Market Segmentation and Product Positioning at Argos Company - Case Study Example

Table of Contents Executive Summary 2 Introduction 3 About Argos 3 SWOT Analysis 4 Market Segmentation 5 Product Positioning 7 Target Market 8 4 P’s of Marketing 9 Conclusion 10 References 11 Executive Summary Argos which is retail company selling consumer durables has worked on a different business model which has helped it to succeed in UK and Ireland. The company looks towards selling products through catalogues and has ensured differentiation in their services. This report has presented the manner in which Argos has been able to identify the market segmentation based on their SWOT analysis. This has helped to identify that demographics and income are the main constituent which has helped them to position their product differently for all section of the people. Argos has been able to ensure that they develop their marketing strategies based on it which has helped Argos to grow and following a similar strategy will ensure that Argos is able to conduct business efficiently in Qatar and ensure rising revenues for the company. Introduction The role played by consumers in this competitive world has increased which has made businesses alter and make changes in the manner they perform. This has increased the concerns of the business towards the consumer and looking towards customer satisfaction is a priority. This report looks into the manner Argos, a retail group looks about marketing itself. This report presents the SWOT analysis along with the target market, product positioning and segmentation. This helps to understand the manner in which Argos confronts to the marketing aspect and looks towards enhancing consumer confidence in the company and the manner in which the start of the company will be beneficial in Qatar as it will help to meet the customer requirements. About Argos Argos is a retail giant from United Kingdom and started its business in 1973. Since, then the business has grown and expanded to Ireland and other parts of the world. The company presently has more than 800 stores and employs more than 51,000 employees (Argos, 2011). The prime reason which has constituted towards the growth of Argos is the fact that despite being in the retail market the company has differentiated itself by ensuring that the products are sold through catalogues (Argos, 2011). The customers look at the catalogue, pay for the product and get it from the store. The business model is thereby different from the traditional method followed by retail players which has helped Argos to be able to tap a wide market. This business model will prove beneficial in Qatar as it will a new thing of this type which will thereby help to attract customers and enhance their experience. SWOT Analysis Understanding the SWOT analysis of Argos will help to understand both the internal strengths and the external opportunities that the world provides. This will help Argos in formulating strategies and ensuring growth of their business. The SWOT is as Strengths Market leader United Kingdom due to differentiation in the business model being followed by them Strong network coverage by having stores and presence around different regions have helped to gain loyal customers Having diversification by ensuring products which are owned by Argos has helped to improve the brand name Diversification into different businesses like watches, jewellery, consumer goods has ensured diversification of risk Efficient workforce which looks to deliver products at the home on time and ensure efficiency in their operations Weakness Increased cost of marketing due to increase in the cost of different strategies being used by the company Unable to move to different parts of the world which will provide a wider market to cater to Dependence on outside sources to procure the materials increases the risk associated with the same as it could result in increasing bargaining power of the suppliers Opportunities Diversify into other areas and move their operations in Qatar Increasing population base providing a wider market especially in the Asian countries Better services and higher customer satisfaction with products which are better in quality Threats Increased competition from other retail players who work on the traditional concept of displaying the products thereby helping the consumer to see and touch the product before purchasing the same Increasing competition as other players are looking to follow a similar business model to be successful Market Segmentation Argos has ensured that they are able to segment the market based on various characteristics so that the correct customers can be aimed at. Argos has looked towards identifying the market and conducting various research before coming to a conclusion whether the business model followed by them will work in Qatar or not. This will help Argos to ensure that they are able to efficiently decide on the target market and have a strategy in place which will help them to combat competitors and ensure maximum customer satisfaction. The most important aspect while looking towards market segmentation has been the strategy to understand consumer behavior and decide the strategy based on it. This has helped Argos to look towards the market segment based on geographic, demographic, social economic status and psychographics (Cateora and Graham, 2002). Argos has been able to identify these factors properly as shown in the chart below Geographic South East Asian countries, United Kingdom, Ireland, Qatar and other nations where the population provides an opportunity to develop a market Demographics Qatar is a good destination considering the increase in population along with the willingness and purchasing power to look towards retail marketing Social Economic status Aimed at all section of the society as the company looks to supply materials and goods used by people on daily basis thereby helping to satisfy their wants Psychographics Better services and developing the stores where all products are available at the correct price will help to enhance customer confidence and will ensure loyal customers Argos thus has looked towards ensuring that their strategy of segmenting the product and the market is done after looking into various variables so that the company is able to ensure maximum return from the market Product Positioning Identifying the correct market segment will ensure that Argos is able to position its product better and clearly in the minds of the consumers. Argos has looked towards targeting the customer based on their product offering and also considering the price and demographic factor which has helped to identify the positioning of the product to be for the lower end customers, middle class customers, and upper middle class customers, and upper class customers (Doole and Lowe, 2001). Argos has looked towards considering this because of the varied opportunity the market provides and the offerings they are able to make to the customers. This helps to identify the positioning map of Argos to be as Argos after looking at the various options have been able to identify a positioning strategy for itself where the look to position for all section of the society. Since, the business follows a different model which is different from the traditional one Argos has been able to position its product differently and create a different perception in the minds of the people. The company thereby has ensured that quality and image of the product remains the same and looked towards positioning its product for all section of the society (Shostack, 2009). Target Market Argos has ensured that after having properly ensured their market segment and positioning they are able to identify the correct market they will look to aim at. The fact that Argos provides consumer products aimed at all section of the society and having a different business model helps to identify the manner in which they are looking towards the target (Fletcher and Crawford, 2011). This thereby helps to identify the market segment for Argos to be as follows Customer Aimed at Age Classification of purchaser Purchaser requirements Households 5 - 70 Married and single households Having the willingness and desire to purchase the products as Argos supplies products which are used in their daily lives The reason for segmenting and looking towards household is the growth in population shown by the demographics. This is seen by the demographic figures which show that 46% are college goers, 26% have income less than $35,000, 32% earn between $35,000 & $75,000 and the rest above $75,000 helps to eye this segment of the market. The opportunity that Argos has due to rapidly rising population and income provides an opportunity to look towards conducting business in Qatar 4 P’s of Marketing The 4P’s of marketing will help Argos to plan the mechanism through which they will be able to ensure that the market segmentation and positioning helps the company and ensures effectiveness in the manner the company sells its products. The 4P’s are as Product: Argos looks towards offering all consumer durable products which individuals require in their daily lives. Along with it Argos has also looked towards developing some products within their house and endorses it as their brand name. This has helped Argos to ensure that the variety in their product range along with the brand has helped them to eye all people. Place: Argos presently looks towards selling its products mainly in United Kingdom and Ireland through the 800 outlets it has. The company due to a different business model has an opportunity to move to external market like Qatar which provides an opportunity due to the match between the present strategy being offered by Argos and the opportunity that Qatar presents. Price: Argos has looked toward pricing its product according to quality and ensured that all section of the customers visiting the stores have something to purchase. This has helped Argos to ensure better customer satisfaction and understanding the consumer behavior has helped immensely. Promotion: Argos looks towards promoting in the store by offering different incentives and discounts to lure customers. At the same time Argos have ensured that the loyal customers are offered something extra which has helped them to establish themselves as a chain which is bound to grow with other promotional activities Conclusion This report thereby presents the manner in which Argos has identified the market and ensured proper segmentation and positioning. This has helped Argos in their endeavor and using a similar strategy will help Argos to ensure that they are able to enhance customer experience and deliver better services in Qatar which will help them to diversify risk and grow their business revenues References Argos. (2011). Argos. Retrieved on December 23, 2011 from http://www.argos.co.uk/static/StaticDisplay/includeName/AboutArgos.htm Cateora, P. R., and Graham, J. L. (2002). International Marketing. 11th Edition, New York, McGraw-Hill Doole, I., and Lowe, R. (2001). International Marketing Strategy. 3rd Edition, Bedford Row, London, Thomson Shostack, G.L (2009). Designing services that deliver. Harvard Business Review 62 (1), 133–139. Read More