set out to achieve in the long term. Therefore, this will stimulate interest from different people to find out more about the firm and the product it offers.
In addition, a comprehensive public relations strategy will allow the firm to plan different communication functions that are suitable for its activities in the industry. This will ensure that the firm alerts consumers and other stakeholders about different events it undertakes and how they help it achieve all goals outlined in its mission.
Personal Selling and Sales Promotion
Personal selling will help the firm to understand different purchasing habits customers have to ensure the firm understands how to engage different target markets more effectively. In the long run, the firm will be in a position to adjust its sales and marketing approaches to ensure that the product being marketed conforms to people’s expectations and lifestyle choices.
More importantly, the mobile charger needs to have unique qualities that allow it to satisfy target consumers choices and lifestyles. Personal selling will allow the firm to anticipate the needs and expectations of customers more effectively because its employees will be able to monitor different issues affecting them.
Therefore, the firm will also understand how to come up with an effective customer relations strategy that addresses all areas of its operations more effectively, to give it the competitive edge it desires in the industry.
Sales promotion will allow the firm to come up with more effective selling methods by offering them different types of incentives. This approach will allow the firm to use trade shows to sell its products by offering discounts and other rewards to a select group of customers with the objective of making them more loyal in the future.
This strategy will also allow the firm to motivate its own sales staff to encourage them to improve their performance through commissions and other rewards.
All these benefits will help the firm to increase its standing in the industry because it will be in a position to streamline its internal processes to attain good results in the long run. Sales promotion will be conducted in retail outlets, on streets and other public places where many people congregate. Sales staff will carry out demonstrations that show how the product is used to make more customers understand how it serves their needs.
Both sales promotion and personal selling strategies will be used by the firm to strengthen its performance in the industry. More importantly, the firm will be able to interact freely with customers from different segments to understand how it can serve their needs better. This will help the firm to publicise different qualities that are related to its products more effectively in the market.
Direct and Online Marketing
Direct marketing will be used to engage consumers through different communication channels to encourage them to purchase the firm’s products. It will allow the firm to compile a database of potential consumers’ names, addresses and their lifestyles.
The firm will use catchy phrases to sustain the customers’ interests to encourage them to have more favourable attitudes towards the products. In effect, the firm will be in a position to understand what customers need and their expectations to ensure it sells them products that are high quality to satisfy their needs in the long run.
Telemarketing will be the most used form of direct marketing used by the firm to improve the perceptions of all customers towards its products. Sales staff will also call customers on their fixed telephone lines to engage with them on the product’s features and its long term benefits.
In addition, modern telemarketing procedures consisting of multi-media messaging services (MMS) will be used to encourage consumers to have favourable attitudes toward its products. A picture of the charger outlining its features will be sent to a select number of consumers with information that details where it is sold in the market.
The firm’s website will serve as its main online selling portal where customers will be offered a chance to use their credit cards to purchase the product. This will be integrated with the firm’s Twitter and Facebook accounts to ensure all customer queries are responded to promptly.
The website will serve as a central ecommerce portal and will integrate payment and delivery services for consumers within Nova Scotia who are interested in purchasing the product.
Social networks will be used to monitor consumer feedback regarding the product and will allow the firm to chat with customers online to find out various issues they may be facing. Since there will be no intermediaries, the firm will be in a position to improve the nature of its services to ensure it strengthens its brand in the market in the long run.
Market segmentation is crucial for modern business. Nowadays, one may observe the immense growth of the economy that is extremely unpredictable. Mass marketing is no longer relevant as far as there is no need to spend resources on the audience that is unlikely to be interested in a particular product and service. Market segmentation is the way of identifying individuals who will be interested in goods or services.
The paper under consideration entitled ‘W5 on Segmentation” was posted on July, 14 by the company W5. The article provides readers with the general notions concerning market segmentations that are essential for the understanding of the nature of this approach to marketing. Segmentation research is a way of identifying the target audience with the help of the detailed and profound analysis. Standard marketing presupposes the analysis of the audience according to their demographics (age, income, gender, and region).
When conducting segmentation research, demographics are only one part of the research. Other constituents include the evaluation of behavior, attitude, and psychographic factors. According to the article provided, market segmentation should possess four necessary criteria. First, a particular segment should exist in reality. Second, there should be defined variables typical for one segment. Third, it is necessary to reach the segment within the prescribed amount of time, and that presupposes that it has to be a continuing situation. The stability of the action is the final constituent (“W5 on Segmentation” par. 4-5).
In the following part of the paper, the procedures of the segmentation research are described. The process starts with the development of the questionnaire. The questionnaire should not be based only on demographical factors. It should aim at identifying unique customers’ needs that will influence the choice of marketing strategy. The survey should include data about consumers’ personalities, habits, beliefs, awareness of brands, and media channels. The next step is the sample size. The sample size should be large as far as otherwise, it would be impossible to identify particular segments with definite interests. Besides, large samples are necessary for deep research. Finally, pre-segmentation data analysis follows. This step includes the gathering and evaluation of all already existing data that will be useful for future research.
After the study of the consumer’s behaviors, attitudes, and other factors, it is necessary to derive segments. The division into sections should be based on such factors as the size of sector and attitudes, behaviors, and psychographics. According to the article, four steps should be conducted for the efficient evaluation of segments. The first phase is factor analysis. It is used for the finding of the so-called “underlying factors”. These underlying factors can be understood as potential consequences or branches from one larger factor.
Cluster modeling is the next step that presupposes the division of consumers into groups based on some common features. Thus, these shared features should be identified and arranged accordingly. When groups are defined, it is advisable to test its validity. The discriminant analysis is the next step that is used for testing. The last stage is the formation of the predictive algorithm. It comprises of the final list of attitudes, behaviors, and psychographics that will be used for the creation of the marketing campaign. In the last part of the paper, it is noted that the results of the process of segmentation should be used for analytical purposes.
The concept of marketing segmentation implies that the business or the company will evaluate the market and segment it in the groups of those who are most likely to become their customers. Compared to the mass-market strategies, marketing segmentation does not treat the whole market as potential clients (Weinstein 7). If a company chooses segmentation, it needs to develop unique techniques that will be used to attract the target market (Weinstein 7). In the case of HSCB, the bank needed to review their target market carefully, segment it according to variables in each country, choose the right techniques that would target the consumers efficiently, and position itself according to its slogan “the world’s local bank”.
HSBC is not the first company that adjusts itself to the local features and culture: other corporate giants such as Google, Starbucks, McDonald’s, etc. have also used this approach to implement target marketing efficiently. Segmentation strategies can vary and include undifferentiation (no targeting), concentration or focus on a single niche, differentiation (several market arenas), and atomization (one-to-one marketing strategy) (Weinstein 8). It is evident that the company could not use undifferentiation because mass-marketing strategies would not apply to the specific “local” approach that the bank aimed to use. Therefore, marketing segmentation and targeting were the only options that the bank could use. Nevertheless, there is a risk in the HBSC’s position as “the world’s local bank” as it has to deal with thousands of various markets in tens of different countries.
Segmentation of each market in every country where the bank operates can easily fail if the bank does not review the target market with the greatest attention. Moreover, each of the markets will require specific targeting strategies that can be completely opposite in two different countries. Moreover, even if the bank selects a successful strategy, it is quite possible that some consumers will find it unappealing. At last, market positioning of the company will also require serious investment and understanding of the local markets, which can be very challenging if one has to advertise its business in more than 85 countries. Nevertheless, the bank seems to have a profound approach to target market because it implements completely different strategies depending on the city (New York vs. Hong Kong).
As to the question about the HBSC’s recent campaign, it can be said that it reflects the bank’s aim to establish close relations with its international customers and, at the same time, stress the multiple viewpoints that these customers might have. Nevertheless, the pictures printed as ads might not be as successful as it appears. Since the bank’s customers can only be citizens that are 16 years old (or older/younger, depending on the country), it seems unclear why the bank had decided to put a picture of a child’s accomplishment. On the one hand, it seems that the bank tried to target children as their customers. On the other hand, this ad probably had focused on the customers who had children of the same age and saw the success of their children as their accomplishment as well. Other pictures that were also used had focused on different customers, including diesel heads, environmentalist, those interested in science or fashion, etc. Therefore, the bank’s recent campaign does resonate with the target audience, presenting different viewpoints and beliefs.
BMW – the Ultimate Driving Machine
The German company BMW is a prominent example of successful market segmentation as it has created different types of cars for different consumers. Market segmentation implies that the company does not aim to use general mass-market strategies but rather segment the market into groups and decide, according to the consumers’ age, income, life cycle, local features, and other variables, what strategy is the best one and what product these customers are more likely to purchase (Akwetey 93). BMW has used segmentation in a particular way: it manufactured and advertised different types of cars according to the customers that it had segmented earlier. For example, yuppies of the 1990s were presented with excellent, fast, and sporty sedans that could reflect their life and approach to work. The 7 series, however, targeted the “upper conservatives” that were not interested in sporty cars but rather preferred comfortable and reliable vehicles.
Although BMW is a prestigious and luxury brand, it had also provided cars for the “modern mainstream” group – people who would generally prefer other cheaper brands to BMW’s cars. One could assume that the products offered by BMW are too different from each other and focus only on the specific target market. Nevertheless, one immediately recognizes a BMW car when one sees it; therefore, the company manages to find a particular approach to each of its markets, but at the same time, it never forgets to present its cars as “the ultimate driving machines”. These approaches are the pros of the BMW’s selective target marketing. I do not believe that the company’s strategies need to be improved. On the one hand, the company could provide more lower-priced cars to the customers with moderate income. On the other hand, BMW is a company that specializes in luxury and prestige cars, and it will seem strange if it decides to present “simpler” vehicles.
It seems unreasonable to blame BMW for too selective targeting during the global financial crisis of 2007-2008. The company was not the only one that had to face the decrease in revenues during this period. One should not forget that the corporation produces prestigious products that are mostly affordable for the members of the upper class only. The crises lead both to the decline in sales and revenues as well as stop or even reverse of the wealth grow. Therefore, those who could be described as BMW’s potential customers probably regarded the cars of the company as too expensive to purchase during the recession.
Moreover, even the wealthiest customers would approach such purchase carefully because business investment usually declines during a financial crisis, also leading to a significant decrease in consumption (Akwetey 132). The drop in sales, however, was not as severe as one could predict. The segmentation strategy of the company remained the same during the recession years, but it is highly unlikely that it was the reason why BMW experienced a decline in its sales. It could have tried to retarget the market and manufacture vehicles that would be less luxurious and more affordable. However, if production of automobile series takes approximately several years, it would be entirely unreasonable to reframe the product lines due to the recession as it only lasted for two years. Therefore, BMW met a right decision, and the decrease in sales was connected to the global recession but not to their segmentation strategy.
Works Cited
Akwetey, Lawrence Mensah. Business Administration for Students & Managers. Trafford Publishing, 2011.
Weinstein, Art. Handbook of Market Segmentation: Strategic Targeting for Business and Technology Firms. Psychology Press, 2013.
Marketing consists of strategies and tactics used to identify, create, and maintain satisfying relationships with customers that result in value for both the customer and the marketer. Marketers are therefore supposed to identify the markets and then come out with appropriate strategies. This process involves two very crucial components called segmentation and targeting.
In simple terms market segmentation is the process of broadly identifying different types of markets, customers etc. Segmentation is required to be done depending on a range of factors like the customer profile, preferences, paying capacities, usage of credit card, number of travels, and geographical factors. In order to market a product or service, it is imperative that a company tailors the marketing and sales efforts to specifically reach the segment of population that are most likely to buy these products or services.
Identifying primary market is very critical for a successful business. It is indeed quite a challenge to segment a price sensitive market, as the company might end up losing a good share of its customers, if it plans its services for some other segment. For example, if the segmentation is being done for the retail sector, then the segmentation process might involve classifying the customers on the basis of goods and commodities being purchased, number of visits to the superstore, size of family etc. similarly, if it has to be for an airlines industry, then we need to take into consideration the general aspects of airlines industry, duration of the travel, type of traveller corporate or general etc.
It is not a must that all corporate clients would prefer to have meals on their journey’s ranging from one hour to two hours. Such a journey can be undertaken with a low-cost airline which cuts the cost by not serving the meals. During such a journey what the client will be looking at is a thorough professional approach from the airline staff and a comfortable journey. Though an airline is not limited to one particular segment but still for the sake of pooling efforts it is very important that the airlines identified and divided the customer base into a range from Finest for those wanting something special, to Value for those on a budget. Therefore, segmenting essentially involves identifying customers with homogenous attributes who are expected to respond to the company’s marketing mix in similar manner.
Once the market has been segmented, the marketing team prepares a product-market profile and start targeting those segments by fine-tuning their strategies to suit the needs and requirements of those segments. The targeting process differs from the segmentation in the sense that while segmentation works on the basis of reports and trends available in the market, targeting works on the basis of ground realities. During this process the identified groups and compared and evaluated and then the marketing team zeros in on one or more segment having the highest potential under the circumstances.
Subsequently, marketing professionals start devising strategies in such a manner that when the individual segments are targeted, they should have the desired effect on the existing or prospective customer. For example, in the airlines industry, the emergence of low-cost airlines has made the industry fiercely competitive. After, these low-cost airlines identify the markets they come out with offers tending to attract the railway passengers. In addition, the low-cost airlines also target some of their resources towards the high-end corporate customers. The targeting process also involves;
Planning Products/Services as per the needs of the market: The inputs studied and analysed during the segmentation process come in handy for target marketing. Based on the segmentation done, the marketing team goes into an overdrive to start packaging the products and services, as per the customer preferences. The growth strategy of any service or product company is based on a variety of key components, which happen to be industry or location specific.
Planning a Promotion Strategy: Inviting the attention of those for whom the products or services are meant is crucial for the long-term survival of a business. Newspapers, television commercials, radio jingles, web pages etc. are the important companions of target marketing. If the messenger is someone with whom the prospective customer can identify himself the message reaches swiftly and effectively.
Setting up a Marketing/ Distribution Network: Targeting the customer also involves making one’s presence felt at a place most convenient for the customer. Existence of a well-established marketing network helps in targeting the product or service to the intended customer/ segment. This also involves entering into joint ventures, collaborations, mergers and acquisitions etc.
Taking Pricing Decisions: A product can be priced in many ways depending upon the cost of manufacturing, the cost of reaching out to customers, the income levels of market segment etc. Product pricing also depends on the availability of competitors in the market and certain rules and regulations of the land.
Planning for After-sale Services: It is said that when customers aren’t happy with your business they usually won’t complain to you – instead, they’ll probably complain to just about everyone else they know – and take their business to your competition next time.1 Therefore, following the customer and reaching out to him/ her at the time of need helps in success of the target marketing exercise.
Gathering Feedback: Keeping eyes and ears on the customer behaviour helps in gathering enough feedback for any organisation. This bodes well for the success of target marketing.
Advertisements are supposed to convince the targeted audience why they should buy the product that is being marketed. However, researchers have shown that some advertisements may in fact turn potential buyers away from the product. As such, advertisers have always insisted on marketers to group or segment their markets so as to be able to reach and advertise to a particular group at a time. A target market thus consists of a specific group of buyers whose needs, wants and wishes should be the focus of a company’s marketing effort. In this case we look at benefit segmentation targeting in marketing of a new line of women’s jeans. (Malcom, 2001)
Market Segmentation for Marketing of Women’s Denim Jeans
This case, as any other, requires identifying and analyzing a target market segmenting based on demographic, psychographic, geographic and behavioral factors, as Art Weinstein says in his book, market segmentation.
This is essential as demography determines the age, income, ethnic background, occupation, religion, race and social class of the wearer. With this in mind we shall be able to group our targets in order to have to have the maximum results of our marketing efforts. The income and occupation gives us a guide on how to price our jeans. In fact it is worth to mention that the first denim jeans were designed for mine workers as they are tough and durable given the working conditions in a mine. Other demographic factor dictates on how we should style our jeans in order to comply with religion or race of the wearer. (Malcom, 2001)
The psychographic part of it entails the lifestyle, interest, opinion and attitude of the wearer towards our product. The location of the wearer such as the state, climate, urban or rural and even product expectation will contribute on how the denim jeans will perform in the market. Such information will help us in making our advertisements reach and have some effect on our target markets.
Balance In Media Planning
Introduction
Media planning might be carried out by an organization that intends to market its products through the media by advertising. Frequency means how often the advertisements are executed. The reach determines the medium being used either electronic, print or any other form deemed appropriate that will deliver the message to the intended audience. We have also to consider the length of such a mission. These three attributes have to be balanced for optimum effect.
Reasons for Balance
Researchers have continually sought to find out the formula that makes advertising work. With the media being the most preferred method of advertising, there has always been a problem of congestion in the media houses thereby rendering them infamous as the sole purpose of media houses is entertainment, information and education. Companies and media houses have made a step in handling this issue through media scheduling which aims at striking a balance over the frequency, reach and continuity of such. Considerations have to be made henceforth.(Jack, 1996)
Both partners have to agree on the cost of each advertisement that is carried out. The coverage of the media is the major determinant of the pricing. The wider the coverage area of the media house, the higher the cost. Timing of the advert, Surveys have shown that television and radio houses charge very high rates for advertisements slotted to be aired in between news bulletins or popular programs. In case of programs there is also the considerations of the type of viewers the program attracts.(Helen, 2006). The airing of such should be well calculated to avoid annoying the audience or prevent it being considered a negative interruption. For example, we can’t advertise a Christmas offer in March.
Accessibility of the medium should also be considered as it is not all who can afford to buy a weekly or monthly magazine for example.
References
Jack Z. Sissors, (1996). Advertising media planning. New York: Prentice Hall.
Helen E. Katz, (2006). The media handbook: A complete guide to advertising media selection, planning, research and buying. New York: Lawrence Erlbaum Assoc Inc.
Art Weinstein (1997), Market Segmentation. London: O.U.P.
Malcom, M. (2001). Market segmentation: How to do it, how to profit from it. New York: D E Brell & co.
Segmentation is vital for a successful marketing campaign. The customer needs in this field snow and skating are something fast and safe. On the other hand there are varied age groups the learners, professionals and those who perform it for fun. These groups or segments can be further merged to come up with the professionals as well as amateurs. These two market segments are important to the new product because to them it’s not just any snowboard but that which can guarantee safety and speed which will boost their performances. Amateurs on the other hand, they need a lot of practice and for them to boost their confidence in the sport; they need a snowboard that’s strong and reliable (Paul, 2000).
Customer Relation marketing to be undertaken in this organization should bear the need to keep the customer as our primary target. The incorporation of a CRM should be done on the basis of its performances and performance which should include identifying the company’s important segments, improving customer relations by identifying the company’s most profitable clientele and friendly customer interactions in the entire organization’s departments and networks. The profitability of the company is important and the customer is important as well. The CRM should not also be so complex because a lot of CRM’s have died at the infancy stage because of technicality issues in the implementation and they end up not performing (Bligh & Douglas, 2004).
A campaign to make the product more appealing and popular among the customers is recommended that will involve the internet and the print media. Print media is the number one option since the market segment is for athletes in the skating field. Sports magazines are popular among the athletes and so this should be the number one tool to put forward our message. The theme should be based upon the speed, agility and the security. The running theme should therefore read the fast reliable speed machine of the new generation. The sports magazine will target a few consumers that are essential for this segment. This calls for a complementing promotional tool that will cover the shortfalls the sport magazine. The internet (online) promotion will be a sure bet to cut across all market segments both intended and not intended. The aim here is to popularize our product which will later translate to increased sales and increased profits. The magazine campaigns should be run monthly in the popular monthly magazines whereas the online campaign should be posted on our official website (Bligh & Douglas2004).
Distribution will follow two of the popular channels. Channel one involves the conventional system involves us selling our product to wholesalers who will then sell to retailer then the customer. This guarantees optimum penetration of the product and availability. The other channel is the vertical system where we will be involved directly in the marketing of the product or we other organizations to do this for us. This channel has the increased dealing directly with our customers and attending to their needs.
Pricing of the product will be looked on at three different approaches. Premium pricing strategy is applicable due to the uniqueness of the product and the competitive nature of the market. Owing to its newness in the market, promoting price criteria is also to be considered in determining its actual price. The other important criteria to consider is the geographical pricing method since the product is produced from a different area from the targeted customer in the US or Europe (Paul, 2000).
References
Bligh, P. & Douglas, T. (2004). CRM unplugged – releasing CRM’s strategic value. Hoboken: John Wiley & Sons.
Paul, S. (2000). The Power of Quality Thinking In Sales and Management. New York: Oxford University Press.
There are several differences between the domestic and global marketing approaches to segmentation. First, global marketing is much more complicated than domestic marketing because it targets various countries with specific cultures, mentalities, and geographical positions. On the contrary, domestic marketing can focus on target groups within one nation, making the process easier. Although the country’s regions might have their peculiarities overall, the mentality of the segments group is mostly the same. On the opposite, global marketing has to consider distinctions of the targeting area and adapt the strategy individually to each specific group.
Another difference lies in positioning strategies, which is a crucial aspect of a successful marketing strategy. The organization has to determine how it wants to present its products and what perception to create for the targeted segment. One more intersection with cross-cultures is that the same product or service has different meanings and attitudes towards it, depending on the country. Therefore, the global marketing approach should include a well-developed positioning strategy for the chosen areas of segmentation. The domestic approach, conversely, needs less effort to decide how to present the product to the population with one language and culture.
However, political regulations can cause inconveniences for both global and domestic marketing approaches to segmentation. When the company aims to introduce itself to the international market, it has to be aware of the multiple regulatory issues. The product that the organization targets has to correspond with the safety and health norms (Linton, 2109). Otherwise, the regulators can apply some restrictions and prevent the organizations from entering the market. The domestic approach also has to align with the rules and regulations, but they are well-known and effortlessly managed for the domestic company that already exists within the targeted environment.