Marketing Report on Google Glasses PDF

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Title:

Marketing Report: the Google Glass

Name:

Yan Chen

Student Number:

s0242465

Course Code:

MRKT20019

Course Name:

Marketing Management

Assignment Number:

1

Assignment Name:

Report

Due Date:

Wednesday, 8th May 2013

Course Coordinator:

Roshnee Ramsaran-Fowdar

Lecturer:

Sangeeta Rai

Tutor:

Sangeeta Rai

Yan (Yenny) Chen s0241465

Marketing Report: the Google Glass

Executive Summary This marketing report developed a marketing plan for the Google glass, the first wearable computer. Through researching the STP strategy, investigating and

evaluating

four

major

segmentation

variables,

two

targeting

segmentations were identified for the Google glass. That is to say, the Google glass will target at Sydney market and its target consumers will be the middle and upper class with different life grouping styles. In order to successfully launch the Google glass into the Sydney market in 2014, the market report also evaluated some effective strategies to position this new product. Through researching, evaluating and analysing, some effective marketing strategies for promoting the Google glass were provided in this report. The following recommendations have been made: -

Google should be positioned at high-quality department store in Sydney with high quality of product displays and staff. Google will use direct marketing and it will be directly sold from the producer to the consumer.

-

Google will offer several promotional strategies such as events, websites, media and advertising. It will have a voice in every strategy. Moreover, YouTube videos, blogs, and Facebook will all have the information about the Google glass.

-

Google will use Public relations (PR) support and inform the public that it had taken several years to develop its high tech product. It had involved an investment of millions of dollars in development and advertising this product.

-

Google will study customer behavior and consumer feedback after it launches into the market in 2014.

-

In the future, Google should consider extend its product line and adopt innovation so as to expand its life cycle, gain and retain more

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Marketing Report: the Google Glass

consumers.

Table of Contents

Title Page EXECUTIVE SUMMARY...................................................................I TABLE OF CONTENTS....................................................................II LIST OF TABLES...........................................................................III 1.0 INTRODUCTION......................................................................1 1.1 BACKGROUND OF GOOGLE GLASSES............................................................1 1.2 AIMS..................................................................................................... 2 1.3 SCOPE................................................................................................... 2 2.0 LITERATURE REVIEW..............................................................2 3.0 STP STRATEGY.......................................................................4 3.1 SEGMENTATION........................................................................................ 5 3.1.1 GEOGRAPHICAL..................................................................................... 7 3.1.2 DEMOGRAPHICAL................................................................................... 7 3.1.3 BEHAVIOURAL....................................................................................... 8 3.1.4 PSYCHOGRAPHIC.................................................................................... 9 4.0 RANKING ORDER..................................................................11 5.0 TARGET MARKET ONE: SOCIOECONOMIC STATUS....................13 6.0 TARGET MARKET TWO: LIFESTYLE GROUPING........................13 7.0 EFFECTIVE MARKETING STRATEGIES FOR THE GOOGLE GLASS 14 8.0 POSITIONING.......................................................................15 8.1 POSITIONING STATEMENT......................................................................... 15 8.2 PERPETUAL MAP.................................................................................... 16 9. CONCLUSION.........................................................................17 10. RECOMMENDATIONS............................................................18 REFERENCES..............................................................................19

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Marketing Report: the Google Glass

List of Tables Table 1 The STP Model Steps.……………………………………….……………………………………5 Table 2 Requirements for Effective Segmentation.………………………………………….6 Table 3 Geographic Segmentation.……………………………………………………………………7 Table 4 Demographic Segmentation.…………………………………………………………………8 Table 5 Behavioural Segmentation……………….……………………………………………………9 Table 6 Psychographic Segmentation.…….………………………………………………………10 Table 7 Big Five Personality Traits.…………………………………………………………………10 Table 8 Ranking Order.…………………………………………………………………………………….12 Table 9 Targeting Strategies..…………………………………….……………………………………15 Table 10 Perpetual Map.…………………………………………….……………………………………17

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1.0

Marketing Report: the Google Glass

Introduction It is widely acknowledge that today’s companies are moving away from mass marketing and product-variety marking towards target marketing, because target marketing can help marketers to find out their marketing opportunities more efficiently. Therefore, in order to successfully promote the sales of Google glasses in 2014, Google should adapt this marketing strategy and focuses on potential customers who have greater purchase interest (Kotler et. al 2013).

1.1

Background of Google Glasses This report introduces the Google glass, which will enter into people’s lives by 2014. Montgomery (2013) noted that Google glass is a wearable computer, which has been developing by Google. This high technology product will be available in a range of colours and the price for this wearable computer will be around $1500. The 'smart' spectacles can be worn like normal glasses which would allow people to do a variety of things such as surf the Internet, locate nearby friends, view maps and other data, respond to voice commands, send text messages, take and send photographs and video of what people are viewing (Karp 2013, Douthat, 2012). Without a doubt, an effective STP strategy is needed so as to successfully assist this new product in launching into market. More specifically, a good segmentation, targeting and positioning plan will definitely promote the sales of Google glasses.

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1.2

Marketing Report: the Google Glass

Aims The purpose of this report is to develop a segmentation, targeting and positioning plan for the Google glass. This STP plan aims

to

provide

a

situational

analysis,

target

market

descriptions, marketing objectives, and marketing strategy for Google.

Through

a

comprehensive

analysis

of

major

segmentation variables, a better understanding of current consumer marketing can be obtained. Hence, effective strategic marketing plans can be made so as to attract and gain a vast number of customers and make enormous profits.

1.3

Scope In order to segment a market for Google glass, a high technology product, this marketing report will examine four major segmentation variables, such as geographic, demographic, psychographic, and behavioural variables for this product (Kotler et. al 2013). By doing this, the best way to view the market structure will be identified; therefore, Google can fully develop its ability so as to serve different segments of current market. The research for this report was conducted through consumer marketing research, utilised peer reviewed journal articles and textbooks accessed through the CQUniversity Library.

2.0

Literature Review It has been widely acknowledge that marketers are moving toward target marketing, as this is an efficient way to obtain consumers and save resources. Kotler et.al (2013) claimed that target marketing provides efficient way for sellers to find their marketing opportunities because it is the best way to identify potential users. Therefore, in

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Marketing Report: the Google Glass

such a consumer oriented marketing, it is highly recommended that marketers should fully understand buyers’ purchasing behaviour before they move toward to satisfy their customers with appropriate goods and services. In order to achieve this, marketers should adapt STP strategy into their marketing plan. In targeting market, market segmentation, market targeting and market positioning are three main steps, which serve to identify and define potential consumers, and arrange for a product to occupy a distinctive place in the minds of target consumers (Ferrell & Hartline 2007, Claudiu, Lonel & Tudor 2008, McMellon & James 2012, Oestreicher 2011).

To begin with, an effective segmentation should be substantial, actionable, measureable, differentiable and accessible. Specifically, a segment has to be of sufficient size and profitable. It is worthwhile to locate in a place with more potential customers; Sellers should design effective plans to gain and serve customers; Marketers are able to gain sufficient information so as to segment a market; Segments must react differently to marketing mix programs; Marketers should be able to reach and communicate with their consumers in the segment through a variety of methods (Kotler et. al 2013, Wong, 2013). Therefore, if these five criteria are followed, then marketers can target their products better to their potential consumers.

It has been stated that a consumer market can be segmented into four major

categories:

geographic,

demographic,

psychographic

and

behavioural variables (Kotler et. al 2013, Wong, 2013). In different situations, different segmentation variables will play different roles. Therefore, a marketer should take careful consideration so as to select the most important segmentation factors that influence consumer

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Marketing Report: the Google Glass

buying behavior when making marketing plan. Only by doing to this, they can know how to better satisfy their consumers and attract them.

After evaluating the major market segments and selecting one or two valuable segments, market should decide a strategy, which can be adopted to cover the market. According to both Wong and Kotler et. al (2013), there are three main market coverage strategies which are an undifferentiated strategy, a differentiated strategy and a concentrated or niche strategy. Among these marketing strategies, a differentiated marketing strategy is very popular in today’s markets. This strategy requires markets to develop individual marketing mixes for a variety of segments. Also, a differentiated strategy can contribute to more sales and greater customer satisfaction.

Lastly, position will be decided once marketers decide the segments of the market. At this stage, a market will arrange for its product to occupy in consumers’ minds. In order to achieve this, markets can use different bases, such as product attributes (product features and customer benefits), price and quality, product class, application, and product user for positioning. Product characteristics should be matched to the target market’s needs or wants (Kotler et. al 2013, Wong, 2013, p 53).

3.0

STP Strategy According to Kotler et.al (2013), STP is the essence of strategic marking, because this strategy focuses on presenting a product to customers, who want the product and are able to obtain it. The first step of STP strategy serves to categorise groups of consumers with

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Marketing Report: the Google Glass

different needs, characteristics, behaviour or marking mixes. The second step serves to evaluate and define the potential consumers, and the last step, positioning serves to arranging for a product to occupy a desirable position in the minds of target customers and create a detailed marking mix (Donelaicio & Kaunas 2008, Kotler et. al 2013). The table below depicts three major steps in targeting marketing.

Table 1 The STP Model Steps

Source: Grancutt, Leadley & Forsyth (2004)

3.1

Segmentation Kotler et. al (2013) emphasised that Markets consist of buyers with different needs, wants, resources, locations, buying attitudes and buying practices. Therefore, in order to target a product better to the customer, a company need to segment a

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Marketing Report: the Google Glass

market. A market can be segmented according to customers’ needs, lifestyle, age, purchasing power, and geographic location to name a few. To be more specific, there are four major variables, which are geographic, demographic, psychographic, and behavioural variables, may be used in segmenting consumer market. Moreover, an effective segmentation needs to follow five criteria, such as substantiality, actionability, measurability, differentiability and accessibility; therefore, a market should evaluate each market segment’s attractiveness before selecting the market segments to enter (Claudiu, Lonel & Tudor 2008, McMellon & James 2012, Oestreicher 2011, Finisterra do Paço, Barata Raposo, & Filho 2009).

Table 2 Requirements for Effective Segmentation

Source: Marketing Management Lecture Notes (2013)

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Marketing Report: the Google Glass

3.1.1 Geographical According to the first criteria of effective segmentation, namely, substantiality, a segment has to be of sufficient size and profitable. Clearly, it is worthwhile to locate the Google glass in a place with more population. According to Australian Bureau of Statistics (2011), Sydney has a population of 4.6 million. The Google glass therefore, will set Sydney, the most densely populated city in

Australia as geographic target area. Specifically, inner Sydney will be the main focus because the four most densely populated areas in Australia all surround Sydney’s central business district (Australian Bureau of Statistics, 2013).

Table 3 Geographic Segmentation Geographic Region City size Density

Region, city size, density, climate Sydney Over 4.5 million Major metropolitan areas Source: Kotler et. al (2013)

3.1.2 Demographical Based on the requirements for effective segmentation, segment

should

also

be

actionable,

measurable,

accessible and differentiable. Therefore, variables such as age, income, occupation and education are chosen in demographic segmentation. Australian Bureau of Statistics (2011) shows that Sydney has a population of 4.6 million and the proportion of people aged 20 to 50 years is about 44.2%. The ratio between females and males is almost equal. About two thirds of this age group has completed Page 7

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Marketing Report: the Google Glass

undergraduate

degree

or

substantial

undergraduate

coursework. Therefore, the Google glasses users will be this particular group of people who are in their early 20s and late 50s, have an average wage and salary income of $52325 per year (Australian Bureau of Statistics, 2010).

Table 4 Demographic Segmentation Demographic Age Sex Income Education Nationality Occupation

Age and life-cycle stage, gender, income, occupation, education, religion 20s to 50s Female, male Above $50,000 High school graduate, some college, college graduate, postgraduate Different nationalities Managers, professionals, tradespersons and related workers, and students Source: Kotler et. al (2013)

3.1.3 Behavioural After evaluation, the effective segmentation is identified. The Google glasses buyers would be people, who are tech savvy adults, conscious users or impromptu supporters, have different occupations: Managers, professionals, tradespersons and related workers, and students to name a few. They are all the potential users because they need to browse the Internet frequently and they highly depend on technology. Usually, these people are comfortable in spending more money on high technology products.

Table 5 Behavioural Segmentation Behavioural

Purchase occasion, benefits sought, user status,

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Usage rate Buyer-readiness stage Attitude towards product

Marketing Report: the Google Glass

usage rate, loyalty status, buyer-readiness state, attitude Heavy users, medium users Aware, informed, interested, desirous, intending to buy Enthusiastic, positive, indifferent Source: Kotler et. al (2013)

3.1.4 Psychographic Based on the five criteria of effective segmentation, several variables in behavioural segmentation are also identified. Google glasses users will be people with middle and high social status as they have relatively high income. They are groups of people who are happy with what have got, prefer socialisation and absorb new information, value visible achievement and always look for something better.

In

all,

they

have very

active

life

style.

Furthermore, Google glasses users, trendsetters, who are dynamic

and

open

minded,

have

extraversion,

conscientiousness and openness to experience personality traits (see table 7). They are very enthusiastic and positive people who like adventure, enjoy trying new things, love exploration, experimenting and fantasies (Solomon et al. 2013, pp. 96-105, Chamorro-Premuzie & Furnham 2008, cited in Fazeli 2012, pp. 265-268).

Table 6 Psychographic Segmentation Psychographic Needsmotivation Social class Personality

Socio-economic status, values, attitudes and lifestyle grouping, personality self-actualisation, aesthetic needs, cognitive needs, esteem needs Middle, upper Extroverts, novelty seekers, risk-takers, innovators, fashion Page 9

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Values, Attitudes

Marketing Report: the Google Glass

conscious Something better, young optimists, socially aware, look at me Source: Kotler et. al (2013)

Table 7 Big Five Personality Traits Personality Trait

Facets

Extraversion

Agreeableness

Conscientiousness

Neuroticism

Openness to experience

Friendliness

Trust

Self-Efficacy

Anxiety

Imagination

Gregariousness

Morality