Category: Market Segmentation

Market segmentation is the process through which a huge and homogenous market is subdivided into segments that can be identified without difficulties. The segments are characterized by similar wants, needs, or demand qualities.

Segmentation aims at developing a marketing mix which meets customers expectations in a particular segment. Most companies are small; hence, they find it difficult to adequately satisfy the whole market; thus, the entire demand is broken down into segments. Segmentation has several disadvantages that companies should overcome.

Although segmentation has its advantages, the strategy still has disadvantages that companies should find ways of overcoming. This is because segmentation may lead to losses instead of the anticipated profits and growth of the companies. Different companies experience losses as a result of their failure to overcome the disadvantages associated with segmentation.

The first disadvantage of segmentation that companies should overcome is the disadvantage of the high cost of segmentation. Companies that engage in segmentation incur additional costs since the process of developing separate marketing mixes for each segment involves a lot of effort and additional costs.

This interferes with the financial stability of companies and often leads to financial problems. Companies can diversify their sources of income to overcome the disadvantage of increased cost associated with segmentation. They should not solely rely on the financial resources of the company. For example, companies can look for sponsors and other internal ways of increasing their income to cater for segmentation costs. This is a viable method they can use to overcome the disadvantage.

The second disadvantage of segmentation that companies should overcome is the loss of focus on important markets. Market segmentation requires companies to satisfy too many market segments; thus, some crucial markets lack enough attention. This leads to financial shortages because of losing focus on markets that are key in funding companies.

To overcome this disadvantage, companies should identify the most important markets and focus on them as they carry out market segmentation. For example, certain workers can be assigned the work of monitoring the crucial markets to ensure that the profits of the company do not go down as a result of losing focus on important markets.

The third disadvantage associated with segmentation that companies should overcome is cannibalization. This occurs when some segments overtake others such that no gains are recorded. In some serious cases, the market shares are completely lost. Also, segmentation can send the wrong information to the customers or result in brand dilution. To overcome this disadvantage, companies should ensure that all segments are given equal attention. For example, if the companies decide to add the stock, this should be done in all segments.

Market segmentation can also result in over segmentation where individuals are excluded making it difficult to assess the profitability of the market. This disadvantage can be overcome by companies by keeping segmented sections generalized and large to prevent segmentation downfall.

Generally, companies should consider the reasons for carrying out segmentation to overcome their disadvantages. In diverse markets, companies should develop marketing mixes that cater to the needs of small sections of the market instead of developing mixes that meet the needs of all the people. For example, companies can curve a niche in particular segments and customize the marketing efforts to realize full profits. This enables them to satisfy and meet the needs of certain niches in the market hence overcoming most of the disadvantages of segmentation.

Since I am taking online marketing classes I will advise my friend to focus on online marketing apart from using physical marketing since by using online marketing my friend will be able to market the products over the internet this will acquire more customers hence increasing the sales. Through internet marketing, my friend will be able to attract more customers at a lower cost since the distribution of information on the products is free and this tends to cover a wide scope of customers who can easily acquire the information on the product over the internet and purchasing it without necessary visiting the clothing store itself (Sandhu, 2000).

Since there is increased competition from the Walmart store will advise my friend to spend more time focusing on how her clients will benefit from the product and listen to the customers comment about her products and the services received during the whole purchasing period. After analyzing this I will advise my friend to market her products in a way that is customer friendly as well as the services she will be offering (Kerin, 2003).

I will also inquire her to market her products to the people who seem to be parents and focus on generating her daily customers as well as advertising through the media and networking. Should also inform the potential customers about the benefits and the features of your product and ask your employees about the issues affecting the business and how to solve them (Silk, 2006).

Cross-border alliances can be defined as an international agreement that is formed between two or more companies that produce goods and services to share risks and profits without merging or the full ownership of each company (Hisrich,2000). Cross-border alliances enable companies to achieve their set objectives and goals in a competitive market environment (Wedel, 1999). In addition, they enable companies to achieve goals that can not be attained through mergers and company privatization.

Cross border alliances are very important when it comes to large scale economies as it helps such large scale economies to survive and work in a competitive environment as they bring down the costs and risks involved in introducing a new product in the market. They are also involved in the reduction of time needed to study the market requirements in a particular business environment since they help in the elimination of the difficulties that are involved when two or more companies are merging. Moreover, cross-border alliances play a major role when it comes to the initiation of visions and plans since they are enable participating companies to develop in growing markets where local partner involvement is required (Sterne, 2001).

To begin with, list segmentation can be described as a technique set by direct marketers to lure individuals who are more likely to respond to a direct mail. The first benefit of list segmentation is that it enables proper marketing budget since marketers using this technique implies that people mailed are likely to respond quickly which reduces the likelihood of wastage of resources budgeted for marketing (Croft,1994).

The second importance of list segmentation is that it facilitates an environment through which marketers can easily identify and know-how well target audience tends to respond to the messages sent to them by the marketers. Furthermore, it provides a way through which the marketer can compare the audience between those who respond and those who dont which in the end enables the marketer to effectively evaluate the difference and develop a clear understanding of the cause Marketing managers need research to know which product or service they are going to introduce in the market as it provides the direction and facts which are vital in decision making which can not be gained from the normal knowledge of the market but needs to be in analyzed data.

It provides the decision-makers with the actual data on the effectiveness of the current marketing strategy and the challenges facing it. It also enables decision-makers to know about the available investment opportunities in the market (Birn, 2002).

Market segmentation is the process of dividing the market into diverse uniform groups of consumers. This, therefore, provides a way through which firms can easily modify their marketing mix to specifically identified consumers to effectively satisfy these consumers. To achieve this effect it implies that the market segment should be measurable, durable, accessible by all communication as well as distribution channels, and should be sizeable enough to be profitable. To identify a proper marketing mix then first all the customers needs should be identified and it should clearly respond to the marketing stimulus of the customers (Arndt, 1974).

Bibliography

Richard Sandhusen (2000), Marketing; Published by Barrons Educational Series Marketing.

Robert D. Hisrich (2000), Marketing; Published by Barrons Educational Series.

Roger A. Kerin (2003), Marketing: The Core; Published by McGraw Hill Professional.

Alvin J. Silk (2006), What is marketing; published by Harvard Business Press.

Jim Sterne (2001), World Wide Web marketing: integrating the Web into your marketing strategy; Published by John Wiley and Sons.

Michael J. Croft (1994), Market segmentation: a step-by-step guide to profitable new business; Published by Routledge.

Michel Wedel (1999), Market segmentation: conceptual and methodological foundations; Published by Routledge.

Johan Arndt (1974), Market Segmentation: Theoretical and Empirical Dimensions; Published by Universitetsforlaget.

Robin Birn (2002), Market Research; Published by Capstone Pub.

Edward F. McQuarrie (2005), The market research toolbox: a concise guide for beginners; Published by SAGE.

Market Segmentation

Creating conditions for a stable increase in profits through effective marketing approaches and solutions is a common practice in the sales market. One of the concepts that allow addressing the interests of the target audience and, at the same time, ensuring a steady demand for specific goods or services is segmentation. According to Liu et al. (2019), market segmentation is a strategy that involves the division of a large market into segments of consumers with different needs, characteristics or behavior which might require separate marketing policies (p. 2). About the considered situation of the need to increase ticket sales, this approach can be an effective solution to create sustainable demand. Online purchases are common today, and since football is one of the most widespread sports, utilizing a segmentation strategy to drive profits through an appropriate plan is a potentially successful step.

Principles of Using Market Segmentation to Increase Ticket Sales

The use of market segmentation as a mechanism to promote ticket sales is due to the real prospects for increasing profits. According to Sun et al. (2019), one of the practices that accompany this strategy is price differentiation, an approach that allows creating individual plans for the purchase of specific goods or services. About the sale of tickets, prices can be differentiated based on such criteria as the importance of games, the status of teams, and other factors that may affect the choice of tickets. As a result, this mechanism is one of the possible steps to increase profit in the next year.

Variables to Segment the Customer Market

Demographic Variable

To segment the target market, specific variables may be applied, which can help divide potential customers into individual categories. One of the variables is demographic; as Johansson (2017) states, it allows using such characteristics as gender, income, age, and other customer features. Applying this principle may contribute to creating unique promotional offers for different client groups and encouraging customers to use personalized criteria for selecting appropriate football tickets.

Geographic Variable

In football, the geographic variable is a valuable parameter to apply to implement a segmentation strategy successfully. According to this criterion, the target audience is divided by location and belonging to a specific community (Johansson, 2017). Consequently, football matches can be convenient for building a pricing policy based on such a variable. Games with teams from other regions or even countries cause a stir among fans, which, in turn, may be used to the advantage of organizers. The pricing of tickets based on a geographic principle is a common practice, but it is valid when mass events are involved.

Psychographic Variable

This variable implies taking into account customers purchasing decisions and motives. Johansson (2017) notes that personality traits, attitudes, and some other individual features are crucial factors to assess when compiling a segmentation strategy. For football ticket sales, customers lifestyles may be assessed, for instance, regular fans or occasional spectators. This separation can help create unique promotional offers, thereby increasing profit through more intense sales.

Plan to Segment the Market

Importance of Segmentation

Engaging a segmentation strategy to increase football ticket sales and profit is a valuable and important aspect to differentiate pricing while addressing individual customer needs. According to Scheuffelen et al. (2019), applying this approach creates a link between supply and demand and expands sales opportunities, which is the ultimate goal of any business. For online football tickets, segmentation can influence clients personally, thereby increasing their interest and enhancing customer loyalty.

Advantages/Disadvantages

The existing types of segmentation, based on the aforementioned variables, can have advantages and disadvantages that are critical to consider when making a plan for the case under consideration. Geographic segmentation, for instance, is useful because it narrows the spectrum of work down to a specific location. At the same time, according to Qi and Zhou (2020), this practice hinders the achievement of competitive advantage due to limited interventions, which is a negative aspect. Demographic segmentation is a convenient mechanism for categorizing potential customers into groups of personal criteria, thereby creating individual offers for each of them. However, as Scheuffelen et al. (2019) remark, demographic clusters can be too large, which requires many efforts to get actionable outcomes. For instance, football fans differ not only by age and gender but also by social status, income level, and other parameters.

Finally, psychographic segmentation is a convenient approach to identifying specific decision-making drivers for the target audience. For example, in the Ford case, Christen et al. (2001) view increasing tire size as a strategy to influence customer relationships, thereby dividing potential buyers based on their preferences. At the same time, this approach does not allow addressing consumer relationships comprehensively since only one segmentation criterion is applied. Therefore, each type has individual strengths and weaknesses to take into account.

Suitable Contexts

Each of the considered types of segmentation is relevant to a specific context. Applying the demographic type to increase ticket sales is convenient if teams of specific associations play, for example, college teams. According to the case presented by Lee et al. (2018), who look at the travel industry, demographic data provide the most accurate information on customer loyalty. When applied to the football tickets, the interests of boys and girls, adults and young people, and other groups can help ensure differentiated demand. The geographic segmentation principle is optimal when selling tickets for a match between regions or countries. These mass events often cause a stir, and this is the marketing departments job to take advantage of this. Finally, psychographic segmentation is a technique that comes in handy when selling tickets to game connoisseurs who are good at football. This approach, taken in the Ford case, proves that true car connoisseurs can feel the difference between vehicles with old and tire sizes (Christen et al., 2001). Therefore, the segmentation of sales, for instance, according to the principle of the significance of the game for the championship, can stimulate additional profit.

Limitations

Using individual segmentation types in the case in question can be complicated by special constraints. For instance, in the psychographic approach, personal incentives may not be enough motivation to pay more for a particular ticket. From a demographic perspective, some characteristics, such as age, may not be an effective criterion due to the specific interests of a particular age group. As a result, the geographic type is the most stable since the confrontation based on the teams belonging to a certain location always arouses public interest due to the prevailing sports disputes.

Conclusion

Implementing a segmentation strategy as part of increasing sales and profit in the next year can help achieve the stated goals with proactive approaches to engaging the target audience. Based on the analysis, the geographic type of segmentation is the most robust, although, in some contexts, demographic and psychographic types may also be acceptable. In case none of the approaches justify their strengths, special measures will have to be taken. In particular, the marketing department will need to analyze the dynamics of ticket sales for specific matches and compare the statistics of visits to the games reviewed. This will provide a relatively objective picture of customer preferences, thereby creating a background for successful segmentation.

References

Christen, M., Soberman, D. A., & Cothier, G. (2001). Ford KA (A): Breaking new ground in the small car market. Harvard Business Publishing. Web.

Johansson, R. (2017). Which market segmentation variables are most effective to determine new business potential? [Unpublished masters thesis]. International Business Management with Nordic Focus.

Lee, T. H., Jan, F. H., Tseng, C. H., & Lin, Y. F. (2018). Segmentation by recreation experience in island-based tourism: A case study of Taiwans Liuqiu Island. Journal of Sustainable Tourism, 26(3), 362-378. Web.

Liu, J., Liao, X., Huang, W., & Liao, X. (2019). Market segmentation: A multiple criteria approach combining preference analysis and segmentation decision. Omega, 83, 1-30. Web.

Qi, X. F., & Zhou, L. H. (2020). Market segmentation and energy efficiency  An empirical study based on Chinas provincial panel data. Energy Efficiency, 13(8), 1781-1797. Web.

Scheuffelen, S., Kemper, J., & Brettel, M. (2019). How do human attitudes and values predict online marketing responsiveness? Comparing consumer segmentation bases toward brand purchase and marketing response. Journal of Advertising Research, 59(2), 142-157. Web.

Sun, M., Tian, Y., Yan, Y., & Liao, Y. (2019). Improving the profit by using a mixed after-sales service as a market segmentation.Nankai Business Review International, 10(2), 233-258. Web.

Segmenting Consumer Markets

Geographic segmentation: Demand for some goods and services can vary according to the geographic region. Most major brands get 40-80 percent of their sales from what are called core regions.

Demographic segmentation: Dividing consumer groups according to characteristics such as sex, age, income, occupation, education, household size, and stage in the family life cycle.

Psychographic Segmentation: Divides a population into groups that have similar psychological characteristics, values, and lifestyles.

Product-related segmentation: Dividing a consumer population into homogeneous groups based on characteristics of their relationships to the product.

Buying characteristics by age groups

The Market Segmentation Process

Stage I: Identify Segmentation Process

• Segments predefined by managers based on their observation of the behavioral and demographic characteristics of likely users.
• Segments defined by asking customers which attributes are important and then clustering the responses.

Stage II: Develop Relevant Profile

• Marketers seek further understanding of the consumer in each promising segment.
• Develop a profile of the typical consumer and each segment.

Stage III: Forecast Market Potential

Combination of market segmentation and market opportunity analysis to produce a forecast of market potential within each segment.

Stage IV: Forecast Market Share

• Analysis of competitors positions in targeted segments.
• The firm determines the expected level of resources it must commit to tap the potential demand in each segment.

Stage V: Select Specific Segment

The preceding information, analysis, and forecasts allow management to assess the potential for achieving company goals and to justify committing resources in developing one or more segments.

Reaching the target market

Undifferentiated marketing: When a company produces only one product or product line and promotes it to all customers with a single marketing mix; also referred to as mass marketing (Market Segmenting, Targeting, and Positioning, 2010).

Differentiated marketing: When a company produces numerous products and promotes them with a different marketing mix designed to satisfy smaller segments. It increases costs, though firms may be forced to practice differentiated marketing to remain competitive.

Concentrated marketing: Also referred to as niche marketing. when a company commits all of its marketing resources to serve a single market segment. Common with small firms that have limited resources and firms offering highly specialized goods and services.

Micromarketing: Involves targeting potential customers at a very basic level, such as by ZIP code, specific occupation, lifestyle, or individual household.

Positioning requires the firm to plot customer survey data on a perceptual map (a two-dimensional graph that visually shows where your product stands relative to competitors and based on consumer criteria. This could be in terms of price, quality, level of customer service, etc. This is a vital part of marketing that enables a firm to position its products on an appropriate part of the map where the competition is not clustered (Market Segmenting, Targeting, and Positioning, 2010).

Reference

Market Segmenting, Targeting, and Positioning. (2010). Principles of Marketing and business Communication, 94-113.

Introduction

One of the reasons why Groupon remains on top of the e-commerce marketing industry is precisely done market segmentation. To target its audience, the company chose several areas of focus, segmenting the consumer groups according to geographic, demographic, psychographic, and behavioral factors (Armstrong and Kotler, p. 171). In terms of demographics, the most popular consumer groups may be young adults who are employed, well-educated, and have a middle income. While Groupon might target European countries, its primary audience resides in North America. The business may also consider rich and poor neighborhoods, as well as different population densities in the city, suburbs, and rural areas when segmenting for geographic factors. Since the most targeted consumer group in demographics is young adults, in the psychographic segmentation, Groupon may be interested in promoting their services to current university students and graduates with outgoing personalities who like going out, exercising, and traveling. For the behavioral variables, the business might focus on potential and regular users of the product with a medium to the heavy usage rate.

Main body

Based on the brief market segmentation provided above, one market that Groupon may expand to is full-time university students with young children. Thousands of mothers, currently enrolled in their studies, have to choose between spending a significant amount of money for babysitting or skipping classes to take care of their children. To step into the market, Groupon may introduce discounts for daycare services on the territory of the university, if available, or negotiate the discount under cooperation with local daycare systems.

This consumer group has the potential to bring revenues to the company, fulfilling the requirements of M.A.S.D.A. First, according to Single Mothers in College, there are around 2 million single parents in undergraduate school (1), which provides a measurable segment to target. Second, with Groupon already targeting college students and mothers separately, the company has access to sell services to single-parent university students. Third, the business would make a substantial profit, generating income from their investment, since single parents have to spend money on childcare services regularly. Additionally, this consumer group constitutes a differentiable segment. Though it might overlap with single-parent mothers, who do not currently study in universities, when promoting discounts in local daycare services, childcare on the college territory is available to enrolled students only. Finally, this segment is actionable, since Groupon has sufficient knowledge and resources to negotiate on the daycare discounts for single parent undergraduate students.

Works Cited

1. Armstrong, Gary, and Philip Kotler. Customer Value-Driven Marketing Strategy. Marketing: An Introduction. 13th ed., Prentice Hall, 2017.
2. Single Mothers in College: Growing Enrollment, Financial Challenges, and the Benefits of Attainment. Institute for Womens Policy Research, 2017.

STP framework consists of three components: segmentation, targeting, and positioning. Each of these elements plays a significant role in building organizations strategic value. Market segmentation is defined as a process of apportionment of a mass market into specific and recognizable segments, each of them having common features and demonstrating identical reactions to marketing actions (Baines & Fill 2014). With the help of this process, companies can choose particular target segments and establish marketing plans focused on satisfying the specific requirements of potential consumers. Determining the segments is regarded as an opportunity (Baines & Fill 2014).

Two major groups of variables are employed in segmentation: descriptive considerations (demographic, geographic, and psycho-graphic) and behavioral characteristics (customers responses to brands and benefits) (Kotler & Keller 2012). Descriptive features enable researchers to analyze customers responses to products. Behavioral considerations help to identify whether various features are related to each particular consumer-reaction segment (Kotler & Keller 2012).

Market segmentation is based on a principle that every consumer has different needs and purchasing behavior. With the help of this component of STP framework, companies can identify what segments should be targeted. Market targeting is defined as a set of consumers with similar characteristic features that an organization wants to serve (Zimmerman & Blythe 2013). Segments can be targeted in two ways: by evaluating the appeal of each sector and by scrutinizing the ability of a company to serve particular segments (Dibb & Simkin 2013).

Targeting may be undifferentiated, differentiated, and concentrated. When a company uses undifferentiated targeting, it concentrates on similarities present in all segments but at the same time makes an effort to satisfy the whole market with a single marketing mix. This type of targeting most frequently occurs in the initial phases of a product lifecycle when consumers are bound to accept the product because they have no alternative (Zimmerman & Blythe 2013).

Undifferentiated marketing ends when competition appears. Differentiated marketing is employed when a company creates particular marketing mixes to serve every segment. The cost of this type of targeting is higher than that of undifferentiated marketing. The third kind of targeting  concentrated  is suitable for companies with limited resources (Zimmerman & Blythe 2013). When using this type of targeting, an organization can afford to focus on as little as one or several segments with the aim of building dominance in that sector.

The third component of STP framework is positioning. Positioning takes place when the processes of segmentation and targeting have been completed. Market positioning is defined as establishing a set of features and advantages that will help to single out the brand in consumers perception (Andaleeb 2017). The main members of any companys audience are consumers and employees (Bruggerman et al. 2012). Therefore, positioning helps to suggest the products in a way that is most attractive for the audience.

Segmentation is the element of STP framework that bears the highest strategic value for organizations since it serves as a basis for targeting and positioning. An example of a company that successfully utilizes demographic segmentation is Victorias Secret (Kotler & Keller 2012). The brand focuses on female consumers, and its primary aim was to satisfy the US women with the lingerie shopping experience similar to the European one. The evidence of the organizations use of key concepts presented in this weeks learning resources is in constant growth of its annual sales and popularity all over the world.

Reference List

Andaleeb, SS 2017, Market segmentation, targeting, and positioning, in SS Andaleeb & K Hasan (eds), Strategic marketing management in Asia: case studies and lessons across industries, Emerald, Bingley, UK, pp. 179-208.

Baines, P & Fill, C 2014, Marketing, 3rd edn, Oxford University Press, Oxford, UK.

Bruggerman, J, Grunow, D, Leenders, MAAM, Vermeulen, I & Kuilman, JG 2012, Market positioning: the shifting effects of niche overlap, Industrial and Corporate Change, vol. 21, no. 6, pp. 1451-1477.

Dibb, S & Simkin, L 2013, Market segmentation success: making it happen! Routledge, New York, NY.

Kotler, P & Keller, K 2012, Marketing management, 14th edn, Pearson, New York, NY.

Zimmerman, A & Blythe, J 2013, Business to business marketing management: a global perspective, 2nd edn, Routledge, New York, NY.

Market overview

Packaged cookie market in the US is in two categories: cracker and cookie manufacturing. This market was estimated at $3.3 billion in 2008 by AIB International.

Most sales are made through:

• Grocery stores
• Convenience stores
• Drug stores
• Mass merchandisers

This presentation will cover the following areas:

• Major firms in the market
• Their positioning within the market overall segmentation
• Strategies for used in the marketing

Firms in the market

• There are 56 manufacturers of chocolate chip cookies at the national and regional level
• Market is fairly saturated and therefore prospect for new firms entering the market low
• The market leader is Nabisco with its Chips Ahoy brand and sales of approximately $1,309,852 in US and Unit sale of 441,833,000.
• Nabisco is followed by Kebbler with Chips Deluxe brand cookies and sales of $392,136,100 and unit sales of 139,049,100 in 2008.
• The third largest cookie maker is Pepperidge Farm with the soft baked brand cookies and sales of $233,647,500 and unit sales 72,670,210.

Segmentation of the market

• This industry is driven by impulse purchasing of consumers and therefore, marketing strategy that is appealing very is important.
• Also 80% of purchases of cookie are made by women but children are the end consumers who have a strong influence on the brand to be bought.

Target consumer

• These are children of 12 years and below from families with different demographic, personality and value beliefs.
• This provides a broad segment.

12 years and under segment

• They buy through their parents and their wants are a sweet and tasty cookie while the parents wants portability and satisfaction of their childrens wants.

12-24 years segment

• They tend to be loyal to products consumed as children
• They are also sensitive to price.

25-55 year segment

• Have wants of quality taste and nutrition value of the cookie products.
• They may be buying for themselves and children therefore buy multiple products.

55 years and over segment

• Have wants of quality taste. They use the product as desserts or as an accompaniment for coffee. They tend to consume cookies in social setting where they are shared.

Market positioning of the firms

Nabisco

• It positions itself as a leader in sales and market share for packaged cookies.
• It uses price segmentation measure with the middle income families where it positions itself as moderately priced with a moderate above moderate taste.

Keebler

• Also positions itself as a leader in sales and market share for packaged cookies using price segmentation measure as with Nabisco.
• Also positioning as premium taste moderately priced option.
• Their prices are lower than Nabisco which creates a perception that it is less desirable than its competitor.

Pepperidge Farm

• It Positions itself as a premium alternative to its two competitors above.
• Products are at a higher price with a perceived quality addition to the product.

Marketing mix

Place

• All three companies have similar products and packaged the same way.
• They also have same distribution channels: grocery stores, convenience stores, drug stores and mass merchandisers.
• All the products are put in shelves at the same place in these stores and in the check out counter in small packages.

Price

• It is different for the three companies, which influences demand.
• Nabisco tries to maintain the prices above those of generic products while remaining competitive with the moderately priced brands.
• Keebler uses the same pricing strategy with Nabisco and tries to compete with it on prices.
• Pepperidge Farm uses price differentiation as a way of competing with Keebler and Nabisco.
• It uses higher prices to detach itself from generic cookies and imply a higher quality than its two major competitors

Promotion

• Nabisco currently spends $18.8 million in advertising its Chips Ahoy brand cookies in advertising in the media while Keebler uses $3.3 million for its Chips Deluxe brand cookies.
• In relation to market share of the entire industry, Chips Ahoy has 9% and Chips Deluxe a 3.4 % share.

Market strategy

Nabisco

• It mainly targets children 12 years and under.
• They market by offering moderate prices so as to make them insignificant to parents who buy them.
• It also relies on its strong brand name for the parents; advertisements targeting children which puts emphasizes on taste; and children video games free from the Nabisco website make them more attractive to children.
• Glossy packaging meant to catch the eyes of younger consumers are also used.
• Chips Ahoy products are also available in different packaging meant to suite different needs of portability.
• Brand loyalty strategy is used on adult market segments.

Keebler

• They primarily target children of 12 years and under like Nabisco in shiny brightly colored packaging.
• Prices offered are point moderate but still higher to distinguish from generic cookies
• The also use the Keebler Elf or Elves icon in advertising portrayed as making cookies better. This is to create a special mentality on their products.

Pepperidge Farm

• Mainly targets the adult segments of 25-55 and 55 and over.
• Uses high prices to differentiate it and soft baked cookies as premium products.
• Soft backed cookies are portrayed as an indulgence product.
• Uses their web also in marketing where a quiz is provided for determining the customer taste in cookies and best drink pairings.
• This puts soft baked cookie on the high end market where consumers are quite refined.

Perceptual mapping

This helps in building a marketing and positioning strategy for a brand. This uses the price and quality dimension. Choice of cookie in US is determined by the taste preference and price of the cookie.

In our study we have considered the following cookie brands:

• Soft baked cookies from Pepperidge Farm
• Chips Ahoy from Nabisco
• Chips Deluxe from Keeblers
• Little Debbie from Mckee Foods
• Grandmas cookie from Frito-lays
• Consumers perceives Pepperidge cookies as high quality and high price than the rest of the products.
• Nabisco ranks lower position in perception of high quality and price which makes its products more desirable.
• Keebler is viewed by consumers as providing a higher quality as well as higher price.
• Mckee Fods is viewed as a high quality low price due to its association with homemade formula.
• Frito-lay is perceived in the class of Nabisco of high price and high quality.

Conclusions and recommendations

• Packaged cookie market is stable but lack in growth and therefore a new firm has low possibility of entering.
• The existing products have considerable loyalty from consumers
• There exists an untapped market of young adult between ages 16-24 consisting of high school and college youths.
• The only shortcoming with this is product short cycle as fads influence the target consumers a lot.

Advantages and disadvantages of segmentation in the hospitality industry

In hospitality, industry segmentation can be implemented in a number of ways. The main advantage of using segmentation in the market is to increase efficiency in the market and hence the sales. The hotel industry is demographically segmented in that there are different kinds of hotels operating in different areas. There are hotels operating on beaches and others operating in cities. This segmentation further ranks hotels in a range of quality of their services. This assigns stars to a hotel with a maximum of five stars. This is advantageous to the hotels since it provides customers with a range to choose from according to the quality that they want. It is also advantageous as it assists in making more inventions in the industry to provide new products according to the class of the hotel.

Behaviorist segmentation in the hospitality industry takes the approaches to take into customer’s behavior. This is important since it helps the industry in making new packages according to the customer’s demand. The behaviorist segmentation creates a market for the high and middle-class hotel industry. This has helped hotels in the hospitality industry to operate targeting certain customers with certain behaviors. This has helped in creating specialization in the industry with some specializing in certain cuisines. This reduced competition in the industry reducing operation cost while keeping the profit high.

Benefit segmentation classifies customers according to what they want to derive from the product. Again this goes to the quality of what of the service in the industry. There are those who patrons the industry for fun, others for conferences while others go for food. This is advantageous since it creates a more diverse service industry where customers get what they want under one roof. However, this increases the cost of operation in that many hotels in the industry tries to provide all under one roof, and hence other hotels are forced to follow suit to match the competition. There is an extra advertisement cost since hotels have to advertise all their services to the customers.

Segmentation based on price and quality

In the hospitality industry, this differentiates the kinds of patrons who will visit a particular hotel. Based on the target market, hotels provide a variety of products that are segmented on the basis of price and quality. It will not be a wonder to visit a three-star hotel and get an omelet and a low price and get the same omelets at a double price in a five-star hotel.

This segmentation has been crucial for the survival of the hotel industry as a pillar of the hospitality industry. The factors that have enabled this segmentation to continue are many and vary from place to place. The first factor is the customer target. Fast food in a busy street will not be targeting the same customers as a five-star hotel but the same customers can visit either establishment. This has helped to create identity depending on the quality of services that are offered in an establishment.

Another crucial factor that has enabled the success of the industry has been the range of services that are provided in an establishment. A five-star hotel will offer various quality services than a three-star hotel which justifies the segmentation based on price and quality. Similarly as was said before, the same omelets in a three-star hotel will not be served the same in a five-star hotel. Another key pillar that has supported this segmentation is the location of the establishment. Those located in tourist sites and major cities will offer their service at a higher price and quality.

Positioning strategy

The positioning strategy used in is the industry is the same as above based on price and quality. Customers believe they are expected to pay more in five-star hotels and at the same time get quality services than in a three-star hotel. Customers expect to pay more on quality and extra service they get than in a competing establishment.

Introduction

In order for hotel businesses to compete and maintain their brands in the volatile market, effective and efficient marketing strategies that aim at meeting and exceeding the exact expectations of all customers is a basic necessity.

Different customers have different needs, tastes and preferences and this has shaped the way modern hotel businesses package their products and services to meet the customer needs. This paper discusses the concept of market segmentation, targeting and positioning and how the same is applicable in the hotel industry and in particular Intercontinental Hotels Group.

Segmentation, targeting and positioning in hotels

Market segmentation

How a hotel packages itself to meet the needs of its customer base determines its financial success and retention of its position in the competitive market.

Market segmentation is an important concept in hotel business whereby the customers are divided into unique small groups each different from the other in terms of how they respond to the product’s marketing, promotion, pricing and other variables depending on their unique needs such as financial abilities, age, tastes, resources, behaviors, location tastes and preferences. This is usually the contrast of mass marketing whereby customers are treated as one homogeneous group with the same needs.

Market targeting

Market targeting concept works in the principle of identifying the different markets segments in terms of their unique needs and pining out the most viable segments and concentrating their resources on them by considering their relevance to the core business of the organization, size and profitability (Rudra 25).

Market positioning

Positioning integrates both Market segmentation and targeting to create a clear picture in the mind of the targeted segments of customers, about the uniqueness of the packaged products and how they best suit their unique needs. Positioning implies the efforts employed towards clearly convincing different segments of the market into perceiving your services as uniquely tailored for them or as simply suggested by Subha “a product’s position is how potential buyers see the product” (Rudra 33).

Segmentation in hotel industry

The hotel industry is arguably one of the most lucrative businesses and also very competitive and volatile. Most multinational hotels use the concept of Market segmentation targeting and positioning to serve the different customer base.

Most market segments in the hotel industry prefer to segment their Market mainly depending geographic segmentation whereby they target different geographic regions depending on the different cultures, sizes such as large cities, population density. Demographic segmentation is mainly focused on income, occupation and social status. Psychographic segmentation in the hotel industry takes on activities such as tourism and business oriented luxuries.

Intercontinental Hotels Group

Intercontinental Hotels Group (IHG) is one the leading hotels in the world. IHG has continually applied the concept of Market segmentation, targeting and positioning to retain its position as the leading hotel chain in the world.

Their Market segmentation is mainly demographic whereby products are packaged focusing on the income of the targeted market with different brands such as InterContinental Hotels & Resorts which is a package of prestige to the most prestigious in the community, Holiday inn express offers limited services targeting middle income earners, Candlewood Suites, which is an extended-stay concept, but one targeting the mid-market business and leisure segment among others (Intercontinental Hotels Group 1).

Psychographic segmentation

In this segmentation IHG offers the brand Crowne Plaza which is a full-service offering, upscale accommodations by targeting more selective, less price-conscious business and leisure travelers. They also offer Stay Bridge suites brand catered to the extended-stay market and Holiday inn brand which targets commercial and leisure travelers (Brophy 1).

Geographic segmentation

Geographic segmentation can be observed in the way brands such as Hotel Indigo is located in urban, mid-town and suburban areas near businesses, restaurants, and entertainment venues, Holiday Inn Express hotels are most commonly situated along major highways, interstates, and airport locations The Staybridge Suites and Candlewood Suites brands are located near commercial business parks, colleges, and universities (Brophy 1).

Different hotel companies such as the Hilton hotels, Wyndham hotel, Marriot international hotels, Accor group, and Choice hotels among other leading hotels compete extensively by targeting the same group of customers. The hotels offer exclusive packages for every segment and as such competition for business in each segment becomes extremely high.

Perhaps the most lucrative and the most competitive segment in the hotel industry is the exclusively rich segment which offers exclusive services to the most prestigious and wealthy class in the world.

IHG competes with other leading hotels such as Hilton hotels in offering the most lucrative and classic services to this segment by using the brand InterContinental Hotels & Resorts designed to deliver customer experience to the elite in a unique and distinctive way. The brand is said to boast of being the hotel brand of choice for some of the most influential personalities in the world (Brophy 1).

Positioning

IHG may not have made such a success in segmenting and targeting this particular segment without proper positioning. Davies John claims that the art of positioning is arguably the hardest and trickiest especially when dealing with the royal class segment. Getting this segment to perceive your services and products as the best is not as simple task.

IHG probably does brand positioning by mostly investing in the most luxurious parts of the world such as the major cities, setting high standards in terms of luxurious service delivery (Davies 1). IHG is also known of hosting some of the most influential people and this have perhaps done a milestone in positioning the brand. A report by Deloitte was quoted claiming that “InterContinental completed its brand repositioning in Q3 2005, with global press and TV advertising campaigns launched with CNN and in-flight carriers” (Deloitte 1).

The fruits of effective positioning of this brand can be attributed to the success of the InterContinental Hotels & Resorts brand in terms of its presence in the most prestigious parts of major cities and its credential of serving the most influential people in the world.

Conclusion

The hotel industry has used segmentation, targeting and positioning concept to best capture every segment of the competitive market. Hotel industry segments divide the market into unique groups and rolls their services according to the specific needs. The hotel industry does positioning of specific segments by setting standards, investing in the most relevant locations and presenting their services in the most attractive way to the specific segment.

IHG has used this concepts and the success can be seen in their position as one of the leading hotel chains in the world. Those who are planning to invest or improve on their hotel industry may be advised to seriously consider the potential of segmentation, targeting and positioning concept if they are to achieve any meaningful success in the hotel industry.

Works Cited

Rudra, S. Market Segmentation Targeting and Positioning. Market Segmentation, 2010. Web.

Brophy, M. Brand Power: InterContinental Hotels Group. Brand Power Intercontinental, 2009. Web.

Intercontinental Hotels Group (IHG).Our History. Intercontinental, 2011. Web.

Davies J. Hotel Marketing in 2010: Perception Trumps Positioning. Hospitality, 2010. Web.

Deloitte. Bringing a luxury brand to life. Deloite, 2006. Web.

Introduction

Market segmentation in sports organizations is underestimated, although it is as important as in any other business. The mistake that caused the Philadelphia Phillies to incur losses and find themselves in a difficult position requiring additional expenses was to overlook this aspect.

Discussion

Due to the management’s misunderstanding of the segmentation principles, their attendance and, as a result, profit fell. The ability to attract people to watch a sporting event is the result of market research (Kwak & Pradhan, 2020). Similarly, the company missed out on a marketing component it managed to fix by bringing in a new celebrity player. Thanks to the same decision, the organization positioned itself more firmly in the market as a well-known strong team. This can go a long way in restoring the brand and name of the organization.

Unforeseen positive circumstances in this situation turned out to be that the famous player began to attract other qualified specialists to the team, due to which it seems more possible to restore the team’s image. The team’s marketing plan is a continuation of the strategy of hiring the best and most famous personnel in order to attract more attention to themselves. These actions can have a positive impact on the organization’s future results.

The Denver Broncos have good plans for market segmentation as they place much emphasis on team promotion and marketing. This attitude towards spectators and fans means winning their attention and improving relations with the team, which allows better strategy development. Relationship marketing can be seen through the management of the team, their social networks, and their promotion of themselves. Through the release of their merch, the team can achieve better results in the future if they continue to promote this strategy. Such behavior contributes to forming the organization’s brand and positioning it as a strong competitor. Unforeseen circumstances in this regard can only be the emergence of a strong marketing strategy for competitors that could compete with the Denver Broncos and become a threat to them in the future.

Conclusion

A marketing plan is being developed to prevent such threats to the team’s future (Adgully Bureau, 2021). In this case, he can contribute to developing plans to respond to various new risks that may prevent the team from winning viewers.

References

Adgully Bureau. (2021). Sports marketing in the new normal. Athena Information Solutions.

Kwak, D. H., & Pradhan, S. (2020). “If You Ain’t First, You’re Last!” Understanding Identity Threat, Team Identification, and Advertisement Messages When Your Favorite Team Loses. Journal of Sport Management, 35(2), 158-171. Web.