Marketing 3

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Week 3 By Javier Ojeda

  Similarity Index 13% Similarity by Source

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5% match (Internet from 29-Feb-2012)

http://publications.theseus.fi/bitstream/handle/10024/37426/Pongthong_Sansanee.pdf?sequence=1

3% match (Internet from 27-Oct-2010)

http://www.blogster.com/imran/market-segmentation-approaches-benefits

3% match (Internet from 30-Jan-2013)

http://assignmentstoday.com/?p=251

1% match (Internet from 20-Mar-2009)

http://www.urenio.org/medicube/npd/index.php?page_id=1088

1% match (Internet from 13-Mar-2014)

http://mbapsitpsat.blogspot.com/p/marketing.html

1% match (Internet from 05-Nov-2012)

http://anzmac.org/conference/AMJ/AMJ_V12_1_2004.pdf

Osim Market Segmentation Analysis Javier Ojeda MKT/571 MARKETING 06/23/2014 Melodi Guilbault Market Segmentation is one of the important concepts which are involved in the contemporary marketing. The same product cannot satisfy two or more different customers in a market, therefore, the marketer has to decide whom to satisfy and ultimately how to satisfy them. Market segmentation is the identification of portions of a particular market that are different from one another. Market segmentation allows a company to better satisfy the needs of its potential customers (Frank, 1972). The marketing segmentation concept calls for the understanding of the customers and their needs better than the competitors. This is because different customers have different needs and it is difficult to satisfy all the customers in the market by treating them alike. In addition to having different needs, for a segment to be practical, an evaluation should be performed against the following criteria: ? Identifiable- Different attributes of the segment should be measurable so that it can be identified. ? Accessible- The segment should be reachable through distribution channels and communication. ? Profitable- The segment should be large enough such that it can earn much profit. ? Durable- The segment should be relatively stable so as to minimize the cost of frequent changes. ? Substantial- The segment should be sufficiently large such that it can justify the resources that are needed to target it. A good market segmentation should result in segment members that are internally homogenous and externally heterogeneous, which means that it should be as similar as possible within the segment and as different as possible between the segments (Frank, 1972). Consumer markets can be segmented on the following customer characteristics: ? Demographic; ? Psychographic; ? Behavioral; ? Geographical; Osim International Ltd is a global leader in the braded healthy lifestyle industry through selling its various products. The company revenue comes from retailing these products and also from distributing these products to its international franchises. The broad target group for Osim is mid-to-high end clients. This is because they are less vulnerable to recessions and demands can become more resilient to cyclic demand patterns which are exhibited in typical consumer companies. This also allows companies to charge premiums to consumers over their competitors’ products. Each of the Osim products is created for a specific target market group in mind with the goal of increasing their market share. The target markets are mainly sorted out through utilizing age group, income levels and gender. The company’s products include massage chairs, neck and shoulder massagers, head massagers, nutritional supplements, and also air purifiers. The organization’s current strategy is to focus on two to three year product life cycle for every product so as to prevent each product from reaching the declining stage of its product life cycle. The company achieves this through coming out with an upgraded version of a particular product in every few years. Since there is a huge product mix, the company should be able to determine the stage of any of its products so that it can be able to come up with the correct strategies. However, most of the company’s products can be viewed to be in the maturity stage as they are already signs of saturation in the healthy and lifestyle product market. The maturity stage is defined as the stage where the market becomes saturated with variations of a basic product and the competitors are represented in terms of an alternative product. In the maturity phase, the market share growth is at the expense of someone else’s business, other than being the growth of the market itself and it is actually the period with the highest returns. The maturity phase has stable number of competitors, low capacity of market growth as well as high profits due to having attained the biggest market share. Osim products fit into this description since its market has seen many new competitors over the years. These competitors include OTO, Panasonic, Sanyo, and OGAWA. This has caused the Asian market to reach heavy market saturation whereby companies are competing for the market share with same kind of products. Therefore, Osim products have lower chances of increasing their market share in the current market unless otherwise they convert their competitors’ clients to theirs. However, even though the chance of growth is low, the company’s massage chair line for example still brings in high profits and has steadily increased over the years. The organization has been embarking on various methods so as to promote growth of its products as they constantly try to break into new and niche markets every year in order to avoid saturation and hence promote market growth. Since the year 2002, the organization has broken in markets in America, Middle East, Europe, and Africa where the healthy lifestyle products industry is still in the growth stage. The company has also been shifting its focus on increasing marketing and distribution of its massage chairs as a strategy of capturing a market share. Its market retail stores have been increasing over the years. The company is also utilizing many marketing techniques such as having celebrity endorsements so as to boost sales. These have enabled the company to gain a majority of the market share in this industry and from these techniques it is number one brand in the Asian healthy lifestyle products. The company actually commands more than 75% of the massage chair market share in Hong Kong by sales revenue according to statistics in 2010. The company mainly targets the elderly as well as high income groups since they have a higher demand for healthy lifestyle products. The strategy still has a huge growth potential as their primary market of Hong Kong and Singapore are both moving in the directions of an aging population. For example in Singapore, the percentage of the population under the nineteen has been decreasing over the years and has in fact decreased from 29% to 23.9% while at the same time the percentage of population over 65 years has been increasing (from 7.7% to 11.1%) over the same period of time. As the company target market increases in size in future, it will signal an increase in demand and therefore potential growth. One of the company’s key markets is China, which is in the midst of developing. China’s growth is very high and has been increasing over the recent years. Since China is still in the developing stages and her people are getting increasingly affluent, this translates into a potentially bigger and better consumer base every year. It is not only China that is growing; Osim is also trying to break into America and Africa markets which are also experiencing growth. Even though Osim is a number one brand in Asia, it still has to institute itself in the western market. The company has 1,136 stores in 32 countries in the areas of North and South Asia, Europe, Middle East, America, Africa and Australia. However, more than 90% of its profits have been derived from Asia. This clearly indicates that there is huge potential of growth in those respective markets and the company looks forward to expand its markets into western countries. The company will benefit from many aspects apart from the trend of people getting wealthier. One other global trend that will benefit the company includes the global trend of becoming more health conscious. According to a recent research done by Technomic in 2013, 64% consumers up from 57% in 2010, believe that it is far more important to eat healthy and pay more attention to nutrition. These global trends will definitely benefit Osim through increasing the size of their market. The company also shows a great likelihood of growing in terms of product innovation. It is also always trying to improve on its product mix through coming out with new and improved versions of its products in every few years. This enables the company to differentiate its products from its competitors and therefore appeal to its consumers through giving them the improvements that they have been looking for. The organization is also constantly finding new usages for its products and this has enabled it to leverage on it in allowing potential market growth. Besides the company working on its products so as to ensure their continued market growth, it is also constantly looking for new ways of reducing the cost of production. This will allow the company to increase its profits and hence ensure that it is able to price its products more competitively therefore increasing the demand of its products and ultimately increasing the market growth. References (Osim) 2014. The most trusted brand. Retrieved From: http://www.osim.com/home.aspx Cahill, D. J. (2006). Lifestyle market segmentation. New York: Haworth Press. Michman, R. D. (1991). Lifestyle market segmentation. New York: Praeger. Frank, R. E., Massy, W. F., & Wind, Y. (1972). Market segmentation. Englewood Cliffs, N.J: Prentice-Hall. OSIM MARKET SEGMENTATION ANALYSIS OSIM MARKET SEGMENTATION ANALYSIS 2 OSIM MARKET SEGMENTATION ANALYSIS 3 OSIM MARKET SEGMENTATION ANALYSIS 4 OSIM MARKET SEGMENTATION ANALYSIS 5 OSIM MARKET SEGMENTATION ANALYSIS 6 OSIM MARKET SEGMENTATION ANALYSIS 7