Market Analysis and Target Market Selection

The assignment provided is focused on market analysis and target market selection. It involves understanding how companies select their target markets based on market segment evaluation, market orientation, positioning strategy, and brand performance. The document includes references to various studies and research papers in the field of marketing and strategic management. It also touches upon the importance-performance analysis-based SWOT analysis and internal and external search strategies of innovative firms. The assignment is likely part of a larger course or project in business or marketing education.

Mountain Equipment Co-Op

TABLE OF CONTENTS
1. INTRODUCTION.......................................................................................................................1
2. VALUE PROPOSITION.............................................................................................................1
3. SWOT ANALYSIS ....................................................................................................................2
4. TARGET MARKET AND POSITIONING ...............................................................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

1. INTRODUCTION
Mountain Equipment Co-op (MEC) is a Canadian consumers' cooperation or association.
It belongs to outdoor equipment industry. It is a non profit making cooperation that enjoys tex
exemptions and other privileges. The organisation sells the campaigning gear, travelling
equipments, sporting goods and exclusive clothing to its members who possess the lifetime
membership of this cooperation.
Background : The company was founded in Vancouver, British Columbia in the year
1971. Its headquarter is in Vancouver. It has 23 stores across Canada. It has more than 4 million
members in Canada and from around the world. It has a Corporate & Group Sales store for
serving large orders. Its members largely comprises military, Royal Canadian Mounted Police,
search and rescue agencies. It is currently controlled by nine board of directors which are elected
by the members. The cooperation has currently rebranded itself and changed their logo in the
form of MEC in bold letters.
Mission : “To provide reliable gear at the reasonable cost”. To help people to enjoy the
benefits of wildness-oriented recreation.
Vision : To serve the needs of its members. It manufactures products with a vision that
states “ Our Products are built with purpose, people and planet in mind”.
Values: It focuses on cooperative values that is helping members of the cooperation. It
has principles that it strictly follows; democracy, open memberships for people, education,
training and development of members, fulfilling responsibility in utmost faith towards society.
The present report is going to discuss its value proposition and how this proposition helps
in connecting the relationship of price to the value of product, SWOT analysis for assessing inner
strengths and weaknesses of the cooperation. Further, the report will include an analysis of
cooperation's targetting and positioning effectiveness.
2. VALUE PROPOSITION
The cooperation offers wide range of products to its members such as clothing, rental
gears, sporting equipments for travellers, climbers, bikes etc. It started selling MEC branded
bikes in 2009 with around 58 models through its seven stores in Vancouver.
Value proposition is a marketing statement of an organisation that sums-up the reasons
that why people should purchase its products and services instead of its competitors products or
how its products will solve problem of customers better than its rivals (Tanner& Raymond,
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2015). In other words, it's a promise made by a company to its target audience regarding the
value and worth of its goods and services. The value statement of the MEC summarises that it
provides good and services at the most reasonable prices along with maintaining sustainability. It
delivers services with minimal effects on the environment. It statement shows the added benefits
of its products in terms of health, environment sustainability. Also, the bikes are highly attractive
in its designs at the most competitive price that provides added value to the customers and
members.
Value proposition very effectively connects the relationships' product to the price, a
customer pays for attaining it. Customers perceives value of a product in various ways such as
product's features, design, price, quality of product, added benefits etc. MEC provides value to
its customers by offering the highly stylish and pretty bikes at the most affordable prices. It
operates on the fundamental fact that customers prefers products with innovative features at low
prices (Ruiz-Pava & Forero-Pineda,(2018). A customer or member of MEC would not purchase
the bikes if it does not provide any additional benefits when compared to the competitors'
products. Gears, wheels, seats, shifters are some aspects that the company have used in its value
proposition statement for telling its customers that they employ the best quality inputs in its
products. A member of cooperation would consider these aspects while purchasing the product
of the brand as these features adds to the worth and value of price they are paying for the
products (Morse & et.al., 2016).
3. SWOT ANALYSIS
SWOT analysis is a way of assessing internal strengths and weaknesses of the company.
It also identifies threats and opportunities for an organisation that could affect the firm in the
future (Phadermrod, Crowder & Wills, 2019). A SWOT analysis of MEC is given below:
Strengths:
 Superior quality products at low prices
 Wide range of product line
 Co-operative structure
 Eco-friendly friendly products
(Mountain Equipment Co-Op,
Competitive intelligence, 2019).
Weaknesses:
 Products and services are not highly
individualized
 Transparency issues in operations.
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 Good brand image
Opportunities:
 Expanding into different markets
globally
 Innovation in products
 Diversified income
 Customised products
Threats:
 Competition from domestic and
international manufacturers
 Depletion of wild and natural habitat
 Restriction and legislations of
government
From the above matrix, various strengths and weaknesses of the company are
highlighted. The cooperation enjoys magnificent reputation in the outdoor equipments' industry.
Its products and services are considered very reliable. The biggest strength is its ability of
offering products at the most competitive prices. This helps it in attracting large number of
customers. It current enjoys 4 million members around the globe. It offers highly innovated and
Eco-friendly goods to its members. Such products have become its competitive edge on the basis
of which it very efficiently handles competition in the market (McDONALD, 2016). However,
the company suffers from the weakness of manufacturing standard products. It does not deliver
highly personalised goods to its members and clients. This restricts the growth of the business.
Every individual is different from other and on the basis of this fact, cooperation must produce
products that very optimally satisfies its customers demand. The other weakness is its lack of
transparency in its operations (Madhavaram,Hunt & Bicen, 2017).
MEC have various opportunities that it can tap for growing and developing in the future.
It can expand its operations in the most emerging markets of the world. It can venture into
different products by forming partnerships. This would create a diversified source of income for
the company, reducing the risk of failure of business. It can employ technology and produce its
product more innovative than its competitors. The co-operation needs to consider major threats
such as competition from international and domestic producers of outdoor equipments, it needs
to develop strategies for coping up with the fierce competition in market. Destruction of wildlife
is a threat to company because its products are based on this factor. Also, it is a non profit
making company, changes in the legislation could severely affect its business. General laws
relating to environment preservation, health and safety etc., needs to be precisely taken care of
for avoiding any disruptions in the functioning of cooperation (Lurati & Zamparini, 2018).
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4. TARGET MARKET AND POSITIONING
Segmentation : It is the division of market into different segments by putting people with
common characteristic, interests, purchasing power, age etc., under same segment. MEC applies
segmentation strategies through which it decides to whom the company is going to offers its
products and services (Cross, Belich & Rudelius, 2015). The main aim of segmentation of the
market is to identify the most profitable segment that could generate maximum revenues for the
company. Cooperation divides the market on the basis of:
Demographics : MEC segments the market on the basis of demographics such as age,
gender, income of the population. Bikes, a product line of company is offered to the people of
various age such as racing bicycles for young people, bicycles for children of age 8-15 years.
Psycho-graphic : The market is also segmented on the basis of personality traits, lifestyle
or social characteristics. The cooperation targets the market on the basis of personality traits of
the people. People who loves nature and likes to do adventurous activities such as cycling in the
hilly areas or population that loves sports, young professionals etc. These are the prime targets of
the company.
Geographic : This involves identifying target market on the basis of locations or regions.
MEC is constantly updating its target market strategies in Canada as people in the country are
becoming more technology driven and highly urbanised. This has changed people's way of
shopping. So, for making larger revenues, it is targeting the lifestyle of people in the country and
offering the products that meets their requirements. It expanding its operations more in urban
areas of the state (Aghdaie & Alimardani, 2015).
Behavioural : This means segregating people on the basis of their consumption,
purchasing power, usage behaviour. For example customer loyalty. MEC focuses on building a
loyal customer base rather than creating sales for one. It approaches the usage behaviour of the
behavioural strategy of segmentation.
The company original had members from schools and colleges in which white male
dominated the cooperation structure. However, the approach of the organisation changed over
the years and has now works on the principle of serving masses rather than catering only specific
segments of the markets. The biggest proportion in organisation's memberships is hold by
military, rescue and search agencies, travellers and young professionals that enjoys sport
(Dolnicar & Leisch, 2017).
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Positioning: It refers to placing the products and services in the marketplace in such a
way that it stands out from its competitors in terms of price, product, promotion and place (Learn
the 3 Secrets that Every Marketing Pro Knows, But You Don’t, 2018). For this, MEC applies
marketing mix for appropriately positioning its products in the target market, such positioning
helps the company in achieving a USP for its products.
An analysis of marketing mix of MEC and Sail Baron sports that are in same industry.
This would show the position of MEC product's in market.
Marketing Mix MEC Sail Baron Sport
Product It offers variety of products
from outdoor equipments to
Bikes along with eco-friendly
products.
It also offers wide range of
outdoor equipments for almost
all types of outdoor activities.
Price It provides products and
services at the most reasonable
prices and applies loss leader
pricing strategy for increasing
sales.
The company applies keystone
pricing strategy where the
retail price is set higher than
wholesale price.
Place It has around 23 stores all over
the Canada that are mainly
found in urban areas. It also
offers online services for
delivering the products.
It sells it products through 13
stores in Greater Toronto Area.
Promotion It promotes the products
through advertisements in
newspaper, magazines, TV,
social media.
Cost leadership is its
marketing strategy for beating
competition (The 7 Ps of
It aggressively uses print
media for promoting its
products.
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marketing, 2019).
Physical evidence The stores are well furnished
and attractive for making
customer's experience better.
Its website is very user
friendly that helps it in
interacting well with its
members.
Physical evidence in terms of
attractivness of its stores is
very satisfactory. However, the
online presence is not so
delightful.
People It has around 1500 employees
and 4 millions members.
It has around 1200 employees
in the country.
Process The process of manufacturing
the products are highly
coordinated and integrated that
ensures continuous flow of
operations. It uses the latest
technologies in its functioning
for attaining the efficiency.
This company uses standard
process of manufacturing its
products that helps it delivery
consistent services to the
customers.
The products are placed in a very competitive position by MEC. This is because it applies
the pricing strategy of cost leadership, loss leader where it tends to attract people of average
earning group. Also, customers prefers quality products at reasonable prices which it tries to
satisfy through marketing and pricing strategies. It follows the trends of market and according
opens it stores (Iyer & et.al., 2018). For example, after market research it realised changes in the
way people shop, lifestyle etc., it started offering online services, opened places in the urban
cities of countries. These are the reason why it has managed to grow continuously from the last
40 years.
However, it needs to more sensitive towards the needs and requirements of its customers
for achieving greater customer satisfaction.
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CONCLUSION
From the above project report, it can be concluded that MEC is very strong when it
comes to its reputation of offering good quality products at low prices, its nature of being
socially responsible is its great strengths which shows in the eco-friendly products it produces. It
however, suffers from weakness of not manufacturing highly personalised products for different
needs of its customer base. It has great opportunity of making its products highly personalised
for serving the best to its members. The target market analysis showed that company has placed
its products very competitively in the market by promoting it through social media for attracting
young and sporting professional and TV, newspaper for reaching masses.
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REFERENCES
Books and Journals
Aghdaie, M. H., & Alimardani, M. (2015). Target market selection based on market segment
evaluation: a multiple attribute decision making approach. International Journal of
Operational Research, 24(3), 262-278.
Cross, J. C., Belich, T. J., & Rudelius, W. (2015). How marketing managers use market
segmentation: An exploratory study. In Proceedings of the 1990 Academy of Marketing
Science (AMS) Annual Conference .(pp. 531-536). Springer, Cham.
Dolnicar, S., & Leisch, F. (2017). Using segment level stability to select target segments in data-
driven market segmentation studies. Marketing Letters, 28(3), 423-436.
Iyer, P & et.al., (2018). Market orientation, positioning strategy and brand
performance. Industrial Marketing Management.
Lurati, F., & Zamparini, A. (2018). Communication SWOT Analysis. The International
Encyclopedia of Strategic Communication. 1-8.
Madhavaram, S., Hunt, S. D., & Bicen, P. (2017, May). The FREE (Firm Resources and
External Environment) Framework as an Alternative to SWOT: An Abstract. In Academy
of Marketing Science Annual Conference (pp. 49-49). Springer, Cham.
McDONALD, M. A. L. C. O. L. M. (2016). Strategic marketing planning: theory and practice.
In The marketing book .(pp. 108-142). Routledge.
Morse, J. M & et.al., (2016). From grounded theory to situational analysis: What’s new? Why?
How?. In Developing Grounded Theory (pp. 194-235). Routledge.
Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis based
SWOT analysis. International Journal of Information Management. 44. 194-203.
Ruiz-Pava, G., & Forero-Pineda, C. (2018). Internal and external search strategies of innovative
firms: the role of the target market. Journal of Knowledge Management.
Tanner, J., & Raymond, M. (2015). Principles of marketing. University of Minnesota Libraries
Publishing.
Online
Learn the 3 Secrets that Every Marketing Pro Knows, But You Don’t. 2018. [Online]. Available
through <https://medium.com/swlh/stp-marketing-6deb6b010b5>
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Mountain Equipment Co-Op, Competitive intelligence. 2019. [Online]. Available through
<https://michelandmp.wordpress.com/external-environment>
The 7 Ps of marketing.2019. [Online]. Available through
<https://www.business.qld.gov.au/running-business/marketing-sales/marketing-
promotion/marketing-basics/seven-ps-marketing>
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