Different Segmentation Bases - Essay Example

Market segmentation is the division of a mass market into identifiable and distinct groups or segments, each of which has common characteristics and needs and displays similar responses to marketing actions (Baines, Fill, and Page 217). Market segmentation allows organizations to use their finite resources to ensure that they reach their select group of customers, in the most effective and efficient way, while having the greatest impact. There are three segmentation bases that could be used for our product: the profile, psychological and behavioral.
Profile segmentation criteria seek to uncover who the market is and where they are. It includes the use of demographic methods (such as gender or age), socio-economics (such as income levels or social class), and geographic location (often using sophisticated zip code or postal systems). Psychological include using customer attitudes and perceptions, the lifestyles of customers and the types of benefits customers seek from products and brands and their consumption choices (Baines, Fill, and Page 232). Behavioral criteria involve the use of behavioral constructs such as product usage, purchase, and ownership to segment consumer markets.
Based on your segmentation, describe each of the target markets that you would seek to reach. Explain why they will be the most profitable for your product/service.
With the increasing sophistication of laundry detergent buyers we shall segment our market into two: (1) low-income, playschool parents – who have children younger than four years old, who purchase their laundry detergents at supermarkets or convenience stores. The laundry detergent will be for washing children's wear. (2) The second target market shares all attributes with (1) except in this case we will be targeting primary school parents, who have children between ages 5 – 9 years.
Young parents are high users of laundry detergents because of the need to keep their children, who change clothes at least twice a day, clean. Though this market segment tends to be loyal to their brands, we are targeting the low-income parents who are much keener than their high-income counterparts to try out new offerings. Though we may have to put a low price on our products to satisfy the low-income market, we anticipate high volumes because this demographic group tends to have more children than its high-income counterparts. Our target market (2) will also feed on the target market (1) as the children grow and their parents become loyal to our brand.
Develop a value proposition for your product/service through differentiation and positioning.
Positioning, therefore, is about how customers judge a product’s value relative to competitors and its ability to deliver against the promises made.
Our biggest competitors shall be Procter & Gamble’s Dreft and Ivory Snow. Dreft’s value proposition is that it “helps remove tough baby stains, the pediatrician recommended and the first choice of mothers (“Dreft Laundry Detergent: Specially Formulated for Baby Clothing and Other Items” 1)”. It has also been in the market for 75 years. On the other hand, Ivory Snow is “one gentle care detergent for all fine washables and baby clothes (“Welcome to Ivory Snow” 1).”
As a new product, we will have to face the barriers to entry posed by the three large players in the industry: Procter & Gamble, Unilever, and Henkel. We shall use emotional appeals to build our positioning. Our brand shall offer high customer involvement by organizing a community around the brand. Read More