Project
Customer Segmentation Analysis
a)
Based on the survey responses, three customer segment markets can be created from them includes millennial markets (aged 18 to 35years), middle aged market (aged 35 to 50years), and over 50 market, which are customers above 50 years. According to the customer responses, the millennials customer segments accounts for more than 50% of the all customers in the company. The customers with 50 years accounts for the lowest percentage of the overall customer groups in the organization.
b)
Demographic segmentation approach was used in the segmenting of the three customer segments for the company. The age of the customers is a key aspect of demographics in the society. It was the most suitable way to segment the customers of the company. According to Hamka, Bouwman, De Reuver and Kroesen (2014), geographic, psychographic and behavioral segmentation approaches are also effective in improving the attractiveness of their products to the customers. Geographical segmentation relies on the location of the customers. Psychographic segmentation approach relies on the attitudes and perceptions of the customers (Hamka, et al., 2014). The age segmentation variable is effective because market survey results recorded the age distribution of the customers. The millennials were estimated to be over 50%. The remaining percentage was shared among the middle age customer segment and the over 50 customer segment.
c)
The three customer segments are influenced by different factors during the purchase decision process. The millennials customer segment is influenced by psychological and situational influences. The millennials customers tend to flow with the situations and make impulses rather than have well planned purchasing process. The social media ads are useful in getting more customers to shape the design of effective customer segments. It is necessary to invest in social media ads and customer appeal ads.
The middle aged customer segment is influenced by the psychological and certain needs. The customers usually have a clear plan and information about the purchase to make. The customers will be influenced by the ability to have clear information about the products. Socio-cultural also influences their purchase process as they are keen on protected their values.https://www.appessaywriters.com, https://www.appessaywriters.com, essaybay-usa.com, essay cola, write my essay, dissertation writing service, writer my paper, homework help On the other hand, the over 50 customers are influenced sociocultural factors while making the customer purchase decision. The customers are always keen to reach and come up with clear product options and specifications. They are rarely influenced by situational and psychological factors.
d)
When investing in marketing campaigns, the management should understand the appropriate marketing campaign for each customer segment. The millennials customer segment can be reached by social media campaigns such as the use of Facebook and Twitter. Middle-aged customer segment can be reached through TV commercials and infomercials. In terms of the over 50 customers, print ads and magazines ads would be the best marketing campaigns to reach them. Older customers prefer print media and this can be used to advertise the products. The design of appropriate marketing campaigns is useful in improving the productivity and performance of the organization.
Target Market Analysis
Table 1:
Profit Potentials of the Three Customer Segments
Millennials ($) Middle-aged($) Over 50($)
Sales revenues 6,600 3,000 2,400
Less: Costs of sales (2,970) (1,350) (1,080)
Profits 3,730 1,650 1,320
From 40 responses, the millennials can be projected to be about 22 customers, middle-aged customers, 10, and 8 over 50 customers. In terms of the pricing, the customers were ready and willing to pay $300 for the drone product. The large percentage of the customer surveyed was willing to pay a unit price of $100 to $300. It can be estimated that the costs of producing the drones is 45% of the product prices.
Reference
Hamka, F., Bouwman, H., De Reuver, M., & Kroesen, M. (2014). Mobile customer segmentation based on smartphone measurement. Telematics and Informatics, 31(2), 220-227.
