P5 Segmentation

Topics: Target market, Target audience, Meal Pages: 5 (1711 words) Published: June 18, 2013
Explain how and why different groups of customers are targeted for selected products at McDonalds (P5).

• Describe segmentation
• Explain demographics, Geographic’s, psychographics and why companies use these methods to segment the market effectively • Explain different methods used to segment markets e.g. ACORN, Mosaic • Explain the different target markets of McDonalds – identify 4 product ranges and describe in detail the target market for each product • Describe the different needs of each target segment

• Use examples specific to McDonalds

Market segmentation is where marketers split the market into groups with similarities that would make it easy to target their product to the consumers, if they do not do this then they could waste money and time on targeting the wrong people. The company would be trying to maximise their sales so that they can gain as much money as possible. Using market segmentation could mean a business could gain a commercial advantage as they would be advertising to a specific audience, they would be matching target audience and the product effectively.

Demographics are where the companies target market would be to a group because of their Gender, age, race/nationality, family size, occupation and education. For example McDonalds advertise happy meals to children because they would keep bugging their parents to take them to get them it.

Geographic’s are where the companies target market would be to a group because of where they live, for example an expensive store wouldn’t come to Burnley because most of the residents are working class and don’t have a lot of money.

Psychographics are where the companies target market would be to a group because of personality, lifestyle and interests. For example subway would advertise to people with a healthy lifestyle.

These segmentation methods are used to split up the market so business can find the perfect target market, if companies didn’t use these methods then the companies wouldn’t have a good understanding of the people they are trying to advertise to.

ACORN or A Classification of Residential Neighbourhoods, is used to segment the market into different classifications, the classifications are split up into 5 categories, which are:

• Wealthy Achievers – wealthy people who already have good, well-paid jobs, • Urban Prosperity – wealthy people who are aspiring to have good, well-paid jobs, • Comfortably Off – people aren’t particularly wealthy but have a decent sized house etc. • Hard Pressed - lower classed people, who are live in high rise flats etc. • Moderate Means – working class people, live in terraces.

Another method of segmentation the public are is a system created by Experian called Mosaic, this assigns people to groups based on their post code, neighbourhood etc. and it makes assumptions about peoples likes, dislikes and lifestyles based on their postcode area.

• A Career professionals living in sought after locations • B Younger families living in newer homes
• C Older families living in suburbia
• D Close-knit, inner city and manufacturing town communities • E Educated, young, single people living in areas of transient populations • F People living in social housing with uncertain employment in deprived areas • G Low income families living in estate based social housing • H Upwardly mobile families living in homes bought from social landlords • I Older people living in social housing with high care needs • J Independent older people with relatively active lifestyles  • K People living in rural areas far from urbanisation

McDonalds target markets are happy meals, saver menu, portion sizes, fillet o’Fish, breakfast and hot drinks; the happy meal is targeted towards children as they will use pester power to make their parents take them to McDonalds. They sell small...
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