For a company to succeed there is the need for segmenting the market so that the parts of the market can be served best and makes the company profitable at the same time. The need for strategies that enhance the best relationships with the right customers is always a priority for many firms that are competing. The traditional mass marketing that used to be a custom for most companies is now being abandoned. The companies are now producing products that are tailored to meet specific needs of the customers. It has been noted that consumers have varying tastes and preferences and as such segmenting and targeting such customers have benefited most companies that engage in such practices of segmentation. One of the advantages of segmentation is that it increases the focus on the enterprise. Segmentation has the power of enabling a company focus on specific market segments. The returns in most cases increase with increases in attention. A good example is the automobile industry like Toyota who started focusing on sectors that deal with small cars, a move that has seen Toyota rise globally. Multi-segmenting increases the competitiveness of the company. Once a company focuses on a particular segment it means that such a firm will innovate products that suit such a market making the business more competitive as compared to the competitors. A good illustration is the Johnsons baby products that segmented the baby market and specializes in baby stuffs a move that has seen Johnson claim a large portion of the market share globally. However, there are some limitations with multi segmenting and are referred to as the costs. With the geographic segmentation, it is limited in scope in the sense that it generalizes the tastes and preferences of consumers. The geographic segmentation requires combination with another strategy so as to be effective. Segments, on the other hand, tend to be small which may affect the operation of a firm. In the case that the market served is small, it means the company will experience low turnover which threatens a company’s viability in the long-run. In a market that has many brands, it may be risky segmenting such markets due to the many competitors providing such products. As a consequence, there are additional costs that reduce the profits for the firm. Lastly, in the case of a new product, it may be deemed risky segmenting such a market as no research has been conducted on such new products. Convincing the consumers to utilize such commodities may take extra effort so as to segment such a market.
Products can get categorized into various classifications depending on the level they are placed on the market. One category is that of new –to world products where a company goes an extra mile producing a product that has never existed before. In this category, the firm diversifies the product, and in most cases, the products are only new to the firm but not to the already existing the market. A good illustration is the Coca-Cola Company that is well known for the good quality of its beverages. If Coca Cola decides to diversify into snacks and cookies, then these new products would be classified as the new for the Coca-Cola Company.
The second classification is the product line extension which is the company’s additional of more products to the already existing stock. In this category, a company develops a brand that stands out among others regarding color, shape, and texture. In the example of Coca-Cola Company, as it has been observed, the company is producing an additional product such as mineral water and juices and as such would get considered as additional products.
With product improvements, it entails making amendments to the existing product that is in the marketplace. In most cases, the change may be minor or major and may involve developing the features of the products to suit the changing needs of the consumers. In some cases, the process is aimed at updating the products so that they meet the standards that are in the market or it may be the case of technological improvement making the commodities to be improved at the same time. Such upgrades may make the product competitive and increase the benefits that consumers can get from such a product. A good example is the Microsoft that has always been updating the windows, for instance, there was Windows 7, then Windows 8 and currently the consumers are using Windows 10.
Finally, product repositioning involves changing the image of a product in the marketplace; however, the product in most instances is an existing product. In most instances, there is communication that is intended to depict the range of benefits from such a product. Reposition of the product is also followed by changing the design of the product either through the mode of packaging. A good illustration is when in the past, Lucozade was meant for the sick, but as of today, it has been repositioned to serve the athletes.
Consumers have the tendency of purchasing products in the markets worth millions of money every year. The products purchased just like the human beings have a lifecycle meaning that there are those products that exit the market earlier as compared to the others. The new products, on the other hand, have the advantage of being dominant in the market and gaining popularity. Most companies, on the other hand, have invested heavily in product development after realizing that their products have a limited lifespan and it is, therefore, their responsibility to make sure they remain relevant in the market.
As products move and evolve along the four stages, various stages should be employed to maintain the success of the product. The promotional strategies that can be employed are as follows:
When launching a new product in the market, the main objective of the firm will be to inform the target group of the existence of such a product. Launching a new product is the most expensive stage for any company. At this stage, it will be critical to employ informative advertising such as the radio, television, and magazines.
At this stage, it is characterized by increase in the sales volume and profits. It is at this stage that the company enjoys the economies of scale which has the effect of pushing the profits margins up. The firms as a result of reaping the profits have the advantage of spending money on the promotional strategies with the aim of maximizing their potential. Since the product has already gained acceptance from the target market, the firm will use a strategy that aims at increasing the loyalty of the customers.
At maturity stage, the product is already established, and in most instances, the manufacturer aims at maintaining the market share. It is at this juncture that competition is at its highest among the firms and businesses are advised to invest wisely in any market they wish to penetrate. The product should also be in a position to undergo modifications or upgrades which can make them more competitive in the market. Since the product experiences more competition from the other brands, there is need to engage in persuasive advertising to entice their clients to use their products over those produced by the competitors. The benefits or advantages of using a product should be communicated to the audience clearly.
The market for the product at this stage begins to decline a stage referred to as the decline stage. The decline could be associated with a market getting saturated or because the consumers have switched to a particular product. The decline stage though inevitable, it still provides opportunities for companies to continue reaping profits through reducing the costs of production or firms venturing into cheaper markets. Reminder advertising would be favorable at this stage reminding consumers that the product still exists.
One of the instruments is advertising where it is necessary that awareness of the new program should be created either through the flyers conveying the message on weight loss. Advertising can also assume the dimensions of the media through the television, radio, and internet.
Sales promotion is also another useful tool. In this case, since the program is very in the market, it would be necessary to have the customers believe that there will be price cuts may be 15% off would be a great deal and attract many customers.
Public relations are aimed at creating a lasting impression about the company. Holding a charity campaign for the neighborhood may create a good deal for the new program. Publicity may entail inviting some prominent person who gets featured in advertising campaigns using the new products.
Personal selling has always held the compelling power of convincing the customers to purchase the products. Conducting door to door campaigns informing people of the new product and its advantages and benefits has the power of inducing some people to join the program.
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