...efficiently, market should be first segmented. And once the firm has identified the firm’s market-segment opportunities, the firm now has to evaluate the various segments and decide how many and which ones to target. We now look at how firms evaluate and select target segments. Imagine practicing archery with your eyes closed or throwing a football with a blindfold on. In both cases, being prevented from seeing your target would make it nearly impossible to hit it. This concept can easily be applied to business, as well. Doing business without knowing what your target market is will prevent you from reaching your objectives: increased sales, market share or brand awareness. Market targeting is a strategic approach to creating a marketing mix for a specific, targeted market segment and set of customers. It is the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter. In evaluating segments, it must look at the segment’s attractiveness indicators and the firm’s objectives and resources. In choosing which segments to target, the company can choose to focus on a single segment, several segments, a specific product, a specific market, or the full market. If it decides to serve the full market, it must choose between differentiated and undifferentiated marketing. II. Theoretrical Framework Four other considerations must be taken into account in evaluating and selecting segments: ethical choice of market targets, segment...
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...1 Choice experiment: Identifying “niche” versus “change-of-pace” brands Albert C. Bemmaor, December 23, 2011 March 30, 2012 October 12, 2012 The use of the “REIBST2_vaa.xls” data file is restricted to the course MKGM31203 (Q1, 2012-2013) at ESSEC Business School. “Niche” brands can be defined as brands that benefit from an abnormally high repeat rate whereas “change-of-pace” brands can be defined as brands with an abnormally low repeat rate for a given penetration level. Key notions Here are some basic notions you need be familiar with prior to carrying out this exercise: (i) (ii) (iii) (iv) (v) (vi) (vii) What a “variable” is. What a mean (expected value) is and how to compute it; What the notion of independence between two events means and how to test for it; What a correlation between two variables is and how to measure it; What a market share is and how to interpret it; What a penetration is and how to interpret it; What the duplication between two brands is and how to interpret it. Analysis as a scientific process Analyzing data consists of a three-step procedure: (i) (ii) (iii) Defining expectations: What do you expect to find and why? If you have “no idea” about your expectations, you need to develop these ideas by discussing with colleagues, “experts”, reading textbooks and/or using other supporting material; Running the analysis; Comparing your expectations with the findings. Do they match? Did you obtain any surprising result...
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...Section: MBAD 518 Team: None Date: 8-27-13 Re: Sonik CD word count: 492 Executive Summary Our company has to determine a growth strategy apposite to the developing music industry. Major retailers and digital downloads have moved in to erode our once-niche position. The company should stay true to its founding values and pursue the niche market, as it is most profitable, but also find ways to expand in to new genres. Situation Overview: Hannah needs to make a decision about the strategic future of Sonic CD. She needs to select one of three growth options: Continue serving a niche market, move towards a mass-market retailing, or move forward as a distribution company only. Sonic CD is currently facing financial pressures from increased competition and eroding margins. Additionally, rapidly changing technology is transforming the industry and how consumers buy music. Action Recommendations: Sonik CD should continue competing as a niche player. To counter stagnating market in the jazz genre, Sonik CD should consider changing their marketing target toward other genres in order to continue growth. If the Jazz/Classical market is indeed captured and can no longer grow, focus on retention of the niche and expansion beyond base genres. The potential value of this course of action is $321.51 LCV. With a 95% retention investment in place, that value jumps to $439.43. Only 4,240 new customers need be acquired to break even on that investment. The value range based...
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...B. Managerial judgments about how consumers perceive products | | | | | C. Rank order of the ratings of a existing brand's preference relative to its competitors | | | | | D. Judgments of existing products or brands with respect to important attributes | | | | | E. Detailed explanations of why consumers make the choices they do | | Answer Key: D Feedback: What you chose is correct. | Question 2 of 25 | 4.0/ 4.0 Points | One marketing action that can be taken to sell a single product or service to multiple market segments is | | | | A. develop and produce another version of the product. | | | | | B. manufacture products that appeal to different markets. | | | | | C. develop separate promotional campaigns. | | | | | D. purchase another firm that has additional products that would appeal to multiple markets. | | | | | E. issue stock used for additional research and development for improved products. | | Answer Key: C Feedback: What you chose is correct. | Question 3 of 25 | 4.0/ 4.0 Points | The second step in segmenting and targeting markets is to | | | | A. group potential buyers into segments | | | | | B. group products to be sold into categories | | | | | C. develop a market-product grid and estimate size of the overall market | | | | | D. select target markets | | | | | E. take marketing actions to reach markets | | Answer Key: B Feedback:...
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...the decision based on what they prefer- natural products cost higher than traditional; however, some people would prefer reasonably priced products regardless of their ingredients. Brand usage indicates how the brand is popular among consumers as consumers would rather spend on brands that they can trust rather than the ones that may use natural ingredients but have failed to convey their value proposition to the consumers effectively. Basically, if the consumers’ perception of the overall brand is positive, they would buy the brand. However, consumers need to have strong brand awareness to have the positive perception about the value proposition and image of the brand. 2. What are the sources of Burt's Bees' brand equity? Utilize concepts from the course. Use facts from the case to support your position. Brand awareness and brand image contribute towards strong brand equity. As Burt’s Bees want to enter the mass market, one needs to consider the brand awareness of brands such as Dove and Olay. These brands are known for their traditional products and rank high on awareness and usage. Aveeno ranks highest in pseudo-natural products and Aveda in the natural product range. In order to raise brand awareness, Burt’s Bees will have to engage in heavy marketing to enter mass market. However, Burt’s Bees does have strong and loyal customer base that perceive the products as high in quality, eco-friendly and innovative. Burt’s Bees’s image is positive as...
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...1. Identify at least three challenges when setting up a business. Explain why they are challenges. One challenge when setting up a business is the obstacle of arranging for financing. In business you’re going to have slow times when revenue is not steady or increasing. Ethically, businesses would like to retain their employees when times get rough. Being able to obtain a loan or establish a line credit is crucial to keeping the flow of the business going. You need capital and equipment to get your business up and running. Another challenge businesses face is finding the right employees for the job. Some people are lucky enough to have friends or family that are self motivated and are willing to put forth the effort to assist in establishing the business plan, practices, and model. Finding employees that have good work ethics: are punctual in their attendance, put in a full day’s work, and their personal integrity is held to a high standard, can be time consuming and difficult to find. Another challenge is getting your name out to a potential customer base. If people are unfamiliar and/or unaware of your company and services that you are offering to provide, they can’t contribute to the growth of your business. Creating an attractive, user friendly website is a great way to gain exposure and attract a new customer base. But most of the time, a company needs a sales force to reach out to its customer base so that the customers feel that there is personal interaction...
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...8 IDENTIFYING MARKET SEGMENTS AND TARGETS Markets are not homogeneous. A company needs to identify which market segments it can serve effectively. Such decisions require a keen understanding of consumer behavior and careful strategic thinking. To compete more effectively companies are now embracing target marketing. Effective target marketing requires that marketers: Identify and profile distinct groups of buyers who differ in their needs and preferences. Select one or more market segments to enter. For each target market, establish and communicate the distinctive benefit(s) of the company’s market offering. Levels of Market Segmentation The starting point for discussing segmentation is mass marketing. In mass marketing, the seller engages in the mass production, mass distribution, and mass promotion of one product for all buyers. A) The argument for mass marketing is that it creates the largest potential market, which leads, to the lowest costs that in turn can lead to lower prices or higher margins. Segment Marketing A market segment consists of a group of customers who share a similar set of needs and wants. A) The marketer does not create the segments. B) The marketer’s task is to identify the segments and decide which one(s) to target. C) A flexible market offering consists of two parts: 1) A naked solution containing the product and service elements that all segment member’s value. 2) Discretionary...
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...Ask.com is America’s fourth largest search engine, which has expanded into European & Asian market. It has also entered mobile user segment. It is planning to focus on its core customers and on answering their questions. In spite of severe competition from global giants like Google, Ask.com has carved a niche share for itself in the search engine market. The swot analysis of Ask.com STRENGTH Loyal Customer Base of 45 million Advance Technological Features a. Ask3D – merges all results with images & maps b. Morph – technological advances like morph c. AskEraser- which ensures privacy OPPORTUNITY Rapidly growing market Dynamic users who are ready to experiment Inability of major players apart from Google to hold on to their market share WEAKNESS Lack of first mover advantage in newer markets Tarnished image about its negative campaign Some of the features aren't user friendly THREAT Domination of Google Competition from other local players INCREASE MARKET SHARE ENRICHING THE CORE – “THE SEARCH EXPERIENCE’ Ask.com’s new infrastructure has improved freshness and, in particular, navigational queries. This is the new Edison algorithm, which went live at the end of March 2008. Edison is a compilation of Ask.com’s core search technologies, including Teoma’s subject specific communities with Direct Hit’s click tracking algorithm layered on top of it. Edison is six-times as fresh as the previous technology they were using. It brings Ask.com’s best assets all together to build...
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...Differentiation 3 Focus on Niche 3 Resources required to execute these strategies 4 Competitive Advantage Objectives Measurement 4 References: 5 Competitive Advantage Businesses always look for a competitive advantage to look different and to offer something right for a selected target audience. Competitive advantage is to indentify customer’s needs, to develop a high quality product with a decent price and to deliver it better than the others. As stated by Cole Ehmke & M.S. a competitive advantage is to answer this question “Why should the customer purchase from this operation rather than the competition? (Cole Ehmke, M.S: 5-01)”. The key point is that a brand has loyal customers for a reason. These loyal customers are often the cause of a successful growing business that builds upon a strong competitive edge than the competitors as stated by Michael E. Porter, a “Competitive advantage is at the heart of a firm's performance in competitive markets (J Collins, Michael E. Porter: 102)”. A competitive advantage can be sourced through many factors such as a high quality product, a superior customer service, less price then rivals, better location, more reliable product than the competitor, better design and providing a better value for money. According to Porter these factors can be categorized into three generic types: 1. Low Cost Leadership Strategy 2. Differentiation Strategy 3. Focus on Niche Strategy We will now examine how KIA Motors will plan their...
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...sounds or seems. Most of the time, the idea comes from inside you. There is a deep, nagging desire to see something accomplished or provided. This focus may start with a select group of people, as it did with “Urban Outfitters”, who began by targeting college students. Finding financing or funding may prove to be a bit more challenging until you decide to do some serious research. You may find various opportunities to acquire the financing you need through investors from different business industries. There are investors searching for small businesses in which they can invest money, time, and/or resources. Finding committed people who can see your vision for your business, and commit to working hard to meet the mission and goals for the business are valuable assets. These people may be family members, friends, classmates, or someone you met and connected with soon after sharing your vision. Urban Outfitters was started by Richard and Judy Hayne, and Richard’s old college roommate, Scott Belair. Roughly a year after the first store opened, Judy and Richard divorced and went separate ways; Scott Belair graduated from school and left the enterprise for Wall Street (Steve Jobs, 2011). Finding these great people does not mean they will stay with you forever, so choose wisely. Question 2: Define what a "niche" product is. Give at least three examples...
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...and co-preneurs do have large success rates and I believe they are alike in a lot of ways. First of all I would like to define these terms. Sole proprietorships are businesses managed and owned by one person. It is said that the business and the owner are the same when being looked at by the law. Co-preneurs are couples that work together for the business and they are the co-owners. So in one case, the business is owned by one person and in the other, a couple owns the business. I believe the large success rate for sole proprietorships has to deal with the fact of the business being owned by one sole person. The business owner has the power to make all of the decisions for his/her business. They do not have to go through someone else to select what is best for their business. This type of business is easy to create and it’s not as expensive as other business styles like franchises. Co-preneurs receive a high success rate as well and I believe this is consequential from having a couple own the business. Each person has their own unique qualities they contribute to the company. Just because they are a couple doesn’t mean they have to do everything the same way. For this type of business to work it is crucial for them to have separate jobs to do. For example, if she is good at the front of the business then she would stay out there (customers, inventory stock). If he is good at the back of the business (writing bills, paperwork, hiring) then he should stick to that. They do...
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...CHAPTER 8 IDENTIFYING MARKET SEGMENTS AND TARGETS LEARNING OBJECTIVES In this chapter, we will address the following questions: 1. What are the different levels of market segmentation? 2. In what ways can a company divide a market into segments? 3. What are the requirements for effective segmentation? 4. How should business markets be segmented? 5. How should a company choose the most attractive target markets? CHAPTER SUMMARY 1. Target marketing includes three activities: market segmentation, market targeting, and market positioning. Market segments are large, identifiable groups within a market. 2. Two bases for segmenting consumer markets are consumer characteristics and consumer responses. The major segmentation variables for consumer markets are geographic, demographic, psychographic, and behavioral. Marketers use them singly or in combination. 3. Business marketers use all these variables along with operating variables, purchasing approaches, and situational factors. 4. To be useful, market segments must be measurable, substantial, accessible, differentiable, and actionable. 5. We can target markets at four main levels: mass, multiple segments, single (or niche) segment, and individuals. 6. A mass market targeting approach is adopted only by the biggest companies. Many companies target multiple segments defined in various ways such as various demographic groups who seek the same product benefit. 7. A niche is a more narrowly defined group...
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...Jackson Randall, product manager for Clean Edge must recommend how to the position, and determine the marketing budget for the companies newest razor. Analysis Clean Edge is the newest razor providing the closest shave for men. Paramount should be aware of the threat of competitors replicating the product in the near future. Alternatives The team agrees that the product should enter at a super-premium price point. Paramount has the option of entering the mainstream market where they have existing products or entering the niche market for the first time. Decision Criteria In order to be a viable option, unit sales must reach 1 million and 3.3 million in the niche and mainstream market, respectively. Marketing and advertising costs must be kept to a minimum to avoid the need to reallocate funds. Finally, the chosen market needs to enhance the overall brand image. Recommendation Paramount should position Clean Edge in the niche market under the name Clean Edge by Paramount. More elite distribution channels should be considered for the product. Research and innovation will be required in order to stay ahead of the technology curve. Problem & Decision Statement Paramount Health and Beauty Company is preparing to launch their newest nondisposable razor, Clean Edge. Jackson Randall, product manager for Clean Edge has been given the task to recommend which market is best to position the razor, how much the marketing budget should be, as well as which name best...
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...producer. This formation of LVMH would signal the creation of one of the world’s most profitable and encompassing luxury goods conglomerates. In 1989, Bernard Arnault would enter the picture, become the major shareholder of LVMH and take up position as chairman. An entrepreneur and art admirer, Arnault had amassed a personal fortune in real estate and in other luxury goods markets before purchasing the majority share of LVMH. Under him, LVMH would grow exponentially, acquire even more brands, expand into new markets, and see unprecedented growth. By the late 1990’s to early 2000’s, the company would be posting net revenues in the billions of Euros, comprise some fifty sub companies, all of brand names synonymous with high end fashion and luxury, and have over 1,500 retail stores operating in every major market on a global level. LVMH became the parent company to some fifty sub companies across a variety of different product industries and types. All were owned by the same company, but most operated independently and, in some instances, were direct competitors of each other. Regardless, each company no matter how different had one thing in common; they all produced high end luxury products. LVMH operated five sub categories: wines and spirits, fashions and leathers, watches and jewelry, perfumes and cosmetics, and selective retailing. Segmenting into these groups allowed more efficient operations and provided companies the availability to use each other to their advantage despite...
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...ericka MGMT305-DB unit1 January 5, 2014 While information systems has one meaning, it can be used in different ways for companies to keep a competitive edge on the marketplace. Compare and Contrast two distinctly different organizations on how they use information systems in their organizations. Include in your post the following: Information systems are the software and hardware systems that support data-intensive applications in the organization. http://www.journals.elsevier.com/information-systems/ * Research the 4 competitive strategies and briefly describe them. 4 competitive strategies chosen are: 1.-Cost Leadership Strategy: It is to produce products and/or services at the lowest cost in the industry. It achieves cost leadership by carefully buying practices, efficient business processes, forcing up the pricespaid by competitiors and helping customer or suppliers reduce their costs. 2.- Differentiation Strategy: it offers different products, services, or product features. By doing this, they can charge higher prices; sell more products, or both. 3.- Niche Strategy: is to select a narrow-scope segment (a niche market) and be the best in quality, speed or cost in that market. 4.- Customer-orientation Strategy: is where they concentrate on making customers happy. Customer is #1 is the basis of this strategy. Web-based systems that support customer relationship management are especially effective in this area because they can provide a personalized...
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