Real Consequences of Market Segmentation - Assignment Example

? How might Innovations overcome the problem of segmentation and focus? Market segmentation can be regarded as a one of the crucial aspects of marketing since it helps in meeting the buying behaviours, as well as the needs of the customers. Business organisations that employ segmentation have an opportunity to address the customers' diverse needs, in the market. While using segmentation, the business organisation may decide to target a certain segment in the market, which it has not reached. Despite the numerous benefits derived from market segmentation, there tends to be various challenges, as well as barriers, which the use of market segmentation may pose. In the case of innovations, there tends to be several ways in which the organisation can overcome the problem of segmentation and customer focus (Dibb, 2005, p. 13). One of the problems that segmentation poses includes the identification of the market segments, which can be regarded as the most significant. The organisation is also faced with the challenge of identifying the strategies that can help in marketing the product, the desire to fulfil all the customer needs for customers who may not be within the market segment, as well as realizing changes that may take place within the market segment. In order to overcome this problem, the organisation should ensure that the market segment that it chooses can be reachable, easy to identify, as well as unique. This will ensure that Innovations categorises its customers easily, and it will know the markets that it should target (Cherneko 2011, p. 3). For Innovations, segmentation would also pose the problem of knowing how the organisation can reach the market segment, which it has chosen to target. Innovations may find segmentation a challenge with regard to this problem, especially if the organisation uses categories that deal with lifestyle patterns in choosing the market segments. In such a scenario, segmentation may be problematic for Innovations since the organisation may find it difficult locating the markets. In order to overcome such a problem, Innovations ought to realise any changes taking place within the segment, and adapt to such changes so as to remain relevant in the market. Innovations should also come to the realisation of the dynamic nature of their markets, and ensure that come up with new strategies, which will be in line with the changes (Hunt & Arnett 2004, p. 8). Another way in which Innovations can overcome the problem of market segmentation and customer focus is through coming up with few market segments. The organisation should introduce few segments that can be easily managed and understood. This will ensure that there is no confusion in the market since the organisation will know its segments better. Innovations can also overcome the problem of market segmentation and customer focus by conducting thorough research (Hunt & Arnett 2004, p. 9). Research is essential as it would allow the organisation to know which market segments it should target. Market research will ensure that there is no misallocation of resources and staff needed to market the products. Market research also equips the organisation with the necessary information regarding the market segments where the products would make high sales, as well as the segments that need certain products (Dibb, 2005, p. 17). The other strategy that Innovations can use in order to overcome the problem of segmentation and customer focus is through introducing regular changes to the market segments. Innovations should aim at defining the segments regularly in order to ensure consistency, as well as relevance of the segmentation strategies. The products should be tailored and developed to coincide with the needs of customers in the market segments (Weinstein 2006, p. 115). Innovations should also be aware of the emerging trends in the market and ensure that the market segments remain relevant to the new trends. Market segments have to be updated to avoid challenges that may result from them becoming obsolete (Dibb and Simkin 2010, p. 113). The other strategy that Innovations can use in order to ensure that it overcomes the problem of market segmentation includes setting up clear objectives, which will guide the market segments that the organisation will create. The objectives of segmentation for Innovations should focus on increasing the profits of the organisation, ensuring that the organisation retains customers, as well as targeting new customers. The market segments should also provide opportunities for the organisation to grow. Innovations can also overcome the problem of market segmentation and customer focus by ensuring the there is an emphasis on quality. An emphasis on quality and the value of products offered to the customers. An emphasis on value will allow the organisation to capture the market segments, which it targets (Cherneko 2011, p. 4). The use of the named strategies can be a crucial step towards ensuring that the organisation overcomes the problem of market segmentation and customer focus. By overcoming the problem of market segmentation, Innovations will focus on its target customers, and this will increase the sales. Why would a company use innovative products as corporate gifts? Innovative products refer to the introduction of new products in the market that have been improved in order to meet the needs of the customers. Innovative products may entail the production of new products, as well as improvements in the quality of the existing products. In some instances, companies may use innovative products as corporate gifts for a number of reasons. Companies use innovative products as corporate gifts in order to gain competitive advantage. The use of innovative products is a necessary step towards ensuring that the company gains a competitive edge in the market. Companies that use innovative products have an advantage over companies that may not be luring customers with products. The company gains a large share of the market and it can outwit its competitors (Gitman & Mcdaniel, 2009). Companies also chose to use innovative products since the strategy of cutting costs is not economical anymore. Since cutting costs of the product that the organisation offers may be expensive, a company may opt to cut the use innovative products as this will help it maintain profitability. Innovative products help in reducing costs; this ultimately leads to an immense growth in the profits of the organisation. The introduction of re-engineered products in the market allows companies to stay in their business and ensures that they do face the risk of closure due to diminished profits (Wulfen 2011, p. 41). The use of innovative products as corporate gifts also ensures that the company increase its revenue. Innovative products record high sales for the company since customers want to test the product and know its efficiency. Through offering new products as corporate gifts, the company induces the customer to try a new product, which may be in the market soon. There is a high likelihood that customers will purchase the product after it is introduced in the market; this is because they have already tested the product and proved its worth. Companies also tend to use innovative products as corporate gifts to ensure their business survives. Companies have to change the nature of the products they offer in order to ensure continuity of the business. Customers prefer to purchase from companies that bring new products on board. Thus, the use of innovative products ensures that a company maintains its customers and ensures the survival of its venture in the market (Dall 2011, p. 4). The use of innovative products as corporate gifts also emanates from the fact that these products help companies to know the customers' tastes and preferences. Through such products, the company will know what the customers like about the company’s products. Based on the likes, tastes, and preferences of the customers, the company can then make changes that customers' needs are met. The use of innovative products as corporate gifts also ensures that the company undergoes maturity, which comes with economic growth (Tucker 2008, p. 33). What factors have enabled Innovations catalogue to survive? There are a number of factors that have contributed to the survival of the Innovations catalogue. One of the reasons that have enhanced the survival of the catalogue includes the exciting items that Innovations offer. Some of these features include a Wine Server that has been patented, a Robot Vacuum Cleaner, as well as Key Finder that can be controlled using the remote. Other factors that have led to the survival of the catalogue include such features as goggles that can massage the eyes, and a tie rack that has been motorised. The original paper catalogue that the company used also gained immense popularity since its delivery was through statements in credit cards, as well as newspapers. Other factors that have contributed to the survival of Innovations catalogue include the clock, which used to be controlled by radio that Innovations had invented. Innovations have also positioned themselves in the market, and the dominance that they have had in the market has contributed to the survival of their catalogue. Customers prefer the company’s catalogue since the wide variety of products that the catalogue offers meet their demands. References List Cherneko, S. (2011). The Real Consequences of Market Segmentation, The review of Financial Studies 10 (1), pp. 1-8. Dibb, S. (2005). Market Segmentation Implementation Barriers and How to Overcome Them, Marketing Review 5(2), pp. 13-30. Dall, J. (2011).Innovative products in creative companies: how to manage to develop them, London, GRIN Verlag, pp. 3-12. Dibb, S. and Simkin, L. (2010). Judging the quality of customer segments: segmentation effectiveness. Journal of Strategic Marketing 18(2), pp. 113–131. Gitman, L. J., & Mcdaniel, C. D. (2009). The future of business: the essentials, Mason, OH, South-Western Cengage Learning. Hunt, D. S. & Arnett, D. B. (2004). Market Segmentation Strategy, Competitive Advantage, and Public Policy: Grounding Segmentation Strategy in Resource-Advantage Theory, Australasian Marketing Journal 12 (1), pp. 7-14. Tucker, R. B. (2008). Driving growth through innovation: how leading firms are transforming their futures, San Francisco, Berrett-Koehler Publishers. Pp. 33-40. Wulfen, G. V. (2011). Creating innovative products and services: the FORTH innovation method, Farnham, Surrey, England, Gower Pub. Pp. 40-50. Weinstein, A. (2006). A strategic framework for defining and segmenting markets, Journal of Strategic Marketing 14 (2), pp. 115-127. Read More