One of the most critical aspects of any marketing campaign is understanding how and which segments purchase a given product. the intent of this analysis is to evaluate and recommend a specific segmentation study for a tablet PC. Psychographic and demographic factors are included in the analysis.
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).
Segment 1: Young and Wireless
As Claritas has shown, the majority of this market segment are young, upscale singles and couples who are known for being technology trendsetters. The majority of the members of this segment extensively rely on wireless devices and have Wi-Fi enabled homes that revolve around the latest devices. This segment is also relatively affluent with a median household income of $63,093 per their Claritas profile. This segment also is known for being highly mobile, often traveling and spending time on the road.
The proposal for segmentation research is as follows:
1. Define Young and Wireless Segmentation Objectives
a. Determine the demographic and psychographic attributes that most closely align with the purchase of a tablet PC and other customizable electronic products.
b. Define personas to guide the overall research strategy, using them to also define the hypotheses of the research study.
2. Define the sampling frame,, methodology and research schedule.
3. Define the key determinants of tablet PC demand within the Young and Wireless segment by concentrating on the following variables:
a. Key Activity Index -- Defines the series of activities that members of this segment participate in, including which electronics products they use over time and for what purpose.
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.
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