Investigating Marketing

     

Segmentation

[1.] Market Segmentation is used as a strategic marketing tool for defining markets and thereby allocating resources. This is also a method used to divide customer population into various groups according to their loyalty score.  This is also a marketing technique which involves grouping audiences into different ‘segments’ or sectors. Marketing segmentation is the process in which the market is divided into similar groups that share or have common features or characteristics.  This involves carry out different action plans for each segment/sector individually in order for promotional purposes. The information of the different sectors are usually obtained and analysed via primary data e.g., using techniques such as cluster analysis via market research etc.

[1.http://www.google.co.uk/search?hl=en&q=define%3A+segmentation&meta=]

 This is basically dividing the market in to different section or according to various aspects or characteristics within a customer, business etc.

Segmentation studies use statistical techniques called ‘Factor Analysis’ and ‘Cluster Analysis’ to combine and come up with demographic data to make segments that are easier to target. In many cases it is better to identify the target groups for a certain business and then market to smaller, more defined segments or sections.

The ways in which that the target market will be segmented in the market is going to be mainly through demographic variables. These are as follow;

• Age - How old will the common customer/consumers of the product be?

The age range of the target market for the iPod that Marks & Spencer’s will sell in their stores would be about 21 to 35 year olds. This age range was chosen as this is the age range that people would be working at and earning a decent amount of pay and therefore could easily afford the product.

• Gender -  Is the targeted audience for ‘Male’ or ‘Female’

The required gender for the Marks & Spencer’s mobile phone product would be male as I have already suggested; this would be based upon the fact that the mobile phone product would be slightly on the larger side so will appeal to men rather than women, that would rather prefer slim phones and sleek phones.  

• Sexual Orientation - Is the product mainly aimed at Homosexual, Bisexuals etc.

The sexual orientation would not be specific in Marks & Spencer’s case as this would not appeal to one orientation more than the other so it would not be necessary to focus upon.

• Family size - How big is the intended family that will mostly want to purchase the product like to be

As this product would not be targeted at families this would not be applicable to Marks & Spencer’s new launched product.

• Education – Is the intended audience likely to be at lower education or higher education so what will there age range/interests be; will they still be in Nursery, Primary School (Junior/Infants), Secondary School, College/Sixth Form or University. What qualifications does or must the intended customer or consumer have in order to purchase the product or what education will the most common customer have or need in order to purchase something i.e. will the technology be easy to utilise or will it require you to have knowledge about it.

Education-wise the product may be aimed at the students on the upper end of the scale so perhaps university student with part-time jobs who are earning a reasonable amount of pay.

• Income – How much income is the target audience likely to receive e.g. has he got a high paid so need a quality higher priced product or has does he/she a lower or decent amount of income so therefore need a cheaper or lower quality product.

Again here this will be aimed at the people who are earning a reasonable or fairly higher amount of pay and therefore, they can afford the product and there would be no hassle in raising the money.  

• Occupation - What does the targeted audience do as in what does he or she work as.

The occupation that the ‘typical’ consumer or customers of Marks & Spencer’s that may decide to purchase this product may work as an accountant, lawyer or a sole trader/manger of a successful business.

• Socioeconomic status – what is the intended customer’s status in society e.g. will more professional and popular/famous people want to buy the product or will common people in society such as teachers etc. want to buy the product.

The intended customers of Marks & Spencer’s in order to purchase the product will be mostly higher people in society so this will include talented people who are well-known and have a good source of income flow so can easily afford the mobile handset and pay for the contract if that is what they require.  

• Religion – What is the most likely religion e.g. will more Christian or Muslim people wants to buy a product that is associated with either religion, who is more likely to come into the stores in order to come in to the stores and therefore who will purchase the product.

Marks & Spencer’s don’t particularly target pacific religions as it will not affect their ability in order to purchase or not to purchase the product.

• Ethnic – What may be the ethnicity of the customer/consumer be i.e. what is going to be the ethic background of the majority of customers for a particular product.

And again ethnicity will not be focused upon as Marks & Spencer’s want maximum custom.

• Nationality – Will the citizens of the country more likely to buy this phone product rather than tourists i.e. will the phone work outside the U.K or E.U.

The nationality will mainly be British as most of the British citizens will want to purchase the product as the product is mainly aimed at businessmen and if the a person came from abroad where they don’t speak in English then they may not want to purchase the product; as they may not be able to read the writing and use the phone, so they may not want to purchase it.  

• Language – What may be the most common language of the targeted audience of the product be i.e. will the product be associated with only ‘English’ or will it relate to other languages as well i.e. will the product be able to adapt or someone who can not speak or understand the English language so will there be other customer for the product other than the people who speak English.  

The language of the buyers for the newly launched product at M&S will have to be English as the phone default language will be in english also; so as long as the person can read and understand English they will able to use the product; and therefore they can purchase and consume the product.

Other segmentation variables may include, Psychological Variables which include aspects such as;

• Personality/ Attitude
• Lifestyle
• Value
• Appearance

Behavioural variables such as;

• Benefit sought
•  
•  
•  
•  stage
•  

From a marketing management perspective, segmentation is seen as the act of dividing a market into distinct groups who might be attracted to different products or services. This is a common technique which is widely used and is one of the requirements for successful marketing. By dividing the market into subgroups and various different categories or target markets, both planning and planned decision making can be made more effective.

The segmentation links in with the chosen product or service of any company as the customers characteristics need to be considered; as a ‘Typical Customer’ of that type of product, for example what type of customer would usually buy a mobile phone handset? This includes age, gender, occupation, culture, level in society etc.

Because each segment is fairly homogeneous in their needs and attitudes, they are likely to respond similarly to a given marketing strategy. That is, they are likely to have similar feelings and ideas about a marketing mix comprised of a given product or service, sold at a given price, distributed in a certain way and promoted in a certain way.

Market Segmentation is basically the process in which consumers are grouped together according to identifiable characteristics that are relevant to their buying behaviour. As this allow marketers more effectively to target one or more segment of the market with the marketing mix.

Broadly, markets can be divided according to a number of general criteria, such as by industry or public versus private sector. Small segments are often termed niche markets or specialty markets. However, all segments fall into either consumer or industrial markets. Although it has similar objectives and it overlaps with consumer markets in many ways, the process of Industrial market segmentation is quite different.

The process of segmentation is distinct from targeting (choosing which segments to address) and positioning (designing an appropriate marketing mix for each segment). The overall intent is to identify groups of similar customers and potential customers; to prioritise the groups to address to understand their behaviour and to respond with appropriate marketing strategies that satisfy the different preferences of each chosen segment. Revenues are thus improved.

Improved segmentation can lead to significantly improved marketing effectiveness. With the right segmentation, the right lists can be purchased, advertising results can be improved and customer satisfaction can be increased.

When enough information is combined to create a clear picture of a typical member of a segment, this is referred to as a . When the  is limited to demographic variables it is called a  (typically shortened to "a demographic"). A  technique commonly used in determining a profile is .

Other less common variable may include;

 variables -

• Region – Region of the world or country, East, West, South, North, Central, coastal, hilly, etc.
• Country – Size of country, metropolitan cities, small cities and towns.
• Density of area – Urban, semi-urban and rural.
• Climate – Hot, cold, rainy, sunny, breeze, humid, thunder, lighting and fog.

Other Psychological variables may include -

• Personality
• Lifestyle
• Value
• Attitude
• Appearance
• Behavioural variables
• benefit sought
•  
•  
•  
•  stage
•  
•  

Target Market

Every company has to set a target market for their products that they are going to sell or service that they intend to provide. Target market is a segment of a certain market that a company identifies as a customer.

The targeted audience or target market for this product would be aimed at a middle classed workingmen with an average paid job and also the higher classed who have a reasonable amount of income; as the product will not be cheap and be for those who are looking for a quality product rather than a bargain or an average sale. This targeted audience will be aged at middle and higher class (c3/c4 class); professional working men aged 21-35 years. This would include people such as solicitors, businessmen of successful businesses and also other people in high profession jobs as they would have the sufficient funds into order to purchase the product form Marks & Spencer’s; and if they wanted the contract phone then they may need to have a decent income and cash flow as they will need to pay the contract fees every month so will need to be able to afford it otherwise they contract will be cancelled.

This should be simple and straight forward to the point to convey the message across to the targeted audience. Also the targeted audience should be male as the have considerably more money than women in terms of work and income.  Even thought men and women are paid almost equally men are still tend to get paid more as in society they are given a higher status than women. Also the product would also attract more male customers as the pricing range and features of the product are more aimed at men.

This product will suit a middle aged person as he would have the money to spend on a gadget/equipment like this and it will also be appropriate and suitable for him if he has a job or a workplace which is associated with ICT as this will be more efficient and help him to work on the go.  

The middle class working men may want to use the phone product at work he may want to use it in the office to store the dates and times of meetings and use the internet for research, type up things and communicate with other colleagues etc. therefore this will be a suitable product for them.

This will help to meet the aims and objectives of the business as this newly lunched product will benefit the business as it will draw attention to customers via adevertisements of the new product and also increase the sales of other existing product as the customers will come into the stores and they may like another item as well and may want to purchase that; so this will bring in extra sales.

The product may use the method of market skimming, which in effect should draw the desired customers into the store and therefore as these customers in theory will have more income they should bring with them more money into the stores of M&S. This will increase the sales of Marks & Spencer’s as the customer should therefore have more spare money so will want to spend it a lot more easier and also they should desire more quality product so will in actual fact spend more money providing the business with more funds and overall increasing the business.

Market Research (Identifying the Market)                  

Market research includes Primary and Secondary research such as questionnaires searching the internet or looking into various books for secondary data. Research in marketing is also vital as this information is needed to so that the business owners etc. know what customers need and want and so cater for these needs ands wants of the consumers. Research involves gathering information from consumers as to which products or services are more desirable.

Similar products such as the ‘Nokia95’ mobile device is retailing ₤300/450 on pay as you go service e.g. in ‘Vodafone’ shop the handset is priced at ₤349.99 and the product that we will be introduced in M&S hopes to be in competition with this product so should be priced around the same margin. Also the contract phone in the N95 product has a monthly fee of around ₤30/40 a month with up to 500mins and 100 free texts.  

The product will not be cheap to make as it will consist of various different features within it such Bluetooth, WiFi, GPRS, a built in GPS receiver, TomTomMobile5, Windows mobile, 3D stereo surround sound speakers, Mp3/Mp4 player, 3GP playback, MPG1 compatible, a digital 5 mega pixel camera with 10x digital zoom, video recorder, touch screen feature, slim palm shape, stunning chrome colour, 2 USB ports, photos, Microsoft office 2007, internet, video playback, video messaging, large 8Gb hard drive memory, additional mini SD memory card slot,  etc. these features will attract more attention to middle-classed working business men.

A questionnaire was carried out to for primary research of the customer demands and research into the market for mobile phones.

What is your Gender?

Male _______22__            ____   Female __________8               ________

 What is your age?

10-18______5_______    19-25_______8______    26-40_______10_______

40+______7___________

Do you own a mobile phone?

Yes__________30_____________    No__ __________0___________

If yes, is it on contract or a pay-as-you-go service?

Contract________ 9__________    Pay-As-You-Go_______21__________

If yes and is it is on Pay-As-You-Go, how much did u pay for the handset?

0-₤50 _____2____   ₤50-₤100______3_____   ₤100-₤150______5______

₤150-₤200____4_ ____    ₤200+____ 6_____

Would you prefer a simple/standard phone or a sophisticated gadget phone with a large variety of features such as an integrated digital camera?

Simple_________1_________     Sophisticated__________29_________

 

This information will be considered and evaluated in order to suit the customers and the product will have to be adjust to meet the requirements and the needs of these customer’s because in reality these are the people who are going to purchase the product and if they are not satisfied and it doesn’t fulfil their demands then they will not want to purchase it.

This data tells that the set target audience is right as more men tend to have and buy mobile phones than women, another major finding is that phones are mostly used and bought buy young, and working adults. Another point that has been made clear is that almost everyone would prefer a sophisticated and modern phone rather that a standard phone.

This data also shows that pay-as-you-go phones are more common than contracts. This data can also be used to figure out how much people are willing to pay for their phones.

One reason why phones become so popular and most wanted is because of the advertisement. Here is an advertisement of the new Apple iPhone; this has been shown all over the world. Even thought it may look so simple a lot of thought has gone into producing this ad and the phone.

The whole purpose of this advertise is to concentrate on the phone rather that the background, this also makes it so much easier to recognise and identify the main features of the phone. The phone looks very sophisticated, original, simple but still very modern and up to date.

 Just by looking at the advertise you can work out that the target audience are the working and upper class adults as the feature can relate to both classes. Because the phone has the normal features such as text messages, camera, music etc. the young adults would also really be attracted to this phone. But it’s the new features that are: Weather, Maps, Stocks and notes that would be really helpful for the working and upper class as they can use the phone at work also to help them out.

http://www.letsgodigital.org/images/artikelen/64/apple_iphone_zoom1.jpg

[1.] Mobile phones is now the most easy and common way of communication. Nearly every month a new mobile phone is launched, it’s astonishing how many people have mobile phones, some even have several. According to Rajesh Jain the managing director of Netcore Solutions Pvt Ltd the mobile phone is rapidly becoming the user device. Mobile phones are not just used for means of communication but also as cameras, alarm clocks, watches, music and video player and for many more things.

[1.http://www.rediff.com/money/2005/mar/24guest1.htm]

Marketing Mix (The 4 P’s of Marketing)

Marketing is the process of identifying what the consumers’ wants and needs are and to make the product or service to satisfy these. This can also be accomplished through market research. Strategic Marketing attempts are to establish how an organisation competes against its competitors in an open market. In particular, it aims at generating a competitive advantage relative to its competitors. This prompts the customer with satisfying services and meeting the customer’s expectations.

Marketing is the promotion of products, especially advertising and also the brand or branding of a product. Products are often being improved upon to meet the requirements of the consumers. The marketing mix consists of four different variables that are used to control and manage a business/organisation of any kind. These are also the four major decisions that are made within a business. These are used by the owner/s of the business or company to help them keep on track so they are aware of the stage that they are at within their business and also so they know where they are going. The four P’s of the marketing mix are the followings:-

Product – The product which is a physical manufactured good or service that is offered to the consumer. Product decisions include features such as function, appearance, and packaging, survive and warranty guarantees and support.  The aspects of marketing deal with the specifications of the actual goods or services, and how it links in to the customers needs and wants.

The product that Marks & Spencer’s will be selling is a limited edition mobile phone handset/product (limited edition iPhone) in the niche market so it will be unique and therefore it shouldn’t have many difficulties in selling.

Place – The place or placement are the decisions that are associated with getting the product to the customers. Distribution decisions include market coverage, and various other things are considered within this such as channel member selection. This refers to how the product or service gets to the customers; this could be via the internet, retail shop or home service or even over the phone if the company provides a telephone service such as a pizza delivery business or a taxi base.

The distribution methods that Marks & Spencer’s will use in order to get to the stores will be transportation via lorries etc as the product will be delivered to the stores directly from the manufacteres.

Price - The price of the product or service should be taken into account, profit margins and the competitor’s response to parable pricing. It also includes discounts, financing and other options such as leasing the property.  

The price of the product as has already been discussed within this report will be £349.99 and this will be done via the market skimming method as already been discussed.

Promotion – The promotion within the business enables the decisions making related to communication and selling to the product to potential customers.  Promotion decisions include dealing with things such as advertising, public relations and media type such as sales promotion, publicity, and personal selling. This also refers to the various methods and techniques used to promote a particular product/service or a company/organisation.

The promotion methods that will be used by Marks & Spencer’s in order to sell the product will mainly be advertisements as this will gain awareness and gain recognition for the product and therefore enable it to sell successfully.

Marks & Spencer’s will by not just be introducing a new product they are providing a service as this will be done through the network provider for the mobile phone product. All customers will have a choice of handset as a variety of models and colours should be available and also they also get a choice of contract and pay-as-you-go service so they can chose from these. This should attract a wider audience as any choices are given here so this is more likely to be a successful in selling.  

This will also again me targeted/aimed at men of working class and should satisfy the customer’s needs as the research that has been carried out shows the more sophisticated products are the ones which are better at selling.

Good customer services will be provided for any one entering the M&S store and various targeted audience will be addressed and staff will introduce the new product to them through the use of their communication skills and persuasive manner towards the potential customer, this will promote the product and also advertise it via public relations.

If the product is successful then it should be sold in all the M&S stores including overseas branches.  The offer you make to you customer can be alternated by changing the marketing mix elements. If the business needs a high profile/brand, or just needs to increase the focus on promotion and desensitise the weight given to price.

Evaluation

The product should be successful in terms of selling as it has all the needs and requirements of the targeted audience and therefore it should not have any problems sales wise and should attract a niche market as the product is unique to the M&S stores within the U.K and know other retailer will be selling he product as the manufacturer’s of M&S will be producing the product.

Also as the product will be will me only manufactured and sold for a limited amount of time so therefore it will not have many problems to sell as the customer/consumers who are interested in buying them will not wait long to purchase them as they know they will not be selling in shops for long. This also would mean that later on within the product life cycle the product would not have to be sold at a lower price. Also as the product is going to limited they will also be rare so that would mean that this would increase the value of the product so it could easily be sold at a relatively higher price.

Other plus points about Marks & Spencer’s and it newly launched product, may be that through the advertisements of the product more awareness to the stores will gain, therefore resulting in the company to increase the amount of sales and the business that they normally would get. Even if the product does not sell so well, it will only be in eth market for a certain period of time so if it were to be a ‘flunk’ and make a loss then it wouldn’t be that much as the product will only be out and being produced fro so long.

The disadvantages of this newly launched product may that as the product is in the niche market it may take some time to gain awareness to the people who would be interested in the product and Marks & Spencer’s will not have existing customers for this newly launched product to start off with.

Another disadvantage may be that the advertisements and market researching, and marketing of the product will be expensive and consequently decrease the overall income of the business/organisation.

Recommendations to the product and Marks & Spencer’s may be to launch a variety of different colours in the product so that the customer’s feel as if their demands are being met and so that they can chose the product in the colour that they desire the most and be satisfied with the product and this should also lower the amount of negative feedbacks from the customer and consumers of the product.

Conclusion

Overall in conclusion the product of Marks & Spencer’ should prove to sell effectively and be successful in terms of selling to the customer/consumers; as the appropriate marketing method are used theoretically and also the price range and customer profile/target market has been narrowed down and the relevant and specific audience have been targeted therefore it should be a success.

Also the product that will be sold should also increase the business and publicity of the Marks & Spencer’s;’ organisation, so the product should also have a lot of awareness as it will advertised all over the U.K as the product will be selling throughout all the branches and not just the one or tow odd ones.  

In order to finish the product will be easily sold as it is of high quality and calibre and so the more sophisticated customers would want to buy the product straight away, and there should be no hassle in doing so as the targeted audience will have the sufficient amount of money to easily afford the product along with enough to spare for accessories.

Appendix

Bibliography

http://www.google.co.uk/search?hl=en&q=define%3A+segmentation&meta=

 http://www.businessplans.org/Segment.html

http://www.joltsearch.co.uk/search.asp?QUERY=n95+on+contract

http://www.mobilephonesdirect.co.uk/phonenetwork-302-1-Nokia_N95_on_Vodafone.html?lpsrc=yahoo&lpgrp=nokia+N95&lptxt=N953&lpcat=nokia&lpkey={keyword}

http://marketingteacher.com/Lessons/lesson_marketing_mix.htm

http://www.users.globalnet.co.uk/~rxv/companies/mks.htm

http://www.users.globalnet.co.uk/~rxv/companies/mks.htm

http://www.rediff.com/money/2005/mar/24guest1.htm

AS Level, Applied Business, for EDEXCEL, Double award, pages 121, 122, 123, 124, 125.