P5 Explain how and why groups of customers are targeted for selected products

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Task 8

P5: Explain how and why groups of customers are targeted for selected products

The difference between customers, customers and buyers

Customers and consumers

A customer is a person who buys a product, e.g. you are a customer when you buy any product from a store for example. Whereas a consumer is a person who consumes a product bought for example you are a consumer if you eat a chocolate that has been bought.

A customer can also be a consumer sometimes, for if someone buys some sweet and eats them, this person will be a consumers as well as a customer

Buyers

A Buyer is anyone who has the abilities to buy products or services and since customers are people who buy products, they can be called buyers unlike consumers.

Importance of identifying who has influence over purchasing decisions

It is really important for marketers to be able to know what customers want by identifying their behaviours because when they know what the customers want then they will be able to target them better and to satisfy customer’s needs with their products.

When identifying buyers’ behaviour it is also important to know the needs of the customers because it is what helps to better identify the buyers behaviour.

Targeting individuals who have the influence over the purchasing decision, for example for a charismas present for children, it is the parents who will be targeted as they have the influence over the purchasing decision.

How markets are segmented for a product or a service

The segmenting is a method used for marketing for products or services, there are four main methods used to do so and these methods are geographic, demographic, psychographic and lifestyle. Segmentation is a method used by organisations to allow them to develop products and plans that will fit the needs of customers more effectively.

When segmenting a market, the general categories to consider are demographic, psychographic, lifestyle and geographic

Psychographic –

This segmentation refers to the lifestyle or the beliefs of customers. For example if the product being marketed has a belief attached to it you will need to identify the corresponding audience who have that belief

Geographic –

This segmentation depends on the location of the customers. These customers might be divided into national or regional group.

Demographic –

The demographic segment refers to the age, sex, gender of customers. For example beauty products are mostly aimed at women first

Socio- cultural

This refers to different classes, it can also include things like education, income etc... People in society are classed into different classes depending on their jobs, from A which is Upper middle class to E which is lowest class.

Uses of geo-demographic systems to identify and reach target groups-

Geo-demographic systems are used by businesses when they decide to target their customers on a geographical level. There are two neighbourhood classifications that are used by businesses to do so, and these are ACORN and MOSAIC

ACORN

ACORN is a go-demographic instrument used by organisations to identify and understand the UK population and the local demand for different products and services. This system uses demographic statics and lifestyles to divide the UK postcodes and this is used as a guide by businesses to differences between geographical regions. This ...

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Uses of geo-demographic systems to identify and reach target groups-

ACORN

MOSAIC

The role of the MOSAIC system is to classify households into the UK into 12 different MOSAIC groups and 52 sub-groups which are called MOSAIC types. These types and groups are created according to the share certain characteristics. This system helps businesses to make their decision based on the kind of customers they attract. The kind of decision could be like, where o open a new store for example.

Reasons for choice of target group

Accessibility

Businesses need to make sure that they can reach and get hold of customers through effective marketing communication

Current and future prospects of groups as customers

When targeting markets, businesses needs to work out whether the segment they will be targeting will produce good return on investment they made now and in the future if there are any changes made to the products or services

Profitability

It would be pointless if the business target a segment with products or services that that required high cost of production if the business doesn’t make any profits

Ability to service customer group

It is important that businesses have their ability to service their chosen segments. For example if a business might identify a segment for fresh products made at about 40 miles from the store, but the business will not be able to service the segment there are no organic farm in that area

Fit with organisation’s mission

It is really important that the values of the business are taken into account and fit in with the segment targeted or segmentation will not work

Identifying customers in business to business markets

Decision Making Unit

The decision making unit is about all the people involved in or groups who take part in the purchasing decision process in a business

The basis for segmentation of business markets

Businesses markets can also be segmented like customers but in a different way to customers

Size

Businesses in the UK for example are segmented in maybe different ways including their sizes, regions, value or whether they operate in the public, private or voluntary sector.

Small businesses – small business tend to need sympathetically help from bank sometime as they are starting. In these types of businesses, there are usually about two people involved in the decision making
Large businesses – these types of businesses need more help in decision making financial decision
Very large businesses – these sorts of businesses, there are many people involved in the decision making because it involves complicated financial decisions and investments.

Region

Region is another fact that can influence segmenting of a business for example some businesses focus their selling effort according to their geographical location

Value

Value is another factor that can be used of segment businesses

Public, private and voluntary sectors

Businesses can also be segmented on according to what sector they operate in, for example, the Public, private or voluntary sector. Selling businesses in the public sector means that you have to follow a complicated process. This will involve that the selling business will have to go through a process of applying to be able to provide products and services and will still have to face competition.

Products

Product is a factor by which a business can be segmented, and this means that the particular type of product can be used in different ways. In this case, customers are split into groups according to their particular use of that products or service

Industry

Segmentation can also be done by businesses as there are industrial industries that are likely to use certain type of products or service. For example wholesalers can serve products to three different segments such as grocers, pubs and caterers.

Benefits for different member of the DMU

Cost Benefits

Deciders are the one concerned with the cost benefits because they want to make sure that by the end of their sales, they get the all of the money they put in as an investment plus benefits or otherwise they see no good in investing in the first place

Ongoing relationships

The influencers are the members that will benefits from ongoing relationships as they opinions are always needed for new products for example.

Security of supply

The security of supply is mostly relevant to buyers or purchasing officers as they are the one who usually worry about the condition and the accessibility of their merchandises

Information sheet for four businesses to consumer markets

Saga holidays

An introduction to the company

Saga is a British holiday company who offer services to those aged 50 and over. The company has about 2.7 million customers. The company operates from several sites all of which are in the UK. There are four in Folkestone, Kent at Middelburg Square, Enbrook Park, Cheriton Park and Ross Way and the fifth one at the Eurokent Business Park in Ramsgate, Kent, and the newest at Priory Square in Hastings, Sussex

The target group / who are they?

Saga holydays only targets people from 50 and forward, that’s those who may need holidays to escape from their daily lives. People over fifties may also be those on retirement or close to that.

How saga select their target group

They target their customers based on their age, that is people over fifties. They can also accept people under fifty as long there are accompanied with someone aged fifty or over. They target customers because they know they can reach their customers through advertisement on TV adverts, magazines and brochures.

They target those people because they know there is a market there for them and they can make good products.

Club 18-30

An introduction to the company

Club 18-30 is a holiday company operating in the, London that provides holidays for people aged 18–30 in typical party island destinations. Club 18-30 Company takes around 110,000 guests each year with turnover of around £50m a year. The average age of guests is 19

The target group / who are they

Their target group lies in people from 10 -20 years of age,

How club 18-30 select their target group

Club 10 -30 target their customers based on demographic, age (18-30). People must on this holidays should be 18 or over because it involves traveling without parents. Most customers attending the holiday company are 19

Why club 18- 30 targets these particular customers

Club 18- 30 targets these particular customers because it involves traveling without parental guidance. They also target these particular audience because they offer typical party destinations and this is exactly the type of things this target audience like to do.

Adventure holidays

An introduction to the company

Adventure travel is a type of holiday designed for people who like practice tourism, involving exploration or travel. Holiday offers risky activities for people who like challenging things

The target group / who are they?

Their target group involves people who love to practice challenging activities, their target group would be people 18 and over.

How adventure holidays select their target group

They select their target group by age, demographic and sex

Why adventure holidays targets these particular customers

They target these particular group because they like challenges, nature, activities and keeping healthy.

Keycamp holidays

An introduction to the company

Keycamp holidays is a division of holydaybreak company which is a company based in Hartford, Cheshire which primarily serves customers in the United Kingdom, Republic of Ireland and the Netherlands. Keycamp has been sold to France’s Homair Vacances, for 89 billion and now operates with people in France.

The target group / who are they?

Keycamp holidays are mostly targeting families with children and couples or groups of people looking for a good camp adventure.

How keycamp select their target group

Keycamp select their target group by demographic and age mainly, they do their selection by internet advertisement and brochures.

Why keycamp targets these particular customers

Keycamp targets this particular type of customers because they can provide them with the type of entertainment they want and need.

Information sheet for two business to business markets

NatWest business banking

An introduction to the company

NatWest is the largest retail and commercial bank in the United Kingdom. It is part, of The Royal Bank of Scotland Group since 2000 and is ranked among the top 10 largest banks in the world by assets. NatWest was established in 1968 by the merger of National Provincial Bank (established 1833 as National Provincial Bank of England) and Westminster Bank (established 1834 as London County and Westminster Bank).

The target group / who are they?

As a retail and commercial bank, they mostly target small businesses, people who want to start up their businesses i.e. (couples). They also target different retailers who may need help.

How the target group has been selected

NatWest targets their selected group by making TV adverts, radio advertisement, brochures and also deals for those who switch to them.

Why NatWest targets these particular customers?

NatWest targets their particular group help them start their own independent businesses by providing with finance start ups,

Booker’s cash and carry

An introduction to the company

Booker’s cash and carry is a branch of the Booker group which is the largest food wholesaler in the UK.

The target group / who are they?

They target small businesses like corner shops, pubs, bars etc... They target independent retailers, people, for anyone needing cash

How the target group has been selected?

They target their target groups by making online adverts, radio adverts,

Why booker’s cash and carry targets these particular customers?