Aspen Communications - Segmentation Marketing Approach - Case Study Example

?SEGMENTATION OF THE UK IT MARKET: CASE STUDY OF ASPEN COMMUNICATION This paper presents a comprehensive analysis of Aspen Communications as a case study of an IT company which requires expanding its business in the UK through a market segmentation marketing approach. The paper describes and justifies the most appropriate considerations in identifying and segmenting the UK IT market by the company in addition to the benefits that it will achieve through this form of marketing. Table of Contents Abstract 0 Table of Contents 1 Introduction 1 Aspen Communications 2 Products and Services 3 Identifying and Segmenting the Market 3 Benefits of segmenting the Market 5 Conclusion 7 Introduction With advancement in IT and increased competitiveness within the business environment, a higher demand for IT services and products within the UK market is evident. It is in this regard that Aspen Communications requires expanding its business activities within the UK IT market so that it could fulfill its strategic objectives and goals for international expansion and growth. Segmentation of the UK market is considered the most appropriate marketing strategy that Aspen communication would employ in its endeavors for business expansion. However, the management within the company requires understanding that the identification of market segments and segmenting the company is achieved through the consideration of various factors. This paper presents as case Study of Aspen Communication in its international expansion of IT business in the UK market. The paper aims at presenting evidence based analysis of the factors which must be considered by the company in identifying the market segments and segmenting its market within the UK. The paper also aims at presenting the benefits that the company will achieve through the application of a segmentation approach in marketing its products and services in this market. The purpose of the case study therefore is to allow the company to achieve success in the UK market and profitability through the use of appropriate approach in selecting its market segments and justifying this approach by describing the gains that the company will achieve through segmentation. Aspen Communications Aspen Communication is a US company which provides IT solutions by providing its customers with a wide range of products and services in information technology. The company is based in Arizona and global growth expansion is one of its major business strategies. The company intends to expand its business within the UK as a way of meeting its strategic goals and objectives. The need for growth within the UK is motivated by the identification of new market segments and the growth of the range of the company’s IT products and services. In addition, a market research conducted by Aspen communications within the UK market illustrates that there is an increased demand for IT products and services. This is related to the competitive business environment in the UK and the need to increase productivity through IT mediated management within companies and organizations (News Wire, 2009, p.1). Products and Services Aspen Communications aims at promoting management of human resource within companies which comprise of its market. The company achieves this by providing its client companies and organization technology based communication solutions. This includes the design, installation and implementation of various technologies and infrastructure within client companies. The services provided by Aspen Communications include IT consultancy and telephony services. In addition the company offers Networking services and products. Distribution of wireless networks and services and information security solutions also comprise of the company’s IT services and products. Because of the wide range of services and products and the increased demand within the emerging markets in the UK, the company aims at employing segmentation as an effective marketing strategy for its IT products and services within the UK market (News Wire, 2009, p.1). Identifying and Segmenting the Market According to Ferrell, Hirt and Ferrell (2011), globalization has allowed companies to internationalize and operate within various markets of the world without economic and political barriers. It is in this regard the Aspen Communications has employed internationalization of its business strategies through identifying market opportunities in foreign environments. The application of segmentation as an ideal marketing opportunity within the UK market requires the company to identify various market segments that it will target for its products and services. Shelby & Dennis (2007, p. 9) illustrate that market segments can be identified in relation to geographical locations, consumer demographics, psychographic factors and the consumer behavior approach to market segmentation. Therefore Aspen Communication would employ geographical market segmentation as one of the criteria of identifying market segments in the UK. The economics and dynamics of business activities and processes should guide the selection of the company’s geographical segments. For example, urban centers are effective market segments when geographic location is used as the segmentation criteria. This is because of the numerous businesses, organizations, individuals, agencies and institutions which are based in urban centers that would comprise of the geographical segment for the company’s IT products and services. According to Simkin (2008, p. 470), the identification of a market segment should ensure that it is sufficient enough in order to earn the company high profits. This justifies the selection of the urban centers as the geographic market segments for the company IT services and products. Psychographic factors would also be used by Aspen Communications in identifying its UK market segments. This is a form of market segmentation which involves the identification of the market in terms of social class, lifestyles and values of the consumers (Frenkel, Jan-Benedict & Wedel, 2009, p. 16). For example the UK market would have different attitudes to the company’s products depending on the company image, quality and cost of its IT services and products. As a marketing strategy, the company should ensure that it improves its corporate image within its UK market through adherence to business ethics and its social corporate responsibility. This involves effective management of human resources through ethical and non-discriminatory hiring policies and procedures in addition to good compensation of staff. In this sense, the company will grasp the attention of the market for its products and services depending on the psychographic factors which affect the manner in which consumers view the company. Frenkel, Jan-Benedict & Wedel, (2009, p. 13) show that the demographics of consumers are other appropriate criteria of identifying and selecting market segments. Therefore Aspen Communication will segment its market in terms of income, client business size and the level of education or technological awareness. The income that the consumers of the company IT products and services attain determines their purchase power. In addition, the size of the client organization, agency or institution defines the demand for the company’s IT services and products. For example a large company is likely to demand more IT products and services within its information system for effective management of human resource. Dibb & Simkin (2007, p. 57) explain that consumer behavior in the identification and defining market segments refers to a form of segmentation which takes into account the attitudes and knowledge of consumers which plays a central role in defining the nature of their response to the services and products provided by the company. The knowledge that the management and staff of different organizations on IT and their attitudes towards the use of IT applications defines their propensity for purchasing Aspen Communication’s IT products and services. Therefore the segmentation of the market should adequately consider all the aforementioned factors for success. Benefits of segmenting the Market Segmenting the UK market for its IT products and services will allow Aspen Communications to have a focused attention to specific markets. Ferrell, Hirt and Ferrell (2011) explain that when a company has a clear focus on a specific segment of the market, more returns are expected in terms of increased sales. This is achieved through the fact that a focus on a specific segment allows a company to understand the specific needs of the target consumers so that they are effectively met. In order to improve its profitability within the UK market, it is therefore necessary for Aspen Communications to ensure that the provision of IT products and services are designed in line with the varying needs of the market segments. For example consumer demographics such as size and income will comprise of the market segments with which the company should focus attention so that the IT services are delivered in line to the unique needs of these market segments. Segmentation of market will allow Aspen Communications to become more competitive within the UK IT market. The competitiveness in the market arises from the focus of a company on a specific segment of the market (Simkin, 2008, p. 464). For example if Aspen Communications focuses on SMEs within UK as small earners in the economy, the delivery of its products will be designed to meet their needs which will lead to their loyalty to the company’s products and services. In this regard, the company will become more competitive within this market segment. Shelby & Dennis (2007, p. 10) further explains that competitiveness which a segmented market causes a company emanates from an increase brand recall among consumers which is caused by a close focus on that particular market segment. Expansion or growth within the UK IT market will be achieved by Aspen Communication through the segmentation marketing strategy. Simkin (2009, p. 191) illustrates that when a company employs geographic segmentation of the market by location, a market strategy for expansion is made possible. For example if Aspen segments its market within a specific urban setting in the UK IT market, the chances of expanding the market within the urban center and to other urban environments becomes viable. Dibb & Simkin (2007, p. 55) emphasize that a company which segments it operations within a specific territory has an opportunity of expanding the business to the surrounding territories. According to Simkin (2009, p. 192), improved communication with the market and the resultant retention of customers are other major benefits that companies achieve through the application of segmentation in its marketing strategy. Within the marketing mix variables, communication of promotional images and messages is more effective when a company focuses on a particular segment (Frenkel, Jan-Benedict & Wedel, 2009, p. 8). The promotional messages that Aspen Communication will use in the UK market will be designed to meet the preferences and priorities of a specific market segment. As a result the consumers of its IT products and services will be attracted and motivated to become loyal to the company. This therefore will allow the company to maintain and retain its clients. It is therefore necessary that Aspen Communications targets the right market segment so that it gains from the advantages of segmenting the market and focusing on specific segments within the UK IT market. Conclusion The new markets and demand for IT services and products for improved communication and management of employees in the UK firms is the motivation for the international business growth strategy of Aspen Communications in this market. The analysis of the concept of market segmentation in this case study has allowed the identification of the best approaches that the company will employ to identify and segment its market. Geographical market segmentation is one of the best strategies that the company will employ in segmenting its market within the UK. The benefit of this approach is that it will allow the company to expand into the surrounding territories or geographical areas and as a result expand its business. The application of psychographic factors will allow the company to market its products and services by ensuring that it promotes the attitudes and values of the market on its products through ethical business practices and effective human resource management. Using the demographics of consumers in identifying market segments will also allow the company to tailor its IT products and services in line with the unique needs of specific market segments. This will cause customer satisfaction and retention. Finally, a focus on specific segments of the market will improve communication of promotional messages to the market which will enhance consumer loyalty leading to an increased profitability. References Dibb, S. & Simkin, L., 2007. A program for implementing market segmentation. The Journal of Business & Industrial Marketing, vol. 12, no. 1, pp. 51-65. Ferrell, O.C., Hirt, G.A. & Ferrell, L., 2011. Business: A Changing World, 8th edn, New York: McGraw-Hill. Frenkel, T.H., Jan-Benedict, E.M.S. & Wedel, M., 2009. International market segmentation based on consumer-product relations. JMR, Journal of Marketing Research, vol. 36, no. 1, pp. 1-17. News Wire, 2009. Company Profile for Aspen Communications, New York, United States, New York. Shelby, D.H. & Dennis, B.A., 2007. Market Segmentation Strategy, Competitive Advantage, and Public Policy: Grounding Segmentation Strategy in Resource-Advantage Theory. Australasian Marketing Journal, vol. 12, no. 1, pp. 7-25. Simkin, L., 2008. Achieving market segmentation from B2B sectorisation. The Journal of Business & Industrial Marketing, vol. 23, no. 7, pp. 464-474. Simkin, L., 2009. Handbook of Market Segmentation: Strategic Targeting for Business and Technology Firms. Journal of Targeting, Measurement and Analysis for Marketing, vol. 13, no. 2, pp. 191-192. Read More