Market segmentation strategy for a build-to-order tablet PC

Target Markets

Proposal to Identify Primary and Secondary Target Markets

For a Build-to-Order Tablet PC

For purposes of this example, the product is a tablet PC that expands on the functionality of the Apple iPad2 by allowing customers to design it how they choose. Using the popular selling and manufacturing strategy of build-to-order PCs as pioneered by Dell, this tablet PC will allow customers to design a custom configuration online and then have it produced within 72 hours.

Market segmentation is critically important to the success of this project. Segmentation of high technology markets is most often done by stage of adoption, with early adopters being critical to overall market adoption and growth (Johne, 1984). This approach to segmentation however isn't as valuable as combining demographic and psychographic data, to get a more complete picture of potential customers. Using Claritas: My Best Segments and online research tool Quantcast, two market segments with significant potential for the build-to-order tablet PC have been defined. These are the Young & Wireless and the Time Shifters. Both of these segments are in the 25- to 44-year-old age group, with the majority having college educations and above-average incomes. As the Apple iPad2 is the primary competition to this device, the online, free segmentation tool Quantcast has been used to determine its market segments. Please see Appendix A: Quantcast Analysis of Apple iPad Web Pages for an analysis of the Apple iPad2 pages from a segmentation perspective. The results of this analysis align with the descriptions of the Young & Wireless and Time Shifters segments from Claritas as well. From a psychographic standpoint it is clear that the Apple iPad2 owners, as evidenced by the analysis in the Appendix, have a duality of needs that this device fulfills. On the one end of the spectrum is the use of the iPad2 for entertainment and on the other, the iPad2 is being used as a learning platform.

Proposal for Segmentation Research Project

The essence of any effective segmentation strategy is the capturing of value drivers for a given market segment, including both the functional and psychographic (Dunn, Hulak, White, 1999). Judging the quality of customer segments must be predicated not just on aggregate measures but primary research as well (Dibb, Simkin, 2010).

b. Persona assignment variables

i. Pleasures vs. productivity index -- how much each subsegment of the Young and Wireless spent time on their wireless devices for pleasure vs. For work.

ii. Key Criterion of Pleasure vs. Productivity use of the proposed tablet PC

c. Ergonomic and Change Management Variables

i. What are the switching costs from existing electronics products to the build-to-order tablet PC?

ii. How is this defined by demographics, income levels, self-concept segmentation?

d. Price Elasticity Analysis -- Demand curve for build-to-order tablet PC.

Segment 2: Time Shifters

The second segment of interest are the Time Shifters, defined on the Claritas site as those consumers in the 25- to 44-year-old age segment who are both homeowners and apartment-dwellers who share a passion for consuming media and communications. They are intensive consumers of movies and digital content, in addition to being highly interest in international programming and movies as well. The following are the key objectives of research this segment's interest in the proposed build-to-order tablet PC:

1. Psychographic profile of Time Shifter in Each Consumption Role

a. Digital Content Consumer -- Foreign and Domestic Films

b. Digital Book Reader and Consumer -- Which sites they download eBooks' from and how often

c. Digital Content Creator -- Use of both video and photo-based features of the build-to-order tablet PC are used in this segment

2. Aspirational Study of Time Shifters

a. Idealized system or product definition assessment

b. Study of usability features and needs

3. Price Elasticity Analysis

These three factors of the research study are the most critical for the success of the tablet PC in the Time Shifter segment. The methodology and sampling frame will reflect the unique aspects of this segment overall.

Conclusion

The proposed build-to-order tablet PC has the potential to completely revolutionize the personal use of technology across the two segments defined in this proposal, the Young & Wireless and Time Shifters. Each of the methodologies is designed to capture critical psychographic data that can provide insights into how each segment will perceive the value of the proposed tablet PC, what their preferred uses will be, and how a research strategy can be created to ensure that the best possible market intelligence is gathered over time. Included in this research proposal is the addition of personas, which define the specific roles and preferences of each member of the segments of interest. Using Key Activity Indices in conjunction with personas will provide insights into the prioritization of each functional area and feature. From a research standpoint this will be invaluable in that it will directly compare product attributes or characteristics to segment needs. This research proposal will also provide profiles and analysis of differences between those customer purchasing the Apple iPad2 relative to the proposed new product.