About Market Segmentation and Brand Strategy

[alexzhz]

We all know that Market Segmentation is a very important concept in modern marketing theories, targeting and positioning are all based on market segmentation. I think Caplab should at least offer a segmentation simulation, whatever by function or by price, for example, by price segmentation, consumer market should be divided into 3 segments, for example, high-end market, low-end market and mid-range market, it is easier than function segmentation because it is fit for all the products and categories, thus, before we are going to make a product, we need to make it clear that who are our consumers, and then we can use a more specific product strategy, for example, if we are aiming for high-end table computer market, we will use high quality and high price strategy.

If Caplab can offer the market segmentation options, brand strategy I just mention in a previous post(http://www.capitalismlab.com/forum/view ... f=14&t=910)will be much more useful.

Let's see an interesting example here:

When I start a new game, I find there is only 1 city, maybe in China or India, which means purchasing power is not as high as cities in western countries, so I check the imformation of this city, it shows that low-end market takes 87.5%, while high-end market takes only 5.3%, by evaluate the market size, I decide to make a low price cell phone product with low quality.

After S-T-P( Segmentation-Targeting-Positioning), I decide name a new brand to my cell phone product, so I input a brand name "HUAWEI", I want to use this brand to enter low-end market.

After 10 years, the situation have changed, high-end market now takes about 21.5% in this city, the sales of Huawei cell phone is continuely going down, thus I decide to enter the high-end market, but the brand image of HUAWEI cannot be changed easily, so I create another brand, "iphone", I hope it will satisfy the high-end market will high quality and high brand image, and finally it did.

20 years later, I am tired of doing cell phone business, so I decide to sell the my cell phone business, and 2 brands, HUAWEI and iphone, fortunately, one of my competitors has great interesting in this deal and I successfully sell it finally, including 1 R&D center, 4 factories, 2 brands and 3 technologies.

[Grashopa]

Yep, if I were to have done cap lab, I'd have scrapped the 9 square layout which is meaningless micro and added this in. Going high end is also a risk for example if a competitor has a tech breakthrough you'd lose all sales until you managed to catch up in tech level if you even could.

[Esoteric Rogue]

Well, segmenting has more to do with marketing than production, and the marketing is almost completely hands off currently -- marketing, of course, entails far more than "set price", and "buy advertising". Enhancing the marketing first may be prudent. Upon further consideration, I would go as far as saying that segmentation is just a market scheme lol After typing the rest of this, I decide production also seems to be lacking means of differentiation too.

But right now I'm only hearing that I would have to do three times as much. But I might be going deaf, sometimes I just don't hear what I should

Most cities share the same one or two base resources, there's often no variation in quality there. It doesn't make sense to research differently for different segments, so the production tech would be the same, too. We'd just be selling the essentially the same product in slightly different manners. Which, I understand, is almost the point -- but specifically until we can make products more that "slightly" different, I don't see much of a point. We would need more aspect of production and marketing to be implemented.

If this were my game, I'd have been adding all sorts of products and their resources. I want diamonds and diapers and Diablos. But there is a strong argument that "more of the same is not better". I would need some convincing that three times as many product lines would be more fullfilling than even three times as many radically different products. Well, okay, you almost make the point of the product lifecycle... but that just says "micromanagement" to me: "Revamp the production and marketing every five years! Wohoo!" Naw, I hope a bit of sarcasm doesn't sound too patronizing there... maybe it could be fun, but that hasn't been made clear to me.

The base resources just aren't diverse enough: A main way to differentiate production would be to use substitutes (cubic zirconia in lieu of diamond), but our simple resources don't support that. Even representing extra labor (special attention to details!) I don't think is a simple addition to implement. (i.e., all products get build instantly... I don't know if the game mechanics would easily accept spending 3 years to manufacture a Lamborghini to sell for $280,000)

And for differentiating marketing, a couple big points would be packaging and distribution, and again, that's just not implemented with any diversity in the game at all, currently.

And now I'm digressing into how marketing could be expanded (and how it couldn't be), so I'll stop here.

Have fun!