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Read the information supplied and answer the questions which follow - Leaving Cert Business - Question 7(B) - 2018
Question 7(B)
Read the information supplied and answer the questions which follow. Irish people are spending more on chocolate than ever before - and market experts say movie str... show full transcript
Worked Solution & Example Answer:Read the information supplied and answer the questions which follow - Leaving Cert Business - Question 7(B) - 2018
Step 1
Discuss the benefits for a large chocolate manufacturer of engaging in market segmentation.
Answer
Engaging in market segmentation offers several benefits for a large chocolate manufacturer:
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Better Matching of Customer Needs: By segmenting the market, manufacturers can tailor their products to meet the specific needs of different customer groups. This leads to increased sales as products align better with consumer preferences.
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Enhanced Customer Targeting: Segmentation allows for more focused and targeted advertising campaigns. Manufacturers can direct their marketing efforts to particular segments, reducing overall marketing costs and improving effectiveness.
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Increased Customer Retention: Understanding the distinct traits and preferences of different segments can help retain customers who might otherwise be overlooked. By adapting products according to these preferences, manufacturers can maintain loyalty.
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Opportunities for Product Development: Segmentation provides insights into customer behavior that can inspire new product developments tailored to specific segments, thereby expanding the product range effectively.
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Competitive Advantage: By focusing on specific market segments, manufacturers can differentiate themselves from competitors, establishing a stronger brand presence in chosen niches.
Step 2
Illustrate two different ways the chocolate market could be segmented.
Answer
The chocolate market can be segmented in various ways:
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Demographic Segmentation: This involves categorizing consumers based on demographic factors such as age, gender, and income. For instance:
- Age: Products can be designed for specific age groups, such as Age-Freddo bars aimed at children, which offer kid-friendly branding and flavors.
- Gender: Marketing strategies can vary, as seen with the Yorkie bar's former tagline targeting men, illustrating differences in purchasing preferences.
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Geographic Segmentation: This approach focuses on the location of consumers. Different regions may have varying tastes and preferences for chocolate products. For example:
- Regional Preferences: Certain brands may be popular in specific areas, like how Hershey's is known in the U.S. market but may not have the same recognition in Ireland.
- Taste Variations by Country: Chocolate products may differ in taste depending on the country, reflecting local flavors and cultural preferences.