Market Segmentation and Situation Analysis (Essay Sample)

Market segmentation and Situation Analysis
Marketing segmentation forms a critical element in marketing in most industrialized countries. According to Wedel and KamakuraCITATION Wed00 \p 4 \n \t \l 1033 (2000, p. 4), among the mass production and marketing strategies put was manufacture oriented production, focusing on reduction of production costs rather than satisfaction of consumers. Since production processes became more flexible with the diversification of demand due to consumer affluence, firms started producing appropriate offers for specific target group. In his influential book, Market Segmentation: Conceptual and Methodological Foundations, the evolution of market-oriented thoughts led to the view of heterogeneous markets to be a number of smaller homogenous markets responsible for differing consumer preferences.
Wedel and Kamakura CITATION Wed00 \p 5 \n \t \l 1033 (2000, p. 5), further describe new challenges and opportunities in the market environment to cause market segmentation. This segmentation becomes effective and efficiently manageable only if they have a different homogenous group of customers. This icons micro marketing and direct marketing approach. For this reason, identifiability, substantiality, accessibility, stability and responsiveness describe the criteria for determining profitable marketing strategies.
Clarke (2005, p. 302), argument on intrinsic and extrinsic factor analysis affecting a business, demand for clarity before engaging in any future business plans. In this case, a car entrepreneur plan will define the potential long-term customers, project growth, competitors with a realistic assessment of the business. This assessment involves a SWOT analysis of strengths and weaknesses while sourcing for opportunities and strengths from an external analysis (Lorette, para 2). Creation of goals, strategies, and implementation practices forms an imperative decision-making protocol for future planning and product evaluation of a SWOT profile.
Richter & Pahl CITATION Ric09 \p 6 \n \t \l 1033 (2009, p. 6), identify strategic planning phase to be the most important phase in both market segmentation and situation analysis. Issues involving the project, that is, a car enterprises plan is considered, with close emphasis on both positive and negative factors. For this reason, this section intends to focus on the market segments and size, target market, recent trends and the competitive environment.
Market Segments and Size
According to Andre CITATION And11 \p 3 \n \t \l 1033 (2011, p. 3), the global car rental industry offers temporary terms and conditions on vehicle usage and hire of trucks by companies. In order to ensure its efficiency, installation of technology is done. Consideration of these variables sets up the market segments. Geographic variables, socioeconomic variables, the household and firm sizes and the standard industrial classifications constitute the core function. Based on buying and consumption behavior, consumer perceptions of the car brand enterprise attribute depend on the market penetration.
The car Rental Enterprise Industry has its largest market segment in the United States, making over $17.4 billion in revenues in 2004 (Andre, 2011, p. 3). Location of the Car enterprise branches close to its customers, enabled it have many consumers. However, this convenience gives the Car Enterprise a competitive advantage over its rivals. Having many rental locations clustered over a large region such as a state with many vehicles makes them available for renting purposes. America has over 17,000 rental locations with over 1.7 million vehicles available for rental (Andre, 2011, p. 3). According to "Passenger Car Rental”, the leading company that had various branch locations in the industry supplied almost 30.5 percent of all cars. With these segments, emphasis on customer welfare is created that relieves their burden and stress. Offering customer satisfaction strategies, proper communication strategies in the rental locations extensively put its services higher than other renting firms.
Target Market
The target group forms the most crucial part in the car enterprise cycle. Analyzing the target group in the market involves a series of steps, else the focus would be at the wrong target group. According to Andre, (2011, p. 2), the Enterprise’s primary focus usually is on the adjacent neighborhood markets. Basing on this, the enterprise forms a local network of individual customers in the neighborhood vicinity.
The description of the target market requirements involves highlighting the target people such as professionals, business individuals and vendors, students et cetera. The demographics such as age and gender, behaviors, and need desires need greater emphasis. According to Tanner, Jr, & RaymondCITATION Tan13 \p 260 \n \t \l 1033 (2013, p. 260), many factors have proved to influence the consumer behavior. Environmental and marketing factors, personal and social attributes, the psychological wellbeing, the family, and culture. Though the personality factors create the considerable effect, gender and age concept bears more weight on the target market. Though many businesses today are taking greater pains to figure out what a specific gender requires in the Car enterprise, marketing strategies have dwelled on an all-round technique of targeting both genders.
Lifestyle activities including, how people spend their time and what their priorities are, values, opinions, and general outlooks on the world are put into consideration. Where do they go other than work? Who do they like to talk to and their conversations? These specify an individual preferred product such as a carCITATION Tan13 \p 300 \l 1033 (Tanner, Jr, & Raymond, 2013, p. 300).
The target social class is a great determinant in marketing strategies CITATION Arm11 \p 155 \l 1033 (Armstrong, Adam, Denize, & Kotler, 2011, p. 155). Because, income defines social class, the primary variable determining social class is occupation. To some degree, consumers in the same social class exhibit similar purchasing behavior. Basing all the above when identifying a target group, The car rent Enterprise will get the best market for its goods.
Recent Trends
According to CITATION USA13 \p 11 \l 1033 (USA, 2013, p. 11), trends in the United States market research include an analysis of key supply-side and demand trends dictating the current market situation. A detailed segmentation of the market with previous information volumes and values helps reflect on the past before exploring in the future. The company’s brand market shares with a five-year forecast of market trends and market growth provide a robust and transparent market research methodology conducted in-country. Most firms use situation analysis of opportunities and risks. Andre (2011, p. 7), identifies trends that impact the consumer markets. The first trend is power purchasing conscious of the environment; the second is economical smartness in the declining state of the economy. Most companies use these two trends to create opportunities to generate revenue and customer satisfaction.
According to various car cooperatives in the United States, several initiatives were launched to ensure a user- friendly environment. Companies’ need for cheap, environmentally safe and accessible vehicles invented the friendly option. Basing an enterprise in such an opportunity, a program designed to ease traffic congestion, decrease pollution, and make car rental convenient to downtown commuters. However, with this concern on environmental issues with the hybrid car sharing program, car enterprises collectively help their consumers’ budget efficiently in financial crisis. Like any other enterprise firm, producing most of its revenue in a country, services rendered by a car enterprise may be subject to economy fluctuation in a country.
Competitive Environment
There are many factors that drive competition within the car rental industry. Price competition ...