An Analysis of Benefit Segmentation of Digital

Camera Industry: Product Design and Branding

Strategies

NAME PRATIK MOHANTY

ROLL NO - 1403133
EL-02
ELECTRICAL ENGINEERING
KIIT UNIVERSITY
SEGMENTATION METHODS
Several varieties of market segmentation have been popular in the recent past. At least three
kinds have achieved some degree of prominence. Historically, perhaps the first type to exist was
geographic segmentation. Small manufacturers who wished to limit their investments, or whose
distribution channels were not large enough to cover the entire country, segmented the U. S.
market, in effect, by selling their products only in certain areas. However, as more and more
brands became national, the second major system of segmentationdemographic segmentation
became popular. Under this philosophy targets were defined as younger people, men, or
families with children. Unfortunately, a number of recent studies have shown that demographic
variables such as age, sex, income, occupation and race are, in general, poor
predictors of behavior and, consequently, less than optimum bases for segmentation strategies.
More recently, a third type of segmentation has come into increasing favorvolume
segmentation.
The so-called "heavy half" theory, popularized by Dik Twedt of the Oscar Mayer Company,-'
points out that in most product categories one-half of the consumers account for around 80'^ of
the consumption.

BENEFIT SEGMENTATION:
An approach to market segmentation whereby it is possible to identify market segments by
causal factors rather than descriptive factors, might be called "benefit segmentation." The belief
underlying this segmentation strategy is that the benefits which people are seeking in consuming
a given product are the basic reasons for the existence of true market segments. Experience with
this approach has shown that benefits sought by consumers determine their behavior much more
accurately than do demographic characteristics or volume of consumption. This does not mean
that the kinds of data gathered in more traditional types of segmentation are not useful. Once
people have been classified into segments in accordance with the benefits they are seeking, each
segment is contrasted with all of the other segments in terms of its demography, its volume of
consumption, its brand perceptions, its media habits, its personality and life-style, and so forth.
In this way, a reasonably deep understanding of the people who make up each segment can be
obtained. And by capitalizing on this understanding, it is possible to reach them, to talk to them
in their own terms, and to present a product in the most favorable light possible.
The benefit segmentation approach is based upon being able to measure consumer value systems
in detail, together with what the consumer thinks about various brands in the product category of
interest. While this concept seems simple enough, operationally, it is very complex. There is no
simple straightforward way of handling the volumes of data that have to be generated.
Computers and sophisticated multivariate attitude measurement techniques are a necessity.

While the material presented here is purely illustrative to protect the competitive edge of
companies who have invested in studies of this kind, it is based on actual segmentation studies.
Consequently, it is quite typical of the kinds of things which are normally learnt in the course of
a benefit segmentation study.

GENERALIZATIONS FROM BENEFIT SEGMENTATION STUDIES

A number of generalizations are possible on the basis of the major benefit segmentation studies
which have been conducted thus far. For example, the following general rules of thumb have
become apparent:
It is easier to take advantage of market segments that already exist than to attempt to create new
ones. Some time ago the strategy of product differentiation was heavily emphasized in marketing
textbooks. Under this philosophy it was believed that a manufacturer was more or less able to
create new market segments at will by making his product somewhat different from those of his
competitors. Now it is generally recognized that fewer costly errors will be made if money is
first invested in consumer research aimed at determining the present contours of the market.
Once this knowledge is available, it is usually most efficient to tailor marketing strategies to
existing consumer-need patterns.

No brand can expect to appeal to all consumers. The very act of attracting one segment may
automatically alienate others. A corollary to this principle is that any marketer who wishes to
cover a market fully must offer consumers more than a single brand. The flood of new brands
which have recently appeared on the market is concrete recognition of this principle.

A company's brands can sometimes cannibalize each other but need not necessarily do so. It
depends on whether or not they are positioned against the same segment of the market. Ivory
Snow sharply reduced Ivory Flakes' share of market, and the Ford Falcon cut deeply into the
sales of the standard size Ford because, in each case, the products were competing in the same
segments. Later on, for the same companies, the Mustang was successfully introduced with
comparatively little damage to Ford; and the success of Crest did not have a disproportionately
adverse effect on Gleem's market position because, in these cases, the segments to which the
product appealed was different. It depends on whether or not they are positioned against the
same segment of the market. Ivory Snow sharply reduced Ivory Flakes' share of market, and the
Ford Falcon cut deeply into the sales of the standard size Ford because, in each case, the
products were competing in the same segments. Later on, for the same companies, the Mustang
was successfully introduced with comparatively little damage to Ford; and the success of Crest
did not have a disproportionately adverse effect on Gleem's market position because, in these
cases, the segments to which the products appealed were different.

New and old products alike should be designed to fit exactly the needs of some segment of the
market. In other words, they should be aimed at people seeking a specific combination of
benefits. It is a marketing truism that you sell people one at a timethat you have to get
someone to buy your product before you get anyone to buy it. A substantial group of people
must be interested in your specific set of benefits before you can make progress in a
market. Yet, many products attempt to aim at two or more segments simultaneously. As
a result, they are not able to maximize their appeal to any segment of the market, and they
run the risk of ending up with a dangerously fuzzy brand image.

Marketers who adopt a benefit segmentation strategy have a distinct competitive edge. If a
benefit segment can be located, which is seeking exactly the kind of satisfaction that one
marketer's brand can offer better than any other brand, the marketer can almost certainly
dominate the purchases of that segment. Furthermore, if his competitors are looking at the
market in terms of traditional types of segments, they may not even be aware of the existence
of the benefit segment which he has chosen as his market target. If they are ignorant in this
sense, they will be at a loss to explain the success of his brand. And it naturally follows
that if they do not understand the reasons for his success, the kinds of people buying his brand,
and the benefits they are obtaining from it, his competitors will find it very difficult to
successfully attack the marketer's position.

An understanding of the benefit segments which exist within a market can be used to advantage
when competitors introduce new products. Once the way in which consumers are positioning
the new product has been determined, the likelihood that it will make major inroads into
segments of interest can be assessed, and a decision can be made on whether or not
counteractions of any kind are required. If the new product appears to be assuming an ambiguous
position, no money need be invested in defensive measures. However, if it appears that the new
product is ideally suited to the needs of an important segment of the market, the manufacturer
in question can introduce a new competitive product of his own, modify the physical properties
of existing brands, change his advertising strategy, or take whatever steps appear appropriate.

Camera Market Outlook in India:

India Digital Camera Market which was previously dominated by Point & Shoot segment is now
experiencing an inclination towards DSLR cameras. This shift is primarily as a result of reducing
cost of DSLRs as well as rising income levels and technological advancements in Smartphone
and Tablets.

According to research, India Digital Camera Market annual shipments reached 1.99 Million units
registering a substantial decline of 34% in H2 over H1 2014. Nikon continues to dominate the
overall market followed by Canon in DSLR whereas SONY in Point & Shoot segment.

Point & Shoot Digital Cameras still holds major share of the India Digital Camera Market,
however growing popularity and continuous evolution in the technology of smartphones is
shrinking the demand of Point & Shoot cameras. On the other hand, DSLR segment is growing
steadily because of their superior image quality as compared to Compact cameras. To attract the
Indian customers, OEMs are constantly using new marketing strategies and started offering
personal products to cater and adapt the ongoing changes accordingly.

Market trends includes WI-FI, Android OS, Waterproof, HD Screen, Touch screen, 4K recording,
higher optical zoom etc. In Point & Shoot segment, 5x optical zoom captured around 35%
market share whereas in DSLR, 10x optical zoom registered more than 43% share of the market.
In Lens category Nikkor lens endured its market leadership.

A surge in demand has been observed for the High-End Mirrorless Interchangeable-Lens
cameras (MILCs).

OEMs need to strengthen their distribution and service network in Tier II and Tier III cities.
Further, increasing number of internet users and social network base in India will help the
players to broaden their RTM (Real Time Marketing) in the market.

Product Offering:

Launching a camera to cater to the high and medium end user segments requires careful
consideration of design and product features, as also an effective sales pitch for inducing a buy
decision.

Benefit Segmentation: A Decision-oriented Research Tool

Segment Name: The The hobbyist Casual

Professional photography
Principal benefit High lens Good picture Price
sought: resolution, quality,
product emotional appeal
appearance
Demographic Professional People with a Street and at
strengths: photographers keen flair for times, travel
photography photographers
Special Specialized and Medium skilled Medium to
behavioral skilled users users relatively
characteristics: negligible
photography
skills
Brands Sony, Canon, Kodak, Canon Kodak, Pentax
disproportionatel Nikon, Fuji,
y Panasonic
favored:
Personality High self Purchase Low to medium
characteristics: involvement decisions budget
with an eye for influenced by individuals
detail fellow
photography
enthusiasts.
Life-style Active Hedonistic Value oriented
characteristics:

Product Features:
1. Camera Dimensions- 41mm height, 59mm length, 30mm width
2. Camera Weight - 88g-95g
3. Waterproofing - 40m (with case)
4. Field of view - 17mm (35mm equivalent) and 170 degrees
5. 4K Video Recording -30/25/24 fps for high resolution products or 15/12,5 fps for Mini Cams.
6. HD Recording Full HD 120/100/60/50/48 and HD 120/60/50
7. Still Photo Resolution and Burst Rate- 12 MP and 30 fps
8. Ease of Sharing - Wi-fi and fully integrative app with versatile settings
9. Mounting Accessibility- Chest harness, head strap, wrist housing, surfboard mounts
10. Low Profile - focus on action cameras, camera mounts, and camera accessories only.

The unique features of my product offering would be:

1) Price per pixel ratio(P/P): Primarily intended to target a large customer base(including low-
end customers) and influence consumer purchase decisions. For e.g, a DSLR with high
resolution frame, manufactured by top brands like Canon, Nikon and Sony varies anywhere
between 25,000 to 1,15,000. Competitive pricing or offering attractive discounts on limited
period offers would help in increasing market share.

2) Innovations in product design: Introducing the product in a variety of colors in order to

increase product attractiveness and introduce an element of emotional appeal. Also, in-built Wi-fi
to enable to upload photos to various technology based platforms like Instagram, Facebook,etc.

3) Product bundling: An attractive sales pitch strategy that aims to bundlea variety of
accessories like a camera mount and memory card reader.

4) After sales follow-up: Introduction of extended product warranties (5 years instead of the
usual 2 years).
CONCLUSION:
The benefit segmentation approach is of particular interest because it never fails to provide fresh
insight into markets. The marketing implications of this analytical research tool are limited
only by the imagination of the person using the information a segmentation study provides. In
effect, when segmentation studies are conducted, a number of smaller markets emerge instead of
one large one. Moreover, each of these smaller markets can be subjected to the same kinds of
thorough analyses to which total markets have been subjected in the past. The only differencea
crucial oneis that the total market was a heterogeneous conglomeration of sub-groups. The so-
called average consumer existed only in the minds of some marketing people. When benefit
segmentation is used, a number of relatively homogeneous segments are uncovered. And,
because they are homogeneous, descriptions of them in terms of averages are much more
appropriate and meaningful as marketing guides.

Q.2
Uncontrollable factors affecting markets:
 Uncontrollable factors in marketing are conditions or circumstances outside an organization's
control that affect its ability to develop and implement a marketing plan. Common categories of
uncontrollable factors include economic changes, government regulations, technological
evolution, new competitors, supplier factors and natural disasters.

The external /uncontrollable factors affecting the market are described in details as follows:

Competition
Government policies
Natural forces
Social and cultural forces
Demographic factors
Technological changes

(1) Competition: competition refers to the numbers of similar competitive product brands
marketers in your industry, their size and market capitalizations. You as a marketer might not
have direct influence on them, but its important that you monitor their activities, and then design
effective strategies using your controllable variables.

(2) Governmental policies: the government policies refers to the laws and legality that guilds the
land, they go a long way to affect your business operations as a marketer. For instance,
government restriction on the importation of a particular product might hinder the marketers
playing in that particular field.

(3) Natural forces: this refers to the physical environment, it comprises of the available or lacks of
natural resources that can vacillated or hinder your production output.

(4) Social and cultural forces: the social and cultural forces refers to the structure and dynamics of
individuals and groups and their behaviors, believes, thought patterns and lifestyles, friendship
etc many of this trends goes a long way to affect your marketing operations.

(5) Demographic factors: demography refers to study of people, such as their age, sex, marital
status, occupation, family size etc. Though, demography is uncontrollable because you cannot
control the sex, age, marital status in your external environment, but accurate forecast of it goes a
long way to enabling you as a marketer forecast future trend and consumptions of your product.

(6) Technological changes: Technology post much challenges to marketers, it affects the kind of
product that you as a marketer can offer, For instance, technology have changed products like
typewriting machines into a more proficient computer systems. You cannot stop the advancement
of technology, but you can learn to adapt to it changes.

However, it should be noted that while an external environmental force affect one business, it
may create an opportunity to another business. So you as a marketer need be on a look out to
forecasting possible changes in external environment so to also design effective strategies on
how to adapt you business to it.

The internal environment of marketing

The internal environment is comprises of the activities inside of your marketing organization. In
your internal environment, you have some variables to make decisions and influence your
marketing efforts, such variables as in your 7Ps of marketing e.g. product, promotion, price,
place, process, physical environment.

The key factors that influence demand in the camera industry are the holidays, seasonal cycles,
new innovations, extreme sports events, and music festivals. Demand for cameras is volatile and
most prominent in the particular seasons such as winter and summer. For winter, extreme sports
like snowboarding and skiing drive sales up as well as in the summer time for sports like surfing
and skydiving. These products are for anyone who wants to capture and share their experience.

On top of these events, a big influencer of this industry is innovation. With higher pixels, easier
ease of use, higher frames per second, and integrated apps: the camera industry is open to new
possibilities and endless competitive intensity amongst the leading companies.

Threat of New Entrants: (Moderate- High): The growing size of the portable and mountable
camera market has not gone unnoticed by larger electronics firms. The threat of new entrants is
moderate to high for this product. One of the main reasons why threat of entrants is high is due to
the action camera industry having relatively low barriers to entry for large companies that can
develop similar technology.

Buyer Power:Moderate This industry is relatively new within the last decade. However, based
on research reports, buyer power is still moderate since there are less than ten brands customers
can switch to. This industry has seen a dramatic increase in disruptive technology in the last few
years. This has allowed customers to have a larger selection of products that may suit their needs
better even if it may be considered an inferior product.

Competitive Intensity: High - Competition is bullish in the camera market, a new and
underappreciated product category that is fastly gaining track in consumers mind. We are seeing
emerging new subcategories and usage cases of wearable cameras which has prompted larger,
more established companies to catch up.
Threat of Substitutes High The most important force in the camera industry is the threat of
substitutes. With the industry growing steadfastly, new products are coming out from Google and
Apple that are diversifying and changing the game in the camera industry. The lines of camera
technology are being blurred as newer products are being introduced that satisfy particular needs
and create certain value for customers.

The competitive marketing strategies for the competition within the camera industry will focus
mainly on innovation and building brand equity. These companies can differentiate themselves
by offering higher pixels, more fps, cheaper prices, extended battery life, and lighter weight. This
leads to building brand equity. By having more people loyal to the companys products, the
greater the chance friends of users will also purchase the same product.

Legal & Regulatory Environment:

One potential worry for the company is customers might injure themselves by performing
daredevil stunts to impress people, which could damage its brand. participation in a wide variety
of physical activities, including extreme sports, which in many cases carry the risk of significant
injury

If lawmakers or governmental agencies were to determine that the use of camera products
increased the risk of injury to all or a subset of our customers, they may pass laws or adopt
regulations that limit the use of the products or increase the liability associated with the use of
our products. Any of these events could adversely affect our brand, operating results or financial
condition.

Economic Landscape:
Events such as recession could trigger a general drop in demand for all commodities and affect
industry growth figures. In such situations, weak financials and supply and demand could
potentially affect market shares and revenues. Hence , we could concentrate on building a
product and a brand image of repute so as to sustain demand during difficult growth periods.

Societal Factors:

We would want our product to become the most socially engaging brand through user generated
content online. People are largely influenced by contemporary subscriber reviews as regards
product quality and pricing. A considerable amount needs to be spent on creating awareness
about features and advantages over market challengers.

Environmental Issues:
Camera manufacturers use a lithium ion battery which is common among consumer electronics,
but it is alleged to have some negative environmental effects during the production phase. These
impacts are a result of the production, processing and use of cobalt and nickel metal compounds.
The environmental impacts include resource depletion, global warming, and ecological toxicity
while the health impacts are poor respiratory, pulmonary and neurological effects for the local
region in which the battery is manufactured. Albeit, lots of consumer electronics companies use
this type of battery in their products.

Technological Advancements:

Camera technology is continually improving. For instance, Apple recently patented a new video
camera that caused other camera brands stocks to drop dramatically (13%). This happened after
the U.S. Patent and Trademark office published 34 newly granted patents for Apple . Since
technology is constantly evolving we can expect to see higher resolutions than the industry
leader of 1080p. As this industry is becoming larger we can expect to see more competitors
which in return will cause camera manufacturers to create new innovative products. Hence, we
have to increase R&D spends and come up with new innovations to retain market share amidst
growing competition.

Marketing Implementation:

We will continue to utilize social media websites to create an encompassed community of

camera users. Social media websites such as Facebook, Twitter, and Instagram will be the main
avenues for social media. This is important because it is a basically free way of marketing to our
target market.