Market Environment Analysis For Open Family: Industry Overview, Segmentation, And Targeting Strategies

Industry Overview and Service Description

Discuss about the Market Environment Analysis for Open Family.

The company, ‘Open Family’ is an old organization that is into operations for more than 30 years. It was established in the year 1978. The company was founded in Melbourne and since then it has increased its area of operation in the entire country. The organization has various services and primarily it is focused to improve the condition of youth in Australia (Cavalcante & Ulhoi, 2011). The company has various community development programs. The website of the company says:

“For more than 30 years, Open Family Australia has been providing a range of Outreach services to young people experiencing high complex needs”

The age group of the client of Open Family is the age group of 12 to 25 years. Over 80% of these young people are in this situation due to family break down or family conflict (Walker, 2011). This issue goes across all socio-economic groups and may result in homelessness, criminal activity, drug abuse, mental health problems and disengagement from school or employment.

The industry segment in which Open Australia operates is a niche industry. Most of the players that operate in this industry are government organization or government sponsored organization. The industry is not highly competitive in nature and most of the players in the industry would depend on funds received from various corporations (Reidenbach & Robin, 2013). This is the reason that the organization like Open Australia would often conduct the fund raising events. In fact, it is believed that close to 25% of the funding for the organization in this industry segment comes from corporate gifts and grants. It is expected that the funding from corporate gifts and grants would increase further for Open Australia and other organizations in this industry segment. A snapshot of the funding of Open Australia for the year 2012 can be shown as:

Source: https://www.openfamily.com.au/images/Infographics/HowWeAreFunded2012.jpg

The various local governments could be considered as the major players in this industry segment. There are various organizations in Australia that provides alcohol and drug control service. In December 2011, Open Family Australia merged with like-minded youth organization, Whitelion. In the seven months since, both organizations have worked to come together with a particular focus on achieving efficiencies in back office areas such as finance, HR, marketing and fundraising. There are various other organizations in the industry that are the direct competitors of the company. However, the nature of the industry suggests that different players in the market should collaborate together to deliver maximum benefits to consumers (Lin, 2016). The organizations operating in this industry segment would often work under the guidance of the strategies and policies developed by the government at the national and at the state level. It is expected that various players in the private sector would continue to provide the funding to the organizations in this industry so that the life of the Australian youth could improve.

Company’s Micro and Macro Environment

It would be correct to say that the macro environment factors and the microenvironment factors are critical elements for any business. Typically, it is the combination of macro environmental factors and microenvironment factors that would be the basis of the future strategy of the organization (Leeuwis & Aarts, 2011). The macro environment and microenvironment factors that affects the business operations of Open Family can be discussed as:

The macro environment factors are the factors that would usually impact the industry as a whole. The key macro environment factors for Open Family can be discussed as:

1. Political and Legal: The political and legal factors are key macro environment factors. The political and legal factors are positive for the organizations that work for the social cause. The government of Australia has always supported the organizations in this industry segment. It is expected that the government would continue to support the firms like Open Family that take the steps to help Australian youth (Lin, 2016).
2. Social: The society of Australia has always encouraged the people and organizations to come forward and to help others. It is expected that the social factors would remain positive in this sector. The youth of Australia that takes the wrong way need the support of people and the Australian society is willing to help the youth.

• Economical: The operations of the organizations operating in this industry would depend a lot on the available funding. The funding would in turn depend on the economic factors. The corporations and people would be ready to fund more when the economic conditions of the country are strong.

1. Technological: The technological factors would ensure that the operations are optimized and the youth get the help in an effective and efficient manner. The key technological factors that have affected the operations of the firms like Open family would include the Information Systems like ERP (Employee Resource Planning) products.
2. Cultural: The cultural factors are a key support function for the organizations like Open Family. Australia is a developed country and the society of the country is an open society. In general, Australians have a helping culture and people are ready to help other. People are especially willing to help the youth of the country.

Unlike macro economic factors, the microeconomic directly impact the firm. The microeconomic could be considered as the factors that are specific to any firm or the factors that are internal for the firm. The key microeconomic factors for Open Family can be discussed as:

1. Suppliers: Open Family has a number of suppliers that helps the organizations for various products and materials. However, most of the suppliers are the partners of the company that provides funding to the organization (Minichilli, 2012). It is expected that the suppliers or the partners would continue to have a critical role in the growth and development of Open Family.
2. Public/ Society at large: It appears that the public and society is one of the key stakeholders for Open Family. The public sentiments and the perception of the people in the society also have a direct impact on the operations of the company (Kaufmann, 2013). The public and especially the youth of the country is one of the most important microeconomic factors for the business operations of Open Family.

• Employees: It would be correct to say that the success of the company depends a lot on the performance of the employees. The management of Open Family believes that employees are one of the biggest assets for the organization (Vaccaro & Jansen, 2012). Employees influence the organizational strategies and policies of Open Family.

1. Intermediaries: There are various intermediaries that affect the business operations of the company. These intermediaries include the organizations in private and public sector. Some of these intermediaries are the small firms that help Open Family to arrange fund raising events (Minichilli, 2012). The intermediaries may not be a critical or important microeconomic factor, as intermediaries do not affect the business operations of the company in a direct manner.

One of the basic or the first step of any marketing activity is market segmentation. The targeting and the positioning strategy follow the market segmentation. Simply defined, Market segmentation is the process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as segments) based on some type of shared characteristics (Flint & Woodruff, 2012). There are various basis or factors of segmentation. The key factors of market segmentation are demographics, income level, geographic, psychographic and behavioral. The variables involved in the type of segmentation can be discussed as:

Segmentation basis	Segmentation Type	Variables involved
Consumer market	Geographic	Region, population growth rate
Consumer market	Demographic	Age, ethnicity, gender, income, family status, education, nationality
Consumer market	Psychographic	Values, perception, attitude, lifestyle, activities
Consumer market	Behavioral	Brand loyalty, consumer preferences, usage rate
Business market	Type of Customer	Value chain of industry, product lifecycle, size of organization, type of industry
Business market	Buying behavior	Suppliers involved, order size, usage patterns

Open Family use combination of more than one segmentation variable to do the segmentation. The two key segmentation variables used by Open Family are demographic and psychographic (Carlsen & Andersson, 2010). The segmentation variable for Open Family can be shown as:

Demographic	Age, ethnicity, gender, income, family status, education, nationality
Psychographic	Values, perception, attitude, lifestyle, activities

Open Family has defined the values for each of the segmentation variables. It helps the organization to put a boundary around is targeted audience and this in turn enables Open Family to have effective targeting strategy in place. The detailed segmentation for Open Family based on the above segmentation variables can be discussed as:

Segmentation Variable	Volume
Age	12 to 25 years
Ethnicity	Australian (geographic)
Gender	Male & Female
Income	Low income group and Mid income group
Education	Low
Values & Perception	These are the people that are mainly low on self-esteem. These are the people who believe that nothing is good in the life.

Based on above analysis, the four segments that Open Family should consider for targeting are:

Marketing Segmentation	Attributes
Teenage (Male & Female)	Age 12 to 18 years
Youth (Male & Female)	Age 18 to 24 years
Low Income family group	Parents with monthly average income of less than $500
Less educated family group	Parents with educational qualification less than graduation

The above basis of market segmentation enables Open Family to set a basis of the targeting and the positioning strategy. The market segmentation enables Open Family to divide the target audience into number of groups. The management of Open Family realizes that different targeting groups can have different expectation (Kumar & Zia, 2016). Therefore, it is important that the organization addresses the expectations of these groups individually. For example, the perception and the expectations of the youth group that does not have home would be different that the perception and the expectations of the youth group that is alcoholic and under the influence of drugs. It would be correct to say that the market segmentation acts as the basis for management of Open family to reach out to Australian youth.   

Market Segmentation

The entire philosophy of segmentation, targeting and positioning can be shown as:

Once the segmentation is done, the next thing in line is targeting. Simply defined, Targeting or target marketing entails deciding which potential customer segments the company will focus on. The entire objective of targeting is to increase the relevance for brands. With effective targeting strategy, Open Family would be able to develop good rapport with its customer base. The targeting strategy would be a way forward for the company to reach out to consumers. One of the key and widely used targeting strategies for Open Family is to increase the reach through awareness (Schlegelmilch, 2016). The company has invested a lot to increase the awareness level of Australian youth. The company has run several programs with the objective to establish better connection with Australian youth. It is important and it is recommended that Open Family should also have a dedicated targeting strategy based on social media. The social media platforms like Twitter and Facebook is the fastest way to reach out to consumers and it is suggested that Open Family should increase its presence over these networks to target the potential users in the market.

Based on the above discussion, one of the targeting profile for Open Family can be discussed as:

Marketing Segmentation	Attributes
Teenage (Male & Female)	Age 12 to 18 years

This is the group that is prone to drug use or any other addiction. Therefore, it is important to increase the information and education level of people as soon as they enter the teen stage.

The segmentation and the positioning act as the basis of differentiation or positioning. Simply defined, positioning refers to the place that a brand occupies in the mind of the customer and how it is distinguished from products from competitors. Primarily, it is about “the place a brand occupies in the mind of its target audience”. Positioning is now a regular marketing activity or strategy. Different brands and the organizations in the industry can have different positioning strategy (Knutsen & Brock, 2014). Open family uses the positioning strategy of reliability to reach out to consumers. The organization has created a niche in the market with its positioning strategy for reliability. It is expected that the company would continue to improve its position in the market. It is also important that Open Family should also create focus on core competency or competitive advantage through its differentiation or positioning strategy. Generally the differentiation could be achieved as product differentiation or cost leadership. It is important that Open Family should develop a service differentiation through its reliable services. Open Family believes that its customers should be the advocates of the company (Wright & Sturdy, 2012). It means that the youth of the country should spread the word about the various programs that are conducted by Open family.

Market Targeting and Consumer Profile

Conclusion

The above paper discusses the market environment analysis for Open Family. The organization has various services and primarily it is focused to improve the condition of youth in Australia. The company has run several programs with the objective to establish better connection with Australian youth and it is expected that the company would continue to have a great impact on Australian youth. With the above discussion it can be said that the organization should consider both internal and external factors before developing or before implementing any organizational strategy. The macro economic factors would be mainly external in nature and micro economic factors would be mainly internal in nature. The above paper also discusses the segmentation, targeting and positioning strategy of organization. The segmentation and the positioning act as the basis of differentiation or positioning. It is recommended that Open Family should use segmentation, targeting and positioning as the basis of the marketing mix. There are four key elements of marketing mix. These are product, price, place and promotion. It is recommended that these elements of marketing mix should be based on the segmentation, targeting and positioning strategies.

References

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