Segment by segment invasion plans

A company would be wise to enter one segment at a time. Competitors must not know to what segment(s) the firm will move next. Segment by segment invasion plans are illustrated. Three firms A, B, and C, have specialized in adapting computer systems to the needs of airlines, railroads, and trucking companies. Company A meets all the computer needs of airlines. Company B sells large computer systems to all three transportation sectors. Company C sells personal computers to trucking companies.

Where should company C move next? Company C will next offer midsize computers to trucking companies. Then, to allay company B’s concern about losing some large computer business with trucking companies, C’s next move will be to sell personal computers to railroads. Later C will offer midsize computers to railroads. Finally, it may launch a full scale attack on company B’s large computer position in trucking companies. C’s hidden planned moves are provisional in that much depends on competitors’ segment moves and responses.

Market segmentation is the process of dividing a heterogeneous market into homogeneous sub-units. The Indian market consists of 844 million people. For a consumer product company making toiletries, this is a big number and hence a big market. However not all the 844 million people believe in the same things or look for same features and buy for the same reason. The same toiletries firm can look at the census data further to find that there are about 438 million men and 406 million women. This then is a new insight. Should the firm make toiletries for men or women or both? The firm also found that 74% of the entire population lived in rural areas.

Thus, the total population of a given market indicates only the market size. This, however, does not indicate anything more. To succeed, a firm needs to appreciate that the market is a heterogeneous one and the marketer must also identify similarities among different groups of customers.

Unfortunately, too many companies fail to develop a long term invasion plan. Pepsi Co is an exception. It first attacked Coca-Cola in the grocery market, then in the vending machine market, then in the fast food market, and so on. Japanese firms also plot their invasion sequence. They first gain a foothold in a market, then enter new segments with products. Toyota began by introducing small cars (Tercel, Corolla), then expanded into midsize cars (Camry, Avalon), and finally into luxury cars (Lexus).

A company’s invasion plans can be thwarted when it confronts blocked markets. The invader must then figure out a way to break in. The problem of entering blocked markets calls for a mega-marketing approach. Mega-marketing in the strategic coordination of economic, psychological, political, and public relations skills, to gain the cooperation of a number of parties in order to enter or operate in a given market. Pepsi used mega-marketing to enter the Indian market.