Market With Respect To Customers And Segmentation Marketing Essay

Analysis of market with respect to customers and segmentation is a fundamental process for any market offering. Several researches has been conducting on analyzing the factors on which the homogenous markets are segmented into several groups and are made heterogeneous with respect to some attributes possessed by the customers.

Market segmentation is a challenge by marketers to identify group of customers with similar attributes and then target the product according to their different needs. These segments which are made as a result of market segmentation process, are then refined and one or several segments are selected to target a particular product or market offering.

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The process of selecting appropriate group of customers for a particular market offering is a part of planning before the product is initially launched in the market. The overall marketing efforts are the post consequences of this process or in other way these market efforts are based on attributes possessed by the customer.

Each set of customers is targeted according to their attributes. Therefore it is of crucial importance for marketers to identify these attributes of customers that can be satisfied by the product offered in the market.

However, after all these planning and marketing segmentation it is a common issue for marketers to indentify the actual target market for their market offering. Sometimes it is also observed that a product targeted to a particular segment is also being used by other customers that falls apart from that targeted segment.

Segments are made on several characteristics like age, gender, geographic location, personality type, income group etc. It is the decision of the marketers to segment the market according to a particular or several characteristics.

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The ultimate goal of this process is to match the attributes of market offering to customer needs. The processes of marketing effort followed by segmentation analysis and selection are given a direction to target that particular segment and highlight the product attributes with respect to customer needs.

In our research we make an attempt to study the effect of linking a market offering to a specific segment on it’s acceptance by another segment. During this research we have identified several products that are linked to a particular customer segment based on different characteristics. Mainly we have divided these market offerings into three sections that are: market offerings linked to a particular gender, market offerings linked to a particular age group, market offerings linked to a particular geographic location.

We included these products in our survey to identify customers’ acceptance of a product that is linked to a particular segment by another segment that is not targeted by that product.

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Problem statement

To study the effects of linking market offerings to specific customer segments on its acceptance by other customer segments.

In this problem statement we’ll study the effect of linking market offerings to specific customer segments as an independent variable. We will be including market offerings that are linked to a particular market segment and will study its effect by identifying the acceptance of these products by other segments.

Therefore, the acceptance of market offerings that are linked to a particular segment by another segment will be dependent variable.

Hypotheses

For conducting this research we have created the following hypotheses:

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H1: Linking a market offering to a particular customer segment based on age does not have any effect on it’s acceptance by another segment based on age.

H2: Linking a market offering to a particular customer segment based on gender does not have any effect on it’s acceptance by another segment based on gender.

H3: Linking a market offering to a particular customer segment based on geographic location does not have any effect on it’s acceptance by another segment based on geographic location.

Outline of the study

Initially this study included the introduction to our research. In first chapter we tried to elaborate on our research topic. We discussed the issues that lead us towards our research problem. Furthermore we motioned our research problem statement along with the variables we’ll study from our research problem. To test the variables we have formulated our hypotheses that we’ll check in our result section.

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The second chapter brings about focus of research studies obtained from various research papers available. We did in depth study of around fifteen research papers related to our study and provided a brief discussion about their views regarding their respective field of study. This will provide a theoretical base for our study.

The third chapter describes our research methods in detail. It will cover methods of our data collection. The sampling technique we used to collect our data from respondents, along with the sample size. Instrument of data collection that we have used and the validity and reliability of data collected from that instrument. The research model is represented in diagram and statistical technique that we have used is also discussed.

The fourth section includes results of our study. This will be supported by statistical outputs of our data analysis and its interpretation to elaborate our results in theoretical terms. In the end of this section we’ll provide hypotheses assessment summary.

The fifth chapter will provide the conclusion on basis our results and discussions about it. The implications of our study on practical grounds. It will further indicate the areas of research that we can vision for further research.

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Definitions

Market offering: any product tangible or intangible that is offered in market or customers.

Market segmentation: Process of segmenting market into similar segments.

Chapter 2: LITERATURE REVIEW

Johnson (1971) found that “market segmentation studies can produce result which indicates desired marketing action. Techniques which are presentably available can (1) construct a product space (2) discover the shape of distribution of consumer’s idea point throughout such a space, and (3) identify likely opportunity for new and modified produce.”

Wendell R. Smith (1956) found in his studies that market segmentation is done by viewing different preference of different groups. Consumers with similar requirements and preferences are considered as a segment. Segmentation in this way in done in order to satisfy consumer wants.

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Through market segmentation marketers can identify the required marketing action. These technique help to indentify new offering that could be designed. Different offerings could be designed according to the customer requirements. These groups with different requirements are then divided into segments in order to bring in new products in the market (Johnson, 1971).

“Market segmentation consists of viewing a heterogeneous market (one characterized by divergent demand) as a number of smaller 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. As market segmentation simultaneously addresses the roles of both marketers and customers, the segmentation concept has captured the attention of many scholars and practitioners alike in the field. Accordingly, within the last few years, a number of new developments have emerged in market segmentation. Segmentation is based upon development on the demand side of market and represents a rational and more precise adjustment of product marketing effort to consumer or user requirements.”(Smith 1956).

Segmentation helps companies to achieve competitive advantage., as different segments leads to different outcomes. Segmentation helps marketers identify the role of consumer preferences. This segmentation is based on the demand by different consumer groups. Marketers design market offerings by evaluating difference preference of different segments so that it could satisfy their needs.

Age based segmentation is done by dividing people into similar age groups. The first age group that was born 1946 and 1964 are known as baby boomers I . They are more prone to make saving and questioning authority, so marketers have to design the product that has more cost to benefit ratio plus they have to provide more information about the offering. The second age based segment is baby boomer II 1964 and 1973 these are more towards spending then savings. N-Gens and Generation X segment are the once that are born between 1977 and 1987 and age from 1984 to 1994 respectively. They are more prone to spending money then saving. They prefer using internet as mean to socialize with people they know, so marketers need to produce product that close to technology. (Bidwell)

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“The brand extension decision is strategically critical to an organization. Though an extension is a way to exploit perhaps the most important asset owned by a business, it also risks decreasing the value of that asset. The wrong extension could create damaging associations that may be expensive, or even impossible, to change.” Ries and Trout (1981). “For most brand extensions, a motivating rationale is that the original brand has associations that will be helpful to the extension. The impact of a brand association, however, can be harmful to the extension. For example, the Betty Crocker attribute association might be viewed as negative if the name were used on fashion product designed to appeal to young women.” Zeithaml (1988)

Brand extension is of the most dangerous decision that a company make. The motivation behind brand extension is that the existing parent brand helps the new brand to acquire its place in the market. But as it get positive effects from parent brand it could also put a negative effect on the parent brand. As in case of failure or success of brand extension it some how reflects the reliability and success of an existing parent brand. Unrelated extensions are some times might be disastrous for the company.

Gender identity, sometimes referred to as an individual’s psychological sex, has been defined as the “fundamental, existential sense of one’s maleness or femaleness.” (Spence, 1984) A number of researchers have attempted to relate purchases of product types or specific brands to personality traits of the purchasers. These researchers advanced the basic hypothesis that individuals who consume in a certain manner will also manifest certain common personality characteristics, leading to prediction of consumer behavior. (Grubb & Grathwohl, 1967)

When attempting to measure whether segmentation has succeeded or failed. It is important to clarify the notion of success. Little research has dealt directly with the question of success and failure in segmentation research. (Dibb, 1998)

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With many questions regarding the relationship between marketing strategy and measurable business outcomes, proved the link with particular strategic decisions. It is difficult to achieve. (Dibb, 1998)

The classic illustration of bad understanding of segmentation principles comes from the following quotation from a MD which emerges from a study examining the competitiveness of British industries. The study recommended that British businesses were reasonably weak in the application of a segmentation approach: I don’t know if we segment the markets, or who we really place ourselves against the opposition. I expect our advertising agency knows. I think we are almost certainly up-market, because we advertise in some very posh magazines (Doyle et al., 1986)

Some business view segmentation other as a tactical trick than as a staid strategic marketing tool. In some respect it has become industry’s buzz expression. The cure for anything and everything. The attraction to view segmentation as an additional of marketing’s “goodies” in a kind of “bitter shop” mentality may be just too huge. Advertising executives sometimes criticize that product and brand manager’s view endorsement as a tactical answer to short-term declines in sales. When the month’s figures are reduced, advertising personnel complain that the managers visit the promotions “bitter shop”, with a steady stream of requirements for quick-hit campaign. Segmentation is sometimes view in the same manner, used tactically to deliver short-term payback, ignoring the need for a longer-term viewpoint. For customers the outcome can be a confusing mix of conflicting marketing programmers. (Dibb, 1998)

Managers responsibility segmentation analysis for the first time often state surprise at the lack of sensible guidance and step-by step approach to help. This conversation begins by reviewing the kinds of question which practitioners ask when moving out segmentation study, then examines the degree to which available guidance matches up to these supplies. The following questions, which are characteristic of those asked by practitioners responsibility segmentation for the first time, are drawn from deliberations with managers at several divisions of an industrial chemical trade. (Dibb, 1998)

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The repayment of following a plan for the entirety of the segmentation project is apparent. Planning encourages the location of clear objectives, so that marketers found from the start exactly what they desire to achieve from the keep fit. This also increases the chance that measures will be designed to confirm that objectives have been achieved. (Doyle et al., 1986)

Like the target of any market segment, racial targeting is done by brand manager to maximize sales and income. The basic rationale after this strategy is that a variety of promotion programs (unique combination of products, publicity, pack-ages, pricing, sharing, etc.), each intended to better match the psychology and happiness of a separable section, will eventually produce more sales and income than would a single undifferentiated mar-kiting agenda, so called mass promotion.( Polly, Lee and -Whitney, 1965)

Marketing segmentation is ordinary among large consumer merchandise firms and has incurred criticism only when the product itself is challenging. The central concern, therefore, is not classically with the use of event or sex as a basis for marketplace analysis and idea. Selective targeting can be benign or even helpful, but only if the product is. When the mar-kiting process is deferential and appropriately customized it may be more applicable, efficient and may provide better service and settlement to targeted segments. But if the product is unpleasant, even ad-dative and deadly, segmentation’s competence delivers more death and illness, not more payback, and pro-vides damage, not a service. (Polly, Lee and -Whitney, 1965)

Segmentation in commerce markets should reflect the association needs of the party involved and should not be based solely on the customary consumer market loom, which is primarily the collapse method. Through use of both the collapse and the build-up approach, a more correct, in-depth, and potentially more gainful view of industrial market can be achieve (Crittenden, Crittenden, and Musky, 2002).

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However, evils remain concerning the practical Application and completion of B2B segmentation. Manager’s account that the analysis process are reasonably clear, but it is not clear how they be supposed to ‘choose and evaluate flanked by the market segments’ which have been resolute. (Nude and Cheng, 2003).

Much segmentation theory has been developed during the period when transactional marketing was the principal approach to marketing, rather than the more relational approaches adopted in today’s service-dominated environment. Under these circumstances, the allocation of resources to achieve the designated marketing mix goals was of key importance. (Naudé and Cheng, 2003).

Evils with the segmentation literature debate with a range of market practitioners from industry as varied as industrial substance and car mechanism to distillers and nibble foods are quick to condemn the convenience and ease of use of the so-called academic writing. The use of technical and turgid speech is a particularly common disparagement, though not unique to the segmentation literature. While it is beyond the scope of this piece to conduct a complete examination of general question about the style and arrangement of academic literature, it is important to discover issues which are specific to the segmentation text. One of the most fundamental concerns is that the writing reflects a inlet between educational and practitioner needs and that academics have a research agenda which sets different kinds of priorities to those of practitioners. A second area of worry is that the literature fails to believe some of the sensible constraints faced by marketers seeking to implement segmentation advance. (Dibb, 1998)

Chapter 3: RESEARCH METHODS

3.1 Method of Data Collection

The method of data collection for this research will be Personal Surveying Technique which is highly effective for this research study.

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As far as the procedure is concerned for the collection of data. Firstly we will visit respondents according to the proposed sample size and ask them to solve the questionnaire for the research study. If respondents have the time they can fill the questionnaire at the moment in any other case they can fill at later time or date and the researcher can gather the questionnaire upon the set time from the respondent.

3.2 Sampling Technique

Researcher proposes to use Non probability based sampling, where the researcher selects the sample based on convenience sampling, data will be mostly based on questionnaire since the researchers don’t have that much time and is short of resources.

3.3 Sample size

 Number of respondents for this study is 250 users for around 14 different brands which are gender, age or geography based linked.

3.4 Instrument for Data Collection

 Self administered questionnaire will be used to collect data from the correspondents, which will have ample number of questions to address all the variables of the study. Various options would also be assigned to each question to measure the variables.

3.4.1 Validity and Reliability Test

The validity and reliability of our data that we gathered in our study is given by the following “cron-batch alpha” statistical test.

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TABLE 3.4.1 Reliability and Validity Test

Case Processing Summary

N

%

Cases

Valid

246

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98.4

Excludeda

4

1.6

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Total

250

100.0

a. Listwise deletion based on all variables in the procedure.

Reliability Statistics

Cronbach’s Alpha

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N of Items

.769

60

Here the value of Cronbach’s Alpha is 0.769 that is about 77%. This confirms that our data is 77% valid and can be consider as reliable data for this study.

3.5 Research Model Developed

Figure 3.5

This model refers to our variables and the effect that we have studies in our research.

3.6 Statistical Technique

We have used custom table percentage method in which we have developed combine effect of customers’ perception about the product designed for and who will use the product in percentage terms.

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CHAPTER4: RESULTS

4.1 Findings and Interpretations of the Results

Table 4.1.1 Zong Lahore Unlimited

Custom Tables

Who else can use

People of Karachi

People of Lahore

People of Pakistan

Any other

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Table N %

Table N %

Table N %

Table N %

Designed for

Karachi

3.6%

1.2%

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1.6%

.0%

Lahore

5.2%

55.6%

18.8%

.0%

All pakistan

.8%

4.0%

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8.4%

.4%

Any other

.0%

.0%

Do You Adapt to International Rules?

Yes! UK, US, or Aussie standards—we’ll tailor your paper to fit your school’s norms perfectly.

.4%

.0%

Table 4.1.2 Ufone-Prepaid Karachi Offer

Custom Tables

Who else can use

People of Karachi

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People of Lahore

People of Pakistan

Any other

Table N %

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Table N %

Table N %

Table N %

Designed for

Karachi

58.0%

6.4%

18.8%

.4%

Lahore

2.8%

.0%

1.6%

.0%

All pakistan

4.0%

.4%

6.8%

.0%

Any other

.0%

.4%

.4%

.0%

Table 4.1.3 Jazz- Karachi Bachat Offer

Custom Tables

Who else can use

People of Karachi

People of Lahore

People of Pakistan

Any other

Table N %

Table N %

Table N %

Table N %

Designed for

Karachi

57.6%

4.8%

20.8%

1.2%

Lahore

1.2%

1.2%

.4%

.0%

All pakistan

4.0%

.8%

6.8%

.4%

Any other

.0%

.4%

.0%

.0%

14.00

.4%

.0%

.0%

.0%

Table 4.1.4 Zong- Karachi Unlimited

Custom Tables

Who else can use

People of Karachi

People of Lahore

People of Pakistan

Any other

Table N %

Table N %

Table N %

Table N %

Designed for

Karachi

62.0%

3.6%

17.2%

.0%

Lahore

1.2%

.4%

1.6%

.0%

All pakistan

3.6%

.4%

9.6%

.4%

Any other

.0%

.0%

.0%

.0%

Table 4.1.5 O’more Karachi ka dil khusheyon se fill

Custom Tables

Who else can use

People of Karachi

People of Lahore

People of Pakistan

Any other

Table N %

Table N %

Table N %

Table N %

Designed for

Karachi

42.0%

2.8%

22.0%

.8%

Lahore

.4%

2.4%

.8%

.0%

All pakistan

2.8%

2.4%

22.0%

.4%

Any other

.8%

.0%

.4%

.0%

The above mentioned tables are related to geographic location linked to a particular segment. As a common result we can justify that even there is a lot of variation in customers’ perception and acceptance but if we concentrate on where majority lies we can conclude that a product that is linked to a particular geographic location is used by the customers’ belonging to that location. Hence the other geographic segment does not accept the marketing offer linked to another geographic segment.

Table 4.1.6 Jang- Bachon ka jang

Custom Tables

Who else can use

10 yrs or below

11-18 yrs

19-26 yrs

above 26

All ages

Table N %

Table N %

Table N %

Table N %

Table N %

Designed for

10 yrs or below

18.5%

18.1%

2.8%

.4%

3.2%

11-18 yrs

12.0%

19.7%

7.6%

.4%

7.2%

19-26 yrs

1.6%

.4%

2.8%

.8%

2.4%

above 26

.4%

.4%

.8%

.4%

.0%

Table 4.1.7 Jang- Bachon ka jang

Custom Tables

Who else can use

10 yrs or below

11-18 yrs

19-26 yrs

above 26

All ages

Table N %

Table N %

Table N %

Table N %

Table N %

Designed for

10 yrs or below

18.5%

18.1%

2.8%

.4%

3.2%

11-18 yrs

12.0%

19.7%

7.6%

.4%

7.2%

19-26 yrs

1.6%

.4%

2.8%

.8%

2.4%

above 26

.4%

.4%

.8%

.4%

.0%

Table 4.1.8 Djuice- its fun to be young

Custom Tables

Who else can use

10 yrs or below

11-18 yrs

19-26 yrs

above 26

All ages

Table N %

Table N %

Table N %

Table N %

Table N %

Designed for

10 yrs or below

1.6%

.4%

.4%

.0%

.0%

11-18 yrs

2.8%

11.2%

14.8%

.4%

5.6%

19-26 yrs

.8%

22.8%

19.6%

6.0%

11.6%

above 26

.0%

.4%

.8%

.4%

.4%

Table 4.1.9 HBL- Young Savers Account (upto 18 years)

Custom Tables

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10 yrs or below

11-18 yrs

19-26 yrs

above 26

All ages

14.00

Table N %

Table N %

Table N %

Table N %

Table N %

Table N %

Designed for

10 yrs or below

2.4%

4.4%

1.6%

.0%

.0%

.0%

11-18 yrs

16.0%

35.2%

11.2%

.8%

4.0%

.4%

19-26 yrs

.4%

4.0%

11.2%

2.8%

2.0%

.0%

above 26

.0%

.4%

1.2%

1.2%

.8%

.0%

Table 4.1.10 Dawn- Young World

Custom Tables

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10 yrs or below

11-18 yrs

19-26 yrs

above 26

All ages

41.00

Table N %

Table N %

Table N %

Table N %

Table N %

Table N %

Designed for

10 yrs or below

7.6%

10.0%

.4%

.0%

1.6%

.0%

11-18 yrs

14.0%

20.0%

13.2%

2.0%

9.6%

.4%

19-26 yrs

1.2%

4.0%

6.0%

2.4%

2.4%

.0%

above 26

.8%

.8%

1.2%

.8%

1.6%

.0%

In this section of our instrument we presented the market offering linked to a particular customer segment based on age group. The general result of all 4 market offerings is showing that there is a significant variation in usage of product designed for a particular age by other age groups. Hence we can conclude that a market offering linked to a particular age group is accepted by other age groups.

Table 4.1.11 Garnier Men

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Who else can use

Male only

female only

both genders

Table N %

Table N %

Table N %

Designed for

Male only

66.8%

4.0%

14.2%

female only

3.2%

2.0%

2.4%

both genders

1.2%

.4%

5.7%

Table 4.1.12 Jazz-Ladies Package

Custom Tables

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Male only

female only

both genders

Table N %

Table N %

Table N %

Designed for

Male only

6.4%

2.8%

1.2%

female only

2.8%

31.2%

29.6%

both genders

3.2%

4.0%

18.8%

Table 4.1.13 Gillette- The best a Man can get

Custom Tables

Who else can use

Male only

female only

both genders

Table N %

Table N %

Table N %

Designed for

Male only

68.1%

4.0%

10.5%

female only

4.0%

2.8%

2.0%

both genders

2.8%

.4%

5.2%

Table 4.1.13 Head and Shoulder- for Men

Custom Tables

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Male only

female only

both genders

Table N %

Table N %

Table N %

Designed for

Male only

41.5%

5.6%

25.4%

female only

4.8%

.4%

1.2%

both genders

2.8%

2.0%

16.1%

Table 4.1.14 Ufone- Ladies Package

Custom Tables

Who else can use

Male only

female only

both genders

Table N %

Table N %

Table N %

Designed for

Male only

4.4%

3.2%

2.0%

female only

3.2%

33.1%

26.2%

both genders

3.6%

3.6%

20.6%

In this last section we presented market offerings that are linked to a particular gender. In this it is not justifiable to give a general consensus for all the 5 products we presented. There is a different pattern of behavior that is identifies and it is with respect to the nature of the product.

Hence we can conclude that for cosmetic or body care products the market offering linked to a particular gender is not used by other gender and hence not accepted.

However in case of telecommunication packages, a market offering linked to a particular gender is accepted by other gender and they can use it.

4.2 Hypotheses Assessment Summary

Table 4.2 Hypotheses Assessment

HYPOTHESES

SUMMARY

ASSESMENT

H1:- Market offering linked to a particular customer segment based on age does not have any effect on another customer segment based on age.

With respect to age we have seen there is a lot of variation in usage of product by other age groups.

H1 accepted

H2:- Market offering linked to a particular customer segment based on geographic location does not have any effect on another customer segment based on geographic location.

With respect to geographic location prominent behavior is that a market offering is used by same geographic location its linked to rather than other geographic locations.

H2 rejected

H3:- Market offering linked to a particular customer segment based on gender does not have any effect on another customer segment based on gender.

In this the usage of a product by other gender is according to the nature of product however the prominent behavior suggest that the product linked to a particular gender is not used by opposite gender

H3 accepted

CHAPTER 5: CONLUSION, DISCUSSION, IMPLICATION AND FU