The paper “ A Multivitamin and Minerals Company Value Min - Market Segmentation and Targeting to Get More Commercial Advantage" is a motivating example of a case study on marketing. Value Min, a successful multivitamin and minerals company intends to introduce a w brand of its products to the market. The new brand of products is aimed to reach the affluent end of the market, though the company is not up to speed with the segmentation and targeting process. This report seeks to elaborate on these concepts, and illustrate how these processes can be incorporated into Value Min Company to enable its market its new multivitamin range. SegmentationA business cannot satisfy the wants and needs of all the buyers and do so can lead to a massive drain in the organization's resources.
This, as a result, necessitates the need for a company to segment its market. Segmentation is a fundamental aspect in marketing and it is important for marketers to first segment the market in order to ensure that the services or products’ being offered gets to the right individuals or firms.
Essentially, segmentation refers to the classification of subsets of customers within a market who share related needs and show similar characteristics (Goldstein, 2007). For instance, if you are marketing a chocolate bar, it will attract the younger generation compared to the older generation, thus you have to target that particular cluster for enhanced results. According to Michel & Wagner (2000) segmentation is a form of crucial evaluation rather than a set system or process; therefore markets are segmented and defined in different ways. It entails finding out what kinds of buyers with diverse needs exist in the market.
For example, in the auto market, some buyers demand performance and speed while others are concerned with safety and roominess. This means that a business cannot satisfy the needs of all consumers and experience has revealed that, companies that specialize in satisfying the wants and needs of one homogenous group of buyers tend to be more profitable. Businesses have to make tough choices during segmentation. Consumers can be divided into homogenous groups using various variables but it is always important to establish the most practical variables while differentiating these diverse groups of buyers.
For instance, when grouping different kinds of soft drink buyers, we can consider such variables as a reference for taste vs. low calories, willingness to pay vs. price sensitivity, preference for noncola vs. cola tastes and light and heavy consumers which are considered as the most relevant. These variables are then combined to obtain various segments. General criteria such as public or industry vs. private can be used while segmenting markets (Michael, 1994). Both consumer market segmentation and industrial market segmentation have similar goals, they are simply proxies for true groupings that do not always fit into suitable demographic boundaries.
Consumer market segmentation is performed on a specific product basis which provides a close match between the individuals and specific products. Requirements for market segmentationIn order for firms to make certain that segments are practical, they should ensure that such segments are accessible, identifiable, substantial, durable, and have unique needs. A good segmentation will lead to segment members who are externally heterogeneous and internally homogenous. Research has revealed different methods of segmenting a market and they include a priori segmentation, usage segmentation, cluster analysis, and attitudinal research, and needs-based segmentation.
The method of segmenting used by a firm depends on various factors including the cost of conducting the research and strategy implementation and the business repercussion.