Segmentation and brand positioning in the multivitamins market
|✅ Paper Type: Free Essay||✅ Subject: Marketing|
|✅ Wordcount: 2826 words||✅ Published: 3rd May 2017|
Marketing is always a determinant of a business. Good marketing leads the company to be energetic, innovative and stable because good marketing can bring profit and help achieve the business objectives of the company. In contrast, failure to set a good marketing strategy can cause business difficult to operate. Since lack of the profit, the business is hardly to step forward while other competitors are all improving the products, then finally, the one who stay behind must be eliminated. Thus an organization that wants to remain competitive and be profitable needs to be distinctly aware what their target markets are.
Over the years, the traditional face of marketing has changed. Whilst organisations recognize that they can no longer take their customers’ loyalty for granted, and need to adopt ongoing marketing strategies to stay ahead of their competitors (A general review, 2006, p. 23-25). Consequently, the target and strategy are crucial for a company’s marketing.
The company aims to bring a new brand of multivitamins called “Supreme” to the market. The product range includes Multivitamin and Iron, Multivitamin and minerals, Zinc, Cod Liver Oil, Effervescent Vitamin C, and Evening Primrose Oil. These different Multivitamins were identified through initial market research undertaking with the proposed target market. Indeed, it needs a detailed analysis for the segmentation and targeting process in order to reach the affluent end of the market. Therefore, it must be focus on the strategy such as segmentation, the differences between B2C and B2B for segmentation processes; the marketing phrase of “targeting” and how to make a segment and target market for the new range of products.
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Market segmentation is the process through, which consumer’s needs and desires, purchasing behaviour and buying habits are identified in order to divide the overall market for certain products into several consumer group market segments. Mass production, mass communication, technology, globalisation has helped create larger and lucrative potential markets. Organisations do not have the resources to or the inclination to be a single force within a loosely defined market (Brassington and Pettitt, 2006, p.193). The whole market can be seen as an ‘orange’, each segment of the orange represents a different market based upon geographic, demographic, Geodemographic, psychographic and behavioural similarities. According to the geographical factors for consumers segmentation, is where the geographical position and geographical environment variables to segment the market. Because in different geographic environments customers may have different needs and preferences for the same kind of products. According to statistics, personality factors subdivision is by age, sex, occupation, family income, family, life cycle, race, religion, nationality, variables, thus the market will be divided into different groups. Additionally, geodemographic combines demographic and geographic information together to help organizations know where the customers are and how many people there are. And then, the psychological factors, groups’ consumers according to their life style, personality, purchasing motivation, attitude, on different variables subdivided into the different groups. At last, the behavioural factors subdivision is that according to the consumers to purchase or used a commodity of time, purchase quantity, purchase frequency and the brand loyalty variables to segment market.
segmenting B2B markets
Business to business (B2B) segmentation is focused on the organization and the individual buyers. Macro Segmentation is based on the characteristics of organisations and the broader purchasing contexts they operate within. It assumes organisations will exhibit similar patterns and needs, reflected by their same buying behaviour. Bases used for macro segmentation are easily obtained from secondary information and grouped into two main categories which are organisational characteristics and product or service application. There are three organisational characteristics which are size, location and usage rate. Generally, the size of an organisation can make a difference in suppliers and purchasing. Organisations may sell according to the geographic concentration of the industries to serve. Additionally, the quantity of product purchased can categorise the difference in potential customers. Product or service application is the second group of segmentation based on acknowledge that the same goods can be used in many different ways. Looking at customer groupings within specific industries defined by standard industrial classification (SIC) codes. The SIC codes help identify sectors with a greater propensity to use particular products for particular applications. For example, glass has many uses to the motor industry.furthermore, Micro segmentation within macro segment a number of smaller micro segments may exist (Brassington and Pettitt, 2006, p.195).To focus on these, the organisation needs to have a detailed knowledge of individual members of the macro segment; while their management philosophy, decision-making structures, purchasing policies and strategies and their needs and wants. Much Information on these can come from published sources, past experience of potential buyer, sales force knowledge and experience, word-of-mouth, or the first hand from potential buyer. Overall, it has a number of ways to be able to segment business to business market to relate the nature of product sold and the buying organisation.
segmenting B2C markets
In B2C (business to consumer) markets, there are five main categories of segmentation which are defined geographic, demographic, geodemographic, psychographic and behaviour based. Between them, they cover the full range of characteristics, such as descriptive, measurable, tangible or intangible, relating to the buyers’ lifestyle and the relationships with the product (Brassington and Pettitt, 2006, p.220). Geographic segmentation, it can be defined as the location for the consumer and based on the regional variables like region, country, city, climate, population density, and traffic. Demographic segmentation variables include age, gender, race, income, family lifecycle, occupation, education, religion, socioeconomic and nationality. Many of these variables have standard categories for the consumers’ values. Geodemographic segmentation is based on “the analysis of people by where they live” (Sleight, 1997, p.16) and combines geographic and demographic information together. Psychographic segmentation involves intangible variable such as lifestyle, activities, attitude, interests, values and opinion of the potential customer. Behavioral segmentation is based on actual customer behavior or the individual’s relationship with the products. Some variables include benefit sought, end use, usage rate, brand loyalty, buyer readiness, price sensitivity and occasions. All the relevant characteristics from these five categories are suit for the market to segment.
The target market is identified through market segmentation organisations provide appropriate products and services to meet the needs of customer or several sub-markets. There are three types of targeting for marketing mix strategies which are undifferentiated strategy, differentiated strategy and concentrated strategy. Firstly, the undifferentiated strategy approach is the demanding of the three approaches that assume the whole market is one great homogeneous unit without differences individuals in the market. Secondly, the differentiated strategy contains the development of a number of individual marketing mixes, each of them serve the different segment (Brassington and Pettitt, 2006, p.212). Finally, the concentrated strategy is the most focused approach and involves serving one specific segment. It can lead to detailed understanding of the target segment’s needs and wants.
The differences between B2B and B2C on the segmentation
The B2C markets have some similarities with B2B segmentation. However, the main distinction between both approaches is that a consumer purchases on emotion and a business purchases on logic, although they both selling a product or a service to the individual or groups, the marketing is difference for business to business (B2B) and business to consumer (B2C). The B2B market relies on very different sales strategies to be successful than the business to consumer market because the B2B sales market very relies on relationship selling and the sales can obtain in a longer term sales cycle than B2C(business to consumer) sales. The main difference is that consumer segments always much larger in terms of number of potential buyers. Consumer segmentation also bases on the buyers’ lifestyle and context because of most consumers purchases fulfill high-end needs rather than simply functional ones (Brassington and Pettitt, 2006, p.197).
Certainly, they also have the difference segmentation for their different marketing. By the previous analysis of B2B segmentation, it’s divided into macro and micro variables or bases. Macro segmentation is the whole market share common general characteristics which have three characteristics are size, location and usage rate; micro segments based on differences in specific buying characteristics. In contrast, in consumer markets, in other words, it is B2C market; five main categories of segmentation are defined as geographic, demographic, Geodemographic, psychographic and behaviour. Thus they can divide into different aspects to segment the B2C market. For example, age, according to the age level to segment the market because these different kinds of multivitamins for different age level have different efficacy. Such as children need iron and zinc, multivitamin and minerals for teens and young, effervescent vitamin C for middle and cod liver oil and evening primrose oil for elderly. In addition, the gender and education level as target. Like high school, college and university, on the different level of studying they need different nutrients to supplement. Furthermore, not the same level of income for the individuals also can decide the different markets. Such cod liver oil and evening primrose oil is much expensive than the other multivitamins. Additionally, ethnic or religious background also can act as a basis to segment a market. Like as some religions cannot consume cod. Moreover, the family life cycle also is a point to have the market. For example, newly married, married for 10 – 20 years, with or without children. Overall, they both have different property to have the way to segment the market they needed for B2C and B2B. At the end, all the multivitamins products will have the appropriate market in the small groups to sale because of the market have segmented different layer based on the market segmentation standards.
segment the market for the new multivitamins
It is suggested that two main strategies to segment and target the market for the new multivitamins. One is the brand strategy and another one is the pricing strategy. Firstly, As Ruvalcaba and Elkes (2008) suggest: we have to find a way to diverge from others, to differentiate your offering through your branding work so that the offering stands out as relevant and superior in value to a clear target market. The brand is to give owner produce value-added of intangible assets, it could be used to separate with other competitors’ products of name, terminology, symbols or design and their combination, value-added source from the products impression of consumer heart formed. Businesses that are at the top of consumers’ minds have a high market share. Consistent, creative advertising will get the business top of mind awareness (TOMA RESEARCH, 2010).
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Brand awareness refers to the strength of a brand presence of a brand in the memory of a consumer. Brand awareness can create a reason to buy as well as a basis for a customer relationship (Aaker & McLoughlin, 2007). For example, according to the brand awareness and radiation region, the new products can be divided into areas brand, domestic brands and international brand thus the new products have the different market in the geographic area.
For multivitamins, the key proposition of the supreme brand is healthy. The main elements of the proposition include the kinds of multivitamins that different populations needed and keep healthy. Moreover, supreme follows a strategy of product innovation, in order to achieve a long term objectives. It takes the form of timely new product launches to enable the brand to more closely meet the needs of different types of consumers in different areas.
Secondly, pricing strategy is another popular strategy which utilize for marketing. The limited use of pricing as a strategic tool to gain and hold competitive advantage has created an opportunity for companies willing to redesign their competitive portfolios and go with unorthodox strategy mixes (Thompson & Coe, 1997). Cutting price of the products can be considered as an easiest way to absorb the customers. Therefore, pricing control also can be used to segment the different suitable markets. For example, the actions for the new product market can be cutting down the price to open the new market for new products in order to make more consumer known about these products, like have a small gifts if buying a bottle of multivitamins, buying one more than getting another free one or special discount for different type of multivitamins that have different kinds of efficacy, in particular date are very popular in sales industry to obtain more benefit. These actions also can execute in the center of city or the town center to segment the market. The effect of cutting price may increase the quantity demanded, however, a major barrier to the use of value pricing has been the belief that industrial markets are largely inelastic, therefore, price will not be a major determinant of quantity demanded (Barney, 1991). The reason for that is for the company, it is difficult to find the exact “right price” that matches the expectations of customers. Besides, blindfolded cutting price will lead an unhealthy competition environment with competitors. The result of conflicting on sale is all companies losing profits at the end.
For short term, it could be suitable, acceptable and feasible, but for long term, for example, once the customers have get used to buy the product on a sale price, it is difficult to raise the price again. Then it is unacceptable, the risk is too high. The customers would not consider the price seriously again. Therefore, the pricing strategy is not suitable for long term.
Focus on fits the two main criterions of a good marketing strategy. The key of marketing is value, which can be defined as a ratio between benefits and costs between the customer gets and the organizations gives. The suitability of target is obvious, no matter improves the brand awareness, the quantity of product or the price control to share the same purpose, which is to gain profit. It is the mission of marketing. All these two aspects help the “supreme” to reach the goal, thus brand positioning and price consideration is suitable. Although there are risks, such as investment in advertising and building sponsor relationship with other organisations will cost, it is deemed worth the risks. Overall, continual segmentation is vital to fully understand consumer needs and changing habits. This will help provide appropriate produces to satisfied their needs and wants.
Segmentation is the tool that enables supreme to identify different groups of customers and markets, and provide the best possible products to meet individual or groups requirements. It also brings a number of benefits to both the consumer and the organization. The new multivitamins market consists of different consumers with differing needs. Focusing on branding positioning is a comprehensive strategy for the new multivitamins products to achieve a successful marketing. Whereas, as a diversified product, it should use many ways and the marketing segment strategies to sale in order to get the profit. In other words, the multivitamins still needs to focus on the different segmenting market. Alluring more consumers and keeping the regular customers in main areas to build brand loyalty are the main missions at present. They are still the primary objects for multivitamins to make profit and sustain operation.
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