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
Geographic 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.
Behavioural 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.
Situational: 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.
Psychographic: “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.

 

 Geolocation: Essential as Pop Boutique operates in the UK and    Sweden.

 Behaviour: Identifies consumers who may use the service.

 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 

 

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

	+		+
		24/7

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
TA1 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.
TA2 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.
TA3 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