Marketing Segmentation of Canon

Question:

Write an essay on the marketing segmentation of Canon.

Answer:

This report offers recommendations regarding the marketing strategies that Canon Company should pursue to enhance its competitiveness in its industry. Canon company marketing manager commissioned the report with the primary objective of identifying certain data about its target market, the positioning of the brand in the market, and its marketing mix. Therefore, the report aims to search various databases such as Proquest, Ebscohost, Justor, and Google scholar as well as the company website to find detailed information regarding the subject under the study. However, the major limitation encountered during the research is getting specific information regarding the company

Target Segment

As a strategy, market segmentation is utilized by companies to subdivide its target market into various groups based on their demands, interests, and needs (Wedel & Kamakura 2000, p.83). The primary purpose of market segmentation is to help company management to understand the attributes of their target market. The market is often segmented based on geographic differences, psychographic, demographic, and behavioral (Calvert 2008, p.215). Demographic segmentation is based on occupation, generation, and the life-cycle of an individual. Canon Inc, in the recent past, recorded a decline in the sales of its products because of the integration of the improved photo functions into the Smartphones. Additionally, the decline in sales is attributed to the dominance of Smartphones in the market. As such, the corporation has decided to target children, to be precise, those aged between 14 and 18 years to combat its declining sales and sustain its profits. According to Canon Inc management, this niche market provides it with an opportunity to increase its sales volume. Additionally, the target market is characterized by liberal birthday gifts and increased allowances, the reason Canon is interested in this target market. Accordingly, children aged between two and 14years are responsible for $ 500billion annually in regards to household purchasing (U.S. Market for Kids’ Foods and Beverages 2003, p.6).

Segments

Brand Positioning

Canon EOS 5Ds is currently the most preferred camera in the market compared to Nikon D810 and Sony Alpha A7II Mirror-less. Canon EOS 5Ds can make use of this advantage to position itself in the market. Given the fact that Canon EOS 5Ds and its competitors make use of online advertising to target their audience, Canon EOS 5Ds can differentiate itself from its competitors by making of emotional branding. Equally, an emotional branding strategy makes sure that the target segment recognizes the brand by differentiating it from those of the competitors (Kapferer 2008, p.189) notes that consumers’ decision-making process is characterized by distinct emotions. Therefore, using the emotional branding strategy will help the company to establish an emotional bond with its target consumers and consequently enhance its profitability(Clifton 2009, p.73; Sengupta (2005, p.65).

Price vs. the Level of the User

Level of Innovativeness

C and the Diffusion of Innovation 

Introductory Stage: It is the most expensive cycle because the company is launching a new product in the market. The market size of the product is small, and the sales are very low. It is characterized by minimal competition and high rates of failure. 

Growth Stage: It is defined by strong growth in profits and sales because the company is starting to benefit from the profit margins and economies of scale. Businesses are encouraged to invest in promotional activities to maximize profits.

Maturity Stage: The product is already established, and the primary objective of the manufacturers is to safeguard the market share that they have acquired. The maturity stage is very competitive, and companies are required to invest wisely in their marketing strategies..

Declining Stage: The product market starts to decline as a result of market saturation or due to customers switching to a substitute product. The company can make profits by switching to cheaper markets and investing in cheaper production methods. 

Innovators are the first 2.5% individuals to adopt a product. They are well educated, have a high income, self-confident, and are adventurous. Early adopters refer to the next 13.5% people to adopt a product. They greatly depend on group values and norms and people respect their views. The early majority comprises of the 34% to adopt next after early adopters. They only adopt a product after gains are proven. The late majority comprises of the next 34%. They are price sensitive and risk averse. Laggards comprises of 16% and fall under the low socioeconomic status, suspects new products, and marketers often ignore them.

Type of Consumer Product

There are four types of consumer products: specialty, shopping, convenience, and unsought products. Canon EOS 5Ds is a shopping product because consumers must make comparisons with other brands before purchasing it. The final purchase depends on the price.

Marketing Mix 4Ps and Recommendations

While marketing its product, Cannon Inc needs to design an effective mix of suitable promotion, place, price, and product (McGhie 2012, p.32). To achieve an effective marketing mix, it is advisable that Cannon Inc provides its target market with products that exhibit the right features. In essence, the products should be affordable as well as accessible to consumers at any place and at any time.

Product

Given the fact that Canon EOS 5Ds is a new product that has been launched in the market, it is important that Canon Inc highlights its unique attributes to its target audience. The attributes include high resolution, USB 3.0 interface, 30MP APS-H crop, 1080/30p video, and 50MP CMOS sensor. Other features include 5fps continuous shooting, and it allows users to capture extra resolution. Besides, the company must ensure that the product durability and quality are high by using materials that are of superior quality. The use of the high-quality material will enhance the sustainability of the product. Additionally, clients are in pursuit of environmentally friendly products which will be a great advantage for the company.

Place

We recommend that Canon joins a transportation partnership to ensure that its products are accessed by consumers, retailers, and distributors at an affordable price. Additionally, the company should have in place a team of employees who are responsible for handling the product’s looks and details as per the distribution policy (Weinstein 2004, p.116). The company should also strategically place its warehouses so that products are easily accessed by the end consumers. Moreover, the end customers must access the product at the company’s website and its showrooms. Furthermore, it is important for Canon to make use of E-commerce retailers such as Ebay, Amazon, Snapdeal and Flipkart to distribute its products. As a result, Canon’s target market will get excellent deals on accessories and cameras by accessing the mentioned sites.

Price

The triumph of any corporation greatly relies on its product’s quality (Dogra & Ghuman 2010, p.80). For this reason, the company should not dare compromise on the quality of its products. Hence, to attract both loyal and potential customers, it is important for the company to strike the equilibrium between production costs and the selling price. Given the intense competition in the industry, it is vital for the company to utilize the competitive pricing model because of the aggressive rivalry from Nikon, Sony, and Olympus. 

Promotion

. The strategy should be characterized by trade shows, advertising, and public relations because Canon EOS 5Ds is still new in the market (Little & Marandi 2003, p.11). The most important tool to market the product is advertising. Advertising makes sure that information about the product is accessible to potential customers via magazines, newspaper, radio, television, Facebook, YouTube, mobile applications, and websites (Dunbar & McDonald 2013, p.67; Barker & Angelopulo 2006, p.63). 

Marketing Mix Strategy Table

The Canon EOS 5Ds is at its growth stage, and it is the preferred type of camera on the market. However, it is facing aggressive competition from other models in the market including Sony Alpha A7II Mirror-less and Nikon D810.

Marketing mix strategy Growth stage

Pricing strategy Competition pressure results in declining prices

Promotion strategy Triggers selective demand and the brand is aggressively advertised

Distribution strategy Aggressive efforts to create permanent relationship with retailers and wholesalers

-Increased number of dealers

Production strategy -Frequent modifications made to the product

-Numerous models 

Conclusion

Conclusively, the recommended marketing mix effectively outlines the company’s brand positioning strategy and is internally consistent. The design of the product will be done using sustainable and high-quality materials. The Canon EOS 5Ds will be distributed by e-commerce retailers such as Amazon and E-bay. Similarly, the distribution will be done through collaborating with other companies to distribute products with the aim of reducing transportation costs. The report has recommended that the company makes use of trade shows, advertising, and public relations to market the product. Likewise, the paper recommends that the company makes use of a competitive pricing model because of the aggressive competition that defines the industry. Apart from focusing on the 4ps, it is important for the company to take into consideration corporate social responsibility, especially using re-usable and recyclable products to manufacture its products. The company marketing strategy focuses on sustainability and producing green products. However, the company should create a compliance program to ensure that all its activities adhere to the ethical standards. 

References

Barker, R & Angelopulo, G 2006, Integrated Organizational Communication, Juta Academic, Cape Town. 

Calvert, S 2008, Children as Consumers: Advertising and Marketing, Department of Psychology Georgetown, vol. 18, no. 1, pp. 205-234.

Clifton, R 2009, Brands and Branding, John Wiley & Sons, New York.

Dogra, B & Ghuman, K 2010, Rural Marketing: Concepts and Practices, New Delhi, Tata McGraw-Hill.

Dunbar, I & McDonald, M 2013, Market Segmentation: How to do it, how to profit from it, Chichester, John Wiley, & Sons, New York.

Kapferer, J. N 2008, The New Strategic Brand Management: Creating and Sustaining Brand Equity Long Term, Kogan Page Publishers, New York.

Little, E & Marandi, E 2003, Relationship Marketing Management, Thomson Learning, London.

McGhie, A 2012, Brand is a Four Letter Word: Positioning and the Real Art of Marketing, Advantage, Charleston, South Carolina. 

Sengupta, S 2005, Brand Positioning: Strategies for Competitive Advantage, McGraw-Hill, New Delhi.

U.S. Market for Kids’ Foods and Beverages 2003, Food Marketing to Children and Youth, Institute of Medicine, United States. 

Wedel, M., & Kamakura, W. A 2000, Market Segmentation: Conceptual and Methodological Foundations, Kluwer Acad. Publ., Boston, Mass.

Weinstein, A 2004, Handbook of Market Segmentation: Strategic Targeting for Business and Technology Firms, Psychology Press, New York.

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