Q9. Should the firm pursue full market coverage, market specialization, product specialization, selective specialization, or single-segment concentration? (Choose one and omit the others) (Ch. 9)
“Product specialization is one strategy a company can use to target specific customer market segments”.( ) This method is good for businesses that put their focus on high-quality merchandise with the ability to tailor it to the explicit desires of different segments. Smaller companies with distinguishable goods can get an advantage from this method.
Product Specialization can be the key to the profit of small and medium size businesses. These business that deal with several products at times can find it problematic when it comes to finding a sufficient amount of market space for their merchandise. They end up spending the bulk of their money on adverting the products along with the brand name. The funny thing is a lot of these businesses never find enough loyal customers for the marketed products. This is where specialization comes in to aid the company.
By specializing and diverting their resources to maybe one or two of their top products offer you can have several benefits. Product specialization let’s you to focus on one maybe two markets allowing one to keep up with the latest trends and demands. It can also cut down on the company’s competition, by lessening the number of competitors a company can help the company give their customers a better product. It can also improve post-sale services which lets a company plan and implement a successful and detailed marketing campaigns
Advertising the brand name by way of its products works out better then advertising in the media. The success of one individual product marketing strategy can create a strong foundation and allows the product to branch out. “Recent studies also show that companies focusing on one or two products earn better sales opportunities than offering multiple products”. ( )
There are pros and cons to marketing just one product, example, for some companies, it’s logical to be focused on just one of their products, on the other hand there are some that would be happier and more productive by selling several products. The other pros of marketing just one product is focusing, this allows you to put all your attention on producing one great product. No interferences that comes from trying to manage, market and sell numerous products, you’ll be able to actually fine tune your key creation. Having a comfortable or suitable position is another pro. This is called having a niche, A niche is where you can create a product designed for the needed market extremely well. Targeting this target group in most cases will lead to great success because capturing most of those who feel they are not getting the services that they want/need will be easy, by targeting one type of consumer, you can quickly create a create a great product instead of trying to focus a lot of time and effort on several different products. It also allows you to get know your consumer and allow you to understand their needs,
With all the pros that product specialization it does comes with a few cons, starting with not having the ability to cross-sell. When specialization in product, you won’t have the ability to increase your profits by cross-selling, giving sample products to your established based customers. Cross-selling can improve the profit intake and increase your marketing budget. Another con of product specialization is the lack of customers return, there is little need for the same product. The only way to get and keep return customers a company would have to continuously keep re-inventing the product they are offering, making it considerably different from the original product and much improved. If not, it will be very difficult to generate return customers. Putting a cap on the amount of profit a company can earn.
Another con is fewer marketing opportunity. The ability to sell a single product and be a successful company, can be a challenge, finding ways to keep renovating the same product to over and over again to keep customers and generate return customers it limited. To reach your market capacity, a company would have to participate in a more general marketing strategy, that practice is very costly and inefficient. A company’s marketing and sales demands would also become a problem. Selling one products to various targeted areas will mean increasing the marketing and sales efforts, which means increases the amount of staff needed. Requiring more staff to sell merchandise a specialized product can be very costly in the end, yielding very little results.
Increasing labor costs is not the only increasing cost that a company can incur, but but there is also a cost to modify the products along with much needed research into the changing trends of the customer base are also expensive as well. Travel expenses for the increase sales staff can also be extremely costly. To pay for all these extra costs a company will inherit they must increase their sales or charge higher prices to get a profit. Consistency Challenges when using product specialization approach, for branding purposes it is important that the progress and marketing of the product stays consistent in all targeted markets. If marketing fails in any of the targeted areas this could cause negatively harm to the brand’s image that can in turn effects the company’s overall customer marketing.
Another challenge of a product specialization approach is that a company can get tunnel vision, by this I mean that they can put so much time and attention into the product research and development that they forget about the actual needs/wants of the customer.
Q10. Explain the needs that are met for each of the firm’s target markets. (Ch. 9)
Descriptive Research; This type of research plans, forecast, outline and examine the link between other problems that deal with the same situations. The study will also give added consciousness to dealing with the actual problems of guest complaints in relation to housekeeping and employee attitude. With this form of research we can design a more supple solution to the problem.
Applied research; is the last type of research that should be used. This research will produce the cause and effect connection between all that is involved in the research question, This research is useful when it comes to tying together all of the prior research that was done, forming a well-versed answer to the research questions, This is a great tool when trying to predict the outcomes of the action taken when it comes to the customer complaints and employee behavior, Applied research would help make the best outcome of the problem.