Marketing is a system of business activities designed to plan, price, promote and distribute ‘want satisfying’ products to customers in the market in order to achieve business objectives. However, the total market is very large and it would be impossible to develop some strategies that would meet customer’s needs and wants of everyone better. Because of this, businesses break the market down into segments which are so important for businesses to aim at their specific target market. The best relevant business case study to illustrate the selection of market is ‘Sprite’ produced by Coca Cola.
The target market needs to be identified. The target market is the current/ potential customers with similar characteristics. For ‘Sprite’, a new target market was selected to take advantage of the fact that young males drink the most soft drink. In this market, Sprite competes with other products such as Solo, Fanta based on its market segmentation in four key areas: Demographic, Geographic, Psychographic and Behavioural. Demographic segmentation: It is the division of the market into groups based on demographic variables such as age, gender, family size, income, education. The market segmentation of Sprite in primary market demographic focuses on the male or teenager whose ages are between 12 and 17. It is based on their ages, income and gender. At the age of 12 to 17, they identify some products with characteristics of ‘Cool Refreshment’. And they cannot afford to some expensive products. The secondary market segmentation is to concentrate on all lemonade drinkers aged 8 to 29. According to family size, some of Mums and Dads buy soft drink for their families. So Sprite segments its target market to aim at those groups to purchase their products with low prices, and gain more profits.
Geographic segmentation: the market is divided by location because it is assumed that the people who live in the same area will probably have similar needs and wants. These can be in the form of countries, states, cities and local neighbourhoods. While, Sprite was produced by any places like Urban. People lived in urban or cities are likely to spend some money on fashionable and popular products. And their standards of consumption are higher than other people who live in countryside.
Psychographic segmentation: it occurs when the market is divided into different groups based on social class, lifestyles and personality characteristics. Nowadays, young males who have their own identity and make their own choice. They have their own lifestyles and motives to be a cool and trendy people. They are not fooled by traditional promotional ploys. They are attracted by creative and unique things. Based on this current situation, Sprite produces ‘cool soft drink’ to meet these male’s need and wants because its target market are the customers who are being honest and being interested in something fresh with particular personalities. Behavioural segmentation: this is the segmentation strategy when the market is divided into groups based on consumer knowledge, attitude towards use for and responses to a product. It involves purchase occasion, benefits sought and usage rate. In the context of Spite, building loyalty and repeat custom through relationships management is the way to take advantage of behavioural characteristics. It provides products with low price in many places and it has large customer base. Then buyers can be grouped according to the occasion on which they buy a particular product or service.
After identifying the methods used to segment target markets, it is very important and essential for business to develop marketing strategies in order to satisfy the needs of the target market to achieve marketing objectives effectively. Otherwise, in the same way, Sprite also focuses on marketing strategies which include marketing mix of four P’s: product, price, promotion and place.
Product: Product is a good or service that can be...
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