Segmentation: E-business market

1.0 Introduction

This report will cover some outlines of segmentation and how to target the potential market for our new E-business in the market it is important that we understand what kind of requirements there are for effective segmentation. I would try to compare and contrast some of the important points give some examples. Also to keep our position safe in market and to keep running a successful business first we need to consider different segmentation processes and then I would define the business model according to our E-Business.

1.2 Identify the target markets for Complete Training Solutions’ intended expansion. The school will need to consider the demographic, geographical, psychographic, and consumer characteristics of there identified markets. For that school need to understand the market segments which are as follows.

2.0 What are the market segments are?

Market segmentation may be defined as Jobber says that “the identification of individuals or organistaions with similar characteristics that have significant implications for the determination of marketing strategy”.

“Where segmentation is the first and one of the most important steps” (Yan, 2008).

Where as according to Lancaster & Reynolds market segmentation is defined as “the process of breaking down the total market for a product or service into distinct sub-groups or segments where each segment may conceivably represent a separate target market to be reached with a distinctive marketing mix.

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2.1 Market segmentation

A segment is a unique group of customers or potential customer who share some kind of common characteristic that make them different from other groups. Proctor thinks that different segments may have different needs, they may ask for different versions of the same product, pay different prices, buy in different places and they may be reached by different media. Every one has the own opinion and own choices. It is very important for us to keep a healthy relationship with the customers and to do this they need to understand their customers’ demand.

According to Proctor in consumer markets customers and prospective customers can be grouped together or segmented by attitude, lifestyle, age, gender, stage in the family, lifecycle, job types, level of earnings and many others relevant variables. These things should be kept in mind whenever introducing any new brand because if we want to maintain our image in the market then we need to fully understands the logic of customers and their purchasing behaviours.

It is very important for us to identify what each segment wants, what it can afford, whether it is loyal to a particular competitor and how it might respond to an offer is vital information. As mentioned by Proctor that market segmentation and accurate targeting keeps a firm close to the market. It reduces waste, finds the best customers and helps to keep them satisfied.

Segmentation is very useful tool. But it is necessary for us to understand each and every sub-group in order to get the positive result from customers and to compete with competitors in the market.

As mentioned by Croft the methods of separating the market according to similarities that exist among the various subgroups within the market. Characteristics, needs and desires may be the common similarities. Market segmentation comes about as a result of the observation that all potential users of a product are not alike, and that the same general appeal will not interest all prospects. Therefore, it is essential to develop different marketing tactics to effectively cover the entire market for a particular product. There are four basic market segmentation strategies: behaviour segmentation, demographic, geographic, and physiographic segmentation.

2.2 Demographic segmentation

Involves dividing the market on the basis of statistical differences in personal characteristics, such as age, gender, race, income, life stage, occupation, and education level (Anon 2002)

We could focus on customers’ age because user needs and wants change with their age although they still want to learn the same types of courses. In order to introduce the new ideas in market and we should look at the design of the courses and what will be the learning outcomes we could meet the user demands of different age group.

Income is another popular basis of segmentation. Customers will be more attractive towards the less income. We need to understand this point that in marketing the courses that appeal directly to the customer is relatively low prices.

So therefore other variables of demographic are as important as mentioned above and they should not be neglected.

2.3 Psychographic segmentation

It is based on the assumption that the types of products and brands an individual purchases will reflect that person’ personality and patterns of living.

Generally to promote the product marketers are using celebrities, such as football team. If we use this technique for her new courses then we could create a big image in front of users. As it mentioned in the definition that every one has different life style, they have there own opinions but it could be influenced by other people personalities. This is benefit for us because for example if David Becham is learning the team building strategies from our institute then the user influencing his fans to join in the same course.

2.4 Geographic segmentation

Lancaster & Reynolds said that geographic is consists of dividing a country into regions that normally represent an individual sales person’s territory. This is mostly suitable for broad companies and these massive regions are then broken down into areas with separate regional manager controlling salespeople in distinct area.

This will help only if we expand our company our institute international, so far there is need of geographic segmentation. The geographic segmentation method is useful where there are geographic locations differences in consumption patterns and preferences but in our case we need to think about that because our institute is more about online courses so we have to consider about that.

2.5 Behavioural segmentation

As stated by Lancaster and Reynolds behavioural segmentation is based on actual customers” behaviour’ towards products. It has the advantages of using variables that are closely related to the product itself. Such as: brand loyalty, benefits sought, occasions (holidays, events which stimulate point for marketing) etc.

As Lancaster & Reynolds stated that the customers that can be divided into number of groups according to their loyalty, or their propensity to repurchase brand again is called brand loyality.

Actually we have to think about if we will provide the those learning facilities are those are enough for the learner requirement with that they can bring some more students for the reappearing in the same courses or tell others to participate in those courses those are good and according to the your standards this is some sort of the advertisement when any costumer tell other customer for the same product just we need to think about if, if the user doesn’t like our learning style then what will be our next plan to satisfied the learner.

3.0 Effective segmentation

The needs of customers should be central to all business decision making so therefore

Effective segmentation can be achieved by solving the problems of users. The major dimensions are price, service, product and quality for example an image of institute. Therefore it is necessary to identify all the requirements of user so realistic segments could be targeted. Kotler said that, “A customer orientation toward marketing holds that success will come to organizations that best determine the perceptions, needs, and wants of target markets and satisfy them through the design, communication, pricing, and delivery of appropriate and competitive viable offerings”.

According to Xu, Jianfeng “An accurate and effective segmentation technique is the basis of the ideal dynamic heart modeling”.

One author state that effective segmentation is about customer needs, demands and other is telling the importance of effective segmentation. Each segment should be evaluated in terms of its overall size, projected rate of growth, actual and potential competition and customer needs. According to the targets we need to decide which criteria is appropriate for assessing different bases.

3.1 Measurable

According to Recklies it has to be possible to determine the values of the variables used for segmentation with justifiable efforts. This is important especially for demographic and geographic variables. For an organisation with direct sales the own customer database could deliver valuable information on buying behaviour (frequency, volume, product groups, mode of payment etc.

3.2 Accessibility

Lancaster & Reynolds researched that accessibility base used should ideally lead to the company being able to reach selected market targets with their individual marketing efforts.

3.3 Validity

Reynolds and Lancaster mentioned the extent to which the base is directly associated with the differences in needs and wants between the different segments. Given that segmentation is essentially concerned with identifying groups with different needs and wants, it is vital that the segmentation base is meaningful and that different preferences or needs show clear variations in market behaviour and response to individually designed marketing mixes.

3.4 Substantial

According to Lancaster & Reynolds substantial is the base used which lead to segments which are sufficiently enormous to economically and practically worthwhile serving as discrete market targets with a distinctive marketing mix.

If we need to make segmentation effective it is important that we know that where and who we targeting. Segmentation is the basis for developing targeted and effective marketing plans.

4.0 Targeting

Lancaster & Reynolds mentioned that after market has been separated into its segments, the marketer will select a segment or series of segments and ‘target’ them. Each segment has different tastes and demands unique marketing mix in order to make the product or service more attractive to those customers who occupy that market segment. The process of manipulating the marketing mix in terms of differentiating products, methods of communication and other marketing variables is known as ‘target marketing’.

After the process of segmentation the next step is for us to decide how it is going to target these particular group(s). There are three options

Undifferentiated marketing

Differentiated marketing strategy

Concentrated Marketing

We should use differentiated marketing because we can use several segments and develop distinct courses with separate mix strategies at the varying groups.

Mr Jobber stated that “When market segmentation reveals several potential targets, specific marketing mixes can be developed o appeal to all or some of the segments”.

As Siklos and Abel says that “The…giving inflation targeting an additional credibility…boost many emerging markets”.

Comparing these two definitions of different authors its becoming noticeable that targets play an important roll to achieve goals. It would allow us to identify specific customers groups with different needs and wants and also the unfilled gaps in a market can be apprised and then satisfied through unique product or promotional offering (Lancaster & Reynolds 1999).

Target marketing can thus be said to be the process of identifying market segments that will be the most likely purchasers of a company’s products, and devising inventive marketing approaches to suit these specifically distinguished needs (Lancaster & Reynolds 1999).

After segmentation process has taken place as Lancaster and Reynolds mentioned that each segment should be identified and must be assessed in order to decide whether or not it is worthwhile serving as a potentially profitable target market with its own distinctive marketing mix. Where there is good sales and profit potential the favourable attributes of a target will include segments. If competition is not too intense and where the segment might have some previously identified requirements we should able to serve them.

5.0 Mix marketing

As mentioned by Lancaster and Reynolds that the marketing mix describe the functional aspects of marketing over which the company has control. This includes what E Jerome McCarthy dubbed the ‘four Ps’ in 1960, namely, Product, Price, Promotion and Place. In addition to these four Ps, is sometimes added a fifth P – People, which includes the people who mainly carry out the function of marketing and who interface with customers. These have been described as the key elements of the marketing function. There are two further Ps that specially relate to the service industry because of its tangible nature. These are Process and Physical evidence. These are called the seven Ps of service marketing. However we should understand the notions of four Ps which are still prevails in marketing litre.

The elements of marketing mix are all related in terms of how they combine in the marketing planning process. Lancaster & Reynolds pointed out that it is the skill of marketing management to ensure that the combination chosen is a successful one.

“Marketing is seen as a strategic management activity aimed at developing customer relationships. Concepts such as the ‘four Ps’ (product, price, place and promotion), marketing plans, the marketing mix, segmentation, promotion and evaluation are identified and discussed in relation” (Wakeham, Maurice 2004).

According to these authors we can see that with marketing mix we could raise the strong relationship with users and with the concept of 4 P’s we can identified and evaluate the segmentation. Let’s expand on these 4 Ps’ and see how we can link them with our new online learning facilities of Team Building, Assertiveness, Coaching Skills and Delegation Skills for the Busy Professional.

Mission statement draft:

A learning experience that prepare students to contribute in a dynamic, global, and diverse business environment. Our mission is to provide training to all level of the users who ever is connected with their business, Including team building, assertiveness, coaching skill and delegation skill for the busy professionals.

Objectives

Aim

Our school of intelligent learners is for the users who wants to build up there extra qualities for to compete the new era requirements. And our aim is to provide them up to date training which is purely concerned for the business levels. Our school is one of the best schools in Bradford. Currently we are struggling for more students that is why we are moving online and we will provide online courses for the relevant business. That was the our main reason to be online but there is one more reason to be online is that before we were enable to mark the global market now we can mark the global market by choosing online learning facilities now we can provide our service across the glob where ever any one and any type of user can access us and learn what ever they want from our main courses. We will provide online video and audio conferencing which is the solution to save the cost of the booking hotels and halls. Our main concern is to think about the user from different back ground from any part of the world we can arrange there course in any language. Our basic and main aim is to provide them solution for their problems.

Value proposition:

For the learner’s satisfaction school has to think about the language, course compatibility, learning facilities for the disable people which we don’t have at the moment so we have to concerned about those problems and we have to satisfy the learner needs by that as a distance training provider we will have to save their time and they can chose there own learning style and they can manage their staff as possible as they want they can call more people if they want they can organize big halls for more people and they can provide the requirements for the disable peoples as well by using the our video and audio libraries.

Product and services:

The school will provide Team Building, Assertiveness, Coaching Skills and Delegation Skills for the Busy Professional. That will be a complete training for the binger’s as well as for the expert. Expert can learn new techniques and binger can develop some skill too for the requirements of the new era. School will also provide some extra courses as well whoever will join the school for instance, web development in visual basic oracle it is good for the companies for there advertisement and for account as well. Learning on internet is the best learning style then old time styles you can learn while sitting at home at your own pace. The school will provide you the services of all the documentation and applications with which the students and companies can enable to access the schools resources.

Business models:

There could have been taken several attempts to categorize all the business models emerging with the coming new economy in order to understand how e-companies are making money or not making money. Some of are the company see there business model highly exposed such as the reverse action model of Priceline or online grocery model of shield. But still, is at all so clear so far? For instance, ebay.com might be typical of an Agora B-web like in Chicago but all the same as ebay.com and the main function is to be a online merchandiser. All of them have the same object but the different perspectives. Is there any better or could be worse way to explain or justify the business models? Are those comparing with each other or allowing comparisons? Do they help customer to categories the different actors in the same category, for instance online grocery shop? Do they explain why some of them benefits from the financial figures? Nowadays new business models do not finish emerging in electronic commerce and can become a major stake in the e-business game ((Maitre and Aladjidi (1999), Kalakota (1999)). It is even possible to patent them in some countries (Pavento (1999)! Research issue is important to understand the new business for to helping to design but not covered so well until now.

E-business modelling has similar as to enterprise modelling in general. Modelling helps the companies to develop their business visions and strategies, redesign and align business to operations, share knowledge about the business and its vision and ensure the acceptance of business decisions through committing stakeholders to the decisions made (Persson, Stirna , 2001). A business model is nothing else than the architecture of a firm and its network of partners for creating, marketing and delivering value and relationship capital to one or several segments of customers in order to generate profitable and sustainable revenue streams. The E-Business Model framework is therefore divided into four principal components.

1. The products and services a company offers, representing an ample value to a target customer (value proposition), and for which he is eager to pay.
2. The relationship assets the firm creates and maintains with the customer, in order to suit him and to generate sustainable revenues.
3. The communications and the network of partners that is necessary in order to create a good customer relationship. And last, but not least,
4. The financial aspects that can be found throughout the three previous components, such as cost and revenue structures.

If we think in depth how the school is related to the business models and how it will work to generate the more revenue. Basically the intelligent learner’s is associated with several business models. The main models include business-to-business (B2B) and business-to-consumer (B2C). B2B consists of companies and school doing a business with each other, whereas B2C involves selling directly to the end consumer (students). When intelligent learners first began, the B2C model was first to emerge. B2B transactions were more complex and came now.

Conclusion:

some of the benefits associated with online intelligent learners are include the availability of information 24/7. Students and companies can log onto the Internet and learn about products, as well as purchase them, at any hour. Intelligent learners can also save money because of a reduced need for a sales force. Overall, intelligent learners can help you to expand from a local market to both national and international marketplaces. And, in a way, it levels the playing field for big and small players. Unlike traditional marketing media (like print, radio and TV), entry into the realm of Internet marketing can be a lot less expensive and offers a greater sense of accountability for advertisers.