By Jeremy O’Brien. Jeremyob ID 216224841
With the current standards of knowledge/information storage and internet dissemination capabilities combined with more than 100 years (Jones, Brian, Shaw 2006) of accumulated research and knowledge available to marketers today there is no doubt that we are getting better and better at marketing and business development. There are many examples today of how brands and businesses identify themselves with, align with and target various segments of our community. For example: Rolls Royce, a luxury car brand that provides their customers with access to a prestige driving experience that suits budgets and their desired lifestyles. On the other hand, a supermarket chain like Aldi targets a completely different segment of the market that seeks value for money and access to lesser known branded products at a significant cost savings over premium brands.
I believe it is possible that some Rolls Royce customers may choose to shop at Aldi but I have yet to witness it.
These are both examples of how businesses have successfully used our wealth of marketing knowledge to identify and align themselves with a particular want or need. However to illustrate the importance of market segmentation, targeting and positioning perhaps we should compare examples where this is not done so well:
I recently saw a great scene in a movie (Batman Begins, 2005) where Lucius Fox, the head of the Wayne Enterprises R&D department, is showing the hero Bruce Wayne around the products, including Kevlar harness, magnetic grapple gun and Memory Fabric that transforms into a pretty awesome cape. Bruce shows interest in these products because he wants to create the Batman character and tells Lucius that he wants them to support his cave diving (spelunking) and base jumping hobbies but he is confused why the products were produced to be so expensive that they priced out of the reach of the target market (US military) and nobody was buying them.
Lucius’s response was “I don’t think they tried to market it to the billionaire, spelunking, BASE-jumping crowd.”
A memorable moment in the history of marketing indeed and how fortunate for Lucius that he now has found his highly specific target segment.
The fact that these products were so attractive to one highly specific market segment and not to others shows us that customers have different priorities when it comes to selecting a product and if you position your product towards the wrong target segment then your business will be in trouble. In this case the intended target market (US military) was too price conscious to go after the premium battlefield products and so the business came to a halt.
Smart companies will segment their customers into groups of similar people and then position their offerings to fit the target segment(s), they will target their sales, marketing and operational efforts towards those segments that allow them to maximise their profitability and use of their core strengths. They will ensure their pricing models and their capacity is attuned to the size and demand of their targeted segment (Iacobucci, 2014).
Another example of poor product positioning I experienced recently was when I attended a local milk bar (convenience store) in Melbourne, this was just like many other, similar milk bars selling newspapers, ice creams and of course milk. These tier 2 resellers of selected grocery items are usually more expensive (Sivasailem 2010) and target customers with one or more of the following attributes:
- Small business friendly customers who live within a small geographic radius from the shop and value convenience over saving money.
What set this particular shop aside for our positioning analysis was that it had a whole section of the shop set aside for what I would call “expensive knick knacks” – such as a 1 metre high, jewel encrusted globe of the world priced at $1000.The globe and just about everything on that shelf has sat there for years – nobody is buying them and they are simply tying up valuable cash and shelf space. Utilising the segmentation and positioning model we have explored above perhaps we could be forgiven wondering where the shop keeper was hoping to find a cashed up, time poor, ice cream loving customer who is likely to walk into the local milk bar in the hope of finding a giant bejewelled globe?
Perhaps if he simply changed the name to Milk Bar and Gift Emporium for visibility it might be a start towards finding his customer? I hope he finds one soon, Wayne Enterprises could afford to wait, most of us probably can’t.
Jones, Brian D. G.; Shaw, Eric H. (2006). “A History of Marketing Thought”. Handbook of Marketing. Weitz, Barton A.; Wensley, Robin (editors). Sage.
Batman Begins 2005, film, Warner Bros, Los Angeles
Iacobucci, D 2014, Ch3-4, Marketing Management (MM), 4th Edition, Cengage Learning
Sivasailem, Naren, IBISWorld Industry Report C2172 Chocolate and Confectionery Manufacturing in Australia. 2010. pp21-27. IBISWorld.