Case Study on Segmentation, Targeting & Positioning

Profiles Group is a leading interior decorator and designer in the country. Mr$.$ Neerav Gupta,

one of the partners in the group has invested a good amount of money in the business. The

other two partners namely Mr$.$ Pratham Gupta who is a distant cousin of Neerav and Mr$.$ Dev

Suri are mainly into managing the firm$$s country wide operations. Mr$.$ Stanley Pereira, who

is more of a sleeping partner, looks after the administrative and financial aspects of the firm.

Profiles Group has around $44$ service centers in the country including state capitals and

several developing cities. Since the firm$$s inception in $1998,$ its progress has been

unstoppable. The clients include many reputed companies, hotel chains, popular celebrities

and even hospitals and commercial banks.

A brief background of the Partners:

Neerav Gupta had a family owned business that was into manufacturing wooden furniture but

Neerav$$s interest was more into decorating. So$,$ after completing a Master$$s course in interior

designing from a reputed college abroad, he decided to start his own interior design services.

Meanwhile, the furniture manufacturing business was handed over to Pratham Gupta due to

property and family settlement issues. But, Pratham decided to join Neerav and they both

started a partnership firm.

Dev Suri, a friend of Neerav who had been living abroad, sold out his real estate business and

had decided to settle on the Indian soil itself. He offered help by providing additional capital

and his knowledge of real estates did help the firm although in a small way. Stanley Pereira,

an experienced teacher and consultant, had worked previously in leading interior designing

colleges and was instrumental in making required changes in syllabus structure and interior

designing courses. He has also written many books and articles on the topic. He had retired

early due to family commitments but landed up in Profiles Group as a Partner through mutual

contacts.

The conversation:

All the four partners are comfortably sitting face to face on a peach colored cushioned sofa

which is situated near the window corner inside Neerav$$s well$-$structured office.

Pratham Gupta feels that since their firm has invested large funds, they must enter into more

market segments especially the smaller ones. And, regarding this issue, a professional

conversation takes place among the partners. The talks are as follows:

Pratham: $$So$,$ what do you think about expanding our market segments to smaller more

ordinary markets?$$

Stanley: $$What are you exactly trying to say, Pratham? Will you explain it$?$

Pratham: $$Listen guys, right now, we have $44$ centers and competent people to work under

us$,$ but when we see our customer base, it looks small and limited$.$ What I mean to say is that

we also need to have those individual household customers who are looking for service

expertise in this field. Most household customers don$$t get the necessary information as to

how to go about the interiors or how to decorate their home$/$offices etc.$$

Neerav: $$I agree with your points Pratham, but don$$t you think if we have to reach the

smaller segments of the market, we need a different approach to cater to their needs. We

would have to advertise and communicate to these segments in a customised way. This will

increase the promotion budget and our focus on the existing customers may be

compromised.$$ Dev: $$I think we need to get a balance here. Pratham$$s points are valid

enough and it will make Profiles group more productive. If need be$,$ we may have to take

help of a service consultancy in order to penetrate deeper markets.$$

Stanley: $$Okay$...$ so$,$ even if we allocate these segments, we need to target them in a way

where we will know the immediate impact of these segments. We have to position in such

manner that we get this customer base to keep moving towards us$...$ however, the problem

lies in the demand for our product in these segments!$$

Pratham: $$What is that problem you are talking about, Stanley?$$

Stanley: $$I will tell the problem, we know our product... but these individual customer

segments will see our product as a one time purchase... Interiors and designing is done by a

household customer at one point... very rarely, he will seek for a change or improvement. So$,$

is it acceptable that we cater to their one time need and then let go$?$

Neerav: $$I do understand that point... But, that$$s always the case in our business. Interior

decorations and designs are usually considered one$-$time expenditure by household

customers.... and as a matter of fact, that has not affected the way we do our business or on

our returns.$$

Pratham: $$See$,$ even otherwise it should not affect our firm because individual customer

segments are willing to pay or spend on interiors. If they need a good, comfortable home

along with a neat set of furniture then why don$$t we cater to that need, even if it$$s a one ti