Marketing Techniques and Segmentation in Examples

IKEA & Portakabin

Comparison of marketing techniques

IKEA is a multinational retailing company that deals with diverse home furniture and accessories and it has gained remarkable market recognition since its establishment in 1943. Currently, the firm’s product portfolio is comprised of 9,500 products, which are distributed through its 276 stores located in 25 countries. On the other hand, Portakabin specializes in designing modular building and it has been in business operation for over 40 years in the UK. The firms’ success has arisen from the formulation and implementation of effective marketing strategies. Both firms have adopted the concept of 4Ps in their marketing processes, which include the product, pricing, promotion, and the distribution strategies. The firms’ decision to adopt the 4P strategy has arisen from the need to attain an optimal market position.

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IKEA and Portakabin have integrated the concept of product diversification, which has enabled them to establish a comprehensive product portfolio. For example, IKEA markets diverse home furniture and accessories, while Portakabin specializes in designing and delivering diverse modular buildings. In an effort to penetrate the market, IKEA has adopted low pricing and quality as its market differentiation strategies. On the other hand, Portakabin has adopted quality as its product differentiation strategy.

In order to maximize their sales revenue, and thus their profitability, IKEA and Portakabin have integrated both conventional mediums such as brochures, magazines, leaflets, television, public relations, and direct mail and emerging mediums such as online marketing through websites in their marketing communication processes. Despite the above similarities, IKEA has adopted an effective distribution strategy by establishing 276 stores in 25 countries as opposed to Portakabin whose operations are mainly based in the UK.

IKEA’s success

IKEA’s success in the international market has arisen from its commitment to implementing effective marketing techniques. The firm has integrated both conventional and emerging techniques in creating market awareness. The firm uses television and print mediums such as catalogs, brochures, and flyers in creating awareness to potential customers. Furthermore, e-marketing has enabled IKEA to penetrate the international market.

In its marketing processes, IKEA appreciates that consumers are sensitive to product prices. Consequently, the firm has adopted the penetration-pricing strategy in order to attract and retain a large customer base. The penetration pricing strategy has also enhanced the firm’s ability to market its products to customers belonging to diverse demographic characteristics such as age and level of income.

Yusuf and Trondsen (176) assert that consumers’ tastes and preferences are subject to change. Therefore, firms must adjust their operations in order to align with the prevailing market trends. In order to avoid the risk of obsolescence, IKEA undertakes continuous product improvement, which is achieved through its commitment towards innovation. The firm’s innovative processes are based on the findings of market research. Thus, IKEA has been successful in providing customers with a wide range of effectively designed functional products.

Despite the above successes, IKEA has experienced extensive criticism for tolerating forced labor. For example, in 2012, IKEA admitted procuring some of its furniture products from suppliers who had used forced prison labor in their production processes in communist East Germany. Furthermore, the firm has extensively been criticized for its late delivery of customer orders. These two issues might have adverse effects on the firm’s competitiveness (“The Australian” par. 1)

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Marketing research in Portakabin

Portakabin appreciates the contribution of market research to an organization’s marketing plan. Subsequently, Portakabin invests in both primary and secondary market research. Market research plays a fundamental role in gaining market intelligence. Through the market research, Portakabin is in a position to understand a number of issues, which are of fundamental value in its marketing planning process. First, the firm obtains market feedback from its customers regarding its products and services. Additionally, the firm is in a position to understand the customers’ behavior. These two aspects provide Protakabin with sufficient insight on how to formulate its marketing strategies such as pricing, product, distribution, and promotion strategies.

The firm’s market research activities are also aimed at understanding the competitors’ goals, strategies, and plans. Gaining such information enables Protakabin to identify potential gaps in the competitors’ operations that it can exploit in order to enhance its competitiveness. Moreover, the data obtained from the market research enables the firm to understand the industry. Subsequently, the firm is in a position to formulate effective growth and market expansion strategies, for example by identifying the need to establish a new branch in order to boost its competitiveness. Finally, market research enables Protakabin to understand the customers’ tastes and preferences regarding its products.

Recommendation on how Portakabin can improve its market research

The above analysis shows that market research is a critical component in organizations’ quest for competitive advantage. Therefore, it is essential for organizational leaders to ensure that the market research conducted yields high value. One of the most important issues that Portakabin should be concerned about within its market research process relates to enhancing the validity of the market research. The validity of the data obtained through the market research will have a remarkable impact on the quality of the strategies that the firm formulates. In its quest to improve the validity of the marketing research, it is critical for Protakabin’s marketing department to take into account the following issues.

  1. Portakabin should mainly rely on primary market research in order to collect real market information. The firm should adopt the survey method as its primary method of data collection through the adoption of diverse methods of the survey such as e-mail surveys, face-to-face surveys, telephone surveys, and postal surveys. These methods of the survey will enable the firm to gain market information from a large number of consumers. Furthermore, conducting online, telephone, and postal surveys will enable the firm to minimize the cost of conducting market research.
  2. The firm should also conduct focus group interviews involving experts on the industry’s operation to gain insight into the prevailing industry dynamics.
  3. It is also important for the firm to conduct open days in its quest to gather market intelligence. Organizing open days will enable the firm to gather information on the consumer’s tastes and preferences regarding its products. Subsequently, the firm will be in a position to implement effective product improvement strategies.

Al-Ain marketing mix

Al-Ain Dairy is a firm that intends to enter the UAE dairy industry. The firm’s decision to enter the market arose from the identification of potential market opportunities in the dairy industry. Its operations will entail the provision of camel milk ice cream.

Product strategy

Al Ain Dairy intends to provide a unique product in the UAE dairy industry. Its products will entail flavored camel milk ice cream, which is a new product in the market. In its market entry phase, Al Ain will market five main flavors, which include saffron, chocolate, date, rose, and cardamom. The production process will entail the integration of different flavors in the milk ice cream in order to appeal to the consumers’ tastes and preferences. Al-Ain Dairy will ensure that its products do not have additives, but they will be produced from pure camel milk. Additionally, product safety will be ensured through effective product packaging.

Pricing strategy

In a bid to acquire an optimal market position, the firm will adopt the penetration-pricing strategy. The price of the camel milk ice cream will range between 2 Dirham and 5 Dirham. The penetration pricing strategy is intended to attract customers.

Promotion strategy

The firm will ensure that adequate market awareness is achieved by adopting integrated marketing communication. The firm will utilize diverse marketing communication methods such as sales promotion, advertising, and public relations. Traditional and emerging marketing communication mediums such as print media, television, radio, and online marketing will be used in creating awareness.

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Place

The firm will ensure that its milk ice cream can easily be accessed in the market. Subsequently, the firm will utilize both direct and indirect channels of distribution. The indirect channels will entail distributing through convenience and grocery stores.

KIA Motors SWOT Analysis

KIA Motors Corporation has successfully established its operations in 165 countries. The firm has also established 12 assembly and manufacturing plants. The firm is committed to succeeding in the global motor industry. Consequently, the firm has based its competitive advantage on a number of issues. One of these issues entails brand management. KIA Motors is committed to developing a positive image amongst its customers regarding its brand. Therefore, the firm has based its competitive advantage on the quality and design of its automobiles. The table below illustrates the firm’s strengths, weaknesses, opportunities, and threats.

Strengths

  • Pricing;KIA has adopted a competitive pricing strategy
  • Distribution strategy; the firm has established operations in over 165 countries
  • Customer relations; KIA provides customers with an attractive after-sale service contract.
  • Market position; the firm has optimally positioned itself in the global automobile industry. The firm is ranked fifth with regard to sales revenue.

Weaknesses

  • Recalls; the firm has experienced an increase in the number of recalls over the past few years.
  • KIA is yet to develop a global image in the automobile industry.
  • The firm has not adequately exploited the opportunities associated with technology by upgrading its technology systems.

Opportunities

  • New markets;the firm can enhance its competitiveness by venturing into new markets such as the European market.
  • Innovation;KIA can improve its competitiveness by diversifying its product portfolio for example by developing hybrid cars.

Threats

Competition; the firm is experiencing intense competition from other industry players such as Honda, Nissan, and Toyota.

Macro and micro environmental analysis; Air Arabia

  1. Political environment; the high level of political stability in the UAE coupled with the country’s economic stability will enable the firm to be effective in formulating its marketing strategies. First, the firm will be in a position to sustain its low pricing strategy, hence improving its competitiveness in the low-cost carrier market segment.
  2. Economic environment; the UAE is committed to developing its infrastructure within the transport, banking, and telecommunication sectors. Subsequently, the firm will be in a position to operate conveniently. Additionally, the country’s economic growth will lead to an improvement in the consumers’ purchasing power, and hence their ability to afford its travel.
  3. Social environment; the high rate of globalization has led to an increment in cultural diversity within society. In order to deal with this challenge, Air Arabia will be required to adopt ethical business practices in order to satisfy its customers. Additionally, the firm will be required to foster an optimal organizational culture, for example, by fostering a positive employee attitude through training. This move will increase the firm’s ability to provide customers with high-quality services.
  4. Technological environment – Arabia Air will be required to implement emerging technologies such as e-ticketing and other wireless technologies such as WiFi in order to improve its service delivery. Furthermore, implementing these technologies will enhance the level of customer satisfaction.
  5. Legal environment – the firm will be required to comply with diverse laws in the UAE such as employment laws. For example, Air Arabia will be required to enhance the safety of its employees and customers through the provision of insurance cover.
  6. Environment – the firm will be required to observe environmental sustainability by protecting the environment from pollution.

Microenvironment

The firm’s long-term success will be influenced by the quality of decisions formulated by the top management (Marti and Cabrita 23). Additionally, the firm’s operations will be influenced by the effectiveness of the stakeholders in the supply chain such as fuel and food suppliers and other stakeholders in the catering industry. Moreover, the firm’s operations will be affected by its competitors such as Rotana Airline, Fly Dubai, and Rak Airways. The commitment of the firm’s employees such as the cabin crew and pilots in providing an optimal level of customer service will also affect the customers’ level of satisfaction, and hence their loyalty.

Market segmentation

Air Arabia has adopted demographic variables in its marketing segmentation by targeting middle and low-income consumers. Subsequently, the firm has implemented a low-cost strategy. The adoption of a low-cost targeting strategy has enabled Air Arabia to offer low and middle-income households with attractive prices. In order to enhance the level of customer satisfaction, it is imperative for the firm to invest in online booking systems.

Roads and Transport Authority (RTA): Market segmentation and positioning

  1. RTA should adopt demographic market segmentation in order to appeal to its target market. Some of the demographic market segmentation variables that the firm should focus on include the consumers’ age and gender. This move will enable the firm to target school-going children from high-income families and female travelers. Furthermore, the firm should also consider adopting psychographic market segmentation variables such as lifestyle, which will facilitate in targeting customers seeking comfort in their traveling process. On the other hand, Sharaf DG should adopt psychographic market segmentation in order to appeal to customers seeking high quality and luxury mobile products. Subsequently, the firm will be in a position to appeal to the target customers.
  2. The consumers’ buyer behavior will have significant impact on the RTA and Sharaf DG marketing activities in a number of ways. The two firms have focused on providing products to high-end consumers. Subsequently, the firm will be required to ensure that their products and services appeal to the customers’ emotions in order to foster a high level of customer satisfaction. Additionally, the firms will be required to improve their products continuously in order to satisfy the target customers.
  3. Positioning refers to a product’s place in the consumers’ minds. In order to enhance its success, RTA should consider attaining an optimal market position. In order to be effective in its market position, RTA should consider developing an effective brand identify, which can be achieved by designing an attractive logo in order to appeal to female office goers and children. Additionally, the firm has achieved an optimal market position by helping customers subscribe directly to Dubai transport cooperation on a weekly, monthly, or annual basis.

B2B and B2C strategies

Organizations can adopt in their marketing strategies depending on their sector of operation. Some of these strategies include business-to-business (B2B) strategies and business-to-consumer (B2C) strategy. B2B marketing involves business transactions between businesses, for example, Hewlett Packard and ADSM. On the other hand, B2C refers to a transaction between businesses and consumers, for example, Costa Coffee selling its products to individual customers. However, these two strategies differ in a number of ways as illustrated below.

B2B marketing B2C marketing
Relationship; The nature of the relationship is long term The relationship established is short term in nature.
Contract; B2B transactions involve a long term service of contract B2C transactions involve short-term service contract
Size of market; B2B transactions focus on a small market B2C transactions involve a large market because of the large number of target customers.
Process; the business transactions entail a number of steps The business transactions mainly involve a single step process.

Facebook Incorporation has adopted both B2C and B2B business strategies. This aspect has arisen from its consideration of both individual and institutional customers as its core target consumers. Businesses are increasingly adopting Facebook usage in their marketing communication processes. On the other hand, Elsevier has mainly targeted institutional customers. Subsequently, the firm has adopted B2B marketing strategies. This move has enabled the firm to target diverse institutions in the health care industry such as pharmacies.

Works Cited

Marti, Jean, and Maria Cabrita. Entrepreneurial excellence in the knowledge economy intellectual capital benchmarking systems, New York: Palgrave, 2012. Print.

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The Australian: IKEA admits using forced labor 2012. Web.

Yusuf, Muhammad, and Torbjorn Trondsen. “A market oriented innovative quality framework for the investigation of competitive entry opportunities into new seafood markets for producers.” International Journal of Quality and Innovation 2.2 (2013): 175-193. Print.

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