IBM CORPORATION: TARGETING

THE LGBT SEGMENT

CASE STUDY


GROUP 7:
Abhishek Kumar
Arijit Guha
Bharat K.
Kiran S. Gupta
Shaivya Gupta
Syed Arshed

IBM CASE STUDY

International Business Machine, IBM, one oI the leading inIormation technology companies in
the world, with its origin rooted Iar back in 19
th
century got transIormed Irom a mere tabulation
company to a recording company and then moved into manuIacturing oI devices and machines
like cheese slicers, punctured cards etc. IBM has been ranked 4
th
in diversity Inc`s list oI top 10
companies Ior LGBT employees in US. The Second World War Iormed a good mean oI
opportunity Ior the company Ior diversiIying their product line and was into manuIacturing oI
riIles, bombsights and machines. Travelling all the way along transIormations, IBM is now one
oI the top companies providing the soItware and hardware services along with consultancy
services in a wide range oI areas across the globe.
IBM was recognized and well Iamed Ior its diversiIication in culture that it maintains and the
encouragement they give Ior the minorities. Being Iar ahead in providing a platIorm Ior the
disabled, the blacks and women to develop and thus reIlecting their non-discriminatory policies
to the eternal world.
This case deals with how the pioneer, in encouraging the minorities, took another step ahead in
dealing with the LGBT (Lesbian, gay, bisexual and transgender) segment and thereby creating a
support and encouragement Ior the segment.
The case is analyzed on the basis oI Market Analysis and Market Segmentation (i.e. on the
internal and external environments oI the company, the marketing mix(4P`s) and how the
marketing mix was accepted by the target segment.

Market Analysis:
SWOT

INTERNAL EXTERNAL
(Changes inside the company)
MICRO VARIABLES MACRO VARIABLES
O BUYERS POLITICS
O SUPPLIERS ECONOMY
O NEW ENTRANTS CULTURE
O COMPETITORS

Opportunity:
IdentiIying the potential market and targeting the untapped segment (LGBT) was a big
opportunity Ior IBM. IBM has utilized its opportunity and gained a drastic proIit. LGBT`s have
been very Brand Loyal and had high disposable income.

Threats:
O The company had a very good vision and mission to progress in Iuture but it was really
risky Ior the company to target the niche market; one single Iailure could wash away the
whole company.
O Targeting the LGBT could create a negative impression about IBM in the mind oI the
consumers.

Macro Variables:
O IBM had great opportunity to Iocus on their target segment (LGBT group), when the law
allowed to have diIIerent sexual orientation bringing about corporate equality.
O IBM was very eIIicient in understanding the changing needs oI business, due to which
they changed the typewriters to the computers, which matched the needs oI the business
opportunities.
O 12,000 employees were redeployed and an early retirement incentive was introduced to
reduce the operating cost.
O ue to change in the culture outlook (i.e accepting LGBT`s as the normal consumers),
they broadened their consumer segment.
O The company always accepted the changes. For example, during Globalization the
company accepted the changes brought by the government policies and started changing
their structure and the way oI working which kept them competitive.
O The company kept aside 1 oI their proIit Ior the Widows and the Orphans.
O LGBT has given Iair employment to LGBT and have provided them an equal workplace
beneIit.
O iversity initiative has been taken by employing 1 employee with disability in the year
1914.
O ondiscrimination policies were also initiated to help LGBT community.

Micro Variables:
Several Iollowing Iactors made the company to Iocus on the segment and take a competitive
advantage oI being a pioneer in encouraging and supporting the segment and thereby tapping the
untapped market besides maintaining their policy oI encouraging the minorities.
The analysis reveals that:
O The company could Iind that their main target segment were LGBT`s so they also
targeted the LGBT suppliers which helped them not only to gain the LGBT consumers
but also to increase their brand loyalty
O IBM had a great Iirst mover`s advantage, oI targeting the LGBT segment.
O LGBT Iormed a new niche market and were aIIluent and responsive to an aIIinitive sell.
O This segment can expect high disposable incomes since they had no children and Iamily
bounds.
O IBM created a great barrier Ior the new entrants and Ior the competitors as they created a
great competency Ieeling among the LGBT consumers that was very diIIicult Ior the
other company to set in.

Market Segmentation:
The segmentation was done on the basis oI market analysis. From the market analysis it could be
stated that the company could Iind the LGBT segment to be most lucrative. They attached with
the Ieelings oI the LGBT`s and made them Ieel that they were the main stream customer Ior the
IBM. They also targeted the B2B customers.
IBM slowly shiIted Irom the manuIacturing to the service providing company.

Market strategy:
The IBM managed the marketing strategy with their marketing mix i.e. product, price, place and
promotion.
PRODUCT
IBM had a strong R& due to which they were ahead oI all other technological companies. They
always changed themselves with the changing market. They were in the business oI selling
typewriter but they changed their product to the think pad that created great buzz in the market.
PRICE
The target segment Ior the company was the LGBT`s. It was Iound that the they had a high
disposable income and were highly brand loyal due to which the pricing oI the products were
high, targeting mainly the premium segment.
PROMOTION
The company was very eIIective in communicating with their mission, vision and developments
to their stakeholders.
They chose mainly: i) Advertising ii) Online promotion iii) LGBT sales team iv) Sponsorship
Advertisements were mainly in the Iorm oI print ads. They concentrated on the print ads as the
research revealed that print ad was the most accepted Iorm oI promotion by the LGBT`s. The
various POP & POP and MOM & POP advertisements were very popular among the LGBT`s
showing an increase in revenue. Various gay magazines, journals were used Ior the advertisment.
Online promos were mainly done to attract the LGBT consumers as they spent most oI their time
being online. Online promos and marketing were the Iinal deciding and the inIluencing Iactors
Ior them.
LGBT sales team was the diIIerentiating Iactor Ior the company. It was very easy Ior the
company to reach the target segment with the same group oI the sales team. LGBT sales team
was eIIective to increase the sales oI the company, as they could understand the sentiments oI
their consumer.
Sponsorship played an important role to gain the attention oI the target segment and it played the
push strategy Ior the company.

Employee benefits and changes within the company:
O In spite oI the great depression, IBM had a rapid growing business. It was due to the Iact
that they took great care oI their employees and had an opportunity to retain their present
employees and thereby saved their investment in recruiting new employees.
O First company to provide group insurance to its employees.
O uring World War II , IBM increased its product line and also took initiatives to train
their disabled employees.
O The company transIormed many oI its rules in the year 1993, i.e. they transIormed the
company Irom manuIacturing to a service oriented company.

Consumer decision-making:
The strategies employed by the company were successIul in attaining the attention oI the target
audience and developing a positive impression in their minds. The position gained by the
company, as the most gay- Iriendly company employer, reveals the Iact oI acceptance by the
LGBT and the company`s involvement in making it possible in a serious manner.
They were able to attain a good pie in the 14 million customer base who accounts to about US
$607 billion in purchasing power. (%