he first step in developing a marketing strategy involves segmenting, targeting
ID: 361034 • Letter: H
Question
he first step in developing a marketing strategy involves segmenting, targeting and positioning (STP).
Segmentation is breaking down the market into homogenous groups; targeting is selecting the consumer groups on which you will focus your marketing efforts. The appropriate segmentation variable is dependent on the needs and wants of the consumers. These decisions require extensive marketing research on the consumers and are directly tied to your value proposition. Once the segmentation variables are determined and the target markets selected, you need to develop a positioning strategy. Positioning refers to the image of the product that you want the consumer to have relative to the competition.
Describe the market research you would conduct to analyze and segment the market for the new Dyson vacuum cleaner. Explain how you would select a target market or markets for the product offering. These can be domestic markets, international markets, or both. In addition, explain the process of positioning the new Dyson vacuum cleaner relative to the competition.
Milestone 3: Your research results should be presented in a three-page paper (excluding cover page, reference list, tables, graphs, and/or exhibits). Be sure to support your work with the required readings, scholarly sources, and reliable nonscholarly sources (such as Bloomberg, Yahoo! Finance, Money, Forbes, Fortune, and Harvard Business Review) using UMUC's library search engine. You will combine the work you have completed in this milestone with the other milestones and submit all work together in the final step.
Explanation / Answer
INTRODUCTION
The vacuum cleaner market is growing at a tremendous rate both domestically as well as internationally. Research and development has led to innovative products and improved efficiency of vacuum cleaners. The demand of the product is backed by the growing need for hygiene in residential and commercial market.
Overtime, vacuum cleaners has developed from manual to automatic and programmable vacuum cleaners. Advanced technologies such as voice recognition and touch control will lead to a rapid growth in the market.
In the case of domestic market, better wages and rise in standard of living has improved the growth in the domestic market.
Technology has developed in-house robots and out-house robots which works on pre-programmed software. In-house robots perform sweeping, washing and mopping. Out-house robots perform window washing, and cleaning outside the house. This being the present industry scenario, Dyson had to plan a well-defined market strategy to target and position their vacuum cleaners.
MARKET RESEARCH FOR DYSON VACUUM CLEANER
Segmentation of Vacuum Cleaner market with special reference to Dyson Vacuum Cleaner
Dyson Vacuum Cleaner is planning for an expansion process. They are targeting a market in California and to markets outside the US. In order to launch the product and provide a product meeting the expectations of the market, it is suggested to conduct a market research. A market research helps to identify the competitors in the market, the needs and expectations of the market, identify the potential customers, segment the customers based on different categories and finally, launch the product.
In order to analyze the vacuum cleaner market, a questionnaire survey can be conducted. The questions shall focus on the utilities and benefits that the target market expects from a vacuum cleaner. The sample population comprises of business enterprises, households, malls, offices. Data can be collected from around 500 respondents in the city.
Sample Questions
Age:
Gender:
Income:
Occupation:
· Do you use a vacuum cleaner in the household/office? Yes No
· Which brand of vacuum cleaner do you use?
· What mode of vacuum cleaner do you prefer to use?
Automatic/Programmable Manual
· Does your vacuum cleaner offer the following utilities?
· What features/utilities you expect from a vacuum cleaner?
· Are you satisfied with your vacuum cleaner?
· When will you expect to buy a new vacuum cleaner?
Within three months three to six months six months to one year
Including such questions will give help Dyson vacuum cleaners to know their competitors, know the expectations of the market and develop a product meeting the needs of a particular segment.
Once the market research is done, strategies are devised for targeting and positioning the product.
TARGETING AND POSITIONING
The first step to target a market is based on the segmentation. A market segment comprises of individuals, groups or organizations with similar characteristics and respond in a similar way to a marketing approach. (Kotler 2002, p. 279). For doing segmentation, a market research plan shall be devised by the company.
The position strategies are devised after a SWOT (strengths, opportunities, threats, limitations) analysis of the internal as well as external market.
The first step involves segmentation of the market based on demographic variables of the market, then the product is target to particular category of the market based on their needs and wants and finally the position of the product is done in the market. Positioning refers to the image and benefits of the product that the marketer wants to place in the minds of the target market relative to the competition.
Segmentation based on demography
Demographic segmentation consists of age, gender, income, education, occupation, family size etc. where Dyson focuses on gender, income, and social class. They are maids, housewives in gender category and lower and higher income as Dyson offers a wide range of products for different income class.
Segmentation based on end-users
Further, they can be classified based on end-users as commercial and residential. Commercial market comprises of business establishments, offices, malls, hotels, shops etc. Commercial vacuum cleaners’ specifications differ from that of the residential market. Residential market consists of the households.
Segmentation based on geography
The target market can also be segmented as domestic market and international market.
Segmentation based on demographic variables as age and gender.
Differentiation strategy
Since Dyson’s target market may comprise customers from lower, middle and upper level social classes, they shall adopt a differentiation strategy to launch the products. The company shall differentiate the product based on features and price for these three categories. For instance, for lower level, a light weight, semi-automatic. For middle class, a more light-weight, low-noise. Finally, for upper class, a lighter weight, combining the features of lower and middle class products.
Results and findings
The analysis of the data will help Dyson Vacuum Cleaners to identify the market based on the leading brands will help to analyze the market size and market share of each brand.
The growth can be expected in the near future, within two years, five years etc.
Analyze the trends in the market, market drivers, limitations and opportunities that affect the market dynamics
Which is the potential segment to launch the product
Knowledge of competitors, their product strengths and opportunities etc.
As a generic strategy, Dyson shall continue to add innovative features to satisfy customer needs.
Promotional methods using print and television advertisements, launching brand ambassadors, offers will help to reach the target market using 4 Ps of marketing. Viz., product, place, price and promotion mix.
Customer feedback and taking corrective measures to improve the product and service will help to position the product.
The major competitors of Dyson vacuum cleaners are Electrolux, Neato, Robotics Inc., LG Electronics, Samsung Electronics, Haier, Panasonic, Bissel etc. The market dynamics has become strong with acquisitions and launch of high-end technology vacuum cleaners. In 2014, AB Electrolux has launched third generation of Ergorapido with more time and power saving capabilities (http://www.grandviewresearch.com/press-release/global-vacuum-cleaner-market). They have also announced acquisition with business division of General Electric to enhance product capability.
This being the present market scenario, Dyson has to launch and devise an aggressive positioning strategy to gain a significant competitive advantage.
Dyson shall create different advertisements for different market segments. After identifying and analyzing the target market, the company has to set objectives and create an advertising platform for maximum reach in the market. They can also adopt the effectiveness of the campaign using a pre-test and post-test advertising. This will help the company to identify the errors in advertising (pre-test) and know the attitude of customers towards the advertisements (post-test).
If the product I accepted in the market, later they can expand the market.
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