Part 2 MARKET RESEARCH AND TARGET MARKETS

4: Marketing Research and Information Systems 5: Target Markets: Segmentation and Evaluation

Chapter 5 Target Markets: Segmentation and Evaluation Professor Jason C. H. Chen, Ph.D. School of Business Administration Gonzaga University Spokane, WA 99258 chen@jepson.gonzaga.edu

Internet Exercise iExplore is an Internet company that offers a variety of travel and adventure products. Learn more about its goods, services, and travel advice through its website at www.iexplore.com.

1. Based on the information provided at the website, what are some of iExplore’s basic products?   iExplore offers Trip Finder, Travel Guides (by activity and destination), Experiences (inspiration, ideas, and tips), Lodging (hotels and rentals), and Deals (and specials). The website says that its Adventure Experts travel the world to uncover the very best hotels, destinations and off-the-beaten path sites to ensure that the viewers’ trip is unique and a once-in-a-lifetime experience.

2. What market segments does iExplore appear to be targeting with its website? What segmentation variables is the company using to segment these markets?   Answers will vary, although the company is obviously targeting people who travel. They segment the market primarily by activity and destination, as well as by income.

3. How does iExplore appeal to comparison shoppers?   The company offers travel deals for shoppers looking to save money. The site also prominently features prices and benefits for lodging and trips and aggregates listings.

Video Case 5.1 Raleigh Wheels INTO A NEW ERA FOR bicycle marketing

Summary   This case discusses bicycle company Raleigh’s long history and its transition from being a company known for its sturdy, high-quality product to a global brand catering to bicycle messengers and commuters. Raleigh noted that many of its customers do not don special gear to go riding, but rather wear their street clothes. In order to familiarize new markets with its bicycles, Raleigh brings samples to cities around the world and lets people ride the bikes. Raleigh takes great strides to remain in touch with its target market and to provide the products that customers want. It has even started to use high-technology in marketing through maintaining a blog and a Twitter account.

1. Of the four categories of variables, which is most important to Raleigh’s segmentation strategy, and why?   According to the case, psychographic variables such as the European lifestyle and tradition of getting around on bicycles are most important to Raleigh’s segmentation strategy. These consumers ride for fun, rather than as serious racers. Applying psychographic variables allows Raleigh to identify and focus its marketing on this specific group of consumers

What are the four Segmentation Variables for Consumer markets? VALS ("Values, Attitudes And Lifestyles") is a proprietary research methodology used for psychographic market segmentation. Market segmentation is designed to guide companies in tailoring their products and services in order to appeal to the people most likely to purchase them. VALS

2. How would you describe Raleigh’s positioning for its steel-frame bicycles?   In general, Raleigh seems to be positioning its steel-frame bicycles as sturdy, comfortable, light, fast, nimble, easy to steer, and fun to ride. Students may offer additional positioning ideas as well. Raleigh’s positioning helps the company correct misperceptions of steel-frame bicycles as heavy and awkward to ride, and fits with the interests of its target market.

3. Raleigh sells exclusively through retail dealers, not directly to consumers. How does this affect its ability to segment the bicycle market using geographic variables?   Raleigh can select dealers in the geographic areas where consumers in its target market live or travel on vacation. This allows the company to sell through multiple dealers in states where riding bicycles is a popular pastime, for example. In this way, Raleigh will be assured of solid marketing distribution coverage when it launches marketing communications or new product demonstrations in those areas. For efficiency, Raleigh can choose fewer dealers (or have no dealers) in areas where the lifestyle is not geared toward bicycling.

Figure 5.2 - Targeting Strategies Designs a single marketing mix and directs it at the entire market for a particular product Targets two or more segments by developing a marketing mix for each segment Targets a single market segment using one marketing mix Copyright © 2014 South-Western, Cengage Learning. ALL RIGHTS RESERVED.