QUESTION
Microsoft Australia is running a competition to help market their Kinect product. They are calling for students to help. Individually, you need to write a report that answers the following question:
How would you market the kinect for use outside the gaming industry?
Microsoft has provided some back ground details on their product and their markets. Please refer to the protégé case study found in the resources folder in your Interact site.
Microsoft is looking at both the end consumer as well as the business market. Below are the two options (please choose only one option and if your presentation was on consumer markets, you need to focus on the industry application alternatively, if your presentation was on a business market you need to focus on the consumer applications).
Option 1
How would you market a kinect application (that is currently being developed or that already exists) to a specific industry? Your task is to create an innovative marketing proposal that showcases the uses and benefits of one of the kinect applications to that industry
Option 2
How would you market a kinect application (that is currently being developed or that already exists) to consumers? Your task is to create an innovative marketing proposal that showcases the uses and benefits of one of the kinect applications to that industry
As part of your report you need to research theory and the market you will be targeting. Then you need to develop a customer profile. Step one and two are outlined below to provide some directions for the content of your report. The suggested structure listed below provides a guide to the headings. You need to include an introduction and conclusion as well as a reference list.
Step one: Research
Using a minimum of five academic sources (not just the textbook and study notes) develop a theoretical definition and description of the concepts of:
Segmentation
Target Markets
Positioning
Please use these terms as your sub-headings (approx. 800 words for this section)
Step two: Identifying segments, target markets and the creation of the positioning statement
In this step you need to create and describe the profile of the segments (the primary and secondary segments). For example, the segments may be end consumers or business customers (use segmentation variables to help describe your chosen groups). Then you need to identify and justify the specific target markets. That is, you need to show that the target markets are sustainable and will be profitable to the Microsoft (consider providing some statistics about your segments from sources such as the Australia Bureau of Statistics). Finally, develop a creative and engaging positioning statement for segment. For example, Qantas uses “I still call Australia home” or Commonwealth Bank “Determined to be different” (approx. 1000 words for this section). Chapter 6 and figures 6.6, 6.9 and 6.10 will help you in this process.
Suggested Structure:
Introduction: Include details of case study and your chosen context option one or option two (approx 350 words)
Theoretical Concepts: The definitions and descriptions of theory using the sub-headings of
segmentation,
target markets and
positioning (approx.800 words)
Description of your segments, target markets and the positioning : Detailed outline of each segment, target market and positioning statement (approx 1000 words)
Conclusions: Summarise the main points in your report (approx. 350 words)
Reference list: Be sure to list all references that you used in your report (not part of the word count)
Rationale
This assessment will help students:
to demonstrate an understanding of the environment that marketing operates within and how it is studied
to demonstrate an understanding of how value can be created through products, services and brands
to demonstrate an understanding of different marketing management philosophies and the role of marketing within organisations
to demonstrate an awareness of the complexity and diversity of markets and marketing’s response to it
to demonstrate an understanding of skills in researching and communicating ideas about industries, markets, and/or marketing strategies.
to develop report writing skills
SOLUTION
Definition and Description of the Concepts of:-
(i) Segmentation :
In case of all most all products the market normally comprises of various segments. A market is basically the aggregate of consumers and it is the consumers who make a market as end users. These consumers have different buying behaviors and characteristics. Many factors are responsible for the varying mindset of the consumers in the market. Therefore it is natural that different segments would appear within a single market. Marketers have to divide the market into many sub markets or segments and this process is called market segmentation. It is a necessary process to capture the heterogeneous market for any product (Goller et al, 2002). In this way we can say that segmentation of markets into various homogenous groups of consumers is known as the process of market segmentation. These groups of consumers react differently to factors like communication, pricing, promotion and other variables related with marketing mix. These markets segments need to be formed in such a way that very little difference is present between the customers in each segment so that each segment can be targeted with individual marketing mix. The primary importance of segmentation of markets lies in the fact that the customers of a particular product or service do not belong to a homogenous group. The needs, behavior, preference and resource of individual buyers are different. As it is not possible to cater to the requirements of all the customers individually the marketers have to group their customers into market segments depending on the variables that these customers have in common. These common variables allow the marketers to develop a standardized marketing mix for the customers in a particular segment. Segmentation also allows the marketers to see the differences present between these customer groups and then the side the most appropriate strategies for each group individually. This is the reason why market segmentation has been termed as a strategy to divide the markets and then conquer those (Dibb et al, 2001).
Segmentation allows the development of effective and targeted marketing plans. By analyzing different segments of market, decisions can be made regarding the intensity of marketing activities to be conducted in particular segments of the market. The segment oriented approach provides several advantages to businesses as well as the customers. It facilitates the decisions by the marketers as to which segment of market should be their target. This approach generally results in higher profits as it is difficult to hike prices for the whole market but certain premium segments can be developed in which the customers are ready to pay higher price. These segments are distinguished from the whole market through feature like exclusive sales points, product variation and additional services. Segmentation also helps the markets in crystallizing the requirements of their target customers. It helps in generating a precise prediction regarding the possible response from each segment of their market.
Careful segmentation results in homogenous responses from each segment. This helps a marketer to develop offers or programs that are most suitable for each group. Segmentation makes the over all marketing offer much more economical and efficient. While following this approach the marketing effort becomes more concentrated on carefully chosen and well defined segments. As the resources of firms are limited, they can not afford to target the whole market without any segmentation what so over. The communication becomes much more targeted and sustainable consumer relations are developed by following this approach.
(ii) Target markets :
Target marketing allows the marketers to find their best prospects. Markets segmentation is required to define a target market. Target marketing means the particular segment of the market to which specific products or services are to be marketed. It is generally defined by factors like geography, age, gender, socio-economic groups. The process of target marketing requires the breaking up of the market into different segments and then concentrating the marketing efforts on the key segments only (Christensen, Cook and Hall, 2005). Target market should not be confused with segments of the market. Segmentation is in realty a prelude to the selection of target market. Segmentation allows an organization to divide the market into different segments but all these segments need not be the target market of the organization. Target market only signifies those segments which the company wishes to take up as its market. While choosing their target market, company’s generally carry out an evaluation of different segments of the market and then selects the segments which it considers as the most appropriate ones for its products or services. Though the process of choosing target marketing is related with market segmentation, it is not synonymous with this process. While segmentation is the tool or the means, choosing target marketing is the real purpose (Hunt and Arnett, 2004).
There are two important factors which need to be considered while selecting a target market. These are attractiveness of the target market and the alignment between the target market and the resources capabilities and objective of the company. Factors like the size of the segment, competition in the segment and growth rate of the segment need to be consider while evaluating the attractiveness of the target market. This information can be obtained by using market research and analysis. For example to determine the sales potential of a particular segment tools like test marketing, sales force estimates, statistical demand analysis and buyer intentions could be used. There are several target market strategies that can be adopted by the companies. These strategies have been categorized in following categories like single segment strategy, product specialization, market specialization, full market coverage or selective specialization. It is also important for the marketers to decide the market size to see if the target market is large enough to maintain the business. There is a minimum size which would make it viable for a particular company (McDonald and Dunbar, 2004).
Selecting the right target market is very important for a company. Wrong targeting can lead to incorrect product offers wrong pricing, over emphasis on brand name and in appropriate marketing appeals. It is not possible for any company to offer a single product or service which can satisfy all the segments of the market. Therefore it is important the companies select the target only those segments which are appropriate for their product or services (Baines, 2005).
(iii) Positioning:
There are several definitions of Positioning and probably the most common definition described positioning of the product as it is viewed by the potential buyer and it is expressed in relation to the position of the competitors. Positioning acts as a platform for the brand. It helps the brand in getting through the mind of its target customers. Therefore the position of the brand needs to be maintained and managed carefully. There are generally three types of concepts related with positioning. These are functional positions, symbolic positions and experimental positions (Freytag and Clarke, 2001).
Positions are generally described with the help of variables that are quiet important for the customers. Some of the common examples of these variables are quality, value for money, reliability, supporting services and price (Crittenden et al, 2002). Usually the consumers positions of a product or service in the relation to a brand which is particularly visible to them. It can be either the market leader or an offer which has high media exposures. In debt market research needs to be conducted to determine the relevant parameters for understanding the way consumers rate different products. There is a relation between product positioning and positioning of brand. Though these terms are used interchangeably but there is a technical difference between the two. While product positioning refers to the specific category or class of a product in which the product is going to compete, brand positioning relates with the positioning of the brand as against the competing brands in the same product category. A successful positioning should involved clarity, consistency, credibility and competitiveness (Page, 2003).
Identifying segments, target markets and the creation of the positioning statement
The Kinect technology developed by Microsoft has seen the emergence of several speculative applications since its introduction. The different segments of market include prominent technology company and well known research groups.
Apart from its use in gaming industry, the technology is also used for developing security applications which can detect unauthorized entry help in lighting control and trigger cameras when they see an object moving. The introduction of Kinect technology have help the motion sensing technology to move towards creating interactive and immersive user interface which can be apply in various situations. One significant application of it is the integration of motion sensing technology with the technology related with video conferencing like Skype software application. With help of Kinect, Skype can provide a video conferencing experience which is must more immersive.
Kinect technology can also be used in the field of consumer multimedia. Applications are being developed which help in controlling the gesture based play back functions of multimedia.
Kinect products can also be targeted at military projects. At present Kinect is being used in reconnaissance mission by combining the real time visual odometry system with the depth sensor of Kinect faster and more accurate measures of trajectory of vehicle can be obtained. This project has been sponsored by the Army Research office and Office of Naval Research. The other project of the military which is using Kinect is the request for information being developed by DARPA and is for biologically driven navigation. The aim of this project is to develop a military training experience which is more immersive. They are trying to explore the novel approaches with regard to sensing and interpreting biological signals that correlate with the intent of human user and then to translate these signals into real movement commands or way points in a physical or virtual environment. It is widely speculated that Kinect technology can play a vital role in this project.
The other area where Kinect could be marketed by Microsoft is the field of medicine and surgery. The ability provided by Motion Sensing Technology in the field of touch free interaction has several implications in medicine and patients as well as their caretakers can get the benefits of reduced risk of contamination. Gesture control can aid or even perform actual surgery with the help of robots. It can also be used to view and manipulate crucial CT and MRI imagery. In these cases the surgeons are provided with immediate and clear benefits as the touch free controls allow them to avoid exposure to computer surfaces which are non sterile. At present the surgeons are required to move in and out to access their computers safely but this process can add upto two hours to an operations. This could lead to precarious delay in operation during which complications can also develop in the patients. It also cause fatigue in the operating staff and prolongs the period of patient recovery. The problem could be alleviated with the help of and assistant who can aid the surgeons by accessing imagery for the surgeons but this involves the use of additional human resources and increases co-ordination costs as the assistant would have to navigate through thousands of images in certain cases. A hospital in Toronto which pioneered in this field by using Kinect technology as reported that the effectiveness increased dramatically after using Kinect for accessing imagery during surgical procedures. The hospital reported that huge amount of information was available on a particular computer but it had to be kept separate. After using Kinect the information was available right in front of the surgeons during operations.
Though the implication of Kinect technology in the field of robotic surgery are not very certain, as the effectiveness of robotic surgery is still being questioned by many experts and several doctors have lamented its short falls. If we put aside the debate regarding the use of robotic surgery for a while, we can say that gesture control can improve the performance of the surgeons in many ways. The powerful ability of the Kinect to note spatial information from a seen, some experts feel that a most commonly offer criticism regarding robotic surgery can be addressed effectively. This criticism related with the lack of haptic or tactile (touch) feed back for the surgeons operating the robots. With the help of the indepth cameras of Kinect the operators will be able to ‘feel’ when a surface is contacted by the robot. This would be helpful particularly in areas where they wish to avoid any kind of damage. The control stick movement is restricted by the system in response to the information provided by the indepth camera thereby providing a feed back to the robot operator. The technology is set to become popular in this segment of the market as it is low cost and really accessible. With the introduction of Kinect the cost of owning such a system has dropped significantly. What needs to be done now to use Kinect in surgical procedures is to scale down the sensors to a size which is appropriate for surgical used and enhance the video resolution to make it fit for use during surgical procedures.
Another segment of target market for Kinect technology of Microsoft could be the consumer and enterprise multimedia market. Video conferencing has already become popular in business and private market and due to the fact that words can be spoken faster than being typed, video conferencing is set to become more popular in the coming days. Microsoft has made full use of market segment. Kinect technology has also several implications in the security sector.
Conclusion:
In this way we see that the Kinect technology of Microsoft has several implications. The particular markets discovered by us in our present report include the use of this technology in fields of military research, medicine and surgery, consumer multimedia and security devices. At least two projects sponsored by the military are under way which can use Kinect to increase their effectiveness. Microsoft can market its Kinect products to military. Other segment of the market is the medicine and surgery where Kinect can be used to enhance the CT and MRI imagery. Similarly this technology has implications in surgery also. It can provide access to the surgeons to imagery during surgical procedures and also help in conducting robotic surgery. Other market segment is in security devices where this technology can be used to develop motions sensing cameras and making them more efficient. Microsoft needs to concentrate on these segments of the market and target its marketing efforts on these segments. In case of consumer multimedia, the technology has been already used widely. The above mentioned segments could provide sustainable target markets which could prove profitable to Microsoft.
References:
Baines, P., Worcester, R., Jarrett, D. 2005, and Mortimore, R., ‘Product attribute-based voter segmentation and resource-advantage theory’, Journal of Marketing Management.
Christensen, C., Cook, S., and Hall, T. 2005, ‘Marketing malpractice: the cause and the cure’, Harvard Business Review.
Crittenden, V. L., Crittenden, W. F., and Muzyka, D. F. 2002, ‘Segmenting the business-to-business marketplace by product attributes and the decision processes, Journal of Strategic Marketing.
Dibb, S., Simpkin, L., Pride, W. M., and Ferrell, D. C. 2001, Marketing Concepts and Strategies, Cambndye, Mass.: Houghton Mifflin
Freytag, P. V., and Clarke, A. H. 2001, ‘Business to business segmentation’, Industrial Marketing Management.
Goller, S., Hogg, A., and Kalafatis, S. P. 2002, ‘A new research agenda for business segmentation’, European Journal of Marketing
Hunt, S. D., and Arnett, D. B. (2004), ‘Market segmentation strategy, competitive advantage and public policy: grounding segmentation strategy in resource-advantage theory’, Australasian Marketing Journal.
McDonald, M., and Dunbar, I. 2004, Market Segmentation: How to Do it, How to Profit from it, Oxford: Elsevier.
Page, K. L. 2003, “What do we really mean by usage: measuring current web session usage”, paper presented at the Academy of Marketing, Birmingham; UK .
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