Segmenting the e-Learning Market

One of the most rapidly growing markets in recent years has been e-learning. Each year, companies spend millions on training employees and upgrading their skills. Traditionally, this kind of training took place in-house in company training facilities; alternatively, staff were sent away on training courses hosted by universities, training institutes and consulting companies. Increasingly, more and more of this activity is being conducted electronically. Initially, electronic learning comprised the purchase of CD-ROMs but now more and more of this kind of training is being conducted online. The e-learning market has also grown rapidly and several new segments have emerged. In the past, the main users of e-learning were IT firms and professionals, who were comfortable with the medium. Since then, many leading firms have been using e-learning for all their business training. Different companies have focused on different segments of the market. Companies like Digital Think and Netg offer products to customers whose primary needs are in the area of IT training through suites of web-based courses designed for programmers, software developers, systems administrators and technical engineers. ProsoftTraining is even more specialized; it provides Internet training, Internet training courseware and Internet skill certification online. Other companies, such as SkillSoft, are providers of general business skill content, offering web-based courses to companies that need training in areas like project management, marketing, customer service and human resources. The e-learning market is, at present, highly fragmented with vendors offering everything from content to technology to training services. However, Smartforce, a company founded in Ireland, is emerging as a clear leader in the field by providing both training content and the infrastructure necessary to deliver training online. The market is increasingly looking for customized rather than off-the-shelf courses, and Smartforce aims to develop 'learning universities' for its clients, which will allow them to customize training programs and tailor individual learning experiences for students.

Target marketing

The role of market segmentation is to achieve effective target marketing. This refers to the choice of specific segments to serve and is a key element in marketing strategy. An organization needs to evaluate the segments and to decide which ones to serve. For example, CNN targets its news programmes to what are known as 'influentials'. This is why, globally, CNN has focused so much of its distribution effort into gaining access to hotel rooms. Business people know that wherever they are in the world they can see international news on CNN in their hotel. Its sports programming is also targeted, with plenty of coverage of upmarket sports such as golf and tennis. We shall first examine how to evaluate market segments, and then how to make a balanced choice about which ones to serve.