Market segmentation is the main mechanism that companies use to target their consumers in an effective manner in order to generate more sales. Firms have been using segmentation by demographics, product categories, etc. for many years, seeing it as the best way to profile their consumers. However, Clayton Christensen, a Harvard Business School professor, argues that this method is quite ineffective.

Christensen argues that there is a difference between something that causes a decision and correlates with a decision. He provided an example, stating that “the fact that you’re 18 to 35 years old with a college degree does not cause you to buy a product, […] It may be correlated with the decision, but it doesn’t cause it.” He later argued that firms need to “crawl into the skin of your (their) consumer” in order to effectively market their products, and continually ask themselves why a consumer made a certain decision over another.

Why would consumers choose a certain product or brand over another at a certain point in time of the day? In relation to my blog post responding to Sharon’s blog post on music streaming platforms, consumers may choose a certain platform over another depending on their mood, whether they want to listen to a playlist while studying or search for music to purchase. The moods and the decisions that consumers make are what companies need to analyze and consider in their marketing.

It was interesting to see Christensen’s point of view on this situation. I was also quite intrigued by the article and the situation it provided with Christensen’s fellow researcher’s and their milkshake situation, along with the fact that 95% of new consumer products fail.

Sources:

Like Sharon, I too like to stream music daily. Whether its through Youtube, 8tracks, Soundcloud, Spotify, or any other music streaming platform, finding and listening to songs is a part of my everyday activity. Often when I listen to music, I think of how different it was many years ago, and not at very advanced stages.

Sharon touched on how Spotify has been seen as the leader in the music steaming service for several years now. This is undoubtedly true, as I find many of my friends using Spotify. What it has, many other music services lack, old and new. With its sleek aesthetic design, ease of use and ability to share songs and playlists, Spotify creates a service that is unmatched by any of its competitors.

It was interesting to see how Sharon’s stance on how CD’s and Albums (such as those that iTunes provides) were being challenged by the “freemium business model” of Spotify and various other music streaming platforms. Despite the inter-competition that these freemium platforms face between themselves, their main concern is still fighting off the CD and Album market.

I personally fear a time where CD’s will no longer be in existence and record players will be a thing of distant memory. Where all we will have as consumers will be these streaming platforms, without any physical aspect to the music that brings us joy.

Sources:

Phone showing list of music streamers. Digital image. Pocket-lint. N.p., n.d. Web. 6 Nov. 2014. <http://cdn.pocket-lint.com/r/s/628x/assets/images/phpoognv4.jpg>.

Spotify New Design 2014 Overview. Digital image. Amazonaws.com. Amazon, n.d. Web. 6 Nov. 2014. <http://s3.amazonaws.com/digitaltrends-uploads-prod/2014/04/spotify-new-design-2014-overview.jpg>.

Grace Liu argues that Apple should reposition their sales or decrease the price of their iPad’s if they want to maintain their dominance in the technological market. I believe that Grace makes a very valid point in her analysis of Apple’s current methods.

Apple has for a very long time continued to branch off of a creation made many years ago. This isn’t a terrible strategy, Samsung is doing it with their Galaxy models and Google has been doing it with their Nexus phones.The thing with Apple though is that they have various generations and various forms of these products. A basic iPad with 3-4 generations has led to an iPad Air and an iPad Mini. This isn’t to say that their strategies are wrong, and neither is it to claim that its unsuccessful, its very successful. However there comes a point where products eventually reach their dog days, and new innovations must arise.

Apple can continue to use brand extension and product-line strategies in order to expand the lifespan of their products, like they did with the iPhone. However, consumers will eventually continue to realize that they’re essentially paying the same price for a good that is practically the same as its predecessor. To some Apple fans, the extra S or C makes the worlds difference.

I have many Apple products myself, the iPhone, the Nano and the MacBook. But eventually, when the new Nano or the new iPhone came out, I disregarded it. Because as a consumer, I’m not willing to pay a premium for a product that isn’t miles away more advanced than what came before it.

Sources:

Launching new iPads is not the best way to promote sales

Apples Devices. Digital image. Cdn.phys.org. N.p., n.d. Web. 6 Nov. 2014. <http://cdn.phys.org/newman/gfx/news/hires/2014/applesdevice.jpg>.

China Denies Government Ban on Apple Products. Digital image.Pakdigg.com. N.p., n.d. Web. 6 Nov. 2014. <http://pakdigg.com/wp-content/uploads/2014/08/CHINA-DENIES-GOVERNMANT-BAN-ON-APPLE-PRODUCTS.jpg>.

Bootstrap. Digital image. Colorlabs. N.p., n.d. Web. 5 Nov. 2014. <http://colorlabs.lemuel.netdna-cdn.com/wp-content/uploads/2014/01/bootstrap-guest-post-helga.png>.

Bootstrap your startup. No, I don’t mean get Bootstrap, a technological framework for developing your first projects on the web. Neither do I mean Boostrap Bill from Pirates of the Caribbean. Bootsrapping is a business concept which involves starting your own company up, from scratch, using your own funds or those you obtain from your startup. Entrepreneurs would be most interested by this concept of bootstrapping. However daunting it may seem, Forbes actually encourages the idea of bootstrap.

Forbes described the three main reasons for bootstrapping to be focus, purpose and iteration.

With focus, Forbes argued that CEO’s would be able to place most of their attention on creating value for their customers rather than “pitch, pitching, and improving their pitch.” I believe that this is a very relative argument, as many CEO’s of startup’s would be aiming to raise funds instead of actually placing their attention into how the company could better serve its consumers. In some cases, the funds are necessary in order to do so. Purpose relates to the fact that there will come a time when there are more and more shareholders within a company, and the true company culture may begin to become diluted as ownership does. Finally, iteration does not have as much of an effect on startups that bootstrap, as they are “more effective at making constant course corrections” primarily due to the fact that they are not politically and financially caught up with various shareholders.

I personally believe that all entrepreneurs should strive to boostrap, and feel that Forbes hits it on the nail with their evaluation of Boostrapping.

Sources:

Weber, Derek. “Why You Should Bootstrap Your Company.” Forbes. Forbes Magazine, 27 Jan. 2014. Web. 06 Nov. 2014.

Twitter received a huge amount of attention around their time towards going public. Leonard, Katherine. Twitter IPO. Digital image. Lonelybrand.com. N.p., 13 Sept. 2013. Web. 2 Nov. 2014. <http://lonelybrand.com/blog/wp-content/uploads/2013/09/Twitter-IPO.jpg>.

I remember sitting on my bed a couple of months ago, eagerly flipping through the channels on the TV. I came by one which I almost flashed past, pressing on the channel key with great pressure. CNN was reporting on Twitter’s recent IPO. There were two things that surprised and confused me about this news story. I had no clue what an IPO was, and after I found out, I was puzzled as to why a firm as huge as Twitter had not gone public already. There is no doubt that private companies are also highly influential and large. It took my by great surprise.

There were mixed opinions about Twitters move towards going public. Many think Twitter made the right choice and is doing well, while others believe that Twitters has failed with its IPO.

Nevertheless, it was very interesting to learn about how companies came public, and learn about the various advantages and disadvantages of doing so. More so, it was interesting to see how there were so many companies I knew and used that did. Square, a firm that I actually wrote one of my blogposts on, is also thinking about an IPO and going public.

Sources: