Business Market Segmentation, Choice of Target Customer Segments - Essay Example

Strategy Selection segmentation model A business can only exist and provide value if it has s that have specific needs to be satisfied. Products and service provide value to the customers with needs. Customer behavior and customer profiles are very important for the selection of customer segmentation model. Through market segmentation companies divide large markets into smaller segments. These segments can be reached more effectively and efficiently with products and services that match their segment type. (Freeman, 1993) There are different criteria on the basis of which companies segment their market. 1. Geographical segments: market is divided into different segments based on its location for example regions, countries etc. 2. Demographic segmentation: dividing market based on demographic factors such as age gender, education, religion, industry, company size etc. 3. Psychographic segmentation: dividing market into different groups based on social class, lifestyle or personality characteristics. 4. Behavioral segmentation: dividing markets into groups based on consumer knowledge, attitude, use or response to a product (Price, 2004) Market segmentation, targeting and positioning are the three major approaches which are applied by the marketing departments in their endeavors to achieve organizational goals. Of the three steps mentioned above segmentation is the first one to take on. In market segmentation, segment variables are identified and the market is segmented accordingly. The segmentation allows the company to focus on the demands of the targeted market and fulfill its demands. It seeks to differentiate between various segments of a market and addresses to the needs and requirements of each market. In this way they make products and introduce services which are specifically meant for that particular segment of the market only. There are various approaches that can be applied in the segmentation of market. Company would thus, be able to create its identity in all its major market segments. Different marketing and communication strategies could be applied for each segment keeping in mind, the respective consumers in the segments. (Dickensin, 1987) The market is segmented according to the Business market segmentation. The segmentation has been done according to the following bases: geographic segmentation, customer type and buying behavior. Geographic segmentation gives us secondary segment which includes metropolitan and regional hospitals. Customer types and buying behavior usage patterns blend together to give us the primary segment -who are medical practitioners and local GPs- and tertiary segment including medical charities and humanitarian support organizations. In market segmentation, we have grouped customers and non-customers with similar characteristics. These characteristics include similar economic, biographic and usage behavior. Biographics are considered because Mycrolab is a health related diagnostic system and is mostly used by people in health services or people with health issues or health conscious. Moreover product related segmentation have also been used to identify the target markets of Mycrolab which have also resulted in the primary, secondary and tertiary segments. Product related segmentation is described as the segmentation according to different benefits that consumer seek from the product (Consumer market segmentation, 2011). Mycrolab is a medical diagnostic system able to perform multiple tests on a sample as small as a drop of blood in a fraction of time at a fraction of cost of processing by a conventional laboratory. From comparative competitor analysis also show that competitors have partitioned on similar benefits as Mycrolab. Mycrolab provides various benefits to its purchasers also described in the Strengths of Mycrolab in SWOT Analysis portion. Hence product related segmentation is used. Product related segmentation focuses on “why” a customer is purchasing rather than “what”. The reason for buying Mycrolab may be because it is a miniaturized diagnostic system with universal testing capabilities that can be used for almost every invitro diagnostic (IVD) test providing laboratory quality results to unskilled users in minimum time. For medical practitioners or pathologists and hematologists, Mycrolab is a device that is helping them to save time of driving as well as testing hence making “point of care” testing accessible. The attributes and benefits of Mycrolab are both beneficial to Medical practitioners and hospitals as well as individual patients who can use it as self test device at home. Problems related to the technical quality of results of the tests are now more likely to be due to poor compliance with operating procedure. Users of POCT (Point Of Care Testing) need training on the use of the diagnostic device, interpretation of results and development of the service which is costly and is prone to errors. Understanding the pre and post-analytical phases are vital. Technological developments have resulted in more robust, miniaturized and reliable devices like Mycrolab (Price, St.John & Hicks, 2004). This device has solved the problems of patients and doctors mutually. The device has low training needs with accurate result and its analysis. Hence it has the potential to be an asset to the healthcare institution. Choice of Target Customer Segments Primary = medical practitioners and local GPs:- In recent years, technologies to design and manufacture in vitro diagnostic (IVD) tests have strongly developed ((Price, St.John & Hicks, 2004). A wide range of innovative IVD rapid testing techniques to diagnose or screen for conditions have become available since then and is still expected to continue to increase in a market that currently represents 32% of the global IVD market (Intelab Corporation,2010). Australian market is open to the potential boom of Mycrolab diagnostic device. Metropolitan NSW Local Health is divided into 8 Districts which make it possible to handle the health care issues of urban metropolitan NS Wales. The districts are: Central Coast Illawarra Shoalhaven Nepean Blue Mountains Northern Sydney South Eastern Sydney South Western Sydney Sydney Western Sydney Source: (Health services, Website) The primary market for our product Mycrolab would be the medical practitioners and the general practitioners. They are the main users of internal medicine and will benefit from Mycrolab by making it a part of their daily use. The device caters to a business-to-business market. It is helpful for diagnosis of people suffering from minor ailments and don’t require hospitalization. General practitioners are the fundamental pillars of the Australian Health system. Above 85% of Australians visit a general practitioner every year. They are the first contact with the people. Hence it is very important for general practitioners to be well equipped, well read and masters of their book. Particularly, well targeted area of Mycrolabs would be the remote areas of Australia. In the remote areas, laboratories are difficult to set up. GPs are present all over the country. There are shortages in some cities and some remote regions where not many general practitioners work. In such places products like Mycrolab can fill the gap. The practitioners don’t have the expertise required to run sophisticated lab processes and equipment in these remote areas either. Within such localities, Mycrolab can become a huge hit. The product will also have the support of the Australian Government. Over the course of time, it is also expected that the product’s demand will rise. This means that potential visitors and users from other areas will also start capitalizing on the lucrativeness of this product. In Australia, as of 2010, 23, 518 general practitioners were in motion. The industry has been rising at the rate of 2.4% per year in the last 12 months and the trend is still increasing. Female GPs make up 38% of the total number of GPs in Australia. This means that Mycrolab would primarily be targeted at male GPs. Secondly, 79% GP are located in Metropolitan areas and Metropolitan-Rural areas. Metro-politan rural areas GPs will prove to be a better target market. (GP numbers in Australia, 1999-2000 to 2008-09) Australia is already suffering from a huge dearth of supply of medical practitioners. There are rapid changes taking place in the industry where their requirement is concerned. There are relatively few number of medical schools operating. The growth of these medical school has hit rock bottom in this decade. With such a huge dearth of medical practitioners in the market, amateur and unskilled practictioners are taking on IVD tests, Mycrolab will help them master their expertise in no time. There is data available that suggests retirement of the baby boomer generation of doctors and it is reckoned that it will trigger a downward pressure on workforce suppy. As a result the quality of services is going to take a step back. All this needs to be taken care of. (Bagozzi, 1998) Secondary =Metropolitan and regional hospitals The secondary target market is our metropolitan and regional hospitals. Thousands of patients arrive at the hospitals daily which require immediate diagnosis for their treatment. Emergency departments, research laboratories, hematology, critical care units as well as infectious disease units also need a device which can present accurate results in a fraction of second. Healthcare Associated Infections (HAIs) are an ever-present factor in every health system which are complex MROs that can be difficult to detect and treat. The Governments response to the Special Commission of Inquiry, Caring Together - Health Action Plan for NSW, committed $25.4 million over four years to further improve infection control. Yet people are at a risk of contracting infections even from the environment (Health Services, Website). Mycrolab is the solution for these problems. It will be an asset to hospitals in regional Australia, as access to pathology labs and health services in these areas is relatively difficult as compared to metropolitan cities. The usage and importance of Mycrolab rapid testing portable device in critical care units of hospitals and emergency wards cannot be denied. Blood test reports are vital for the Doctors to diagnose and prescribe medicine to emergency patient but usually the test reports and analysis take time to reach the doctors and sometimes was fatal for the patients. This problem is solved by Mycrolab testing device which provide accurate and rapid results with report and analysis storage facility and low cost low maintenance. Therefore the primary and secondary customers have the major growth potential for Mycrolab diagnostic system. Tertiary = medical charity and humanitarian support organizations Medical charities and humanitarian support organizations are our tertiary consumer markets. They work in areas where direct and fast access to laboratories is difficult. Often such organizations have limited budgets and cannot afford quick resulting POC devices which are very expensive. Hence fast and accurate diagnostic tool like Mycrolab is the need of the hour which can provide accurate and fast diagnostic result in second by a fraction of sample and easy handling and maintenance even in difficult working conditions. The market for POC devices is forecasted to show improvement in 2011 after declines in 2010 that were mainly the result of unfavorable comparisons with the unusually strong growth seen in 2009 due to the H1N1 pandemic. Some of this improvement is expected to be offset by reduced funding for healthcare programs in the developing world (Point of Care Diagnostics - Players, Products & Future Market Prospects, 2011). References Callipers Life Sciences (the-original-lab on a chip company-USA). (n.d.). Retrieved 9 10, 2011, from Callipers: http://www.caliperls.com/country/usa/ Consumer Market Segmentation. (n.d.). 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