The Segmentation Strategy of Google - Research Paper Example

? MK 491 Seminar in Marketing-Report Introduction Online companies have been in existence since many years. They have led to rapid rise in the development of online products and services which are useful to the users. Consumers can now easily do transactions or buy products or services online which is more efficient and less troublesome as compared to going physically at store. This led to many companies to change their online marketing strategies and adapt to it. In this paper we will concentrate on Google Inc. as the company whose marketing strategy is to be analyzed. In 1998 Google Inc. was started by two Stanford University graduate students, Larry Page and Sergey Brin. Since then it has literally transformed to a giant firm employing over 10,000 people. Google Inc. is a household name for their search engine service. Google has become so big now that it has almost become a new word in English language. Research Question The Research question posed here is discussion of the product, pricing, promotion and distribution strategies adopted by Google Inc. Literature Review Google Inc. is one of the top technology companies in the world. It offers a range of products and services which caters to the needs of the users. This company is present across different domain in the Internet and most of the consumers use their products and services in everyday life. Google hence uses different strategies to market their diverse products and services. Since they offer such diverse set of products and services, they use different market segmentation strategy to reach out to their consumer base. Their positioning strategy has to be prefect so that they live up to consumers demands. Similarly their pricing and distribution strategy has to be developed to make them be on profit terms with other competitors. Analysis and Findings Overall business and marketing strategy of Google For Google their biggest success factor is the search engine which they have created. Google alone earns millions of rupees through advertisements. For Google information gathering is the key to their success. It makes all the products and services in such a way that it caters to all the segments in the market. This makes non-profit and private use by users absolutely free of cost. The founders of Google have a strong liking to education and libraries. The atmosphere of the company is like a university where continuous research and analysis of their product and services are done. They strive continuously for better search methods so that more useful information is available to the consumers through as many means as possible. Hence all the employees are encouraged to create something new and are rewarded for their effort through means like freedom with work hours, free meals, competitive pay etc. It organizes Annual Code Jam international competition which aims at solving the mind racing problems, and the winner is given large amounts of money. This helps them to find bright new employees. Hence Google primary business strategy is the innovation which the innovation in their products and services which they brings in front of the consumers. They have been largely successful at their overall business strategy. Segmentation strategy The segmentation strategy of Google is very diverse. Google has a diverse product line and hence it is present everywhere to cater to a number of users worldwide. For instance Google Search and other products are available to users at over 110 languages and it is still expanding (Anderson, Lazarus, Loftsgaarden and Weiss, 2003). According to a survey conducted in United States it was seen that their Search Engine was popular among users less than 34 years of age. Among them 55% of the users are male. Their users are predominantly technologically adept. Most of the users are business professionals. Again the products like Google plus, Google hangout, Picasa indicate that they are targeting the young peoples who are in their colleges and like to engage in social networking. One of the best Google products is the YouTube which is a video sharing site which lets people all across the domain to share their content. Hence people for students, to business peoples to filmmakers, to whole lot of other people. They have also launched Nexus, which is a smartphones. Through the smartphone Google targeted the youth and the business class people so that they can use it to make their life easier. Google has their own Application stores which cater to the needs of a variety of consumers ranging from students, gamers, business men, etc. It is seen that Google has segmented their consumer base according to the product or service they offer. They have been remarkably successful in segmenting the market by building their products or services which caters to the specific needs of the consumers. Positioning Strategy of Google Google has been offering new innovative products and services which meets the demand of the consumers. They design their products and services in such a way that they are capable of competing against their competitors. But Google faces a problem when it tries to position their new products in market where there is dominance of already another existing product. Google has the tendency of realizing new products only after such products have already been developed by their competitors. Though their products are much more advanced but they face the risk of users moving on to new technologies (Abt, 2007). But Google makes all of their products and services compatible across multiple devices and platforms which gives them an edge over others. For example Google Android applications are available not only for Android platforms but also for Blackberry and iPhones. By doing this it tries to capture the consumer of both the brands while it tries to enter into the world of Operating Systems. Google has positioned themselves as a universal technology company which is striving for continuous development. The target market of Google is primarily The Savvy Student, but trying to make too specific positioning may not be good since it will skew their overall intentions. It must try to generalize their target market. Distribution Strategy Google uses multiple distribution strategy for their products and services. Like Google uses Private Channel for distributing their Google Apps. This allows the Google Apps to reach their users through their Google Play store. This is done mainly by the Google Apps domain administrator. He chooses which user groups or users can access Private Channel to make them eligible for downloading the internal applications. Google uses an open distribution channel where the source code for its Android is made available to the public as per open source software license. Google doesn’t give any incentive to its intermediary, but rather it gives them to the manufacturers, and Google can simply load the software into their phones and sell it to the public. But it gives the manufacturers choice of tailoring it according to their own needs and interest. This may harm Google because they may lose the ability of managing and monitoring the distribution channel. Pricing strategy Google uses Pay-per-click (PPC) advertising to earn major part of their revenue. This is an auction-based pricing strategy which charges customers according to their willingness to pay. Beside each search result Advertisers bid for placing their ads. For a webpage, the more an advertiser wants so to pay, the higher will be its rank. They basically bids for specific keywords on per click basis and this bidding process happens all throughout the day. Google has been quite successful by following this strategy (Hagiu and Yoffie, 2009). Promotion strategy The Promotion strategy of Google relies on Referral and viral marketing. Google has the knack of gaining customer trust with the help of their morally superior policy of advertisement. Hence the Google consumers recommend Google to their friends. They mainly relies on word of mouth advertisement where a friends with a lots of friends with crate abuzz among them about their products. Google does their promotion by purchasing their own Ad Words internet ads and also through Google channel on YouTube. An example of such an Advertising policy is when Google released its Google Chrome. Google placed a link of it in their home page for a few weeks. This shows the modest advertising strategy of Google. Such simplicity in their advertising has helped them gain clout over others. Recommendations The following are few key recommendations for Google. Google must continue to invest R&D in computers, apps, televisions etc. It must try to settle areas which plague them like lawsuits, privacy and copyright issues. Google should develop artificial intelligence and applications which will use it and thus enhance their services. Innovate new technology and hence encourage the internet users in using their products and services. Conclusion Google is one of the top technology companies which build product and services catering to wide range of consumers. They must try to develop products which will reflect their corporate culture of innovativeness. They must try to understand the needs of the customers and accordingly try to position their product in the local market. They have to develop innovative marketing campaigns and execute them successfully. Google should track the marketing programs and analyses them so as to optimize the overall results and hence plan accordingly their channel mix. Such strategy will definitely help Google in making their brand more useful to the consumers. Reference Abt, L. (2007). Google Inc. Marketing Case Study Analysis. Retrieved from: http://aeunike.lecture.ub.ac.id/files/2012/04/Case-Kel.12.pdf. Anderson. C, Lazarus. J, Loftsgaarden, B. and Weiss, B. (2003). Internet Search and Strategies For Sustainable Profits. Retrieved from: http://www.mcafee.cc/Classes/BEM106/Papers/UTexas/2003/Google.pdf. Chao, C.C., Fan, Z., Lin, J. and Saha, A. (2012). Analysis of Google’s Strategy on Android. Retrieved from: http://www.stanford.edu/~ccchao1/Business%20Strategy/MS&E%20270%20Android.pdf. Hagiu, A. and Yoffie, D.B. (2009). What’s Your Google Strategy? Retrieved from: http://au4372.epage.au.edu.tw/ezfiles/71/1071/attach/31/pta_15648_8944776_82730.pdf. Read More