MARKET SEGMENTATION Meaning

In todays competitive business wor d! it is not possib e to se everyt"ing everyone# T"ere are di$$erent types o$ customers! eac" wit" di$$erent needs and wants! tastes and pre$erences! di$$erent purc"asing power and so on# %or instance! t"e Mumbai mar&ets do "ave various types o$ customers suc" as co ege student! o$$ice goers! retired peop e! "ig"er income peop e! midd e income peop e! ower income peop e! Ma"aras"trians! Gu'arat"is! Goans! etc# Again in eac" category o$ customers representing t"e most desirab e mar&et and according y ma&e every possib e e$$ort to induce and encourage t"em to buy t"e goods or services# T"us! mar&et segmentation enab es a $irm to $rame di$$erent mar&eting mi(es $or di$$erent groups o$ customers# Normally, the market is made up of people with: Different c"aracteristics! Different needs and wants, Different purchasing power, Differences in the degree of willingness to buy. Differences in eligibility to buy. If marketers wish to do an effective marketing job in such diverse and heterogeneous markets, they must identify the differences in the different group of people in the market. This is because one marketing mi will not satisfy them. In other words, different marketing mi es have to be designed to satisfy different marketing groups. Thus, there is a need for market segmentation.

RE)*IREMENTS O% E%%E+TI,E MARKET SEGMENTATION

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!. -eterogeneity. The various groups of the consumers for the type of product which the firm is selling in the market must be different. In other words, potential customers" characteristics and wants must be heterogeneous i#e#! di$$erent $rom eac" ot"er# #. Avai abi ity o$ data. The information on the consumer variables must be easily available. The marketing manager must not find it difficult to collect the data. $onsumers, dealers and other must be willing to provide correct data. %therwise, marketing segmentation process may be of no use. &. Measurabi ity. The segment variables must be capable of measuring. It refers to the measurement of the si'e of the target market and also the purchasing power of the segment market. The other segment variables such as the age factors, use rate, etc. must be capable of measuring. In other words, the segments can be identified and compared in terms of relative attractiveness. (. Sustainabi ity. It refers to the degree to which the segments are large and)or profitable. The market segment must be suf$icient in si/e so as to design a suitab e mi( to t"e satis$action o$ target segment and at t"e same to enab e t"e $irm to earn su$$icient pro$its# T"ere is no sense in concentrating mar&eting e$$orts i$ t"e si/e o$ t"e mar&et segment does not bring returns in $orm o$ pro$its# T"ere must be at east one segment arge enoug" to serve pro$itab y# *. Approac"abi ity. It re$ers to t"e degree to w"ic" t"e segments can be e$$ective y reac"ed and served# T"e segment mar&et must be ocated at a particu ar p ace and is e(posed to certain advertising media! and t"en on y it can be e$$ective y reac"ed and served +. Action abi ity.
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It refers to the degree to which effective marketing programmes can be formulated for attracting and serving the customers. T"ere is no sense in identi$ying severa mar&et segments! i$ t"e $irms are not in a position to underta&e mar&eting programmes to serve and satis$y t"e consumers# ,. Responsiveness. It refers to the degree to which the market segment responds to the marketing programmes adopted by the firm. -or instance, the marketing firm may develop high .uality products for .uality products for .uality conscious people. They should react favourab y towards suc" products# In ot"er words! t"ere s"ou d be a $avourab e response $rom t"e segment mar&et#

0ASES O% MARKET SEGMENTATION

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There are several ways or methods to segment a market. /uch ways or a method depends upon consumer characteristics and their responses to the products or services. 0 paradigm shift has taken place in the way the Indian corporate 1is2 viewing customers. There has been a shift from organi'ing by3products to organi'ing by3market segments. -or e ample, 4aruti is segmenting is customers on the basis of economic and premium class, which was not done previously. I.

GEOGRA1-I+ SEGMENTATION .

In geographic segmentation, the market is sub divided on the basis of area.

Region.
5egional segmentation is made because regional differences e ist in respect of demand for products. -or e ample, buyers from south India are different from the buyers in north.

*rban 2 Rura .
There are differences in buying behavior of urban and rural customers. 0ccordingly, marketing strategies must be designed depending upon their likes, dislikes, moods, preferences, and fashions and buying habits.

3oca ity.
$onsumer"s buying behavior is also reflected by the locality within a particular city. -or instance, there are differences in terms of buying patterns of people residing at 6arel and 6arle, within a city like 4umbai.

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4EMOGRA1-I+ SEGMENTATION.

Demography refers to study(about the different aspects of population. 4arkets can be divided on demographic factors like age, gender, education etc. The various demographic factors are:

Age.
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The primary method of analy'ing markets by age is to divide the total population into age groups and analy'e the wants and needs of each group.

Gender.
4arketers devote much attention to male and female differences in purchasing. Today, marketers segment female groups into college girls, working women, housewives, etc. 0gain, male groups can be further classified.

Income.
7uying patterns depends on income of the consumers. No two individuals or families spend money in e actly the same way. If a researcher knows a person"s income, he can predict with some accuracy wants and needs of that person and how those wants are likely to be satisfied.

Education.
4arket can be segmented on the basis of education 8 matriculation or less, under graduates, graduates, post3graduation, etc. 4ost studies show that the highly educated people spend more than the poorly educated in respect of housing, clothing, recreation, etc.

%ami y Si/e.
The consumption patterns of certain products definitely vary with the number of people in the household. 4anufacturers of certain products such as ice3cream market family packs.

%ami y 3i$e +yc e.

The market can be segmented as bachelors, newly married couples, married with grown up children, older married couples, etc. -or selling tours and vacations, 9ife Insurance policies etc., this segmentation is of use.

Race and Re igion.

$onsumption patterns of certain products differ on the basis of religion and race, such as alcohol and meat products.

II.

SO+IOGRA1-I+ SEGMENTATION.

The market can be segmented on the basis of sociological factors such as :

+u tura In$ uences.

The marketer must consider cultural influences while segmenting markets. 6eople in urban areas are influenced to a certain e tent by western culture, whereas, many people in villages follow more or less traditional culture. $ulture is influenced by our socio3cultural institutions like family, religion, language, education, and so on.

In$ uence o$ Socia + ass.

7uying behaviour is reflected by the influence of social class to which the consumers belong. The social class can be segmented as 8 lower 3lower, middle3lower, upper3lower, lower3middle, middle3middle, upper3middle, and lower3upper, middle3upper and upper3upper. -irms dealing in clothing, home furnishing, automobiles, etc. can design products for specific social class.

In$ uence o$ Re$erence Groups.

0 reference group may be defined as a group of people who influence a person"s attitudes, values and behaviour. $onsumer behaviour is influenced by the small groups to which they belong or aspire to belong. These groups include family, religious groups, a circle of close friends or neighbours, etc. :ach group develops its own set of attitudes and beliefs that serve as guidelines for members" behaviour. III.

1S5+-OGRA1-I+ SEGMENTATION.

It refers to individual aspects like life style and personality.

3i$e6Sty e.
/ellers study the life3styles of the consumers. -or e ample, a manufacturer of readymade garments may design his clothes differently matching different life styles of college3students 1more fashionable2, office3goers 1more sober2 and so on.

1ersona ity.
6ersonality characteristics such as leadership, independence, masculine, impulsive, ambitious,3 etc., do influence buying behaviour.
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0E-A,IO*RA3 SEGMENTATION.

In this case, buyers are divided into groups on the basis of their response to the product 8 usage rate, user status, loyalty status, buying motives, and so %n.

*sage Rate.
%ne possible way to define target market is by product usage. There can be heavy users, medium users, light users, and nonusers. Targeting on this basis may be useful to the sellers who want to increase consumption by present users and to convince and induce nonusers to become users.

*ser Status.
4arket can be segmented on the basis of user status such as: non3user, e 3user, potential user, first3time user, regular3user, < so on.

Readiness Stage.
4arket can be segmented on the basis of people"s readiness to buy the product. /ome people are well informed and are interested to buy the product. /ome other may be well informed but not interested to buy the product.

0uying Motives.
7uyers buy the product with different buying motives such as economy, convenience, prestige, etc. 0ccordingly promotional appeals can be directed to the target audience.

SEGMENTING 0*SINESS MARKETS

7usiness markets can be segmented on the basis of geographic location, type of organi'ation, customer si'e, product use, demographic factors, and usage rate benefits sought.
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Geograp"ic ocation.
The demand for business products varies considerably from one geographical area to another as a result of differences in climate. Terrain, natural resources or similar factors. It is basically used for serving industries that are concentrated in certain location.

Type o$ organi/ation.
0nother basis for segmenting organi'ation market is the type of organi'ation in that market. Different types of organi'ation often re.uire different product features, distribution system and price structures. =ence due to these variations in needs, a marketer may decide to concentrate on a single segment with one marketing mi or may focus on several segments with multiple mi es.

Si/e o$ customer
The market may be segmented on the basis of si'e of the customer to be served. 0ccordingly marketers employ different marketing practices to reach various customer groups.

1roduct use.
Depending upon product use the markets can be segmented as products use for production, research or other business operations.

*sage rate.
/egmenting business market on the basis of usage rate includes3heavy users, light users or non3 users. %ther factors include: /egmentation on the basis of purchasing criteria 1.uality, service, price2 /egmentation on the basis of purchasing function 1decentrali'ed and centrali'ed2 /egmentation on the basis of loyalty.

STE1S IN T-E MARKET SEGMENTATION

The following are the steps or procedures in developing a segmentation strategy:

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7# 4e$ine t"e re evant mar&et.

7efore making an attempt to define market segments, a company should define its relevant market. -or e ample, a company that produces a soft drink is in the soft drink market, and a company that is selling sports cars is in the sports car market. 0 proper definition of relevant market will keep the company on the right track.

8# Ana y/e c"aracteristics and wants o$ potentia customers.

0fter defining its relevant market, the company should collect data that describe the characteristics and wants of the potential customers. This data can be collected from secondary research 1collecting and using data that is already available in published form2. The data can also be collected from primary sources by conducting a field survey.

9# Identi$ying bases $or segmentation.

The company can proceed to identify bases for segmenting the market. The bases include geographic, demographic, sociographic, psychographic and behavioural. The company may identify all bases or one or two bases. /pecific segmentation variables, based on the data collected might include age, se , occupation, lifestyle, brand loyalty, etc.

:# 4e$ine and describe mar&et segments.

0fter identifying possible segmentation variables, the company can proceed to define the various market segments. This can be done by developing market segment profiles which describe the characteristics and wants of the people in each market segment.

The people in one segment will be highly similar to each other in terms of their characteristics and wants. =owever, they will be different from the people in other segments in terms of their characteristics and wants. Thus, a company in the soft drink market can define market segments as3 fitness conscious, fun loving college students, occasional sippers, sociable, and the like.

;# Ana y/e competitors positions.

0fter defining and describing the market segments, the company proceeds to identify the major competitors in each of the segments. %ne approach is to survey a sample of consumers in each of

the segment and determine as to how they rate various brands in terms of features, price, taste, etc. and find out the reasons as to why they prefer a particular brand over others.

<# Eva uate mar&et segments.

The company must conduct cost benefit analysis of serving a particular market segment. /erving a market segment profitably re.uires that the cost of the marketing effort be less than the sales revenues reali'ed from serving it. :valuating the market segments in terms of the generation of sales revenue and the cost of marketing efforts helping ranking the segments in terms of relative attractiveness.

=# Se ect mar&et segments.

0fter identifying the various market segments and evaluating their relative attractiveness, the company must select the market segment that it intends to serve. >hile selecting the market segment, the company must consider: %verall company"s objective. 5esources and capabilities of the firm. The level of competition. The strengths and weaknesses of competitors. The e pected competitors" reaction to the firm"s entry into one or more segments.

># %ina i/ing t"e mar&eting mi(.

0fter selecting market segment, the company must then finali'e the marketing mi appropriate for specific market segment. In other words, the company has to make decisions in respect of the product, price, promotion and distribution efforts. It is to be noted that each segment needs a separate marketing mi , because consumers in each segment are different from those of other segments.

A4,ANTAGES O% MARKET SEGMENTATION

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7# 4etermination mar&et opportunities.

4arket segmentation enables to identify market opportunities. The marketers can study the needs of each segment in the light of current offerings by the competitors. -rom such study, the marketer can find out the current satisfaction of customers. /egments with low level of satisfaction from present offering may represent e cellent market opportunities. -or instance, customers may not be satisfied with the current offering of water purifiers in terms of product or after3sale service. /uch situation will enable a marketer to launch a new range of water purifiers and market them well.

8# Ad'ustments in mar&eting appea s.

/ellers can make best possible adjustments of their product and marketing appeals. Instead of one marketing program aimed to draw in all potential buyers, sellers can create separate marketing programs designed to satisfy the needs of different customers. 6roper advertising and sales promotional appeals can be made depending upon the target audience.

9# 4eve oping mar&eting programs.

$ompanies can develop marketing programmes and budget based on a clearer idea of the response characteristics of specific market segments. They can budget funds to different segments depending upon their buying response.

:# 4esigning product
4arket segmentation helps in designing product that really match the demands of the target audience. 6roducts with high market potential can be designed and directed to meet the satisfaction of the target market.

;# Timing o$ mar&eting e$$orts.

It helps in setting the timing of the promotional efforts so that more emphasis is placed during those periods when response is likely to be at its peak. -or instance, consumer goods can be heavily advertised to $hristians during $hristmas season and to =indus during Diwali time.

<# E$$icient use o$ resources.

7y tailoring marketing program to individual market segments, management can do a better marketing job and make more efficient use of marketing resources. -or e ample, a small firm
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can effectively use its limited resources 8 money, sales force, etc. 8 in one or two segmented markets rather than unsuccessfully, aiming at a wider market.

=# 0etter service to customers.

4arket segmentation enables the company to concentrate its marketing effort in a particular market area, thereby, providing a better service to the target customers. 6roper marketing segmentation cans facilitate customer satisfaction.

># -e ps to $i( prices.

The marketing segmentation also enables to fi prices of the goods and services. /ince different market segments have different price perceptions, it is necessary to adopt different pricing strategies for different markets. -or instance, the prices for lower income groups will have to be lower and accordingly the product and promotional efforts are adjusted.

?. Assist in distribution strategies.

If you have a specific market segment you"re trying to reach, you can decrease your distribution channels, targeting those outlets that have the highest amount of traffic from your desired customers. %nce you learn where your main target customer shops, you can focus your sales and promotions budgets in those outlets.

7?#Media se ection.
It helps in selection of advertising media more intelligently and in allocation funds to various media. The funds are allocated to various media depending upon the target audience, impact of the media, competitors advertising etc.

3IMITATION IN MARKET SEGMENTATION

7# +onservative attitude o$ management.

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In India, there are companies that adopt a conservative attitude towards marketing. They do not give much importance to marketing activities. They fail to reali'e the benefits of market segmentation. -or such conservative managements, it does not make meaning to segment the market and adopt different marketing mi es.

8# 4eceptive variab es.

There are certain consumer elements that are deceptive. -or instance, the income of the consumers. It is often felt that the lu ury items such as cars, sophisticated watches, etc., are purchased only by the rich class. =owever, now3a3days, a large number of customers belonging to the middle class do purchase such items. Therefore, it is difficult to strike a line between the rich and the near rich.

9# *npredictab e consumer be"avior.

It is .uite difficult to judge precisely the behavior of the customers. They may have different perceptions about product, its features, price, etc. such perceptions do change at different times. Today, the customer may be price conscious@ tomorrow he may be .uality conscious, then he may again be price conscious. Thus, it is very difficult to judge consumer behavior.

:# Inade@uate mar&et in$ormation.

The marketing manager may not be able to get the e act market information to base his decisions on market segmentation. This may be due to wrong information supplied by the consumers in respect of their income, and other aspects or the market data collectors may be ineffective to collect the right data. 0s such the decisions on market segmentation may be based on inade.uate, incorrect, and outdated information.

;# Arong 'udgment.
4arketing people may wrongly interpret the marketing data. To a great the .uality of market segmentation depends upon the .uality of marketing people their imagination, intelligence, maturity and e perience.

<# +"anging environment.

The changing market environment may also throw the process of market segmentation out of gear. Imported goods may flood the market as a result of market liberali'ation policies. In such

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instance, the market segments may not respond to the marketing mi es designed by the Indian firms.

=# 4iversity o$ Indian mar&et.

The diversity of Indian markets like rural3urban, rich3poor, etc., poses a problem to have a systematic segmentation of market. 0gain, e cessive market segmentation amount to market fragmentation and this may not be profitable to the company.

># Time consuming and e(pensive process.

/egmenting markets involves lot of time, effort, and money on the part of the firm. 0t time, there may a waste of time, effort and money, especially when the market situation changes considerably before implementation of the market segment strategy.

1OSITIONING
The term ApositioningB was made popular in !?,# by two marketing e pert. 0l 5ies and Cack Trout. They contended that marketing is more a battle of perceptions than of products.

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6ositioning is the most fundamental concept or tools in marketing. The product or brand must register in the buyer"s mind. =ow strongly it does so, would decide its position in the market place. 6ositioning starts with a product. 0 piece of merchandise, a service, a company, an institution or even a person. 7ut positioning is not what you do to a product. 6ositioning is what you do to the mind of the respect. That is, you position the product in the mind of the prospect.

STE1S IN 1RO4*+T 1OSITIONING 7# Identi$ies competitive di$$erences.

The marketer should identify the competitive differences of his product or service. The differences can be: a2 6roduct differences such as features, design, packaging, etc. b2 /ervice differences such as delivery, after3sale3service, etc. c2 6ersonnel 1sales people, service technicians, etc.2 differences such as competence, nature)manners, etc. d2 Image differences such as the goodwill of the producers, brand name, brand price, brand advertising, etc.

8# Se ecting important di$$erences.

The marketer must select the most important differences that would differentiate it from that of the competitor. -or e ample, if marketers of T; sets claim that they provide & years guarantee and if a particular marketer provides , years guarantee, then this could be an important difference which the firm offers.

9# 4eve oping positioning strategy.

The marketer should then make effort to develop positioning strategy. The marketer may position the brand by following any of the following positioning strategy:

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a2 Dsing specific product feature b2 6ositioning by 6rice c2 6ositioning by use d2 6ositioning by competitors, etc.

:# +ommunicating t"e companys positioning.

The marketer should select proper media to communicate the company"s positioning. The right media must be selected to communicate the image of the brand. -or e ample, an e pensive watch like 5ole communicates its image by associating with the >imbledon Tennis Tournament 5ole >atches may not be able to communicate the rich image of the rich image of the brand if it sponsors sport like cricket which is played by few countries and that too liked by masses.

;# %o ow up positioning.
The marketer may try to follow up the positioning of the brand. This can be done by undertaking research, or by analy'ing the sales of the brand. If the positioning strategy is not successful, the marketer may re3position the brand with alternative strategies, so as to create a distinct image in the minds of target customers.

1OSITIONING STRATEGIES
The adviser can adopt different positioning strategies in order to develop or reinforce a particular image for the brand in the mind of the audience. The various positioning strategies are:

7# *sing speci$ic product $eatures.

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The most popular positioning strategy is to highlight specific product features that would benefit the customer. 0t times, a new product can be positioned with respect to product features that competitors have ignored. It would be advisable to highlight a specific but important feature rather than positioning along several features.

8# 1ositioning by price and @ua ity.

In many product categories, the price .uality feature is so important that it needs to be considered in any positioning decision. The adviser may position the product as .uality product that is worth the money. %ther may position the product as .uality product but still at a reasonable)affordable price.

9# 1ositioning by use.
The brand can be positioned by associating it with a use or application. The adviser may e tend the use of the brand

:# 1ositioning by user category.

The brand may be associated with a user or a class of users. The advertiser makes use of famous personalities or models to influence the audience.

;# 1ositioning by product c ass.

/ome advertisers highlight the product class association. The toilet soap Dove positioned itself apart from the soap category as a cleansing cream product for women with dry skin.

<# 1ositioning by cu tura symbo s.

/ome advertisers may use cultural symbols to differentiate their brands from competitors.

=# 1ositioning by competitors.
In some cases, a reference may be made directly or indirectly to one or more competitors. 6erhaps the most famous positioning strategy of this type was that from 0vis.

># 1ositioning by products bene$its.

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The advertiser can position the product on the basis of special benefit of the product. -or e ample: Afast to cook, good to eatB of 4aggie Noodles.

B# 1ositioning by corporate image o$ identity.

The most common base for positioning is corporate image or identify. /cores of products or brands use their corporate names to position themselves. 6roduct ranging from health care and cosmetics to consumer durables and computers use this type of positioning.

+ASE ST*45 NESTLE INTRO4*+TION

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NestlEFs products include baby food, bottled water, breakfast cereals, coffee, confectionery, dairy products, ice cream, pet foods, and snacks. #? of NestlEFs brands have annual sales of over ! billion /wiss francs 1about G!.! billion2,including Nespresso, NescafE, Hit Hat, /marties, Nes.uik, /toufferFs, ;ittel, and 4aggi. NestlE has around (*I factories, operates in J+ countries, and employs around &#J,III people. It is one of the main shareholders of 9F%rEal, the worldFs largest cosmetics company. %n (th /eptember #I!&, software and search3engine giant Koogle announced that they would be naming the ne t 0ndroid, version (.(, after the ever3popular chocolate wafer LHit HatL with NestlE"s legal permission. Nestle, confirming the team3up, announced the distribution of around *I million Hit kats worldwide, featuring the android mascot in the covers. NestlE was formed in !?I* by the merger of the 0nglo3/wiss 4ilk $ompany, established in !J++ by brothers Keorge 6age and $harles 6age, and -arine 9actEe =enri NestlE, founded in !J++ by =enri NestlE. The company grew significantly during the -irst >orld >ar and again following the /econd >orld >ar, e panding its offerings beyond its early condensed milk and infant formula products. The company has made a number of corporate ac.uisitions, including $rosse < 7lackwell in !?*I, -indus in !?+&, 9ibbyFs in !?,!, 5owntree 4ackintosh in !?JJ, and Kerber in #II,. NestlE has a primary listing on the /IM /wiss : change and is a constituent of the /wiss 4arket Inde . It has a secondary listing on :urone t. In #I!!, NestlE was listed No. ! in the -ortune Klobal *II as the worldFs most profitable corporation. >ith a market capitali'ation of G#&& billion, NestlE ranked No. ? in the -T Klobal *II #I!&.

Mission Statement
NestlE is... ...the worldFs leading nutrition, health and >ellness $ompany. %ur mission of LKood -ood, Kood 9ifeL is to provide consumers with the best tasting, most nutritious choices in a wide range of food and beverage categories and eating occasions, from morning to night.

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,ision and va ues

To be a leading, competitive, Nutrition, =ealth and >ellness $ompany delivering improved shareholder value by being a preferred corporate citi'en preferred employer preferred supplier selling preferred products.

Nest Cs 1resence in India

0fter more than a century3old association with the country, today, NestlE India has presence across India with J manufacturing facilities and ( branch offices. NestlE India set up its first manufacturing facility at 4oga 16unjab2 in !?+! followed by its manufacturing facilities at $holadi 1Tamil Nadu2, in !?+,@ Nanjangud 1Harnataka2, in !?J?@

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/amalkha 1=aryana2, in !??&@ 6onda and 7icholim 1Koa2, in !??* and !??,, respectively@ and 6antnagar 1Dttarakhand2, in #II+. In #I!#, Nestle India set up its Jth manufacturing facility at Tahliwal 1=imachal 6radesh2. The ( 7ranch %ffices located at Delhi, 4umbai, $hennai and Holkata help facilitate the sales and marketing activities. The NestlE India"s =ead %ffice is located in Kurgaon, =aryana.

Map o$ India

N This pictorial representation does not purport to be the political map of India.

NEST3E 1RO4*+TS

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0ases $or Segmentation.

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$onsumer markets can be segmented on the basis of following customer characteristics. !. Keographic #. Demographic &. 6sychographic (. 7ehavioral

Geograp"ic.
>eather: NestlE 7angladesh 9imited segmented its market for Nescafe Ice based on the geographic weather: hot and cold. Nescafe Ice: 0 coffee which can be consume with ice. During hot season consumers consume this coffee with normal or cold water with ice cube to bring freshness in their mind.

4emograp"ic. Age.
NestlE segmented market for its major products based on the age. -or the products $erelac, 9ectogen, Hoko Hrunch, Nido, Nestle divided the market segment for baby and children of different ages.

Nido:
It is nutritious milk specially formulated for children # years onwards. It contains #* minerals and vitamin D which helps child"s growth.

+ere ac:
Nestle also offers cerelac for new born baby. It contains milk and rice mi ed for under one year"s baby. It fulfills baby"s proper nutrition.

Nes@uic&! Ko&o Krunc":

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7oth are chocolate milk for children.Nes.uick and Hoko krunch maintain child"s proper growth. It"s very delicious and also contains vitamin protein, mineral.

3actogen.
Nestle brings full cream milk powder in our country. It gives baby proper nutrition. 9actogen ! is for babies whose age less than , months and lectogen & is for babies whose age is below !# months.

Income:
Nestle segmented their market based on customer"s income in an effective way.

3ectogen.
Nestle charge tk JII for per ?IIgm 9ectogen !# milk powder. They also charge tk !III for ?IIgm 9ectogen & milk powder pack. 4iddle income and low income people are not able to buy these products for their babies.

Occupation:
Nestle segmented the market based on their customer"s occupation.

Nesca$e c assic:
This product is for those who work hard and needs more freshness. 7oth the male and female who need more caffeine Nescafe classic is for them.

1syc"ograp"ic.
9ife style and personality: Nestle provides HIT H0T these people who really want to enjoy chocolate. Nescafe & in ! is for e clusively those customers who are really busy and do not have enough time. They can save their time by taking Nescafe & in !.0ll the things sugar, milk and coffee remain mi ed.

0e"aviora :

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0ene$its:
7ased on benefits Nestle segmented their market in an effective way. /o they provide $erelac for those customers who want more benefits from the products. $erelac contain a high nutrition for baby"s whose age below ! year. Two most important elements rice and milk remain mi ed in cerelac. %n the other hand, cerelac contains vitamin, mineral and all nutritious elements for babies.

Target Mar&eting.
4arket segmentation reveals the firm"s market opportunities. Then the firm sort market targeting by evaluating the various market segments and deciding which and how many segments it will target. Nestle 9td evaluated the various market segments on the basis of segment si'e and growth, segments, structural attractiveness, and company objectives and resources and decided to launch their operation all over the country. Nestle separate their target market because of having uni.ue need and wants. Nestle 9td selected their target market into two market coverage strategies:

*ndi$$erentiated:
NestlE has offered several products such as Nescafe & in ! 4aggi noodles, and Hit Hat to the people of the whole 7angladesh without differentiating the market segment.

4i$$erentiated:
Nestle also selects the differentiated marketing. It offers different product for different segments based on different age, occupation, season and climate.

Nesca$e 9 in 7:
$offee for people who are busy.

Ko&o Krunc"! Nes@uic&:

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$hocolate milk who want to get taste of chocolate.

Nesca$e Ice:
$old coffee for the people in hot weather.

+oncentrated. Through concentrated marketing, NestlE achieves a strong market position

because of its greater knowledge of consumer needs. In the niches it serves and special reputation it ac.uires. NestlE speciali'es in producing baby foods. It offers nutritious milk powder 9ectogen ! for babies whose age is less than , months and lectogen & for babies whose is under !# month. It also offers baby nutrition cerelac for baby less than ! year.

1ositioning Strategy.

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7y creating product, service, channel, people and image differentiation Nestle reach the consumer touch point more effectively < efficiently in comparing with their competitors in the highly competitive food processing sector.

1roduct 4i$$erentiation:
Nestle brings a lot of product for target customers. They provide #* types of minerals in Nido for children. It also provides $erelac and 9actogen! <& for newly born baby e clusively. Now the doctors prescribe these products for babies to their parents for high nutrition Nescafe is a product which contains ( types of categories. They offer Nescafe ice for hot weather, classic for all & in ! for those who are busy. They provide 4aggi including 4aggi instant@ 4aggi # minutes which contain various minerals, vitamins and nutritions. 4aggi also provide magi healthy soup and 4aggi corn soup but charge the same price.

+"anne 4i$$erentiation:
Nestle reach their products to the customers through their e pert market salesman and transportation. /o that their products are much available to their respective customers.

Image di$$erentiation:
NestlE"s logo is totally different from its competitors that are greatly accepted by its customers. -or that reason customer easily identify them in the market which is another effective advantage for Nestle.

1eop e di$$erentiation:
Nestle has a large number of employees that are highly educated and trained. In 7angladesh, (II employees are working in market $ompany chairman@ 6eter 7rakeck3 9etmathe and $:% 6aul 7ulcke are highly educated, wise and e perienced people. They are running this business successfully for a long time.

Service di$$erentiation:
0nother advantage for this company is better service for its respective customers from its competitors. They provide #( hours hot line service. =igh .uality checking is maintaining for its customers. Its marketing dept. and 65 1public relation2 dept. are working for finding out customer"s new demands and response toward their products.

Se ecting an overa positioning strategy.

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The full positioning of a brand is called the brands value proposition3The full mi of benefits up Oon which the brand is differentiated and positioned.

More $or more:

4ore for more positioning involves providing the most upscale product or service and charging a higher price to cover the higher cost. : actly Nestle is doing that. NestlE"s products provide more benefit and for that Nestle charge higher price than other competitors. Nido ensure nutrition and charge #*I tk for (II gm. 7ut -resh, 4arks do not ensure nutrition and charge less than that of Nido. 5espectively Nescafe, 4aggi noodles ensure .uality for high price, rather than competitors.

1ositioning Statement 0aby 1roducts:

To babies who are deprived of proper nutrition, Nido, $erelac, 9actogen are the nutritious milk 6roduct that give you more nutrition than any other brand because these contain different types of vitamin, mineral etc.

Nesca$e:
To busy people who drink coffee and have little time for taking rest, Nescafe is the coffee that gives you more energy than any other brand because it has the highest level of caffeine,

Maggi:
To people, noodles and soup consumer who seek better .uality, 4aggi noodles and healthy soup that gives you proper nutrition than any other brand because it has the best .uality. Their motto for business is AGOO4 %OO4 GOO4 3I%

+ON+3*SION

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Nestle has seen a strong start to #IIJ, partly thanks to its strategy of increasing product prices .uickly in line with commodity price increases. Through internal research and development at NestlE there have also been significant advances in the environmental impact of refrigerants and packaging. >ithout compromising product .uality there was a reduction of &?# III tonnes of packaging material between !??! and #IIJ. :vidence shows that NestlE advertised and still advertises its formula as a risk3free substitute 1or even a preferable alternative2 to its products, resulting in increased use.

0I03IOGRA1-5

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