Marketing & Media Blog

Bases For Segmenting Consumer Markets

2011-08-15T03:40:00.000-07:00

The four major segmentation variables in consumer markets include:

Geographic Segmentation

It is one of the earliest and still most commonly used methods of segmentation. It involves dividing markets into different geographical units such as countries, regions, states, cities or neighborhoods. Few or all of these are chosen by the marketers as areas of operation. For instance, Japanese automobile makers produce different versions of auto for American and European markets.

"American spec" is different from "European spec". Nokia is currently designing rugged and easy to navigate mobile phones for illiterate populations in rural India, working closely within the peculiarities of these rural communities.

Demographic Segmentation

The second major method of segmentation, and probably the one most frequently used, rests on the assumption that markets can be subdivided into groups on the basis of one or more demographic variables such as age, sex, income, education, occupation, religion, race and so on.

The following demographic variables can be used to segment markets.

Age

Consumer needs vary with age. For example: West African Milk Company, in addition to its premium powder and evaporated milk recently developed a more nutritional product branded 1-2-3 for babies between the age of 1 and 3 years; and 4-5-6 for children between the ages of 4 and 6 years.

Sex

Many products like clothes, shoes, wristwatches, jewelries, wine and coffee are either targeted at men or women. For instance, salons break their market into barbing salon and hair dressing salon.

Income

Segmentation by is a long-standing practice in such product and service categories as automobiles, boats, clothing, cosmetics, travels, airlines and alcohol. Many airlines, for example break down their market into economy, business and first-class.

Psychographic Segmentation

Buyers are divided into different groups on the basis of lifestyle or personality and values. This is necessary because people within the same demographic group may exhibit different life-styles and value.

Lifestyle

The types of goods and services bought by consumers express their life-styles. Night crawlers patronize nightclubs, people who seek adventure buy tourism and sports lovers attend sport events.

Personality

Marketers endorse their products with brand personalities that correspond to consumer personalities. For instance, MTN has used high style personalities as people who achieve what they want to achieve.

Values

Some marketers segment by core values, the belief systems that underlie consumer attitudes and behaviors. For instance, Coca Cola promotes sharing value among families with its 1-litre Coke.

Behavioral Segmentation

Buyers are divided into groups on the basis of their knowledge, attitude and product usage. Variables under consideration include: occasions, benefits, user-status, usage rate, loyalty status and so on. Some of these are discussed below:

Occasions

Buyers can be isolated on the basis of the occasions they develop a need, purchase a product or use a product. Attendance at cinemas theaters, musical shows and other events in Nigeria, for example, usually takes place on Sundays, public holidays or festive periods.

Benefits

Buyers can be segmented according to the benefits they seek. Glomobile, the high-flying Nigerian GSM provider touts itself as the pioneer of pay-by-the-second billing system. Also, buyers of toothpaste seek any of these benefits: economy, oral hygiene, peer acceptance and taste as benefits.

User status

Markets can be segmented into non-users, ex-users, potential users, first-time users and regular users of a product. Blood banks, for example, must not rely only on regular donors to supply blood. They must recruit new first-time donors and contact ex-donors.

Usage Rate

Market can be segmented into light, medium, and heavy product users, Bournvita has three sizes: Big, medium and small sizes, with big size targeted at heavy users.

Conditions For Effective Segmentation

To be effective, market segments must be:

Measurable

The size, purchasing power, attitude and characteristics of the segments can be measured.

Substantial

The segments are large and profitable enough to serve.

Accessible

The segments can be effectively reached and served with a distinct marketing mix.

Differentiable

The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs

Actionable

Effective marketing programs can be formulated to attract and serve the segments.

Steps Involved In Market Segmentation

2011-08-10T06:37:00.000-07:00

Market segmentation involves four steps:

Identifying product-related need Sets.
Grouping customers with similar need sets.
Describing each group.
Selecting an attractive segment(s) to serve.

Product-Related Need Sets

Organizations approach market segmentation with a set of current and potential capabilities. These capabilities may be a reputation, an existing product, a technology, or some other skill set. The first task of the firm is to identify need sets that the organization is capable (or could become capable) of meeting.

The term need set is used to reflect the fact that most products in developed economies satisfy more than one need. Thus, an automobile can meet more needs than just basic transportation. Some customers purchase cars to meet transportation and status needs. Others purchase them to meet transportation and fun needs. Still others purchase automobile to meet status, fun, and transportation needs.

Customers with Similar Need Sets

The next step is to group consumers with similar need sets. Consumers with similar need sets can be grouped into one segment as far as product features and perhaps even product image are concerned despite sharply difficult demographics. This step generally involves consumer research - including focus group interviews, surveys, and product concept tests It could also involve an analysis of current consumption patterns and deductions based on an ,understanding of consumer behaviour.

Description of Each Group

Once consumers with similar need sets are identified, they should be described in terms of their demographics, lifestyles, and media usage. In order to design an effective marketing program, it is necessary to have a complete understanding of the potential customers. It Is only with such a complete understanding that we can be sure we have correctly identified the need set, In addition, we cannot communicate effectively with our customers if we do not understand the context in which our product is purchased and consumed ho it is thought about by our customers, and the language they use to describe lt.

Attractive Segment(S) To Serve

Once we are sure we have a thorough understanding of each segment, we must select our target market - that segment (s)of tile larger market on which we will focus our marketing effort. This decision is based on our ability to provide the selected segment(s) with superior customer value at a profit. Thus, the size and growth of the segment, the intensity of the current and anticipated competition, the cost of providing the superior value, and so forth are important considerations.

Understanding Market Segmentation

2011-08-10T06:12:00.000-07:00

Perhaps the most important marketing decision a firm makes is the selection of one or more market segments on which to focus. A market segment is a portion of larger market whose needs differ somewhat from the larger market.

Since a market segment has unique needs, a firm that develops a total product focused solely on the needs of that segment will be able to meet the segment's desires better than a firm whose produce or service attempts to meet the needs of multiple segments.

To be viable, a segment must be large enough to be served profitably. To some extent, each individual or household has unique needs for most products. The smaller the segment, the closer the total product can be to that segment's desires. Historically, the smaller the segment, the more it costs to serve the segment. Thus, a tailor-made suit costs more than a mass-produced suit.

However, flexible manufacturing and customized media are making it increasingly cost effective to develop products and communications for small segments or even individual consumers.

Market Segmentation is the process of dividing a large and heterogeneous market into relatively homogenous segments that can be reached with a distinct marketing mix. For example, an aircraft firm may segment its market into commercial, military and private markets/customers. Mobile phone users are divided into" low-end, middle and high-end users.

Segmentation offers:

A better understanding of customers.
A better understanding of competitors.
More effective targeting of resources.

Market Aggregation is the opposite of market segmentation. Market aggregation is the strategy where by an organization treats its total market as a whole. The firm then develops a Single marketing mix to reach as many customers as possible in the aggregate market.

Market Management Organization

2011-08-10T06:04:00.000-07:00

Many companies sell their products to many different markets. Dell sells its products to consumer, business, and government markets. Steel companies sell their steel to the railroad, construction, and public utility industries. When customers fall into different user groups with distinct buying preferences and practices, a market-management organization is desirable.

A market manager supervises several market managers (also called market- development managers, market specialists, or industry specialists). The market managers draw on functional services as needed. Market managers of important markets might even have functional specialists reporting to them.

Market managers are staff (not line) people, with duties similar to those of product managers. Market managers develop long-range and annual plans for their markets. Their performance is judged by their market's growth and Profitability. This system carries many of the same advantages and disadvantages of product-management systems. Its strongest advantage is that the marketing activity is organized to meet the needs of distinct customer groups rather than being focused on marketing functions, regions, or products. Many companies are reorganizing along market lines and becoming market- centered organizations.

Matrix Organizations

A business facing an extremely complex and uncertain environment may find a matrix organization appropriate. The matrix form is the least bureaucratic or centralized and the most specialized type of organization. It brings together two or more different types of specialists within a participative coordination structure. One example gaining increased popularity is the product team, which consists of representatives from as number of functional areas assembled for each product or product line.

Companies that produce many products flowing into many markets may adopt I a matrix organization. It allows a project to be assigned to task force made up I of people drawn from various functional departments. Each task force is headed by a team leader or manager, and its members report both to the team leader and to the heads of their functional department.

The greatest advantage of matrix is the fact that it combines the skills and talents of people from several departments.

The disadvantage stems from the fact that members report to more than one person can lead to conflict instead of cooperation. But we can say categorically that none of the five ways of organizing marketing activities is inherently better off or worse than any of the others.

Types of Marketing Organization

2011-08-10T05:44:00.000-07:00

Marketing department can be organized using several variables/bases as discussed in this post. They include;

Functional Organization
The functional form of organization is the simplest and most bureaucratic design.
At the SBU level, managers of each functional department, such as production or marketing, report to the general manager. Within the marketing department, managers of specific marketing activity areas, such as sales, advertising, or marketing research, report to the marketing vice president or director.

At each level the top manager coordinates the activities of all the functional areas reporting to him or her, often with heavy reliance on standard rules and operating procedures. This is the most centralized and formalized organization form and relies primarily on hierarchical mechanisms for resolving conflicts across functional areas. Also, because top managers perform their coordination activities across all product-markets in the SBU, there is little specialization by product or customer type.

These characteristics make the functional form simple, efficient, and particularly suitable for companies operating in stable and slow-growth industries where the environments are predictable.

Geographical Organization

Probably the most widely used method of specializing activities is to organize a sales force on the basis of geographical territories. Under this type of organization, each sales person is assigned a specific geographical area - called a territory - in which to sell. Several sales people representing contiguous territories are placed under a territorial sales executive, who reports directly to the general sales manager. These territorial executives usually are called district or regional sales managers.

A territorial organization usually ensures better implementation of sales strategies in each local market and better control over the sales force.

Product Management Organization

When a company or SBU has many product-market entries, the simple functional form of organization is inadequate. A single manager finds it difficult to stay abreast of functional activities across a variety of different product-markets or to coordinate them efficiently. One common means of dealing with this problem is to adopt a product management organization structure. This form adds an additional layer of managers to the marketing department, usually called product managers, brand managers, or marketing managers, each of whom has the responsibility to plan and manage the marketing programmes and to coordinate the activities of other functional departments for a specific product or product line.

A product management structure decentralizes decision making while increasing the amount of product specialization within the SBU. If the product managers are also given substantial autonomy to develop their own marketing plans and programmes, this structure can also decrease the formalization within the business.

Finally, although the product managers are responsible for obtaining cooperation from other functional areas both within and outside the marketing department, they have no formal authority over these areas. They must rely on persuasion and compromise - in other words, more participative methods - to overcome conflicts and objections when coordinating functional activities. These factors make the product management form of organization less bureaucratic than the functional structure.

Product management organizations have a number of advantages. They identify and react more quickly to the threats and opportunities individual product- market entries face improved coordination of functional activities within and across product-markets, Moreover there is and increased attention to smaller product-market entries that might be neglected in a functional organization. Consequently, about 85 percent of all consumer goods manufacturers use some form of product management organization.

Despite its advantages, a product management organization has shortcomings. The major one is the difficulty of obtaining the cooperation necessary to develop and implement effective programs for a particular product given that a product manager has little direct authority. Also, the environment facing product managers is changing drastically. They increasingly must face the fact that customers can quickly compare products and prices and even suggest their own.
As a result of these trends and the inherent weakness of the product management type of organization, many companies have undertaken two major types of modifications - market management and matrix organization.

Meaning of Marketing Organization

2011-07-15T07:46:00.000-07:00

Weihrich and Koontz (1994) observe that organization is a word many people use loosely. But it implies a formalized intentional structure of roles or positions. Fifield and Gilligan (2000) believe that the way in which an organization develops and implements its plans is inexorably linked to its structure and managerial culture and determine organizational efficiency and effectiveness. Boyd et al (2002) explain that successful implementation of a given strategy is more likely when the business has the functional competencies demanded by its strategy and supports them with substantial resources relative to competitors; is organized suitably for its technical, market, and competitive environment; and has developed appropriate mechanisms for coordinating efforts and resolving conflicts across functional departments.

An organization consists of two interrelated dimensions: the formal structure and informal structure. The formal structure relates to the authority hierarchy, the division of labour to job specifications. The informal organization is concerned with the social dimensions and relationships within the business. It can be used both for getting things done and for creating obstacles. For effective implementation of plans, these two structures should be recognized.

The type of structure in any organization determined:

The size
The financial status
The skills available within
The value system of the organization
The product the organization intend to produce
The type of market / customer it intend to serve etc

However companies may not have marketing department or marketing organization structure as this is a common situation with small companies because it cannot afford the luxury of managerial expertise.

In small companies, the owner or manager may carry out some or all of the functions of marketing such as relationship marketing, product development, marketing research. Large organization may use the traditional structure based on functional lives of production, personnel, finance and sales the same task; may still be carry out by these department. Some of the multinational companies in Nigeria have embraced the use of marketing structure in implementing marketing programmes. Such companies include PZ Industries PLC, Cadbury Nig Plc, Nestle Plc, WAMCO Nig Plc, and so on. It should be noted that not all companies that do not have marketing department are poor at marketing nor did the existence of a marketing department guarantee marketing orientation or success.

Understanding Marketing Environment

2011-07-10T07:18:00.000-07:00

A company's marketing environment is made up of actors and forces that affect the company's ability to develop and maintain successful transactions and relationships with its target customers.

Various environmental forces influence an organization's marketing system.
Some are external to the firm and thus are largely uncontrollable by the organization. Others are within the firm and generally controllable. A firm needs to be aware that there are favourable and unfavourable trends in its external environment. Unfavourable trends negatively influence market demand and have a devastating effect on the performance of the firm in the market. Conversely, favourable trends exert positive forces that make it easier for firms to perform well.

Thus, decisions about whether to enter or invest in a new business or a new market, whether to continue to serve the firms current market, or whether to adopt new strategies to take advantage of favourable trends or mitigate the effects unfavourable ones require that such trends be identified and understood.

Uncontrollable Variables
External macro environmental variables such as demographic, economic, social- cultural, political and technological variables are described as uncontrollable because no firm have control over them the way they have control over its marketing mix variables. The best a firm can do is to respond to these variables.

Political and Legal Variable
Marketing decisions are mainly affected in various ways by happenings in the political/legal environment. The factors that are of utmost interest to marketers are: types of government, legislative structures, political orientations, political and government stability, taxation policies, monopolistic restrictions, employment legislation, pressure groups and trade unions power. Legal variable involves control over such issues as competition, unfair trading practices and consumer protection. A wise firm relies upon experienced lawyers or a legal department to ensure that actions taken comply with regulations.

It is an established fact that democracy remains the best form of government because it encourages participation; it offers the greatest stability. Therefore, country under democracy offers more market attractiveness to firms than country under dictatorship.

Various Jaws and regulations, policies and actions by the Federal, State and Local Governments also affect marketing activities.

Economic Variable
The economic performance of a country is measured by gross domestic product (GDP) - usually on per capital basis after accounting for inflation. For instance, while Nigerian economy achieved 5.6% growth of GDP in 2005, Botswana had 4.5% in the corresponding period. The implication is that Nigerian economy offers greater opportunity for investors than Botswana's. A marketing programme is also affected such economic considerations as business cycles, inflation rates, interest rate money supply, investment levels, unemployment levels, wage levels, energy costs and so on.

Business Cycle (prosperity, recession, depression, and recovery) greatly determines the success or otherwise of a firm. While many Western economies are prospering, many of third world economies are either receding or depressing.
Marketers should recognize which stage of the business cycle the economy is currently in because each stage offers different opportunities.

Interest Rate also Influences the level of demand in most markets. Higher Interest rates increases the cost of borrowing resulting in higher prices of goods and services, lower demand and rising inventory. For instance, while Nigerian Banks In preconsolidation era in 2005 charged interest rate of 30.5%, their counterpart In Japan, Greece and Gambia charged less than 1%, 6% and 19% respectively. Post-consolidation interest rate (21-25%) in Nigeria is still considered very high.

Inflation Rate can either be a favourable trend (low level) or unfavourable trend (high level). High inflation rate depresses consumer demand and stifle industrial growth. While inflation rate in Nigeria was 11.6% in 2005, it was 3.5% in Greece and 1.5% in Cameron. The implication is that consumers' purchasing power is more enhanced in Cameron and Greece respectively than in Nigeria and this results in greater marketing activities in these countries.

Social-Cultural Variable
This variable represents the values, attributes, and general behaviour of the individual in a society. Compared with economic, political and technological changes, the socio-cultural environment evolves slowly. People grow up in a system of values they tend to carry throughout their lifetimes. Socio-cultural variables include: changing demographic structures, changing family structures shifting values, major lifestyle changes, a greater willingness to accept technology, changing family roles and greater emphases on value for money.

Niger-Delta in the recent times has been characterized by the traditional values of restiveness, violence, assassinations and other social vices that pose serious threats to the operating business organizations in the region. Also, changing family roles in Nigeria is another socio-cultural phenomenon that influences marketing activities. As a result of the difficult economic situation in the country, greater number of women and children are now working to sustain the family. In the process, some women have emerged the bread winners in such families.

Demographic Variable
The statistical study of human population and its distribution is called demography. It is of special interest to marketers because people make up markets. Marketers need up-dated information on the size and growth rate of population in different cities, regions, states and nations; age distribution and ethnic mix; educational levels, household patterns' and other variables. The marketing implication of this is the rapid growing market for a diverse array of products and services for a high rapidly growing population, For instance, Lagos market, with over 12 million populations offers more attractiveness than any other market in Nigeria. Similarly, Nigeria's population has more female than male and this represents a favourable trend for companies producing and marketing product targeted at female segment. . . .

Technological Environment

For instance, the development of Xerography copier destroyed the market for carbon paper, while the development of cars damaged the demand for railways, in much the same way that vinyl records were replaced by compact discs and video tapes by VCD, DVD and other coming high fidelity variants.

Such technology as Automatic Teller Machine (ATM), Internet, GSM, Vending Machines Cable Televisions are all posing greater challenges companies in Nigeria.

Relationship between Controllable and Uncontrollable Variables
Customers are the target because they are the focus of the firm's activities. Their satisfaction is achieved through simultaneous adjustments in the elements of the marketing mix, but the results of these adjustments are uncertain because the marketing task takes place within an uncontrollable environment

What to Do When a Computer System Hangs

2011-07-06T06:57:00.000-07:00

Hi guys, hope you all doing great today!

As I promised to always share some solutions to technical problems I come across in my day-to-day dealings with my clients, today, I want to discuss about some things you can do if your computer system hangs after finishing booting.

A client called last week complaining about her Hp laptop problem - Hangs after booting.

What to Do First.
If you were face with this problem, the first thing to do is to try and set up a "System Restore". In some cases, you might not be able to get to the system restore application because the system hangs after booting to desktop. No stress. What you can do in this case is to reboot the system and enter through "Safe Mode".

What Next?
If you are successful with this stage, good luck to you because you have only one step remaining for you to solve the problem. The next thing you do is to get to the System Restore by selecting Start Menu -> All Programs -> Accessories -> System Tools -> System Restore.

On the System Restore application window, the next thing to do is to chose a date before you noticed the problem as the date to restore or change the computer system to.

After this, the system would finish by rebooting and restoring your computer system to an earlier date and all should be okay with the computer system but in case the system still hangs, see a computer engineer to help you solve the problem by either repairing your operating system or re-installing it. Hope this was helpful. In the case of my client, a system restore to an earlier date solved the problem.

Note: This tutorial is for computers with Windows Operating System.

What's New in WordPress Version 3.2

2011-07-06T03:32:00.000-07:00

I'm very happy to welcome you to my blog which I mainly created to help solve IT/programing/technical related issues you might have and also shares some technical experience I've gained over the years as an IT consultant.

WordPress Version 3.2 was released to the public on 4th of July 2011. For more information about the realease, visit the WordPress Blog to get the full information.

The organisation behind the product stated on their website that the latest stable release of WordPress (Version 3.2) is available in two formats that are available for free download.

I'd since updated some of my websites using WordPress and I was happy with the new version that included functionalities that made the CMS to be ligther than before because most of the visited script were optimized to load faster. Other notable changes in the version are;

A Refreshed Administrative User Interface - Admin redesign
New Default Theme "Twenty Eleven" - Which Uses latest Theme Features
Full Screen Editor - This is so wonderful because it makes writing distraction free unlike before.
Extended Admin Bar - This makes it possible for more useful links to control the site

To get more details about the realiease and othe useful information, I've listed some links below to help you understand it better.

Kindly share with others. Thanks for dropping by and hope to have your comment in the comment section. :)