Market Segmentation MEMO

Apply segmentation and targeting techniques to potential new subsets for a marketing campaign. This connects to course learning outcomes of constructing market segments of target customers for a product or service. Assume the role of a marketing analyst. Your consulting firm has been hired to help with a campaign effort for the client company of your selected product/service. You will communicate your results in a professional memorandum. There are three steps to this assignment. Review all three steps before you begin. Step 1: Refer to the product/service you chose for your Value Proposition Assignment. The product/service you chose for the Value Proposition Assignment in Week 2 will be the subject of this assignment. Review any feedback you received on your Value Proposition memo. You will be writing a longer, more detailed memo about the same product/service for this assignment. Follow the specific instructions outlined in Steps 2 and 3 below. Step 2: Respond to each of the following questions as they relate to your product/service. Note the research and references requirement. Your market segmentation memo will have three major sections. Respond to all the questions in each section. Your memo also must meet the research and references requirement in Step 3. I. Market Segment Analysis Determine and describe the current primary segment. The client has an interesting question. What target market can be perceived by current messaging for the product/service? Visit the public website for your company's product/service. Based on the information available and any other publicly available information, infer the primary target market based on the messaging you find. Describe the primary segment you believe your company is targeting for this product/service. Focus only on this product/service (e.g., for Disney+, focus on just the streaming service, not the parks or other Disney offerings). Describe the primary segment in terms of the behavioral, demographic, and psychographic characteristics for the segment. Give this segment an appropriate name. See, Segmenting and Targeting Markets and Customersin Learning Resources. Classify the primary segment according to one of the VALS types discussed in the Segmenting and Targeting Markets and Customers Learning Resource. II. New Market Segments Construct new segments. Your client company is interested in diversifying and building its target customer base for this product/service in the US market. Who is currently being underserved or overlooked? Who could be better served by being addressed directly? Construct and describe two new potential segments or subsegments for your company to target for this product/service for the US market. Describe each new segment in terms of its behavioral, demographic, and psychographic characteristics. Give each segment an appropriate name. Follow steps 1-4 of the process described in the Selecting Target Markets Learning Resource. Begin by identifying the customer need for this product/service. Then, break the market down into subgroups. Develop profiles of target segments. Do some secondary research on your two segments. develop a full research plan or conduct primary research for this assignment. Of the two potential segments or subsegments you have created, which of the two has greater market potential for your company to target? Why?

Sample Solution

Marketing Segmentation and Targeting for [Your Chosen Product/Service]

To: Client Company From: Marketing Analyst Team Date: June 9, 2024

Subject: Market Segmentation and Targeting Analysis for [Product/Service]

Introduction:

This memorandum outlines the results of our market segmentation and targeting analysis for your [Product/Service]. We identified the current primary segment, constructed two new potential segments for the US market, and evaluated their market potential.

I. Market Segment Analysis

A. Current Primary Segment

Based on our analysis of the [Company Website] and publicly available information, the current primary target market for [Product/Service] appears to be:

Segment Name: Busy Professionals with Families
Demographics:
- Age: 25-50 years old
- Income: Above average household income
- Education: College degree or higher
- Location: Suburban areas
Behaviors:
- Time-crunched with busy schedules
- Value convenience and efficiency
- Utilize technology for entertainment and information
- Seek solutions that simplify family life
Psychographics:
- Aspiring and goal-oriented
- Value quality and innovation
- Seek a balance between work and family life
- Tech-savvy and early adopters

This segment aligns with the VALS type of "Achievers". They are motivated by success, status, and recognition. They are attracted to well-established, high-quality products and services that enhance their image and lifestyle.

II. New Market Segments

A. Segment Construction:

We identified two new potential segments for the US market:

Segment 1: Budget-Conscious Millennials

Demographics:
- Age: 22-35 years old
- Income: Average household income
- Education: College degree or some college
- Location: Urban and suburban areas
Behaviors:
- Value affordability and cost-effectiveness
- Tech-savvy and digitally engaged
- Active social media users
- Open to new and innovative products and services
Psychographics:
- Socially conscious and environmentally aware
- Seek experiences over material possessions
- Value authenticity and personalization
- Price-sensitive but willing to pay for value

Segment 2: Active Seniors

Demographics:
- Age: 55+ years old
- Income: Varied (退休 tuīxiū - retired) income, Social Security benefits
- Education: Varied (may include college degree or higher)
- Location: Varied (may include active adult communities)
Behaviors:
- Lead active and healthy lifestyles
- Seek products and services that enhance their well-being
- Utilize technology for communication and information
- Value convenience and ease of use
Psychographics:
- Independent and adventurous
- Seek to stay connected with family and friends
- Value lifelong learning and personal growth
- Open to new technologies that improve their lives

B. Market Potential Evaluation:

Segment with Greater Market Potential: Budget-Conscious Millennials

We believe the Budget-Conscious Millennials segment holds greater market potential for [Product/Service] in the US market. Here's why:

Larger Market Size: Millennials are a large and growing demographic segment in the US.
Tech Savvy: This segment is comfortable using technology, aligning well with [Product/Service] features.
Value-Driven: They prioritize value and affordability, which can be addressed through targeted pricing strategies.
Open to Innovation: Their openness to new concepts makes them receptive to the benefits of [Product/Service].

III. Conclusion

This analysis provides a starting point for expanding your target market for [Product/Service] in the US. By exploring new segments like Budget-Conscious Millennials and Active Seniors, you can reach a wider audience and achieve sustainable growth.

Next Steps:

Further research is recommended to refine the segmentation and understand each segment's needs and preferences in more detail. This could involve conducting surveys, focus groups, or competitor analysis. Additionally, developing targeted messaging and marketing campaigns tailored to each segment will be crucial for reaching and converting potential customers.

Research and References:

VALS Types: https://penpoin.com/values-attitudes-and-lifestyles-vals/
Selecting Target Markets Learning Resource: [Insert reference to your learning resource here]
Segmenting and Targeting Markets and Customers Learning Resource: [Insert reference to your learning resource here]
(Additional industry reports, articles, or data sources relevant to your chosen product/service can be listed here)

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Market Segmentation MEMO

Sample Solution

Marketing Segmentation and Targeting for [Your Chosen Product/Service]

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