XIBMS – Segmentation, Targeting & Positioning
XIBMS – Segmentation, Targeting & Positioning XIBMS – Segmentation, Targeting & Positioning Profiles Group is a leading interior decorator and designer in the country. Mr. Neerav Gupta, one of the partners in the group has invested a good amount of money in the business. The other two partners namely Mr. Pratham Gupta who is a distant cousin of Neerav and Mr. Dev Suri are mainly into managing the firm’s country wide operations. Mr. Stanley Pereira, who is more of a sleeping partner, looks after the administrative and financial aspects of the firm. Profiles Group has around 44 service centers in the country including state capitals and several developing cities. Since the firm’s inception in 1998, its progress has been unstoppable. The clients include many reputed companies, hotel chains, popular celebrities and even hospitals and commercial banks. A brief background of the Partners: Neerav Gupta had a family owned business that was into manufacturing wooden furniture but Neerav‟s interest was more into decorating. So, after completing a Master’s course in interior designing from a reputed college abroad, he decided to start his own interior design services. Meanwhile, the furniture manufacturing business was handed over to Pratham Gupta due to property and family settlement issues. But, Pratham decided to join Neerav and they both started a partnership firm. Dev Suri, a friend of Neerav who had been living abroad, sold out his real estate business and had decided to settle on the Indian soil itself. He offered help by providing additional capital and his knowledge of real estates did help the firm although in a small way. Stanley Pereira, an experienced teacher and consultant, had worked previously in leading interior designing colleges and was instrumental in making required changes in syllabus structure and interior designing courses. He has also written many books and articles on the topic. He had retired early due to family commitments but landed up in Profiles Group as a Partner through mutual contacts. The conversation: All the four partners are comfortably sitting face to face on a peach colored cushioned sofa which is situated near the window corner inside Neerav’s well-structured office. Pratham Gupta feels that since their firm has invested large funds, they must enter into more market segments especially the smaller ones. And, regarding this issue, a professional conversation takes place among the partners. The talks are as follows: Pratham: “So, what do you think about expanding our market segments to smaller more ordinary markets?” Stanley: “What are you exactly trying to say, Pratham? Will you explain it?” Pratham: “Listen guys, right now, we have 44 centers and competent people to work under us, but when we see our customer base, it looks small and limited. What I mean to say is that we also need to have those individual household customers who are looking for service expertise in this field. Most household customers don’t get the necessary information as to how to go about the interiors or how to decorate their home/offices etc.” Neerav: “I agree with your points Pratham, but don\’t you think if we have to reach the smaller segments of the market, we need a different approach to cater to their needs. We would have to advertise and communicate to these segments in a customised way. This will increase the promotion budget and our focus on the existing customers may be compromised.” Dev: “I think we need to get a balance here. Pratham‟s points are valid enough and it will make Profiles group more productive. If need be, we may have to take help of a service consultancy in order to penetrate deeper markets.” Stanley: “Okay… so, even if we allocate these segments, we need to target them in a way where we will know the immediate impact of these segments. We have to position in such manner that we get this customer base to keep moving towards us… however, the problem lies in the demand for our product in these segments!” Pratham: “What is that problem you are talking about, Stanley?” Stanley: “I will tell the problem, we know our product… but these individual customer segments will see our product as a one time purchase… Interiors and designing is done by a household customer at one point… very rarely, he will seek for a change or improvement. So, is it acceptable that we cater to their one time need and then let go?” Neerav: “I do understand that point… But, that’s always the case in our business. Interior decorations and designs are usually considered one-time expenditure by household customers…. and as a matter of fact, that has not affected the way we do our business or on our returns.” Pratham: “See, even otherwise it should not affect our firm because individual customer segments are willing to pay or spend on interiors. If they need a good, comfortable home along with a neat set of furniture then why don’t we cater to that need, even if it’s a one time demand from a particular customer? This is exactly what I meant earlier when I said, given the expertise we have, why don’t we use it to expand our customer base? Of course, we may have to develop suitable pricing strategies, promotion strategies for these market segments which is according to me, not a big thing to do.” Dev: “Let’s first consult with our marketing hero and ask their opinion or suggestions as well” Dev takes out his cell phone to dial Mr. Sunil’s number and he immediately gets the connection. Sunil is the head of the marketing section and he is very efficient in his job. He also has an acceptable humour quotient. Dev asks Sunil to come over to Neerav’s office. Sunil enters the office: Sunil: “What’s up, Bosses?” Dev gives a brief explanation to Sunil about the potential market. Sunil: “that’s a welcome sign actually… we have the necessary resources and we are available to any customer at any given point… So, I think it‟s a
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