Transcript Chapter 3 Effects of IT on Strategy and Competition

Part 2
MARKET RESEARCH AND
TARGET MARKETS
Dr. Chen, Principle of Marketing
4: Marketing Research and
Information Systems
5: Target Markets:
Segmentation and Evaluation
Dr. Chen, Principle of Marketing
Chapter 5
Target Markets: Segmentation
and Evaluation
Professor Jason C. H. Chen, Ph.D.
School of Business Administration
Gonzaga University
Spokane, WA 99258
[email protected]
Dr. Chen, Principle of Marketing
Internet Exercise
 iExplore is an Internet company that offers
a variety of travel and adventure products.
Learn more about its goods, services, and
travel advice through its website at
www.iexplore.com.
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 1. Based on the information provided at the website, what
are some of iExplore’s basic products?

 iExplore offers Trip Finder, Travel Guides (by activity and
destination), Experiences (inspiration, ideas, and tips),
Lodging (hotels and rentals), and Deals (and specials).
 The website says that its Adventure Experts travel the world
to uncover the very best hotels, destinations and off-thebeaten path sites to ensure that the viewers’ trip is unique
and a once-in-a-lifetime experience.
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 2. What market segments does iExplore appear to be
targeting with its website? What segmentation variables is
the company using to segment these markets?

 Answers will vary, although the company is obviously
targeting people who travel. They segment the market
primarily by activity and destination, as well as by income.
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 3. How does iExplore appeal to comparison shoppers?

 The company offers travel deals for shoppers looking to
save money. The site also prominently features prices
and benefits for lodging and trips and aggregates
listings.
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Video Case 5.1
 RALEIGH WHEELS INTO A NEW
ERA FOR BICYCLE MARKETING
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 Summary

 This case discusses bicycle company Raleigh’s long history
and its transition from being a company known for its sturdy,
high-quality product to a global brand catering to bicycle
messengers and commuters. Raleigh noted that many of its
customers do not don special gear to go riding, but rather
wear their street clothes.
 In order to familiarize new markets with its bicycles, Raleigh
brings samples to cities around the world and lets people ride
the bikes. Raleigh takes great strides to remain in touch with
its target market and to provide the products that customers
want. It has even started to use high-technology in marketing
through maintaining a blog and a Twitter account.
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 1. Of the four categories of variables, which is most
important to Raleigh’s segmentation strategy, and why?

 According to the case, psychographic variables such as the
European lifestyle and tradition of getting around on
bicycles are most important to Raleigh’s segmentation
strategy.
 These consumers ride for fun, rather than as serious racers.
Applying psychographic variables allows Raleigh to
identify and focus its marketing on this specific group of
consumers
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What are the four Segmentation Variables
for Consumer markets?
VALS
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 2. How would you describe Raleigh’s positioning for its
steel-frame bicycles?

 In general, Raleigh seems to be positioning its steel-frame
bicycles as sturdy, comfortable, light, fast, nimble, easy to
steer, and fun to ride. Students may offer additional
positioning ideas as well.
 Raleigh’s positioning helps the company correct
misperceptions of steel-frame bicycles as heavy and
awkward to ride, and fits with the interests of its target
market.
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 3. Raleigh sells exclusively through retail dealers, not
directly to consumers. How does this affect its ability to
segment the bicycle market using geographic variables?

 Raleigh can select dealers in the geographic areas where
consumers in its target market live or travel on vacation.
This allows the company to sell through multiple dealers in
states where riding bicycles is a popular pastime, for
example.
 In this way, Raleigh will be assured of solid marketing
distribution coverage when it launches marketing
communications or new product demonstrations in those
areas. For efficiency, Raleigh can choose fewer dealers (or
have no dealers) in areas where the lifestyle is not geared
toward bicycling.
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Figure 5.2 - Targeting Strategies
• Designs a single marketing mix and directs it
at the entire market for a particular product
• Targets a single market segment
using one marketing mix
Dr. Chen, Principle of Marketing
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• Targets two or more segments by
developing a marketing mix for each
segment
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