Essay Sample
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Contents
Introduction
Research Details
Problem
Limitations
Market Segmentation
Ø The fundamentals of
Market Segmentation
Ø The Geographic
Segmentation
Ø Demographic
Segmentation
Ø The Psychographic
Segmentation
Ø The Behavioral
Segmentation
Conclusion
Work Cited
Introduction
In the competitive
markets of today, the consumer’s behavior has become the primary concern for
the business to follow. To survive in the competition the organizational
strategies are directed more towards the customer oriented theories. For more
than forty years, managers in every field have been exhorted to “stay close to
the customer,” to “put the customer first,” and to define the purpose of a
business as the creation and retention of satisfied customers (Elmore-Yalch 1998). This is when
market segmentation concepts and research laid its foundation in the strategic
planning of the business.
“The
segmentation is the delineation of customer group or groups with homogenous
wants and needs which the organization might successfully satisfy. It is the
process of grouping individuals whose expected reactions to the producers’
marketing efforts will be similar during a specified time period”(Julian Vieceli n.d.)
Dealing with the
competition is not the only aim that can be achieved by adoption of market
segment theories in fact the discoveries in the process can serve the planning
purposes of the business more effectually.
Research Details
Sportzshoo Plc. is a
manufacturer of sports shoes that is standing in the industry for a credible
period of time. Sports shoes are regularly consumed products in the western
markets due to their comfort prospects. The environmental situation in which
the company is not very difficult to handle since the economic situation of UK,
where the country is situated has only improved over time. During 20 years, the
manufacturer was able to increase its profit figure but only by making the
sales to the retailers. Now that the company is trying to expand change in the
marketing strategies is indispensable which has been a major reason for less
growth of the business in the past.
In the course of
change, market segmentation has several important theories that can majorly
influence the marketing strategy of the business. The research below is aimed
to investigate all the appropriate market segments that can be relevant in
studying the future opportunities for the shoe maker.
Problem
The only activity for
the purpose of promotion of Sportzshoo Plc. is the press release after fixed
intervals that mainly focus on the retailers. The company is presently lagging
behind in the promotional activities of the brand. Branding is a usual smart
function in most of the competitor organizations. The effective and modern
techniques that can boost the sale and image of the brand greatly have never
been followed. This is why the brand sales are just confined to a limited
region where the factories are actually situated. The retailers may be reselling
the Sportzshoo’s products to the other markets but the business individually
has no such information. This is the reason why the advertising plan of the
company may not support the expansion, the owner of the business is expecting
in near future. There has been no significant marketing plan in the past, so
the market segmentation research can be taken as an effective measure as it
covers and provide the wide opportunity of information for the business.
Limitations
-The market
segmentation is the extensive study of consumer markets therefore; it may use
number of secondary resources in the exploration procedures. The secondary
resources may sometimes limit the flow of precise information as it is meant
for some other purpose.
- Other than that there
are a few misinterpretations and limitation that are closely related with the
process of segmentation and are can’t be ignored. Small market segments, the
misinterpretation of consumer’s behavior and the costing errors are a few
problems that can mislead the research.
Market
Segmentation
Studying the case of
Sportzshoes closely, there is a very little certain information available that
can be used for the future planning of the business. This is very less with the
marketing prospect. However, the scenarios of Market Segmentation are a
fortunate as they are applicable at any stage of the business development. In
the book of Marketing William M. Pride and O. C. Ferrell have essentially
highlighted the market segment functioning: The use of market segment profiles
benefits marketers in several ways. Such profiles help marketer determine which
segment or segments are more attractive to the organization relative to firm’s
strengths, weakness, objectives and resources (William M. Pride 2011).
As the Sportzshoes Plc.
is expecting to enter new markets it would be very essential for the business
to know about their prospective customer. This information would give the
company certain ideas about what should be introduced as their new product. The
user of information will be able to know about what their customers would
prefer and also about the acceptable prices of a product in the consumer
markets.
The fundamentals
of Market Segmentation
There is a complete set
of segmentation fundamentals that can be practiced in order to understand the
consumer behavior towards a particular product.
The Geographic
Segmentation
Consumers in different
geographic locations are subject to varying conditions in terms of climate,
terrain, natural resources and population density. Markets can be divided into
regions because one or more of the geographical variables to causes differences
to appear from one region to another.(Anon 1999a)
Example: The
Sportzshoes Plc. would have great scope of sales in the regions where climate
remains cold in most time of the year. The company can further locate that
where the natural resources like leather and other materials are easily
available so that the manufacturing set up can be made easy. Geographic study
can also tell that in which areas the sales will remain consistent and where
there is a scope for seasonal sales. The promotional campaigns can also be made
active and inactive in certain areas in accordance with the demand.
Demographic Segmentation
The most common
approach to market segmentation is demographic segmentation, the division of
the consumer groups according to demographic variables such as age, sex,
income, occupation, education, household size, life style and stage in the
family life cycle(Anon 1999b).
Example: For a shoe
manufacturer, the discovery of this information would make it easier to decide
the preferable designs and size of the shoes. For marketing purpose it is also
important as it would affect the way of addressing the target customers in the
advertising campaigns of the business. The age density and occupational
situation of families in a particular region will assist in developing an
effective price strategy for the business.
The Psychographic Segmentation
Life style refers to
the consumer’s habits and mode of living. Consumers’ life style is regarded as
composites of their individual psychological make-ups – their needs, motives,
perceptions and attitudes (Anon 1999c).
Example: This research
will particularly be helpful in understanding the facts about what should be
the organization’s major concerns during the advertising campaigns. As for
parents, the comfort ability and price of the shoes will be more relevant and
for the younger customers the sports utility will be the striking point.
The
Behavioral Segmentation
This type of
segmentation looks at consumer’s behavior patterns with regard to products –
they may be frequent or infrequent purchases, show loyalty to a particular
brand, or regularly switch brands.(Anon 1999d)
Example: This demonstration will be able to
inform the shoe manufacturer about what can make the brand consistent or vice
versa. The shoe maker can study from market history about the practices that
made the customer skip one product and jump on to another.
Benefit Segmentation
Benefit segmentation
focuses on attributes such as product usage rates and the benefits derived from
a product (Anon 1999e)
Example: The buyer of
shoes can be retained by providing the maximum style and comfort factor in the
shoes. The price and reliability can be other benefits that a shoe buyer might
be looking for.
Conclusion
With the help of
research about how market segmentation works, it can be concluded that the
geographic, demographic, psychographic, behavioral and benefit segmentation can
greatly assist in overall planning of new products. The Sportzshoes Plc. can develop
a clear marketing and manufacturing strategy to apply in future for long time
and also reliably forecast the profit figures. This vast study of consumer
behavior not only helps with studying the demand of the product but also
discloses the facts about what prices will be acceptable for the prospective
buyer of the shoes.
Work Cited
Anon, 1999a. No Title. In Business for Higher
Awards. Heinemann, p. 32.
Elmore-Yalch, R., 1998. No Title. Integrating
market research into transit management, p.7.
Julian Vieceli, M.V., No Title. In Marketing
management. Atlantic Publishers & Distri, p. 138.
William M. Pride, O.C.F., 2011. No Title. In Marketing.
Cengage Learning, p. 171.
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