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Posts Tagged ‘market segmentation’

The topic of duplication of models between ready to run manufacturers regularly raises its head within the hobby especially on the many online forums. It has once again recently been mentioned in light of the National Railway Museum’s announcement that via Bachmann they have commission a model of their Midland 4P compound 1000, when Hornby has already this year reintroduced in to its “Railroad” range their 4P from its 1980’s tooling and have started to promote it in the same livery as the NRM model [insert your own conspiracy theory here].

Last Christmas when Hornby announced their version of, the quickly becoming iconic, new build A1 Tornado, there was much online disgust as Bachmann already had a model in their range.

This to me shows that some within the hobby do not understand market segmentation which is a classic marketing strategy tool:

The process of defining and subdividing a large market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment or group. By making this division there is a high chance that each group responds in favour to a specific market strategy (i.e. spends money).
Market segmentation comes about due to all potential users of a product not being alike, and that the same general appeal will not interest all potential customers. Therefore, it becomes essential to develop different marketing tactics based on the differences among potential users in order to effectively cover the entire market for a particular product.

It is also a fact that on the whole the model manufactures are trying to sell models to make the maximum return on investment and not necessarily to meet the demands of each and everyone of us all of the time. I have lost count of the times I have read online or heard that modellers are disgruntled at every manufacturer announcement that there is nothing that they want and how dare they make ‘model x’ opposed to the ‘model y’ that is what they want!   

Hornby have clearly segmented the model railway market into a number of ranges to suit different markets expectations and needs. The Railroad range is a classic example (as is the Thomas range); bringing lower costs models to that segment of the market that is not looking for highly detailed and accurate models.  This market segment will have heard of the Hornby brand, might be younger modellers or parents of younger modellers that want the iconic engines and trains such as Flying Scotsman, the HST or now Tornado at a suitable price point.

Bachmann and Hornby do not really compete in the same segment with the Railroad range (with the very small exception of the small Bachmann junior range) but do at the higher end more detailed models. Within this market segment the models are generally more accurate and detailed and can therefore command higher prices targeted at the more discerning modeller or collector.

Yes there has of course been some instances of duplication, such as the BR Standard 4MT and the humble 08 Shunter, this is usually due to either the development time involved and therefore a case of design / development work already having taken place before the duplication is known (we would not be happy to find out that the manufacturers were in cahoots with each other!), or producing an upgraded version of an older model on the market.

With this in mind the Hornby release of Tornado was simply aimed at keeping the latest iconic engine within their “Railroad” market segment which is an area that Bachmann on the whole neither target nor expect sales from. It does however for those in other market segments, or on the edge of segments, choice depending on the level of detail that they are prepared to accept.

Overall it has to be good for the hobby to encourage new, perhaps younger, blood at an initial level into the hobby as they hopefully will be come the inspirational modellers of the future.

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