Free Sample: Marketing Segmentation paper example for writing essay

Marketing Segmentation - Essay Example

Marketing Segmentation: united Health Care An integral part of a business’s market strategy is market segmentation. Market Segmentation is that process of breaking down a large market into smaller groups of consumers so that they can market more efficiently. Whether you are a consumer oriented company or a business oriented company you should use Market segmentation. Demographics As a health insurance provider our market segmentation is based on research and academic literature.

In the health care industry we cover every constituent served by our organization. Out target markets are: Employers Members-commercial group, individual, Medicare, and Medicaid Network Physicians Brokers Although the orientation of each analysis differs the all have the same basic principles. Experience has led to the belief that the right connections between the conceptual and analytical approaches to derive segments and implementation strategies that clients has found useful for Improve marketing efficiency and effectiveness.

We have the same general approach to marketing as most health care Insurance companies. We just add our own Ideas and put a special twist on the presentation of our product when It comes to our marketing strategy. Our primary market segment is our members. The reason being that they are the largest market offer market our products in a way that is appealing to the member not only do retain current members but we also attract new members. The process of market segmentation must be conducted with the ability of an organization to address the resulting segments.

Geographic We have a fairly large geographic area, with the most of our members being located n the United States of America. We originated in the state of California so most of member or in the Western United states. We have also migrated to the other sections of the US. We currently have a heavy population in southern states such as Texas, Florida, and Georgia. We also have a heavy population in along the Eastern Seaboard and Northern states such as Wisconsin. The way we market our product in those areas is through mailers, magazine ads, television ads and sometime radio.

Chirography’s Our members come from all walks of life. When developing plans we aim to tailor hem to the different types of member we serve. Many of our members are travelers so we offer a benefit that covers them from state to state and internationally as well. This benefit is very attractive to the members with active lifestyles. We also serve a high elderly population. We tend to offer benefits that would be appealing to the aging population that many other insurance plans have yet to offer. In 2011 we began offering a hearing aid benefit to our member.

At this time no other company is offering this benefit, we have enrolled many new members because of this. Hearing ids are very expensive and the fact that we offer them at a discounted rate keeps our member and draws new members to us. We also offer a gym membership that caters to senior citizens, this is tends to draw members that like to stay fit and it enables them to do it at their own pace. We also offer products that are affordable to individuals that don’t have insurance offered to them by their employers. Behavioral We offer plans for all ranges of incomes.

Members with higher incomes tend to purchase the plans that offer the premium benefits. Those with lower incomes tend o purchase plans with that meets the basic needs Just to have some coverage. Our Medicaid members tend to have the basic needs met because it is basically a state funded program. When designing plans and choosing benefits, we have to consider the target market and user behavior. We design plans for members that go to the doctors frequently as well as for members that only go to the doctor for preventative care only.

When designing these plans we also have to make cost sharing arrangements with employer and discuss premiums being that they will also be contributing to the cost of the insurance for their employees. Past behaviors such as history of switching, current health plan and carry, current benefit design, monthly premium and cost sharing arrangement with employees. Product Positioning to position our products and services for fit each particular segment. Product positions may be defined by communication such as advertising rather than the differences between the products.

The objective is to expand existing products and continuously adjust them to our ever changing demographic. When doing so we make sure we assess certain criteria for all potential segments: profitable size- profit attention accessibility- segment must be accessible through advertisement and other promotional tactics self-containment- product launched should not take demand from other products offered marketing mix response- segment should be responsive to marketing and promotion efforts If all of these criteria are met there is a great chance of have a successful and profitable business.

Free Sample: Marketing Segmentation paper example for writing essay

Marketing Segmentation - Essay Example

Target Market 17 8 Idea Cellular is an Ditty Barilla Group Company, Indian’s first truly multinational corporation. Idea is a pan-India integrated GSM operator offering G and 36 services, and has its own NIL and LID operations, and ISP license. With revenue in excess of $4 billion; revenue market share of nearly 1 5%; and subscriber base of over 121 million in FYI 2013, Idea Is Indian’s 3rd largest mobile operator. Idea ranks among the Top 10 country operators in the world with a traffic of over 1. Billion minutes a day. Idea Cellular Is a part of the US $24 billion Ditty Barilla Group and a leading GSM bile services operator with licenses to operate In 13 telecoms service areas In India. The company has operations In Delhi, Himalaya Pradesh, Restaurants, Harlan, Attar Pradesh (W) Ramp: Utterance, Attar Pradesh (El Madhya Pradesh&amp: planned expansion into Iambi, Briar and Shorthand. Telecoms Industry in India The telecoms industry is one of the fastest growing industries in India.

India has nearly 200 million telephone lines making it the third largest network in the world after China and USA. With a growth rate of 45%, Indian telecoms industry has the highest growth rate in the world. Much f the growth in Asia Pacific Wireless Telecommunication Market is spurred by the growth in demand in countries like India and China. Indian’s mobile phone subscriber base is growing at a rate of 82. 2%. China is the biggest market in Asia Pacific with a subscriber base of 48% of the total subscribers in Asia Pacific.

Compared to that Indian’s share in Asia Pacific Mobile Phone market is 6. 4%. Considering the fact that India and China has almost comparable populations, Indian’s low mobile penetration offers huge scope for growth. Marketing strategy is defined as a process that can allow an organization to incinerate its resources on the optimal opportunities with the goals of increasing sales and achieving a sustainable competitive advantage.

Marketing strategy includes all basic and long-term activities in the field of marketing that deal with the analysis of the strategic initial situation of a company and the formulation, evaluation and selection of market-oriented strategies and therefore contribute to the goals of the company and its marketing objectives Market segmentation is a marketing strategy that involves dividing a broad target market into subsets of consumers who eave common needs, and then designing and implementing strategies to target their needs and desires using media channels and other touch-points that best allow to reach them.

Market segments allow companies to create product differentiation strategies to target them. Criteria for market segmentation An ideal market segment meets all of the following criteria: * It is possible to measure. * It must be large enough to earn profit. * It must be stable enough that it does not vanish after some time. * It is possible to reach potential customers via the organization’s promotion and distribution Handel. It is internally homogeneous (potential customers in the same segment prefer the same product qualities). * It is externally heterogeneous, that is, potential customers from different segments have different quality preferences. * It responds consistently to a given market stimulus. * It can be reached by market intervention in a cost-effective manner. * It is useful in deciding on the marketing mix. Identify Market Segment of the Product We can segment any product into Geographic, Demographic, Cryptographic and Behavioral.

So the market segment of Idea Prepaid is as below. Geographic: Mounties, cities, neighborhoods, or postal codes. The gee-cluster approach combines demographic data with geographic data to create a more accurate or specific profile. With respect to region, in rainy regions merchants can sell things like raincoats, umbrellas and gumboots. In hot regions, one can sell summer wear. In cold regions, someone can sell warm clothes.

A small business commodity store may target only customers from the local neighborhood, while a larger department store can target its marketing towards several neighborhoods in a larger city or area, while ignoring customers in other continents. Region: Idea GSM services are licensed in 13 circles of India, so that these services are used by people in different circles and also used by different region people. City: Idea Prepaid is used in metro city, mega city and also in small villages because of reasonable prices and also offered many schemes for people in less monthly rental.

Demographic: A demographic or demographic profile is a term used in marketing and broadcasting, to describe a demographic grouping or a market segment. This typically involves age bands (as teenagers do not wish to purchase denture fixing), social class bands (as he rich may want different products than middle and lower classes and may be willing to pay more) and gender (partially because different physical attributes require different hygiene and clothing products, and partially because of the male/ female mindsets).

A demographic profile can be used to determine when and where advertising should be placed so as to achieve maximum results. In all such cases, it is important that the advertiser get the most results for their money, and so careful research is done to match the demographic profile of the target market to the demographic profile of the advertising medium. For instance, shortly after the cancellation of Star Trek in 1969, Nab’s marketing department complained that was premature.

They explained that their newly instituted demographic audience profiling techniques indicated that the series’ main young urban audience was highly desirable for advertisers. In 1971, CBS acted on their own marketing department’s demographic findings about their television network’s programming and canceled several series that appealed primarily to older and rural audiences in a move nicknamed the rural purge.

In more recent years, such demographic marketing incinerations do not always dictate such drastic programming decisions with the rise of numerous cable channels. For instance, on the channel, The Hub, it was discovered that their original animated series, My Little Pony: Friendship is Magic, was not only attracting good ratings with its intended young girl demographic, but also a significant teen and adult male and female audience as well.

Although this cross-demographic appeal was entirely unexpected by the network’s executives, the franchise owner, Hasher, decided to take advantage of this opportunity with some incinerations for this fantod in the series’ writing and marketing and the decision produced favorable results with the series attracting the highest ratings in the show, TV channel, or magazine is to study the ads that accompany it. For example, in the United States the television program The Price is Right most frequently airs from 11 a. . To Noon. The commercials on it (besides the use of product placement in the show itself) are often for things like arthritis pain relievers and diapers. This indicates that the target demographics are senior citizens and parents with young hillier, both of whom would be home at that time of day and see that show. Another example would be MAT, for it has many ads with digital audio players indicating that the channel is targeted to young adults and teenagers and/or fans of music.

Age: Idea Prepaid is used by age group of 15 to arrears. Now-a-days this prepaid service is also used by below this age group. Family size: We can also segment our product based on family size because if the family size is large and if they are using more mobile phones in family for connected with each other then they also using prepaid services. Income: Income is not much affects in segmenting the market because price of Idea Prepaid is reasonable and the lower class people also afford it.

Occupation: Occupation also affects in segmenting the market because Idea Prepaid is only not used by lower class and middle class people but also used by higher class people who have their own business. Education: Education does not affect the segment of the Idea Prepaid because Idea Prepaid has been used by educated people as well as uneducated people. Cryptographic: It is the study of personality, values, attitudes, interests, and lifestyles.

Because this area of research focuses on interests, activities, and opinions, cryptographic factors are also called IA variables. Cryptographic studies of individuals or communities can be valuable in the fields of marketing, demographics, opinion research, featuring, and social research in general. They can be contrasted with demographic variables (such as age and gender), behavioral variables (such as usage rate or loyalty), and organizational demographics variables (sometimes called pornographic variables), such as industry, number of employees, and functional area.

Chirography’s should tot be confused with demographics, for example, historical generations may be defined both by demographics, such as the years in which a particular generation is born or even the fertility rates of that generation’s parents, but also by cryptographic variables like attitudes, personality formation, and cultural touchstones. For example, the traditional approaches to defining the “Baby Boom Generation” have relied on both demographic variables (classifying an individual as a “boomer” based on age) and cryptographic variables (such as attitudes and behaviors).

When a relatively omelet profile of a person or group’s cryptographic make-up is constructed, this is segmentation as well as in advertising. Some categories of cryptographic factors used in market segmentation include: * activity, interest, opinion (Ciaos) * attitudes * values * behavior Chirography’s can also be seen as an equivalent of the concept of “culture” when it is used for segmentation at a national level. Chirography’s involves using sciences like psychology and demographics to better understand consumers. Cryptographic segmentation divides consumers according to their lifestyles, personality, values and social class.

Consumers within the same demographic group can exhibit very different cryptographic profiles. Lifestyle: Lifestyle also affects in segmenting the market. So temperate while segmenting the market of Idea Prepaid shouldered this in his mind, because high class people also using disservice. Personality: Personality does not affect the Idea Prepaid Service segmenting his market. Behavior: Behavioral segmentation divides consumers into groups according to their knowledge of, attitude towards, use of or response to a product. Behavior does not affect in segmenting the market. Segmentation by Occasions

Segmentation according to occasions relies on the special needs and desires of consumers on various occasions – for example, for products for use in relation with a certain holiday. Products such as Christmas decorations or Dalai lamps are marketed almost exclusively in the time leading up to the related event, and will not generally be available all year round. Another type of occasional market segments are people preparing for a wedding or a funeral, occasions which only occur a few times in a person’s lifetime, but which happen so often in a large population that ongoing general demand makes for a worthwhile market segment.

Segmentation by benefits Segmentation can take place according to benefits sought by the consumer or according to perceived benefits which a product/service may provide. Using segmentation in customer retention The basic approach to retention-based segmentation is that a company tags each of its active customers with three values: * Is this customer at high risk of canceling the company’s service? The company’s service. For example, in the credit card industry this could be signaled through a customer’s decline in spending on his or her card. Is this customer worth retaining? This determination boils down to whether the post-retention profit generated from the customer is predicted to be greater than the cost incurred to retain the customer. * What retention tactics should be used to retain this customer? For customers who are deemed worthy of saving, it is essential for the company to know which save tactics are most likely to be successful. Tactics commonly used range from providing special customer discounts to sending customers communications that reinforce the value proposition of the given service.

Algorithms and approaches Any existing discrete variable is a segmentation – this is called “a prior'” segmentation, as opposed to “post-hoc” segmentation resulting from a research project commissioned to collect data on many customer attributes. Customers can be segmented by gender (male’ or ‘Female’) or attitudes (progressive’ or ‘conservative’), but also by discredited numeric variables, such as by age (“<30” or “>=30”) or income (“The 99% (GAG&ICUS $300,000)” vs. “The 1% (GAG US $300,000)”).

Common statistical techniques for segmentation analysis include: * Clustering algorithms such as K-means or other Cluster analysis * Statistical mixture models such as Latent Class Analysis * Ensemble approaches such as Random Forests. Current Situation Analysis Porter’s five forces: SOOT Analysts Current Customer Segmentation Idea Cellular currently segments its customer profile into 2 basic groups: 1) Prepaid Customers 2) Postpaid Customers Prepaid Customers are generally the personal use customer group I. E. Non institutional.

This segment accounted for around 80% of the customer base (2008 figures) and the remaining 20% was accounted for by the postpaid customer base. The customer base is also segmented into groups according to the monthly revenue generated. The segmentation here is done as: 1) PIP customers: These are the customers who form the PIP group as the name suggests and comprises of MSP, Meals, industrialists and other high profile customers. These are given high attention in services as they are key to implementation of services across their regions. ) Corporate Customers: These are the customers having more than five connections to their name and generate revenues in excess of RSI. 10000 a month. These are usually institutionally driven Services provided including preferential customer service treatment is provided to retain these high value accounts. 3) Platinum Customers: These are the customers whose current monthly expenditure on Idea Cellular Services is in excess of RSI. 500 per month. The revenue generated from these accounts includes Voice, Data and VASS services. Around 60% of these are from the post-paid group while the remaining 40% are from the pre-paid group.

Institutional Customers account for around 70% of the post-paid base while the remaining are the personal usage customers. 4) Gold Customers: These are the customers providing revenues to the company between RSI. 1000 and RSI. 1400 a month. The pre-paid base is again smaller in this segment accounting for nearly 35% of the customers. A healthy split is found between personal and institutional usage customers. ) Silver Customers: This customer group provides revenues in the range of RSI. 750 to RSI. 999 to Idea Cellular each month.

Pre- paid user group is in the range of around 55% while institutional sales account for around 80% of the post-paid group. 6) Medium Volume users: These are the customers generating between RSI. 220 to RSI. 750 each month. Prepaid customers form around 65% of the group while this group accounts for approximately 30% of the whole customer base of Idea Cellular. 7) Low Volume customers are the customers generating revenues less than RSI. 250 per month. Tier 1 Metropolitan Circle Tier 2 Urban Circle Tier 3 Rural Circle Target Market The Target Market is the high revenue generating segment of the Platinum and Gold Customers.

It is strategic for the company to increase user base in these two segments as they generate a steady income source and most being post-paid, the company is usually assured of ease of collection of bills. Major Benefits for these customers: These are even given treatment in Customer care. These are generally high data usage group and hence given dedicated Time Slots when their data usage is detected to maximize usage and revenue generation as a result. The Metropolitan and Urban circles have mobile density of 134% as compared to 29% in rural areas.