Microsoft, Tesco, Google.com Market Segments - Essay Example

 Market segments are an important tool for companies to secure their market share. Successful brands do not just rely on the quality of their goods and services, they have to do better than just that, they have to reach out to their consumers and ensure that their goods and services are reaching their target niche. If market segments are researched properly then it is possible for a firm to reach the optimum amounts of consumers and dominate the market. Examples of market domination are Microsoft, Tesco, Google.com etcetera. The segments we create directly affect our marketing mix, therefore affect not just the promotion, but also the pricing, placement and the product itself. Market segments in terms of promotion ergo become imperative (Cheverton, 2005, p.53). Market segmentation basically refers to specialising and specifically focusing on one kinds of consumers. Segments can be based on a variety of factors some of which include gender, geography, industry, age groups; or they can be a little bit more specific e.g. democrats in the USA or soccer fans etc. By concentrating on one particular part of the market the producers are not just able to market their product better, they can even improvise and enhance their goods in a way which makes them the most appealing for their customers. Geoffery Yeo further defines market segments as, “Market segmentation is a technique widely used in he market research industry. It can be defined as ‘the process of splitting customers into different groups, or segments; within which customers with similar characteristics have similar needs” (Yeo, 2005, p27). How does one segment the market for food? Everyone needs food, however, if that was the only thing that crossed a producers mind then he would end up with a burden of a segment which consists of not just people from the UK, but the whole world. Focusing on what kind of food one is selling is extremely important, in our case we will be focusing on fast-food. Segments for this market will be created based on a number of factors: they can either be demographic or psychographic. Demographic factors take into account the age, sex, gender, income etc of the consumers, where as the psychographic factors look into what attracts and appeals to consumers the most (Shiffman & Kanuk, 1994, p.73). For a fast-food organisation to function properly in the UK it would have to focus primarily on psychographic factors. The problem with focusing on demographic factors is that fast-food is an affordable eatery, not just in the UK, but all over the world. Since, it is an organization it would want to operate more than one outlet which cannot be done by creating segments based on demographic. For example if they split categories based on income and focus on higher income segments their profit and revenue will fall for a large margin, along with which it will really defeat the purpose of putting fast-food on their menu (Kurtz, 2008, p287). They cannot just target women and exclude men because fast-food has never been centred on the needs of one gender, along with which they can also not exclude one age group for another because there is no set trend that dictates that only teenagers like fast-food or only the elderly are allowed to have some. Segmentation therefore must be based on psychographic factors which take into account the attitudes and opinions of individuals. The fast-food organization needs to start by using the concepts of a convenient lifestyle. The main idea is that people who are on the run on a constant basis would like to have a good meal, but most likely don’t have time to cook it themselves. A large portion of the UK population is now a working population. These kind of people’s opinion is to get something on the go that saves them time in both making the food and then having to sit down and consume it. The organization can take into account the growing need for speed amongst people in everything that they do. The working adult, and young adult, is therefore essential as a segment. McDonald’s cashes in on a large segment of the market by indirectly targeting parents with their goods for children. A child is a very effective means of luring in a large portion of the population. In order to maximize the benefit from this, the organization could also affiliate itself with other children’s organization such as cartoons or movies, just as McDonald’s has done, and pull in a lot more customers. A successful fast-food organization needs to cater to children and should have its own section of a children’s menu for this purpose as well. Another segment that they can focus on is student’s i.e. high school, college and university students can be targeted through the promotions. If the outlets can be made a place fitted with popular cultural references i.e. the latest in music, movies, technology etc then they might be able to attract a humongous portion of the population. By building an association with things that this group relates to the organisation can ensure that they visit the outlet frequently. The young generation today is interested in a lot of things and is constantly specialising these interests as well. If the organisation is able to give them a taste of their interests then they might be able to create affinity and ergo brand loyalty in the long run. Nationalism is used by fast-food organisations in many countries to attract consumers and keep them there. The citizens of the UK are no different than people all around the world. They aren’t only proud of their history but also hold their position in the world today at a high place. Nationalists can be induced to eat more at the outlets by introducing a menu that caters to their taste. This does not mean that the ingredients will be influenced in anyway by nationalism, it does; however, mean that a burger, sandwich or a meal combo maybe dedicated to the UK, or even the queen. In this way they might attract consumers regardless of their age, gender, income group, social status etc. they will show up only because of their patriotism. Another important segment for the organisation should be the café goers. This would include people who are simply looking to spend some time out of their homes or work spaces to wind down and relax or even looking for a place to conduct business or entertainment visits. The marketing segments have a great influence on the marketing mix. There are several benefits of creating segments before getting down working on the actual goods and services. They help the organisation get a better understanding of the market dynamics and how to deal with these dynamics. Without understanding what kind of consumers exist in the market, if the organisation develops its outlets and products it may end up with no customers. By creating segments the organisation will also be able to better judge the capabilities of its competitors and how to out do them. For example they may employee lower prices; introduce a celebrity to endorse their menu etc, based on the trends of their competitors. Pepsi and CocaCola regularly employ celebrities to endorse their drinks for this reason alone. Consumer’s always respond to their loyalties. Market segments will also help the organisation understand what the consumers are looking for. They cannot create a menu or products based on what they think is right, their ultimate aim is to satisfy the consumers and conducting research and creating segments tells them exactly what the consumers are looking for. For examples, a family looking for a place to hold a birthday party for their children will not go to a bar. The organisation can also plan its future strategies based on the segments as well. They can explore their consumers and then appropriately base their supply chain on the needs and wants of their customers. This can also heavily influence the structure and management of the organisation itself. If the organisation is able to create an effective place for itself in the market and acquire brand loyalty then it can even price its goods however it wants to. Cheverton proposes that “the purpose of segmentation is to focus your limited resources on to those opportunities that will take you where you wish your business to be, and represent the best chance for you to gain competitive advantage (Cheverton, 2002, p. 54). Which is entirely true; market segmentation helps producers turn the interests of their consumers into profits. References Cheverton, P. 2002. If You're So Brilliant ...How Come You Can't Identify Your Key Customers?: The Essential Guide to Key Account Selection, Volume 2 of The if you're so brilliant- series: Kogan Page Publishers Kurtz, D 2008 Contemporary Marketing, Edition 13: Cengage Learning Schiffman, L & Kanuk, L. 1994. Consumer Behavior, Edition 5, Prentice Hall Tigert, D., Lathrope, R., & Bleeg, M. 1971. The Fast Food Franchise: Psychographic and Demographic Segmentation Analysis. Journal of Retailing, 47(1), 81. Yeo, G. 2005. Understanding Users and Use: A Market Segmentation Approach. Journal of the Society of Archivists, 26(1), 25-53. Read More