Market segmentation strategy for e-reader devices

Marketing E-Reader

Segmentation Worksheet

MBA 5220 Marketing Management

Indiana Tech

Using the form below, identify the segments of the market in which you plan to market your product. You will first want to review the completed sample of this form. Complete the below form for all of the segments in your market, identifying the segments, their size, customer needs, customer behavior, and key demographics. Finally, for each segment, draft a one sentence profile of the typical customer in the given segment.

SEGMENTATION OF THE ____e-reader____ MARKET

Segment

Size

Key Customer Needs

Customer Behavior

Key Demographics

Hobby groups

Convenience, service. Good price.

Bound by common interest

Usually older -- empty nesters (50+), female more important

Students

40%

Can use to distribute materials for a class.

Buying because they need it for a course. The school can load a text + all info onto the reader for less cost than a paper textbook

18-25. But you're selling it to the schools, so profs (30+, male & female) and administrators (40+). All employed/attending college/university

Businesses

10%

For use on things like projects; needs key materials/resources organized

Basically a substitute file folder that everybody can access.

30-60y.o., professional, project team setting. Corporate comptrollers need to be sold on the value of the device.

Best, Roger J., Market-Based Management: Strategies for Growing Customer Value and Profitability (5e), Pearson Prentice Hall, 2009, p.159

CUSTOMER PROFILES

1. The first customer type is the hobby groups. These groups are often older, empty-nest individuals who have joined one or more hobbies/clubs. They are purchasing for the library-sharing ability. They will buy as a group, but must make this decision as a group, which means there are many decision makers. They have the money to buy, but are not necessarily tech-savvy, so the device and its functions need to be easy to use.

2. The student market can allow savings for students, if the textbook and all other materials are loaded onto a tablet that costs less than the cost of a single textbook. Bonus if it can be used for multiple classes. The students are the payers, but the decision to adopt this technology must be made by the school, and with the acquiescence of the publishers. Get those two groups on board and this is a large market, and the students will have to pay. But if they are saving money, this will not be a big problem for them.

3. There is potential in the corporate market. The purchase would need to be approved by a purchaser/comptroller, but there is value in being able to use a simple device to keep all data/materials related to a large project in one place, accessible by the entire project team. If the reader can handle/edit things like PDFs, spreadsheets, databases and other business doc forms, this device can be quite valuable. If not, there may still be small niches that can be exploited.

Anticipated Critical Issues

MBA 5220 Marketing Management

Indiana Tech

Product Marketed: _e-reader Student:

List the key issues that you will need to address as you plan to market your product.

Requires bulk purchases by the entire group; that's a harder sell

Ultimately, you have to convince people that this product offers them something that their existing e-reader/tablet does not. And whatever that attribute is, it has to be worth what you are charging.

Is this better as an app that can be used on the tablets people already have?

DISTRIBUTION

Online is low cost, has a bigger reach. So…what online stores? Amazon? Not with a competing product.

Can you go international with this? Other languages, IP laws, etc.

What is the potential for offline distribution. Most e-readers on sold online only, and with sales declining, finding offline channels can be difficult.

Who will be the shipper? UPS? FedEx ? USPS? How does this affect pricing?

PROMOTIONS

You need to reach the audience. How? Online ads?

Need a promotional budget

Are there offline ways to target groups? Email mailing list?

What's the breakeven on a sales rep?

Free shipping -- what does that cost and how can it be utilized to add value for the customer?

Should a referral program be implemented?

PRICING

What's the cost of production?

What's the breakeven sales figure at the desired price?

Is that a reasonable number?

What are the features of his vs. The competition? You can't ask people to pay more unless they are getting more.

Should there be a volume discount for larger groups?

Are you selling the content as well -- which would make the devices a loss leader?