Marketing Value Sample Paper.
Market segmentation is the process of dividing the total market into smaller groups of
potential customers exhibiting homogeneous characteristics who may need separate products or
marketing mixes. Marketing-oriented managers think of segmenting as an aggregating process-
clustering together individuals with similar needs into a “market segment”. Buyers are separated
or divided into classes who differ in their product needs or buying processes and who are often
identified by varied combinations of factors, such as age or income. Marketing Value Sample Paper. The four most common bases for segmenting the consumer markets are demographic, geographic, behavioristic and
psychographic segmentation (Maricic and Djordjevic, 2015). Mega Bloks has achieved 22
consecutive years of profitability and sales growth since launching its first toys in1985. Among
many other reasons, Mega Bloks success is driven by excellent market segmentation and
positioning.
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In business, SWOT analysis is often used to gauge or asses organizations in their
environment. Businesses can apply marketing SWOT to analyze segments too. The idea is to
find target segments with the use of SWOT. As pointed out earlier in the text, some of Mega
Bloks strengths include a strong management team, customer loyalty, strong brand name, pricing
power and ability to create unique products. Part of its weaknesses includes a high burden debt,
work inefficiencies, bad acquisitions, and weak customer service. However, opportunities are
there for Mega Bloks to exploit. They include new technologies, new markets, online markets,
and financial leverage are opportunities that can be exploited. Threats to Mega Bloks include
intense competition internally and externally, volatile revenue, substitute products, and volatility
in currency (Canada, 2014). Marketing Value Sample Paper.
To succeed in the market, Mega Bloks needs to protect their gold mines with SWOT
analysis. The initial step would be to define the criteria for segment SWOT. In segmentation,
companies would want people who identify with their products, want and need their products,
are easy and cost-effective to reach, trust a brand, respond to marketing messages, are loyal to
the brand, and want a relationship with the company.
The size of the global toy market is estimated to be standing at around $US 84 billion as
of 2012 up from $71 billion in 2007 (Canada, 2014). As of today, this market continues to
expand with toy industries reporting increased revenues. Based on such records, Mega Bloks
need to capitalize more by segmenting the market into different categories in this industry in order to continue being a profitable firm. There are at least three target market segments in this
market that Mega Bloks can divide the market into as indicated below.
Market Segmentation Approach
a) Children (2-11 years)
Mega Bloks needs to segment the market to cover children aged between 2-11 years. This
segment is made up of children who mostly use toys on almost daily basis. Children in this age
group are made of toddlers and school going children (Anthony et. al., 2006). Marketing Value Sample Paper.
b) Businesses
This type segmenting the market is where toy companies or industries such as Mega Bloks
targets business clients (Anthony et. al., 2006). These organizations are typically school based or
day care based organizations such as nursery schools or pre schools who may wish to purchase
toys for children.
c) Adults
It is argued that the number of people aged 65 years and above increased by annual rates of
2.5% from 2000-2010 to account for more than 7.9% of the total population globally. On the
other hand, reports point out that there is a decline in child population. Due to this reasons, Mega
Bloks need to target adults. Toys are no longer meant for children only. In fact, a large number
of collectible action figures, capsule toys, and candy toys are now aimed at adults, particularly
targeting impulse buyers. In 2011, for instance, toys targeting individuals over 20 years of age
accounted for more than 23% of all traditional toys (Anthony et. al., 2006). Mega Bloks should
adapt to the changing demographics and segment their market to cover this type of people. Marketing Value Sample Paper.
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Market Profiles
A market profile can be described as sets of attributes that relate to a target population,
and in business settings, a target group of buyers. Such characteristics mainly include
demographic factors such as income or geographic factors such as region and psychographic
factors such as values among others. In short, market profiles are used to formulate marketing
plans. The aforementioned target segments or groups (children, businesses, and adults) market
profiles are described below. Marketing Value Sample Paper.
Market Profile for children (2-11 years)
According to Liepiņa and Korabļova (2014), majority of toys are used by children mostly
influenced by age and type of products. In the toy industry, there are baby toys, lad toys, and children toys. Baby toys are meant for babies under one year or toddlers or pre-school year children. At this age, children receive most toys in quantity. The second group is made of lad toys which targets school going children aged between 6 to 8 years. Reports indicate that most
money is spent on toys for children in this age. Lastly, there are children toys that targets kids
between 9 to 11 years of age. Toys targeting children in this age tend to be more sophisticated
and here, children are the ones who drive the buying decision.
Market Profile for businesses
As pointed earlier majority of businesses today are purchasing toys for children who are
their clients. Some of these organizations are made of day care bodies or school-based
organizations such as nursery schools that purchase toys so that children can use. Reports
indicate that majority of schools are lately purchasing educational toys as such toys help children
exercise their muscles, help them gain confidence, and invite children to create and use their
imaginations among others (Liepiņa and Korabļova, 2014). Mega Bloks should take note of such
and target this group.
Market Profile for Adults
Toys and games manufacturers such as Mega Bloks biggest concern is the shrinking
numbers of children in key markets. However, adults are lately emerging as a demographic
worth taking seriously with the recognition that toys are no longer meant for children. Adults are
lately getting interested in outdoor and sports toys, model sets and puzzles (Liepiņa and
Korabļova, 2014). Marketing Value Sample Paper.Majority of the adult populations are recently flocking toy industries to
purchase toys for their own use. Mega Bloks must capitalize on this trend to boost its
profitability margins.
Recommendations for selection of target audience (children)
Based on the above market profiles, Mega Bloks should continue putting an emphasis on
children aged between 2 to 11 years with preference for puzzles and building blocks. This should
in fact be the primary target that Mega Bloks should base much of their effort targeting. Purchase
records of Mega Blok indicate that much of their sales are generated by toys that target children
below 11 years of age. This is a group who use toys the most as compared to the adult population
or business organizations that purchase toys for their clients. More importantly, children in this
age group are the ones who mostly influence buying decision based on their preferences. Mega
Bloks should capitalize on targeting this market with increased effort.
Positioning Strategy for Mega Bloks
Positioning is the process of formulating competitive positioning for a product with use
of detailed marketing mix (Hadjinicola, Charalambous, and Muller, 2013). As indicated before,
Mega Bloks need to target or focus much of its efforts on manufacturing toys for children. To do
this, Mega Bloks need to position their products worldwide. Due to market share gains in
existing markets and new play patterns in geographic markets, Mega Bloks need to expand
worldwide. Secondly, Mega Bloks need to position their products so that they capture customers
based in North America. Market share gains are increasing in North America coupled with new
play patterns among children, Mega Bloks has to position its products to target this geographic area.
How Mega Bloks has managed to defend its market positioning
Position defense involves the exercise of occupying the most desirable market space in
the minds of consumers while working to make the brand almost impregnable. Marketing Value Sample Paper.There are a number of ways in which companies can use to defend its positioning in the market in order to
continue staying relevant in an ever dynamic and competitive business environment. Mega Bloks
has been able to defend its position by using a number of ways. For instance, by expanding to
international markets and using patents or copyrights to protect its products, Mega Bloks has
managed to defend its position in the industry. In addition, the company has improved its
distribution channels in addition to making acquisitions of rival firms hence defending its
position in the toy industry across Canada (Hadjinicola, Charalambous, and Muller, 2013).
Positioning Map
A positioning map can be described as a tool that is usually used by individuals in
marketing and deals with goods or products that they are attempting to market. The main idea is
that every person has a different perception about a certain product (Hadjinicola, Charalambous,
and Muller, 2013). A positioning map can be designed to target customers who can afford high
income earners or low income earners. In addition, the positioning can be designed to cover
those people who prefer products that are of high quality and those who may prefer those of low
quality as indicated in the figure below. Marketing Value Sample Paper.
2.4 Customer Relationship Management
Customer Relationship Management (CRM) refers to practices, technologies, and
strategies that organizations use to manage and analyze customer interactions and data
throughout the customer lifecycle. Its goal is to improve business relationships with customers,
assisting in customer retention while driving sales growths. CRM systems are designed in a
manner aimed at compiling information on customers spread across different channels or points
of contacts between the company and the customer. Such points could include direct mail,
websites, telephone, live chat, and social media. CRM is knowing about staff detailed
information on aspects such as purchase history, purchase preferences and concerns (Chris,
2012). Marketing Value Sample Paper.
Importance of CRM
According to Purnama (2015) Customer Relationship Management is important due to a
number of reasons. First, it helps in reduced searching and correlating customers in addition to
helping foresee customer needs effectively. Secondly, CRM can be used to determine which
customers could turn out to be profitable and those who may not. Closely related to this, CRM is
important since it may help in focusing and concentrating on specific customers separately.
Others have argued that CRM increases the chance of getting more customers hence boosting
profitability margins. CRM are cost effective and companies using such technologies will benefit
as they will use lesser staff and resources to implement it.
Steps used in implementing a CRM system
According to Chris (2012), there are a number of steps that businesses or organizations
can follow in implementing a successful CRM system as listed below:
1. Identify why the organization needs a CRM system
2. Research the many vendors in the CRM bracket to find one that will be a good fit in the
organization
3. Instill good businesses practices before implementing CRM
4. Identify which areas within the organization that will use the system
5. Develop a realistic budget before implementation of CRM system
6. Implement the CRM system with a trickle down approach. Marketing Value Sample Paper.
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References
Anthony, P., Velitchka, D. K., David, L., Dennis, A. P. (2006). Segmenting the toy industry: a
study of pre‐teen Millennials, Journal of Consumer Marketing, 29 (2), pp.156 – 162.
Canada, N. (2014). MEGA BLOKS showcases product innovation and powerhouse brands at the
2014 American International Toy Fair. Canada Newswire.
Chris, A. (2012). Customer relationship management and customer satisfaction. african journal
of business management, 6(22). Marketing Value Sample Paper.
Hadjinicola, G., Charalambous, C., & Muller, E. (2013). Product Positioning Using a Self-
Organizing Map and the Rings of Influence. Decision Sciences, 44(3), 431-461.
Liepiņa, R. & Korabļova, L. (2014). Market Surveillance of Toys: Situation Assessment and
Improvement. Procedia – Social And Behavioral Sciences, 156, 360-364.
Maricic, B. & Djordjevic, A. (2015). Strategic market segmentation. Marketing, 46(4), 243-251.
Purnama, C. (2015). Importance of Customer Relationship Management in Customer Loyalty
(Brangkal Offset of East Java, Indonesia). Journal Of International Business Research
And Marketing, 1(1), 29-35. Marketing Value Sample Paper.