As discovered in previous research, the premium pet industry was not impacted fr
ID: 462727 • Letter: A
Question
As discovered in previous research, the premium pet industry was not impacted from the recession and continues to grow. You have been approached by an individual who wants to open up a pet food delivery service. Customers will either call an 800 number or go online and place orders for pet foods. The pet foods will then be delivered to the home within 24 hours of the order placement. For an additional fee, the delivery person will place the purchased product in the home and, if necessary, will put the food into a receptacle for the pet owner. The person wants to open up the business in the greater Tampa/St. Petersburg area. However, the person is uncertain as to the type of person they should consider approaching as customers. They do not know who their target market is.
Reflecting on the above from a Marketing Strategy Perspective, address the following issues:
a.) Develop a target market for this project. Make sure to address at least three market segmentation variables that would be important to consider and how you arrived at the target market you are suggesting for this project.
b.) Develop a customer retention program for this business. Discuss the concept of customer orientation and the importance of a customer retention program and what factors should be considered for this business. Identify the type of information the company needs to design this program and from where the company will obtain this information.
c.) Marketing strategy focuses on solving problems. Many of the problems originate from specific needs. Identifying the appropriate needs assists in the product differentiation process, as well. Identify the Primary Needs and Secondary Needs this product will satisfy. How will this be used in the product differentiation, positioning of the product, and the impact within the consumer buying process?
Explanation / Answer
a. Target market for this project will a selection of pet owners based on the market segmentation variables as identified later in this answer. The market segmentation variables that will be considered are age, income and marital status. Marketing research in USA has shown that spending on pet products increases with age, with the highest spending occurring in the age groups of 40-49 years and 50-64 years. In terms of income, this variable also has a direct relationship with spending on pet products. Market research has shown that families having annual income of $35,000 to $75,000 are the highest spenders. The last variable is marital status. Married couples with children are big spenders and have to be included in the target market.
Thus the target market are married people (preferably with a child), in the age group 40 years to 64 years and having an annual income of $35,000 to $75,000.
b. For the project to be successful it is important to have a strong customer retention program. For this the company should focus on providing excellent customer service. Since customers order through toll free number or online, the company should make all efforts to connect with the customers through providing excellent customer service. Value added offerings like educating the customers about proper nutrition for pets, putting the food into a receptacle for a very small fee, giving loyalty and bonus points on every purchase etc. can be used to increase customer retention.
The information that will be required are - information regarding the buying habits of the customers, information for measuring the lifetime value of a customer, and information generated through the CRM system.
c. The primary need that the product will satisfy is the need to feed the pet and to provide the required nutrition to the pet. Secondary needs that will be satisfied are the need of providing care and affection to the pet. Now the company can differentiate its product by focusing on both primary as well as secondary needs. The company can differentiate its products on the basis of primary needs by offering different flavors and good ingredients that will be healthy for the pet. It can also differentiate its products on the basis of secondary needs by providing value added offerings like customer orientations on how to take better care of the pets. All these will help in developing a connect with the buyers and will help the company position it's offering as a premium product.
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