1.3 Current Distribution
Kraft Tiger is widely distributed across various supermarkets and minimarkets alike in Singapore; it could be found in various general supermarkets such as NTUC FairPrice, Cold Storage or Carrefour. NTUC FairPrice is Singapore’s largest retailer, with a network of more than 230 outlets across the country (NTUC FairPrice, 2011). NTUC FairPrice could be found in almost any area throughout Singapore. Cold Storage is Singapore’s second largest retailer, just behind NTUC FairPrice, it operates 36 stores in Singapore located across the country at prominent city centers, suburbs and HDB estates (Cold Storage, 2011). Carrefour is one of the largest hypermarket chains in the world (Carrefour, 2011), it only has 1 outlet in Singapore but it is considered to be one of the largest supermarkets in the country, it is also located in Plaza Singapura at Orchard Rd, which is in the Central Region where people’s population density is the highest. From the three stores mentioned above, while also considering Singapore’s relatively small geographical area and ease of transport, consumers could easily gain access to Kraft Tiger and purchase them from any places; as Kraft Tiger is engaged in a monopolistic competition market, it has to ensure its availability to reach out the mass market through an intensive distribution strategy. Technically speaking, consumers could also purchase Kraft Tiger directly from the manufacturer, which is Kraft itself, however it is very unlikely for them to do so since buying directly from a manufacturer generally requires them to make a wholesale purchase rather than a retail purchase, making a wholesale purchase would also take a long and tedious process. There are some characteristics of Kraft Tiger that influence its distribution; this includes the product’s life cycle, and the time the product needs to reach consumers in its distribution channel. Kraft Tiger is a type of non-durable goods, therefore it needs to be sold as many and as quickly as possible before the product reach its decline stage, or in other word, expires. It is also the reason why Kraft use a wide distribution method, this is because they are selling the product in high quantity, if they only focus on a single market, they would not be able to sell much since the number of products sold exceeds the number of consumers available, it will eventually lead to a loss since the leftover products cannot be reused due to it being non-durable (Komninos, 2002)
1.4 Current Promotion
Kraft Tiger can be seen through various recent advertisements, such as from newspaper and magazine ads, and the internet. Using this combination of both traditional and non-traditional promotional tools Kraft intended to create brand awareness; they wanted to let the consumers know that Kraft Tiger exists. Kraft Tiger asserts its existence by emphasizing that Kraft Tiger chocolate biscuit is a healthy product which could give consumers extra energy to do their daily activities (Animetric’s World, 2009); Kraft wanted to propose these positive attributes to consumers, so that they may be interested and willing to try the product. In addition, Kraft Tiger also make use of its brand reputation to help the product in creating awareness. Kraft Tiger is using a combination of slice-of-life, fantasy, personality symbol, and scientific evidence to convey the product’s promotional theme (Kotler et al. 2009, 462). The product uses normal, everyday settings in its advertisements; the promotion theme is based on a normal context, common example of Kraft Tiger’s slice-of-life advertisements usually includes children doing sports or doing house chores. However, despite the normal settings, there are several fantasy elements featured within it, such as when the children were suddenly able to do unrealistic movements or behaviors after they eat the biscuit. These fantasy elements, however, are simply a symbolism related to Kraft Tiger’s mascot figure, the tiger Tigo; Tigo is the personality symbol of Kraft Tiger, the fantasy elements were used to portray a tiger’s prowess, hence the unrealistic movements in the advertisements. Kraft Tiger is also backed up by scientific evidence, which is featured in the ENERMAXX; the product boasts its ‘9 vitamins 6 minerals’ features which could help in releasing and providing extra energy, these are not merely empty words, since there is the nutrition facts to prove it. Kraft Tiger delivered the same message in all of its advertisements through the rational and emotional appeal. Kraft used the rational appeal to create awareness and product knowledge as a cognitive approach towards consumers, rational appeal is used to outline a product’s functions and benefits (Kotler et al. 2009, 440); this is used to certify the message that Kraft Tiger is a healthy product and features the ENERMAXX. At the same time, Kraft also used emotional appeal to convey the feelings featured in Kraft Tiger’s advertisements. Kraft Tiger’s advertisements is generally filled with lively scenes featuring children striving in their daily activities, using the emotional appeal, Kraft wanted to deliver these feelings to the audiences (consumers) so that they may be stimulated and attracted to Kraft Tiger.
- Segmentation Theory
2.1 What Is Market Segmentation
Market segmentation means the process of dividing and classifying the once large mass market into a separate individual market; the mass market is separated based on the traits and characteristics that they share. Consumers have different preferences, wants, and buying attitudes. They may also have their own preferences of buying channel, such as ordering by phone, online purchase, or simply a physical purchase from a store. Each consumer has their own unique necessities and desires, thus each one of them can be considered a separate market (Kotler et al. 2009, 229). These differences are the factors which made market segmentation important for marketers; in order to handle the differences in every consumer’s needs and wants efficiently, while also effectively make them satisfied, market segmentation is necessary (John McMillan 2008). Market segmentation is important in any businesses as focusing marketing efforts toward the mass market is no longer a viable option today, because consumers have become increasingly diverse and there are a high number of competitors (Why Use Customer Segmentation 2007)
2.2 Benefits of Using Segmentation
Firms can gain heaps of benefits from using market segmentation. First and foremost is market segmentation could help firms in selecting and focusing on the most responsive segment. Marketing efforts can then be adjusted effectively to suit the consumers from that particular segment (Joel Goldberg 2008). Kraft is a large company with an equally large customer base. These customers include people with different demographics throughout the world. Kraft is involved in various production of confectionary, foods and beverages products; in order to effectively market their products to the vast customer base that Kraft possess, it used a detailed market segmentation to determine the best customers for each one of their product. Another benefit that firms could reap from the use of market segmentation is the minimization of costs and a more efficient allocation of resources. Knowing and understanding a product’s specific customer base could greatly help a firm in managing their resources more efficiently and minimize the costs needed to market their product, since they could focus on that particular customer base and no longer have to make unnecessary extra costs in their marketing efforts (Business Link 2011). Each one of Kraft’s product has its own primary target market, hence Kraft could take a narrower approach towards each product’s customer base and would not have to take a mass market approach that would cost them more money.
Last but not least, market segmentation could also help firms in gauging their company’s market position – how the company is perceived by its customers compared to the competitors (Strategic Marketing and Research Techniques 2011). Competitors may also be engaged in the same target market, thus the way the customers response to the brand that a firm has would determine the market position of that firm; the one who gain the most positive responses would become the market leader. Kraft is just one of the producers of confectionary goods, there are various other large corporations who act as Kraft’s competitors. Kraft is already one of the market leaders dealing in confectionary goods, however to maintain its position it has to ensure that its products are still among the top of consumers’ consideration set. The mass market is divided into separate, smaller individual market and thus it is easier for Kraft to gather information from consumers, additionally, since the customer base share similar characteristics, it is easier for them to make adjustments in their marketing efforts.
3.0 Target Market Identification
3.1 Geographic Segmentation
Kraft Tiger is geographically segmented in Singapore. Singapore consists of five regions; Central Region, East Region, West Region, North Region, and North-East Region. Among the five regions, West Region is the largest; however the most densely populated region is Central Region (CityPopulation, 2010). Singapore has a land size of about 704 km sq with a dispersed urban population. Climate in Singapore is considered to be hot and humid throughout the years. These statistics posit a high influence on Kraft Tiger’s marketing mix. Since Kraft Tiger is engaged in a monopolistic competition market, it adopts an intensive distribution strategy to ensure product availability; which means that Kraft has to ensure that the product is available in all five regions, especially since Singapore’s populace is dispersed throughout each region. As for the climate, Kraft noticed the fact that customers in general are more reluctant to spend their time outdoor during a hot day, and thus it is unlikely for them to purchase the product if it is sold in an outdoor stall. Therefore Kraft Tiger is mostly sold in indoor supermarkets where there are air conditioners.
3.2 Demographic Segmentation
Kraft Tiger is demographically segmented towards children with an age of 8-12 years old (otherwise known as the tweens group), in other words these children are the primary target market of Kraft Tiger. These children can be male and female, and include all children from any race and nationality within Singapore. People from the tweens group are not employed and therefore do not earn money on their own, their source of ‘income’ came from their parents in the form of pocket money or allowances. Children from age 8-12 generally receive an average of S$30-40 allowance per month (Money and Kids, 2009). People from the tweens age group can mostly be considered gullible towards their surroundings; however, recent studies mentioned that children have become increasingly clever, knowledgeable and self-conscious of their surroundings due to better technology and ease of information access, particularly from the internet (Bhattacharyya and Kohli 2007). These factors bring influence to Kraft Tiger’s marketing mix in a way that the product’s promotion methods are focused towards its primary target market, which is the tweens group. Kraft Tiger’s promotion theme is about being “full of energy and move like a tiger” with its ENERMAXX feature; being kids with sincere minds, they are bound to be curious toward such extravagant lines. Additionally, Kraft Tiger use a cartooned figure of a tiger as its mascot and include it in its packaging; children are more attracted to colorful packaging with funny or attractive pictures on it rather than a plain packaging.
3.3 Psychographic Segmentation
Tweens male and female belong to the people from lower socioeconomic status, because they do not earn money on their own and are still dependent on their parents or guardians (Socioeconomic Status, 2007). Courtesy to Sri Values and Lifestyles (VALS) typology, tweens can be best classified into the ‘strivers’ group, and ‘experiencers’ as their secondary type. Tweens generally do not have a clear focus of their life yet since they are still considered immature and childish, their actions are mostly impulsive and based on whim; this includes their buying behavior (VALS™, 2011). They might just decide to purchase Kraft Tiger based on their sudden crave for biscuits or snacks without putting much consideration on their financial possessions, since they assume that they could simply ask for money from their parents. Another method in evaluating consumers’ lifestyle is the Roy Morgan value segmentation; tweens would be categorized in the 4th segment, which is ‘Look at Me’, young children are free and are always looking for fun; Kraft Tiger assert the ‘fun’ element in its advertisements through emotional appeal. In the AIO dimension, tweens fall under the category of community for Activities, food for Interests, and product for Opinions. In the community basis, young tweens may influence their peer groups such as their friends or family to eat Kraft Tiger with them. In the food basis, young tweens are looking for confectionary product and light snacks, while in the product basis, young tweens are more attracted to colorful packaging such as the one that Kraft Tiger has.
3.4 Behavioural Segmentation
Tweens male and female consume Kraft Tiger because it contains 9 vitamins and 6 minerals which give them extra energy to do their daily activities as to what they have seen from the advertisements, they also consume it to satisfy their crave for snacks. The time they consume Kraft Tiger is generally during their leisure time. The user status of Kraft Tiger consists of mostly regular users, whereas their usage rate is light to moderate. It is worth noting, however, that Kraft being a high-market-share company would be particularly interested in attracting more potential users (Kotler et al. 2009, 236). Usage rate of Kraft Tiger could actually be heavy, but it is unlikely to happen since considering the primary consumers of Kraft Tiger are young tweens, parents would limit their consumptions since consuming too much snacks are not healthy for children. The loyalty status of Kraft Tiger’s consumers is ‘somewhat loyal’, the reason is actually because of Kraft themselves; Kraft produces various types of biscuits, and Kraft Tiger is just one of the tens of product lines that they possess. Consumers may still choose Kraft as their favored brand, however it is not guaranteed that they will always choose Kraft Tiger, not to mention the vast number of competitors dealing with similar product. There might be some consumers who take a particular liking for Kraft Tiger’s taste, especially considering that tweens have a habit to stick on their favorites once they find it, however these types of consumers mostly fall under the minority.
4.0 Completion of Discussion/Rationale of the Target Market Images
Chosen Table
*only included in the hard copy*
5.0 Reference List
Animetric’s World. 2009. Kraft Launches Tiger Energy Biscuits!. Blogger.
Bhattacharyya, Ritu and Sangita Kohli. 2007. “Target Marketing to Children – The Ethical Aspects”. dspace.iimk.ac.in/bitstream/2259/387/1/69-74.pdf
Bijmolt, Tammo H.A., Harald J.Van Heerdee, and Rik G.M. Pieters. “New Empirical Generalizations on The Determinants of Price Elasticity”. Journal of Marketing Research 42 (2): 141-156. http://www.journals.marketingpower.com/doi/pdf/10.1509/jimk.15.3.1
Business Link: Segment your customers. 2011. The Chartered Institute of Marketing.
URCES
Carrefour. 2011. Our Group. http://www.carrefour.com/cdc/group/our-group/
CityPopulation: Singapore. 2010. Singapore Department of Statistics.
Cold Storage. 2011. Corporate, About Us. http://www.coldstorage.com.sg/corporate/public/Corporate_AboutUs.html
Goldberg, Joel. 2008. Advantages of Market Segmentation. Market Segmentation Services. Accessed August 22. http://www.marketsegmentation.com/benefits_of_segmentation.html
Komninos, Ioannis. 2002. Product Life Cycle Management. http://www.urenio.org/tools/en/Product_Life_Cycle_Management.pdf
Kotler, Philip, Stewart Adam, Sara Denize, and Gary Armstrong. 2009. Principles of Marketing. National Library of Australia: Pearson Education Australia
Laycock, Jennifer. 2010. A Content Case Study: Kraft Plays to Their Audience.
Learning Point Associates: Socioeconomic Status. 2007. North Central Regional Educational Laboratory. http://www.ncrel.org/sdrs/areas/issues/students/earlycld/ea7lk5.htm
McMillan, John. 2008. The Importance of Market Segments. McMillan Technology. Accessed August 22. www.mcmillantech.co.uk/articles/MarketSegments.pdf
Moffatt, Mike. 2010. Cost-Push Inflation VS Demand-Pull Inflation. About.com - Economics.
Moffatt, Mike. 2010. Price Elasticity of Demand. About.com – Economics. http://economics.about.com/cs/micfrohelp/a/priceelasticity.htm
Money and Kids: average allowances for kids and teens. 2009. .
NTUC FairPrice. 2011. About NTUC FairPrice. http://www.fairprice.com.sg/webapp/wcs/stores/servlet/FerretAbtUsView?langId-1&storeId=90001&catalogId=10051&Corporate=Y
Strategic Marketing and Research Techniques: Market Segmentation. 2011. SMART.
VALS™: Experiences. 2011. Strategic Business Insights. http://www.strategicbusinessinsights.com/vals/ustypes/experiencers.shtml
VALS™: Strivers. 2011. Strategic Business Insights. http://www.strategicbusinessinsights.com/vals/ustypes/strivers.shtml
Why Use Customer Segmentation, Innovation Insights: The Benefits of Market Segmentation. 2007. Markitecture. http://www.markitecture.com/innovation_insights/customer_segmentation.html
