REQUIREMENTS FOR EFFECTIVE SEGMENTATION 137Selecting the right target groups
Th e second decision is to select the most attractive target groups. To evaluate segments, com-
panies have to look at four elements: size and growth of segments; structural attractiveness of
a segment; objectives and budgets of a company; and stability of market segments. Current
turnover, potential growth and profi tability of segments are the fi rst important conditions a
marketer should evaluate for each segment. For small companies, it could be wiser to target
smaller or less attractive niche segments when competition is strong in the larger segments.
Structural attractiveness can be analysed by using Porter’s model. Current competitors, potential
entrants, substitution products and the power of customers and suppliers infl uence the
attractiveness of segments. Some attractive segments may not fi t with the strategic objectives
or long-term goals of a company.According to the NPD Group, GfK Chart-Track and Enterbrain, the game has sold 1.433 million copies in the USA,
624 000 in the UK and 1.547 million in Japan, respectively, for a total of 3.604 million copies sold from January to
July 2008. As of December 2008, ‘Wii Fit’ is the Wii’s third best-selling game, with 14 million copies sold world-
wide.^52 Research International looked at the introduction of ‘Wii Fit’ in the Netherlands, one year after the launch in
April 2008. It found that awareness was very good: 8 out of 10 adults indicated that they knew, had seen or even
read something about this game. The survey found that 1 out of 14 people used ‘Wii Fit’, a figure which it was felt
could be higher. There are some interesting socio-demographical differences: Research International found the
biggest usergroup among women, youngsters (under 35) and owners of game PCs. Men and people older than
35 years contained the biggest group of non-users.^53In 2005, MySpace ruled the social media world and was bought by News Corp. for nearly $600 million. But
MySpace tried to be everything to too many people, which is difficult with one single product, unless the product is
a true commodity (e.g. milk) that nearly everyone wants. In the social media world, customers were not looking for
the same product. They wanted a product that was customisable to their own styles. Facebook took advantage
of this situation and surpassed MySpace in web traffic in 2007. MySpace was forced to reposition itself. It changed
its marketing strategy – new website design, new content and more emphasis on entertainment (games, music,
movies) – and adopted a more targeted approach. The company hoped to appeal to the under 35 market, and in
particular the under 25s.
According to ComScore, more than 50% of the MySpace users are 25 and younger.^54 In June 2011, MySpace was
sold for $35 million to the digital media company Specific Media and investors including Justin Timberlake. Their
‘new’ focus for MySpace was music.^55 In February 2012, MySpace added more than 1 million new users in one
month, taking it to 25 million registered users. The website claimed that about 40 000 people a day had signed
since it introduced apps with the social networks Twitter and Facebook. This represented a dramatic turnaround for
MySpace.^56 Music had always been MySpace’s biggest attraction, especially as a hub for independent artists
looking to make their music available to the masses. CEO Tim Vanderhook put it as follows: ‘the one million-plus
new user accounts we’ve seen in the last 30 days validates our approach. MySpace is building meaningful social
entertainment experience around content, where consumers can share and discover the music they love.
Consumers are getting excited about MySpace again – a testament to a great music product.’^57 MySpace is claimingBUSINESS INSIGHT
The repositioning of MySpaceM04_PELS3221_05_SE_C04.indd 137M04_PELS3221_05_SE_C04.indd 137 6/5/13 3:00 PM6/5/13 3:00 PM