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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 provides several key benefits for large chocolate manufacturers:
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Better Understanding of Customer Needs: By identifying specific segments within the market, manufacturers can tailor their products to better meet the needs of their customers, leading to higher satisfaction.
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Targeted Marketing: Segmentation allows for focused marketing efforts, ensuring that promotions and communications are directed towards the most relevant audiences. This can lower marketing costs and improve conversion rates.
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Product Positioning: Segmenting helps in positioning products in the minds of consumers, promoting greater brand loyalty and consumer satisfaction.
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Growth Opportunities: By targeting specific groups and understanding their purchasing behaviors, manufacturers can spot opportunities for expansion and innovation, such as premium products or seasonal offerings.
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Easier Decision Making: With a segmented market, companies can streamline their decision-making by focusing on particular demographics, allowing for strategic insights that lead to better results.
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Enhanced Profitability: When customers are effectively segmented, there's potential to enhance profits through personalized pricing strategies that cater to different income levels.
Step 2
Illustrate two different ways the chocolate market could be segmented.
Answer
The chocolate market can be segmented in several ways. Here are two notable methods:
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Demographic Segmentation: This approach considers different demographic factors such as age, gender, income, and family size. For instance, products may be targeted towards children (e.g., chocolate bars with fun packaging) or adults (e.g., premium dark chocolates). Companies often adapt marketing strategies based on these demographic insights to resonate with different consumer profiles.
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Behavioral Segmentation: This type of segmentation looks at consumer behavior related to chocolate purchasing, including occasion-related buying (like seasonal chocolates during holidays), purchasing motivations (such as impulse buys versus value-seeking) and brand loyalty. For example, a brand might promote special offers during holidays to increase sales volume during peak seasons.