The Four Common Bases for Segmenting Markets, Branding, and Positioning of the Eco-Shack - Case Study Example

Report: Marketing the Eco-Shack Name Course Instructor Date 1.0 Executive Summary The purpose of this report is to provide a framework that will exemplify the bases for segmenting markets, identify and describe a consumer segment in New Zealand in relation to the major case study “Marketing the Eco-Shack”. It explores the meaning of market segmentation in detail, the types and the most appropriate to use when it comes to identifying the right customer segment to Eco-Shack. It describes the best consumer segment that would be most interested in the Urban Eco-Shack and goes on to describe the business segment in New Zealand that would be interested in the Standard Eco-Shack. It also goes on to discuss how the branding and positioning of the Eco-Shack product will be done in order to optimally target the chosen consumer and business segments. 1.1 Introduction Marketers have come to the realization that target audiences which are also called consumer segments are different for different products. This is because these consumer segments differ in terms of needs, attitudes, demographics, locations and even social affiliations. Therefore, it is important for marketers to mark the different levels of consumer segments as well as the business segments. According to Pickton and Broderick (2005, p. 373), the process of segmentation of customers will allow the marketers to deliver a product that will fully meet the needs and wants of the target audience. By adhering to the segmentation process, Doug and Paul will be able to effectively identify the most appropriate consumer and business segment for their Eco-Shack Project. The aim of this report is to provide insight into the most appropriate segmentation of the Eco-Shack project and the concepts surrounding the entire segmentation process. Furthermore, after grasping full knowledge of the concepts, it should then be possible to determine the proper consumer segment for the Urban Eco-Shack and the most appropriate business segment that would be interested in the standard Eco-Shack. 2.0 The Four Common Bases for Segmenting Markets Market segmentation is at the heart of any marketing business in today’s business world. It is a common strategy that companies use to divide the market into categories of consumers or segments by looking at their needs, wants and other factors hence grouping them accordingly. The core purpose of segmentation is to gain a competitive advantage within each segment by concentrating the force and energy of a product in one targeted area. Pickton and Broderick (2005), define market segmentation as the process of dividing a market into smaller categories according to various factors such as their needs, wants, social characteristics or their particular behaviors. Notably, those with similar needs are placed in the same segment. The four common bases for market segmentation include demographic, geographic, behavioral and psychographic elements. 2.1 Demographic Segmentation This involves dividing the customers into groups based on demographic factors like age, gender, the size of the family, the occupation, income and religion of the population. Other factors that are at play include race, social class, education and nationality (Armstrong and Kotler 2005, p. 187). This type of segmentation is used where variables are easily identifiable. A good example here is income. While some marketers will be interested in targeting the high-income consumers, there are those that will particularly target those with considerably low income (Goyat 2011, p. 45). 2.2 Geographic Segmentation This approach on the other hand divides the consumers according to their geographical areas. It uses criteria such as states, countries, regions, cities or varied neighborhoods (Goyat 2011, p. 47). It will be important for any marketer to segment their consumers geographically since their purchasing behaviors could be highly influenced by places they either live or work (Pickton and Broderick 2005, p. 376). Moreover, geographic segmentation will be particularly important especially if the product is marketed in a particular geographic location. Notably the advertising and promotion of the Eco-Shack, having been largely carried out in New Zealand will have a greater impact on the residents of New Zealand than anywhere else. 2.3 Psychographic Segmentation This considers the personality, attitudes and values of the consumers. However, in most cases, these factors are only used as supplementary considerations rather than core ones (Pickton and Broderick 2005). They only provide supplementary information about the preferences of the targeted consumer segment. According to Pickton and Broderick (2005, p. 377), this type of segmentation will divide the consumers in relation to their beliefs, attitudes, interests and lifestyle. The Eco-Shack could as well target older people with established families since it is capable of making a home. 2.4 Behavioral Segmentation This will divide the consumers into groups according to their behaviors. For instance, the behavior of the consumers on particular occasions such as time of day, year or month (Kotler & Keller 2009, p. 263) will be considered. The consumers will therefore be grouped according to the time they get in to buy (Armstrong and Kotler 2005, p. 191), or the time of the year when they are likely to be replacing household goods and other items. Behaviors may also be measured by the rate at which the consumers are likely to use the product (Armstrong and Kotler 2005). In most cases, it is adults that will be more interested in a house as compared to the younger generation. In this case, it is in the view of this report that the demographic segment is the most likely to be interested in the Urban Eco-Shack in New Zealand. This is because of the following reasons. First and foremost, Doug and Paul believe that having used eco-materials to build the Eco-Shack is advantageous and that this will attract many customers. Demographic segmentation is the most commonly used criteria as stated in Armstrong & Kotler (2005). The reason for this is that the factors at play are easy to identify and easy to measure. For instance, it will be easy to tell the gender of a person by the naked eye. Age is also easy to estimate. Generally, information about the customers is easily collected and at less cost. This way, the owners of the Urban Eco-Shack are at high chances of attracting many interested consumer segments if they factor these elements. 2.5 Business Segmentation of the Standard Eco-Shack The standard Eco-Shack is built in a manner that it can be easily modified to meet the needs of the client. It is transportable, has solar power, a wind turbine, battery storage, composing toilet, a hot water shower, steel roofing, decks and awnings, a phone connection among other accessories. It is more likely to attract the geographic segmentation and the demographic group because then, it can be used by almost everyone in any location. As a matter of fact, it is likely to fit in any geographical variable because of its model. It will also be beneficial to segment it geographically because the response of the customers in purchasing the product is more likely to be influenced by where they work and where they live (Armstrong and Kotler 2005, p. 186). Factoring geographical segmentation becomes even more useful when the product can be marketed in different locations (Goyat 2011, p. 49). This is particularly possible with the standard Eco-Shack since it is in itself a portable building. It is also material to note that the geographic segment can be merged with the demographic one, a position that Kotler & Keller (2009) have referred to as deogeographic segmentation. The reason for this is that some demographic factors can contribute to the segmentation of the standard Eco-Shark. In particular, the social factors such as the preferences of the customers in lesiure activities and home furnishing. Different social classes have different tastes, which could largely contribute to the segmentation process (Kotler & Keller 2009, p. 260). 3.0 Branding and Positioning of the Eco-Shack Once the consumer segmentation has been done for both the Urban Eco-Shack and the standard Eco-Shark, it is important for the marketers to deal with the branding and positioning. According to Kotler and Keller (2009, p. 308), positioning involves placing the product such that the customers view and define it as being potentially beneficial. In this case, if the Eco-Shack is to successfully sell, then Doug and Paul must do their best in the branding and positioning of the same. The aim of this is to persuade the consumer segment to buy the Eco-Shack. In branding, the marketer must include all the details about the product on sale in a language that is comprehensible. In most cases, consumers are not able to remember everything about a product and companies must therefore organize their products in a manner that will make the buying process easy for the customers (Armstrong and Kotler 2005, p. 208). It is hence good to include all details about the Eco-Shack that outline its positive aspects such as its environmentally friendly aspect, the sensor lights, wool carpets, smoke alarm among others. This way, they will also be able to gain advantage over other competing products in the market. Notably, there are steps to follow when branding and position. First, the marketers ought to understand ideas that customers will most believe in order to purchase the item (Goyat 2011). Secondly, it is important to develop a brand that will fully cater for the specific needs and demands of the customers. In this case, the Eco-Shark is seen to be ideal for the New Zealand population. It is designed as very environmental friendly with eco-materials. The Urban Eco-Shack in particular, does not even need a council permit, is affordable and has all the necessary accessories. It can be said that it conclusively meets the needs of the demographic segment of the people of New Zealand. List of References Armstrong, G and Kotler, P 2005, Marketing: An Introduction Upper Saddle River, N.J. Prentice Hall, 7. Edition Goyat, S. 2011, The basis of market segmentation: a critical review of literature. The International Institute for Science, Technology and Education (IISTE). http://www.iiste.org/Journals/index.php/EJBM/article/view/647. Kotler, P and Keller, K. L 2009, Marketing management. Upper Saddle River, N.J., Pearson Prentice Hall. Pickton, D., and Broderick, A 2005, Integrated marketing communications. Harlow, England, Prentice Hall/Financial Times. Read More