Requirements For Effective Segmentation Marketing Essay

This criterion requires that the size, purchasing power, and the profile of the segment members can be measured. Because segment size has both nu-meric and volume components, we first define size as the number of countries, sites, and individuals on the Internet, and then include the volume of data transferred on the Internet (through services like FTP, Gopher, WWW, and USENET) and the number of messages on USENET in the definition of size. Furthermore, if we can measure the purchasing power and profile of the segment members we will conclude that the segment is measurable.

Accessible- the segments must be able to be reached and served.

This criterion stipulates that the direct marketer be able to communicate effectively with members of a segment. Since timely and cost-effective com- munications are two major constraints in global di- rect marketing, we define effective communication as a method by which the direct marketer may es- tablish a two-way, one-to-one communication with segment members in different countries in a timely and cost-effective manner. We do this by sending E-mail surveys to a representative sample of users who post on USENET newsgroups. We expect to see no significant differences in response rates and time of questionnaire completion between the do- mestic and global respondents. If there are no such differences, we will assume that all members of the segment are accessible through a two-way com- munication medium in a timely and cost-effective manner.

Substantial- the segments must be large or profitable enough. A segment should be the largest possible homogeneous group worth going after with a tailored marketing program.

This criterion requires that the segment be substantial enough for a direct marketer to serve profitably. First, for a segment to be substantial, it should have the “right” growth characteristics (20:281).

Because right growth is a relative term that depends on the nature of the market and on the size of the marketer, we next define right growth characteristics from a direct marketer’s perspective. Rogers (34) suggested that innovations (in this case the Internet) diffuse through the social system in a typical fashion. These innovations start to diffuse slowly as more member of the social systems become aware of the innovation. Once a critical mass adopts the innovation, the innovation goes through a rapid diffusion stage, which is characterized by rapid growth. Ideally, most direct marketers would like to enter the market at the stage when the market is growing rapidly. For example, a software manufacturer that produces Windows-based software would like to +8 JOURNAL OF DIRECT MARKETlNG VOLUME 10 NUMBER I WINTER 1996 enter the software market when the Windows market is still growing. Similarly, a direct marketer that is going to use the Internet would like to enter the market when the diffusion of the Internet is in its growth stage. First, a direct marketer would expect to reach a global segment through the Internet. We define this as a stage where the number of countries that have an Internet connectivity is at a growth stage (i.e., the Internet is available in many countries and the diffusion of the Internet in different countries is growing rapidly). Second, a direct marketer would like to enter a growing segment. Thus, we define right growth as the stage where the number of hosts with access to the Internet and the bytes of data transported through the Internet are growing rapidly[e.g., Bowman and Gatignon (6) considered growth potential as one of the primary measures for market attractiveness]. There are a number of growth models that study the diffusion of an innovation in a social system [see (24) for an excellent review of this literature]. Our purpose here is not to develop a new growth model, but to demonstrate whether the diffusion of the Internet among countries, Internet hosts, and bytes of data flowing through the Internet follow a traditional growth model (3). The Bass growth model can be written as where N(t) equals the number of cumulative adopters of the innovation at time t, p is the coefficient of innovation, q is the coefficient of imitation, and m equals the market potential or the size of the market. Typically, in the Bass model, parameters p, q, and m are estimated based on time series data on the number of adoptions of an innovation. The market potential, m, provides an estimate on the total size of the market. For example, if the Bass model predicts the number of potential hosts on the Internet as three times the current number, it would provide compelling evidence that the number of hosts on the Internet is growing. Similarly, if the potential number of countries equals all the countries in the world, and the potential number of bytes is three times the current penetration, it would provide a strong indication that more people in different countries of the world are going to use the Internet.

Differentiable- the segments must be conceptually distinguishable and respond differently to different marketing mix elements and programs.

This criterion requires that the members of this segment are conceptually distinguishable from, and respond differently to, different marketing mix elements (20:281). Clearly, the fact that the Internet users and nonusers are conceptually distinguishable is obvious. Only Internet users are likely to be influenced by changes in marketing mix variables on the Internet. Thus, an advertisement of a product on the Internet is going to be seen and responded to only by the users. For example, consider a recent labor strike at a newspaper facility in San Francisco (41). To deliver the paper despite the work stop page, the management started releasing an on-line newspaper on the Internet. On the first day over 3,000 people from different parts of the world accessed the newspaper. Obviously, only those with Internet connectivity could receive the newspaper. Because this criterion is obvious, we will not dwell on this in the results section.

Actionable- effective programs must be able to be designed for attracting and serving the segments.

This criterion stipulates that effective programs can be formulated for attracting and serving the segment (20:281). Here we use case studies to demonstrate how other organizations have designed programs using E-mail, USENET, FTP, and the WWW to service members of these segments. If we can demonstrate a case for each service that most direct marketers can easily adopt, we will conclude that the segment is actionable.

2. Have you made a distinction between the market segmentation and the target market?

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3. Although you should identify more than one customer segment, for the purpose of this assignment you only need to concentrate on one target market

4. Think about potential customers’ (target market) needs, wants, behaviour, attitudes, loyalty, and purchasing patterns.

5. What positioning strategy have you used? How does this relate to branding?

Week 3 explains

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Objectives

1. Marketing objectives – Short term (what you want to achieve in the next 12 months)

2. Establish specific and measureable goals for sales, market share, brand awareness, customer segments, loyalty etc.

3. Identify objectives for marketing strategies (and rationale) to overcome key issues identified in SWOT analysis.

For most travel agents are more dependent on transport and therefore are more exposed to such risks.

It can be expected that well-established travel agencies get more reliable method to distributors through the previous cooperation while for a new online business; it becomes less competitive and sensitive to the distribution segments.

The political restrictions in the countries to which the resorts belong indirectly affect the scope of the traveling.

The natural disasters that could happen near the resorts that are hard to control for human beings

As an online business, the website design as well as the maintenance is critical to the performance of the travel agency.

The cost of operations are significant to a small business thereby directly affect the profitability of the company both in short run and long run

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Note: You are not required to include long term objectives