MARKET SEGMENTATION, TARGETING AND POSITIONING
Persistent attempts to sell what is easiest for the company to produce, should be replaced with attempts to
discover what consumers want to buy or even better – to tell customers what they need even before they know it.
To understand a particular market, it is necessary to have prior knowledge about the type of the marketxxiv. In
most cases, the company can’t serve all customers, and it is necessary to identify market segments and select
those that the company will be able to serve most effectively. Market segmentation and selection of target group
of consumers within a segment are procedures that are closely related to the formulation of marketing strategy of
an enterprise. Segmentation would mean separation of heterogeneous markets of homogeneous groups of
consumers who have similar characteristics, requirements and needs. There are many factors that influence the
segment selection process, and in the case of chocolate market the following should be taken into consideration:
geographic factors (where do customers live?), demographic factors (who are the customers?)
and psychographic
factors (how do the customers behave?).
Geographically, Macedonia can be divided in two segments – rural and urban areas. Macedonia is
characterized as migration area with intensive internal population shifts, and a continuous process of migration
of population in other states. Regarding the marketing strategy, the recommendation is in favor of the urban
areas for several reasonsxxv: Internal migration flows have different intensity in different periods and mostly in
relation from smaller cities or villages to the city of Skopje; Although a total of 1762 populated settlements only
36 towns have urban character, 63.85% of the total population or 1,308,464 people are concentrated there, and
only in the capital city – Skopje live 24.7% of the total population; Lack of investment to build the necessary
infrastructure, especially in rural areas; The transport costs participate with 30% in the price formation and they
automatically increase when the product is placed in distant rural areas; Relatively low disposable income of
families in rural areas dominated by agriculture, which still belongs to branches with low profitability;
Different
lifestyles and buying behavior of the population which do not fit the attributes of the product as in urban areas.
Within urban areas, towns with over 10,000 inhabitants should be included - in total of 23 in Macedonia: Skopje,
Kumanovo, Bitola, Tetovo, Gostivar, Kicevo, Debar, Ohrid, Prilep, Strumica, Stip, Kocani , Veles etc. The total
number of population in them is 1,252,953 inhabitants. Before placing the products on these markets, test –
marketing should be the previous step, on the territory of Skopje because it is considered the largest consumer
market of confectionery products. According to age groups, there is a negative trend - the natural growth of
population reduces and the number of elderly population and its share in total population increases. Specifically,
in 1994 the share of population from 0 to 14 years of age decreased from 33.2% to 19.2% in 2006, with forecasts
that it will continue to decrease to 17.4 (2010), 15.4 (2020) and 14.4% (2030). In contrast, the share of older
population is increasing from 8.5% (1994) to 11.2% (2006). On the other hand, there is an opportunity to use the
so-called demographic bonus (there is still greater participation of the active population in opposite of young and
old people), i.e. the rate of active population is 56.5. The total workforce is 919,424 people of whom 609,015 are
employed, 310,409 unemployed, and 40,8% are with high school and 14,2% with higher level of educationxxvi
.
The average net salary in December 2010 amounted to 21,454 mkd. The total cost for food and beverages totaled
12,342 mkd, i.e. 42.5%xxvii
. In terms of age, it is recommended a segment of population older than 10 years to be
selected, primarily due to the nature of children's perceptions regarding the benefits of the products, and also
because for this group of consumers a specific line of products is needed, where the presentation of the products
should be completely different from all others which requires hiring additional funds for the promotion of
chocolate. Within this market segment a strong domestic and foreign competition exists in terms of a large
supply of cheap chewing gum, lollipops, caramels, cookies and chocolate desserts, and it becomes harder to
extract the limited pocket money primarily for chocolate without specifically focusing on that group of
consumers. Regarding the life cycle of the family the following segments may be included: Teenagers and
students; Youth - singles / couples / bachelor / unmarried or divorced (with or without children); Young couples
with or without children; Married couples with children older than 18 years; Couples without children; Older
married couples; Older singles and divorced. In terms of revenue, the segment can be determined in individuals
with personal monthly income of minimum 6000mkd, or households that have a minimum total monthly income
of the average net salary for 2-3 members and opportunities to purchase at least one TV and access to cable
television or Internet. The results of the questionnaire for consumer preferences show that all respondents,
regardless of education, gender, occupation, race and ethnicity consume chocolate products, which means that
the segment should include young people - school age (primary and secondary education) and adult individuals
(secondary and higher education), male and female, from all kinds of occupations, races and ethnic groups that
belong to existing or potential customers.
Universal consumption of chocolate is changing and moving from
consumption on occasion to every day, normal consumption. Also, consumer preferences in terms of pack size
are changing - bigger to smaller, individual packaging, in terms of value - a better value for the price,
housewives and employees have less time to prepare home sweet snacks etc. When buying chocolate consumers
don’t invest much effort and time, procurement is often impulsive and unplanned, from the nearest store. In
Macedonia people pay particular attention to family, friends, children, and in recent years to personal
achievements and success, individualism, material comfort and health. In terms of social class the following
segments may be selected: Upper middle layer which account for almost 12% of the population, (pusher,
successful business people and professionals, with a status based on occupation and earnings, beautiful clothes
and attractive home, not price-sensitive); Lower middle layer with about 30% of the population (conservative,
respectable, conscientious, require highest value for the price, higher education for their children); Higher low
layer comprising about 35% of the population (workers with limited education, seeking safety in the workplace,
impulsive when buying, loyal to national brands of products). In terms of personal characteristics of consumers
and their values and lifestyle, selected segment may include: Consumers "believers"(middle-class people whose
lifestyles are driven by external criteria, are conventional and are quickly adapting to circumstances, their life
revolves around family, church and wider community, are careful buyers of mostly conventional products and
are primarily driven by the popularity of products, are loyal to the brand); Consumers - "achievers"(are
motivated by the desire for success - work oriented, with a sense of responsibility, good education, live a normal
life, respect the authority buy known products and products that can save them time); Consumers -
"experiencers"(young, enthusiastic, impulsive consumers open to novelty and risk taking, and mostly driven by
self - expression, looking for excitement and risk, socially active, give away money on products that are in trend
and serve to socialize - clothes, fast food, music, movies, and are impulsive shoppers); Consumers - "pushers"
(are motivated by success, seek approval and admiration from those around, are impulsive buyers). Common
thing for these groups of consumers are: the benefits expected from the product - satisfying the desire for
something sweet, the preferred attributes - all appreciate the quality, taste, packaging and product availability,
and are not immune to communication that would have the greatest effect if taken as a base connection with real
life and elements of emotion or involvement of good models, music and modern design. They all are not
extremely sensitive to price and in case of better quality, would pay a higher price for the product. They all buy
branded products, as much as the revenues allow, and are family and success oriented.
The target group for chocolate products should include consumers over the age of 10
- young people in
primary and secondary school, students and employees with secondary or higher education that live and work in
urban centers with over 10,000 inhabitants, from different professions, with an active life, socially mobile,
devoted to family and the wider community, form middle and higher low social layers, impulsive buyers, with a
desire to succeed, loyal to the national/domestic brands, who are not too price sensitive, appreciate the quality of
products, and are willing to try new products.
The positioning of the product and the company can be done through a new solution for old problems, on
the base of consumers’ behavior (the rising awareness of the advantage when using domestic products), products
characteristics (quality and taste, communication, availability, packaging) and the usefulness of the product. For
competitive positioning of chocolate products, all selected qualities for positioning can be summarized in a
message: "For vigorous and healthy people – chocolate lovers, quality homemade chocolate for whenever and
wherever the desire for the sweet "sin" is stronger than you - at school, at work, with family at home, as a gift for
the beloved, at a walk with friends