GameDog is a small start-up company that that develops video games. An independe
ID: 442069 • Letter: G
Question
GameDog is a small start-up company that that develops video games. An independent marketing research firm – using a combination of demographic, behavioristic, and psychographic variables – has broken the overall video game market into three segments: Segment A (multiple player games), Segment B (single player games), and Segment C (educational games). Because GameDog lacks the financial resources to compete in all three segments, management must decide which segment it will pursue as its target market. Accordingly, GameDog’s top management has asked you to list and explain the criteria it should take into consideration to assess the attractiveness of a market segment. In doing so, explain the relevance of each criteria. Please note that you are not being asked to speculate on or recommend a particular video game segment. Instead, you are being asked to describe the criteria for assessing market segments and choosing a target market, in general.
Explanation / Answer
Game Dog has to select a market segment. It can use the following criterias and factors to come to a conclusion:
1. Assess the future potential of all the 3 segments. Identify which segment has the highest growth potential in the future. Also determine the profitability of each segment type.
2. Each segment has its own needs and requirements. Segement C' requirement willl be to develop more content oriented topics and games, whereas Segment A and B's products will have to be high on entertainment factor. GameDog should evaluate its core competency with reference to the requirements of each segment and evaluate its ability to cater to the needs of each segment.
3. Thirdly look at the competitive landscape of each segment. Try and avoid the segment that is already overcrowded in terms of number of companies offering games. It will be difficult to carve a niche for GameDog in a overcrowded segment.
After evaluating the above criteria's, GameDog should make a segment attractiveness, competitive position matrix in order to analyse its own position vis a vis segment attractiveness.
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