Scenario A company with many years of experience in manufacturing chocolate want

Question

Scenario

A company with many years of experience in manufacturing chocolate wants to launch a new premium product line of self-heating chocolate and coffee beverages. The company has undertaken extensive taste-testing to come up with a unique range of flavours: (i) ‘raspberry & chocolate’, (ii) ‘hazelnut & coffee’, (iii) ‘toffee & coffee’, and (iv) ‘nightblazer’ which is blend of chilli, chocolate & caffeine. These premium products will cost RM 9.50 per can and will be sold from specially designed vending machines.

Explain market segmentation and then describe what segmentation bases you would use to assist in identifying the primary target audience for this range of beverages. You are required to use at least two (2) segmentation bases and to justify (explain) explain your choices.

Part B. What two (2) types of reference group appeal would you suggest that the company consider using in their 2014 media campaign? You must explain your reasons and illustrate your answer with examples

Explanation / Answer

1) Market segmentation is basically dividing the entire market into smaller segments so that those segments can be effectively targeted and better competitive benefits are reaped. The segments have similar characteristics such as same preferences or demography which helps in better marketing the product.

The two important segmentation base for the choclate and beverage category could be:

A) Pschyographic segmentation : This type of segmentation is based upon the social class, lifestyle and personal preferences of the individual. It is most suitable for an innovative and self heating product such as the one above. Since coffee and choclate both are considered upper class products and are associated with high status, this would help them in identifying the right target population. Also self heating beverages are a sign of paucity of time and hence such instant beverages would instantly click with people who have active lifestyle.

B)Demographic segmentation: This segmentation is based upon demographic variables such as income,gender , age , life cycle etc. Since it is a premium product with uique twist in the taste , it would be preferred more with the younger generations and also with the upper class strata. Hence this could be an important criteria to target population.

Part B) Reference groups are groups of people which an individual refers to or refers to in order to self asesess his own taste, attitude and behaviours. The two types of reference group appeal which the company should use are :

1) Primary Positive Membership group appeal : Individuals are all part of a group. Membership group is one where individual is already memeber and is in primary contact with the members such as family , peers etc. Hence an individual in close contact with primary members would be highly influenced by the lifestyle led by them. So an advertisement which shows a family together having an active fitness lifestyle and have a knack for coffee and choclate beverage would hit the right chords.

2) Aspirational group appeal : Here the individual aspires to be a part of the group. Hence a celebrity endorsement having a beverage and using it as status symbol for uniqueness would enforce the individual watching the ad to adopt the same.

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