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Market segmentation and product positioning are a necessity in a competitive economy. It is the vital pillar for success, especially for the new products in the market. Market segmentation involves subdividing large mass of markets into smaller segments each containing a relatively homogeneous group of consumers. For instance, consumer markets can be divided into heavy and light user segments or into segments which seek distinct benefits in their use of a product. The process of segmenting and selecting markets makes the allocation of corporate resources efficient. In this sense, the funds and human resources are allocated to relatively smaller groups of consumers than if the whole market were the target (Botha, 2005). On the other hand, product positioning involves the use of the strategic marketing tools, the four Ps, to give a brand a unique image or position in the minds of consumers in each target segment. The integrated functioning of these four factors should be focused on presenting a target segment with a single image of a brand. The analysis will focus on the new product, Maprick, which is a fashion cloth.
The new product is to be introduced into the economy in order to reverse the recent declining revenues in Fanteck Company. The current economy is fashion-oriented and the product aims at targeting the fashion conscious population in America. In order to, effectively, market its product in the market, the company has decided to advertise in high fashion magazines such as Glamour. The fashion magazine provides a platform for the society to review the products that are currently fashionable in the economy; therefore, target market will be realized with ease. For effectiveness, market segmentation cannot be realized without thorough consumer research, which will lead to an incisive understanding of the economic, social and—where relevant—psychological position of the consumer. The economic location is determined by data on income, access to credit, incidence and extent of taxation, savings and other group membership. Situational influences, cultural observances, and affiliations will also have an impact on the market segment to be selected. The psychological location that was put into consideration included attitudes and personality, information processing style and innovation proneness.
The target market for the product was the upscale consumers, particularly women engaged in the workforce or activities outside the home; who wanted fashion and quality products. Maprick aimed to target a younger, better educated customer employed in a managerial or professional position with higher income than other catalog users. The company’s change of product meant the replacement of its merchandise assortment with high-fashion clothing. The company has also gone after segments of the target market such as plus-sized women because of competition from various stakeholders and rival companies.
The SWOT analysis for the company will enable it to realize its strengths, weaknesses, opportunities, and threats. Its analysis will enable the company to make decisive decision concerning the product’s marketing strategy. The company will be able to appreciate the dependencies of its operations, especially the new product, with the activities prevailing in the external environment. The matrix below shows the SWOT analysis for the company.
The company’s strengths and weaknesses are the internal factors that affect Fanteck operations. Its strength in the market includes the availability of the unique brand—Maprick—that will necessitate an increase in the market share. The company has sufficient finances to enhance funding of the new product, and its managerial team has shown a significant managerial position that has enhanced its overall performance in the economy. Although Fanteck Company has positive employee and customer relations, the company is not well-known worldwide. Advertisement undertaken in Glamour Magazine will be pivotal in its publicity. Low research and development that has seen the company come up with new product for a period of ten years has been facilitated by inadequate leadership roles. Indeed, for the new product to realize success in the economy, research and development should be the vital component in assessing the trends in the volatile economy.
The company’s opportunities in the economy include the ease of diversification of the business interest in order to realize the increased revenue outlay, and the placid competitors prevailing in the economy. In addition, the company is enjoying the favorable shift in culture of the target market, thus, making its product competitive in the market. However, the company is not immune to the threats in the economy; of importance is the consumer’s freedom to substitute products. The variation in the exchange rate and the changing trends in the fashion industry are costly to the company as it needs to undertake market research frequently.
Ideally, the market position should be determined in order to integrate it with market segmentation. Marketing managers must allocate limited corporate resources in order to achieve its strategic goals. As such, they must spend limited funds in the four areas of product positioning: product development, pricing, distribution, and promotion—the goal of positioning the brand into a unique place in the market. Product positioning will work effectively even in highly competitive markets, such as the fashion industry, as strategic energies of the managers are focused on the competitors.
The success of a marketing strategy depends on the managers understanding of the consumer and properly executing a strategy. However, the use of consumer behavior in the service of marketing goals goes beyond such fairly programs. Fanteck company’s market segmentation and product positioning will enhance the realization of the strategic goals of the company. As such, having a clear understanding of both the internal and external forces that affect the operations of the company will lead to success of the new product in the competitive economy. Strategies need to be harnessed to ensure that the weaknesses and threats facing the organization, in their current situation, are minimized.