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SAINT PETERSBURG 2017
The modern technologies, software and gadgets have become recently an integral part of our life. It is caused by positive influence on everyday life of each individual who has a smartphone and different mobile apps installed on it. They help us to do any kind of purchase, to book the hotel or tickets and so on. The goal of this paper is to analyze the segmentation and targeting process, and also to review the methods of collecting secondary data. The paper also reviews the mobile apps’ market condition. The research provides the methodology of the future study and which of them will be the most usable for such kind of research. The only disadvantage of this paper is a not so long period of time when the data can be useful. And the main cause of such problem is a rapidly changing situation in the external environment.
Keywords: Marketing research; Segmentation; Targeting; Audio streaming mobile app.
Table of Contents
In the last 20-30 years the studies began to acquire a new meaning and value. And it confirms not only its number but also the quality. Research is carried out absolutely everywhere. In any market, industry and niche. Various issues are studied and different goals are put. This may indicate that the mankind has realized their importance and their ability really to open a new knowledge.
The purpose of this study is to conduct marketing research and discover new knowledge in the field of audio streaming mobile apps. Audio streaming is a technology when the user can listen to music directly from the browser or so without any downloading on the phone. All the multimedia content is kept on the server and user need to have only the Internet connection. The mobile app will be constructed on the same technology but with some new features like a possibility to connect with different cloud services and other technical specifies. The author is going to use the primary data as a basis for this project. With the help of existing scientific papers, the author of the study is planning to build a design of marketing research aimed at identifying the target audience and whether there is any interest in this new mobile app, based on key characteristics of audio streaming technologies.
It is necessary to understand the purchase decision-making process and the motivations behind it: why the consumer buys a certain product, when and why s/he is using it, what kind of benefit s/he has or expects to have from the product and the brand (Lhotakova & Klosova, 2009). Clear identifying of target audience before entering a new product will help to reach a good market performance.
Research question: Who is the target audience (TA)?
- To conduct a segmentation of market;
- To identify the target audience among the segments;
- To distinguish a crucial characteristics of typical consumer;
- To measure an interest to such kind of mobile app;
- To draw a conclusion about possible number of installations.
Due to it is absolutely new product on the mobile app market in Russia, there is no any already existing data about the consumers of such kind of app or in another words TA. That is why this study is helpful for the developers of the app and undoubtedly will benefit in the future having a clear understanding of their TA.
In this paper it will be discussed the definitions of marketing research by foreign authors, as well as segmentation, targeting and the mobile apps’ impact on modern life.
Smith and Albaum (2010) define research as: “A systematic and objective investigation of a subject or problem in order to discover relevant information or principles” (p.12). Another scholar, Yigzaw and Degu (2006), define it as: “A scientific inquiry aimed at learning new facts, testing ideas, etc” (p.141). It is the systematic collection, analysis and interpretation of data to generate new knowledge and answer a certain question or solve a problem. Analyzing these two definitions we can say that they are almost identical. There is only one small difference in mentioning of the main goal of any research – scientific novelty. Each scientific study based on the following common characteristics:
- It demands a clear statement of the problem;
- It requires a plan (it is not aimlessly “looking” for something in the hope that you will come across a solution);
- It builds on existing data, using both positive and negative findings;
- New data should be collected as required and be organized in such a way that they answer the research question(s) (Yigzaw & Degu, 2006).
Talking about definition of marketing research – it is completely the same as it was given above. It differs only in its characteristics and specific.Â Smith and Albaum (2010) say that: “Marketing research focuses on understanding the customer (purchasers, consumers, influencers), the company (product design, promotion, pricing, placement, service, sales) and can also be expanded toward the environment to include competitors (and how their market offerings interact in the market environment)”. Author`s study will focus only on customer. But who is the suitable one segmentation and targeting will help to puzzle out in it.
Kotler and Armstrong (2005) define market segmentation as: “Dividing a market into distinct groups of buyers who have distinct needs, characteristics, or behavior and who might require separate products or marketing mixes” (p.78). The market segmentation is mentioned as being one of the key elements of modern marketing and is, as mentioned, the process of dividing the market into several groups and/or segment(s) based on factors such as demographic, geographic, psychological and behavioral factors. By doing so the marketers will have a better understanding of their target audience and thereby make their marketing more effective (Gunter & Furnham, 1992).
In the segmentation process the second stage is market targeting. Once the marketer has identified the segments it must be decided how many and which customer groups/segments to target. So the targeting is a process of choosing the most suitable segment for your product and follow after the segmentation (Dibb & Simkin, 1996).
A research model is a way of proceeding through the research process. By breaking the process down into logical steps each action can be designed more effectively. Here is the logical step-by-step general research design process:
- Define research objectives – very specifically questions that need to be answered;
- Do preliminary research – the process of collecting information that will help to define objectives more clearly;
- Design the formal research – defining the data-collection instruments, deciding on how the target group will be sampled and choosing the means of contact;
- Do fieldwork – collecting the data;
- Analyze the data- analyzing, interpreting and reporting the results (Wolf, 1986).
The research process best considered as a systematic, linear series of steps that should be followed from the start of any research, from the initial identification of the problem to the generation and testing the hypotheses (Hussey & Hussey, 1997). The process includes preliminary data gathering and problem definition, followed by a determination of a theoretical framework.
The next important question in each study is how to collect the information or data. The most commonly used methods of collecting information (quantitative data) are the use of documentary sources, interviews and self-administered questionnaires (Yigzaw & Degu, 2006). The choice of methods of data collection is based on:
- The accuracy of information that will be yielded;
- Practical considerations, such as, the need for personnel, time, equipment and other facilities, in relation to what is available.
Each method has advantages and disadvantages. It depends on study’s aim. Consider the methods mentioned above.
The documentary sources can provide ready-made information relatively easily and the best means of studying past events. But it can have problems with reliability and validity. It means that the information was collected by a number of different persons who may have used different definitions or methods of obtaining data (Yigzaw & Degu, 2006). So interviews and questionnaires have its advantages and disadvantages as well. The success of interview depends on interviewer skills in majority cases. A good interviewer can stimulate and maintain the respondents interest or if anxiety is aroused, the interviewer can allay it. Moreover, in questionnaires the respondent can just not to answer some questions or answer not fairly.
According to a study by MobiLens (2010), the number of mobile application user in US grew by 28% between April 2009 and April 2010. Within last few year, smartphone and mobile application uses growth rate is so high. So the Mobile and mobile application also has a great positive impact on Business. There are different areas of business where the mobile applications play an important role.
There are mainly two types of Business model (store): one is Native or on deck and another is Third party or off deck. In one of research “Global Mobile Application Market“ (2010- 2015), published that in 2009 about 6.4 billion mobile applications have been downloaded from native and third-party application store. In that some are free, some are paid and some are ad-supported. In that yeas the total revenues came around $4.5 billion with 2.5 billion download. Now the Google, Nokia and other company entering in application market space with news software which are increase the usability of smartphone and mobile application. According to their research estimates (2010), the global mobile applications market is expected to be worth $25.0 billion in 2015.
From those online markets, users can download a lot of useful mobile apps. Some are free, but for some of them users have to pay to download to the device. Every year a large number of apps are downloaded. Therefore, it is a big business sector. In this business sector, mobile companies as well as network operators and apps developers are earning a lot of money. To download an app a user uses Internet. He/she loads not only applications, but also games, music and other entertainment materials.
The rapid development of cloud computing has caused the rapid development and subsequently the popularization of audio streaming technologies. Users can realize all the benefit of their use in everyday life, and business is not far behind them. In Russia appeared a start up recently, which claims to be the pioneers in the field of audio streaming mobile apps. Any new product requires market research for its alacrity to accept the product.
And the steps of reaching these goals:
- Conduct a literature review of foreign experience to develop research hypotheses;
- Carry out some primary data from foreign developers with such kind of functional of mobile app;
- Carry out a secondary data using the suitable methods for such study directly;
- Analyze the carried data;
- To draw a conclusion.
At first it is expected to interview the Russian and foreign developers who have already done such apps. They might have some analyzed data and cases which could help to develop some hypotheses.
As a method of collecting a primary data a questionnaire will be developed with questions based on data collected (see point 2 above). The questions in the questionnaire will seek to test hypotheses from point 1. It is useful enough due to facility to cover a big number of people in short terms.
Data analysis will use the SPSS software. Statistical tests will be run to find out some correlation between some variables to ensure hypotheses were right or not. Also factor analysis will be employed.
After analyzing the collected data, it is expected to provide the full audience image divided into segments.
The expected results of this research is a detailed description of target audience of future audio streaming application users. This depiction will help the marketing team to get familiar with the peculiarities of potential customers and to create a positioning strategy for this application on the Russian market.
The results can be used by other Russian marketing agencies or developers in order to determine the potential target audience. However, the obtained results cannot be used precisely as every application has its own features and should be launched to the market in a unique way. Moreover, there is a problem for future studies due to dynamically changing external environment and in several years the target audience will not be actual anymore.
It is very important to conduct this research to open new knowledge and investigate the research question: define the target segment and audience as a whole for the new audio streaming mobile app on the Russian market. Having a full image of typical consumer or a person who might will be interested in installing such mobile app, undoubtedly will help to define the features that must be added, changed or deleted out of the app (e.g. architecture, positioning, UX design etc.) on developing stage. This research can also become a basis for future counting of possible developers’ revenues on the assumption of number of people belonging to target audience. Moreover, it will be possible to calculate the approximate volume of such market and to assess advisability to invest money in this project.
Dibb, S., & Simkin, L. (2008). Market segmentation success: Making it happen! New York: The Haworth Press.
Global Mobile Application Market (2010- 2015) Markets and Markets, Aug 2010, Retrieved from http://www.researchandmarkets.com/research/9692 cd/global_mobile_appl
Gunter, B. & Furnham, A. (1992). Consumer profiles: An introduction to psychographics. Routledge, London.
Hussey, J. ,& Hussey, R. (1997). Business research: A practical guide for undergraduate and postgraduate students. Basingstoke: Macmillan.
Kotler, P., & Armstrong, G. (2012). Principles of marketing. City: Pearson Education International.
Lhotakova, M., & Klosova, A. (2009). Identification of a target consumer in process of positioning – theoretical and practical aspects.Working Paper 3, University of Economics, Prague.
Smith, S. & Albaum, G. (2010). An Introduction to Marketing Research. 1-21.
Srinivasan, A. (2010). Fastest Growing Mobile App Categories. Retrieved from http://gorumors.com/crunchies/fastest-growingmobile-app-categories
Wolf, F. (1986). Meta-analysis: quantitative methods for research synthesis. Newbury Park, CA: Sage.
Yigzaw, T. & Degu, G. (2006). Research Methodology. Lecture Notes, 55-56.
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