1. Based only on the cluster analysis data, which preference related variables are most useful for segment identification and evaluation? Which variables are least useful? This qualitative research aims in identifying and evaluating the potential customers of PicDeck and determinate a precise target. The interviewees have been asked to answer questions based on a ranking system from 1 (strongly disagree) to 5 (strongly agree). The questions investigate the needs: Q 1, 6 – 9, and interest in this new technology service: Q 2 – 5, as well as the willingness of the interviewees to pay for this service:
Q 11 – 13. The cluster method divides the interviewees between homogeneous segments, which have to be as different as possible between each others. Q 1, 2, 6 & 10 are extremely interesting because these answers give us insights about the customers’ needs for the PicDeck service. Indeed, we assume that the people saying they don’t find the current uploading method easy but who, in the same time, would like to take more phone pictures if the uploading method was easier, would be interested in the Ontela service.
In addition, we recognize in the people looking to save their pictures, a latent need of uploading the pictures in a safety place such as a computer or a mail box. This corresponds to the PicDeck service. Q 11 & 13 are really important too, to study the willingness of the potential customers to actually buy the PicDeck service. Thanks to these answers, we get to know the real purchasing intentions of the people. The pricing gives an idea of the perceived value of the service per the customer.
We learn about their attitudes regarding the innovations: if they will rush to get the new gadget/tech service, or if they will buy it only if it is cheap. Q 3,4 & 5 and 7, 8 & 9 are not the core questions. Q3, 4 & 5 seem to give more insights about the customers’ relation to technology than to their need of the Ontela service. Analysing the results, we noticed the rates of Q7, 8 & 9 are quite the same whatever the cluster is. Therefore, these 3 variables (sending photos by email & putting them on the desktop or on facebook) are not useful in differentiating clusters.
Therefore, these 3 questions do not appear to be efficient in identifying segments. Q 12 appears to be in the middle. It does not appear like an appropriate variable because all the customers tend to look for the best price while purchasing new technologies. However, it is still a useful answer to study the willingness to buy of the customers. 2. Keeping in mind what you know about each cluster before you look at Exhibit 3 and Exhibit 4, create descriptive profiles for the customer segment represented by each cluster. Label each segment with a title that best describes that cluster.
To what extent does this new information reinforce or challenge your previous assumptions about the segments in this market? Cluster 1: Technology seekers looking for convenience, 24% Young professionals: They are interested in an efficient, easy & safe way of transferring photos as well as better quality phone cameras. They would be eager to use only one digital device in the future: camera on phone. They are looking at the new technologies as a way to improve their life: saving pictures on the computer, sending the pictures to their friends, and quick sharing of photos through the social networks.
They are price conscious therefore they would agree to pay 5. 75$ for the Ontela service. Cluster 2: Photo passionate, 12% Young to Middle-age professionals: They are interested in better quality phone cameras, aiming in taking more pictures. However, traditional photographers, they would like to keep their digital camera and maybe use their phone as a backup solution. They see Ontela service as a way to save their dear photos on the computer and sharing them on social networks. They are not early adopters but price conscious.
They value the service at 6. 64 $ per month Cluster 3: Young’s’ want to be trendy, 19% Young people: students in high school or university. They are interested in an efficient, fast & easy transfer of their photos. They would like to have and better phone cameras to take shoots of them and their friends all day long. They are looking for the latest technology even if they are price conscious. They still value the service at 7. 93 $. Cluster 4: Traditional & limited users of technology, 16% Housewife, or middle-class professional in their 40’s.
They are not interested in a more efficient transfer and do not think it is currently difficult uploading photos. We could wonder if they already tried it. However, they do are interested in better quality phone cameras as a back-up tool in case they couldn’t use their “real” digital camera. They are not really keen on social networks. The only value they give to the Ontela service is the security: the possibility to save the photos in the computer. In conclusion, because they do not really want the Ontela service, they are not willing to pay a lot for it: 3. 90 $
Cluster 5: Traditional but into the world, looking for convenience, 15% 40-60 years old, housewives, professionals or early retired. They are interested in a better quality phone cameras and an easiness of uploading the pictures to send them by email and keep them in a safe place. They are not reluctant in having only once device: Smartphone that shows they are quite open-minded to the innovations. If they are not early adopters, they are wealthy enough to pay more than the other clusters for the service: 8. 31 $ Cluster 6: Reluctant to technology innovations, 14% 0 – 70 years old, retired. They are not interested in a more efficient transfer nore in a better quality phone camera. They prefer to keep their digital camera better than having only once device (camera on the phone). Plus, they are not early adopters and are not willing to pay a lot for the service: 1. 67$. Establishing these profiles has been difficult because the rates of some clusters are very closed to each others. Indeed, we identified two highly valuated variables by the potential customers: Needs of safety and easiness of transfer.
Yet, without any qualitative data, we can’t guess their age, sex, revenue nor lifestyle. This is impossible to establish a fair segmentation or targeting a cluster on the basis of these information. 3. Now, use the profiling information in Exhibit 4 to create a revised profile for each cluster. Is this profile different from what you “guessed” based only on the preference data? Cluster 1: Technology seekers looking for convenience, 24% Young to middle-age professionals, 52% are between 25-40 years old. 52% of them are Male. Quasi all are interested in technology magazines and web sites. 2% of them have a data Plan on their mobile. They are interested in an efficient, easy & safe way of transferring photos as well as better quality phone cameras. They would be eager to use only one digital device in the future: camera on phone. They are looking at the new technologies as a way to improve their life: saving picts on the computer, sending the pictures to their friends, and quick sharing of photos through the social networks. During their leisure time they have a preference to surf the internet and read about sports (online or on magazines).
It is right to say they are technology orientated and that internet takes a big part of their lives. They are price conscious and pay their own bills (91%) therefore they would agree to pay 5. 75$ for the PicDeck service. Cluster 2: Families with few spare time, 12% Young to Middle-age professionals or housewives, they are majority females (52%) with children (45%). They do not seem to have a lot of free time to read magazine or go on internet. Therefore, they do not have Data Plan (15%) but more Family Plan (54%). They are interested in better quality phone cameras, aiming in taking more pictures.
However, traditional photographers, they would like to keep their digital camera and maybe use their phone as a backup solution. They see Ontela’s service as a way to save their photos on the computer and sharing them efficiently on social networks. They are not early adopters and do not seem to have the time to be in fond of new technology. Because they have a family and pay their own bills, they are price conscious and value the service at 6. 64 $ per month Cluster 3: Young’s’ want to be trendy, 19% Young people (55% < 25): students in high school or university, mainly female (57%).
They spend their spare time on internet or reading plenty of magazines (celebrities, fashion etc. ). They do not have Data Plan yet, but do belong to a Family Plan (66%) and probably use a lot their Message Pack (61%) to communicate with their friends. They are interested in an efficient, fast & easy transfer of their photos. They would like to have better phone cameras to take shoots of themselves and their friends in any occasion. They are looking for the latest technology even if they are price conscious. 55% of them do not pay their bills but they still convince their parents to pay 7. 3 $ for the service. Cluster 4: Reluctant to PicDeck but Technology orientated, 16% Young professional in their 30’s, 59 % of them are males and 60% are single. They use a lot text messages (65%). Almost all of them are interested in technology magazines and web sites, sports and on computer internet use. They are not interested in a more efficient transfer and do not think it is currently difficult uploading photos However, they are interested in a better quality camera phone to use it as a back-up tool. They would prefer to keep their digital camera better than having only once device (camera on the phone).
The only value they give to the PicDeck service is the security: the possibility to save the photos in their computer. In conclusion, because they do not really want the Ontela service, that they pay their own telephone bill (93%), they are not willing to pay a lot for it: 3. 90 $ Cluster 5: Traditional but into the world, looking for convenience, 15% 40-60 years old, housewives, professionals or early retired. 64% of them are married, 35% have children. 39% of them use the Message Pack and 27% of them have a Data Plan.
They seem highly educated and involved in the world with reading women magazines, celebrities and tech articles online or in magazines. They are interested in a better quality phone cameras and an easiness of uploading the pictures to send them by email and keep them in a safe place. They are not reluctant in having only once device: Smartphone that shows they are quite open-minded to the innovations. 92% of them pay their own bills. If they are not early adopters, they are wealthy enough to pay more than the other clusters for the service: 8. 31 $ Cluster 6: Reluctant to technology innovations, 14% 0 – 70 years old, retired or housewives, mainly women (59%), most of them are married (67%), some have children (39%). They do not seem having a large use of their mobile phone because few of them have a Data Plan (11%), a Message Pack (18%) or a family plan (12%). Than surfing the internet or looking for new tech, they prefer reading women magazines or homemaking mags. They are not interested in a more efficient transfer nor in a better quality phone camera. They prefer to keep their digital camera better than having only once device (camera on the phone).
Plus, they are not early adopters. They pay their own bills but because they are not interested in the service, they are not willing to pay a lot for the service: 1. 42 $ In conclusion, most of my profile I elaborated thanks to the customer preference data matches the profiles I updated with the qualitative data. The only one exception will be the cluster 4 that I imagined much more older. I guess, the cluster analysis could rely in a gut-feeling as well as quantitative and qualitative data. 4. Which segment(s) would you recommend as a target for PicDeck?
Explain the logic behind your choice. After this deep analysis of the clusters and the needs of each profile, I decided in a Needs-based/benefit segmentation. PicDeck seems creating the most value for the clusters 1, 3 and 5: Technology seekers looking for convenience (24%); Young’s’ want to be trendy (19%); Traditional but into the world, looking for convenience (15%). These 3 segments represent 58 % of the interviewees. Both of them have the same 3 needs: safety, efficiency and easiness. 1. They are looking for a way to save their pictures on a computer (Q6).
2.They expect a service efficient in uploading the pictures on their favorites places: social networks, computer and mails in order to use them immediately (Q7,8,9). 3. They want an easy service to adopt and use at anytime (Q1, 2 & 10). PicDeck could easily match these 3 needs with its new service. I personally think it will be a good strategy for the company, to position its product like the benefit answering to peoples’ needs of safety, efficiency and easiness transfer of their photos. Even though these 3 clusters are different in age, activities and revenue, they seem to be willing to buy the service between 5. 75$ to 8,31$.
A medium price will be easily accepted by both of them. Moreover, by choosing to target these 3 segments, Ontela could expect high returns on investment because the target market is rather large. 5. Develop a positioning statement for your selected target customer(s) that defines the key benefits of the PicDeck service and how the service is differentiated from alternatives that customers might consider. “For people who value memories, the PicDeck is a reliable photo sharing system which allows to transfer and save your pictures from your mobile phone to your PC, efficiently and easily wherever you are and seamlessly. ”
