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Name: Joel Quah Min Liang Student ID: 32861793 Class: BUS 350 B

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Name: Joel Quah Min Liang Student ID: 32861793 Class: BUS 350 B

Question 1: 2

Name: Joel Quah Min Liang Student ID: 32861793 Class: BUS 350 B

Market segmentation is the method whereby separating the market into their own specific identical groups of consumers based on their needs, characteristics or behaviours. It also helps to find out more opportunities through consumer’s characteristic needs. Successful segmentation will lead the company to achieve better competitive advantage and stand out from competitors. In this case study, market segmentation of Kill_Kapture was based on the population of the United States through demographic segmentation. Demographic characteristics of the target market includes age, gender, income, occupation, education and race/ethnic background to assist a company to target their consumers accurately (Lees et al 2016, 240). In terms of age, the product of Kill_Kapture was targeted towards the population from 30 to 40-year-old veterans who are made up of 26% of the total population and mostly for those who are serving the country/nations such as uniformed service personnel which includes firefighters, FBI police and special forces as their occupation. Most consumers at that age will be more particular about their health so jacket will probably be useful for them for cold weathers. As for race and nationality, the product caters to consumers who are Americans due to the weather climate in United States as the country will experience winter seasons. In terms of gender, men will more likely to purchase Kill_Kapture’s jacket as their fashion focuses more on military and macho-looking (tough) unless female who are serving the military or have the preference of leather jacket as fashion. Ethnicity background could be for those who are not against animal slaughter or cruelty to animals as Kill_Kapture’s jacket is made from kangaroo. Lastly, Kill_Kapture’s Pathfinder jacket cost USD $1,500 due to quality of kangaroo leather and based on Mark Wales’ experience with the military, it is known as a luxury product whereby it requires customers to have higher purchasing power and higher income household to purchase which also shows that it caters to the upper-class population of United States (Lim et al 2012, 209). Good!

Question 2: 3

Name: Joel Quah Min Liang Student ID: 32861793 Class: BUS 350 B

Psychographic segmentation is based on the interest, activities, opinions (AIO) of consumers which includes consumer’s hobbies and lifestyle-related activities that provide them with joy and meaning in life, it can also relate to how consumers see products fitting into their lifestyle (De, Charlotte and Patrick 2017). Psychographic segmentation also includes Mitchell and SRI’s (1978) VALS or VALS2 framework concept which is known as Value, Attitudes and Lifestyles as shown in Appendix 1. It is a marketing medium to understand the motivation regarding consumer purchasing decisions and focusing on the attitudes of the people (Cohen and Richard 1985, 9). The framework includes eight types of elements and two concepts to understand consumers. The eight elements consist of Innovators, Thinkers, Believers, Achievers, Strivers, Experiencers, Makers and Survivors. The concepts are primary motivation and resources such as ideals, achievement and self-expression which relates to Maslow Hierarchy while resources are whereby people’s tendency to consume goods/services beyond demographic characteristics. For instance, Self-confidence, self-orientation, intellectualism or leadership are considered individual’s resource. Hence, integrating both will determine how consumer will express themselves in the market.  In terms of self-orientation, it will apply to most dimension of VALS or VALS- 2 concept under Value, Attitude and Lifestyle for classification of psychographic segmentation. It divides people in eight types of groups on two dimensions such as resources and selforientation. VALS investigates three elements such as, by understanding consumer’s Value on how personal behaviour can be guided in consumers, followed by analysing consumer’s positive or negative attitude towards an object and understanding the lifestyle of how people live and spend their money in life (Wongsiriwat 2017, 15).  An example of the first dimension of VALS would be a self-oriented consumer usually view product differently such as researching on every detail and plans everything on how it will impact or benefit them. In addition, consumer will possible to be motivated by the idea of Kill_Kapture’s kangaroo leather jacket’s material. Consumers may also question about the reliability of the information regarding Kill_Kapture, credibility provided in the information regarding Mark Wales and durability of the jacket. Hence, they are the ones who stays home but knows all about the world activity. These potential consumers fall under the group of Thinkers whereby consumers are driven by knowledge, ideals and principles to purchase intention and which includes Believers who are conservative and predictable. The second dimension whereby potential consumers who want to be different from others and wants to prove to their peers that they are successful by purchasing Kill_Kapture’s luxury jacket for prestige and image. In additional, consumers may also strive as they are more motivated for achivement. This relates to Achievers and Strivers as they are motivated through sense of achievement. Achievers tends to be more work-oriented and politically conservative while Strivers are similar but lesser economic, social and psychological resources (Wongsiriwat, 2017, 15).  As for the third dimension relates to having the needs for social or physical activity such as word-of-mouth (WOM) marketing comes in place whereby consumers will seek their answers and opinions through their friends, family or even referrals as it has been known for being the most influential factor on what people know, feel and do or consumers could even be influenced by their peers through word-of-mouth as well. (Groeger, Lars, and Francis 2014, 1186) In addition, these potential consumers motivated by self-expression which is 4

Name: Joel Quah Min Liang Student ID: 32861793 Class: BUS 350 B

known as Experiencers and Makers. Experiencers are youthful consumers are under the median age of 25 who tends spend more on clothing and youthful activity with their peers while Makers are practical people who prefers self-sufficiency and functional products (Wongsiriwat, 2017, 15).  Lastly, Potential consumers who are known as Innovators could have any three types of motivations in the dimensions above to be driven to purchase intention due to their high resources. While for those who are in Survivors, they are usually people who are in their age of 61 and lives with satisfaction and confidence without any motivation which is listed above. Hence, the differences between grouping of Innovators, Achievers, Thinkers and Experiencer with Survivors, Makers, Strivers and Believers are that their ranking of resources and innovation. For example, high resources and innovation group are Innovators (the highest resources), followed by Achievers, Thinkers and Experiencers. While, Survivors, Believers, Strives and Makers for having low resources and innovation. Relating to this case study, Kill_Kapture falls under luxury product whereby consumers need high purchasing power and resource to purchase their product which concludes that potential and target consumer falls under innovators who will eventually lead to Thinkers, Achievers and Experiencers.  Question 3: Targeting strategies consist of three strategies such as Niche-market strategy, massmarket strategy and growth-market strategy. For this case, Niche-market strategy is one of the most suitable strategy for start-up. Kill_Kapture focuses on Niche-market strategy whereby only serving one or more segments (not the largest), consist of acceptable number of consumers seeking for specific benefits from a good or service as well as finding out the needs and wants of consumers (Toften and Trond 2013, 272). It is important for organization to know what does consumers needs and wants to meet their expectations for satisfaction and to gain competitive advantages. In addition, price skimming strategy was used in this process by setting a high price for early adopters to purchase the new product and eventually reducing the price to attract other potential consumers. (Du, Peng, and Qiushuang 2017, 275) By doing so, it has positive impact such as it helps to create an awareness into what consumers are willing to pay, promoting higher prestige on product and branding among competitors. It is also possible for pricing to be reduced from initial pricing for late adopters to purchase and gaining goodwill on the company. According to Rogers’ (2003), diffusion of innovation theory whereby explanations on how, why, and at what rate new innovations, ideas and technology is distributed around the world. It is also known as a social system communication over time. As shown in Appendix 2, adopter category consists of five elements such as innovators, early adopters, early majority, late majority and laggards. In this case study, Kill_Kapture making use of price skimming to attract consumers who are innovators and early adopters as they are the ones who are willing to take risks, have strong opinion leadership and high social status. These will determine the failure and successful of the company in the future as opinions and feedback will be pass on to early majority, late majority and laggards over time. Furthermore,

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Name: Joel Quah Min Liang Student ID: 32861793 Class: BUS 350 B

due to technology changes in the current years, information, news and opinions will spread faster around the world. For an example, Apple first launched their first iPhone 3G in 2007 which change the world. The price of an iPhone was more expensive than other mobile devices, but there is still a huge demand for it. However, the price of the first iPhone to decrease in price and value as it reaches various stages in the product lifecycle. Since then, due to Apple’s product lifecycle they launched a new iPhone every year. The amount of loyal Apple consumers queuing outside Apple’s store before the newest iPhone is launch are increasing over the years. Consumers who are innovators and early adopters in 2007 had become one of the main opinion leaders which caused positive impact and lead them to be successful in the recent years (Kubilay and İbrahim 2015, 2019) Relating to current case study, Kill_Kapture made use of niche-marketing by targeting a unique market in United States such as veterans. Followed by starting off with a high-end leather jacket which cost around USD $ 1,500 through price skimming strategy and claiming the beneficial factors and the functions of jacket such as it is for keeping warm during chilly weather, the weight of the jacket is ten times lesser than normal jacket, water/wind resistant and having a tracking beacon to assist consumers to finding their jacket when it is lost or other related emergencies which is shown in Appendix 3.  By doing so, it prevents them from direct competition with larger firms, removes problems relating to positioning of the product and creating a strong brand equity and brand value as it helps to build customer satisfaction and better brand awarenessGood (Nam et al 2011, 30). In addition, the manufacturing of the jacket was made of kangaroo instead of cow which is distinctive among competitors. Furthermore, consumers who are serving the military will purchase it due to Mark Whales’ experience in the military and his experience with George Bush and Barack Obama. These are prestige and achievement for Mark Whales and it is passed on into his jacket. It will be prestigious for veterans and military personnel. In additional, relating to positive word-of-mouth, there will be an increase of potential customers when product has met consumer’s expectation after purchase such as Kill_Kapture’s luxury jacket having the capability in meeting their required needs for consumers (Groeger, Lars, and Francis 2014, 1186). They will tend to recommend them to their peers and family.

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Name: Joel Quah Min Liang Student ID: 32861793 Class: BUS 350 B

Appendices Appendix 1: Mitchell’s VALS framework

Appendix 2: Everett Rogers’s Diffusion of innovation theory model

Source: http://sphweb.bumc.bu.edu/otlt/MPH Modules/SB/BehavioralChangeTheories/BehavioralChangeTheories4.html Appendix 3: Newspaper article of Kill_Kapture

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Name: Joel Quah Min Liang Student ID: 32861793 Class: BUS 350 B

Source: https://moodleprod.murdoch.edu.au/pluginfile.php/1118904/mod_resource/content/2/Newspa per%20article%20Kill-Kapture.pdf References/Bibliography Cohen, Richard L. 1985. "VALS Ad Concept Puts Consumers in Pigeonholes." San Francisco Business Journal 6 (50): 9. De Corte, Charlotte Emily and Patrick Van Kenhove. 2017. "One Sail Fits all? A Psychographic Segmentation of Digital Pirates." Journal of Business Ethics 143 (3): 441-465. doi: 10.1007/s10551-015-2789-8. Du, Peng, and Qiushuang Chen. 2017. Skimming or penetration: Optimal pricing of new Fashion products in the presence of strategic consumers. Annals of Operations Research 257 (1): 275-95. doi: 10.1007/s10479-014-1717-0. Groeger, Lars, and Francis Buttle. 2014. Word-of-mouth marketing. European Journal of Marketing 48 (7/8): 1186-1208. doi: 10.1108/EJM-02-2012-0086. Hales, Gareth and Carolan Mclarney. 2017. "Uber's Competitive Advantage Vis-à-Vis Porter's Generic Strategies." IUP Journal of Management Research 16 (4): 7-22. Kubilay, İbrahim Atakan. 2015. The founding of apple and the reasons behind its success. Procedia - Social and Behavioral Sciences 195: 2019-28. doi: 10.1016/j.sbspro.2015.06.222. Lees, Gavin, Maxwell Winchester, and Sidath De Silva. 2016. "Demographic Product Segmentation in Financial Services Products in Australia and New Zealand." Journal 8

Name: Joel Quah Min Liang Student ID: 32861793 Class: BUS 350 B

of Financial Services Marketing 21 (3): 240-250. doi: 10.1057/s41264-016-0004-3. Lim, Weng Marc, Ding Hooi Ting, Pei Theng Khoo, and Wei Yi Wong. 2012. "UNDERSTANDING CONSUMER VALUES AND SOCIALIZATION - A CASE OF LUXURY PRODUCTS." Management & Marketing 7 (2): 209-220. Doi: 1030262932. Ma, Long, Chei Sian Lee, and Dion Hoe-Lian Goh. 2014. Understanding news sharing in Social media: An explanation from the diffusion of innovations theory. Online Information Review 38 (5): 598-615. Monahan, Michael and Shakil Rahman. 2011. "Porter's Generic Competitive Strategies: How Appalachian Businesses use them to Compete." Competition Forum 9 (1): 26-37. Nam, Janghyeon, Yuksel Ekinci, and Georgina Whyatt. 2011. “Brand equity, brand loyalty And consumer satisfaction.” Annals of Tourism Research 38 (3): 30. doi: 10.1016/j.annals.2011.01.015. Oliveira, Santos De, Mauro Caetano, and Limongi Fran Ricardo. 2017. "Approaches that Affect Consumer-Based Brand Equity." REMark 16 (3): 281. doi: 1934315868. Toften, Kjell and Trond Hammervoll. 2013. "Niche Marketing Research: Status and Challenges." Marketing Intelligence & Planning 31 (3): 272-285. doi: 1355056564. Shavandi, H., and A. G. Zare. 2013. Analyzing the price skimming strategy for new product Pricing. Scientia Iranica. Transaction E, Industrial Engineering 20 (6): 2099. doi: 1509437149. Wongsiriwat, K. 2017. “A Study of Influences of Values, Attitudes and Lifestyles (VALS II) on Brand Equity of Luxury Handbags in Bangkok.” (2007): 15-20. Retrieved from http://dspace.siu.ac.th/bitstream/1532/192/1/SIUPSSOM-MBA-2006-12.pdf

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Name: Joel Quah Min Liang Student ID: 32861793 Class: BUS 350 B

BUS350 Strategic Marketing

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Case study analysis marking feedback Student:

Marks Allocated

Marks Achieved

All 3 questions answered in sufficient depth, minimum 1,000 words, with well informed, logical discussion

9

6.8

Understanding of academic theory - analysis of relevant theories with application to the case study

6

4.8

Understanding of broader concepts - additional research demonstrated with discussion from a broader perspective which provides support to the analysis

6

4.8

Academic research - 4 relevant academic journal articles cited with relevance to the discussion, correctly cited and referenced

4

4

Quality of writing - clarity in writing, concise, avoiding grammatical and spelling errors

2

1.6

Overall report presentation - correct formatting, appropriate appendices and correct referencing. Urkund report provided.

3

2.5

30%

24.5

Objective/Criteria

Total Marks

Please compare your answers with the below, understand the areas you have done well and areas that you may not have answered well: Question 1: a. Define and explain market segmentation and why Marketers use this process i.e. why market segmentation has become increasingly important. b. Discussion of the bases for segmentation and how demographics fit into this. c. Answer to the question using demographic factors: Age: 40+; Gender: predominately male, Income: above average. Question 2: a. Explain psychographic segmentation and psychographic characteristics, why this segment buys (psychological needs, drives, attitudes, self-image, social pressure, values and personality. Briefly discuss VALS 2. b. Explain self-orientation, how consumers pursue and acquire products and services that provide satisfaction and shape their identities, lifestyle. 10

Name: Joel Quah Min Liang Student ID: 32861793 Class: BUS 350 B c. Explain Kill_Kapture customers based on (1) Self-values: the way a person lives his or her life. The armed services attract people who are committed to serving their country. (2) Selfconcept: the image people ideally have of themselves. Kill_Kapture is attempting to provide an image for veterans who no longer have a group uniform to wear. Question 3: a. Define what a targeting strategy is and why businesses take this approach. b. A brief discussion which identifies the three types of targeting strategy; niche, mass and growth market strategies. c. Identify that Kill_Kapture is using a niche market targeting strategy and explain (1) Kill_Kapture have selected a single, primary target market (US veterans) and other uniformed personnel, and are focusing all their energies on providing a single product (2) why? E.g. KK is a small start-up business, limited funds and personnel to manage the business, limited product range (only one product), fairly unique product with limited appeal.

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