A C T A U N I V E R S I T A T I S L O D Z I E N S I S FO LIA OECONOM ICA 17, 1982
Teresa Jaw orska *
STR A TEG Y O F SELECTIN G TA RGET SEG M ENTS A G AINST TH E BACKGROUND OF M ARKET CHANGES IN PO LA N D
1. INTR OD U CTIO N
T he pap er deals w ith analysis of ap p licab ility of th e stra te g y of selecting ta rg e t segm ents in Poland. T here w ill by p rese n ted conse-quences of th is stra te g y fo r p ro d uction and tra d e com panies and espe-cially fo r form s of ties b etw e en these com panies and p rin cip les of th e ir specialization. T here w ill be b rie fly outlin ed some directio n s of p rese n t changes in th e P olish m a rk e t and new possibilities fo r o p eration of com -panies — m a rk e t p a rtic ip a n ts re su ltin g from these changes.
The concept of th e s tra te g y of selecting ta rg e t m a rk e t segm ents is re fe rre d to such a situ a tio n in w hich d iffe re n tia tio n of b ehaviour of b u y e rs a n d /o r end users in th e m a rk e t c o n stitu tes one of c rite ria of d e-cision-m aking in th e com pany and is reflec ted in m ethods of its ac ti-vity. This s tra te g y m ay tak e th e form of firs t of all:
— d iffe re n tia te d m ark etin g , — co n c en tra te d m arketing.
2. CONSEQUENCES O F TH E STR A TEG Y O F SELEC TIN G TA RG ET M ARKET SEGM ENTS FO R IN D U STR IA L AND TRADE CO M PA NIES
G ro w th of asp iratio n s and gen eral stim u la tio n of d em and in the P olish society m ake possible, to a grow ing e x te n t, ap p e ara n ce of diffe-rences in m ark e t behavior of bu y ers possessing d iffe re n t economic, socioprofessional, dem ographic and o th e r ch aracteristics. L ack of a d ap -ta tio n of su p p ly to tre n d s of changes in dem and produces tw o types of m a rk e t phenom ena. On one hand, th e re can be observed a „w a itin g ”
dem and fo r new goods and services or for goods a lre ad y know n and accepted by consum ers b u t produced in insufficient qu an tities. On the o th e r hand, th e re a re being accum ulated excessive in ventories in tra d e com panies encom passing goods w hich are not accepted by buyers. These phenom ena testify to inad eq u ate allocation of production factors of com -panies am ong d iffe re n t m ark e t segm ents. T hus e.g. segm ents fre q u e n tly buying a given p ro d u ct (heavy users) ap p e ar in p ractice to be m uch less n um erous th a n it is assum ed w hile launching production. This leads to w aste of resources on m icro and m acro-econom ic scale and causes dissa-tisfaction of end users.
D iffe ren tia te d m a rk e t situation, q u a n tita tiv e deficits of some p ro -d ucts w ith sim ultaneous excess of oth ers im ply th e nee-d for pusuing d iffe re n t stra te g ies in m ark e ts for various products.
N am ely, in th e case of goods accepted by consum ers b u t tu rn e d out in in su fficien t q u a n titie s it seem s ju stified to em ploy th e s tra te g y of u n d iffe re n tia te d m ark etin g . The aim of th is stra te g y is n ot so m uch to in te n sify sales (anyw ay th is does not pose a n y bigger problem s in th e situ a tio n of th e s e lle r’s m ark et) b u t to achieve econom ies in costs of production, and q u a n tita tiv e increase of production. It is especially im p o rta n t to en su re deliveries of goods in q u a n titie s re q u ire d b y consu-m ers in th e case of p ro ducts satisfying basic needs of th e population. In rec e n t y ears a list of such com m odities w as fixed as a re s u lt of d e -cisions tak e n by th e go v ern m en t a u th o ritie s 4 In th e field of stra te g y of these pro d u cts it w as decided to tak e into account only req u irem e n ts of an average consum er w hile th e re w ere in te n tio n a lly ignored needs of consum er groups rep re se n tin g m ore „ re fin e d ” req u irem en ts.
On th e o th er hand, a d iffe re n t stra te g y m u st be em ployed in m a r-kets w h e re a lth o u g h th e production in its q u a n tita tiv e te rm s is su ffi-cient, it is not approved by consum ers. In m ost cases th is re fe rs to m a rk e ts c h aracterized w ith changeable consum er p referen ces (footw ear, clothing). In th is situ atio n th e m ost essential problem is to a d ap t th e product to d iffe re n tia te d needs of consum ers, reduce useless stocks, and apply a m ore a ccu rate allocation of production factors. C onsequently, th e s tra te g y of selecting ta rg e t m a rk e t segm ents becom es justified.
The m ost fre q u e n tly advanced a rg u m e n t u n d e rm in in g th e advisabi-lity of th is s tra te g y is increase of in p u ts connected w ith p ro d u ct d iffere n tia tio n or o th e r s tra te g y m eans. It app ears h e iffere th a t th is d iffe iffere n -tia tio n does not have to encom pass a single com pany as it can be carried
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1 T. W r z a s z c z yk, R ozw ój p ro d u k c ji r y n k o w e j i usług (E xpansion of M ar-ket P ro d u c tion an d Services), „Now e D rogi” 1978, No. 1.
o ut on a scale of a group of com panies, th e production of w hich form s to g eth e r a final supply of a d efin ite product, e.g. com panies rep re se n -ting a given branch. On th e o th er hand, an individual com pany m ay pu rsu e a stra te g y of co n c en tra te d m ark e tin g specializing in provision of goods for one — a d e q u ate ly num erous — m ark e t segm ent.
E stab lish m en t in rec e n t y ears in P oland of la rg e econom ic organiza-tions grouping m ost or even all com panies w ith in a d efin ite b ran ch prom otes such stra te g y of selecting ta rg e t segm ents. On th e scale of a large economic organization th e s tra te g y of selecting ta rg e t m ark e t segm ents m ight take the form of d iffe re n tia te d m a rk e tin g w hile on the scale of a single com pany — of co n c en tra te d m ark etin g . W ith th is
so-lution the m ost im p o rta n t m a tte r w ould be to define prin cip les of specialization in providing goods and services for d iffe re n t m a rk e t se-gm ents so th a t on th e scale of th e w hole b ra n c h it is possible to achieve th e envisaged degree of d iffe re n tia tio n of su p p ly ad ap ted to re q u ire -m en ts of d efin ite consu-m er groups.
T his solution could obviously not be of a com m on c h a ra c te r, at least due to d iffe re n t c h a ra c te ristic s of dem and in d iffe re n t m ark ets, e.g. lack of clearly isolated segm ents. A basic d iffic u lty in realizatio n of this solution is posed by a m onopolistic position of larg e economic organizations and th e ir production o rie n tatio n as w ell as ensuing from it relu c ta n c e to achieve a m ore adeq u ate a d a p ta tio n of th e p ro d u ct to consum er needs. S im ilarly th e p re se n t m an ag em en t system of com
pa-nies does not induce th em to tak e into account c h a ra c te ristic s of consu-m er deconsu-m and — a p a rt froconsu-m technological c rite ria — w hile selecting
di-rections of production.
A question arises h ere, w h a t m ay be th e consequences of th e com p a n y stra te g y m aking provisions fo r d iv ersification of consum er b e h a -viour for th e d istrib u tio n policy?
So far, p ro d uction com panies do not possess in m ost cases a n y con-cept of d istrib u tio n channels m ost d esirab le from th e v iew point of th e b u y e r a n d /o r end user. T hey do not a tta c h enough a tte n tio n to th e fa c t w here, w hen and by w hom th e ir p ro d u ct w ill be sold. This re su lts from the situ a tio n th a t not these com panies com pete to w in d efin ite m iddlem en b u t tra d e com panies com pete to p urchase d e fin ite products. In consequence detailed solutions in th e field of d istrib u tio n a re in m ost cases elaborated by tra d e com panies, w hich in th is situ a tio n m ay be tre a te d as a tru lly se p ara te su b ject of th e d istrib u tio n stra te g y . On th e o th e r hand, it is com m only know n th a t th e tra d e cannot e x e rt a satisfac to ry influence on c h aracteristics of p ro ducts m an u fa ctu red by in d u s tria l com panies, w hich in tu r n allow s to tre a t th e in d u stry as a su
-bject of the production s tra te g y 2. Such situ a tio n m ay, of course, survive and not b rin g an y losses for both above m entioned su b jects in conditions of m a rk e t disequilibrium . H ow ever, th e m om ent th e m a rk e t se g m e n ta -tion s tra te g y becom es ju stified, and th u s in condi-tions of re la tiv e e q u ilb riu m and app earin g difficulties in selling, th e ailbove m entioned d iv i-sion of th e m ark e tin g s tra te g y su b je c ts b rings losses not only for both sides b u t also for consum ers and the w hole econom y. A fter all, it is w ell know n th a t a product, th e physical fe a tu re s of w hich w e re even m ost c a re fu lly a d ju ste d to p refe re n c e s of a s tric tly defined m a rk e t segm ent, w ill n ev er reach it w hen these fe a tu re s a re not „ s u p p o rte d ” by a p ro p e rly co -ordinated m ark e tin g a c tiv ity on th e p a rt of tra d e com panies. W hat w e m ean h e re is both th e influence of th e tra d e on p rom otion of a physical tra n s fe r of a given good to d efin ite consum er groups and its influence on fo rm atio n of th e p ro d u ct im age. A lthough physical c h a ra c te ristic s of a p ro d u ct re p re s e n t an im p o rta n t basis for form ation of the p ro duct im age am ong consum ers, th a t is not th e only basis. E qually im p o rta n t a re h e re th e socalled fe a tu re s „ad d ed ” to p h y -sical c h a ra c te ristic s w hich w ere c re a te d ow ing to m a rk e tin g activ ities (place, form and tim e of selling, professional skills of selling personnel) and prom otional activities. In th is situ a tio n it becom es n ecessary to co o rd in ate activities of in d u stry and tra d e concerning both above m en -tioned groups of ch aracteristics, an d th e ir a d a p ta tio n according to a uniform concept to th e m ark e t segm ent selected a lre a d y a t th e stage of pro d u ct developm ent. O bviously a d a p ta b ility of tra d e com panies to d iffe re n t m a rk e t segm ents w ould be m uch bigger th a n a t p re se n t if th e ir services could be m easured in te rm s of valu e (as it is the case to -d ay in th e c a te rin g in-dustry).
For th e above m entioned reasons it becom es necessary to en su re h a r -m onious co-operation b etw een th e in d u stry and th e trade. This proble-m has received m uch a tte n tio n in the Polish economic lite ra tu re , w hich com prehensively discusses conditions and possibilities of co-operation betw een in d u stria l and tra d e u n its a lth o u g h th e re a re still lacking so-lu tio n s w hich w ould be successfully applied in th e practice. A fter all, it is d iffic u lt to o btain harm onious co-operation solely by m eans of organizational solutions. An im p o rta n t point h e re is th e s ta te of m ark e t equilibrium . This factor also d ete rm in e s a possibility of allow ing some degree of com petition understood as an additional elem en t stim u la tin g
4 See W. W r z o s e k , Z ależności m ię d z y h a n d le m a m a rk e tin g ie m (R
b eh av io r of com panies*. W hat is m ea n t h e re is com petition th ro u g h th e product, its c h a ra c te ristic s (in d u strial activities) and selling con-ditions (area of com petition betw een tra d e com panies). P resen ce of the com petition th ro u g h th e p ro d u ct w ould accelerate th e ra te of response of in d u stria l com panies to changes in dem and and increase th e ir inno-v ation p ropensity. A nd coninno-versely, com petition b etw een tra d e com pa-nies w ould induce th em to u n d e rta k in g activ ities aim ed a t im p ro v e-m en t in th e level of tra d e services in o rd er to a ttr a c t buyers. F o r such com petitive phenom ena to ap p e ar th e re m u st be e n su re d a re la tiv e m a rk e t eq u ilib riu m and elim in atio n of h ith e rto applied rigid alloca-tio n of th e scope and area of com pany operaalloca-tion w hich w ill pave the w ay for bigger freedom in e n te rin g th e m ark et. T he p re se n t c e n tral allocation of sp h eres of o p eration am ong com panies does not prom ote such freedom . T h at leads to phenom ena of poor u tilizatio n of resources in production and tra d e com panies for w hich e.g. th e re w as allocated a n u n su itab le region of operation. A t presen t, th e sp atial coverage of m ost tra d e com panies encom passes one province, w hile it is know n th at, for exam ple, specialization in m ark e tin g activ ities in some m a rk e t seg-m en ts seg-m ay call for se ttin g up tra d e coseg-m panies equipped w ith a big coverage (e.g. a segm ent of m obile tourists). A sim ilar situ a tio n can be observed in case of specialization according to form of selling or a sso rt-m ent. The point h e re is n ot only to reach possibly nu rt-m ero u s consurt-m er g roups w ith d efin ite ch a ra c te ristic s for w hich a p ro d u ct or service are m eant, b u t also to secure a p ro p e rly d iffe re n tia te d tra d e offering for consum ers re g u la rly availing them selves of tra d e services in a given area.
3. BA SIC TRENDS O F CHANGES IN TH E PO L ISH M ARKET
T he stra te g y of selecting ta rg e t m a rk e t segm ents req u ires a good know ledge of th e m ark et. The applied seg m entation c rite ria should be continuously bro u g h t u p -to -d a te ag ain st th e background of p re se n t and p ro je c te d tre n d s in developm ent of th e m arket.
In rec e n t y e a rs th e re can be observed in Poland a rapid develop-m e n t of develop-m ark e ts for develop-m an y products, and especially of th e ir dedevelop-m and side. It seem s w o rth w hile to m en tio n h e re th e follow ing changes of th e m a rk e t and of its segm entation c riteria :
3 Z arządzanie p rze d się b io rstw a m i — u cz e stn ik a m i r y n k u dóbr k o n s u m p c y j-n y c h (M aj-nagem ej-nt of C om paj-nies — P a rtic ip a j-n ts ij-n C o j-n su m er Goods M arket),
a) F irs t of all, it should be u n d erlin ed th a t v alue of c rite rio n of th e p o p u latio n ’s division into u rb a n and ru ra l is g rad u a lly decreasing. Of course, th is c riterio n w ill c e rta in ly continue to be qu ite im p o rta n t for m any y ears to come in m a rk e ts for m any products, and th e segm ents isolated on its basis w ill d iffe r not only in c h aracteristics of areas in h a -bited by these tw o groups of population but also in th e ty p e of w ork p erform ed by them , life sty le etc., and co n sequently also in th e ir m ark e t behavior. This division loses, how ever, its previous sharpness w hile b ehavior of th e isolated segm ents in th e m ark e t loses its hom ogeneous c h a ra c te r, as th ere grow s in the c o u n try the n u m b er of population being urbanized, w hich is rep re sen te d by in h ab ita n ts of ru ra l d istric ts obtai-ning incom es from n o n -a g ric u ltu ra l sources. T hese a re people em ployed in in d u stria l com panies com m uting to w ork in tow ns, or people w orking in the c o u n try as skilled w orkers, those em ployed in sta te farm s etc. T hey b ring to the c o u n try an u rb a n sty le of life, d iffe re n t consum ption p a tte rn s etc. This population displays h ig h er re q u ire m e n ts in re la tio n to tra d e services: the a sso rtm e n t offered, c u ltu re and skills of selling p e r-sonnel etc. This tre n d is, m oreover, prom oted by g eneral developm ent of education an d increase of professional qualifications as w ell as to u rist functions of th e country. These phenom ena involved gro w th of contacts b etw een in h ab ita n ts of tow ns and villages. As a re s u lt th e re a re dim inished differences in th e s tru c tu re of consum er e x p e n d itu re b etw een both population groups. U n fo rtu n a tely , su p p ly of goods and services does not afford th e sam e possibilities for rea liz a tio n of the accepted consum ption p a tte rn s for ru ra l and u rb a n population. This creates a factor h am p erin g th e speed of th e above m entioned changes.
b) T he significance of area size of a g ric u ltu ra l farm s as a criterio n of th e ir stra tific a tio n is decreasing as th e land ceased to be th e m ost im p o rta n t incom e-earning factor. A grow ing im portance is a ttrib u te d to professional qualifications and application of m odern production m e-thods. H ence from th e point of view of ru ra l m a rk e tin g a m ore useful seem s to be division into: developing farm s, d e te rio ra te d farm s (m ostly w ith o u t successors), and w o rk e r-p e a sa n t f a r m s 4. These groups of farm s a re characterized w ith d iffe re n t behavior in th e m ark et for consum er and p ro d uction goods and services. It can be expected th a t th ese d iffe-rences w ill be f u rth e r deepened in th e fu tu re.
4 A. W o ś , K la so w o -w a rstw o w a s tr u k tu r a ludności w ie js k ie j i je j ew olucja
w procesie b u d o w y rozw iniętego spo łeczeń stw a socjalistycznego w Polsce (Class-
-S tra tu m S tru c tu re o f R u ra l P o p u latio n an d Its E v olution in th e P rocess of C o n stru c tin g th e D eveloped S ocialist S ociety in P oland), „S tu d ia S ocjologiczne’’ 1978, No. 2, pp. 87—101.
c) A c riterio n of possessing a passenger c ar gains a bigger im p o rta n -ce. Significance of th is c riterio n is connected w ith re c e n t increase in th e n u m b er of possessed cars. This phenom enon e x e rts an essential influence on buying p a tte rn s. Possession of a c ar leads to decreased freq u en cy of purchases and th e ir increased com plexity. T h ere a re also changed m otives of selecting th e location of shopping. T he c riterio n of th is selection is no longer location of a tra d e u n it in th e v icin ity of w orking or dw elling place. A m obile clien t m akes decisions as reg ard s his shopping place not so m uch according to p ro x im ity of tra d e u n its b u t according to th e a sso rtm e n t offered by them , com fort in reaching them , p a rk in g possibilities etc.5
The segm ent of m obile clients is a re la tiv e ly new phenom enon in Polish conditions. Its buying h ab its a re ju st being form ed. It can be expected th a t th e y w ill be sim ilar to preferen ces of clients in oth er highly m otorized countries. T he tra d e , how ever, has not b e n e fitte d from this phenom enon as yet. A dap tatio n to re q u ire m e n ts of m obile clientele calls especially for intro d u ctio n of d iffe re n t principles of location of tra d e netw ork, provision of ap p ro p riate p a rk in g lots, d iffe re n t selling techniques etc.
d) A new phenom enon in th e Polish society is increase in th e leisu -re tim e being a -re su lt of la te ly introduced „f-ree S a tu rd a y s ”. In m any fam ilies „bigger shopping” done on free S a tu rd a y s is a form of sp en -ding free tim e. Reduced w orking ho u rs of tra d e u n its on free S a tu rd a y s do not create, how ever, fav o urable conditions in th is respect. It is w o rth u n d e rlin in g f u rth e r th a t „fam ily shopping” produces a bigger th a n it w as the case previously dem and fo r developm ent of d iffe re n t com p lem en tary services in rela tio n to tra d e services e.g. n o u rishm ent, re c re a tio n etc.
F re e S a tu rd a y prom otes, to a considerable degree, developm ent of w eek -en d tourism . So fa r lim ited in te re s t tak e n by th e p o p u lation in th is form of rec re atio n re su lts m ainly from lack of trad itio n , and in sufficien t publicity. A p art from th a t w e should also m ention h e re u n sa -tisfac to ry eq u ip m en t of areas, in w hich w eek-end rec re atio n is concen-tra te d , in concen-tra d e and c a te rin g netw ork. I t can be expected th a t in fu tu re th e im portance of th e segm ent of people involved in w eek-end to urism w ill be growing.
The above m entioned changes of th e Polish m a rk e t as w ell as m an y o th ers (dem ographic changes, changes in life sty le etc.) afford new chances of a c tiv ity for com panies. In m an y cases p ro p er u tilizatio n of
5 H. S z a w l o w s k a , L o kalizacja za k u p ó w k lie n tó w zm o to ry zo w a n y c h (Lo-ca tio n of P u rc h a se s of M obile Clients), „H andel W e w n ętrzn y ” 1978, No. 4.
these chances m ay be assisted by th e stra te g y of selecting ta rg e t m a r-k e t segm ents.
T eresa J a w o rsk a
S TR A TEG IA W YBORU DOCELOW YCH SEGM ENTÓW NA TLE PR ZEM IA N RYNKOW YCH W POLSCE
W re fe ra c ie om ów iono m ożliw ości w y k o rz y sta n ia k o ncepcji seg m en tacji r y n -k u w w a ru n -k a c h g o sp o d a r-k i c e n tra ln ie p lan o w an ej. W szczególności oceniono p rzy d a tn o ść te j koncep cji d la o rg an izacji k an a łó w d y stry b u cji. W skazano n a czy n n ik i sp rz y ja ją c e i u tr u d n ia ją c e p ra k ty c z n ą re a liza cję koncep cji seg m en tacji r y n -k u, a w śród nich — szczególnie dużo m iejsca pośw ięcono a -k tu a ln y m przem ian o m ry n k u polskiego.
