The Concept of Market Segmentation
The assistant to the Manager of the marketing department of Dyson have
been asked to write a report that describes the concept of market
segmentation with suggestion on how Dyson could segment its markets,
an outline of the new product development process along with
suggestions of how Dyson should apply these stages and concluding with
an explanation of how Dyson can perform their marketing control.
Procedure
=========
This report is fully based on secondary data, primarily from the
course literature but also other internet based sources.
Findings
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This report will systematically explain the concept of market
segmentation together with examples of how Dyson can segment its
markets. This will be followed by a stage outline of the new product
development process accompanied by my suggestions on how Dyson should
apply these stages. Finally, a descriptive scenario of how Dyson might
control and monitor its performance will follow.
Levels of market segmentation
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Mass marketing
A company using this strategy does not segment the market at all; it
offers the same product and uses the same promotion for all consumers.
This method has often been used by companies with mass production of
convenience products or by companies with few or none competitors.
Mass marketing is associated with low promotion costs often reflected
by a low price.
Segment marketing
This involves the process of dividing the market into categories with
different characteristics and needs. By doing this a company can adapt
all their offerings to...
... middle of paper ...
...o
penetrate these markets more strongly they had decided to wait with
their launch in the US and Asia. However, with the forecasted market
share standards not meeting its target they decided to launch the
washing machine in the US and Asia earlier than planned which turned
out to succeed since in the second quarter of the second year their
revised forecasted market share figures where exceeded.
Bibliography
============
Internet
http://www.dyson.com/
http://www.quickmba.com/marketing/market-segmentation/
http://www.examstutor.com/business/resources/studyroom/marketing/market_analysis/8_psychographic_segmentation.php
http://www.tutor2u.net/revision_notes_marketing.asp
Literature
Kotler,P Wong,V Saunders,J Armstrong,G (2005) Principles of marketing
Harlow; Pearson Education Limited
As discussed in Chapter 3, there are several bases for market segmentation. Because the needs and wants of consumers in various markets differ, there are general indicators that are used to segment markets—geographic demographic, and arguably most importantly, psychographic segmentation. From this, variables like lifestyle, family size and region are used to identify key segments for Virginia Beach. (Spiller, 2012, 88)
Another marketing strategy that Clorox is employing is consumer fragmentation. Through consumer fragmentation, the company is able to group its target consumers into groups that can be served with a particular advert or marketing approach. Clorox also intends to increase its brand investment behind superior products and more targeted 3D plans. The company appreciates the influence that media has on the purchasing decisions of consumers, it therefore wants to evolve its demand-creation model of 3Ds in the face of increased fragmentation of retailers and consumers. The three D’s of the model stand for desire, d...
Firstly, one of the most important focuses would be given to the target customer as we will need to know more about their taste and preferences. What it is they need and or want. Particular topics covering this area will be, the need for ‘Market segmentation’, identifying a competitive position in the market about to enter in the market and studying consumer behaviour, will all be discussed.
Target markets their products to a variety of market segments when speaking about their clothing lines. The top three segments are Age-Related Segments and Gender-Related Segments. Targets approach to development, marketing and advertisement is based on seasons, genders, age in the terms of wants and needs and styles while also staying true to their brand imagine. Target has positioned itself as one of the biggest retailers with a brand imagine that can connect to the consumers, and the ability to develop and deliver high end products that come at an affordable price.
The business world is becoming more and more heated up as a result of the ever increasing levels of competition. Each and every industry is witnessing an alarming rate in the number of competitors that exist within it. This is further fueled by the increasing world population, which brings about the speculations that the future of the market is rather bright. It is interesting as to how many things are nowadays done based on speculations and future expectations. In the turmoil of it all, marketing has been established as a very effective tool used by various firms to gain competitive advantage over others. As such, each organization has been able to develop its own marketing strategy based on the various things that affect the industry and the nature of business undertaken. Theories and practical research are two major items that form the basis of development of marketing strategies. Rolls-Royce is one of the many organizations that have been in big business for a long time. As such, the company has been able to identify major areas of strength and weakness when it comes to marketing.
Market research provides information to help unravel marketing obstacles that businesses face in today’s business climate, an essential part of the business planning process. As shown in the example certain strategies such as segmentation or differentiation are almost unattainable without relevant market research.
During the last couple of years, segmentation has become increasingly important in developing, positioning, and selling products, due to the formation of a global marketplace and the competition within it. Nevertheless, this method is not a recent development but segmentation is used since at least the introduction of mass production. (Brandt, 1966, p.22) It was Wendell Smith, who introduced the concept of market segmentation into the marketing vocabulary in 1956. According to Smith, “segmentation consists of viewing a heterogeneous market as a number of small homogeneous markets in response to differing product preferences among important market segments. It is attributable to the desires of consumers or users for more precise satisfaction of their varying wants. Segmentation often involves the use of advertising and promotion and it is a merchandising strategy." (Smith, 1956, p.3) In order to adjust the product and marketing efforts to consumer or user requirements more precisely and rationally, a company can almost divide its market in as many ways as it wants. (Haley, 1968, p.30) However, the importance of segmentation can sometimes be overplayed and the use of this strategy can be questioned. A critical analysis becomes essential, which should incorporate a functional, intellectual, ethical and political viewpoint.
Segmenting and profiling a market is done in order to create a product that best suits the needs of the desired consumer. Market segmentation is useful as it separates the total market into different segments allowing a company to create a product specific to the consumer’s needs. Profiling the market then allows the marketer to define the certain characteristics of the target market helping the product to cater better specifically to their needs. Sources of information that could be used to segment and profile the market include industry sources, using qualitative and quantitative research, priori research, by making assumptions and using research to support them as well as existing research data.
The market for Frigidaire's front-loading washing machine should be divided into single segments which can then identify groups of consumers who share commonalities that have the potential to drive demand for the new product. Each segment of the market will have similar needs in quality and performance; they have a semi-uniform response to the marketing mix. The target of Frigidaire's marketing campaign will rely on the hierarchy of each segment's priorities. Typically, a market is segmented to include demographics combined with other behavioral attributes as previously demonstrated in the VALS survey. The information obtained in data collection from these market segments is crucial because the behaviors behinds these groups combined with the presentation of the product are the driving forced behind sales. One technique frequently used is a perceptual map that discerns which features are important to consumers, often called determinant attributes (Business).
Market Segmentation This document prepared and presented by Business Resource Software, Inc. Market Segmentation The purpose for segmenting a market is to allow your marketing/sales program to focus on the subset of prospects that are "most likely" to purchase your offering. If done properly this will help to insure the highest return for your marketing/sales expenditures.
One business function that would address Tiger’s innovation needs is Marketing, specifically marketing segmentation. The formal definition of marketing segmentation is the process of grouping customers in markets with some heterogeneity into smaller, more similar or homogenous segments. (Dibb et al., 2016, p.204) Essentially this means dividing a market of potential customers based on different characteristics, interests and needs which correlates to how similarly they will respond to different marketing strategies. Target markets can be grouped in various ways, for example they could be separated based on demographic variables (Age, Gender, Ethnicity), geographic variables (Country, Region, City), psychographic variables (Personality, Lifestyle,
Segmentation, targeting and positioning are interrelated activities which are important to achieving a successful Marketing Mix. Discuss these concepts in theory and give practical examples of how they can be applied to one industry of your choice
Market Penetration means existing product being supplied into current market to increase the market share by selling more buildings to the current customers or finding new customer within these current markets, these type of strategies consider comparatively low risk because customers and products are existent from the beginning.
Market segmentation means dividing the market into distinct groups that have common needs and will respond similarly to marketing action. Each segment must be unique, have common needs, and respond in a similar manner to marketing efforts. Target market is the group of potential customer that has been selected by business to focus its marketing efforts towards. This is the group the business wants to sell its products/services to. Positioning refers to the image created in the minds of customer of its product or brand. It is a perception created in the minds of the consumer relative to that of its competitors.
Nowadays, Segmentation, Targeting and Positioning (STP) is the most used strategic way in Marketing. It is the prime of the available methods that are applied to create marketing models in practice. This model is beneficial when making marketing communication plans because it aids marketers to prioritize ideas and thereby create and advertise unique and appropriate slogans to communicate with various segments this is a segment based strategy rather than a product based strategy. This strategy enables to communicate more appropriate messages to product appealing segments.