Criteria useful in market segmentation
Discuss about the Market Segmentation of Hershey Company.
The Hershey Company is one of the largest chocolate manufacturers in the world. Kisses chocolate is a brand of Hershey. It has unique taste and ability to satisfy health conscious people. The Hershey was founded in 1894 by Milton Hershey. This report identifies the segment market of Hershey’s kisses. The research is made on the market. Further it identifies and describes the market. Further three target segments are selected to meet market objectives. The report describes the consumer profile of the target market. The consumer attitude is outlined to the chocolates being offered. The marketing and distribution options are developed. The positioning strategies are developed and the best one is chosen to fit in the marketing requirements. Finally the whole segmentation and implementation plan is submitted.
The criteria useful for market segmentation is segmentation bases and target market segment.
- The market segmentation is the method of dividing market into sub set of consumers on the basis of needs and characteristics. The market is segmented on the basis of geographic, demographic, psychographic and sociocultural (Baalbaki & Malhotra, 2015).
- Health conscious is the most suitable segment to be targeted by Hershey’s Kisses. The decision is made on the basis of identification criteria which require the marketers to identify and measure some significant characteristics.
The chocolate market of Australia is expected to grow in the coming years. The demand for confectionary products is increasing number of players in the chocolate industry. The chocolate market is segmented on the basis of types of chocolate such as milk chocolate, dark chocolate, white chocolate and more. The consumption of chocolates is on the rise in Australia (Ramli, 2017). The chocolate manufacturing companies face changing preference of consumers in the past five years. The awareness of health benefits about consuming a chocolate drives the chocolate market in Australia.
The major players in Australian chocolate market are Mars Inc, Nestle, Ferrero Group, Shirin Asal company etc. The key target audience in Australia are chocolate manufacturers, chocolate suppliers, research organisations, industry associations and market research firms. The chocolate market of Australia is segmented on the basis of market which includes type and category of market, age group, end user, distribution channel and region (Park, Ungson & Cosgrove, 2015). The chocolate companies in Australia have diversified their range and introduced healthy options in chocolates to change perception of people towards chocolates. The manufacturers have predicted demand of milk, white and dark chocolates in the future.
The target segments to meet marketing objectives are:
Demographic: The demographic segment includes age and life cycle, gender and income. The buyers of Kisses come from the age of 2 to 50. Kisses chocolate is meant for males as well as females. It includes both genders. The chocolates are reasonable and affordable.
Behavioral: The behavioural segments include the occasions, benefits and usage rate. The chocolates have changed the scenario from having it casual to occasional. People like to gift Hershey’s Kisses on occasions. There are regular users of Hershey’s kisses (Cross, Belich & Rudelius, 2015).
Market research
Psychological segment: The psychological segment comprises the attitude towards product and life style of consumers. The products of Kisses are segmented on the basis of varieties like milk chocolate, milk chocolate with almond, mint truffle, cherry cordial and more.
The consumer profile can be understood in terms of demographics. The consumers of Hershey’s Kisses are of generally high income and older age. The consumers like to purchase Kisses chocolates during larger pantry stocking trips. The educated people come under the demographics of Kisses Chocolates. The educated people are known to the health benefits of chocolates. The Kisses chocolates are equally famous in kids and youngsters. The males and females both are targeted by the company. People prefer to gift chocolate on occasions. The usage rate is increasing among the higher income group (Chawla & Sondhi, 2016).
The attitude of consumers is affected by the psychographic, demographic and geographic factors. The consumers are sensitive towards various factors of chocolates like shape, consistency in mouth, melting and touch (Livingston & Graff, 2018). According to some of consumers excess of chocolates is not good for health so the company focuses on the healthy option of chocolates such as dark and milk chocolates. According to a survey conducted by company, customers have good perception about products of Kisses. According to them chocolates are tasty, healthy and provides variety of options. The attitude of consumers towards Hershey chocolates is favourable which makes company to enhance variety of products and as a result it increases sales of company.
There are various options for the marketing and distribution of Kisses chocolates:
Wholesaler and distributors: The company has to deliver products at one central location to the wholesaler or distributor. The wholesalers and distributors deliver the products to the various stores. The distributors have more indulgence in the sales.
Self-distribution: the company can sell and distribute products by itself. In the self-distribution process there is no need of middlemen such as agents, distributors and wholesalers. It is helpful in saving cost of company (Huerta-Muñoz, Ríos-Mercado & Ruiz, 2017).
Samples: It is the standard approach adopted for the marketing options. The company can offer free sample of chocolates to passers-by. Offering free samples can have impact on consumers. If he likes the taste then he can purchase products with good impact. It is a good way to reach customers.
Personalisation: Chocolates are easy to manipulate. A minor change in molds can bring personalise theme to be ordered for occasions. The company can make available orders with personalise images or messages. It is a good option for marketing which can be adopted by the company.
Identification and description of market
Hershey Kisses holds the top position in the chocolate industry. An effective positioning can build up the image of company. The company can position itself by differentiation and proposition. The company can differentiate it’s product quality by creating a better position in the mind of consumers (Brindle & Layton, 2017). Different and innovative flavours can be introduced by the company. It can be helpful in increasing effectiveness of product. The strategies helpful for differentiation is print advertising, personal selling and public relation etc. proposition are the benefits which are delivered by the company to customers. The value proposition increases customer satisfaction by different tastes and flavours. The quality and benefits provided by company helps to position.
The segmentation means identification of buyers within a market which shares similar buying behaviour in terms of needs. The whole segmentation aims to match group of purchasers having similar needs and behaviour (Craft & Hassan, 2015). The adults are held for the largest sale of Kisses chocolates. The increased interest of customers in healthy food segmenting market includes:
- Promoting benefits of having dark chocolates
- Changing mind-set of consumers that is chocolate being an unhealthy snack.
- Enhance potential sales through promotional programs.
- Repack chocolates so that it is appealing to customers and tagged as low calorie.
The implementation plan of Kisses chocolate includes up gradation and standardisation of company’s business process. The plan further includes fine tune delivery to suppliers. The plan enables efficient customer driven process which will be capable of managing and updating customer needs. The order cycle time should be reduced to boost inventory accuracy. The plan aims to reduce inventory costs and better implementation of business strategy (Jia, Wang & Xiong, 2017).
References
Baalbaki, I. B., & Malhotra, N. K. (2015). 11.4 Macro/Environmental/Ethics/Quality-of-Life Marketing: Health Public Policy, and International Market Segmentation. In Proceedings of the 1995 World Marketing Congress (pp. 48-48). Springer, Cham.
Brindle, M., & Layton, R. (2017). The power of positioning and scale. In Social Entrepreneurship for Development (pp. 37-59). Routledge.
Chawla, D., & Sondhi, N. (2016). Attitude and Consumption Patterns of the Indian Chocolate Consumer: An Exploratory Study. Global Business Review, 17(6), 1412-1426.
Craft, S. H., & Hassan, S. S. (2015). Global consumer market segmentation strategy decisions and managerial assessment of performance. In Revolution in Marketing: Market Driving Changes (pp. 26-30). Springer, Cham.
Cross, J. C., Belich, T. J., & Rudelius, W. (2015). How marketing managers use market segmentation: An exploratory study. In Proceedings of the 1990 Academy of Marketing Science (AMS) Annual Conference (pp. 531-536). Springer, Cham.
Huerta-Muñoz, D. L., Ríos-Mercado, R. Z., & Ruiz, R. (2017). An iterated greedy heuristic for a market segmentation problem with multiple attributes. European Journal of Operational Research, 261(1), 75-87.
Jia, C., Wang, Y., & Xiong, W. (2017). Market segmentation and differential reactions of local and foreign investors to analyst recommendations. The Review of Financial Studies, 30(9), 2972-3008.
Livingston, C. E., & Graff, R. B. (2018). Further evaluation of the use of preference categories to identify novel reinforcers: A systematic replication. Behavioral Interventions, 33(2), 173-184.
Park, S. H., Ungson, G. R., & Cosgrove, A. (2015). Positioning Firms for Profitable Growth. In Scaling the Tail: Managing Profitable Growth in Emerging Markets (pp. 51-66). Palgrave Pivot, New York.
Ramli, N. S. (2017). A review of marketing strategies from the European chocolate industry. Journal of Global Entrepreneurship Research, 7(1), 10.
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