Eco Shack Marketing - Case Study Example

Eco Shack Marketing Name Course Name and Code Instructor’s Name Date Introduction The demand for environmental friendly product and services has driven the producers to develop products, which fulfils the requirements of consumers. Different products ranging from beauty to airline products and services have been developed with the aim of sustaining the environment. The aim of this report is to analyse Eco Shack, which is an organisation that specialises in development of portable house and are built with environmental sustainability consciousness. The report analyses the segmentation basis applicable to both products: Urban Eco Shack and Standard Eco Shack. In addition, the report analyses the positioning and branding applicable to the product. Segmentation Basis – Urban Eco Shack Market segmentation is the strategy that is utilised in dividing a larger market into smaller and different homogeneous groups of customers. This is because a single market consists of buyers who vary from other customers in different ways (Franzen and Moriarty, 2008). Variation among these customers depends on various factors that might include resources, wants, locations, buying attitude and buying practices (Kumar, 2007). The aim of segmentation is to target larger heterogeneous markets and divide into smaller segments that an organisation can maximise on to ensure efficiency and effectiveness is achieved with services and products that are applicable to the unique needs for that segment (Dibb and Simkin, 2013). Therefore, market segmentation is important for these companies that services larger market. Some factors to be considered while selecting market segments include accessibility, measurability, durability, unique needs and substantiality. However, the most important component that marketers utilise and base their segmentation requirement are geographical variables, psychographic variables, demographic variables and behavioural variables. Eco-Shack business also understands this requirement and therefore it has to utilise segmentation into accessing the appropriate market segment. Demographic segmentation utilises various demographic factors such as social class, gender, income and age in segmenting the customers. The demographic variables bring into consideration factors sch as usage rate, wants and consumer and obtaining such information is important in formulating and implementing a market strategy. Urban Eco Shack products would be positioned based on this framework since the disposal incomes and other factors play an important role in acquiring housing (Franzen and Moriarty, 2008). Utilisation of demographic segmentation is the major tool utilised by numerous organisations across the world since the organisations can categorise consumers’ needs on the basis of demographic factors such as income. This is because the variables are issue to obtain and utilise if compared to other segmentation variables (Kumar, 2007). However, the approach might not be able to certain scenario because the method is one dimensional approach ion which needs of a group of consumers are based on a single variable (Dibb and Simkin, 2013). Nevertheless, the Eco Shack can utilise this strategy in ensuring the consumers are attracted to the products because of family needs and requirements. For example, it is easier to utilise the Urban Eco Shack to accommodate an additional family member rather than seeking the numerous permits for house extension plus the costs that are associated with the entire process. Moreover, the option of renting would be beneficial for those consumers who want an addition space for a short time. Demographic is also sometimes utilised together with geographic variables. Geographical segmentation allows a larger market to be dividend into geographical units such as population density, regions, city sixe and climate (Kumar, 2007). It is assumed that those people living in urban areas have lifestyles that are different from people living in the rural areas. Numerous factors define the way these two groups operate and live (Dibb and Simkin, 2013). The Urban Eco Shack is specifically designed for urban areas and also they can be moved easily. This means that the marketing should be concentrated in urban centres with the aim of attracting and maximising on the urban customers (Franzen and Moriarty, 2008). Numerous rules and regulations govern construction and extension of buildings within the urban areas and the condition that these Eco Shacks installation does not require council approval means that the urban consumers can be concentrated on (Mcghie, 2012). The two entrepreneurs are located at Auckland and therefore they can start with concentrating on this market because of logistical and other issues associated with marketing and delivering products into a far area. In addition to geographic variables, psychographic variables such as opinions, interests, personality, attitudes and activities can be utilised to understand a given market segment (Kumar, 2007). A single market that has similar demographic factors may have different psychographic factors (Dibb and Simkin, 2013). It means therefore it is important to understand the wants and needs of consumers before creating a marketing strategy. Opinions such as the Urban Eco Shack are beneficial because it is friendly to the environment might appease more customers and be able to purchase the product (Franzen and Moriarty, 2008). The shape, nature and design of the Eco Shack can also define the direction and approach in which a given product is embraced by customers. Therefore, the management at Eco Shack should develop and inform the customers on features associated with the housing and also comparing these benefits to other environmental factors such as legislations and laws that govern the construction industry (Temporal, 2011). The last approach that can be utilised by Eco Shack is behavioural segmentation approach. The theory behind behavioural segmentation is dividing the segments based on attitude, consumer knowledge and utilisation a given product. Some behavioural variables include brand loyalty, product benefits, usage rate, user status, price consciousness and occasions (Franzen and Moriarty, 2008). The benefit of this segmentation approach is that it utilises the product or service as the backbone to marketing strategy. Urban Eco Shack has features that are associated with town lifestyle such as data connection and this can appeal to the consumers easily (Dibb and Simkin, 2013). In addition, the Eco Shacks are environmentally friendly products and this is an important component that determines and directs how consumers who are environmental conscious can appreciate the product (Kumar, 2007). Moreover, the easiness of portability of the Urban Eco Shack also plays a major role in determining how consumers perceive towards the product. Generally, in segmenting a given market, numerous variables and factors are utilised to ensure the most appropriate strategy is employed (Dibb and Simkin, 2013). According to the design and applicability of the urban Eco Shack, these four segmentation strategies would be utilised into forming a single strategy that would appeal most consumers based on their tastes and preferences (Franzen and Moriarty, 2008). Moreover, the segmentation process and features associated with the Eco Shack would also be a driving force towards accessing and acquiring the products. Market Segmentation – Standard Eco Shack The Urban Eco Shack and Standard Eco Shack share some features. However, the major difference between the Urban and Standard Eco Shack is the length of product. In addition, the framing of the Standard Eco Shack also defines the practicability of the product (Kumar, 2007). Therefore, these two products appeals to different consumers and they are more suited for those individuals that are moving or requires privacy (Dibb and Simkin, 2013). For example, the Standard Eco Shack has a numerous products that are suitable in an environment that lacks most of the general amenities (Franzen and Moriarty, 2008). For example, the Standard Eco Shack has decomposing toilet, battery storage, and solar power and under floor water tank that is utilised for catchment off the roof (Dibb and Simkin, 2013). These are features that are common in normal housing and therefore the Standard Eco Shack can be utilised as a standard alone home and this is beneficial to New Zealanders who appreciate frequent holidays, moving from one location to another. Therefore, the favourable segmentations that are appropriate for the Standard Eco Shack are psychological, demographic and behavioural. The most important segment is behavioural because it utilises the features of the product in marketing strategy rather than the features associated with the consumers (Dibb and Simkin, 2013). For example, the Standard Eco Shack has numerous features that are aimed at environment sustainability compared to products from competitors (Franzen and Moriarty, 2008). It is easier for consumers to purchase the product because it can be utilised as a stand alone home. Therefore, these variables determine the consumers who would purchase and utilise the products. Psychological factors also determine whether a consumer can purchase a product or service. The influence of family members and other people within the social environment may determine whether a consumer can purchase a given product (Franzen and Moriarty, 2008). Information available regarding a given product plus interest associated with the product determines whether consumers can purchase the product. In addition, demographic factors also guide customers in determining to purchase the Standard Eco Shack. The Standard Eco Shack is expensive and the income and social class of the consumers would also determine positioning and advertising of the product (Kumar, 2007). In addition, the frequency of use of the product also determines whether a consumer can easily purchase the product (Dibb and Simkin, 2013). Therefore, the market for the Standard Eco Shack should be based on these numerous factors into understanding the consumers and their perceptions towards the product. Like Urban Eco Shack, the Standard Eco Shack is applicable to a given market grouping. It is difficult to segment an entire market based on a single criterion and therefore it is important to segment the market based on numerous factors (Dibb and Simkin, 2013). Huge amount of information regarding a given market would provide enough platforms in which information would be coalesced into developing an effective and infective marketing strategy. Branding and Positioning of the Eco Shack Products Brand strategy is the method in which the brand’s unique features are identified and brought together to create a unique promise. A brand that is strong is seen easily from competitors, has credibility and relevant to those who comes into conduct of the product (Franzen and Moriarty, 2008). This means that a brand position must be believable, relevant and defendable (Zonis, 2009). To achieve the branding position, it is important for Eco Shacks to analyse and determine uniqueness of their products and its applicable when compared to competitors products (Kumar, 2007). Therefore, the product uniqueness should be communicated in a manner in which customers would identify themselves with the product. Some of the branding strategies that Eco Shack should utilise include: Environmental nature of the product – Eco Shack should brand their products based on the environment benefit associated with utilisation of the product. The product does not use a lot of energy and it has means of collecting run off water. Features associated with the product – Eco Shack products have numerous features that are applicable to day to day leaving (Kumar, 2007). Practicability and applicability of the product – The Eco Shack products are applicable to different environments and also are acceptable by local council legislations (Dibb and Simkin, 2013). Therefore, there is no need for numerous paper work and permits application and hence can be utilised in different areas. Benefit of the product – Eco Shack products are beneficial to the customers who want additional space that can be moved easily. Positioning brings into consideration how the customer beliefs about the product’s features, value and benefits. It allows comparison to other substitutes and alternatives offered by competitors (Franzen and Moriarty, 2008). These beliefs are usually based on customer evidence and experience rather than factoring only on promotion or advertising (Dibb and Simkin, 2013). Product positioning is based on positioning strategy that brings into consideration the distribution channels, promotion, price and advertising. Generally, Eco Shack would utilise the following strategies in position the Standard and Urban Eco Shack: Benefit of the product – this is the commonly utilised positioning strategy. The benefit of the Eco Shack products is it is environmental friendly and it is also applicable to numerous scenarios Use – the Eco Shacks can be utilised both in urban areas and in rural areas such as during outings (McDonald, 2012). Moreover, Eco Shack products can be utilised by numerous persons with the aim of achieving different goals. Product class- Eco Shack produces two products that are applicable to urban areas and another one that is applicable to different utilisation purpose (Burkard, 2011). The more expensive product, the Standard Eco Shack can be advertised to those people who keep moving and like touristic activities while the urban Eco Shack can be positioned towards the urban individuals (Kumar, 2007). By competitor – Eco Shack has one major competitor and has been in the business for sometime. However, the products of the competitor are not environmental friendly but they are cheaper compared to Eco Shack products (Dibb and Simkin, 2013). Therefore, Eco Shack should leverage on the environmental friendly nature of the product in ensuring more consumers can purchase the product. Price and quality – The price is usually associated to the quality of the product. The higher the price the more features and benefits the product has. Therefore, the Eco Shack inform consumers the higher prices are attributed to the quality of the product including the steel chassis and also the fifty years minimum lifespan of the products. The basis of positioning is what the consumers believe rather than what the organisation wants the customers to believe. Positioning strategy usually changes because of the counter measures that are instituted by the competitors and also at the competition (Dibb and Simkin, 2013). Therefore, in formulating and implementing a product positioning strategy, it is important to understand what the customer wants and also to understand how competitors perform. Therefore, Eco Shack should understand how the competitors operate and the requirements of consumer to ensure more customers are informed regarding the product. Conclusion In segmenting the market, an organisation can utilise four bases which are demographic, psychological, geographical and behavioural factors. The Urban Eco Shack would employ the four bases in grouping the consumers with the aim of ensuring that they appreciate the Eco Shack products. Moreover, the Standard Eco Shack would embrace three of the four segmentation strategies: psychological, geographical and behavioural. In addition, the branding and positioning strategies would be based on information obtained from segmentation. Recommendations The following are the recommendations that the two entrepreneurs should embrace: Market both products at the same time highlighting the different features and applicability of the products Choose alternative marketing strategies/promotional strategies to increase the number of sales Utilise also the psychological pricing strategy to ensure more consumers can purchase the Eco Shack References Burkard, N. 2011. Market Segmentation and Branding in the Hotel Industry with Special References to Hilton Cooperation. London: GRIN Verlag Dibb, S., and Simkin, L. 2013. Market Segmentation Success: Making It Happen! London: Routledge Franzen, G., and Moriarty, S. 2008. The Science and Art of Branding. London: M.E. Sharpe Kumar, S. 2007. Marketing and Branding: The Indian Scenario. Jakarta: Pearson Education India McDonald, M. 2012. Market Segmentation: How to Do It and How to Profit from It. New York: John Wiley & Sons Mcghie, A. 2012. Brand Is A Four Letter Word: Positioning and the Real Art of Marketing. London: Advantage Media Group Temporal, P. 2011. Islamic Branding and Marketing: Creating a Global Islamic Business. New York: John Wiley & Sons Zonis, N. 2009. Market Segmentation in European Markets. London: GRIN Verlag Read More