Escolar Documentos
Profissional Documentos
Cultura Documentos
5-2015
This Honors Thesis - Open Access is brought to you for free and open access by Digital Commons @ East Tennessee State University. It has been
accepted for inclusion in Undergraduate Honors Theses by an authorized administrator of Digital Commons @ East Tennessee State University. For
more information, please contact dcadmin@etsu.edu.
SegmentationMarketing:ACaseStudyonPerformanceSolutionsGroup,LLC.
By:
JordanBrian
ThesissubmittedinpartialfulfillmentofHonorsrequirements
EastTennesseeStateUniversity
TheHonorsCollege
UniversityHonorsScholarProgram
__________________________________
JordanBrian
Date
__________________________________
Dr.KellyPriceRhea,ThesisMentor
Date
__________________________________
Dr.JoyWachs,Reader
Date
__________________________________
Mrs.DanaHarrison,Reader
Date
TableofContents
Abstract
LiteratureReview
IntroductiontoSegmentationMarketing
TheSegmentationProcess
SixTypesofSegmentationMarketing
4
5
8
CaseStudy
12
PerformanceSolutionsGroup,LLC.Overview
SegmentationMarketing:WhyItShouldBeImplemented
12
13
Recommendations
15
UseBenefitSegmentationtoMarketSpecificProductstotheCustomer
UseGeographicSegmentationtoMarkettoaSpecificArea
UsePsychographicSegmentationtoMarkettoaSpecificLifestyle
ManagerialImplications
15
16
17
18
ContinuedResearchonTargetMarket
IncreasedMarketingEfforts
MonthlyBudgetChangetoAccountforExtraMarketingMoniesSpent
18
18
19
Conclusion
References
21
22
Abstract
ThispurposeofthisresearchistoshowhowPerformanceSolutionsGroup,LLCcan
effectivelyusesegmentationmarketingbothintheircurrentmarketandinexpansion.Thegoalis
tofindasolutionandsuggestchangesthatshouldbemadetothemarketingteamatPerformance
SolutionsGroup.Thisresearchwascompletedbylookingathowsegmentationmarketingis
usedinbroadindustriescurrentlyandinvestigatinghowPerformanceSolutionsGroupcanuseit
intheircompany.Thiscasestudyshowsthatsegmentationmarketingisaneffectivewayfor
PerformanceSolutionsGrouptomarketitsservices.
LiteratureReview
IntroductiontoSegmentationMarketing
Segmentationmarketingfirstappearedinthe1950s.Asfocusshiftedfrom
manufacturingneedstoconsumerneedsintheearly20thcentury,marketorientedgoalsgrew
throughfirmsofthetime.Thesemarketorientedgoalsmadewayforsegmentationmarketing,
firstintroducedbyWendellSmithin1956.Heregardedmarketsegmentationasviewinga
heterogeneousmarketasanumberofsmallerhomogeneousmarkets,inresponsetodiffering
preferences,attributabletothedesiresofconsumersformoreprecisesatisfactionoftheirvarying
wants(Wedel,2000).
Smithsearlydiscoveryofsegmentationmarketingleadtosegmentationresearchdone
extensivelybyPeterDicksonandJamesGinterin1987.Theyfoundthatmarketsegmentation
andproductdifferentiationmustbecombinedwithdemandfortheproductorserviceinorderfor
themarketingmixtobesuccessfulinthetargetedsegment(Dickson,1987).Today,technology
isallowingcompaniestolookatconsumerbehaviorslikeneverbeforeandallowsmanagersto
usemicromarketingtofocusevencloseronspecificconsumergroups(Wedel,2000).Market
segmentationisdefinedtodayastheprocessofdefiningandsubdividingalargehomogenous
marketintoclearlyidentifiablesegmentshavingsimilarneeds,wants,ordemandcharacteristics
(MarketSegmentation,n.d.).Thisthenallowscompaniestodesignamarketingmixthatattracts
thepotentialcustomersintheselectedsegment.
AgreatexampleofsegmentationmarketingwasthereleaseoftheiPhone5Sandthe
iPhone5Cin2013.Applewasalreadyanimmenselypopularbrandnameinthesmartphone
businessbutwasalsoknownfortheirhighpricedproducts.Inanattempttomarkettopeople
whowerefansofAppleproductsbutwerealsoconsciousabouthowtheyspenttheirmoney,
ApplereleasedtheiPhone5C.ThisiPhonehadthenewestiOStechnologybutwasinaplastic
caseanddidnotofferupgradedfeatures,likethenewestresolutioncamerafeaturedinthe5S
model.Applewantedawaytokeepitscustomerswhowouldpaytheextramoneyforthenewest
phonebutalsowantedtoinfiltrateanewmarketsegmentofpeoplewhowerenotaswillingto
spendtheextramoney(Arora,2013).Theirplanseemedtoworkasconsumerssawthereleaseof
theiPhone6andtheiPhone6+in2014.
TheSegmentationProcess
Thesegmentationprocessconsistsof5steps:strategy,choosingsegmentationmethods,
evaluatingsegmentattractiveness,selectingatargetmarket,andidentifyinganddevelopinga
positionstrategy.Thisprocessleadstothedevelopmentofamarketingmixforthetargetmarket.
Figure1.AnOverviewoftheSegmentationProcess
Thefirststepistoanalyzewhichstrategybestsuitsthecompanyandtheirgoalsfor
marketing.DoraszelskiandDraganska(2006)recognizedthenicheandthefulllinestrategyin
theirpapertitledMarketSegmentationStrategiesofMultiproductFirms.Anichesegmentation
strategyfocusesallmarketingeffortsonasmallportionofthepopulationafullline
segmentationstrategyoffersmanyvariationsofaproducttoappealtomoreofthepopulation.
Thesearejusttwoofthemanydifferentstrategiesacompanycouldusetodevelopmarket
segmentationfortheircompany.
Oncethestrategyisdetermined,thecompanymustlookatthebestmethodfor
segmentingthemarket.Vriens,Wedel,andWilms(1996)investigatedapriorisegmentation,a
methodwhereconsumersareseparatedintogroupsbasedondemographicandsocioeconomic
variablesapriori.Theymentionanothermethodcalledthecomponentialsegmentationmethod
wheregroupsofconsumersarelinkedbycharacteristicsotherthansocioeconomicor
demographicthattheyshare.Themethoduseddependssolelyontheneedsandwantsofthe
company.Afterthesegmentationmethodisdetermined,thecompanymustevaluatethe
attractivenessofthemarkettheyareentering.
Toevaluatemarketattractiveness,marketdemand,competitiveintensityandmarket
accessmustbeassessed.Toassessmarketdemand,size,growthrate,andgrowthpotentialareall
importantfactorswhendecidingifthemarketisattractive.Evenifthemarketdemandlooks
promisingforthefuture,competitiveintensitycanquicklychangetheattractiveness.Amore
attractivemarketintermsofcompetitiveintensityisonethathasfewcompetitorsandsubstitutes
fortheproduct.Oncebothoftheseaspectsareassessed,marketaccessmustbethoroughly
examined.Ifthemarketcannotbepenetrated,themarketisuselesstothecompany.Theremust
beademandfortheproductinthemarketforittobeuseful.Allthreeofthesefactorsmustbe
examinedanddeemedusefulinordertofindthemostattractivemarketforthegoodorservice
beingprovided(Best,2013).
Afterevaluationofmarketattractivenessiscomplete,atargetmarketmustbedefined.To
selectaprofitabletargetmarket,companiesshoulddoextensiveresearchtounderstandwhowill
mostlikelybenefitfromtheirproduct,andthenanalyzethecharacteristicsofthisgroupof
people.Afterthegeneraltargetmarketisassigned,companiescanusetheinformationtocreatea
customerprofile.Customerprofilesareaspecificgroupofcustomercharacteristicsthecompany
believeswillbemostprofitableinthelongrun.Themorespecificthetargetmarketand
customerprofileis,themoreeffectivethemarketingstrategytothisgroupwillbeinthelongrun
(Pakroo,2014).Oncethereisaclearviewofthetargetmarket,apositionstrategymustbe
identifiedanddeveloped.
Positionstrategiesareimportantbecausetheydeterminehowcustomerswillviewthe
productorserviceoffered.First,positionstrategiesrequireresearchintowhatthetargetmarket
findsimportantaswellaswhatcompetitorsoffer.Afterthisinformationisacquired,the
companycandecidewhichpositionwillbethemostbeneficialforboththemandtheircustomers
(MarketPositioningStrategies,n.d.).Oncethesegmentationprocessiscomplete,thecompany
shouldhaveabetterideaofhowtomarkettheirproductorservicetothespecificsegmentthey
aretargeting.
SixTypesofSegmentationMarketing
Marketsegmentationisusedtoclassifyalargemarketbysmallergroupswithsimilar
characteristics.Thissegmentationmakestargetingaspecificaudienceeasierbecausethe
marketercantailortheirmessagetothespecificneedsofthetargetedconsumer(Whatisa
MarketSegment,n.d.).Thisapproachisdifferentfrommassmarketingstrategieswherethe
entiremarketistargeted.Themarketcanbesegmentedinseveralwayshowever,thesixtypes
thispaperwillfocusonarebehavioral,benefit,demographic,geodemographic,geographic,and
psychographic.
Tousebehavioralsegmentation,marketersmustlookatspendingbehavior,consumption,
anddesiredbenefits.Thistypeofsegmentationisamorefocusedformofmarketsegmentation
thatgroupsconsumersbasedonspecificbehavioralpatternstheydisplaywhenmaking
purchasingdecisionsenablingproducerstoadapttheirmarketingapproachtospecificgroups
(BehavioralSegmentation,n.d.).Thisapproachisnormallythemostpowerfulformof
segmentationhowever,itisalsothemostdifficulttoexecutebeneficially,becausetheresearch
involvedinfindingthesebehavioralcharacteristicsistimeconsumingandexpensive.Behavioral
segmentationcombinedwithdemographicorgeographicsegmentationismuchmorepowerful
thanbehavioralsegmentationonly,becauseamoreindepthcustomerprofilecanbecreated
(Ferrell,2005).Whenthemarketcrashedin2008,Hyundaiquicklydeterminedhowtheywould
keeptheircustomerswhosebehaviorwaschanging.Theircustomersbecamemorewaryof
buyingexpensiveitemssoHyundaidevelopedtheHyundaiAssurance.Thecampaignread,
WereintroducingHyundaiAssurancetoshowyouthefaithwehaveinyou.Rightnow,
financeorleaseanynewHyundai,andifinthenextyearyouloseyourincomewellletyou
returnit.ThatstheHyundaiAssurance(Barr,2009).
Benefitsegmentation,ontheotherhand,considersthedifferencesinspecificbenefits
thatdifferentgroupsofconsumerslookforinaproduct(BenefitSegmentation,n.d.).Not
everyoneiswillingtospendmoney,especiallyextramoney,oncertainbenefitsthattheydonot
necessarilyneed.Marketersconsistentlydeterminewhichproductbenefitsmostinteresttheir
potentialconsumers.Lifestylechangeisimportantinthisformofsegmentation,because
sometimescharacteristicsthatconsumersoncefoundimportantmaynolongermattertothem.If
themainbenefitoftheproductchanges,marketersmustalsochangetheirmarketingcampaigns
tofitconsumersnewneeds(Strydom,2007).Nikeisagreatexampleofbenefitsegmentationin
play.Theirconsumersvaryfromprofessionalathletestocasualperformers.Theysegmentthese
marketsbybenefitssoughtandcatertotheneedsofconsumersfromallaspectsofathleticlife
(Shank,2015).
Thenexttypeofmarketsegmentationisdemographicsegmentationwhichsegmentsthe
marketbyage,familysize,race,religion,gender,ethnicity,income,oreducation.Segmenting
themarketdemographicallyhelpscategorizetheneedsofthecompanysconsumers.Twomain
advantagestosegmentthemarketinthiswayare:theinformationneededtoseparatethemarket
bydemographicsiseasilyavailablethroughcensusandotherpopulationsurveysandcustomer
retentionandloyaltyarehigherbecausethecompanycaneasilysatisfytheircustomers(Gigli,
n.d.).Starbucksusesdemographicsegmentationtotheiradvantage.About89%ofallStarbucks
revenuecomesfromtwospecificdemographicagegroups.Thefirstis25to40yearold
professionalswhonormallyhavehighendjobsandareatmanagementlevelorhigherintheir
workplaces.Theothergroupisaged18to24.Starbucksmarketstothissecondagegroupfor
creatingthecoffeehouseswithenjoyableatmospherestohangoutandusingthelatest
technologyandinnovativeideas.Bybreakingthemarketintothesetwospecificgroups,
Starbuckscaneffectivelymarkettobothgroupsseparately(Cachola,2012).
Geodemographicsegmentationissimilartodemographicsegmentationbutcombines
geographicinformation,psychographicinformation,andconsumerbehaviortobetterdetermine
whothecompanyismarketingto.Thisapproachisbasedontheideathatpeopleinthesame
regions,states,cities,andevenneighborhoodshavesimilarbuyinghabitsandareinterestedin
similarproducts(Goss,1995).UsingacomputersystemlikePRIZM(PotentialRatingIndexfor
ZIPMarkets)orACORN(AClassificationofResidentialNeighborhoods)allowsmarketersto
specificallytargetconsumerswiththesamewantsandneeds(Mitchell,1994).Anexampleof
thisstrategyiswhendiscountretailersorgrocerystoresopennewstoresinaneighborhoodwith
ahighlevelofunemploymentorfamiliesdependingonwelfare.
Thenextformofsegmentation,geographicsegmentation,istheoldestformof
segmentationandseparatesconsumersintogeographicregionssuchascities,counties,states,or
regions.Consumersinurbanandsuburbanareastendtohaveverydifferentneedsfromeach
otherandthisallowsmarketerstotargetconsumerswhowillbenefitfromtheirproducts.
However,itcanbearguedthattheinternethascompletelyeliminatedgeographicsegmentation,
makingithardertoachievetheboundariesthatwereonceclearlyseen(Strydom,2007).Agreat
exampleofgeographicsegmentationis,again,Starbucks.Becauseoftheirdemographic
segmentation,thecompanytendstoputcoffeehousesinupscaleareasoftownnearbusiness
officesandaroundcollegecampuses(Cachola,2012).
10
Thelastwaytosegmentamarketisthroughpsychographicsegmentationwhichassists
marketers[to]understandthelifestyle,personality,andsocialclasscharacteristicsofthetarget
market(Strydom,2007).Understandinghowconsumersliveassistsmarketersindeveloping
marketingstrategiesthatwillappealtoveryspecificmarketsegmentsthatactandliveinsimilar
ways.Marketerscanassesshowpeoplespendtheirtime,whatintereststhem,orhowthey
consumeproducts.Thisapproachisbecomingmorepopularthanusingthetypicalsegmentation
typesbecausenoteveryonewhohasthesamelifestylelivesinthesamegeographicregion
(Strydom,2007).Forinstance,energydrinkconsumersarenormallyeitherbusinesspeoplewho
worklonghoursorstudentswhoareworkinglateandgettingupearly.Allbusinesspeopleor
studentsdonotliveinthesamearea,soitmakessenseforacompanylikeRedBulltomarketto
thatlifestyleinsteadoftheregionofthecountrytheconsumerlivesin(Segmenting,2013).
Usingsegmentationstrategiescanbeextremelybeneficialtoacompany.Insteadof
marketingtothemassmarket,themarketcanbecategorizedintospecificgroupsthatreactto
specificmarketingstrategies.Becausenoteveryonehasthesameneedsatthesametime,this
strategyallocatescompanysmoneymoreeffectivelybyspendingadvertisingbudgetswherethe
dollarswillreturnthemostprofititinthelongrun.Smallbusinessowners,suchasChadMiller
fromPerformanceSolutionsGroup,LLC.,needtounderstandhowtoeffectivelymarkettheir
businesseswhilespendingnoexcessmoney.LookingcloselyatthetargetmarketofMr.Millers
companywillallowhimtopenetratenewmarketsandexpandincurrentmarketsprofitably.
11
CaseStudy
Casestudiesareeffectivewhenaresearcherseekstoansweraquestionaboutaspecific
subjectinsteadofansweringagenericquestiononabroadsubject.Theyarealsohelpfulwhen
decidingwhichprocessesworkbestintherealworld.Acasestudyisusedinthispaperbecause
theresearchquestionansweredisaboutaspecificcompanythatischoosingthebestprocessto
marketproductstobothexistingandpotentialclients.
PerformanceSolutionsGroup,LLC.Overview
PerformanceSolutionsGroup,LLC.(www.performancesolutionsgroup.biz),orPSG,isa
smallleadershipconsultingbusinesslocatedinMountJuliet,Tennesseeandwasfoundedin
2011.Thecompanyfocusesalltrainingsonthecommercialtruckandtirebusiness,astheowner
haspreviouslyworkedinthatindustry.PSGofferssixdifferentproductstogrowsales,build
teams,anddevelopleaders.Theofferingsare
QBQ!QuestionBehindtheQuestion
Personal
AccountabilityTraining,BurkeAssessments,GiANTWorldwideLeadershipModules,Keynote
Events,TelenotesProductivitySystem,andtheLeadershipCoachingDevelopmentProgram.
Thecompanyfounder,ChadMiller,wantstofocusfuturesalesonTelenotesProductivity
SystemandtheLeadershipCoachingDevelopmentProgram,thefocusoftheremainderofthis
paper.
TelenotesProductivitySystem,referredtoassimplyTelenotes,isacustomerrelationship
managementtool(CRM).Insteadofthesalesmantypingnotesattheendoftheday,Telenotes
allowssalespersonstocallintothesystem,speaktheirnotes,andanemployeetranscribesthe
verbalnotesby5AMthenextmorning.Thesalesmancangivecompanynames,contactnames
12
andnumbers,andcallnotesthatwillbesavedontheTelenotessystemforeasyaccess.The
sellingpointofthisproductisincreasedsalesproductivitythroughouttheweek.Onaverage,
salespeoplecanmakeroughlyonemoresalescallperday,increasingcustomercontactbyabout
250pointsthroughouttheyear.Currently,Telenotesisthelargestcontributortorevenuefor
PerformanceSolutionsGroup.
TheLeadershipCoachingDevelopmentProgram,orLCDP,isasixmodulecustom
trainingworkshopfocusedondevelopingleadersworthfollowing.Eachmoduleisonedaylong,
onceamonth.Thisprogramgivesleadersofthecompanytoolstotakebacktotheirteamsand
increaseteamwork.Currently,LCDPisthesecondlargestcontributortorevenuefor
PerformanceSolutionsGroup,butMr.Millerwouldlikeforthisproducttobecomethelargest
contributorofcompanyforrevenueoverthenextfewyears.Mr.Milleralsowantstostart
offeringteamretreatswherethissixmoduletrainingistransformedintoaweeklongtrainingfor
leaderstogetawayfromthehustleandbustleofbusinesslifeandbacktothebasicsof
leadership.
SegmentationMarketing:WhyItShouldBeImplemented
PSGispresentlyfacingastuntinnewcustomergrowth.Themajorityoftheircustomers
arereturningclientswhohaveusedoneofPSGsofferingsandhavecomebackforasecondor
third.WordofmouthmarketingistheonlymarketingtechniquethatPSGisimplementingatthis
time.IncreasingortransformingmarketingeffortscouldsignificantlyincreasePSGsclientbase.
UsingsegmentationmarketingwouldallowPSGtospecificallymarkettonewclientstheyhope
13
toacquire.Becausetheyalreadyhaveastrongpresenceinthecommercialtruckandtiredealer
industry,itshouldnotbeachallengetoexpandtheirclientbasewithintheircurrentmarket.
Toexpandoutsidetheircurrentmarket,segmentationmarketingwouldallowPSGto
marketdirectlytosmallercompanieswhotheneedtoimproveleadersskills.Thisapproachwill
allowPSGtopenetrateothermarketsegmentswhilestayingfocusedonwhattheyknowbest.
Oncethecompanypenetratestheseothermarketsegments,theirreputationwillbuildfurthering
theirrevenueandclientbase.Ultimately,PSGcansavemarketingdollarsbyusingwordof
mouthmarketingagain.Itwillbevitaltothewellbeingofthecompany,though,touse
segmentationmarketingforanextendedperiodoftime.
14
Recommendations
UseBenefitSegmentationtoMarketSpecificProductstotheCustomer
Tosuccessfullyusebenefitsegmentation,PerformanceSolutionsGroupmustanalyze
whichaspectoftheirtrainingsarethemostbeneficialtotheirpotentialcustomers.Oncethe
benefitisfound,PSGcanmarkettheirproductsstronglyinnewmarkets.Thebenefitforboth
TelenotesandtheLeadershipCoachingDevelopmentProgramdifferimmenselyandshouldbe
marketedtothespecificsegmentofpotentialcustomerswhoneedeachindividualbenefit.
TelenotesbiggestbenefitishowmuchtimesalesmensavewhenusingTelenotesCRM.
Thesegmenttowhichthisproductshouldbemarketedisbusysalespeoplewhoforget
appointments,losecontactinformation,anddonothavetimetotypecallnotesattheendofthe
day.Managersofteamslikethiswillmostlikelybewillingtospendextramoneyeachmonthon
Telenotesbecausetheywanttheircompanytohavethebestimageintheindustry.Eliminating
forgottenappointmentsandlostcontactinformationwillputthemaheadoftheircompetitorsin
thelongrun.BenefitsegmentationforTelenoteswillworkbestinafastpaced,competitive
environment,likepharmaceuticalsales,wheresalespeoplearealwayslookingforproductsthat
lessenlosttimeandincreasetheireffectivenessthroughouttheworkday.
TheLCDPsgreatestbenefittotheclientisthecustomizationofthetraining.Team
leaderscantellPSGexactlywhattheyneed,andPSGwillcreatealeadershiptrainingtoconquer
theseissueswithinthecompany.Notallcompaniesarewillingtospendthetimeandmoneyon
genericleadershiptraining,sothecustomizationaspectisimportanttomarkettoPSGsclients.
Thesegmentofthemarketthatwouldbethemostwillingtopayforcustomizedleadership
trainingwouldmostlikelybesmallercompanieswhodonotalreadyhaveleadershiptrainingin
15
place.Forexample,largercorporationslikeTargetorProctorandGamblealreadyhave
extensiveleadershiptrainingfortheirmanagers.Eventually,PSGshouldattempttoenterinto
largermarketsandpotentiallyrunleadershiptrainingsforlargercorporations.
UseGeographicSegmentationtoMarkettoaSpecificArea
Geographicsegmentationistheeasiestandoldestformofsegmentationtouse.Usingthis
approachwouldallowPSGtoadvertiseincitiesintheirgeographicregion.Stronglyadvertising
inmetropolitanareasinthesoutheasternUnitedStateslimittravelexpenses.Travelingtocities
likeAtlanta,Charlotte,orGreenevilleislessexpensivebecauseofNashvillescentrallocation
andlowcostplanetickets.PSGismorelikelytogrowinlargercitiesbecausemoresmall
businessesarelocatedthere.OncePSGhasinfiltratedthesethreemajorsoutherncities,the
surroundingareaswillalsobeexposedtothemarketing,bothbyPSGseffortsaswellasword
ofmouthmarketing.Oncethesoutheastisconquered,PSGshouldincreasemarketingeffortsin
themidwesternUnitedStates.
Besidescontrollingtravelingexpenses,geographicsegmentationalsoallowsPSGto
bettermarkettotheircustomersinlargercitiesandsmallertowns.Companiesinlargercitiesare
normallyusedtoafastpacedworkenvironment,butcompaniesinsmallertownsaremorelaid
back.Evaluationofthetypesofworkdayatypicalcompanyineachplaceexperiencesis
essentialinunderstandinghowtomarketTelenotesandLCDPtoconsumersineachmarket.
AlthoughTelenotessellingpointissavedtime,acompanyinasmallertownwithfewer
consumersmaynotbewillingtopaytheextramoneyfortheservice.Acompanyinalargercity
maynotwanttopurchaseLCDPbecausethetrainingwilltaketoomuchtimeoutoftheirbusy
16
workdays.Payingattentiontowherethecompanyislocatedandhowtheirdaysarespentis
importantinunderstandingwhichcomponentstoadvertisemoreheavilyincitiesandtowns.
UsePsychographicSegmentationtoMarkettoaSpecificLifestyle
ThelifestyleofconsumersmustbeevaluatedinorderforPSGtoadequatelyuse
psychographicsegmentation.Clientslifestylesmaybesimilar,buthowtomarketTelenotesand
LCDPtospecificlifestylesmaydiffer.Acommondayinthelifeofasalespersonispackedfull
ofsalescalls,meetings,trainingseminars,andadministrativeworkfromthetimetheygettothe
officeuntilthetimetheyleave.ThebenefitsofTelenotesandLCDPhavetoagreewiththis
lifestyletobeprofitableforPSG.Showinghowbothproductscansavethecompanytimeand
moneyinthelongrunwillundoubtedlybeprofitableforPSG.
Telenotescaneasilyattracttheattentionofclientswhohavenotimeforadministrative
workatthebeginningorendoftheday.Telenotesismarketedsothatthesalespersonfeelsthey
havegainedanexecutiveaide.Forbusysalespeople,thisisoneofthemostsurprisingaspectsof
theservicewhichimmediatelyleadsthemtoinquireaboutotherservicesTelenoteshastooffer.
Thelifestyleofthesalespeoplemakesthissellingpointworknomatterwhatbusinesstheyare
in.
Trainingseminarsalsotakevaluabletimefromsalespeople.Sellingthesixmodule
LCDPprogramtoacompanycouldsavesixdaysofsellingtimeinayear.Managerscanlearn
howtoeffortlesslymanagetheirtimeandcommunicateproductivelywiththeirteammembers
whensalesareslower.Inthelongrun,leadershiptrainingsavescompaniestimewhenmanagers
arebetteratplanningandcommunicating.
17
ManagerialImplications
Whenmakingtheserecommendations,thebusinessstructurewillalsochangeslightly.The
conclusionsdrawnfromtheaforestatedrecommendationsareasfollows.
ContinuedResearchonTargetMarket
BecausePerformanceSolutionsGrouphasnotshowneffectivemarketingeffortsthisfar
intothelifeofthebusiness,thecompanyshouldmakeeffortstoresearchthetargetmarket.Mr.
MilleratPSGhasageneralideaofwhoheismarketingbutnostatisticaldataisfoundonthis
groupofconsumers.Usingawebsitelikewww.experian.com/hitwise/canallowPSGtonotonly
seehowmanytimesthecompanywebsiteisviewedbutalsostatisticsonexactlywhoviewedthe
website.
Understandingthetargetmarketiscrucialforeffectivesegmentationmarketing.The
companyshouldunderstandwhattheirconsumersfindimportant,whatstageoflifetheir
consumersarein,andwhattheyfindappealinginpotentialpurchases.Thisstepisacrucialpart
ofthemarketingeffortsofPerformanceSolutionsGroup.Researchshouldbeginassoonas
possiblesomarketingeffortscanbeincreased.
IncreasedMarketingEfforts
Fortheaforementionedrecommendationstobeeffective,PerformanceSolutionsGroup
mustincreasetheirmarketingeffortsacrosstheboard.Afterthetargetmarketisunderstood,
wordofmouthmarketingshouldnolongerbetheonlymarketingchannelPSGuses.Marketing
shoulduseonlineadvertisingandadvertisingatnewindustrytradeshows.PSGmustunderstand
18
marketingtechniquesthatarenotcurrentlyfamiliar.Afterinstitutingwebsiteadvertisingand
attendingnewindustrytradeshows,theyshouldaddnewmarketingtechniquestofurtherthe
visibilityofthecompany.
Onlineadvertisingisbecomingmorepopularwithnewtechnologyavailabletosmall
businesses.Effectivelyusingsearchengineoptimizationcangreatlyincreasethetraffictothe
PSGwebsite.Withmorepeoplevisitingthewebsite,greaterinterestintheservicesofferedand
evenmorepurchasesshouldresultdirectlyfromthewebsite.PSGcanalsouseGoogleAnalytics
toacquirequantitativedataabouthowthecompanyseffortsarecontributingtointendedgrowth.
Thebestmarketingstrategyisappearingatnewindustrytradeshows.PSGhasalready
participatedintradeshowsinthecommercialtruckandtireindustrybutshouldinvestigatetrade
showsforotherindustriesthathavethespecifiedtargetmarket.Tradeshowsforpharmaceutical
salesrepresentativeswouldbeanidealplaceforPSGtomovenext.Atthesetradeshows,PSG
shouldhaveaboothadvertisingbothTelenotesandtheLeadershipCoachingDevelopment
Program.Bringingmanagerstotheboothwillincreasepotentialconsumersandexpandthe
currentconsumermarket.
MonthlyBudgetChangetoAccountforExtraMarketingMoniesSpent
Currently,PSGdoesnothaveabudgetsetasideformarketingbecausecurrentlytheyare
engagedinlittlemarketing.Withanincreaseinmarketingefforts,asignificantincreasein
marketingdollarswillneedtobespent.PSGshouldtakeintoaccountspecificchannelstheywill
useandbudgetforeachchannel.ThefirsttwochannelsPSGshouldfundaresearchengine
19
optimizationandtradeshowadvertising.Oncethesetwochannelsareinfiltratedandmore
revenueisflowingintothebusiness,themarketingbudgetshouldbeincreasedagain.
PerformanceSolutionsGroupshoulddecideexactlyhowmanypeopletheywishtoreach
throughsearchengineoptimizationandquantifythenumberbyjoiningGoogleAnalytics.
CheckingthedataonGoogleAnalyticsattheendofeverytwoweekswillallowPSGtoidentify
theareasthatneedadditionalwork.Thisapproachcouldalsoresultinacompletewebsite
redesignwhichshouldbebudgetedforattheendofthefirstyearafterdataarecollected.
Tradeshowadvertisingshouldhaveitsownbudgetbecausethisrequiresupfrontcoststo
designagenericboothforadvertisementatalltradeshows.Foreachindividualtradeshow,PSG
shouldcustomizetheboothinawaythatappealstothatspecificindustry.Travelcostswillalso
beincurredaswellastargetmarketresearchcostssoPSGfullyunderstandsboththecurrent
marketandthefuturemarkets.
Increasingthemarketingbudgetwillbeanextraexpenseforthecurrentfinancialperiod.
However,inthelongrun,theupfrontexpensesshouldberecoveredbytheadditionalrevenue
generatedbynewclients.Ifnoincreaseinrevenueisseen,themarketingbudgetshouldbe
reducedandmarketingstrategiesreevaluatedtoimprovemarketingtotheendconsumer.
20
Conclusion
Segmentationmarketingisaneffectivewayforcompaniestomarkettheirproductsor
services.BecausePerformanceSolutionsGroup,LLCcurrentlyhasnomarketingplanforthe
futureofitscompany,segmentationmarketingcouldtargetspecificgroupsofconsumerslikely
tobuyitsmostpopularproducts.Benefit,geographic,andpsychographicaretherecommended
typesofsegmentationPerformanceSolutionsGroupuseinitially.Afterthesestrategiesare
successfullyimplemented,PerformanceSolutionsGroupcouldfocusonotherareasordifferent
targetmarkets.Forthisproposaltowork,PerformanceSolutionsGroupwillhavetoincrease
theiroverallmarketingefforts,budgetmoneyfortheseincreasedefforts,andcontinueresearch
ontheirtargetmarkets.PerformanceSolutionsGroupcouldbecomeamoreprofitablecompany
ifsegmentationmarketingwasimplemented.
21
References
Arora,N.(2013,October20).Apple'sMarketSegmentationDifficultiesWithTheNewiPhones.
RetrievedFebruary18,2015,fromhttp://www.forbes.com/sites/timworstall/2013/10/20/
applesmarketsegmentationdifficultieswiththenewiphones/
Barr,M.(2009,March10).HowHyundaiUsesBehavioralSegmentationtoTaketheBullbythe
HornsandSendtheBearPacking.RetrievedMarch16,2015,from
http://www.marketingprofs.com/9/howhyundaiusesbehavioralsegmentationbarr.asp
BehavioralSegmentation[Def.1].(n.d.).In
BusinessDictionaryOnline
,retrievedFebruary23,
2015,fromhttp://www.businessdictionary.com/definition/behavioralsegmentation.html
BenefitSegmentation[Def.1].(n.d.).In
BusinessDictionaryOnline
,retrievedFebruary23,
2015,fromhttp://www.businessdictionary.com/definition/benefitsegmentation.html
Best,R.(2013).Chapter5:Marketsegmentationandsegmentationstrategies.In
Marketbased
management:Strategiesforgrowingcustomervalueandprofitability
(6thed.).Upper
SaddleRiver,N.J.:PrenticeHall.
Cachola,J.(2012,December1).Starbucks...World'sLargestCoffeehouse.RetrievedMarch17,
2015,fromhttp://cacholajennifermar100.blogspot.com/2012/12/chapter8segmenting
andtarketing.html
Dickson,P.,&Ginter,J.(1987).MarketSegmentation,ProductDifferentiation,andMarketing
Strategy.
JournalofMarketing,
51
,110.
Doraszelski,U.,&Draganska,M.(2006).MarketSegmentationStrategiesOfMultiproduct
Firms*.
JournalofIndustrialEconomics,
54
(1),125149.
Ferrell,O.,&Hartline,M.(2005).Customers,Segmentation,andTargetMarketing.In
MarketingStrategy
(3rded.,p.136).Mason,Ohio:Thomson/SouthWestern.
Gigli,M.(n.d.).WhatisDemographicSegmentationinMarketing?RetrievedFebruary24,
2015,from
http://study.com/academy/lesson/whatisdemographicsegmentationinmarketingdefini
tionadvantagesdisadvantages.html
Goss,J.(1995)."WeKnowWhoYouAreandWeKnowWhereYouLive":TheInstrumental
RationalityofGeodemographicSystems.
EconomicGeography,
71
(2),171198.
MarketPositioningStrategies.(n.d.).RetrievedFebruary20,2015,from
http://www.learnmarketing.net/positioning.htm
22
MarketSegmentation[Def.1].(n.d.).In
BusinessDictionaryOnline
,retrievedFebruary16,
2015,fromhttp://www.businessdictionary.com/definition/marketsegmentation.html
Mitchell,V.,&Mcgoldrick,P.(1994).TheRoleofGeodemographicsinSegmentingand
TargetingConsumerMarkets:ADelphiStudy.
EuropeanJournalofMarketing,
28
(5),
5472.
Pakroo,P.(2014,February1).DefineaTargetMarketforYourSmallBusiness.Retrieved
February20,2015,from
http://www.nolo.com/legalencyclopedia/definetargetmarketsmallbusiness
29950.html
Segmenting,Targeting,andPositioning.(2013,October5).RetrievedMarch17,2015,from
https://manansilawat15.wordpress.com/2013/10/05/segmentingtargetingandpositioning
Shank,M.(2015).Segmentation,Targeting,andPositioning.In
SportsMarketing:AStrategic
Perspective
(5thed.,p.239).UpperSaddleRiver,N.J.,NewYork:PrenticeHall.
Strydom,J.(2007).SegmentingtheConsumerMarket.In
IntroductiontoMarketing
(3rded.,pp.
6575).CapeTown:Juta.
UniversityofSouthernCalifornia.(2010).
Segmentation,Targeting,andPositioning
[Figure].
Retrievedfromhttp://www.consumerpsychologist.com/cb_Segmentation.html
Vriens,M.,Wedel,M.,&Wilms,T.(1996).MetricConjointSegmentationMethods:AMonte
CarloComparison.
JournalofMarketingResearch,
33
(1),7385.
Wedel,M.,&Kamakura,W.(2000).Chapter1:Thehistoricaldevelopmentofthemarket
segmentationconcept.In
Marketsegmentation:Conceptualandmethodological
foundations
(2nded.,pp.36).Boston:KluwerAcademic.
WhatisaMarketSegment?(n.d.).RetrievedFebruary23,2015,from
http://educationportal.com/
academy/lesson/whatisamarketsegmentdefinitiontypesexamples.html
23