The paper "Using Market Segmentation for Better Customer Service" is a great example of a Marketing Case Study. Headquartered in Cincinnati in the United States, Procter & Gamble Co is an American multinational company that manufactures a diverse range of consumer goods. It has worldwide operations, including in the Arabian Peninsula, where it runs a subsidiary that manufactures four product divisions: "Look and Beauty, " "Home, " "Family" and "Health. " The company has a large portfolio of global brands like “ Tide” and “ Ariel. ” The company seeks to be a leading fast-moving consumer goods (FMCG) company, as well as to improve the lives of its global consumers through the provision of quality and innovative consumer goods in the Arabian Peninsula (Rajni 2014). This report examines the concepts related to marketing that Procter & Gamble is following, the variable used to segment three consumer markets (Look and Beauty, Home, and Health), the type of market segmentation strategy Procter and Gamble uses, the pros and cons of operating in diverse market segments, the positioning strategy the company should adopt for the “ Caring About Home” segment, and lastly the Corporate social initiatives the company pursue as part of its Sustainability initiatives in the Gulf. 1.0 Concepts related to marketing Procter & Gamble uses The Procter & Gamble has grouped its Arabian Peninsula markets into two concepts: market segmentation, and target marketing. 1.1 Target marketing Procter & Gamble uses the concept of target marketing.
The company’ s general marketing strategy entails targeting the market, a mechanism it employs to appraise the market segments it has developed to select one or more segments. By selecting its target markets, the company further employs several strategies, such as undifferentiated marketing and differentiated marketing (Kotler et al.
1999). Through undifferentiated marketing, Procter & Gamble gets to ignore the difference in each segment and instead targets the entire market with a single product offering. By using such a mass-marketing strategy, the company gets to concentrate on what it perceives to be the prevalent needs of Arabian Peninsula consumers instead of what is different. A case in point is Procter & Gamble’ s brand of dandruff oil called “ Head & Shoulders, ” which the company targets to any user without discriminating the age or gender.
What is significant to note in the example is that the company does not specify or discriminate on the market segment, whether children, adults, males or females (P& G 2015). When it comes to differentiated marketing, the company seeks to target a range of market segments and, therefore, creates a different offering designs specifically for each segment. For instance, it has introduced a range of brands found under its product category. Under the health category, it has health products like Oral-B, Crest. Under the laundry detergents, it makes Tide and Ariel (P& G 2015). What this shows is that rather than concentrate its resources on one major brand, it introduces a range of brands found under its product category.
One reason for this is since consumers seek a range of benefits from products bought. For instance, while they may seek laundry detergent to wash their garments, they may want detergents with bleaching agents or which are economical. 1.2 Market segmentation Procter & Gamble also uses the concept of market segmentation. Market segmentation is a marketing concept where a business separates the market in homogenous divisions (Premkanth 2012). Put differently, it is the practice of dividing the market into smaller clusters of consumers, who share distinctive needs, features, or behaviors and who may require separate marketing mixes.
Procter & Gamble uses the concept of market segmentation, as it acknowledges the constraint of connecting to its entire customers in the Arabian Peninsula in the extensive and diverse market. For this reason, it seeks to focus on certain customers it can intimately relate with, as well as serve in its best capacity possible. Because of this, Procter & Gamble divides the market into definitive segments of consumers who have similar tastes, wants, and needs.
Despite having mass marketing phenomena in some category of its products, such as detergents, Procter & Gamble uses segmentation to achieve more efficiency and effectiveness in the manner in which it serves the tastes, wants, and needs. At any rate, the real reason for relying on segmentation is because it allows the company the capacity to concentrate its marketing energy and force on the subdivisions with the hope of gaining a competitive advantage in particular segments (Civic Technologies 2009).
From this, it could be reasoned that the practice of concentrating marketing energy is in actual fact at the heart of Procter & Gamble’ s entire marketing strategies and that segmenting the market provides it with a conceptual tool to attain this focus (P& G 2015).
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