Marketing Theory Market Segmentation

Question: Discuss about the Marketing Theory for Market Segmentation. Answer: Introduction Marketing can be defined as a group of activities that the business organizations must do in order to promote and sale their products and services in the market. According to Barton (2015), marketing is the most important part of the business operations of the companies. In the words of Schlegelmilch (2016), marketing is the process through which the marketers of the companies make the people aware about the products and services. Arthur, Wiseman and Cheng (2015) stated that marketing is important because it provides the scope of increasing sales or revenue of the company. The companies can increase their customer base through marketing and at the same time, the companies can know the demand of the customers through marketing. Dibb and Simkin (2016) mentioned that proper marketing strategy helps the company to achieve the loyalty or trusts of the customers and provides a strong position in the market. This particular report is based on the subject area of marketing. During this report, the focus is made on particularly the segmentation and targeting activities of marketing. Along with that the discussion in the report also focuses on the product mix. The evaluation, discussion and analysis of the report is solely focused on the segmentation, targeting and product mix of Knorr. Knorr is an international food and beverage brand that is originated from Germany. The brand is under the ownership of Unilever and the company has started its business since 1838 (Knorr UK 2016). The company deals with a wide range of products that includes ready to eat foods like, soup, sauce, noodles, pasta and many other products. Currently, the company is operating its business in several countries including UK, US, India and many other countries and the management of the company is planning to expand its market more (Knorr UK 2016). Segmentation and Targeting Segmentation is one of the primary marketing activities that every company needs to do. Dibb and Simkin (2016) defined that segmentation is the first step of marketing, where the marketers divide the overall market in to different segments. Hoegele, Schmidt and Torgler (2016) added that segmentation helps the companies to identify their target market easily. In the words of Arthur, Wiseman and Cheng (2015) market segmentation is splitting up the market in some segments according to the needs or the characteristics of the demand. Segmentation can be done on the basis of demographic factors, geographic factors and psychographic factors. Cross, Belich and Rudelius (2015) stated that market segmentation is very important for the business organizations because it helps the companies reducing the risk of selecting the place and types of customer for future business. At the same time, with the help of market segmentation, the companies can easily understand what type of business strategy they must take for convincing the customers because segmentation clearly shows the type of customers and their demand pattern Hoegele, Schmidt and Torgler (2016). In support of this, Calvetet al. (2016) commented that market segmentation helps to take effective market plans and makes the decision-making process of the companies easier. Application of market segmentation strategy at Knorr In case of the market segmentation of Knorr, the company has segmented the market on the basis of two factors demographic factors and geographic factors (Knorr UK 2016). In case of demographic factors, the marketers of the company have considered the two elements age and income of the customers. In context of age, the company has segmented the market in to three segments children, young people and older people (Knorr UK 2016). Age wise the company has segmented the market into three groups like, 12 years to 18 years, 19 to 30 years and more than 30 years. This segmentation helps the company to identify the pattern of demand of the people of different age groups (Knorr UK 2016). As per the income level of the people, the company has segmented the market again into three segments high income group, upper-middle class income group and middle class income group. The primary reason behind the market segmentation as per income levels are that the company can better understand the purch asing capacity of the people, which will ultimately help the company in taking the pricing strategy (Howell 2015). The management at Knorr has also segmented the market on the basis of the geographic factors. Geographic segmentation has helped the marketers of Knorr to differentiate the demands of the people in different geographic areas (Knorr UK 2016). On the basis of that differentiation, the company can easily identify the most suitable customer segment for it. In case of geographic segmentation, the company has segmented the market in to two segments urban segment and rural segment (Knorr UK 2016). This type of market segmentation also helps the company in modifying the product range. Targeting is as important as the market segmentation. Batemanet al. (2015) has explained targeting as the second step in marketing, which comes after market segmentation. In the words of Schlegelmilch (2016), targeting refers to the selection of the specific market by the companies for future sales. Stienenet al. (2015) stated that targeting is important because it helps the company to find out the specific market of it. This is essential because it makes the marketing activities systematic. Marteau, Hollands and Fletcher (2012) believed that with the help of targeting, the companies can avoid wastage. For example, if a company does not have any target market, then it will try to sell its products or services to every person and for that it will spend much money. However, it is obvious that all people are not its customers. Therefore, the money that the company spent for convincing the people who are not interested becomes the wastage for the company (Barton 2015). Hence, targeting is important to avoid the wastage or inefficiencies. The activities of targeting clarify the changes in the demand of the customers. At the time of targeting, the companies verifies the demand of the customers and so if any changes in the demand take place, then that can be identified with the help of targeting (Batemanet al. 2015). Therefore, it can be said that every company must focus on the targeting activities to improve their business performance. In case of Knorr, the targeting has been done carefully and effectively. The company has mainly applied the differentiated targeting strategy because it has targeted more than two market segments. Previously, it has been identified that the company has segmented the market on the basis of the demographic factors and geographic factors. In case of age wise segmentation, there are three segments and among those three segments, the company has targeted only the children and young age groups. The company has focused on the advertisements and packaging in order to target the children (Knorr UK 2016). At the same time, it has concentrated on the strategy of low pricing to target the young people, who are very conscious about the price level. In case of income-based segmentation, the company has targeted the people from upper-middle class and middle class income groups. In order to target these people, the company has concentrated on the affordability of the customers. The company has intro duced small packets of the products, which are available at low price (Knorr UK 2016). This particular strategy has also helped the company to target the geographically segmented markets. Product mix Product is a tangible element that can be sold in the market to earn revenue or money. The companies can sell the products by manufacturing that in the production unit or purchasing the products from any other companies. Calvetet al. (2016) stated that there are mainly three levels of product core product, actual product and augmented product. In case of Knorr, the core product is the health goodness. The products of the company are very hygienic and healthy for children as well as young people. The core product of the company helps the people to get fitness. The actual products of the company are soup, noodles, chicken slices, Pasta and the other products, which are tangible in nature (Knorr UK 2016). Stienenet al. (2015) stated that the benefits of the core product of Knorr can be achieved only when the people consume the actual products of the company. On the other side, the augmented product is the added value that the company provides to its customers. In case of Knorr, the au gmented products are the free gifts that it provides with its actual products.Pasta is one of the main products of Knorr. In case of Pasta, the core product is quality of the pasta, which is of much high quality. The core product in case of pasta is the healthy ingredients that do not harm the health of people. The actual products in this case are the varieties of pasta that the company produces. The augmented product in this case is the discounts or extra quantity that the company provides to the customers. Conclusion In this study, it has been identified that marketing is one of the main pillars of business of the companies. In the activities of marketing, segmentation is the first step that the companies need to follow and after segmentation, the next step is targeting. In case of Knorr, the segmentation has been done on the basis of the demographic and geographic factors. Under the demographic factors, the segmentation has been done as per the age and incomes of the people. In case of geographic segmentation, there are two segments of the company urban segment and rural segment. On the other side, in order to target the market, Knorr has taken several strategies. The study has also identified the core, actual and augmented products of the company. 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