Segmenting the market reveals Nestlé’s market segment business opportunities. The Company evaluates each market segment’s attractiveness and selects one or more of the market segments to enter. Targeting marketing involves two steps: 1.Evaluating Market Segment, 2.Selecting Market Segment.
1. Evaluating Market Segment: To evaluate the market segment, Nestle look at three factors: Segments size and growth, segment structural attractiveness and Nestle’s objective and resources.
Segment Size and Growth, the numbers of young generation who drink Nescafe are many and it also brings a huge amount of profit to Nestle. At the same time the future growth of this segment is considerable and acceptable.
Segment structural attractiveness, to evaluate each segment’s structural attractiveness nestle’s consider some forces like
2. Selecting Market Segment: Nestle chooses one of four target marketing strategies, they are: Undifferentiated or Mass Marketing, Differentiated or Segment Marketing, Concentrated or Niche Marketing, and the last one is Micromarketing or Local, Individual Marketing.
1. Undifferentiated Marketing: There is no delineation between market segments, and instead the market is viewed as one mass market with one marketing strategy for the entire market. Although very expensive, this targeting approach is often selected in markets where there is limited segment differentiation.
2.2 Differentiated Marketing: This marketing recognizes that there are several market segments to target, each being attractive to the marketing organization. As such, to exploit market segments, a marketing strategy is developed for each segment.
Marketing Mix Segmentation
2.3 Concentrated Marketing: When company resources are limited, the Company focuses on concentrated or niche marketing. This involves targeting one or few...