The Concept of Market Segmentation - Term Paper Example

?1a. Definitions of Marketing and an overall evaluation of concepts with direct application to Eden Leisure & Fitness Centre. There are a number of different definitions of Marketing; most simply marketing is the function of a business which relates to the selling or promoting of its products or services. Marketing is also used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. The American Marketing Association (AMA) defines marketing as, “an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organisation and its shareholders” Alternatively, The Chartered Institute of Marketing define marketing as, “The management process responsible for identifying, anticipating and satisfying customer requirements profitably” Eden Leisure needs to create a strong brand image and awareness in the market so that customers of all types can be targeted and this way the Eden fitness centre may have the potential to attract a huge customer base. Creating awareness about the business to the potential customers is important for any firm to become profitable and successful. Customers are unable to link the brand name of Eden Leisure with the services provided by them and hence the marketing team of Eden leisure needs to focus on this aspect and reflect through their marketing activities upon the services offered by Eden Leisure fitness centre. This definition looks at marketing as more of a management function, which should be the responsibility of the Eden Leisure and Fitness Centre’s General Manager and the management team. The Marketing of the business requires co-ordination, planning and implementation of strategies and requires the future Marketing Manager having the right skills and training to ensure success. Marketing is an important element for the success of any organisation. Marketing message by the organisation needs to instil a sense of excitement and urgency in the customer to try out the product or service. The marketing by the organisation should satisfy the needs and wants of the customer along with benefitting the shareholders of the organisation. Marketing management is an important part of the business management, with the customer the main focus of its activities. Marketing objectives and targets have to be monitored and met, and through effective use of marketing research and marketing concepts, Eden Leisure & Fitness Centre should be able to identify the needs and wants of its customer and try to delivers benefits for both the customers and the business. Eden Leisure Centre will use marketing to generate the strategy which will define their sales technique, business communication and business development. Marketing concepts and techniques will be used to identify, satisfy and maintain the customer. This will help the leisure centre in building strong customer relationships, creating value for their customers as well as the business itself. 1b. An explanation of the marketing concepts and some suggestions for measures / initiatives the centre could introduce that would demonstrate a marketing orientation approach to its customers. Eden Leisure fitness centre needs to have a marketing oriented approach for making their business successful. A marketing oriented approach allows organisations to conduct their work operations according to the wants of the customers. Eden Leisure fitness centre needs to denote the wants and requirements of the customers and then accordingly provide the services to them. The decisions that would be taken by Eden Leisure fitness centre needs to revolve around the customer wants rather than thinking about what would be right for customers. There are high chances of businesses becoming successful if they opt for the market oriented approach as this way they operate according to the wants of the customer. As competition is at its peak, organisations need to be extra sensitive towards the needs of their customers and strive towards providing them with high quality services and variety of products as well. The Marketing Concept is concerned with meeting the needs and wants of customers. This means that Eden Leisure & Fitness Centre must match its capabilities to the needs and wants of the customer more effectively that its competitors. The process of establishing the customer’s requirements takes place in orthe Marketing Environment. A number of factors need to be taken into account whilst Eden Leisure and Fitness Centre are establishing these requirements, such as the changes in the political, social, environmental, economic and technological environment. When adopting the marketing concept Eden Leisure and Fitness centre must accept the needs of its customer as the basis of the business and their success is dependent on meeting their needs and customer satisfaction. Eden Leisure and Fitness Centre must adopt a marketing oriented approach to meet the customer’s needs. This means that the leisure centre will base their business decisions on the needs and wants of the customer, with the customers and customer satisfaction as the focal point. A number of measures or initiatives could be introduced by Eden Leisure and Fitness Centre to demonstrate a marketing oriented approach to its customers. This may include advertising and carrying out simple customer surveys. Marketing Activities are an important part for all organisations as it is through these marketing activities that customers build up interest and decide whether they should opt for the service or not. Eden Leisure and Fitness Centre can work upon making commercials and videos in which they have an instructor demonstrating the type of services being provided by the fitness centre. Benefits of becoming the member and other benefits of joining the fitness centre can be included. These videos can be run on local TV channel and also videos can be posted on the social networking websites for attracting customers. Through viewing videos about the fitness centre activities, customers may get a clear idea about the services being provided, the benefits and the infrastructure of the fitness centre. Another promotional activity that can be conducted is having a fitness day event in the community. The members of the community or locality can learn more about the fitness centre, why it is important to remain fit the benefits of joining a fitness centre for having a healthy lifestyle. This way the members of the locality or community may learn about the Eden fitness centre and if the find the one day event attractive, they may decide to join the fitness centre. 2. A SWOT Analysis on the leisure and fitness centre; the information could then be used for marketing planning purposes Eden Leisure and Fitness Centre can conduct a SWOT Analysis to determine the needs and goals of the business. This will help Eden Leisure and Fitness Centre establish how well they are doing and how they will compete against their competitors highlighting the positive (Strengths, Opportunities) and negative (Weaknesses, Threats) aspects of the business. Strengths Location – ideally situated – in Fort Retail Park Surrounded by leading retail outlets and well known restaurants Transport Links – well served – major roads and rail links Local Area – Business park nearby – potential customers Size – Large Leisure Complex Facilities – sports hall, sauna, swimming pools, squash courts, cafeteria, lounge bar, all weather pitches, sizeable Car Park Cater for various sports – football, volleyball Expanding Chain – Currently 15 in the UK – Branded Image 15 years experience – since 1996 Weaknesses Weak link of Business image with the services provided by the fitness centre Lack of advertising/promotional activity Fitness centre timings may not be suitable for potential customers as working customers may prefer to use fitness centre facilities after office hours. Location may limit customers– Fort Retails Park is generally only reachable using some form of transport, not really walking distance from any residential area No Marketing Manager depicts that major loophoe in marketing activities and campaigns for Eden leisure fitness centre. Opportunities The location of Eden fitness centre may attract customers from nearby regions as it is an attractive and potential business spot. Customers may increase due to the surrounding of retail outlets and restaurants. Potential customers may have the opportunity to conduct multiple activities of shopping and enjoying food. 15 years of experience can be used in the marketing campaign as trust, loyalty, and brand image of the business comes with the experience level of the business. Development of surrounding area – Shops/Businesses Life style trends Innovation and technology Expanding business Business/Product development Possible partnerships / joint ventures with other business – use of facilities Threats Further economic crisis Market demand Competitors - Other local leisure and fitness centres Technological Advancements – for example in-home exercise Equipment Outdated facilities/equipment Poor management strategies Increase in operating costs / staff costs Price matching – competing with competitors 3. A PESTEL Analysis on the leisure and fitness centre; the information could then be used for marketing planning purposes. A PESTEL Analysis is used in strategic management to analyse Political, Economic, Social, Technological, Environmental and Legal factors. This analysis tool can be used to assist Eden Leisure and Fitness Centre to make their management and marketing decisions. This may include such things as Tax changes, new laws, demographic changes and government policy changes. Political Trade restrictions are less due to the nature being a fitness centre Health and safety programs need to be complied Important to comply with provisions of employment law Economic Economic Crisis – less disposable income Local Income – value for money in comparison to other leisure centres Social Social trends – effect customer demands Age and interest in remaining healthy Older people are becoming interested in leisure activities Technological Improvement in technologies – use of latest technology. For example in customer membership system, a computerised system could be used using a membership card granting the customer entrance into the centre and to certain facilities. Use of latest technology promotes a more professional and sometimes better company image. Other examples include electronic lockers, latest exercise/fitness equipment, Spa facilities etc. Have high barriers of entry according to technology requirements Latest technology is a must to remain competitive Expertise staff required to handle the equipment Environmental UK Weather – effects customers lifestyle trends, also effects their ability to travel to the leisure centre due to snow etc. Climate change Use of chemicals, for example chlorine in the swimming pool. Disposal of waste Use of organic/environmentally friendly products Legal UK Law Disability Discrimination – facilities required for disabled customers etc 4. Explain the concept of market segmentation. Identify and explain the different ways by which the leisure and fitness centre can segment its customers / market. Market segmentation refers to segmenting a particular market into small subsets on the basis of likes, demands, preferences, and tastes of the consumers. A segment of the market is a small group of customers with same interests from the entire market. Market segmentation can be based upon a number of factors such as gender, age group, the income of the customers, the occupation of the customers, the marital status and other such types of factors. There are usually three different types of market segmentation. They are psychographic, geographic and behavioural market segmentation. Eden Leisure and fitness centre can segment its market based on its location. It can ensure that it caters a wide number of customers from its nearby surroundings. As there is a business park located nearby, it has the potential of attracting business customers from the nearby regions. The employees may tend to get exhausted after their work and hence may join the nearby fitness centre before they leave for home. Due to the nearby location, the customers may become interested as they would leave office and walk towards the fitness centre. The facilities offered by Eden are it consists of a sports hall in which sports such as volley ball, tennis, soccer, netball and badminton can be played. It has squash courts, sauna, and swimming pools. Lounge bar and cafeterias are also present in Eden. There is vending machine that has bottled water and sports drinks. The sports hall of Eden leisure and fitness centre can attract athletes from colleges and universities. The retail outlets and restaurants may act as an added advantage as usually youngsters prefer to have fun while they work out or after they work out. Sauna and swimming pool facilities may attract the business customers that are present in the nearby surroundings of the centres. These are relaxing facilities and these business customers may take some time off to relax by joining the Eden leisure and fitness centre. As the brand name says leisure too, these types of leisure activities need to be highlighted to the business customers. There are many benefits in Eden Leisure and Fitness centre segmenting their markets. This will allow them to target its products and services at the right customers. This will allow the leisure centre to identify the specific needs and wants of its different customers providing them customers with their required needs. Eden Leisure and Fitness centre should segment their markets as customers will differ in their wants and needs. For example customers will differ in the benefits they seek and the amount they are willing to pay. Particularly for the leisure centre its customers will differ in age range, and the use of the facilities provided. 5a. Briefly explain the importance of consumer buying behaviour and their influence on a company’s products and / or services. Consumer buying behaviour needs to be studied carefully as it has a major influence on the company’s products and services. If consumer buying behaviour is ignored then building upon a successful customer base would be difficult for the organisation. The decisions made by customers are based upon both emotional reasons as well as rational reasons. Organisations need to know the reasons on which customers prefer one service over another or one organisation over another. For keeping customers loyal to the organisation, it is important to have emotional attachments with the customer. Organisations need to know about the reasons of customers buying products or services so that they can accordingly meet the demands of the customers. Organisations need to know the number of times the service is used by the customer or the number of times a certain product is bought by customers. It is important for organisations to know about which products and services are bought regularly and which are bought occasionally and most importantly how customers get to know about any certain product or service being offered. By knowing these details of the customers, it becomes easier to design and promote marketing activities for the organisation. 5b. Explain and justify how the leisure centre’s marketing activities could be influenced by customer buying behaviour, this could be in context of expenditure on leisure activities. The patterns and trends of consumer buying behaviour lead the organisations to accordingly design and conduct their marketing and promotional activities of the firm. If consumers have a high purchasing power and they have interest in remain fit and healthy then these aspects need to be targeted in the marketing activities of the leisure centre. When customers are satisfied that a particular service organisation has the potential to deliver high quality services then they may join the service. References:  American Marketing Association. http://www.marketingpower.com/_layouts/Dictionary.aspx. www.wikipedia.org This is the missing questions of my assignment I finished most of the assignment I just need you to complete the missing questions: Eden Leisure Centre Question 1 (a) definitions included and have tried to analyse but rather weak Question 1 (b) Question not answered fully in terms of the Principles and Concepts of Marketing Question 2 - You need to explain the areas as too weak (SWOT ANALYSIS) and some factors are not relevant. You could have reviewed strengths and say how these could become opportunities. Question 3 - Your current input is not relevant in most areas (PESTEL ANALYSIS) Question 4 - You have not answered this question (SEGMENTATION), also no input on proposal For this question you need to discuss:- Explain what is segmentation, and to include the various variables (e.g. demographic, geographic etc.) Refer to Eden's location and possibly their surrounding boroughs List all of Eden's current facilities and services; you then need to choose 2 from your list and discuss how you could improve their market share through use of segmentation, as this would identify their target market. Question 5 (a) You have completely lifted this material and therefore will need to represent this section in your own words (CONSUMER BUYING BEHAVIOUR) Question 1 (b) MARKETING ACTIVITIES - No input here. You need to include the advertising and promotional methods in which Eden could implement (you must justify why you have choosen these methods) Read More