Marketing Theory and Practice
In Assignment One trends in the macro-environment were identified that would impact on the development of a road safety product called “Sat-Safe”, a Global Positioning System (GPS) which automatically adjusts vehicle speed to posted speed limits. Consequently, this paper utilises these trends to segment and target the market, to set marketing objectives and using the marketing mix to position the product. These trends included demographic changes in the family unit, continuing ...view middle of the document...
, 2010, p. 265). Accordingly, variables of city size and density are utilised as they suggest promising market volume. Czinkota and Ronkainen (2004) assert that this is due to the potential market, advertising convenience and distribution channels. Accordingly, the target market using geographical variables will be people living in an urban setting in major Australian cities as studies suggest that the five major cities account for 60.8% of total population and that nearly two-thirds of the population live in urban centres (Australian Government, 2010 & ABS, 2009).
Demographic segmentation involves dividing the market into groups based on variables including, but not restricted to, age, sex, income and education. Whilst a multivariate demographic variable will be applied the primary target market for “Sat-Safe” in the sex variable will be females. The changing family structure has resulted in an increasing female workforce participation rate. Paridon, Carraher and Carraher (2006) assert that women account for approximately 80% of total retail expenditure. Accordingly, the female workplace participation rate and their effect on retail expenditure establish them as an important segment. The age variable will target the female Generation X cohort as they are likely to have children starting to drive and the product will appeal to the nurturing instinct to protect their children’s safety. The income variable of $50,000 and over per annum will be utilised; however, not in isolation of other considerations. Yankelovich and Meer (2006) postulate that purchasing doesn’t always align with income and that demographic segmentation alone loses its ability to guide the process. However, this variable will be used to segment people perceived as having higher levels of disposable income. As “Sat-Safe” is a new product, a university education level will also be applied as studies concerning new-product adoption suggests consumer innovators tend to have higher education levels and opinion leadership (Dickerson & Gentry, 1983, Gatignon & Robertson, 1991, Rogers, 1995, Uhl, Andrus, & Poulsen, 1970, as cited in Bayus & Mason, 2003).
Psychographic segmentation divides a market into “different groups based on social class, lifestyle or personality characteristics” (Kotler et al., 2010, p. 270). The values, attitudes and lifestyle groupings variable will be used as it strongly influences consumer behaviour. Accordingly, the product will target the socially aware segment; considered to be innovators who like to find/try new products and in the process persuade others to accept their preferences (Roy Morgan Research, 2010). They are often referred to as opinion leaders, are early product adopters, exert influence over others and assist marketers in selling products to the mass market (Kotler et al., 2010).
Behavioural segmentation “divides a market into...