Market Segmentation

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Market Segmentation
Selecting a market niche and promoting to target audiences
Every company that provides a product or services will always face the problem of how they should present their goods or services to their customers. Not only that, they must first decide what products or services to produce, where they should geographically distribute them and what outlets they should use for their distribution. For a company to be successful it must have the ability to attract and keep customers who are willing to pay a competitive price for their products or services. To do this a company must be able to find customers and produce products and services that satisfy their need and desires. Lastly, they also must find an effective way to communicate to their customers how much they need or want the products and services the company is supplying.

One of advertising’s primary roles is to communicate a product’s utility. A product’s utility refers to its ability to satisfy the perceived need and wants of a customer. There are many ways advertising can communicate utility. Some try to use sex appeal or symbolism while others simply communicate product features and benefits. The type of utility your company chose to advertise depends on the market segment and target audience you have chosen for you product.

The process of market segmentation is typically a two-step strategy. The first step is identifying groups of people that have the same needs and characteristics within the big markets for all kinds of consumers. The next step is then to combine these groups into larger market segments according to their mutual interest in the utility of the products that you may offer. This enables a company to have a selection of market segments they can target and allows them to choose different advertising strategies for the selected segments. A company that produces many products may market to many different segments. Sometimes a company may have one large group or segment that they market to but then produce different products for a more defined segment. This was part of Samsung’s market strategy.

In 2007 Apple came out with the iPhone and controlled the vast majority of the market share for smart phones. That was until the second quarter of 2012. Samsung shipped about 50 million smartphones; the most ever shipped in a single quarter by any vendor, according to market research firms Strategic Analytics and IDC Worldwide (Beer, Jeff). Also, in that quarter Apple sold only 26 million phones (Beer, Jeff). So how did Samsung manage to outsell the king of smart phones? There are many aspects to how Samsung turned around its failing smart phone division but the first and possibly the biggest part was by vastly improving their phones utility by adopting Google as a partner (Beer, Jeff). Using Android, Google’s very popular open-source operating system, gave Samsung a free platform that rivals the user-friendliness of Apples iOS (Beer, Jeff). Android allows Samsung to tweak the system to their liking and it gives them access to all of Google’s properties like the only App store that even comes close to competing with Apple’s App store (Beer, Jeff).

Not only did Samsung vastly improve their operating system but they also had to look at their hardware. Samsung chose a totally different approach to their hardware strategy than Apple. Apple offers only the one iPhone. The only variation with the iPhone is the amount of memory that it comes with the device, i.e. 16Gig, 24Gig, 32Gig exc. Samsung, on the other hand, came out with multiple phones that all had different capabilities and price points (Beer, Jeff). This allowed Samsung to obtain customers that might not want or need all the advanced capability as the iPhone. At the same time they could cut into Apple’s market share by offering a phone that matched the iPhone’s capabilities and even offered some perks that the iPhone didn’t. Features like the ability to run...
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