How Marketing Segment And Decision Making Matters for Organisation ?
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Introduction to Marketing
Marketing creates value for customers and it also establishes a good relationship between the organization and customers. In the process of marketing firm divides the market into different segments on the basis of geographical location, demographical variables, psycho graphical and consumer behaviour. These variables can also affect decision making of any company. The present report is based on ASDA which perform its operations in United Kingdom. The selected retailer focuses on its marketing strategy and promotional activities in order to create a strong customer base. The below mentioned report focuses on the growth and profitability of the organization and how they can achieve these objectives over their competitors (Solomon, 2014). Along with this, it also defines its marketing segments in the market.
ASDA is a retail industry in united kingdom that provides products and services to the people at the lowest price as compare to other competitors. This retail industry is lie in the perfect market. In perfect competition there is no monopoly in the market, prices cannot be manipulated and sell products to earn profits. In this kind of competition there is no transaction cost and no barriers to entry and exit. The market share of ASDA is 16.2%. The company is enjoying there higher profits as compare to there rivals due to its low price campaign. The growth of the company in 2016 is get improved as compared to the last year.
ASDA used pestle analysis in order to remove the external barrier that affect the performance of the company (Hollensen, 2015). These factors are political, economical, social, technological, legal and environmental. If government changes there policies then firm have to suffer in there selling prices. Economic factor is based on the income of the people and social is changes according to the taste and preferences of the customers. Technology can lead the industry towards the innovation and legal is related to the laws that are made by the government. ASDA provide eco friendly products to there end users (Versloot, 2016).
Nature of competition in the industry
Competitive strategies are followed by the organizations to attract more customers and if consumer base will increase then companies will be able to achieve higher growth in the market. These strategies are also used to sustain the competitive advantage in the marketplace and also evaluate the strength and weaknesses of their own. ASDA mainly emphasizes on these promotional activities so that they can attract more buyer than rivals. The retail industry provides products to their end users at flexible prices as compared to its competitors. They are improving there distribution channel through sales so that customers get satisfied with the delivery services (Cross, Belich And Rudelius, 2015). Sometimes, customers will not see only the products but they are also focusing on their distribution process. It is the supermarket in United Kingdom that follows low pricing strategy and also adopts different strategies to satisfy their buyers. There are many retail chain industries in UK but the competitor of ASDA is Tesco as these are the leading organizations. The market shares of both the companies are 16.6% and 30.4% respectively.
Compare and contrast the strength and weakness of the competitors
Varieties of products are offered by the company including financial services and mobile phones.
Products are offered at the low cost.
The company constantly ask about the feedback from there customers and through this they can maintain a good relationship with their consumers.
The retail industries have more than 500 retail outlets in different countries
The company does not provide their products throughout the world so they do not have a strong global image as compared to their competitors.
In order to protect domestic market from huge competition, some nations impose restriction on market entry of other firms.
The company invest more in the research and development.
They does not get more profits.
The Tesco have strong leadership position in the market of UK.
The company also provide non food items in their stores like clothes, mobile phones.
They have strong brand name in the market.
The retail industry provides products on the internet effectively.
Tesco have more than 5000 stores in many different countries.
The companies financial performance is not so good.
They are more dependent on the UK market and they are not offering their products into other countries.
The industries financial performance get affected due to the bad debt and household insurance claims.
The brand image get influenced due to the image scandal that took place in 2015.
ASDA and Tesco both have their different strength and weaknesses. Strength of the industries help to sustain their advantage in the market as compared to there rivals. Weaknesses show that they lack in some of their services and because of that they will not be able to achieve growth in the market (Kotler and et.al., 2015). Tesco is the leader in UK market and other retail industries are the follower. Both company’s grocery products are competing with each other because it provides low price products and another provides products with a strong brand. Both retail industry offer mobile phone of their store brand so loyal customers of the firm will buy. These people only see the uniqueness rather than the price of the products.
Marketing objective of the company is to provide modern quality services to their targeted group. They increase their customer base by offering them more products in a variety of range and renders services that fulfil the needs of the consumers. They have successfully implemented the pricing strategy by maintaining quality of products. Market segment is a process in which the industry divide the market into different groups on the basis of the need and demand of the customers and organization (Craft and Hassan, 2015). ASDA can create a segment on the basis of geographical location, demographic, psychographic and consumer behaviour. In demographic segment, the industry divides population on the basis of age, gender, family, income and occupation. In geographical, they divide the people on the basis of area because buyer has their different needs according to the different location. Psychographic segment is based on the lifestyle, interest, taste and preferences of the end users. Consumer behaviour is based on the taste, lifestyle, interest and preferences of the people. Along with this there buying pattern is based on there decision making power (Hernández-Méndez, Muñoz-Leiva and Sánchez-Fernández, 2015).
ASDA segment their market on the basis of demographic variables like they are more focused on needs of women who are about 20 to 30 years. This group will buy more products from the supermarket for their family. Women generally go into these kinds of grocery stores so that they can get different products at the same place. The firm provides wide range of clothes for different kinds of customers but they mainly focuses on women clothing. On the other hand, the company also offer products and services to the male group. This group also buy commodities for their family (West, Ford and Ibrahim, 2015). The queue is also get reduced due to the technological advancements in the company. Some people do not want to stand in a queue because it is very time consuming so they prefer to buy products from the company’s website. Along with the demographic variables, they also segment market on the basis of geographical location. Different people have different needs so ASDA should provide products as per the demand of the consumers. So, when retail industry establish there outlets in different countries they have to launch new products according to the culture, need, want and demand of the people. This type of segmentation provide many benefits to the business and customers. Buyers can get products that will fulfil there needs and company will be able to create a strong customer base. This provides many opportunities to the company and the firm can use them to increase the sales in the marketplace. If they increase number of users then there growth and profits can be improved. Through this they can sustain there competitive advantage in the market as compared to there competitors (Graham, Harvey and Puri, 2015).
Primary and secondary target markets of ASDA
Primary and secondary target market both are important for the ASDA because this increase the sales and revenue of the company. Primary group are the direct customers who shares some of the common characteristics so the retail industry should focus on the primary buyer because the company can expect the return from these buyers. These customers are the decisions making body who make decisions while purchasing any product. Secondary buyers are indirectly related to the products and services and these will influence the primary customers to buy such a products and services (Banyte, Brazioniene and Gadeikiene, 2015).
Primary target market for ASDA are the people of the united kingdom. The company is focusing on the male and female of the country who are going to buy products and services in bulk from the retail industry. The firm segment the market on the basis of demographic variables like age and gender. More females who are in the age between 35 to 55 will go for the shopping in such supermarkets where they got many products in a single store. They will buy daily used products for there home and family. The ASDA also have a cloth store where they are providing cloths and footwear to their women customers. Male also go in this kind of grocery store for the shopping for there family. Due to the modern technology the firm also provide there products on there website. So, consumers prefer to buy products from there online store instead to stand in a long queue. To go into the supermarket and stand in a queue is more time consuming than buy products from the online store (Liu and et.al., 2015). The company can also follow niche marketing to attract new customers and this will also reduced the competition among the different retail industry.
The secondary targeted group is the second most likely customers who are paying interest into the products of ASDA. Its second target audience are the small business units and retail stores of the country. These target market will buy products and services from the ASDA and offer these services to the customers of the UK. These units and stores will purchase goods in bulk from the industry at a lowest price and sale these goods to other consumers. The firm can find there target audience through the market research. On the basis of this research the industry will be able to identify the people who are interested into the products (Cui and Choudhury, 2015).
The level of involvement of the primary segment and their decision making process
The primary segment of ASDA are customers and the segment is divided according to the demographic variables (Hollensen, 2015). The level of involvement of the primary segment is high in the decision making process of the organization. The company will develop products and services according to the need and demand of the customers. For this the industry conduct a market research so that they can examine the taste and preferences of the consumers. In this kind of research manager will collect the information on the basis of primary method and secondary method. In primary method manager used questionnaire, interviews, observation and focus group and on the basis of these decisions are taken by the managers. In secondary method information is gathered from the government report, newspaper, internet and television. This is the responsibility of the marketing department to identify the demand of people in the market (Chon, 2015).
ASDA develop some of the promotional strategies to attract customers and the company can also sustain there competitive advantage in the market over their competitors. These customers can influence the decision making process of the organization. In this dynamic world, consumers needs are changing according to the changing environment. When these needs are changed then retail industry have to change there objectives and goals so that they can fulfil the demands of the people. This can indirectly affect the decision making process of the ASDA. All the operations of the firm are dependent upon the customers because they are one who can help the industry in order to increase their profits. Decision making process is a sequential approach that should be followed in steps (Banyte, Brazioniene and Gadeikiene, 2015). These steps are:
Identify the purpose: In this step ASDA identify the purpose of the decisions. Problems are identified by the manager that what kind of issues company faced and how these issues can be resolved.
Information gathering: In this information is collected by the retail industry to solve the issue. Some facts and figures are also identified by the organization and that cause can also be examined.
Judging the alternatives: Now, alternatives are examined by the ASDA. In this they have to consider the goals and objectives of the company with every alternative. These alternatives should be able to complete the goals.
Evaluate the alternatives: In this step each alternative should be evaluate effectively. In this process alternatives should be evaluated on the basis of positive and negative aspect (Weinstein and Pohlman, 2015).
Select the best alternative: Now, ASDA have to select a best alternative out of many alternatives. This best decision should complete the objectives and goals of the company.
Execute and evaluate the decision: In this last stage the manager have to execute the decision by taking the help of subordinates. After the execution the manager have to evaluate the outcome of the decision.
In this sequential manner the decisions making process is done by the organization and if customers needs are get changed then again manager have to make the decisions. So, these consumers play a important role in the firm.
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Positioning is a tool that is used by the marketing department of ASDA in order to market the products. This is used to position the products and services. Positioning map shows that existing products are positioned in the market and the firm decide where they will place there products. The company can also compete with there competitors so that they can position there products into the market. It is a kind of map that have two line X-axis and Y-axis. The x axis is goes from left to right and y axis goes from top to bottom. This is based on the price of the products and product range of the ASDA. Through this tool it can be identified that where the organization is going to place there products (Kolios, Read and Ioannou, 2016).
It is explained in the positioning map that ASDA is lie between the broad product rage and low price quadrant. Tesco is the competitor of this retail chain industry and it also lie in the same quadrant. There are some more competitor of the ASDA and these are Sainsbury's, Morrisons, Aldi and Lidl. Morrisons is also there in the quadrant od low price and broad product range. Sainsbury's is there in the section of broad product range and high price. Aldi and Lidl both lies in the narrow product range and low price quadrant (Khan, Alam and Alam, 2015).
From the above carried out analysis it has been observed that the company can use pestle analysis in order to resolve all the challenges. Competitive strategies are also followed by the retail industry so that they can attract more customers. Markets are segment on the basis of the basis of demographic variables and geographical location. Primary such as customers and secondary such as businesses and small retailer targeted audiences are there who can help the firm in order to increase the revenue. The customers can affect the decision making process of the organization. ASDA should conduct a market research so that they can identify the needs and demands of the customers.
Banyte, J., Brazioniene, L., & Gadeikiene, A. (2015). Expression of green marketing developing the conception of corporate social responsibility. Engineering Economics. 21(5).
Chon, K. S. (2015). Traveler destination image modification process and its marketing implications. In Proceedings of the 1990 Academy of Marketing Science (AMS) Annual Conference (pp. 480-482). Springer International Publishing.
Craft, S. H., & Hassan, S. S. (2015). Global consumer market segmentation strategy decisions and managerial assessment of performance. In Revolution in Marketing: Market Driving Changes (pp. 26-30). Springer International Publishing.
Cross, J. C., Belich, T. J., & Rudelius, W. (2015). How marketing managers use market segmentation: an exploratory study. In Proceedings of the 1990 Academy of Marketing Science (AMS) Annual Conference (pp. 531-536). Springer International Publishing.
Cui, G., & Choudhury, P. (2015). Effective strategies for ethnic segmentation and marketing. In Proceedings of the 1998 Multicultural Marketing Conference (pp. 354-358). Springer International Publishing.
Graham, J. R., Harvey, C. R., & Puri, M. (2015). Capital allocation and delegation of decision-making authority within firms. Journal of Financial Economics. 115(3). 449-470.
Hernández-Méndez, J., Muñoz-Leiva, F., & Sánchez-Fernández, J. (2015). The influence of e-word-of-mouth on travel decision-making: consumer profiles. Current issues in tourism. 18(11). 1001-1021.
Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.
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