TheGeneral Motors automobile brand Buick one of the older models of thecar manufacturing company provides a framework for analysis oforganizations venture into modern marketing methods and techniquesthat appeal to the connected younger groups of people while stillrelevant to the elderly who are the major customers of theautomobiles. The company has employed a marketing strategy to usesocial media to promote their newly developed automobile that gavethem a product mix that now includes a compact crossover andturbocharged sports sedan. The analysis of the three approaches toadvertisement media employed that is Vine, a smartphone app that creates and shares video snippets that loops in 6 seconds, YouTubevideo and a TV commercial is typically based on segmentationmarketing.
Which segments were identified in the case study? What were the distinguishing characteristic of each segment?
Marketsegmentation concentrates market demand, it represents a more preciseand rational adjustment of the product and the marketing strategyemployed to the consumer or the user specifications. Productdifferentiation go hand in hand with market segmentation sinceproduct differentiation aims at shifting demand to suit supply and sodoes the identification of proper market segments will(Smith, W. R.1956).This area of analysis is very crucial in this case, as it answers akey question raised, on which segments were identified and theirdistinctive characteristics. The market segments identified in thiscase are two (1) The youth (2) The loyal elderly group of customers.The case study employed social media to target the youth and topromote the brand name while still preserving their major customerswho are the elderly. The youths who were targeted are 25-year-old menand women majority of whom are socially networked while the elderlytargeted group is that of the range between 65 to 74 years of agethat were looking to enjoy retirement benefits. Since the goal of theautomobile company is to reach all the two target groups withoutlosing the later it has employed a TV commercial that appeals to bothage groups but the untapped targeted marked in this case study isstill the youth. For Buick to outreach the youth market segment ithas incorporated a product differentiation by design, turbochargedsports sedan and a compact crossover to reach the youth segment andthrough social media promotion and advertisement soon, they will beable to shift demand and supply.
How were the segments defined? What was the basis of the segmentation? How will you improve on this strategy?
Anotherkey question raised in the analysis of the market segmentation washow the segments were defined, the basis of the segmentation andrecommendations in improving this strategy. The youth market wasdefined through the desire of the company to expand into new marketsthat recorded poor performance over the years and to meet the needsof the younger generation of having fun. On the other hand, theelderly target group was defined through looking at the IHS data thatshow that about 25% of the Buicks new automobiles are being bought bythe elderly and majorly by their need to enjoy luxury and classyvehicles. The company aim at satisfying the needs of both age groupsbased on demographic, but the main basis for this market segment isPsychographic. This is not aimed at targeting specific age groups inthe sense of demographic approach, but rather targeting them throughthe way they think and what they like to do(Schmidt & Martyshenko, 2015).The vice president of AutoPacific says in the case that it takes on apsychographic approach to the marketing of the new vehicles thisshows clearly their goal in employing the type of advertisement andpromotional designs to use. This strategy is good, but also usingdemographics first enables them to do the psychographic approach andachieve better results like in the case using a 24-year-old Vinevideo creator.
Explain the implication of changing or evolving market segments
Marketsegmentation has several implications, one of them is that it mayresult in trial and error because one has no exact means to measurethe performance of the products differentiated in our case theintroduction of the new designs of vehicles may perform better inwith the youth segment and ineffective in the elderly segment or viceversa. The probable solution is to shift emphasis on one segment andconsequently return to the same situation the Buick Company isfacing. On the other hand the newly developed products may gain,especially those involved in the social media marketing strategies,The Buick’s vine account has enabled many videos go top with 64revines so the demand on the youth segment who are the ones who aremore connected to the internet. These programs in accordance with theYouTube video promotion may give the product a wider acceptance thanwhat the company had planned before, thereby satisfying the marketdemand becomes a problem. Hence the company has come up with a moregeneralized marketing plan in case this problem occurs, which is agood decision because it offers flexibility in marketing. Due toever-changing human wants and desire it may cause an evolving marketdemand that may also lead to an evolving marketing strategy. Thiswill cause an increase in marketing costs and human needs cannot befully satisfied.
How does the selection of segments impact 4Ps?
The4Ps also known as the marketing mix has a direct link to marketsegmentation (Musungwini& Zhou, 2014).The organization needs to identify the market segments first that istheir target customers, then the organization can now define/designthe product, price the product, decide how and where to sell theproduct, and finally the promotional techniques to employ to reachthe targeted customers. The four P’s are Product, Price, Place andPromotion. A properly selected market segment will ensure that theapplied 4P’s provide a means for a successful business plan. Thetargeted market will influence price with respect to the income ofthe customers, their willingness to buy and also their taste inproducts influence the design of the product to be sold. The designedproduct should be able to satisfy the customer needs and demands. Thepromotional methods should reach their targeted groups and place ofsale of the goods and services are essential to reach strategicallythe customers.
Describe the factors impacting the buying of at least one segment. How does these factors impact marketing?
Pricewill affect the buying of the newly produced vehicles since manyyouths are not stable financially to buy and maintain a car that istechnologically modified and marketing of the vehicles is costlyhence increasing the vehicle prices. Consequently the target youthsegment may lead to the company making losses in the long run sincethey have invested heavily in promoting the vehicles and there isuncertainty in returns on investment regarding this segment.
Inconclusion, the promotional strategy of the company can yield verypositive results in reestablishing the brand name Buick Company sincesocial media provides a large platform to reach a large group ofpotential customers worldwide. Re branding has always proved achallenge for many business organizations, especially with theemergence of new technologies in the recent posts. Marketsegmentation analysis of this case study offers a great platform forGeneral Motors Company to evaluate their plans and come to aconclusion on whether to proceed with the laid out strategy or not.
Jr.,V. B. (n.d.). Buick lets blue hair down. Retrieved November 09, 2016,fromhttp://www.autonews.com/article/20140609/RETAIL03/306099989/buick-lets-blue-hair-downSmith,W. R. (1956). Product differentiation and market segmentation asalternative marketing strategies. Journalof marketing, 21(1),3-8.
Musungwini,S., & Zhou, T. G. (2014). An Investigation of the Role ofProduct, Place, Promotion and Price (4Ps) in Market Basket Analysis:A Case Study of Retail Shops in Gweru Zimbabwe.
Schmidt,J. D., & Martyshenko, N. S. (2015). Modern Approaches to ConsumerMarkets Segmenting. MJSSMediterranean Journal of Social Sciences.