Group 5

Case Study Chapter 7

JAEGER

1. How is the fashion market segmented?

In this case, Jaeger chooses the first-order segmentation that targets younger shoppers
who rely on the demographic of age and with the socio-economic that have proved more
willing to spend through the recession. => rely on demographic.
The second-order is the young shoppers that at the age of 20 to 25, with the purchasing
behavior: have interest of sale. => rely on customer behavior.

2. Why and how is Jaeger trying to appeal to younger shoppers?

Jaeger is trying to appeal to younger shoppers because they have proved more willing to
spend through the recession.
Jaeger knows the situation of economics and they understand their target customer at the
recession, Jaeger makes the sale with lower price that can’t affect the positioning of the
company in the Luxury fashion market, this also has more products being sold but the
value of the company cannot lower than their company.
By understanding the behavior of customers when shopping that “customer who shops
with us maybe only during the sale”, they can attract that customer all the year round by
that promotion.
NESTLÉ
1. It is having a huge market potential in France and Germany and other brands such
as France's L Company and Germany's D company. Niche market refers to an
important portion of market in which a particular brand of a company enjoys a huge
share. Whenever demand for one such brand of products is more in the region then
the market is termed as a niche market because of the huge demand for the product.
Market segmentation refers to the manner which companies divide their marketing
operations in to various segments.

They do the segmentation based on geographical regions, based on gender, based on

age groups, based on consumer tastes and perceptions. Ideally a company will be
segmenting the market by using a number of types of segmentation. The European
market is one of the largest markets for the coffee products such as N company's
Nespresso. The Nespresso brand gets around 90% of the brands sales in Europe
alone and in the sale in U.S and Asia accounts for only 5 %. Thus, the market offers a
huge opportunity for other to capitalize on the demand, thus other competitors such
as D Company from Germany and Company from France are trying to enter into the
market.

2. Why is Nestlé’s response to this onslaught ‘not to respond’? 

Rather than engage in a price war and start selling its capsules in mass retail outlets
for the first time, nestlé has decided to boost even further its luxury marketing
approach for Nespresso. This to maintain the “luxury” of the Nespresso brand and
compete with different angles of the business such as quality and service.
Instead, they focus on the “trinity concept”: the quality of the coffee, stylish coffee,
and customer service.
Capsules must be bought online, by telephone, or at the 190 or so Nespresso
boutiques around the world.
Customers are enrolled as members of the Nespresso club and loyalty program.

3. What bases could marketers use to segment the coffee market?

Marketers can use attitudinal characteristics to segment the coffee market: with
little differences in the product of coffee, we can use the following bases to segment
the market:
- Behavioral segmentation
Based on benefits Nestlé segmented their market in an efficient way. So they
make available Cerelac for those customers who want more profit from the
product. Cerelac includes a high nutrition for baby’s whose age is less than 1
year. Two very important things: rice and milk remain added in cerelac. On the
other hand, cerelac includes vitamin, mineral and all major useful nutritious
elements for babies.

- Demographic segmentation
 Nestlé segmented market area for its main products based on the generation.
For the products Cerelac, Lectogen, Koko Krunch, Nido, Nestle divided the
market area segment for new born babies and children of different ages.

- Geographical segmentation
Nature: Nestlé Singapore segmented its market for Nescafe Ice depends on the
geographic weather: warm, hot and cold.
Nescafe Ice: A coffee which may be consumed with ice. During warm season
consumers make this coffee with normal, chilled or cold water mixing ice cubes
to bring freshness in their body.

- Psychographic segmentation
Lifestyle and personality: Nestlé provides KIT KAT to these people who really
want to enjoy chocolate. Nescafe 3 in 1 is for exclusively those customers who
are really busy and do not have enough time. They can save their time by taking
Nescafe 3 in 1. All the things sugar, milk, and coffee remain mixed.