Business Marketing And Segmenting And Targeting Markets - Coursework Example

Business Marketing & Segmenting and Targeting Markets Name Institution Name Date Introduction Businesses operate in different environments because the customer differs when it comes to internal and external decision making. The customers are influenced by numerous components, and the marketers have to understand these components and develop a marketing campaign that targets and engages these components. The requirements of customers are defined by social class, usage, application, value for money, to name some. However, the marketers can do a partial research and expound on the expectations of the customer resulting in the development of products and services, which aims to fulfill an integral component. For example, energy drinks are aimed to give an individual instant energy to accomplish a task. Red Bull is an example of such a product, and it is important to segment the market before engaging the customers to purchase the product. A market is large and defined by different variables and through the use of marketing strategies such as targeting and segmentation, it enables a marketer to formulate and implement a strategic initiative to fulfill the requirements of the organization. The paper addresses three important objectives. Objective Marketers have to understand the requirements of the customer to enable the customers to choose the appropriate products and services. The objectives of the paper are: Introduce business market and the requirements of marketers in the entire process of engaging the customers and determining and implementing strategic marketing plans Define segmentation and present overview of segmentation and the components that inform segmentation. It then relates segmentation to Red Bull, which is used as case study Define targeting and present examples of targeting in the case of Red Bull Business Market Businesses produce different products and services (Reynolds and Lancaste 2013). The consumers are required to purchase the product, but it is difficult to understand the requirements of the customers. Most companies do market research in trying to understand the requirements of the customers and how the customers can be satisfied. The technique of engaging the customer differs because of the nature of the products. For example, a fast food business employs a different approach when compared with a motor vehicle company (Cant, Strydom and Jooste 2009). Marketing is an important component in engaging consumers to acquire a product and influence post purchase beliefs. Numerous products are available in the market, and some of the products appeal to specific customers (Mohr, Sengupta and Slater 2009). Energy drink is a common product, and the paper uses the example of Red Bull energy drink in pursuing the Chinese market. It will be the first time the product is introduced into the Chinese market (Zimmerman and Blythe 2013). In the development of the marketing plans including segmentation and targeting, it is imperative to understand the constraints associated with the external environment (Mohr, Sengupta and Slater 2009). The external environment includes the political, economic, social, environmental, legal and technological (Reynolds and Lancaste 2013). These are some of the components that shape a business market and introducing or marketing a product; it is crucial to acknowledge these factors and incorporate them into any strategic operations. Segmenting A marketing strategy involves the division of a broad target market into smaller sections of countries, business or consumers (Mohr, Sengupta and Slater 2009). In addition, segmentation is a division of larger target market into smaller sections based on priorities, interests, and common needs (Mohr, Sengupta and Slater 2009). Identification of these subsets allows the market to formulate and implement strategies that target these subsets. Markets are segmented, and the segmentation process should be based on specific criteria (Reynolds and Lancaste 2013). The segment should be identifiable using differentiating attributes, and the attributes are supposed to be measurable (Dibb and Simkin 2013). The segments accessibility is crucial and reachable through distribution channels and communication. The needs should be unique to justify the segmentation and to define the marketing mixes (Cant, Strydom and Jooste 2009). The segment should be durable to enable recouping of invested resources while also minimization of costs. The segment substantiality is crucial to justify the utilization of resources. The requirements of energy drink are high in the Chinese market because of the expectations of the consumers (Reynolds and Lancaste 2013). Red Bull and other competitors have segmented the market to ensure the messages and communication reaches a specific segment. However, the segment cannot be accessed without understanding the bases of segmentation. In segmentation, numerous bases are employed, which include geographic, demographic, psychographic and behavioralistic. Geographic segments based on regions and in our case, it is China. Geographic segments based on social factors including income and age (Reynolds and Lancaste 2013). In the case of Red Bull, the age will be used, and the segments will be persons between the ages of 13 years and 35 years. Psychographic factors also play an important role since the segments will be persons interested in outdoor activities such as sports (Cant, Strydom and Jooste 2009). The purpose is to associate Red Bull consumption with a sporting event. Furthermore, behaviouralistic segmentation is used to encourage the customers to acquire the product because of the benefits associated with the product (Mohr, Sengupta and Slater 2009). For example, Red Bull gives instant energy, and the consumers will get energy surge when they consume the energy drink (Zimmerman and Blythe 2013). An occasion is another behavioristic component in which the sporting events such as bicycle racing will be used as a means of engaging the customers (Dibb and Simkin 2013). The graph shows the market share of foreign energy drink in the world. The statistic indicates Red Bull is consumed, and Monster drinks. The image illustrates the probable consumption of energy drink that will occur in China: for the purpose of this assignment. Red Bull is indicated as the common energy drink that is consumed in other parts of the world. Red Bull originates from Austria meaning that Chinese population is positioned to acquire the product. Therefore, the reasons for segmentation and the bases of segmentation are crucial in ensuring the customers are engaged (Reynolds and Lancaste 2013). It is imposable to engage customers without thinking about the reasons that can make the consumers acquire a product (Reynolds and Lancaste 2013). For example, demographics provides a means of understanding the social and economic factors that can make a consumer purchase a Red Bull (Cant, Strydom and Jooste 2009). It should be understood a Red Bull is an energy product and thus, a luxury product and requires extensive marketing of engaging the consumer to decide to purchase the product and continue purchasing the product in future (Mohr, Sengupta and Slater 2009). Targeting Market The target market is employed by an organization in deciding the segments of the customers in which the business aims to sell the products (Zimmerman and Blythe 2013). It is also used to determine marketing efforts towards fulfilling the requirements of the identified customers (Cant, Strydom and Jooste 2009). Target marketing allows marketers to define marketing mix variables of price, promotion, place and product (Dibb and Simkin 2013). It further allows the marketers to understand measures that can be employed to ensure the customers acquire the products on sale. For example, numerous approaches exist in which price can be based on (Reynolds and Lancaste 2013). Pricing strategy should start with the cost of production and understanding the monetary value of the product from the perspective of the customers (Mohr, Sengupta and Slater 2009). The following graph presents an example of the target market, according to Red Bull. The valuable and access market is the ages between 13 years and 35 years. To some extent, segmentation is a division of a larger market to a smaller market, and targeting is influencing this smaller market to acquire a product. For example, when the demographic base is employed, the targeted age groups or income levels determines the means of communications and channels of communication (Reynolds and Lancaste 2013). It enables the marketers to understand the common activities of the segment and the target market and determine the communication channel to use (Dibb and Simkin 2013). It is imperative to understand targeting enables the marketing mix to be formulated and implemented for fulfill marketing objectives (Cant, Strydom and Jooste 2009). The case of pricing has been provided because it is understood Red Bull is a luxury product, and the prince of the product is a premium (Mohr, Sengupta and Slater 2009). Therefore, the promotional approach should be unique to access the target market and engage the target market (Reynolds and Lancaste 2013). For example, Red Bull has hosted numerous events in which the main drink is Red Bull. The participants are encouraged to taste the product and through the word of mouth, the persons who have already tasted the product will inform other consumers (Cant, Strydom and Jooste 2009). The promotional strategy is also appropriate because instant feedback is obtained. The formulation of the event considers the targeted market, which originates from the segmentation strategy (Zimmerman and Blythe 2013). Hence, segmentation cannot operate independently from targeting. Targeting and segmentation complements each other (Dibb and Simkin 2013). Conclusion Business environments are different and aim to fulfill different requirements. In engaging the customers, the marketers play an important role. The marketers research the requirements of the customers and profiles the customers based on the available information. The purpose of profiling is to capitalize the minimal resources towards a specific market rather than using the resources to entice a large market that is difficult to engage. Therefore, targeting and segmentation are important in grouping the customers so that they can be engaged easily. Red Bull is an energy drink that is been introduced into the Chinese market. The segmentation is geographic because of location; demographic because the ages between 13 years and 35 years are targeted, behavioral and psychological because of the activities and reasons that the customers can associated with the product. Through the use of targeting and segmentation, it makes it easier for marketers to engage the customers through developing a marketing mix that appeals to the targeted segment. It ensures capitalization of the minimal resource and provides a mechanism for determining the effectiveness of the marketing strategy. References Cant, M., Strydom, J., and Jooste, C 2009, Marketing Management, London, Juta and Company Ltd. Dibb, S and Simkin, L 2013, Market Segmentation Success: Making It Happen! London, Routledge. Mohr, J, Sengupta, S, and Slater, S 2009, Marketing of High-technology Products and Innovations, London, Pearson Prentice Hall. Reynolds, P, and Lancaste, G 2013, Marketing, London, Routledge Publishers. Zimmerman, A, and Blythe, J 2013, Business to Business Marketing Management: A Global Perspective, London, Routledge. Read More