Tag Archives: Market segmentation

Hi-Tech Fitness

Hate working out? It can be such a hassle – there is travel time, using equipment with other sweaty people, showering in messy locker rooms, and not getting enough personal training attention to make a difference. But still, fitness and health are important. What can be done differently to make workouts more enjoyable and fulfilling? Where’s the technology?

Enter Tonal: a San Francisco-based start-up company that aims to revolutionize how people workout by using high-tech to reinvent the workout system. The innovative product and service combines unique hardware, software, and an interactive LED screen to create a workout experience that doesn’t rely on old-school barbells and plates. Tonal can even sense when a workout is too easy, and add more weights for the next set to set the right level of difficulty.

Tonal is high-tech and effective, but not cheap. The machine itself is $2,995, plus custom smart accessories at $495, and a monthly subscription of $49 per month for 12-months minimum. The Tonal system mounts to a wall (similar to flat-screen TV). For the optimal experience, the system only needs access to a 7-foot by 7-foot space. Tonal measures reps, sets, range of motion, time under tension, power, and volume. The monthly subscription provides expert coaching via video with step-by-step instructions.

No pain, no gain.

Group Activities and Discussion Questions:

  1. Poll students:Where do they work out? How much do they spend on gym memberships? On equipment?
  2. View Tonal’s Web site: https://www.tonal.com/
  3. Discuss the importance of clearly defining a target market.
  4. For Tonal, what is the target market?
  5. Divide students into teams and have each team develop a profile of a target market for Tonal. Include demographics, psychographics, behaviors, values, attitudes, etc.
  6. Based on the target market profile, what makes this product unique for these customers?
  7. Debrief the exercise.

Source:  New York Times

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SiriusXM Buys Pandora

SiriusXM satellite radio provider is buying music streaming service Pandora for a $3.5 billion stock deal. The deal will create the world’s largest audio entertainment company. Why should SiriusXM buy Pandora? Because SiriusXM wants to gain people who listen to music but don’t want to pay for the premium SiriusXM service.

SiriusXM offers streaming without advertisements for $10.99 to $20.99 per month per car with up to 140+ channels, or streaming on any device for the same amount of $10.99 to $20.99 per month, or combine both options for all-access streaming. SiriusXM has 36 million subscribers in North America.

On the other hand, Pandora, which has 70 million active listeners (5.6 million who are paying members) can be used at no-cost as long as listeners don’t mind listening to advertisements. Or, listeners can buy monthly subscriptions at $4.99 or $9.99 per month for services that eliminate advertisements and offer personalized stations and create playlists, plus other options.

SiriusXM isn’t new to Pandora; it provided $480 million of funding to Pandora last year. Pandora faces stiff competition from other music services such as Apple Music, Amazon, Tidal, and Spotify.

The war to gain new listeners is heating up!

Group Activities and Discussion Questions:

  1. Poll students:How much music do they listen to each day? Where is their music coming from? How much do they pay each month?
  2. View SiriusXM: https://www.siriusxm.com/
  3. View Pandora: https://www.pandora.com/
  4. Discuss the four primary marketing strategies: market penetration, market development, product development, and diversification.
  5. Which strategy is SiriusXM using? Why?
  6. Divide students into teams. Have each team research the different prices and packages offered by each music streaming company.
  7. Compare price structures. Which offers listeners the better deal?

Source:  Wall Street Journal, New York Times, other sources

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What Women Want (from Cars)

It’s an age-old question: What do women want? While the answers to this question could fill a set of encyclopedias, let’s limit the question somewhat and just discuss what ‘cars’ women want. Last year, Edmunds.com researched this topic and came up with a list of cars that almost no women drive. Can you guess which car was at the top of the list? It’s a sports car, very pricey, very fast, and starts with “L” ….

Yep, you guessed it. Number one on the list was Lamborghini with male owners accounting for 93% of the buyers (tied with McLaren also at 93%), Ferrari at 92%, Maserati at 84%, and Tesla at 83%. Indeed, 90% of ALL sports car buyers are men. Although men seem to prefer loud, fast, impractical cars, this is a problem for automotive manufacturers as women play a significant role in roughly 85% of all car purchases.

So, what cars do women buy? Overwhelmingly, women prefer cars that are affordable with good fuel economy – and these tend to be mostly from Korean automakers such as Kia and Hyundai, along with Japanese automakers Nissan and Mitsubishi. These findings are based on automotive research company iSeeCars.com which analyzed 54 million car sales and more than 500,000 consumer inquires over a nearly three-year period.

The average price of the top 10 cars preferred by women is $14,870 compared to the average price of cars on the top 10 list preferred by men at $49,224. Let’s compare.

The top five cars women want:

Rank Car Ave. Price Inquiries by Women
1 Hyundai Tucson $16,722 66.2%
2 Nissan Versa $12,144 64.0%
3 VW Beetle $18,179 63.9%
4 Kia Forte $13,730 62.8%
5 Ford Fiesta $13,237 62.8%

 

The top five cars men want:

Rank Car Ave. Price Inquiries by Mean
1 Nissan GT-R *40,450 99.1%
2 BMW Me $35,763 92.2%
3 Porsche Cayman $43,303 91.9%
4 Porsche 911 $65,081 91.5%
5 Lexus GS 350 %33,004 91.3%

 

There are no overlaps on the top ten list. Lest we think this is an inconsequential difference, consider the size of the automotive industry. There isn’t any car company that wouldn’t like to increase the size, and diversity, of its customer base.

Think about it – what do women want?

Group Activities and Discussion Questions:

  1. Ask students about their car preferences.
  2. Divide the class by gender. Ask women what cars they think the men will prefer, and what cars they prefer. Ask men what cars they think the women will prefer, and what cars they prefer. Why these choices.
  3. Ask the women to list the factors they look for when buying a car. Ask the men the same question. Compare the findings on the board.
  4. Still in gender-based teams, have the teams examine the marketing mix of the top companies, and adjust the mix to attract the opposite gender.
  5. Debrief the exercise.

Source:  Ad Week, Edmunds.com, Market Watch, iSeeCars.com

 

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