Market segmentation is the procedure of engaging products, prices, places and promotions. The process involves identifying and targeting different markets as the basis for identifying with particular marketing mixes. Proper market segmentation has to engage people, practices and different corporal substantiations.
The procedure for market segmentation involves identifying the potential customers and their needs, possible market segments and later development of profiles for identified market segments.
After the identification, the second stage involves selection of a target segment before engaging an attraction towards the particular market segment. It is equally important for a marketer to engage proper positioning by identifying the advantages of the chosen market segments. This may involve selection of a positioning concept before engaging the marketing plan for each identified segment.
Market segmentation involves division of large markets into consumer-focused subsets for the clients who have common needs or applications for services or goods on offer. Clientele subgroups are identifiable through various demographics in connection with the purpose of the market segment identification or goal of the marketer. Customers’ segmentation determines deigns and implementation procedures of the marketing campaigns.
In relation to McDonald and Dunbar (2007, p. 213) writing, marketers engage in the market segmentation in the aim of understanding the importance of finding a sufficient customer-base to cater for the needs. Categorizing various customers on a given criteria helps firms to establish a better application for the products or services. The gathered ideas of a criterion can thus be of help in identification of a larger audience within the demographics, and thus increase the profit margins due to amplification of market shares in the submarkets.
There are various characteristics of a targeted consumer base. The attributes are identifiable for a given market segment such as gender, age, location, income level or education level. The market segmentation process allows for a phenomenon where a consumer may fall upon various categories. Segmentation of the market allows the company to understand the ways of enhancing customer loyalty especially among potential long-term clients.
The marketers allow the customers to make suggestions concerning the practical means of improving product or service. The changes may be minor with little or no effect to the value of the core product, but they are vital in maintaining a strong and loyal customer base. The changes also ensure that the company is of goodwill because of the readiness to listen to its clients’ needs. Market segregation is generally for strengthening the bond between the vendors and the consumers.
The concept of market segmentation is important because the buyers and sellers form non-homogenous groups for the reason that there are differences on needs, preferences, characters and resources. Considering the Dell Inc case study, the marketing and distribution department realizes that it not possible to cater for each of its customer’s characteristics.
Marketers are however able to accomplish some standardized measures of segmentation by grouping customers to various categories of common characteristics. The common characteristics are the basis for standardized marketing merges into segments.
The decisive factors for market segmentation involve either the consumer or the business marketers. The segmentation requirements for Dell Inc would entail the geographical segmentation. As an international and well-known company, Dell Inc would involve the regional variables in its segmentation such as the concentration of the customers, the measures of international industrial growth rates and, other microeconomic factors such as business expansion plans.
A good example of the geographical segmentation is decision to concentrate on sale of specific products to particular countries. Secondly, the company can segment markets according to the type of customers. Some of the clients are possibly big international organizations, companies, governments, or private firms. The organization’s dimensions, position in a market niche and the capacity of its value chains are the main determinants of concentration.
Thirdly, there is need for Dell Inc to consider the behavioural segmentation based on the consumer performances and behaviours such as the customization, usage, patterns, prices, benefits, competition, consumer and brand loyalty. The demographic segmentation touches on the age, ethnic setting, gender, income levels, status, or occupation, which can equally be of assistance. Lastly, the company ought to consider the psychographic segmentation to determine clients’ bases depending on the attitudes, lifestyles and values.
Integrating the marketing communication strategies
Communication is a key strategy of an organization’s success. A company may be having the best and most innovative services or products, but without strong internal and external communication, then the demand may be weak. Communication of products requires the marketers to focus on the value.
The quality is of much benefit to the client than quantity. Enhancement of dialogue requires invitation of client’s thoughts to enhance a rapport in promotion of coordinated efforts. Client participation ensures timely delivery of proper information or right contents.
According to Doole and Lowe (2008, p. 232), the proper marketing communications tools, which promote companies products and services to its customers and the intermediaries include, the ability to ensure proper direction, precision, uniformity, appearance and timings for the targeted audiences. Marketers have to guarantee the values of proper communication to avoid confusion about branding and products recognition.
The marketing mix enables them to examine prices of products, the distribution procedures, adverting, promotion mechanisms and customer service certification. “By integrating marketing communications strategies, it is important for the marketers to define as well as conduct some research concerning… the targeted audience, objectives, budgets, competition, social effects, and cultural or other technological issues” (Doole and Lowe, 2008, p. 232) .
The final process of the strategy involves evaluation of the decided promotion strategies. Marketers can automatically acquire the customer trust and loyalty by enhancing ethical plans, right communication procedures and following the right communication guidelines such as the marketing communication tools.
Marketing communications tools
Advertising
This tool requires the right medium to get the accurate messages efficiently to the right audience. The effective avenues of transmission depend on the market segments, the chosen niche, and the dynamics.
Considering the Dell Inc company that faces the challenges of international segmentation and maintaining the well-established customers’ loyalty, the advertising tools can be the product magazines, newspapers/ newsmagazines, internet, billboards and, mobile television such as the telephony advancements. The advertisement tools have to reach a wide clientele base regardless of the expenses.
Public Relations
This is a marketing communications tool involving the public perception of the products or services on offer. For a marketer to be in a position of enhancing excellent public appearance for an organization there is need to engage sponsorship vents in the aim of building good customer trust and goodwill. The product or service has to give a positive perspective.
Sales Promotion
Mostly, the sales promotion is a marketing strategy that involves the media, for instance, advertising contests, sales of coupons through the media, provision of prototypes/sample products, sales of premiums, displays, demonstrations and engaging incentives. Promotion of sales accelerates the short-term sales by enhancing brand awareness campaigns, and creating or encouraging a repetitive buying procedure.
Direct marketing
Direct involvement is a strong marketing strategic tool that involves responses to specific individual emails, telephone calls, inquiry catalogues or mails of customers. The marketers have to respond directly to inquiries made through the media such as television or radio. The responses cater for targeted audience to increase sales and introduce new products as a different option for marketing approaches.
Personal Selling
This marketing tool involves direct interaction where the marketing team must set sales appointments to selected clientele. It involves making direct presentations such as one-on-one communication to attract a strong clientele base and strengthen their relationships or loyalty to the firm.
Before selection of a particular marketing tool, the marketing managers and representatives must analyze the “social, competitive, legal, regulatory, ethics, cultural and technological” effects to avoid inappropriateness, controversies and illegal encounters (Shimp, 2008, p. 8).
Analysis of Dell’s decision to enter into relationship with distributing retailers
Since its initiation, the marketing strategy of Dell Inc involved a direct client-server interaction. Its engagement of a retailers’ involvement such as, Wal-Mart is a significant change of marketing strategy. Some well established retailer stores like the Wal-Mart are internationally preferences to most customers and therefore an advantage to Dell in its global retailing strategy.
The shift from strict direct selling to incorporate indirect selling by external retailers is definitely a simpler choice for the marketing team, but equally a difficult cultural move in its marketing strategies. The move is currently still on its underway and it may be difficult to determine. Is it a strategic move to avoid disastrous snarl-ups considering the competition or are the challenges bonds to increase?
Losing its leadership mantle to the rival group Hewlett Packard (HP), Dell may be making the move due to pressure. On the other hand, the establishment in the market may be an indication that the need to emphasize on direct sales is not necessary the attraction to its products among most clients.
Selling through the well-established retailer stores is an excellent move for the Dell Company because of the benefits of exposure especially in different market niches. The company also considers the safety of its products by starting mainly with the low-end products.
The progressive changeover on the marketing strategies enhances performance and ensures provisions of extended commitment in cases of needs. It is usually safe to change from one strategy to another slowly while keenly monitoring the effects as opposed to the direct changeover.
Involving the retailers is a great strategy of testing how well the company would work with the retailer stores especially on the up-coming products. How well would the company be able to handle the sales of its products by third parties especially stores that the company can barely be in a position to control? The experience is worthwhile for Dell Inc future marketing decisions.
The move will automatically affect Dells procedures of engaging customers such as the advertisement strategies and, the supply chain management. The move ensures that Dell Inc is able to develop a record of accomplishment from involvement with the retailers. The record of performance such as, the rate at which the products sell would enable the marketers to decide on the possibility of engaging the more vibrant retailers.
The records provide Dell’s ability to retail from various sublets in the diverse retail channels. According to Cranfield School of Management (2000, p.5), the ability to form relationship with retailers is also a greater chance for other interested parties to channel their interests and form new links since this assists the retailers on their establishments.
The well-established retail markets have the advantage of moving their products very fast and this can turn to be a huge benefit to the Dell Company. The question many marketers would arguably pose is, how well can computer products sell like the other products in the stores? Selling a computer is similar to selling any other product, but the clients want to know how to deal with the product such as the procedure for setting it up.
How many retailers have the workmanship to withstand the long hours of user explanations and education? The arguments may fall upon the earnings of the marketer. The pay scale of Wal-Mart sellers may be quite different from that of Dell, thus Dell’s move to engage outside retailers may seem like a huge bargain over sales.
Conclusion
The main marketing strategy is the need to enhance proper customer relationship. Dell Inc has all along emphasized on the need to focus attention on the clients’ needs and demands. Companies need to find various methods of getting closer to the client for success thus the reason why dell is focusing on diversification into the retail markets. The Dell Company detached the partnership functions to emphasize on the need for it responsibility of customer relationship.
From the case analysis, it is evident that Dell categorizes its business transactions in various customer segments for instance the recent retail stores relationship, which involves the public and private sectors. It also includes the direct customer relationship and lastly the home or public medium or small business sectors.
Such a company need to approach various segments carefully and differently in the aim of customizing to fit specific needs. Arguably, the most viable communication tools for Dell’s marketing strategy would include the internet and call centres considering the diversification of the products and market competitiveness.
References
Cranfield School of Management (2000). Marketing Management: a Relationship Marketing Perspective, Macmillan Business, Basingstoke.
Doole, I., & Lowe, R. (2008). International marketing strategy: analysis, development and implementation. Kentucky, KY: Cengage Learning EMEA.
McDonald, M., & Dunbar, I. (2007). Market segmentation: how to do it, how to profit from it. Oxford, UK: Elsevier Butterworth-Heinemann.
Shimp, T. A. (2008). Advertising Promotion and Other Aspects of Integrated Marketing Communications. Kentucky, KY: Cengage Learning.