Market Segmentation Targeting And Positioning

Market Segmentation Targeting And Positioning Market segmentation involves aggregating of prospective buyers into groups, or segments that have common needs and will respond similarly to a marketing action.  [1]  Nestle provide a wide range of nutritious food and beverages for everyone to practice a balanced and healthy diet and lifestyle. There are four types of major segmentation variables for consumer markets which include geographic, demographic, psychographic and behavioral. Segment marketing has given the company a clearer picture of their customers and competitors so that the company can come up with a more fine-tuned products and services that satisfied customers needs. Through market segmentation, targeting and positioning, Nestle can reach out to their customers more easily and serve their customers more effectively and efficiently. Segmentation We found out that Nestle classify their market by using geographic, demographic and psychographic segmentation based on consumer characteristics. In geographic segmentation, Nestle has divided their market into urban areas (cities) and rural areas (villages). Besides that, Nestle also uses demographic factor to segment its market, it consists on income level and educational level. The income level and educational level can be categorized as low, middle and high level consumers. Apart from that, Nestle uses psychographic factor to differentiate the market. The segmentation variables that Nestle uses are personality, social class and lifestyle. Nestle can groups individuals according to their personalities such as extrovert, self-disciplined or energetic. Nestle divides their customers into low social class, medium social class and high social class. Targeting A target market is a potential market that a company has decides to concentrate its marketing efforts and resources to enter those markets. Nestle segments its market by regions, income level, educational level, personalities, social class and lifestyle. By applying the information and observations that we get, we can simply identify the target market of Nestle. In this case, we found out Nestle focuses on urban areas rather than rural areas. The consumption of Nestle products is often in cities as compared to villages. This may be due to income and educational level. The people in rural area mostly could not afford the products of Nestle as it is considered as luxuries. They do not have strong sense of health consciousness due to educational background. This makes them the less attractive buyers. For segmentation by income level, Nestle has been targeting on those consumer who earn middle income and high income. People will purchase healthy and nutritious food and beverages when they have enough monetary resources to back up them. Those consumers with higher income tend to be the potential buyers for Nestle because they bring most profit into the company. Furthermore, for educational level Nestle tends to pay more attention to those consumers who has an education background. They will be more concern of their health and they will do more to maintain it. Through education, we can improve our knowledge and develop life skills which can contribute to individual and community health. Those people with an education background are more likely to practice and maintain a healthy and balanced diet as they know health is more important than wealth. For personality segmentation, Nestle is targeting consumers who are more outgoing and outdoorsy. It is because they require more energy and nutrition that they have lost during their activities. By adapting nutritional input to physical needs, they can get the most from their body.  [2]  These people wish to maintain their energy level and quick recovery after a hectic day by adapting a balanced diet that provides them with essential nutrients and energy. In addition, from the social class and lifestyle segments, Nestle is targeting consumers who are belong to the higher social classes. They have high purchasing power so that they can afford more luxuries such as Nestles products. These people are the target market of Nestle because they tend to be more health conscious. Nestles products often emphasize on nutritional value and health benefits that can improve ones lifestyle and health issues. As conclusion, Nestle is able to reach out to their customers that it can serve best and most profitably. Through segmentation and targeting market, Nestle can enhance the profits for their company and increase effectiveness in their marketing campaigns. Positioning Product positioning refers to the place an offering occupies in consumers minds on important attributes relatives to competitive products. Nestle positioned itself as the world leader in Nutrition, Health and Wellness, trusted by all its stakeholders, and to be the reference for financial performance in its industry.   [3]  Nestle uses the slogan Good Food Good Life to enhance lives, throughout life, with good food and beverages.  [4]  Nutrition content in their products is the main focus to strengthen their leadership in nutrition industry. To remain their position in that industry, they must identify their competitive advantages against their competitors. Nestle has listed out four competitive advantages of their company that may help their company to compete with their competitors, that are unmatched product and brand portfolio, unmatched research and development (RD) capability, unmatched geographic presence and lastly people, culture, values and attitude  [5]  . For unmatched product and brand portfolio, Nestle provide the largest range of food and beverages among all the food company. Their products range from global icons to local favourites that can adapt to consumer needs, tastes and preferences, making Nestle as a global brand that relevant to everyone and everywhere. Besides that, it is supported by unmatched RD capability that improves the products through innovation and renovation so that it can meet consumer needs and enhances consumer benefits. Nestle spent over billions of dollar on its RD just to ensure its consumer gets the essential nutrition that their body needed. Nestle has an unmatched geographic presence competitive advantage due to the number of countries where they presence. They have been in most countries for over decades and successfully created a strong relationship between their brands and their consumers.  [6]  This also means that they have has plenty of time to study about the local preferences and behaviors to improve their products taste to match the locals preferences. The most important competitive advantage for Nestle is their people, culture, values and attitude. The Nestle culture created a strong bond between their people with a shared set of behaviors and values into a single way of doing business. Their people are determined to deliver their goals as while as creating value to the public.  [7]   Marketing environment Marketing environment consists of microenvironment (internal environment) and macroenvironment (external environment). It embraces all the marketing team inside a firm and includes all the outside factors of marketing that affect the teams ability to develop and maintain successful customer relationships with their targeted customer group.  [8]  Nestle is using it to improve customer relationship management and adapt new strategies when it comes to challenges and opportunities. Microenvironment Suppliers Suppliers are the one who delivered the resources needed by the company to produce the products or services to the consumers. Any problems that incurred in supplier can greatly affect the company sales and damage customer relationship. We can divide the suppliers of Nestle into two groups that are labour suppliers and material suppliers.  [9]  Labour suppliers are in charge of the supply of labour required by the company to optimize their production level. Labour strikes and labour relations are the most important factor to maintain labour satisfaction for company to improve their efficiency. For material suppliers, they deal with the materials needed by the company to place the finished goods on rack. The quality of the material is everything that the company focuses on as Nestle is in the food and beverages industry. By maintaining the quality and quantity of these two supplies, Nestle is able to produce high quantity product to uphold their sales volume and customer satisfacti on in the long run. Marketing intermediaries It helps the company to promote, sell and distribute its product to the final buyers.  [10]  The physical distribution firms design the delivery chain for the company products to reach their final destination. The firms also in charge with the products safety without getting any damage while storing them temporarily. Marketing service agencies of the company helps to target and promote its products to the right market.  [11]  It acts as a communication channel between the customers and the company by explaining the features of the product and providing feedback with the help of survey for the company to improve the quality of the product.  [12]  Banks and insurance companies are financial intermediaries that help to provide monetary resources and protection to the product and company against risk that may be occurred during the operation of the company. Nestle works together with all marketing intermediaries to ensure their valuable customers have a clear image of their p roducts features. Customer Nestle sells its goods to reseller markets that provide the goods to final user at a reasonable profit. Nestle also deals with customer markets which consists of individuals and households that buy a wide range of its products. Nestle works hard on making the product available whenever the customer needs them to maintain customer satisfaction. Macroenvironment Political environment Nestle adhere to the laws and regulations that involve in its activities and the environment. The government may set quotas on the quantity of the products that it can supply and set the amount of taxes that the company must pays in order to conduct the business. To achieve a balance between them, Nestle participates in legislative and regulatory discussions between international organizations, government representatives, industry, scientific community and consumer associations.  [13]   Economic environment Customer purchasing power is majorly affected by a range of economic factors such as income levels, inflation, taxes, unemployment, exchange rates and mortgage rates  [14]  . The disposable income and living standard of a country may bring big business opportunities for Nestle or the other way round. Cultural environment Before Nestle start its operation in any country, it mainly focus on studying the societys cultural value, preferences and behaviors. This is because Nestle hopes its products can be accepted by the local with warm welcome and be competitive among other companies that operating at the same level.  [15]   Technological environment Technologies are the vital part of Nestle RD. Investment in technology will definitely help the company to reduce production cost and improve product quality. For example, Nestle have developed technologies that allow them to use natural vegetable oils instead of partially hydrogenated fats in Maggi bouillon cubes and seasonings.  [16]  With the help of technology improvement, Nestle can create healthier products across their product range and thus improve health and quality of life in a country.