MARKET SEGMENTATION

THE LUXURY ACCESSORIES MARKET FOR MEN

MKW 2402
CONSUMER BEHAVIOUR
Andri Dwisondi (26099586)
Dedi (26405512)
Dinushadha Sri Kahawita (25768697)

TABLE OF CONTENTS
1.0 EXECUTIVE SUMMARY ..........................................................................................................3
2.0
3.0
3.1
3.2
3.3
3.4
3.5
4.0
5.0
6.0
7.0

INTRODUCTION ............................................................................................................4
CONSUMER ANALYSIS.................................................................................................5
MOTIVATION..................................................................................................................5
ATTITUDE........................................................................................................................5
PERSONALITY ...............................................................................................................6
INVOLVEMENT..............................................................................................................7
CULTURE.........................................................................................................................7
MARKET SEGMENTATION...........................................................................................8
TARGET MARKET..........................................................................................................10
RECOMMENDATIONS...................................................................................................11
REFERENCES..................................................................................................................13

EXECUTIVE SUMMARY
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This report critically analyses the internal influences and external on consumers behavior
and their buying decisions. The internal influences described are Motivation and needs,
Personality, Involvement, and attitudes. The external influence described is Culture. These
Influences are understood to create a Marketing Strategy for the launching of the New Classic
Watch we have chosen.
A few potential target markets were analyzed, such as young productive man, matured
productive man, and retired man. We chose to target mature productive man as we better
understood the internal and external influences affecting this group and could come up with a
strong strategy to successfully target this market and earn a potential return.
The need for Self Esteem is a main influence for buyers of Classic Wristwatches. Their
professions or social groups demand sophistication and splendor, the individual within these
groups have high self-esteem and to improve their image with products such as classic elegant
watches. The level of involvement may be very high because of the price tag that accompanies
the product.
We have suggested to premium the product price as a reflection of its superior
craftsmanship and the expensive material. In addition, it also reflects the magnificence of the
superior classic watch. The watch will be crafted from diamond encrusted, sapphire glass will
also be considered to use. It will be promoted in business newspaper and endorsed by a few
famous celebrities, finally the watch is to be sell in shopping mall such as Starhill gallery.

INTRODUCTION
The world is full of opportunities to satisfy consumers unmet needs by creating new
products and services. However, one of the most challenging concepts in marketing deals with
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the understanding of why buyers do and what they do or do not do. But such knowledge is
critical for marketers since having a strong understanding of buyers behavior will help shed
light on what is important to the customer and also suggest the important influences on customer
decision-making. This consumer purchasing decision related information is difficult but critical
for marketers as it helps them to identify what is important to the consumer and what influences
the consumer most at the time for taking their purchase decision (Bennett, 2009).
Identifying external and internal influences that drive the decision of consumer to need a
particular products or services is very important. Without understanding external and internal
factors that affects consumers buying behavior, it will not be possible to serve customers in an
appropriate manner (Kotler, 2002). Thus, this report focusses on both external and internal
factors that influence consumer behavior and their purchase decisions, also segmentation and
marketing recommendation for the selected target market. The purpose of focusing on external
and internal factors is to create successful marketing strategies. This report talks about internal
factors such as Motivation and personal needs, Personality and Self Concept, involvement, and
attitudes. In addition, external factors will also be discussed which will be a Culture as the factor.
The elegance of a product, especially a wristwatches can be meant they are irreplaceable.
Most of the time, wristwatch will only do no more than just tell time. However, our new product
Diamante, shows more than just time, it is a symbol of sophistication and superiority.
Diamante a word from diamond as often esteemed as a universal symbol for luxury. A mark of an
indication as a man as it is symbolize purity and refinement.
This report focusses on three types of wristwatch buyers, which are young productive
men, mature productive men, and retired men on how the different characteristics may affect
them. We have chosen and identified particular target market, thus created a particular product
for this market. The product details and features will be discussed within the report. In addition,
this report will also discuss about the marketing mix that will affect the sales of the product.

CONSUMER ANALYSIS
A. Internal Influences
I.

Motivation and Needs

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Motivation can be defined as an individuals inner state that encourages him or her to satisfy the
specific needs (Kurtz & Young, 2009). According to Maslows hierarchy of needs, most of the
marketers of watches must aim their marketing strategy to overlap with the buyers artistic needs
and more importantly, the buyers esteem needs (Maslow, Herzeberg, 1954). The need to
interrelate with the buyers in case of artistic needs and esteem needs are extremely vital for
marketers mostly for classic watches in order to form a relationship with the customers. In
return, sales will be boosted if marketers success in interacting with buyers in term of those
needs. By identifying the needs and motives the consumers, marketers can easily influence their
consumers purchasing decision. Thus, the most substantial need identification model that can be
used as a foundation on identifying the needs is Maslows need theory.
In todays world, the classic collection of watches has become undoubtedly old-fashioned or out
of style and less trendy. In that case, marketers of the classic watch must aim to persuade the
buyers to purchase the product and must try to rise the value of the classic watch collection. It
can be done by developing the needs of the consumer through several ways, for example an
effective promotions and advertisement. Thus, it is done in order to let the consumer realize their
need of having classic watch and to plan a thought of having a classic watch will increase their
image and status as the classic watches look superior and high class among others. Once
marketers achieve their goals to do the realization, the need will become real and the buyers will
be motivated and will consider to purchase a product from the classic watch collection. To
conclude, motivation is said to be the best driven force that marketers must understand and
identify in order to motivate or persuade consumers.

II.

Attitudes

The next vital internal influence that affects consumers buying behavior is said to be their own
attitude. Attitudes refers to how an individual feels or think about something, where it is always
reflect the individuals action as well as their buying patterns. Once a person attitude is shaped it
is very difficult to change or can be said to be loyal product (Fortin & Dholakia, 2005). However,
it is not always good when the consumers have a specific attitude towards a product, especially
when it comes to a negative attitude. It will also not to be easy to change the belief, because it is
long-lasting general evaluation of consumers about the product or the company itself.
Attitudes tell marketers about how their consumers act and how well they are recognized in the
overall market place. Classic watch marketers need to remember that in modern era, most of the
consumers are exposed with the number of advertisements and information and they usually will
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not remember all of them. However, in this case, if they figure out something against with their
own attitudes is marked off easily. Thus, it is very crucial for classic watch marketer to design an
attractive advertisement that does not conflict with the consumers attitude.
Most of the time, attitudes of consumers are learnt as they are formed with their own personal
experiences along with their own personality (Fortin & Dholakia, 2005). In addition, individuals
attitudes are also influences by the external influence such as friends and family member, more
importantly an extensive media coverage (Kurtz & Young, 2009). Thus, it is very important to create and
establish an effective perception in their mind. Therefore, creating a positive image is essential to influence
consumers attitude and this can only be done by selling them effectively in an inclusive manner.

III. Personality
Marketers must recognize the distinctive personalities of every segments of the market sector.
Personality has an immediate impact on purchasing behavior as every item will just suit
purchasers of a similar personality. In the wristwatch market consumers will buy the kind of
watch that suits their personality the most. Some consumers such as young productive man and
also matured productive age man may have a well reputed personality for who they are. It is
fundamental to wear a watch, for example, an expensive classic watch that best suits their
personality as they regularly meet new customers or individuals as their line of work, for
example, being a CEO is about expanding what they have. A few consumers such as a retired age
man may have a personality that makes them arrangement ahead for their future. This will make
them put resources into costly resources, for example, classic watches that can be sold at a more
prominent cost following a couple of years. Some consumers might likewise purchase a classic
watch with the expectation of passing it on for his or her future generation relying upon their
personality.

IV.

Involvement

Wristwatches can be seen as a symbol of style, of the changing times or as a sign of man, it can mirror his
personality or his profession, tastes and even his needs, esteem and attitudes (Evans, Jamal, Foxall, 2009).
Therefore wrist watch buyers may experience shifting level of involvement in their purchase of the wrist
watch. The level of involvement spent in acquiring the watch, will differ by the level of significance to the
purchaser, its money related quality or the reason he buys it.
Buyers in the age of young productive who are usually following trends, their involvement would be very
low, as they see a product on the market, endorsed by some sport stars or can be because of the income is
measuredly low compared to matured productive and retired man. As newer trend comes to market, they
may switch to those watches. However, in some cases where young productive man is considered as a
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sport enthusiast, their level of involvement will obviously be much higher, where they but watches to assist
them in specific sport or which are durable and last longer. Thus, their purchase pattern are mostly to be
medium-priced or even a high-priced. However, most of mature productive man are not considered as a
sport enthusiast, thus collection or investment in expensive classic watches is the option they have. It is
obvious that, to purchase a classic watches will have high involvement, due to price and features, but some
may argue, since they possess the ability to buy, their involvement may not be high as they but it as a
passion, hobby or out of loyalty and deep desire for the brand and their products. The elegance of a

product, the purity and refinement might be the reasons why matured productive man prefer to
purchase classic wristwatches.

B. External influences
I.

Culture

An individual's values, attitudes, beliefs are mostly to be shaped with his culture. This thusly
likewise shape individuals attitude towards acquiring particular items or services. Culture of an
individual additionally delights his few enthusiastic needs and because of this they attempt to
secure their cultural values and convictions (Singh, 2006). This culture protection is reflected in
people's behavior as purchasers.
Culture can build up a customer need and can likewise influence the satisfaction of that need.
Along these lines, culture delineates how an individual fulfill or satisfy his needs that if
recognized by classic wristwatch marketers. By advertising classic wristwatch in a way that
resonate with the priorities of the culture of every young productive man, mature or even retired
man can increase their chances of consumer acceptance and success. For high income such as
mature productive age, the marketers should have sell the watch at esteemed and premium prices
with elegant environment whereas for youngster productive man, it should be served in
reasonable price. Before serving consumer, it is essential for marketers to collect information
about the specific target markets cultural values, which is in this case is a matured productive
man. It can be done by analyzing their family, religious, and education associations. The culture
and value related information can be considerably utilized by marketers of classic wristwatch to
create messages and advertisements that are more likeable and attractive to attract consumers.

MARKET SEGMENTATION
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The most fundamental thing in marketing is to understand the needs of customers and also to
deliver it to the customer. However, it is impossible for a marketer to satisfy the needs of all
customers and therefore market segmentation is essential in order for them to maximize their
customers satisfaction which then will lead to customer loyalty towards their brand (Kotler,
2012). Market segmentation is a process of identifying and categorizing different types of
geographic, demographic, behavioral and psychographic factors of customer and putting
homogenous characteristics customers into a category (Kotler, 2012; Tynan & Drayton, 1987).
Market segmentation allows marketers to understand different benefits customers seek from a
product based on their segmentation (Haley, 1968; Wedel & Kamakura, 2000). Also from the
market segments developed, marketer will then need to choose one of the segments called target
market and then develop a product as well as marketing strategy in selling their products to the
target market.
As customers behavior in the market being examined, the company has identified three main
segments that are perceived as most profitable segments for men luxurious watch consists of
young productive men, matured productive men and retired men that are living in the urban area
and generally have higher education with high loyalty towards a brand.
Young productive men are male workers in their early time entering to a workforce with age
around 20-35 years old. Those young men workers are generally more aware of the current trend
in luxurious watches as well as try to follow the trend to satisfy their social needs. Being
technologically savvy, especially in utilization of social media, the young men will tend to have
higher degree of esteem needs to show others on their achievement. As the consequence, they
will be having higher rate of purchase compared to other segments in order for them to satisfy
both their social and esteem needs. However, the fact that they just started working implies that
they may not have the purchasing power for luxurious watch that will be the major drawback for
this segment.
Second market segment identified is the matured productive men segment. This segment consist
of male age between 35-65 years old, male workers who already has stable income and normally
achieve professional status in their job which implies to the higher income than the other
segments. For instance, a survey showed that Asian in their 40s make up the biggest proportion
of high incomers (Euromonitor, 2013). Although they may not be as technologically savvy as
their counterparts, they have the high readiness in buying luxurious watch. The expensive watch
would then perceived as a statement of success in their life. The watch will not only satisfy the
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self-esteem and social needs but also the self-actualization of the person. The people in this
segment will perceived the watch as a declaration of them being a leaders and being independent.
Lastly, the segment identified in luxurious watch is the retired men segment. They are male in
their retirement age, normally above 65, who are having high certainty in their life. People in this
segment will tend to have plan on how they will spend the rest of their life. Generally, people in
their retirement will either receive enormous amount of money for their work or having
superannuation program ready for them. When people in this segment buy luxurious watch, they
will try to satisfy their self-esteem as well as self-actualization. This is because the people in this
segment intention to buy this watch as a display of their hard work and achievement along their
life.

SEGMENT
VARIABLES
Demographic

Young Productive
Men

Matured Productive
Men

Age (years old)

20-35

35-65

Occupation

Young Working
Population
RM 2000-4000

Professionals

Income (monthly)

Retired Men

65 and
above
Retired

RM 4000-6000

RM 4000

Single/In a relationship/
Newly married

Married/Divorced

Married/Divorced

Usage rate

Low usage rate

Heavy usage rate

Heavy usage rate

Benefits sought

Social and esteem

needs

Social, self-esteem and

self-actualization needs

Self-esteem and selfactualization needs

Status
Behavioural

Loyalty status

High loyalty

High loyalty

High Loyalty

Readiness to purchase

Low readiness

Intending to buy

Medium readiness

Online behaviour

Actively online

Occasionally online

Passive user

Psychographic
Personality

Impulsive, ambitious
and demanding

Independent, leadership
and imposing

Calm, charismatic and

well-planned

Social Class

Middle-Upper class

Upper class

Middle-Upper class

TARGET MARKET
From all the market segments, it can be concluded that Diamantes target market will be on
matured productive men as it is the most profitable for Diamante. People in this segment will
perceived this watch as a display of their success and achievement in their career towards their
colleagues. The market will advantaged Diamante in several ways such as higher loyalty towards
Diamante that will then allow Diamante to fully achieve the customers lifetime value. Because
in high involvement purchase, a lot of consideration needed to find the best watch to suit their
specific needs because of the high cost in purchasing the product. According to Cartner-Morley
(2005), once a customer found a product in high involvement purchase that suits them, customer
will generally loyal to it.
Furthermore, the high income in this market segment will increase the readiness to purchase the
luxurius watch although the rate of purchase is low. Thus, with customer loyalty in place,
Diamante will able to receive the customer lifetime value. Moreover, when professionals use the
product, people that saw them as a successful person will also want to consider buying their
product in order to feel as successful as the professionals. In conclusion, the matured productive
men segment may seems as the most profitable market for Diamante with several benefits.

RECOMMENDATIONS
1) Product
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Quality has an immense impact on the value of the product. If a consumer is willing to
spend a larger sum of money on a high value brand they expect the product to be durable
and long lasting. The key to outstanding quality is the materials used in manufacturing to
be switched from standard materials to more expensive and lavish materials such as gold
or other precious metals, but in this case would be diamond. Inserting precious stones in
the dial of the watch could highly increase the value. Durability can be extended by using
glass such as sapphire-crystal glass in order for the watch to be scratch resistant.
Undoubtedly the appearance must be advanced and innovative in order for the
organization to maintain a reputation and attract the upper class male which is our target
market.
2) Price
Since this watch is aimed at the upper class, the price should be placed high as the quality
of the watch lives up to the superior priced watches. A high price also helps set in the
consumers mind that this watch would be of high quality. Greater priced products are of
sentimental value to classic watch collectors.
3) Promotion
Many premium watch brands spend large sums of money on advertising their products.
The watch should be advertised in top class magazines such as Vogue. Celebrity
endorsements is a very common form of advertising in the premium watch market, if this
method is used it will bring awareness and liking towards the brand, rising the brand
image, which would in turn improve the value of the product. Giving consumers of the
watch exclusive offers to prestigious member clubs which would have an impact on
brand loyalty.
4) Place
High-end shopping malls such as Starhill Gallery should be the type of malls that this
watch is sold in, which then would directly cater to the target market. Such malls have
prestigious reputation so people browsing through these malls would have prestigious
value towards the watch.

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