Question

Give an example for market segmentation for a new company developing either products for cats or clothing for bicycle riders.

What are some good ways to identify new market or product opportunities?

Answer 1

Ans1 Example: Specialized Bicycle components announced the release of new jacket into their SWAT apparel line and it is known as Deflect. The jacket is wind and water resistant and also can be packed down into a storage compartment in October 2019. It segment market according to the geographic location. it launched where rain and wind can affect riders.

A new company which is developing clothing for bicycle riders can segment market by following ways:

By Product Type-

1. Top wear like jerseys, jackets, t-shirts, body warmers or insulators, etc.

2. Bottom wear like big shorts, tights and pants

3. Gloves

4. Accessories

By Distribution channel

1. Online (direct to customer or third party online channel)

2. Offline includes sports variety stores, franchised stores, sports retail chains and modern trade channels, etc.

By Demographics

1. Men

2. Women

3. Kids

By Region- the global cycling apparel market is segmented into five major regions including:

1. North America

2. Europe

3. Asia Pacific

4. Latin America

5. Middle East and Africa

Ans2 Ways to identify new market or product opportunities are as follows-

1. Consumer segmentation- to understand demand, company must identify consumer segments that share common characteristics.

2. Purchase situation analysis- it is examined to uncover expansion opportunities. For example Amazon launched Amazon cash in the US, enabling consumers without credit cards to shop online by adding credit to their personal Amazon accounts.

3. Direct competition analysis- SKY airline competing in the Chilean market against LAN, founded that there was an opportunity to differentiate itself with a low cost model, which until then had not existed in that region. This helped company to increase its sales.

4. Indirect competition analysis- for example Air carriers should research how many people travel by bus or train on long distances, which route is more preferred and how much they pay for their tickets and what is necessary to persuade a current passenger of bus or train to choose to travel by plane instead.

5. Analysis of complementary product- companies should monitor the performance of other companies’ products, which are complimentary to their own.

6. Analysis of other industries so that whenever they need they can expand their business.

7. Foreign market analysis- when a company operates in a mature or saturated market, exploring other countries may lead to additional opportunities

8. Environment analysis- for example, the growth of internet and smart phones market has enabled the arrival of new companies with new business models such as Airbnb and Uber.

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