TASK 1 – SEGMENTATION

Segmentation Approaches

Market Segmentation is a strategy of which involves dividing a large market into subsets of consumers (Chaffey and Ellis, 2012).

Below is a list of the segmentation approaches Splash of Digital will use and the advantages and disadvantages of each approach;

SEGMENTATION ADVANTAGES DISADVANTAGES
1405302460-300pxGeographic

Data of which can locate a consumer, computer or point of interest on a map.

 

 

For example: IP Address, Wi-Fi and Location Based Services.

+ Targets relevant consumers – by targeting a location-specific audience we can select audiences with more presicion and reduce wasted opportunities.

+ Identifies consumers by wants needs and cultural characteristics.

 

+ Can be monitored in their development easily.

 

Could mix heterogeneous consumers.
Crispy-Computer-mouse-top-down-view-300pxBehavioural

This involves “assessing customers’ past actions in following links, reading content, using online services, buying products” (Chaffey & Ellis-Chadwick, 2012:451)

 

For example: Search terms or social media activity.

+ Data driven – segments built through the use of information collected.

 

+ Considers the factors of loyalty and usage rates.

 

+ Suitable for competitive markets.

 

The identification of data driven segments is not straightforward.

 

Relies on market intelligence – can be a long and often costly process.

alarm-clock-300pxSituational:

dimensions that influence purchases include time of day, days of the week or month, seasons, and holidays” (Hult et al. 2012:164).

 

 

For example:  Day Time /Night time.

 

+ Predictable buying patterns – Consumers are more likely to spend online on weekends and payday.

 

+ Real Time marketing has a higher advertising message – the aim of real time marketing is to provide the consumer with what they want now according to their specific requirements.

-Rarely used as a segmentation approach – limited amount of research supporting this segmentation approach.
Cog-scripted-svg-300pxPsychographic:

“Involves intangible variables such as beliefs, attitudes and opinions of the potential customer” (Brassington and Pettitt, 2006: 203).

 

For example: Price sensitivity

 

 

Detailed insight into the consumers, therefore delivering more relevant messages (Chaffey & Ellis-Chadwick, 2012) Difficult to target these attributes (Chaffey & Ellis-Chadwick, 2012) and could be displayed through online behaviour, which is easier to target digitally.

Choice & Justification

 

Geolocation, Behavioural and Situational segmentation has been chosen to create personalized micro-segments.

 

1405302460-300px Geolocation: Essential as Pop Boutique operates in the UK and    Sweden.

Crispy-Computer-mouse-top-down-view-300px Behaviour: Identifies consumers who may use the service.

alarm-clock-300px Situational: Targets what is going on at the time of the service offering.

 

Issues & Risks of Choice

 

By only combining the above approaches there is a risk of neglecting consumers outside the micro-segmentation.

 

 

Issues & Risks of Neglected Approaches Cog-scripted-svg-300px

 

By discarding Psychographic segmentation, it leads to a weak understanding of consumer’s personalities, therefore provides less relevant messages.

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+

 Crispy-Computer-mouse-top-down-view-300px  

+

 alarm-clock-300px
long-arrow-down-right-300px  

24/7

long-arrow-down-left-300px
 Blonde-Woman-Shopping-300px

The chosen segmentation approaches in our previous blog post help us identify the below target audiences for our 24/7 offering:

TARGET AUDIENCE ADVANTAGES DISADVANTAGES
1405302460-300pxCrispy-Computer-mouse-top-down-view-300pxalarm-clock-300pxTA1

People who search vintage clothing using a mobile device in the UK and Sweden  between 5pm -4am

+ Focuses marketing on relevant consumers.

 

+ The associated tools can build brand awareness on google.

 

-High Competition.

 

-Limited engagement opportunities.

 

Associated tools can be costly.

1405302460-300pxCrispy-Computer-mouse-top-down-view-300pxalarm-clock-300pxTA2

People who are buying clothes through the online store being delivered to the UK or Sweden in January Sales.

-Limited interaction opportunities.

 

-The purchaser may not be the customer.

1405302460-300pxCrispy-Computer-mouse-top-down-view-300pxalarm-clock-300pxTA3

People using social media who ‘like’ ‘follow’ and ‘check in’ to a Pop Boutique Store.

+ Shows interest/engagement.

 

+ Low Cost.

 

+ Builds brand loyalty.

-Possibly irrelevant – consumer need not established.

Justification of Choices

 Priority 1 –  Target audience 1

  • Easily targetable.
  • Search popularity increases year on year.
  • Raises brand awareness.
  • Homogenous market.

Priority 2 –  Target audience 2

  • Easily targetable.
  • Big opportunity to engage consumers.
  • Builds brand loyalty.
  • High potential outreach.

 

Issues/Risks

CHOSEN DISGARDED
TA 1

–               Limited opportunity to build brand loyalty.

–               Highly competitive.

TA 2

–               Missing potential consumers.

TA 3

–               Low involvement purchase.

 

 

Peter Charles Robert: 12095735

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