Segmentation, Research Paper Example

Market segmenting is the process of dividing the market into dissimilar, distinctive groups of people who have similar needs to be satisfied, alike wants and behavior, or who might want same products & services. The process of segmentation is supposed to be performed by each company being interested in creating and successfully implementing marketing mix, which implies product development, placement, promotion and choice of appropriate pricing strategy.

Markets can be divided depending on a number of wide-ranging criteria.  Variables that are commonly used for segmentation are geographic (region, country size, climate etc.), demographic (age, gender, family size, religion, language etc.), psychographic (personality, life style, attitude etc.), behavioral (benefit sought, brand loyalty, decision making unit etc.), and technographic (motivation, usage patterns, standard of living etc.) ones. Successful segmentation requires the following: segments have to consist of members that are similar to each other; segments have to be distinctively different from each other; segments have to be computable and sizeable; segments have to be reachable and actionable; target segment has to be big enough to be financially valuable.

It is important to mention that the process of segmentation is different from that of targeting, which means choosing among the segments those that are worth addressing. Target markets are those segments of the general market that the company chooses to promote its product to, considering its size and structural attractiveness. Targeting helps to raise company’s effectiveness, since it allows a marketer to focus on some specific audience when developing a marketing strategy.

In terms of marketing strategy Nike Company is obviously unique. Its products are designed for men, women, and children of all ages. Nike doesn’t only sell athletic shoes, but an extensive assortment of sporting goods and garments. The company also invents, develops, and promotes high quality dynamic sports clothing, gear, and accessory goods. The company owns 20,000 retail accounts throughout the United States. It also cooperates with numerous independent distributors and has contracts with 110 other countries all over the world. The company also has contracts with Internet companies. Nike has many retail outlets all over the world, with their famous outlet Niketown situated in major cities. Obviously the one area that brings boundless financial prospect to Nike is the international market.

If talking in terms of segmenting according to demographic variables, Nike’s target market for their shoes is males and females between 18 and 35 years old. Generally Nike develops products for all the markets that grew big enough to be profitable. With the development of children and women sports, new product lines were eventually developed. The products the company manufactures are changed and bettered regularly. Nike gives out one new shoe style every day. Nike promotes its products in a variety of ways and targets its advertisement to numerous groups or types of people, each one being distinctive. One of the problems the company faces today is decreasing brand-loyalty. Most people start to prefer to buy cheaper shoe brands. For these reason its marketing campaigns are now making emphasis on the point that a shoe of a higher quality with a good brand name is worth the money spent if being compared to a cheaper shoe that is of a poorer quality and will be wore out more quickly.

Adidas Group is the world’s second major producer of sporting clothing, which has a rich inheritance of producing some of the highest quality and most technologically original sporting equipment, footwear in particular. Pretty much like Nike, Adidas manufactures sport goods for both professional athletes and general public. It promotes its product to both males and females of approximately 15-25 years old. Nike and Adidas are world leaders in sports apparel market, and thus are major rivals in the field. In fact, their marketing strategies are pretty much alike. Adidas is also cooperating with retailers all over the world, with its exclusive outlets being located in world’s largest cities. One of Adidas’ target markets are emerging markets of Asia and Latin America, where the company is attempting to establish itself as a leader. In its promotional campaigns Adidas is addressing to people of different ages with particular interests in sport, admirers of an active healthy way of life, who are brand loyal and prefer expensiveness of a high quality products to cheapness of short-living poor quality goods.

If there is a need for discovering what consumers want, need, or believe, market researches are conducted. Marketing research helps to reveal sources of consumers’ dissatisfaction, and thus contributes to the creation of a new improved product. As a marketer of a large sports apparel producer such as Nike, Inc. or Adidas Group, I would prefer to conduct online opinion poll as for gathering information on a new product idea from company’s existing customers. Both Nike and Adidas companies have well-developed and broadly used websites, frequently visited by consumers interested in sports goods purchasing. On-line survey seems a good idea to me, if I am facing the task of new product development. On-line questionnaires are easy to fill in; they do not take much time or effort, and thus are preferred by customers. Moreover, it is no secret that internet is used actively nowadays by representatives of various age categories both female and male. An individual simply express his opinion if he is discontented or dissatisfied with some product. Thus factors of subjective judgment are mostly eliminated.

References

Dogiamis G., & Vijayashanker N. (2009). Adidas: Sprinting Ahead of Nike. Retrieved July 11, 2009, from http://74.125.47.132/search?q=cache:8ghOlvCTKdwJ:www.mcafee.cc/Classes/BEM106/Papers/2009/Adidas.pdf+adidas+market+segmentation&cd=20&hl=uk&ct=clnk&gl=ua

Locke R. M., &  Siteman A. J. The Promise and Perils of Globalization: The Case of Nike. Retrieved July 11, 2009, from http://74.125.47.132/search?q=cache:HPdGNbYIZF8J:web.mit.edu/polisci/research/locke/nikepaperFINAL.pdf+Nike+case+study&cd=1&hl=uk&ct=clnk&gl=ua