B9MG008 Strategic Marketing Analysis Assessment Answer

Introduction

The study is based on the chosen retail organization Decathlon. This organization has a brand image and unique model for the business that helps the organization to produces new products and distribute the products under the brand name. The organization has a target market and that are the sports persons. The organization basically offers the sports equipments. The study has done the detailed analysis of this organization Decathlon. Decathlon is committed to provide the high quality service and the products based on the needs of the customers. In this study Decathlon’s current market analysis has been done. That has discussed about the several challenges that the organization faces in the current market and also the growth of the organization. The study has done the detailed analysis that how the organization Decathlon done the geographic context. This geographic market segmentation has done the analysis that the organization focus on the market segmentation n the basis of climate, region as well as on rural urban scenario. The study has also done the market segmentation on demographic, psychographic as well as on behavioral segment. The study has also discussed that what segmentation strategy the organization Decathlon uses for the segmentation purpose.

Current Market Scenario in Retail Market

The current trend in the retail market reflects that the retail market has been growing at a rapid rate. Further, there is a continuous change in the retail market with the impact of different factors such as technological advancement and the Covid-19 pandemic. It has been observed that during the pandemic there was a closure of brick-and-wall retail businesses. This results in companies moving towards online platforms (Businessnewsdaily, 2023). Further, it has been observed that the Retail business played an important role in the economic progress of the country. It is also the second revenue as well as employment generator after agriculture. Reports, suggest that retail sales in the USA have grown by 18%, and in the UK it has increased by 13.1% in 2021 (Census, 2023). The share of retail in developing countries such as Mexico, China, and Brazil is quite higher than in India. According to reports, the retail industry in the USA gives employment to 22 million people. Further, the USA generates more than three trillion dollars in sales every year. According to reports, the global retail market had grown by $20298.69 billion in the year 2020 to $22438.07 in the year 2021 (Prnewswire, 2021). Further, it has been expected that the retail market will further grow by $29361.95 billion by the year 2025 at a CAGR of 7%. It has been observed that during the pandemic retail market had to face several losses. Reports suggest that retail sales fell by 9.6% in the year 2020 which represents a loss of 2.1 USD trillion (Reuters, 2020). Further, there has been a growing trend of people shopping online as they are retained in homes. The report suggests that online sales have increased by $2 trillion in the year 2019 to $2.5 trillion in the year 2020 followed by $2.9 trillion in the year 2021. It has also been observed that people have become aware of the impact of activities on the environment. For instance, people have sustainable demand for environment-friendly products. This has enforced retail companies to make products sustainably.

Decathlon Turnover Growth

Source: (Census, 2023)

Geographic Segmentation

The Business target market for Decathlon change depending on where in the world its stores are located and the large variety of products it offers for various sports and activities. The location of Decathlon's determines how the company segments its market. The organization segments the regional market based on the consumer's requirements and the location of the retail locations. This company likewise segments its clientele based on where they are located. Another method that Decathlon divides its market is according to the local climate in the areas where its stores are situated. The company provides goods that are tailored to the unique requirements of clients in various climates (Chron, 2021). Such a business specializes in marketing winter sports equipment in colder climates and summer sports equipment in warmer climates. In addition, the organization divides its market into urban and rural regions based on the locations of its stores. Consumers in urban as well as rural locations can choose from a variety of items that are catered to their wants and lifestyles. As per the graph, the operating income of Decathlon shows to be much higher as compared to the other companies.

Operating Income

Source: (Developer, 2023)

It might, for instance, provide more outdoor recreation equipment in rural areas and thus more cycling and jogging equipment in urban areas. The business sells more jogging and cycling equipment in cities and more hiking and camping equipment in rural areas. The organization Decathlon also does its Market segmentation based on the specific trends and the preferences in different countries. The company tailors its marketing and products campaigns to suit the unique needs and preferences of customers in each country (Developer, 2023). The organization also segment its market based on the language of the customers. The organization offers different versions of websites in different languages to attract the customers of different regions. To do the market segmentation on the country specific basis the organization Decathlon does the market research based on the specific regions and also understands the needs of the customers and according to the needs of the customers the organization does its geographic market segmentation.

Demographic Segmentation

Demographic segmentation is most important for any retail organization in order to compete in the market and maintain its profitability and sales. It is done based on age, gender, income, race, marital status, occupation, and religion (Similarweb, 2023). The demographic segmentation of the decathlon is mentioned below:

Age: Decathlon offers a wide range of sports products for its customer which range of all ages from children to adults. They mostly target consumers belonging to the upper to the middle class. The target age group of the consumer is mostly under the age group of 25-34 years old (Similarweb, 2023). Further, they also target the old age group for promoting the fitness and well-being of older adults.

Gender: Declathlon usually offers products ranging from children to both males and females. They offer a wide range of products ranging from shoes, jackets, cookset, long-sleeved shirts, and more (Decathlon, 2023). The target message of Declathlon attracts both males and females.

Income: Decathlon offers products at a different range of prices so that consumers belonging to backgrounds can afford the products. It is a sporting brand and offers products at affordable prices to promote sports. However, it is more focused on consumers belonging from the upper to the middle class.

Geographic: Decathlon has a global presence and offers a wide range of products according to specific regions. The company is aware of its target message so that it does not harm the belief or cultures of others. It has around 2080 stores all over the world in around 56 countries. Therefore, products offered to the consumers are according to the specific region as well as the country.

Lifestyle: Decathlon also offers products according to the lifestyle of the customer. For instance, it mostly targets customers who are interested in adventures and sports.

Education: Decathlon mostly offers products to consumers who have a higher education level. This is because this group is most interested in high ended fashion clothes.

Family status: Decathlon also offers products for kids such as sports equipment and sports bicycle. Therefore, they also target families having small kids.

Psychographic Segmentation

Psychographic segmentation can be defined as the market segmentation of the customer based on lifestyle, social status, opinions, interests, and attitudes. The psychographic segmentation of the customer is mentioned below:

Adventure seekers: Decathlon target customer who has an interest in outdoor sports such as trekking and adventures. These customers are usually more interested in the sports brand as this adds value to the adventures.

Fitness enthusiasts: The organization usually also targets customers who are zeal about fitness as well as wellness. This is because these individuals are most interested in the sports brand as it motivates them.

Style conscious: Decathlon also target customer who is aware of new fashion trends and like experiencing clothes of a different variety.

Eco-conscious: It also targets customers who are environment conscious and demands eco-friendly products.

Value shoppers: The product line of Decathlon is in such as way that customer feels value for money. Further, it targets consumer who wants high-quality products at an affordable price.

Tech-savvy consumers: Decathlon can also target customers having an inclination towards tech-savvy products. For instance, the consumer who wants products which has the latest technology incorporated such as fitness tracker and heartbeat tracker.

Family orients customers: It also targets customers who give priority to the family with the products that encourage family-friendly sports such as hiking and camping.

Casual exercisers: It can target consumers who like exercising for fun and enjoyment rather than competition.

Socially aware consumers: Decathlon usually target consumer who is socially aware of the CSR of the organization. For instance, the commitment of Decathlon towards labor practices and society can be seen.

Lifestyle enthusiasts: It can target consumers who are enthusiastic about healthy lifestyles or passionate about sports events such as trekking and mountaineering. They can launch such products that motivate them to follow their passion. Therefore, Decathlon can target consumers having common interests, values, and lifestyles with their unique and personalized products along with the target message. 

Products sold by Decathlon

Source: (Qualtrics, 2023)

Behavioral Segmentation

The behavioral segmentation deals with the buying behavior of the customer. This mainly identifies the consumers behavior patterns with the way they tend to interact with the company. The main objective that is used by behavioral segmentation is to understand the needs and desires of the customer. The company also tries to utilize this behavioral segment in order to identify the choices and preference of the customers. Thus the buying behavior of the customers can be identified (Qualtrics, 2023). The company will be able to tailor the product to meet those needs and services. The company will be able to quantify the potential value to the business and this will garner more profits and growth for decathlon. The company will be able to expand its own customer base. This will help the company to enhance its value and the company will be able to identify the behavior of the customers.

The company will be prioritizing on high value prospects and this will enable the company to take smarter decisions. Thus the company will be able to take decision on time budget, growth and the company will be able to enhance its business. The segments mainly help the company to identify the customers and the company will be able to identify the purchasing behavior of the customers. The buying decision that is made by the customers can be identified very easily. The customer tends to look for a variety of products and this will help the customer to identify the right product that will fit their needs (Sgaier et al., 2017). The same thing is applied by the company the company tend to create a variety of products in order to make sure that the products get more attraction from the customer perspectives. This will help the company to sell a large variety of products and the customer will take time in identifying the product based on their needs. Thus, both the customers as well as the company get the profits. The company will be able to increase the sale of product and the customer will get their desired product.

Segmentation Strategy

The marketing segmentation is a marketing term and this mainly refers to aggregating buyers into segments with their needs and this will respond to the marketing action. The marketing segmenting used by eth company mainly works by identifying the different categories of customers and thus the customer will be able to perceive certain products and services which are different from another. The market segment mainly tries to identify the target group of customer and then the company tries to tailor the products and branding the product that are attractive to the group. The markets are segmented into many ways such as geographically, demographically as well as behaviorally (Susilo, 2016). This market segmentation help the company to minimize the chances of risk and this will help in figuring out which way the company will try to acquire the market. With the process of risk minimization the company will be able to focus on its resources and this will help the company decathlon to enhance its profits the company decathlon will be able to increase it number of sales of new products.

The market segmentation strategy that is used by decathlon is mainly done by the company to discover new products and this will eventually help the company to create more reach all over the area (Developer, 2023). The market segmentation helps in the process of identification of the correct segment of customer. This market segmentation helps in identifying the target group of customers and thus tailoring the products and branding in a way which will prove more attractive to the group. Thus, the company will be able to increase a greater number of sales for that product (Tarver, 2023). Plus, the company needs to verify the choices of the customer. Then only the company will be able to create a change in the market (Tarver, 2023). Each and all customers have their own preferences and choices but they are very hard to predict in order to predict those preferences the company tends to utilize this market segment in order to attract more segment of customer.

Target Audience

The main target audience for the company will range from 25 – 40 years old. These segment criteria are maintained by decathlon as the company sells sports good to the entire customer. This will help the company to sell the exact number of products. The company will be able to increase the selling of product with the help of market segmentation. The company identifies the target audience by identifying the choices of the customers and the studying the performance of the competitors within the same industry (Directiveconsulting, 2021). This will mainly work in identifying which group of customers is interested in the products of the customers. The target audience mainly helps in the marketing segmentation of the company. Thus, the company Decathlon will be able to perform its business. The company will be able to identify the people who are interested in the products and services. Thus, the company will be able to enhance its selling of products and services. Every marketing campaign requires identifying the choices of the customer. This will be possible if the company identifies the customer who is interested in buying the product of the company (Sharma, 2023). There are various types of products that are available in the market but it is quite daunting for the company to know about the preferences of the customer.

So, the company tends to identify the choices with the help of market segmentation and thus the company will be able to sell the products to the customer (Indeed, 2019). The geographic areas also play a crucial role in identifying the target audience. As for the company decathlon is a company which mainly sells sports items the company needs to sell good quality sports goods to the athlete and other segment of customer who are interested in sports and thus the company will be able to garner more profits and increase the number of sales of those products. The number of sports good selling will increase if the company identifies the customers who are interested in wearing sports products.

Analysis

Running, football, cycling, and a number of other sports are just a few of the numerous sports categories that Decathlon, a global retailer of athletic goods, sells its products in. Decathlon is a one-stop shop for customers thanks to its broad selection of products in several sports areas. The foundation of this company's pricing strategy is accessibility for a larger consumer base and affordability of its products. In-house production and capabilities are part of Decathlon's vertically integrated business model (Klöckner, 2015). The business is able to regulate the caliber of its output due to this. Also, it enables the company to maintain quality control over its goods and react more quickly to client input. The creative product designs as well as technology used by Decathlon are well renowned. To make its products better, the corporation frequently makes research and development investments. With locations across the globe, this company is likewise globally present. This enables the business to access new markets and aids in the collection of local client preferences. Its growth as well as sales potential may be hampered by the fact that Decathlon is still not well known in some markets (Luo et al., 2019). While Decathlon currently offers a large selection of products, there aren't many opportunities for customers to customize and personalize their purchases. Comparatively speaking to its rivals, Decathlon has a smaller web presence. The expanding worldwide fitness industry presents Decathlon with chances to diversify its consumer base and boost its business.

Decathlon should use social media sites like Facebook, Instagram, and YouTube to connect with its target audience. Social media presents a great chance for the business to promote its goods, interact with customers, and increase brand recognition. Social media can be used by Decathlon to advertise its deals, new launches, and events (Psychographic , 2022). To advertise its products, Decathlon ought to think about forming alliances with athletes as well as sports organizations. This might aid the business in establishing reputation and increasing its visibility among sports fans. To advertise its goods and services, Decathlon might also host sporting events or sponsor athletic competitions.

Conclusion

It can be concluded with that Decathlon is indeed a major retailer of athletic goods that has been expanding significantly in recent years. The company includes a broad range of sporting items and gear for many different sports and activities in its product portfolio. Decathlon is well-known for its high-end, reasonably priced items and enjoys a positive brand reputation. By building additional stores across the globe, Decathlon has been able to grow its business internationally. The business has also been adjusting to the shifting retail environment by enhancing its e-commerce capabilities and putting safety measures in place in its physical locations. Decathlon must contend with issues including competition during COVID-19 and shifting consumer behavior. Decathlon is well-positioned for ongoing expansion as well as achievement in the sporting equipment retail sector due to its strong brand image, wide product selection, and global presence. In order to set itself apart from its rivals and win over environmentally concerned customers, the company should also continue to innovate as well as adapt to these problems by expanding customer involvement, improving its presence online, and putting a stronger emphasis on sustainability. Depending on their target audience, the company should offer the services. Although Decathlon offers a wide range of goods, there are few chances for customers to alter and personalize their purchases.

References

Businessnewsdaily (2023) The Future of Retail: Trends, Business News Daily. Available at: https://www.businessnewsdaily.com/9836-future-of-retail.html (Accessed: March 31, 2023).

Census (2023) Advance monthly sales for retail and Food Services, February 2023. Available at: https://www.census.gov/retail/marts/www/marts_current.pdf (Accessed: March 31, 2023).

Chron (2021) The importance of a target audience of consumers, Small Business - Chron.com. Chron.com. Available at: https://smallbusiness.chron.com/importance-target-audience-consumers-37173.html (Accessed: April 1, 2023).

Decathlon (2023) Decathlon, DECATHLON. Available at: https://www.decathlon.fr/ (Accessed: March 31, 2023).

Developer (2023) What is market segmentation? 4 types & 5 benefits, Lotame. Available at: https://www.lotame.com/what-is-market-segmentation/ (Accessed: April 1, 2023).

Prnewswire, R.and (2021) Global retail market report 2021-2030: Market is expected to reach $29361.95 billion in 2025 at a CAGR of 7%, PR Newswire: press release distribution, targeting, monitoring and marketing. Available at: https://www.prnewswire.com/news-releases/global-retail-market-report-2021-2030-market-is-expected-to-reach-29361-95-billion-in-2025-at-a-cagr-of-7-301232417.html (Accessed: March 31, 2023).

Qualtrics (2023) Market segmentation: Everything to know in 2022, Qualtrics AU. Available at: https://www.qualtrics.com/au/experience-management/brand/what-is-market-segmentation/ (Accessed: April 1, 2023).

Reuters (2020) Global retail sales to fall 9.6% in 2020: Forrester, Reuters. Thomson Reuters. Available at: https://www.reuters.com/article/us-health-coronavirus-retail-forrester-idUSKBN22C232 (Accessed: March 31, 2023).

Sgaier, S.K. et al. (2017) “A case study for a psychographic-behavioral segmentation approach for targeted demand generation in voluntary medical male circumcision,” eLife, 6, pp. 34–45. Available at: https://doi.org/10.7554/elife.25923.

Similarweb (2023) Decathlon.ca Traffic Analytics & Market Share | similarweb. Available at: https://www.similarweb.com/website/decathlon.ca/ (Accessed: March 31, 2023).

Susilo, W.H. (2016) “An impact of behavioral segmentation to increase consumer loyalty: Empirical study in higher education of Postgraduate Institutions at Jakarta,” Procedia - Social and Behavioral Sciences, 229, pp. 183–195. Available at: https://doi.org/10.1016/j.sbspro.2016.07.128.

Tarver, E. (2023) Market segmentation: Definition, example, types, benefits, Investopedia. Investopedia. Available at: https://www.investopedia.com/terms/m/marketsegmentation.asp#:~:text=the%20broader%20masses.-,What%20Is%20Market%20Segmentation%3F,that%20appeals%20to%20their%20interests. (Accessed: April 1, 2023).

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