Connector Pda Case Analysis

...

Discriminant Data Analysis

Though seemingly intuitive, it bears mentioning that we only used the Segmentation Data in order to arrive at the cluster information.We then found that our predicted clusters were well estimated, having a hit rate of 71.88% (See Exhibit 10) . The Discrimination Data (See Exhibit 11) was employed after the segmentation to provide insight into the behaviors and attitudes of the customers. This could also help us better understand certain segments to better position our product. Group Segmentation Descriptions are derived from the sample responses and affords us the ability to understand the individual clusters and target the communication accordingly. In keeping the four clusters,we were able to determine the following segmentation descriptions.

Group Discrimination Descriptions:

Group A (Urban Achievers)

Mid-career, traveling Salesperson; mix of high-school grads and college grads; spends more time on the road than in the office; keep track of business trends to further sales excellence, 44% penetration of PDAs

Group B (Greenbelt Sports)

Mid-to-High Income Mix; professional service provider, salesperson, or business owner; adopted computers in the home and office, high usage of cell-phones, but not of PDA (17%)

Group C (Bedrock America)

High School graduates with some college classes, not fully adopted computers/cell phones in the home or on the job unless programming is the job; spends free time on the lake/river drinking domestic light beer; blue-collar labor, entry-level professionals, and emergency personnel; out on the site (oilfield, jobsite, or server network building)

Group D (Upward Bounders)

High Earners; College-graduates; Concentration of Professionals and Business Development; Enjoy finer things; spend more time in the office than out; Read business and PC periodicals to keep up on trends for professional and personal reasons; already adopted the PDA at 89

By examining the variables within each discriminant function, we found that the most significant characteristics of an individual using a PDA are as follows: level of education, level of income, ownership of a PDA and PC, a Businessweek reader and working in sales. Our target market will therefore possess a high level of all these attributes. By looking at Exhibit X, we found that our target market Group A and D are the groups have exactly higher scores of all these attributes.

- Justification for Targeting

In conducting targeting analysis, we not only used the information from the discriminant (See Exhibit 12)and segmentation variables (See Exhibit 13), but also cross referenced our findings with a market sizing analysis and segment scorecard. Furthermore, we looked at indices to determine the differences of each segment in comparison to the average population. We felt this method was most useful for analyzing segmentation/discrimination data because you can glean concrete examples of differences in behavior and preferences between the segments. For example, we discovered that all segments aside from D (62% index, Exhibit 12) were more likely to spend time away from the office than the average population.

We used two methods to determine which segments would be the best to target. First, we did a market sizing (Exhibit 14) of the four segments based on US Census population and segment price-point. Proxy population for segments A and C was adults 40-44 years, while B and D was Adults 35-39 (based on average age from discriminant variables). According to the sizing, the most profitable segments are A & D, assuming total market potential. Although A has a larger market size than D, the differences in price that each segment is willing to pay evens out their values.

For the market scorecard (Exhibit 15), we weighted three different qualifiers (Size/Growth, Structural Characteristics, Product Fit) against each segment, for two different products (PIM vs. Pro)

Each qualifier was built on different variables from the segmentation and discrimination data. For example, the structural characteristics value for PDA’s are the combined indices of the following discriminant variables: Age, PDA, Income, Construction Emergency Service. The weighting assigned to each qualifier is based on what we think is most important to consider for the specific product. For instance, we feel that market size most important to the PIM product because the goal is to drive volume sales. For ConneCtor Pro, the most important qualifiers are Structural and product fit, because we are trying to encourage a more niche audience to pay a higher price point vs driving a more generic product to a larger audience.

Based on both the market sizing exercise and the market scorecard, we feel that segments A and D will be the most profitable and most pertinent segments for the company to target.

- Communication Strategy

There are distinct differences between our target segments that will warrant different messaging strategies between the two. The Urban achievers will use the product because of the value-add to their professional lives. The Upward Bounders will purchase the product to add credence to their personas of “Innovators”. These two groups are ready to adopt the PDA. The following is a description of each target’s “personas” and detailed communication strategies to approach each segment.

Urban Achievers: “Functional and Efficient”

Achievers expect to pay a lower price than Upward Bounders but still have most of the physical amenities. However, they are most concerned with Personal Information Management. Many work in the sales industry and tend to be “on-the-go”. There are opportunities here to push a more functional device at a lower price point with the goal of capturing more share of volume

Upward Bounders: “Cutting Edge and Niche”

Upward Bounders consider themselves to be innovators, pride themselves on adopting new tech early, and are willing to pay premium prices in order to do so. UB’s mainly work in the tech industry, and have more disposable income than all segments. There is opportunity here to capture share of spend by introducing a premium PDA that appeals to the “tech geek”. Appealing to the “ego” of the Upward Bounder will prove more effective than stressing the functionality of the product itself.