The Effect of Market Segmentation on Sales performance of Soft Drink Industry

 The Effect of Market Segmentation on Sales performance of  Soft Drink Industry

Introduction

Soft drink is highly demanded drinks; soft drink is required at every occasion, family function. Now there are several drinks such as flavored drinks, carbonated drinks, non- alcoholic drinks etc. all these drinks are available in different taste, different size. The demand for soft drink is increasing as on their tremendous increase in demand of western food. Soft drinks are fast consuming product as compare to other FMCG product because the demand of soft drinks is in both rural and urban sector are high. Soft Industry is focusing all consumers whether it is rural or urban this is called market diversification or market segmentation. The market segmentation impact the sales performance because it diversifies the customer need and want.   

The aim of any business is to make complete focus on consumer needs. Every business want to satisfy the need of consumer and wants consumer loyalty for that they frame different marketing strategies and market segmentation is one of these strategies. It is true that no business can satisfy whole market so they have to identify sub market of the existing market can create market demand. The division of market into different homogenous groups called market segmentation. Market need to satisfy the need have customer and every customer had different need. The main reason of market segmentation is important, so that company can understand the need and base of customers. Market segmentation divide consumer into different criteria such as Demographic, Behavioral, Psychographic, geographic segmentation.

Market segmentation is part of market which helps company to understand the need and want of customer. Suppose in the car industry there is market segmentation between middle class people and luxury people car industry have identified there segmentation basis same goes with other industries. 

Market segmentation is never created it is being identify by the company to know the market need and demand for following product. There are several benefits of identifying the market segmentation of any business.

1. Market segmentation gives you clear picture to fix price of product on the basis of requirement and demand of the product.

2.   Market segmentation help you to identify which supply chain is better and effective for the company.

3.  Market segmentation helps to identify or portrait the clear picture of your product competitor and make it easy to decide the strategies of your product.

Market segmentation can define buyer in different categories such as young buyers, middle age buyers, low cost buyers, luxuries buyers, buyers on the basis of gender, on the basis of location, on the basis of interest etc.

There is basically four type of market segmentation such as:

1.                  Demographic segmentation

2.                  Psychographic segmentation

3.                  Behavioral segmentation

4.                  Geographical segmentation

Demographic Market segmentation:

It is most basic segmentation which is required to know the data of the customer and identify the customer group and categories.

There are sub categories of demographic segmentation such as:

Age

Gender

Income

Location

Family situation

Annual Income

Education

Ethnicity

All the categories are based on business to customer perspective. There are some for business to business such as

Company size

Job function

Industry

 

Psychographic Segmentation

Psychographic segmentation is basically depends on people’s attitude, characteristics, personality and attributes.

 

The sub categories of Psychographic market segmentation:

1.                  Personal values

2.                  Ethics

3.                  Attitude

4.                  Lifestyle

5.                  Interest

6.                  Motivation

7.                  Priorities

8.                  Beliefs

Psychological factors are somehow difficult to identify as compare to demographic factors because it depends on mind of customer, so it is complicated to identify the psychological factor of customer but it is necessary to understand the mindset of consumer to define the boundaries of our products. Psychological factors basically related to values and brand of the products.  

Behavioral Segmentation:

While as compare to demographic and psychographic segmentation focus to know the customer and Behavioral segmentation focus on behavior and mindset of consumer.

 

The sub categories of behavioral segmentation are as follows:

1.                  Purchasing power

2.                  Expenditure of consumer

3.                  Standard of living of consumer

4.                  Brand Preference  

Geographical Segmentation

It is segmentation is typically different from other segmentation. This is basically related to geographical boundaries such as bases of country and city.

                   

 The sub categories of geographical segmentation are:

1.                  ZIP Code

2.                  Country

3.                  City

4.                  Radius

5.                  Climate

6.                  Urban

7.                  Rural

 

Geographical segmentation is basically depends on location and climate or weather such some place are warm so may be sale of soft drink can be increases on warm place same as in India mainly in North India product are defined on the basis of Summer, winter and Rainy season.

Formulation of Market Segmentation Strategy

Above information shows about market segmentation and why it is needed, so it is time to know how to identify market segmentation for product.

1.                   Examine your existing customer:

The stage of your market segmentation is to analysis of existing customer because audience examination is key factor in market segmentation. The analysis or study of existing customer will make you learn about customer need and want towards product you will able to learn that how effectively customer changes their demand for the product. The market research will help to understand customer needs.

 

Interact with your customer

Interaction with customer will help to understand the four segments of your product and interaction with existing customer, ideal customer, previous customer will help to understand about different prospective of product and you will be able to fill your four segmentation.

 

Communicate with your sales team

Sales team is also most important factor they invest lot of time on consumer, so if you interact with sales tam you will get to know about consumer preference towards product and trends to the product. Sales team analysis is fully based on consumer focus so they know it very well about consumer trends and needs.

 

Check your business data

Business data is most important thing in analysis of customer; data will guide you to the information about customer that will make you better to understand about customer. Data analysis is tool that will provide you statistical information about customer preference and sale of your business. It will tell you all habits of customer such customer is buying products online or he/ she is visiting your store for buying products.

 

2.                  Create buyers personality for your ideal customer

After examine the existing customer you need to identify who is your current customer. Now you have to take data of your customer and create charter of your customer you must know who your customer is because this will help you to decide the market segmentation for your product. Proper identification of your customer will guide to know attraction of customer to particular product that can also create an opportunity for you.

3                    To know Market Segmentation opportunity 

Once you create personality of buyers the next step you have to perform is to know market segmentation opportunity for your brand.

Market segmentation can guide you to new marketing techniques, to know market segmentation opportunity you brand should answer to following question:

Which problem of customer can be solving by your product?

How your product can solve problem effective than your competitor?

Whom you want serve and what you want to achieve?

These are question will help to establish your brand in to customer mind but their some other question such as:

·                     What segment is still left by your competitor?

·                     What is the loophole of your competitor?

·                     What is segment your brand can focus better?

These are few points on which you can identify an opportunity for your product.

 

4                    Test and perform

Once you identify a market segmentation opportunity you should create few campaigns and launch your idea because to know your segmentation analysis to need to create a test that will give you result. New market test performance should be tracked and analysis.

 

 

Step of segmentation

Market segmentation is effective and complicated. There is several steps in segmentation.

1. Preliminary stage of research:

Preliminary stage of analysis is done to know customer more effectively asking them some open ended question and close ended question.

 

2.    Divide your market segmentation:

Now next stage is determine that which market segmentation you are using for your product such as Demographic, psychographic, geographic, Behavioral segmentation.

 

3.  Frame your study: It is required to frame question according to the demographic, psychographic, behavioral, geographic segmentation a mix question of all segmentation will help to know the customer better.

4.  Customer base creation: All the analysis will help you create the customer base and will connect you to the customer the statistical analysis of customer will take your customer base to the next level.

5. Test and perform: Evaluation and performance analysis will help to know the segmentation well. Segmentation is based on criteria on which customer is being focused.