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Olympian Ltd is a company that produces a range of high quality branded sportswear - Leaving Cert Business - Question B - 2009
Question B
Olympian Ltd is a company that produces a range of high quality branded sportswear. Following a lengthy market research process, the firm is now expanding its busine... show full transcript
Worked Solution & Example Answer:Olympian Ltd is a company that produces a range of high quality branded sportswear - Leaving Cert Business - Question B - 2009
Step 1
Explain the term 'market segmentation', illustrating your answer with reference to Olympian Ltd.
Answer
Market segmentation involves dividing up the market into clearly identifiable sections that share common characteristics. This strategy allows a firm to pinpoint its target market effectively. For Olympian Ltd, the overall market for tracksuits can be segmented by demographic factors such as age, identifying the teenage demographic as a significant group for their new Hoodie Tracksuits. Furthermore, within the teenage market, more specific segments can be created, including gender categories like males and females, as well as lifestyle segments for sporty or non-sporty individuals. By doing so, Olympian Ltd can tailor its marketing strategy to meet the unique preferences of each segment.
Step 2
Outline two benefits to Olympian Ltd of segmenting the market.
Answer
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Cost-effective use of resources: By focusing on clearly identified market segments, Olympian Ltd can avoid targeting customers who are unlikely to purchase the Hoodie Tracksuits. This concentrated effort ensures that marketing resources are utilized efficiently, preventing expenditures on ineffective advertising.
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Development of loyal customer relationships: Segmenting the market enables Olympian Ltd to create targeted marketing strategies that resonate with specific groups. By appealing directly to the needs of teenagers, the company can foster loyalty and build relationships with its customers from a young age, encouraging repeat purchases and brand advocacy.