Market Segmentation Strategies

Market segmentation is one of the specific tools that are used to analyze the taste and preference of consumers in a more effective manner. It is majorly used to analyze the new market before entering into such a market that helps the company to enter in such a market in a more effective and efficient manner (Ernst & Dolnicar, 2018). Marketing the target market is one of the processes of identifying a group of consumers about which, the company believes that they are meeting their needs with their product as well as the consumers are likely to buy them (Dibb & Simkin, 2016). One of the leading companies Mothercare, UK based company is dealing with baby products has planning to expand their business in Dubai to widen their range of consumers in the international market (Quoquab, Ahmad, Hazarina & Ahmad, 2016).

In the following part, there will be a detailed analysis of the potential market that supports the company to cope up with the challenges of shrinkage of the target market.

Mothercare is required to identify the new markets by categorized the potential markers into small market segments with the help of the tools such as psychographics, behavioristic, demographic as well as geographic instruments. The company will target its consumers through a geographic location, their age, income with the take and preference that would make the company target them in a more effective and efficient manner (Dietrich, Rundle-Thiele & Kubacki, 2017). With the help of geographical segmentation, the company would able to find their consumers in regional, local, state or any national marketplace segment. The characteristics of demographics are used to analyze which segment they need to target such as gender, age, income level, marital status. The characteristics of Behavioral and Psychographic will be used to analyze the taste and preference of consumers towards the product in the market to understand their priorities to satisfy them in a more effective and efficient manner (Venter, Wright & Dibb, 2015).

In the recent scenario, the segment of the target market of the company in which they are working is decreased that affect the overall performance of the company a greater level. The company is required to expand their business in a new market where the demand for such products is high. It will provide a new market segment for the company to target their consumers. Therefore, Dubai is the hub of shopping malls. It has an attractive market that can enhance the profit margin of the company at a greater level. The company can expand its business in such a country to cope up with such challenges in a more effective manner. The potential market segments are divided into four groups that are explained in the below points as they are:

Potential Market Segments for Mothercare UK in Dubai

Geographic Segment:

Dubai is the hub of malls; they have lavish malls where the maximum crowd of the country visits. The top malls are Ibn Battuta Mall, Dubai Outlet Mall, BurJuman, Malls of Emirates, and Dubai Mall where maximum crowed visits. Therefore it will give an opportunity for the company to launch its stores in such tops mall to cover a wide range of consumers in Dubai in a more effective manner (Ewers & Dicce, 2016).

Demographic Segment:

• Age and Lifecycle stage: young kids, as well as babies, are the primary user’s groups of the Mothercare baby products. The population structure of the country and their growth rate is high. Most of the people who visited the shopping mall are majorly less than 40 years old
• Gender: the other essential demographic variable for Mothercare is gender.  Mother will be the major target for purchasing and using their products for their babies. The young girls will also be targeted for the product usage
• Demographic environment: the rate of literacy as well as income level are rising that would influence the purchase of products related to baby care.

Behavioral:

The attitude of consumers in such a country towards shopping is very casual. They majorly buy products without compromising with quality. It is the youngest segment since 72% of the shoppers in such segment are less than 40 years in which 91% of the shoppers in such segment are Arabs. The attitude that the mother has towards caregiving, as well as parenting, is essential in segmenting the baby care market. In the recent, most of the women are working as well as look after the house that affects their lifestyle with the attitude towards the brands or any products that they use (Pike & Kotsi, 2018).

Psychographic Segmentation

The variable affecting the target audience’s psychographics as well as behavior are lifestyle, attitude, and personality of the individuals. The young generation and working mothers are the main themes for communicating with the target market. The people in such country are keen towards shopping including the young generation that would create an easy platform for the company to target such consumers in more effective and in efficient manner (Dutt & Ninov, 2016).

The major competitors for Mothercare in Dubai are Johnson & Johnson, Kiddicare baby specialist, Mamas & Papas, Argos, and Baby souk. They have already covered maximum market share in Dubai that will great biggest challenge for the company at a greater level. The product of Johnson & Johnson has 1.5 times the volume compared to the locally produced products. The price of the competitors is quite low as a comparison to the Mothercare than made them more competitive in the market in a more effective manner. According to the same sales representative for mothers buying, Johnson & Johnson baby shampoo is one of the habitual behaviors for them. At the time when they usually purchase Johnson & Johnson offers unless convinced by their children to buy other products (Zaidan, 2016).

Mothercare is a retail specialist in the newborn as well as parenting products with more than 50 years of experience. It is the pioneer of one-stop shop for parents that were founded by Selim Zilkha. The company has earned a good reputation or goodwill in the UK. It is considered as one of the most trusted retail specialists that are providing their products with high quality and at affordable prices. Therefore, the company can expand its business in another market to minimize their risk and able to target a wider range of consumers in a more effective and efficient manner (Paras et al., 2018).

Major Competitors

To analyze the effectiveness of the segments, there is required to evaluate such a segment that can be applied in the business in a more effective manner. It can be evaluated from different tools such as measurable, substantial, accessible, differentiable as well as actionable. Such points are explained in the below points:

Measurable: the company can able to measure the market segment usually in term of sales value or the volume. While analyzing the reasonable degree of accuracy, the company can select the strategies that can be applied in the business. The company can measure the demand of consumers by analyzing their expected and actual sales in such country.

Substantial: The Company will try to avoid unnecessary marketing budget on the market segment or has negligible spending power. A viable market is usually a homogenous group with a clearly defined characteristic such as age group, socio-economic background as well as brand perception.

Accessible: the market should be provided by the company in that manner that can be accessed and easily reach by the consumers. It should be available in the approachable market.

Differentiable: All the consumers in a similar segment should have similar characteristics as well as preferences however they are externally heterogeneous. Therefore, the company will cover the young generation and mothers for their products.

Actionable: the market segment that is chosen must be actionable. The characteristics of the section must act as a source of data for a relevant sales approach or marketing position as well as also provide the quantifiable outcomes as they are measured in the initial market research (Jha, Aggarwal, Gupta & Sarker, 2016).

Conclusion and Recommendation

From the above analysis, it can be concluded that market segmentation plays a vital role for the company to enter the new market. The company can analyze the market in detail with the help of segmentation of the market. One of the leading companies Mothercare in the UK is facing challenges in earning the profit due to the reason of shrinkage in the market. Therefore, it is required for the company to expand its business in another country for which they can select Dubai. It is one of the attractive countries that has a hub of shopping malls. The people are keen towards the shopping that can provide a new market to the company to target their consumers. Therefore, it is required for the company to analyze the market in an effective manner to target their consumers in a more effective and efficient manner. Moreover, it is also recommended to the company to prepare a healthy marketing plan and strategy by analyzing the competition in the market to compete their competitors.