基于两个案例(保洁,肯德基)的市场细分理论研究

1、market segmentation-theory and practicemodule: pmm1002(pmp management 1-5)tutor: debbie ballstudent name: jason haiyu wangicws id: wahyp01word count: 3231submission date: march 17th 201027 / 26this essay would mainly talk about the concepts of market segmentation theories and try to evaluate those t

2、heories based on two practical case studies. the first case study is about the practice of procter & gamble, who use market segmentation to manage their product line in one specific category skincare product. the second case study would try to analyze that how kfc, a global franchiser of fast-food r

3、estaurant, design not only their products but also communication activities with their customers based on the implementation of market segmentation.all conclusions of those two case studies would be based on observation and logical, reasonable assumption due to that it is very difficult to acquire d

4、irect information or evidence about organizations marketing strategy. this fact could lead to the consequence that the observation could be misunderstood or misinterpreted, which would affect the creditability of this research. further study would be needed if those two case studies are taken as pos

5、itive example for practice.furthermore, in the second case study which is about kfc, lots of observation was based on the practice kfc conducted in china market. the reason of this is that probably china is the only market where kfc hold advantages against the industry leader mcdonald and it showed

6、significantly stronger competent in china market than it did in the other counties.during analyzing those two case studies, it is unavoidable to get involved with some fundamental concepts about product line and brand management, because most corporations today use those two concepts as mechanisms t

7、o achieve their purpose of reaching the different market segments by providing different products.market segmentation, as kotler and armstrong defined, is “dividing a market into distinct groups with distinct needs, characteristics, or behaviors who might require separate products or marketing mixes

8、” (kotler and armstrong, 2004:239). the aim of market segmentation, as blythe suggested (2001:57), is “to identify a group of people who have a need or needs that can be met by a single product, in order to concentrate the marketing firms efforts most effectively and economically.” in other word, th

9、e practical aim of the market segmentation theory is to let an organization understand who its customers or potential customers are and to give suggestions about how to fulfill those peoples needs in the most effective and efficient ways. as blythe implied, by market segmentation approaches, organiz

10、ations could enhance and improve their marketing efficiency, which could be beneficial to their business and provide competent or bring competitive advantages to themselves. hence, most of organizations considered market segmentation as one of their most crucial compositions of their marketing strat

11、egies.from late nineteen century to 1940s, lots of corporation got their own success from implementing american system ofmanufacturing, which focused on providing standard products with low prices based on cost control and improving manufacturing efficiency. however, in the 1950s, some people found

12、that the business environment had changed when lots of consumers would not be satisfied by standardized products anymore and demand more selection variety. in 1956, smith introduced the concept of market segmentation, which was as he stated “market segmentation involved viewing a heterogeneous marke

13、t as a number of smaller homogeneous markets, in response to differing preferences, attributable to the desires of consumers for more precise satisfaction of their varying wants”(smith, 1956). since then, the concept of market segmentation has become one of the most important marketing theories in b

14、oth theoretical and practical field.adcock, halborg, and ross in 2001 suggested that though there is no limit to the number of measures to segment the market in particular circumstances, however, unless a segment be definable, sizable, reachable and relevant, it would be useless in the practical fie

15、ld.definable means people must be able to describe the market segment, and for this the key characteristics of the segment should show a degree of homogeneity. the segment is of course a subset of a heterogeneous total market for the reason that if the total market were homogeneous there would be no

16、 need for segmentation. it is also useful to be able to measure the market size and define the boundaries of the segment. sizable means that the market segment must be big enough for an organization to get profit from it by providing commodities and services. this criterion would be different to the

17、 different organization because of their size and the goods or services they offered. reachable means that there must be a way of reaching the segment both effectively and efficiently. this includes the obvious physical distribution of a product, as well as communicating with customers via media or

18、in a direct way. relevant here is considered the most important test for any described segment. it cannot be considered in isolation from the other criteria as there is no point in describing a relevant segment that cannot be reached (kotler and armstrong, 2004).the basic principle of segmentation i

19、s very simple. based on the idea from adcock, halborg, and ross (2001), it involves selecting the classification most appropriate to the groups of customers identified. the work involved in doing this is justified only if it can be used to improve marketing effectiveness. based on wedel and kamakura

20、s theory (2000), the market segmentation bases can be divided into four different classes by whether it is observable to the marketers or not and whether it was mainly concerned about a specific product. they developed a matrix to show this conclusion (figure 1).figure 1, classification of segmentat

21、ion basesgeneralproduct-specificobservablecultural, geographic, demographic, and socio-economic variablesuser status, usage frequency, store loyalty and patronage, situationsunobservablepsychographics, values, personality and life-stylepsychographics, benefits, perceptions, elasticities, attributes,

22、 preference and intentiona segmentation basis is defined as a set of variables or characteristics used to assign potential customers to homogeneous group. following frank, massy and wind (in wedel and kamakura, 2000), wedel and kamakura classify segmentation bases into general (independent of produc

23、ts, services or circumstances) and product-specific (related to both the customer and the product, service and /or particular circumstances) bases. furthermore, they classify bases into whether they are observable (i.e., measured directly) or unobservable (i.e., inferred). that typology holds for th

24、e bases used for segmentation of both consumer and industrial markets, although the intensity with which various bases are used differs across the two types of markets. almost in the same time, adcock, halborg, and ross (2001) hold a slightly different opinion about the classification of market segm

25、entation. they suggested that there were two different types of market segmentation. one is the traditional approach, which use variables and can be described as geographic and/or demographic; the other one is modern approach which is becoming more usual to classify consumers on the basis of self-or

26、ientation and resources. in their opinion, there was some problems with the traditional approach nowadays because of the world had changed so fast in the last couple of decades.although scholars hold different opinions about how the market segmentation bases should be classified, there were some var

27、iables they all use as the criteria for different market segmentation bases. e.g. age, gender, race, family size, income, occupation, education, religion, generation, nationality and life cycle for the demographic bases; acorn and prizm for geo-demographics bases; world region or country, country re

28、gion, city or metro size, density and climate for the geographic bases; vals2, social class and personality for the psychographic bases; and, occasions, benefits, user status, usage rates, loyalty status, readiness stage and attitude towards product for the behavioral bases (kotler and armstrong 200

29、4:240).even lots of people agreed those variables could be used in market segmentation practice, they also had different idea about them. for instance, according to kotler and armstrong (2004), consumers needs and wants would change with age. therefore, organization should offer different products o

30、r use different marketing approaches for different age groups. and they provided some successful practices of some multinational corporation who use age as a variable for their market segmentation. however, davies (1998) stated that age must be used with caution though it can be used as a means for

31、distinguishing between the needs of different groups and segments. he mentioned a report by mintel (in davies, 1998) which was entitled the over 50s (1989), an executive summary, which discovered that media portrayals of this group as mature citizens was often resented. the report elaborates that a

32、significant number in this group find life more satisfying than when they were younger. moreover, he mentioned that “many people in late middle-age consider this to be a time for “selfish” spending and a chance to indulge themselves with a clear conscience, particularly when they do not have to worr

33、y about family responsibilities. also he referred a theory originated by an american professor of marketing, moschis, which is that marketers need to offer marketing offering that are stimulated by the cognitive ages of individuals instead of their chronological ages. cognitive age refer to how old

34、a person feels. in practical terms, if a fifty-five-year-old man perceives himself as fifteen years younger, then he should be targeted with products designed at his perceived age group rather than his chronological age (davies, 1998:106). those limitations of age as a variable of market segmentatio

35、n are still controversial until today.since 1960s, there have been plenty of world-famous organizations using market segmentation measures to identify the distinctive consumer groups of their target markets and depending on it for their product design and marketing communication activities design. p

36、rocter & gamble co., or p&g, is a fortune 500 american multinational corporationheadquartered incincinnati, ohio.it is a manufacturer of a wide range ofconsumer goods. its products varied from different categories which include beauty care products, household care products and health and well-being

37、products. p&g has the largest lineup of leading brands in its industry, with 23 brands with over $1.billion in annual sales, and another 20 brands generating about $500.million or more in annual sales (procter & gamble co., 2009).although p&g offered 47 brand products just in the beauty care and gro

38、oming products category (procter & gamble co., 2010, date access: march 4th 2010), only two similar products from two different brands would be selected to discuss in this case study. the selected products are purifying facial cleansers from sk-ii and olay. the reason of why those brands are chosen

39、is that those brands showed significant differences in product design and brand positioning strategy while they provided similar products. on the home page of sk-ii official website, they are delivering and emphasizing a piece of important information that the products of sk-ii have unique and mirac

40、le ingredient within them (sk-ii, 2010, http:/www.sk- date access: march 4th 2010). in contrast, on the home page of olay official website, they are emphasizing a piece of promotional information that people would be able to get a 20-dollar rebate (olay, 2010, /index.jsp, date access: march 4th 2010

41、). in addition, although on both those two websites they were offering promotion, the promotional activities were in different form. sk-ii offered free travel kit to the people who spent over three hundred us dollars (sk-ii, 2010, http:/www.sk- date access: march 4th 2010) and olay gave their custom

42、ers a chance to get a price reduction (olay, 2010, date access: march 4th 2010). one possible explanation of those differences is that their brand positioning strategies are different. sk-ii is focusing the high-end market while olay is trying to fulfill the low-end consumers needs. this assumption

43、could be proved by the difference between their products price. a sk-ii purifying facial cleanser costs almost eight times than a similar olay product does (sk-ii, 2010, http:/shop.sk- date access: march 4th 2010; target, 2010, dp/b002eaub30/176-4806656-3547462?afid=*affiliateid*&ref=tgt_adv_xsd1000

44、0, date access: march 3th 2010). furthermore, this difference may also affect the distribution channel of sk-ii and olay. on the official website of sk-ii, there is an online-store for their customers. however, olay do not sell their products directly online and just provide a referral link to some

45、online retailer (sk-ii, 2010, http:/shop.sk- date access: march 4th 2010; olay, 2010, locator/index.jsp?upc=75609030383, date access: march 3th 2010).there is another obvious difference between those two similar products. in the product introduction page of sk-ii purifying facial cleanser, sk-ii emp

46、hasis that their product has special formula and would be able to hydrate peoples skin (sk-ii, 2010, http:/shop.sk- date access: march 4th 2010); in the similar page of olay purifying facial cleanser, olay state that their product could bring deep cleans and is dermatologically tested (olay, 2010, o

47、laydeepcleansing/products/dc1000, date access: march 4th 2010). a possible explanation of this phenomenon could be that those two products are focusing the different customers in the different age groups. when females in their adolescence, their skin would be oilier and more sensitive to chemicals.

48、so they would prefer a product which has deep-cleaning capability and would not be easy to lead to allergy; when females come to their late thirty or forty, their skin would be drier than they used to be, so they intend to choose a product which could effectively hydrate their skin. as was previousl

49、y stated, those two products from p&g are actually targeting to totally different market segments even they are belong to the same category.based on the observation mentioned above, a hypothesis could be generated. p&g would probably segment their target market based on consumers income level and ag

50、e. moreover, they take brand positioning and brand management as mechanism to give induced differentiation to their target consumer group. in their practice, kfc use different variables to segment their target market. moreover, they design their products and communication measures with their target

51、customers based on their market segmentation result. after analyzing kfcs product line, there is an assumption could be got that kfc use at least three different market segmentation measures, geographical market segmentation, occasional market segmentation and demographical (age) market segmentation

52、, to segment their target market and provide unique offers to each segments.kfc corporation, based in louisville, kentucky, is the worlds most popular chicken restaurant chain. kfc operates more than 5,200 restaurants in the united states and more than 15,000 units in 109 countries around the world.

53、 kfc is part of yum! brands, inc., the worlds largest restaurant company in terms of system restaurants, with more than 36,000 locations around the world. the company is ranked #239 on the fortune 500 list, with revenues in excess of $11 billion in 2008 (kfc us, 2010, date access: march 11th 2010).k

54、fc are using geographical-based market segmentation for their product design. although kfc is a global fast-food restaurant franchiser and is focusing to lower the cost by providing standardized foods and beverages, it is offering different menus in different counties. by implementing this strategy,

55、 kfc intend to attract different people in different regions to their restaurants. for instance, in the united states, where apple pie and pot pie are very popular traditional food, kfc are offering pot pies as one kind of plated meal and apple pie minis in their dessert menu there (kfc us, 2010, da

56、te access: march 11th 2010); in china, kfc have dragon twister and egg tart for their customer (kfc china, 2010, date access: march 11th 2010). the first one is varied from a traditional chinese pancake which would use sweet noodle sauce as condiment and the second one is a very popular dessert from

57、 traditional guangdong cuisine. they also sell balik ekmek fish sandwich, a popular food in the islamic counties, in turkey (kfc turkey, 2010, date access: march 11th 2010), even lots of people from the other countries will never know what it is. this phenomenon could be considered as a proof that kfc use geographical market segmentation measure to identify the different needs from their customers from different countries and try to fulfill them by providing variable offers.in addition, kfc also provide different products to