Week 3: Assignment Create the Value: Market Segmentation Analysis and a Value Pr
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Question
Week 3: Assignment
Create the Value: Market Segmentation Analysis and a Value Proposition
Your company has decided to explore the possibility of developing a new retail brand aimed at a specific target market. Please prepare a report that would form the basis of a planning discussion with your senior marketing managers. The term retail brand refers to a retail store concept, as opposed to a manufacturer’s product or service brand - the retail company is the brand - like Target, GAP or Victoria’s Secret.
Your report should include a detailed analysis of a potential market segment and a description of the proposed value proposition. Your report should be about 1,000–1,250 words and include a minimum of three references. Please use the APA format for your paper and references. Please include the following sections:
1. Brief Description of the proposed retail brand concept
2. Potential Market Segment
Identify the characteristics of your potential target market. The figure from the Week 2 lecture is helpful – you may also include other variables that you consider relevant. You also need to estimate the size of your target market and the revenue potential.
Major Segmentation Variables for Consumer Markets
Geographic region
Pacific Mountain, West North Central, West South Central, East North Central, East South Central, South Atlantic, Middle Atlantic, New England
City or metro size
Under 5,000; 5,000–20,000; 20,000–50,000; 50,000–100,000; 100,000–250,000; 250,000–500,000; 500,000–1,000,000; 1,000,000–4,000,000; 4,000,000 or over
Density
Urban, suburban, rural
Climate
Northern, southern
Demographic age
Under 6, 6–11, 12–19, 20–34, 35–49, 50–64, 64+
Family size
1–2, 3–4, 5+
Family life cycle
Young, single; young, married, no children; young, married, youngest child under 6; young; married, youngest child 6 or over; older, married, with children; older, married, no children under 18; older, single; other
Gender
Male, female
Income
Under $10,000; $10,000–$15,000; $15,000–$20,000; $20,000–$30,000; $30,000–$50,000; $50,000–$100,000; $100,000 and over
Occupation
Professional and technical workers; managers, officials, and proprietors; clerical salespeople; craftspeople; forepersons; operatives; farmers; retired people; students; homemakers; unemployed people
Education
Grade school or less; some high school; high school graduate; some college; college graduate
Religion
Catholic, Protestant, Jewish, Muslim, Hindu, other
Race
White, Black, Asian, Hispanic
Generation
Baby boomers, Generation Xers
Nationality
North American, South American, British, French, German, Italian, Japanese
Social class
Lower lowers, upper lowers, working class, middle class, upper middles, lower uppers, upper uppers
Psychographic lifestyle
Culture-oriented, sports-oriented, outdoor-oriented
Personality
Compulsive, gregarious, authoritarian, ambitious
Behavioral occasions
Regular occasion, special occasion
Benefits
Quality, service, economy, speed
User status
Nonuser, ex-user, potential user, first-time user, regular user
Usage rate
Light user, medium user, heavy user
Loyalty status
None, medium, strong, absolute
Readiness stage
Unaware, aware, informed interested, desirous, intending to buy
Attitude toward product
Enthusiastic, positive, indifferent, negative, hostile
3. The Value Proposition
Describe the bundle of benefits/features that are offered to the target customer. Features are what the company offers and benefits are what the customer derives from these features.
Functional Benefits – What basic features are offered?
Emotional Benefits – What features are offered that make the customer feel good?
Self-Expressive Benefits – What features are offered that help reflect and communicate the customer’s values to everyone in the social environment?
4. Conclusions
Major Segmentation Variables for Consumer Markets
Geographic region
Pacific Mountain, West North Central, West South Central, East North Central, East South Central, South Atlantic, Middle Atlantic, New England
City or metro size
Under 5,000; 5,000–20,000; 20,000–50,000; 50,000–100,000; 100,000–250,000; 250,000–500,000; 500,000–1,000,000; 1,000,000–4,000,000; 4,000,000 or over
Density
Urban, suburban, rural
Climate
Northern, southern
Demographic age
Under 6, 6–11, 12–19, 20–34, 35–49, 50–64, 64+
Family size
1–2, 3–4, 5+
Family life cycle
Young, single; young, married, no children; young, married, youngest child under 6; young; married, youngest child 6 or over; older, married, with children; older, married, no children under 18; older, single; other
Gender
Male, female
Income
Under $10,000; $10,000–$15,000; $15,000–$20,000; $20,000–$30,000; $30,000–$50,000; $50,000–$100,000; $100,000 and over
Occupation
Professional and technical workers; managers, officials, and proprietors; clerical salespeople; craftspeople; forepersons; operatives; farmers; retired people; students; homemakers; unemployed people
Education
Grade school or less; some high school; high school graduate; some college; college graduate
Religion
Catholic, Protestant, Jewish, Muslim, Hindu, other
Race
White, Black, Asian, Hispanic
Generation
Baby boomers, Generation Xers
Nationality
North American, South American, British, French, German, Italian, Japanese
Social class
Lower lowers, upper lowers, working class, middle class, upper middles, lower uppers, upper uppers
Psychographic lifestyle
Culture-oriented, sports-oriented, outdoor-oriented
Personality
Compulsive, gregarious, authoritarian, ambitious
Behavioral occasions
Regular occasion, special occasion
Benefits
Quality, service, economy, speed
User status
Nonuser, ex-user, potential user, first-time user, regular user
Usage rate
Light user, medium user, heavy user
Loyalty status
None, medium, strong, absolute
Readiness stage
Unaware, aware, informed interested, desirous, intending to buy
Attitude toward product
Enthusiastic, positive, indifferent, negative, hostile
Explanation / Answer
Market Segmentation Analysis and a Value Proposition
Market segmentation is a marketing tool where an organization decides to split the customers, especially the potential customers into different market groups. In these segments, the customers share a similar level of interest by a distinct marketing proposition. On the other hand, value proposition is a marketing technique that summarizes why a customer should buy a certain product and or a service. The statement should convince the customer that a particular product and or service will add more value to solve a problem. The proposition should depict the competitive advantage the product has over the similar offerings.
Market segmentation has to do with understanding the needs of the specific needs of the consumers that the product is serving. In this assessment, the respective organization should be cognizant of the other competitive products that exist in the market. Consequently, from this assessment, the groups are made basing on what the customers share in common. The company can then determine the groups of customers it can serve and the corresponding products or services that the company can offer.The move is very important to ensure that the customer’s needs are met to in order for an organization to outdo the competing firms.
Before coming up a plan for the establishment of business, there should be a careful feasibility study on the success of such a venture. The business should, therefore, be assessed basing on factors like strengths and weakness taken into consideration. Also, must a case study of such business that is thriving elsewhere for benchmarking purposes.
Potential Market Segment
The geographical location of this proposed business should at a place that is accessible for the target customers. The business should be centrally located at a place easy for the customers to access and also easy accessibility to the raw material required for the continuity of the business. Furthermore, the place should be accessible to other support businesses like the banks. The complementary goods and other services can easily be accessed by the presence of the other businesses.
One of the other major consideration before setting up a business is the available capital. The capital investment will determine many things to propel the business.
Value Proposition
Business performance have grown to very high levels. The growth and competition of the business have increased specialization and high-quality services. There should be distinguishing features that will make the products unique and therefore attract the customer to a given product as opposed to the other competing product. The business should identify the needs of the surrounding people and therefore make decisions basing on the need of the needs of the consumers and the existence of the competing firms. One of the main competitive advantage businesses will use to against their competitors are addition of value to the products.
In addition, the business can provide better packaging facilities that are attractive to the eyes of the customers. For instance, a business can decide to provide high-quality cheese with an additional value to the normal cheese in the market. Furthermore, the business can use price discrimination to gain competitive advantage over the others. They can use lower charges for a given good and charge differently in different places depending on how the businesses are performing.
Other services like the home sections can be customized better to the specific needs and desires of the consumers. Value addition and proposition will increase the number of potential customers. More so, the advertisements that accompany the goods should give full information that speak about the goods and their features. Their attractive nature should be well displayed to depict how they appear in the real market. The statement should be captivating, attractive and informative.
Conclusion
Market segmentation serves as a marketing tool to provide better services to customers. Also through the value proposition, the goods and services can be well represented to attract the customers. Business planning and starting of a new venture will depend on the segmentation and proposition together with a detailed feasibility.
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