Segmentation and Targeting - Essay Example

? Segmentation and targeting al affiliation Segmentation and targeting Introduction Marketing comprises of three phases that determine the customers’ reaction towards a product introduced in a new or mature market. In the undifferentiated strategy, every buyer is treated in the same manner making organizations less concentrated on making precise efforts to satisfy particular market groups. Segmentation and positioning prove significant when the product is standard and one rival product is not able to offer what another cannot. Targeting requires analysis on the income distribution of potential and mature markets to realize whether to introduce a new target market or not. Specific marketing cases Ford Escort is a car brand that was revitalized in 1982, adding Ford’s blue oval insignia for the first time in history alongside a newer frame. The brand was aimed at the sports car market, with a two-seater hatch for lower rooflines (University of southern California, 2010). These body features proved unsuccessful in the sports market and once again, the Ford escort was remodeled for the youth market. The escort brand introduced in the early nineties was a much lower-slung and casual car than either the sedan or wagon. The brand reinstated the Escort GT, as the company was more focused on providing an affordable product for the youths. The Lexus target market ranges for people around the age of forty, with a strong household salary. The luxury market back in 1989 had Lexus brands sell around 25,000 cars in hope of achieving a target of 65,000 cars. With the main rivals of Lexus being brands such as Mercedes Benz, the target market of majority of its brands is well-off customers (Anurit, Newman, And Chansarkar, 2006, p. 15). The choice of target market made by Ford while manufacturing the escort brand revolves around the model of product life sequence. This choice has an impact on its advertising and pricing strategies through marketing mix (University of southern California, 2010). Since Ford Escort is a commodity model of this specific industry, its price and mode of promotion is defined by the targeted market, breaking down the promotion procedures into stages. These stages have been used by Ford to realize the standard income made the youthful market and be able to set prices for the escort model. The choice of target market affected the pricing and advertising strategies of the Lexus vehicle brands through product positioning. Unlike Ford, Lexus fixed its models right before customers who could find them affordable, instead of directly looking the customers. Lexus believed their brand would sell in terms of benefits that can be offered to customers through new ways. This way, Lexus could always be affiliated with luxury living, creating a standard means of living able to be felt and understood by its customers. The effects of imposition of a new target market by Ford Escort would have multi-dimensional scaling (Anurit, Newman, And Chansarkar, 2006, p. 16). Market researchers working with ford have analyzed the relationship between introduction of new market targets and consumer perception. Mature Ford escort customers will be inclined to react pessimistically to the bringing in of a new market targets since the dimension the brand has been pursuing for the past twenty years will be altered. Customers will be looking forward to luxurious models of Ford Escort for new buyers (University of southern California, 2010). Therefore, Old buyers will flee the market in search of other affordable brands. The perspective of Lexus buyers will not make a big or significant change with the introduction of a new market target. The brands made by Lexus already hold a luxurious perspective amongst all car buyers worldwide. Therefore, Lexus buyers already find the cars affordable and any significant changes that may occur might be due to the quality or features of new Lexus brands. The image of Ford has been tarnished after the economic downturn began in the European market. As a result, its market will only stand to widen should the company make changes in its financial structure. Ford Escort buyers mainly comprise of youthful individuals without a strong household salary. Therefore, changes in the economy will definitely affect their choice of purchasing the brand, alongside fuel factors (Anurit, Newman, And Chansarkar, 2006, p. 15). The cost of mitigating costs such as fuel and servicing rely on their income and financially effective choices concerning how to decrease costs of living. With the introduction of new Lexus models, equal insurance costs are imposed on them, lowering prices and the possessive features of the car are made more influential through the addition of technical appearances. Lexus buyers have strong household incomes capable of handling nearly all changes that might occur in the economy. Due to this, Lexus’ market is focused vehicle features such as the engine, increase of velocity and horsepower. Retail customers of the luxury brands of Lexus are proletarian buyers willing to spend their own money for non-routine expenditure. This implies that even harsh changes in the economy will not influence their spending habits. Therefore, most Lexus buyers look forward to gaining experimental or symbolic benefits from its brands instead of fulfilling the main purpose of the vehicle; offering transport. Therefore, there exists a huge difference between the specificity amongst individual and group customers (Anurit, Newman, And Chansarkar, 2006, p. 15). Demographic positioning or geography plays a major role in the car commerce. In cases that involve social pressures, a consumer will be inclined to purchase a Ford escort simply because a friend or colleague owns on, or has praised its features and affordability. Ford escort customers can respond to peer pressure in favor of, and or against the company, depending the kind of information the customer has received about the brand. In the United States, the competitive nature of the car industry forced Ford Escort bards to be sold at discounts to influence the new buyers into the mature market of Ford that previously existed (Anurit, Newman, And Chansarkar, 2006, p. 15). Penetrating the car commerce required social interference through the price competition market and improve sales. The outperformance of Lexus in a smaller and inferior market might end in cultural variations like vulnerability and social influence. Income distribution amongst Lexus buyers is different from Ford escort buyers. Therefore, the promotion strategies used by Lexus have been modified to socially influence all potential buyers and cause shifts in car markets around the world. As a result, peer pressure plays a big role amongst Lexus customers; individuals who are vigilant of any new brands made by the company (Anurit, Newman, And Chansarkar, 2006, p. 15). The status of a brand plays a significant part in the ultimate buying decision made by the buyer. Branding is supposed to be initially understood by organizations such as Wal-Mart, and suitably used and branded in their products. The role of branding assists the building of a relationship between the two approaches that establish the highest supposed or trade name value in the minds of customers. In this case, Wal-Mart might not be flawlessly connected to a trading-up picture (Knowledge@Wharton, 2006). Nevertheless, the company has managed to influence customers’ purchasing decisions with the purchase of brands that have the flamboyance customers are significantly looking for. Target market shops are normally price takers. This feature implies that they are able to trade at full capacity and make profits at the market value. Nevertheless, target market shops are not able to individually bargain towards increasing prices. This is because consumer commodity markets could be competitive, monopolistically aggressive or oligopolistic. Seeking a higher price might be appealing to new competitors in the industry, and the price unavoidably falls because of increased supply. The first high price made is an appropriate way to discover their exact target market is ready to buy and could make a picture of quality (Anurit, Newman, And Chansarkar, 2006, p. 18). Conclusion What defines the social and financial class of a citizen is the strength of their household income, an aspect that car and household organizations consider very important when targeting. United States residents have proven to be middle class citizens with the booming of Ford Escort sales after its introduction in the US market. Economic changes play a major role in consumer decision because of the rise in other product expenses that make maintenance appear costly. Promotion and segmentation influences company reputation because they involve the imposition of tough decisions that might compromise the organization financial stand. Reference Anurit, J., Newman, K. and Chansarkar, B. (2006). Consumer Behavior of Luxury Automobiles: A Comparative Study between Thai and UK Customers’ Perceptions. New York: John Wiley & Sons Knowledge@Wharton. (2006). Wal-Mart: Is There a Downside to Going Upscale? Pennsylvania: University of Pennsylvania Stevenson, B. (2010). So you think you’re Middle Class? New York: New York Times University of southern California. (2010). Segmentation, Targeting, and Positioning. California: University of southern California Read More