Segmentation In FCMG Companies Essay

Question:

Discuss about the Segmentation Strategy in FMCG Companies and how the Demographic Factors affect International Trade.

Answer:

Segmentation in FCMG Companies

The three websites of fast moving consumer goods that are going to be discussed in this activity are Fonterra, Coca-Cola, and Parmalat. Fonterra Company deals with dairy nutrition. Australia is its largest market, but it has also expanded to Brazil, China, Indonesia, New Zealand and Malaysia. Coca-Cola Company deals in beverages. The Company has the market all over the world, and it is known by many customers as a leading beverage company in the world. The Parmalat Company deals with milk products and fruit based drinks. It has marketed its products in some countries in the world.

In the two companies Fonterra and Parmalat, there is an evidence of segmented approach. The segmented approach is mostly exhibited in Fonterra as it mainly targets Australia customers. The company has focused on the geographical region and considers Australia because it is where it is based, and therefore, the organization enjoys the degree of loyalty to Australia than those of other countries. Parmalat also has evidence of both segmented approach and mass marketing in its areas of operation. Coca-Cola Company has evidence of mass marketing because it has a wide variety of Audience (Sismeiro, Mizik and Bucklin, 2008, pp. 63-92).


To compare the three companies, Coca-Cola Company is the one that has best implemented the market segmentation strategy. It has divided its market basing on the needs of most customers among other factors (Pride and Ferrell, 2014). The products of this company cover all kinds of consumer demographic issues. Parmalat comes second as it has also covered a larger region compared to Fonterra. Fonterra has mostly based on the consumers' geographical area. The Fonterra Company considers that those people who can have easy access to their products give them a high degree of loyalty. Unlike Fonterra, Coca-Cola does not consider this but rather distributes the products to the whole word.

The three companies could segment their companies further by considering the socio-economic class. The companies could produce products that target a broad range of socioeconomic groups. This can be done by packaging smaller quantities for everybody to be able to buy. Another aspect they should consider is a lifestyle (Kotler and Keller, 2012). People’s lifestyles vary and therefore the companies should find a way of marketing that considers the different lifestyles. The companies should know that people are motivated to buy products for different reasons. The companies should ensure that they have different shapes and color of packaging to attract many customers, for example, most women love pink color while men despise it. Gender and age should be a basic consideration for them to be able to segment their market further. Produce different products for different gender and age of people.

In conclusion, therefore, for any company to carry out marketing, they should consider how far they want to distribute their products. This can help a company to carry out mass marketing or look for the segmented approach. Even when going for mass marketing the companies should consider segmenting the population to ways that are appropriate to carry out marketing because different countries have their ways of carrying out businesses (Cameron, 2014, pp. 22-27). The cultures of different people should be considered so that they are not offended

How Demographic Factors affect International Marketing

Increase in diversity

An increase in diversity is one of the demographic trends that are affecting opportunities for international marketing. The changing face of the world also marks the changing face of businesses industries. Currently, the world has become more diverse, and these have led to opportunities. More women have risen to ranks of leadership, and there are more cultural changes because people are adapting to new ways (Steven and Britt, 2008). For people that are coming up with new products and services, they can now market internationally as they can interact easily. The baby boomers are also stepping down leaving generation x to take their place. Therefore industries dealing with aging people like health industry gets more customers (Jansen, Moore, and Carmen, 2013, pp. 286-302).

The aging population and millennial generation

The changing age structure is another demographic trend. The aging population highly affects the opportunities for international marketing. It has created enormous opportunities for the products and services catering for the elderly, for example, the financial services and leisure activities get a good number of customers and therefore more products and services rendered (Chacon and Mason, 2011, pp. 271-290). This also affects international marketing negatively because business people will have to start looking for skilled and productive labor and this reduces the resources. Goods and services offered to the millennial generations rely on constant digital communications, therefore, a high market for those dealing with telecommunications (Charles, 2012).

Population growth

An increase in the population is another factor that positively affects international marketing. Population growth is both size and age leads to provision of more products and services for a longer period. An increased population of the elderly mostly has an impact on health care services. For example, the health care technology, therefore, gets more customers increasing international marketing. It is an opportunity for business people and innovators to develop new products that can address challenges facing the older generation and the young generation (Rugman and Collinson, 2008).

Industries Set To Benefit From Ageing Baby Boomers

The baby boomers need more attention to their lifestyle. The health care industries benefit the most as they have issues with their health that need to be addressed. The skin care industries are also beneficiaries as the baby boomers like to lessen their wrinkles and also improve the firmness of their skin (Teixeira, Koufteros and Peng, 2012, pp. 69-81). The travel insurance industry is also likely to benefit because older people like to travel to have leisure and they want their lives to be insured. Pilates and Yoga studio industries are also beneficiaries of the aging baby boomers. When they baby boomers retire, they dedicate more of their time to physical fitness to gain strength and flexibility.

Conclusion

In conclusion, therefore, marketers should observe the current demographical trends, for example, the aging population and diversity to know their target customers and the products and services they want. The baby boomers are currently the aging population, and therefore innovators should take that advantage to come up with products that satisfy their needs. The innovators should understand that baby boomers are not only the fast growing population but also the wealthiest, for this reason after retirement they want recreational services that innovators should work towards to satisfy them.

References

Cameron, B. (2014). Management. Strategic Leadership Review, pp. 22-27.

Chacon and Mason (2011). An Analysis of the Relationship between the Passenger Loyalty and Consumer Buying Behaviour for Network and Low-Cost Carriers. Transportation Journal, pp. 271-290.

Charles L. (2012). Essentials of Marketing (7th Ed.). Mason, OH: South-Western Cengage Learning.

Jansen, B., Moore, K. and Carmen, S. (2013). "Evaluating the Performance of Demographic Targeting Using Gender in Sponsored Search." Information Processing and Management, pp. 286-302.

Kotler, P. and Keller, L. (2012). Marketing Management (14th Ed.), Upper Saddle River: Pearson Prentice Hall.

Pride, W. and Ferrell C. (2014). Marketing (17th Ed.) Mason: Cengage Learning

Rugman, A. and Collinson, S. (2008). International Business, Financial Times Prentice Hall

Sismeiro, C., Mizik, N. and Bucklin, R. (2008). A New Dynamics-based Segmentation Approach for Maximizing Long-term Marketing Impact. Marketing Science Institute Reports, Issue 2, Report No. 08-109, pp. 63-92.

Steven M. and Britt, W. (2008). Organizational Psychology, Scientist-Practitioner Approach, John Wiley, and Sons.

Teixeira, R., Koufteros, X. and Peng, D. (2012). "Organizational Structure, Integration, and the Manufacturing Performance: a Conceptual Model and Propositions." Journal of Operations and Supply Chain Management, pp. 69-81.

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