Explain how and why groups of customers are targeted for selected products. When targeting a group of customers a business needs to choose an appropriate type of segmentation method. There are 5 types of segmentation that a business can use to target their customers. Demographical: taking a certain segment of the population and grouping them according to categories such as age, gender, income, occupation and so on. Psychographic: when a certain segment of the population is taken and grouped into how people choose to live. This includes things like; lifestyle choices, activities, interests, opinions and so on. Geographical: taking a certain group of the population and grouping them into segments such as regions, countries and continents. Behavioural: when a certain part segment of the population is grouped into categories that for with how they respond to a certain product. For example this could rely on when a product is purchased the usage rate of the product and the benefits of the product. Business 2 Business: when a business groups a certain part of the business population into segments according to their wants and needs.
Geographical Segmentation is taking a certain group of the population and grouping them into segments such as regions, countries and continents. The McDonald’s Corporation is the world’s largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles.
McDonald’s predominantly sells hamburgers, various types of chicken sandwiches and products, French fries, soft drinks, breakfast items, and desserts. In most markets, McDonald’s offers salads and vegetarian items, wraps and other localized fare. Various countries, especially in Asia, are currently serving soup. This local deviation from the standard menu is a characteristic for which the chain is particularly known, and one which is employed either to abide by regional food taboos or to make available foods with which the regional market is more familiar. http://en.wikipedia.org/wiki/McDonald’s
McDonald’s menu prices range from around 99p upwards. With the menu variety, McDonald’s target audience ranges from kids to adults. Compared to restaurants such as Frankie and Benny’s, McDonalds is on the lower end of the market, this is because the range of food prices is relatively lower than said restaurant.
An example of Demographical Segmentation is Huggies Nappies who sell a range of nappies to suit different baby’s needs. They sell a range of nappies from Pull-Ups, Dry-Nights and Little Swimmers Nappies come in a variety of colours, sizes and different number of nappies in a pack to suit both babies’ genders and parent’s needs. They also have different varieties for day and night. Price range is from £2.71-£81 because of this, compared to Huggies’ competitors; Huggies can be classed as an expensive brand. http://www.idealprice.co.uk/compare.html?q=Huggies-Nappies-Sale&ort=HuggiesNappieSale&adid=iaCkp56q2JiZnMbVkH%2BTo9HLyKRYosyfq6aZmsrH1l6AlNHSzJalWdSfypKnpofFy5KkcMk%3D&baa=H#rpctoken=983774567&forcesecure=1
The target Market for Huggies is parents with children from ages 0-6 http://www.pottytraining.co.uk/huggies-pull-ups-potty-training-pants/ When using Demographic Segmentation, the Family Life Cycle can be taken into consideration. The Family Life Cycle is a traditional life cycle that focuses on 5 different stages; Bachelor, newly wed, full nest empty nest and sole survivor. At these stages, different products will be required due to differences in age, disposable income and presence/absence of children. This means that for Huggies, they will be looking at the ‘Full Nest’ stage of the Family Life Cycle.
Rimmel Kate Lasting Finish Matte Lipstick
Demographical Segmentation is taking a certain segment of the population and grouping them according to categories such as age, gender, income, occupation and so on. Rimmel Kate Lasting Finish Matte Lipstick is currently being sold in a variety of different cosmetics shops and is sold in a variety of shades. Compared to Rommel’s competitors, Revlon, Rimmel products can be classed as cheap. This is because Rimmel products are cheaper than Revlon products. Rimmel Kate Lasting Finish Matte Lipstick is currently being sold at around £5-£6 whereas most Revlon lipstick products are currently being sold around the prices of £8-£14.
This product is an example of Demographic Segmentation as it is aimed at women who are of ages 18 upwards. http://www.feelunique.com/p/Rimmel-Kate-Lasting-Finish-Matte-Lipstick To the left is an example of one on Rimmel’s competitor’s products. As you can see, this simple product is currently being sold at £14. Because of this, it is easier to say that Rimmel branded lipstick can be classed as a cheap product. Therefore, it can also be said that Rimmel products are aimed at the lower income earning women who like to look trendy without the extra cost.
Psychographic Segmentation is when a certain segment of the population is taken and grouped into how people choose to live. This includes things like; lifestyle choices, activities, interests, opinions and so on. The aim of Hussana is to introduce a Halal alternative to the current high street products. Many of which contain alcohol and other Haram ingredients from different animal parts. All of Hussana’s range contains no alcohol or animal products. The launch range consists of Shampoo, Conditioner, Body wash, Moisturiser, Cleanser, Face scrub, Lip balm, Baby shampoo, Baby lotion, Baby oil and Baby bath. The range is suitable for both male and female use.
Because of their products, it is easier for them to target audiences who want to use more Halal products. Also due to their range of skin care products, it is mostly aimed at women who want to keep their skin care up to shape. Hussana products range from £2-£40 with variety of products to suit different skin needs and different varieties. The higher priced products come in bundles and also have products that are suitable for babies. Competitors such as Body Care have more costly products than Hussana as single products can range from £11 and upwards. This makes it easier to say that Hussana is a cheap brand for skin care.
Behavioural Segmentation is when a certain part segment of the population is grouped into categories that for with how they respond to a certain product. For example this could rely on when a product is purchased the usage rate of the product and the benefits of the product. Vodafone has a number of tariffs that appeal to a different range of customers. Vodafone offers a number of tariffs to cater for their customer’s needs. Vodafone offers data plans that have high to low usage on texts, data and minutes.
http://www.vodafone.co.uk/shop/pay-monthly/sim-only-deals/index.htm Depending on the type of package that a consumer wants, will affect the price that they need to pay monthly. Because of this, mobile phone tariffs can appeal to low, middle or high income earners. Primarily, because these packages need a credit card, the phones that come with the tariffs are targeted at ages 20 and upwards. This also means that the expected target audience will be working class men or women. Vodafone’s competitors prices, such as Orange and o2 may differ as the type of packages that are offered are different, this means that depending on the type of package that is offered then there will be different types of targeted audiences. https://www.o2.co.uk/shop/tariffs/
Business to Business or B2B Segmentation is when a business groups a certain part of the business population into segments according to their wants and needs. An example of a business that uses B2B Segmentation is Microsoft. Microsoft Corporation is an American multinational corporation headquartered in Redmond, Washington, that develops, manufactures, licenses, supports and sells computer software, consumer electronics and personal computers and services. http://en.wikipedia.org/wiki/Microsoft
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