Datavast Inc.: The Target Segment Decision

Datavast Inc., a product designer and manufacturer based in China, had just launched its new private cloud storage product, the Data Security Box. The general manager of Datavast Inc was faced with a dilemma of who to sell this product to. He determined that segmenting by size was the most effective method as customers in different industries and regions did not have very different needs or buying characteristics. However, SMEs (companies with 200 to 500 computers) and large companies (companies with over 1,000 computers) exhibited vastly different needs and purchasing behavior. The general manager had limited resources, so he faced the decision of focusing on either SMEs or large companies. Although Datavast did not have any direct competitors at the time, this decision was complicated by the current state and capabilities of Datavast and the data storage industry in China. Also, the general manager was hoping to retire within five years and was unwilling to make additional capital investments into the company. The company was operating at a loss and his goal was to bring the company into profitability within the next year. A net loss also meant that the company could not afford to be burdened with large additional expenses. Lastly, private cloud storage was a new technology in China and the market needed to be introduced to and educated about the concept.