“Report of the targeting analysis for NeoRhythm”

BHO 1171 INTRODUCTION TO MARKETING

PREPARED FOR: Ms. Haslinda

PREPARED BY: Tan Hui Nee 4625834

Tan Xin Ting 4625841
Ang Jie Qi 4627792

TUTORIAL GROUP: Tutorial 3 - Tuesday, 12.30 p.m. - 1.30 p.m.

DATE OF SUBMISSION: 8th April 2020

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Table of Contents

No. Content Page.

1. Introduction ……………………………………………………………………... 3

2. Segmentation Strategy

2.1 Demographic Segmentation ……………………………………………........ 3-4

2.2 Psychographic Segmentation ……………………………………………….. 4-5

3. Targeting Strategy ………………………………………………………………. 5

4. Conclusion …………………………………………………………………….... 6

5. References ………………………………………………………………………. 7 -8

1. Introduction

The aim of writing this report is to analyse the target market or potential client for the electronic
wellness headband named NeoRhythm. NeoRhythm is a medical-grade device which uses

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electromagnetic waves to stimulate the selected brain areas in order to help us release stress,
improve sleep, enhance mental capacity, control pain, energise the body and more. This device
can be used with an app that customers can install in their smartphone for selecting different
modes and also track their health by using the app. In addition, NeoRhythm is easy to carry as it
only weighs 105 grams which is extremely light.

Some of the related theories that will be discussed in this report are market segmentation and
market targeting. According to Weinstein (2004), market segmentation is the process of dividing
potential customers within the market into different groups based on different variables such as
demographic segmentation, geographic segmentation, psychographic segmentation and
behavioural segmentation. On the other hand, market targeting can be defined as a strategy of
choosing a segment which consists of a group of potential customers that can be served by a
given marketing mix to focus in order to provide the greatest customer value to them (Sharp
2017).

2. Segmentation Strategy

2.1 Demographic Segmentation

Demographic Segmentation can be defined as dividing the market based on variables such as
age, gender, income level, occupation, education, ethnicity etc. (Armstrong et al. 2018).
Demographic segmentation is one of the most commonly used segmentation bases in order to
divide the market because demographic variables are easier to measure compared to other
segmentation bases (Mark 2017).

By using demographic segmentation, working adults who have a middle income level have
been targeted as the target customer for NeoRhythm. This is because working adults who have a
middle-income level have the ability to afford NeoRhythm while other segments like college and
university students who do not have any income to purchase such an expensive medical-grade
device. In Malaysia, people who have a monthly income of at least RM4000 to RM10000 can be
classified as a middle level income earner (Wan 2012). Meaning, these people are able to
purchase our product which costs RM1841 by the income that they have earned. Besides, there is
a huge segment size for this group of people in Malaysia. Based on the Department of Statistics
Malaysia (2012), it showed that there are more than half of the total population which is 66.3%
earn an average income within the range of middle income level while the amount of high
income and low income earners only occupy 15.4% and 18.3% respectively of the total

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population. Meaning, the segment size for the working adults who are earning a middle income
is huge in Malaysia. Moreover, the number of working adults with a middle-income level in
Malaysia is continuing to grow as stated in the survey conducted by the Department of Statistics
Malaysia (2014) showed that there is an increase of 20% in the amount of middle level income
earners from 2014 to 2016.

According to Andrews & Currim (2003), when evaluating different market segments, firms
must look at whether the segments are growing and whether the segment size is huge enough.
These are the reasons why we chose this group of working adults who have a middle-income
level to target for our product as this segment consists of a huge segment size and has a potential
to grow in Malaysia over time.

2.2 Psychographic Segmentation

Psychographic segmentation can be defined as dividing customers into different segments

based on their lifestyle, social class, interests, personality characteristics etc. (Sarli & Huam
2011).

Besides that, middle income level working adults have been targeted as there are changes in
terms of their lifestyle. According to the Malaysia’s Healthiest Workplace by AIA Vitality
Survey 2019, it has shown that in 2019, 51% of Malaysian working adults are overworked as
they were found to work an average of 15 hours more than their contracted hours each week and
it has increased 8% compared to 2018 which found that 43% of employees work an average of
10 hours more than their contracted hours each week. These changes in their lifestyle has led to
an increasing stress level of the workers as based on a research conducted by Mathangi (2018), it
shows that there is a positive relationship between working hours and workers’ job stress level.
Meaning, the higher the working hour the higher the job stress level faced by the workers.
Therefore, NeoRhythm can be used by working adults in order to help them release the stress
that they are facing due to the changes in the lifestyle. Hence, there is an opportunity for us to
target this group of people in Malaysia.
Moreover, due to the lifestyle changes in terms of the increasing percentage of workers’ who
are faced with the overwork situation, Pankti et al. (2018) state that those workers who overwork
have to work for a long period of time and thus, it can lead them to face some of the most
common symptoms such as neck pain, shoulder pain and headaches. This means there is a need
for NeoRhythm to solve these common symptoms that are faced by the working adults which
can affect their daily working performance. Other than that, statistics had shown that in
Malaysia, there are 67% of workers who are usually overwork reported that they are having poor

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quality of sleep (Suresh 2019). So, by using the product NeoRhythm, it can help workers who
are facing poor quality of sleep to help them solve their sleeping disorders problems as stated by
Goran, Micheline & Michiel (2017) sleep is crucial as with a proper sleep, the quality of life can
be increased.

Hence, this has shown that overwork has brought changes in the lifestyle for working adults in
Malaysia and this has led them to have an increasing stress level, health issues and poor quality
of sleep. Armstrong et al. (2018) state that by using psychographic segmentation to segment out
different lifestyles of customers, marketers are able to better comprehend the factors behind the
consumer behaviour such as what gives them the intention to purchase either a product or a
service. Therefore, by targeting middle income level working adults based on their lifestyle
changes, the product NeoRhythm is able to help them to solve the problems that they are facing.

3. Targeting Strategy

According to Michael (2011), targeting strategy is a strategy for a company to sell their product
or service by choosing and targeting the potential customers within the market. In this case, our
product NeoRhythm Electronic Wellness Headband is using concentrated marketing or focused
marketing. Concentrated or Focused Marketing can be defined as a market coverage strategy in
which a huge share of one or few segments are being used by a firm (Armstrong et al. 2018). The
reason for using the focus marketing is because NeoRhythm Headband does not consist of any
other type of version that can be used to target different groups of customers. Therefore,
NeoRhythm only targets one segment which are middle income working adults as this segment is
huge and their income allows them to afford the product and also because of their lifestyle
changes due to overwork which can lead them to have serious health issues. Hence, by applying
the appropriate marketing mix according to consumers’ needs and wants, a target market must be
chosen accurately in order to do so.

4. Conclusion

It can be concluded that it is crucial for marketers to segment out the market based on different
variables before targeting a specific group of customers. In this case, the market is being
segmentized based on psychographic and demographic segmentation. Besides that, targeting a
specific group in marketing is also important as it can help companies to better meet their

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consumers' needs based on their behaviour and habits. For example, our product NeoRhythm is
focusing on specifically one group of people which is the middle-income working adults so
marketers can better understand and find out about their needs. Therefore, these are the reasons
why it is important for marketers to segment and target the market before introducing a new
product into the market as without segmentation and targeting, marketers will not be able to
know who could be the right customer for their product.

1384 words

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5. References

Andrews, RL & Currim, IS 2003, ‘A comparison of segment retention criteria for finite mixture
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Armstrong, G, Adam, S, Denize, S, Volkov, M & Kotler, P 2018, Principles of marketing, 7th
edn, Pearson Australia.

Department of Statistics Malaysia 2012, ‘Higher household income, lower poverty rates’, viewed
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Department of Statistics Malaysia 2014, ‘Report of household income and basic amenities
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Goran, M, Micheline, W & Michiel, EH 2017, ‘Short and long-term health consequences of
sleep disruption’, Department of Pharmacy, vol. 9, no. 8, p. 6, viewed 27 March 2020,
<https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5449130/>.

Michael, L 2011, ‘Segmenting and targeting your market: Strategies and limitations’, viewed 28
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Mark, AC 2017, ‘Market segmentation, targeting and positioning’, Journal of Marketing, vol.
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Pankti, PS, Neeraj, AA, Ashok, S & Parag, KS 2018, ‘Awareness of neck syndrome in young-
adult population’, International Journal of Community Medicine and Public Health,
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Sarli, A & Huam, HT 2011, ‘The role of psychographic for distinguishing main categories of
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