Market Segmentation, Targeting and Positioning - Essay Example

Market Segmentation, Targeting and Positioning College Market Segmentation, Targeting and Positioning In the current business environment, internet and media technologies have deeply penetrated into the heart of marketing strategies. Organizations use marketing strategies to reach out for their customer at specific target markets. The digital technology has had far reaching impacts on marketing approaches ushering new positioning strategies and rendering traditional approaches obsolete. One impact of digital technology is that it has opened up international markets, resulting to the formation of a more complex market characterised by cultural diversity (Baker, 2009). Therefore, different market segments have unique customer characteristics and organizations must strive to satisfy them to benefit from them (Schlager & Maas, 2013). As result, there has evolved a controversy on whether mass marketing is slowly fading away. While some analysts concede on this point, there are those who feel that mass marketing is still relevant and large companies still have room to employ marketing programs to target the mass market. From a close look, the digital era has allowed managers to identify unique characteristics of various market segments, making mass marketing an inefficient strategy to market organizational brands. In the last two decades, there has been remarkable increase in digital technology across the global business market. There are number of reasons that have led to the increase in digital technologies. First, there has been an increase in the access of digital access due to decrease in the price of access platforms (Bharadwaj, Sawy, Pavlou, & Venkatraman, 2013). The increase in production of computers and mobile gadgets within the industry has led to price reduction and hence affordability on the customer side. Secondly, innovation has led to development of business oriented software that has come to revolutionize the business world. For instance, the cloud computing technologies and web 2.0 platforms has helped businesses to push their business online, store customer data and reach out to broader markets (Brynjolfsson & Kahin, 2002). Social media platforms have become effective marketing platforms for organization within the online. Resultantly, the online environment is expanding rapidly. Statistics show that by the end of 2014, there will be over 7 million devices connected online, while the online business will be hitting $ 1.5 billion value (Setia, Venkatesh & Joglekar, 2013). On this note, online business is bound to expand and organizations have to consider this change if they have to survive in a competitive market. The impact of business digitization has changed the business marketing dynamics. Organizations have used the digital era as a Launchpad to push their business to the international market as one way of expanding their geographical coverage. As competition builds within the local markets, organizations are challenged to explore new market segments to remain profitable. However, entering the international market has come up with its own challenges. To begin with, different market segments have different consumer characteristics hence influencing their purchasing pattern (Dolnicar & Lazarevski, 2009: Dibb & Simkin, 2009). At a time when customer-value models are idea in winning customer loyalty, satisfying each segment has become critical for any business. For an organization to survive within a business market, it has to understand different market characteristics to ensure which is crucial in designing brands that satisfy the consumers. Secondly, the digital era has resulted to increase in customer data, making it complex for organization to analyse big data from different target segments. For instance, the cloud computing technologies allows organizations to collect and store data from the customers for later processing. As a result, managers have a challenge to use big data to target and satisfy different market segments. Mass marketing is an approach that many organizations have used in the past to roll out their products to various target markets. Mass marketing refers to a marketing approach where firms use one uniform approach to appeal to all its market segments. In this approach, organizations send similar messages to as many customers as possible to appeal to the global business market. For instance, an international company may decide to create a broadcast e-mail to send to all target customers with all their franchises. This way, the organization targets a wide range of consumers and appeals to them to buy this product. Traditionally, organizations preferred this approach due to its cost effectiveness and ability to increase sales of a common product (Michaelidou, Siamagka & Christodoulides, 2011). However, there is evidence that this approach is inefficient in meeting specific customer needs. The fact that mass marketing ignores differences in different market segments renders it inefficient. Evidently, the cultural and traditional attitudes influence the customers purchasing pattern. For instance, the demand for junk food is falling in the US, while it is growing within the third world countries. On this note, a marketing strategy that ignores difference in market segments is inferior in modern business. The rise of the digital era has given organizations the ability to tap information from their customers and use it in designing products that appeal to different market segments. The ability of an organization to satisfy customer demands depends on their ability to have a two-way communication exchange with their customers. When organizations satisfy customer tastes and preferences, the demand for their products is bound to grow, hence increasing sales. The digital media has given firms the power to understand their customers, isolate their tastes and establish an efficient communication with them. For instance, the social media allows organizations to obtain different customer feedback for their products from different market segments (Hettler, 2010). Managers use the customer feedback from different markets to redefine their products such that they satisfy different demands. Secondly, cloud computing technology allows companies to collect and store information from different markets, which they can use to design products for specific markets. On this light, the internet and digital technologies allows marketing professionals to gather customer-related information that they can use to defined more sophisticated market segmentation schemes. As a result, companies are shifting from mass marketing strategies to differentiated marketing strategies that is more beneficial diversified markets. However, a number of scholars have denied the notion that mass marketing is an obsolete approach for the modern business environment. Their argument is that large companies still have a room to use mass marketing to target the global market and roll out their brands with a large geographical space. Jones & Tedlow (2015) argue that mass marketing is a relevant marketing approach for “big boys” to show the relevance of this approach to big brands. Notably, there are companies that launch brands that target all market segments. For instance, the Nokia Company develops mobile products that can be used within all its target markets. Therefore, this approach is cost effective and desirable in introducing new products to all their customers. However, the proponents of differentiated marketing have argued against mass marketing by citing the complexity of customer tastes. The argument is that individual customers think differently and their tastes will vary for each product brand (Homburg, Wilczek & Hahn, 2014: Kumar, Chen & Simpson, 2009). For instance, while Nokia intends to sell its mobile products to all customers, it is clear that the economic abilities of organizations will influence the purchasing pattern. Therefore, differentiated marketing is more powerful in satisfying the customer demands. A more reasonable school of thought has evolved as some scholars suggest that it is possible even in this era for organizations to use both mass and differentiated marketing methods to position their brands in the market. The two methods can be complementary if the managers use them in a way that they contribute to the growth of the organization (Wong & Eyers, 2011). For instance, a company will use marketing to create product awareness within the global market, and use differentiated marketing to target specific market segments (Loštáková, 2009). This way, the company will profit from creating a global demand and satisfying the tastes and preferences of different customers within unique markets. On the other hand, it is clear that differentiated marketing is more desirable due to the rapid changes in consumer tastes that organizations are experiencing today (Krystallis, Vassallo, & Chryssohoidis, 2012). This explains why modern organizations are phasing out mass marketing and using the digital technology to refine their differentiated marketing methods. In conclusion, the evolution of technology within the business environment has threatened the survival of mass marketing strategies. Digital technologies have ushered an era where managers can harness essential customer information from different target market segments and use it to design differentiated marketing strategies. The contemporary business niche demands that organizations understand customer tastes and find ways to develop products that satisfy them. While there still exist organizations that use mass marketing as a push strategy to create a global demand for their brands, it is clear that this approach is no longer efficient. Ignoring the difference within market segments jeopardizes the ability of managers to influence demand in their various franchises. However, while differentiated marketing has many advantages over mass marketing, it is possible for organizations to use both approaches to profit their business. 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