Analyzing Market Segments
Analyzing Market Segments & Selecting Target Markets
Introduction
The credit card industry in Canada has been challenged since the recession started in 2008. There has been an increase in government regulation along with a spike in consumer bankruptcies. Due to the change in market forces, a number of smaller credit issuers like GE Money have exited the industry. Relevant to this paper is the media release announcing that effective January 7th, 2011, financing for the HBC credit cards transferred over to Capital One Financial Corporation.
The HBC private label credit card (HBC PLCC) has a large target market with 93% of their active cardholders being female. Geographic segmentation is similar for all market segments which are Canadian urban and suburban cities. The HBC family of stores includes the Bay, Zellers, Home Outfitters and Fields. In addition, HBC has a long-standing HBC Rewards program with an 8 million person cardholder base. It is my intention to look at the Capital One HBC PLCC, identify some key market segments, evaluate the attractiveness of each segment and share some recent market insights.
Market Segment
I have broken down the market for the HBC PLCC into four main segments which I’ve named the "Post-Secondary Freshmen", “Senior’s Club”, “Value Seekers” and the “Rewards Junkies”. The “Post-Secondary Freshmen” are a group of single females without children, aged18-22 years and are in their first or second year of college or university. In terms of behavior, this segment would use the HBC PLCC as a leisure card and would be considered light user. Given that this segment is young in age and newly independent, they may be unaware or uniformed about private label credit cards. However, they may be looking to establish credit experience which is often not available with major credit cards. Therefore, this young segment may be interested in a PLCC to start building credit experience. This group may not be very loyal because
Introduction
The credit card industry in Canada has been challenged since the recession started in 2008. There has been an increase in government regulation along with a spike in consumer bankruptcies. Due to the change in market forces, a number of smaller credit issuers like GE Money have exited the industry. Relevant to this paper is the media release announcing that effective January 7th, 2011, financing for the HBC credit cards transferred over to Capital One Financial Corporation.
The HBC private label credit card (HBC PLCC) has a large target market with 93% of their active cardholders being female. Geographic segmentation is similar for all market segments which are Canadian urban and suburban cities. The HBC family of stores includes the Bay, Zellers, Home Outfitters and Fields. In addition, HBC has a long-standing HBC Rewards program with an 8 million person cardholder base. It is my intention to look at the Capital One HBC PLCC, identify some key market segments, evaluate the attractiveness of each segment and share some recent market insights.
Market Segment
I have broken down the market for the HBC PLCC into four main segments which I’ve named the "Post-Secondary Freshmen", “Senior’s Club”, “Value Seekers” and the “Rewards Junkies”. The “Post-Secondary Freshmen” are a group of single females without children, aged18-22 years and are in their first or second year of college or university. In terms of behavior, this segment would use the HBC PLCC as a leisure card and would be considered light user. Given that this segment is young in age and newly independent, they may be unaware or uniformed about private label credit cards. However, they may be looking to establish credit experience which is often not available with major credit cards. Therefore, this young segment may be interested in a PLCC to start building credit experience. This group may not be very loyal because
Bibliography: Hilton, Betsy. “Beauty and the Bay: The Bay Announces Shelley Rozenwald as its new Chief Beauty Adventurer.” HBC Media Centre, November 16, 2010. http://www2.hbc.com/hbc/mediacentre/press/hbc/press.asp?prId=387 Hudson’s Bay Co Layne, Rachel. “GE Capital Sells Hudson Bay Portfolio to Capital One.” Bloomberg Businessweek, November 9, 2010. http://www.businessweek.com/news/2010-11-09/ge-capital-sells-hudson-bay-portfolio-to-capital-one.html Robertson, Grant