Paper Sample on Market Segmentation

Introduction

Ontela is a startup company offering cutting edge technology—PicDesk—that allows wireless phone users to transfer their pictures to PC and websites seamlessly. The company wants to position its product strategically in the market to facilitate its market segmentation activities. Notably, the company plans to identify a suitable market segment to develop an effective marketing strategy. However, Ontela sold the innovation to wireless companies, who brand, market, and sell the service to their customers. The firm gets a share of the amount paid to wireless companies from the monthly subscriptions. The paper focuses on identifying the best target segment upon which Ontela can leverage growth opportunities for itself and those of wireless carriers. Nevertheless, the company faces challenges in identifying the nature of its market. The company is also concerned with identifying the best method to determine the appropriate target audience, valuable segments, and how to balance the needs of its direct customers and PicDesk subscribers.

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Recommendations

Ontela should carry out market research to identify the appropriate target audience. It should combine both quantitative and qualitative research to arrive at the best conclusions. The company should target the market segment represented by Steve and cluster one. Ontela should position itself in a market segment that will facilitate not only meeting its goals but those of it the wireless carriers.

Personal Analysis

Ontela should focus on the market segment represented by Steve, the young professional. Based on consideration for both the needs of the company and that of the wireless carriers of decreasing churn and increasing the average cost per user, the persona represented by Steve provides the best opportunities for the two parties who have different goals. The persona is characterized by the average use of technology compared to teen and parent demographics. Steve is also passive in adopting new technologies, uses email at work, shares pictures directly to customers, and prefers convenience and simplicity. Compared to the other demographics the characteristics of this group make it ideal for positioning because of various reasons. Firstly, Steve likes simplicity, for example, he would prefer a phone that takes pictures if it will make him not to carry a camera. in this case, Steve is likely to adopt PicDeck since it offers a simple solution of transferring pictures to personal computers and websites. Additionally, although Steve is passive in updating technology, he has shown a desire to adapt to a method that allows him to take pictures and send them to his clients; therefore, the character creates a marketing opportunity for Ontela.

Secondly, the company should target young professionals since they are valuable customers and can afford the services. Valuable customers provide the best profitability opportunities for business. In this case, Steve will need to upgrade to a new wireless cellphone to access the new service—PicDeck—and subscribe to data services providing a win-win situation for both Ontela and the wireless carriers. The upgrade will help the carriers meet their goal of increasing ARPU, while Ontelo increases its sales. Notably, the demographic can purchase new technologies, making it logical to target them.

Thirdly, the desire of young professionals to remain competitive in their professions serves as a motivator in adopting the innovation compared to teenagers or parents. For example, Steve spends most of his time on the road showing his clients houses. Although he spends most of his time on work compared to teenagers who use most of their time-sharing pictures with friends, his desire to be competitive will drive him into adopting the services. Additionally, this segment is not saturated with technology compared to the teens and possess a desire to upgrade relative to parents. The situation makes it ideal for Ontela’s direct customers who are seeking for a market that is less saturated with technology but has the desire and ability to upgrade.

Positioning Statement

The positioning statement for this segment will encompass key values and desires that resonate with the group. For example, since the target audience desires convenience and simplicity and is not well acquainted with new technologies, the positioning statement will stress on the accessibility, effortlessness, and reliability of PicDeck.

“For professionals constantly sharing pictures and information with clients, PicDeck provides you with a simple and accessible solution that permits you to easily and reliably transfer images from your camera phone to other devices or networks effortlessly.”

Conclusion

Overall, Ontela should focus on identifying a valuable market segment that will not only allow it to meet its goals but also facilitate those of its direct customers—wireless carriers. The company can effectively identify an appropriate segment through marketing research. Notably, Ontelo should focus on the market segments represented by Steve—a young professional—and cluster one. Although young professionals are passive in adopting new technologies, their desire to remain competitive in their professions is likely to motivate them to adopt PicDesk. Additionally, the segment likes simplicity and convenience, which can easily be met by PicDeck. Similarly, cluster one has needs such as high use of internet and photo sharing, making them ideal target audience. Noticeably, the wireless carriers have a goal to reduce customer churn and increase ARPU. In this case, young professionals will aid in meeting the goal by upgrading to wireless phones and purchasing more data plans, while cluster one individuals will maintain existing customer portfolios since they are high internet users. Moreover, cluster one members are easy to reach during promotions since they like reading technology magazines. Overall, the two segments allow Ontelo to resolve their key issues amicably and leverage its growth opportunities.