Consumer Behavior

Assignment 1
Khawar Ali Sher
ERP – ID : 05003
 CB Assignment 1

Part 1: Segmenting the Market:

A market segment can be defined as:

“A group of consumers (or potential customers) who share a set of similar needs and
wants.”

Marketers use segmentation to identify which consumers are the most valuable, and which
ones have the most potential for their product. The objectives for marketers is not limited to
sales numbers only, the ultimate objective is to build product and brand loyalty and not just
make them frequent users but also to convert them into ambassadors of their products.

To successfully segment the market and identify key or potential segments, the marketer needs
to have an in-depth understanding of the consumer behavior patterns which the consumer will
exhibit in purchasing and using the product.

Market Segments:
In order to have a better understanding of how segmentation is done, we can consider only one
brand in the category of Frozen foods. With this simplification it would be easier to study what
strategies that brand has adopted and how they are delivering quality satisfaction and value to
their customers. Here we shall only consider KnNs’ Chicken products.

Age based segmentation

Age based segmentation is one of the simplest demographics based segmentation, in the case
of Frozen foods, the brand managers have to be aware that consumers of their products have a
minimum age limit. Although we see that some of the brands are trying to position themselves
with the younger target market. The purchase decision makers are still the adults. No doubt
children love fun nuggets but it is always the parents who buy the product, thus consumer
behavior of the parents is more important to study.

A respondent in the market told that they usually buy products such as chicken nuggets, chapal
Kabab and read to eat chicken tikka cubes when on way home after picking children from the
tuition center. This shows that the lower age segment has an influence on the consumer
behavior.

Location based segmenting:

Most of the company owned stores for KnN’s are located in DHA and Clifton area (7 stores) that
defines what location preference does that brand when it thinks about the customers it intends
to target.

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From where the stores have been located we can read the core of the brand managers strategy,
they do not wish to position the product for lower income segments and they are explicitly
targeting the higher income localities of the metropolis through their company owned stores.
For this segment the positioning statement is; as an alternative to fresh meat products, as a
convenience provider while ensuring quality and healthy food. For this segment, the brand is a
permanent part of the grocery list.

Life Cycle Stage:

Another element upon which STP can be performed is the life cycle stage. Individuals which are earning
but still living as bachelors’ are one of the potential segments. These people also play the role of Uncles,
Aunts and elder siblings in the family setup. Therefore they not only purchase the product for
themselves but also for the people around them. Since they have started earning recently, the also have
a higher tendency to spend. The important contributing factor here is the life style they have.

Income Segment:
The product is also available throughout the city in almost every street corner retail store or
convenience store, not only is it available, the brand is actually incurring a huge distribution
cost and maintaining relations with the retailers by providing them with branded freezers to
keep the product frozen and in best shape for the consumers.

This suggests that the income segment is not limited to the upper or the upper middle income
categories only. The brand managers have a much broader income segment in mind. Since
income also dictates a number of other factors, we can see that the brand is positioning itself
for the convenience and good taste proposition. The people who buy from retail outlets are not
frequent users of the product, they buy them occasionally. For example when they have to
serve guests, at special family get-togethers’ or prepare a meal in a hurry.

Family Type:
The independent family which has both husband and wife working are the ideal target markets
for the frozen foods category. Since both the hands are earning the level of disposable income
is high, and the time they have on their hands is very limited. Therefore, to have a quality meal
and enjoy home-made taste as well, they would be most willing to spend on frozen food
products. The above mentioned can also be regarded as the positioning statement that the
brand makes to this segment.

Therefore we see that the brand has positioned itself very strongly with such families, these are
most prominently depicted in their advertisements. These families are mostly found in the
middle and upper middle income segments of our society. In terms of population numbers, this
is also one of the fastest growing segments as currently about 60% of our population is below
the age of 25; therefore in future this segment has tremendous value.

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Brand managers are targeting all these segments and how are they managing this? Brand
managers are using the different tools available to them to reach different types of customers.
With the stores they are targeting one segment and through the retailers they are targeting a
different segment.

The table given hereunder gives an idea about the segments the brand managers for KnN’s
have considered and decided to target.

Variable Possible Segments Selected Segments Selection rationale /

medium used for
targeting
Age - 15-21 28 – 40 These are earning
- 22-28 40 - 50 people with
- 28-40 expendable incomes,
- 40-50 also running families.
- 50+
Income - 5,000 – 15,000 25,000 – 39,000 Only above a certain
(per - 15,000 - 24,999 40,000 + income level people
month) - 25,000 – 39,999 will recognize their
- 40,000 + need for the products
Life-cycle - Teenagers -Earning bachelors living Expendable income
stage - Young adults in family setup and changing life style
- Earning bachelors -Earning bachelors living Independents will
- Earning bachelors living independently independently need convenience
Family - Independent couples (Nuclear families) -Independent couples Working couples
Type - Small families -Small families mostly, ideal target
- Joint Family (Nuclear families) market
Geographic Upscale high-end residential areas and Hygiene factor
or location stores as Aghas’, Naheed’s and Metro Lifestyle difference
(Housing space 2 kanal and above) Most small
independent families
Upper and Middle class residential areas constitute these
(Housing space above 10 marla) locations.

Part 2: Quality, Satisfaction and Value

Once the market has been segmented the next task is to position the product with respect to
the consumer behavior patterns which are prevalent in the selected segments. The positioning
statement of the brand is a generic form, which in this case is advertised on the national
television level, but for each segment that positioning translates into a specific set of attributes.

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Studying the emotional and functional attributes which consumers relate to the product for
each targeted segment would take too long, for this let us consider the target market of small
independent families also commonly referred to as nuclear families.

Emotional and functional attributes:

Consumer behavior is the study of how products are consumer by the consumer right from the
purchase decision to the feedback which the consumer gives in the form of repurchase or
discontinuation of usage. Emotional attributes which the consumer places with the product
during this entire process are therefore of immense importance to the marketer.

In the selected market segment, the requirement or the need of the product is the first step
towards emotional attribution. Working women do not have the time on their hand to cook
traditional foods such as kabas or make pizzas at home. Therefore they need a solution which
will enable them to get the job done in a short span of time i.e. after coming home from work
till dinner time. This in most cases is just a couple of hours and that too after an exhausting day
of work. Therefore for this user the emotional connect with the product is very high.

One user which was interviewed called the product an essential on her grocery list, this shows
that she heavily relies on frozen foods by KnN’s and thinks that she cannot operate without the
convenience that she gets from using these products.

In monetary terms the product is providing the customers due value in the ease and comfort of
use. Only the hygiene factor for one of the respondents was enough to satisfy the extra cost
that they were bearing in purchasing the product.

From the functional stand point, the product not only makes it convenient for both the parents
to be able to prepare a quick meal for their children, but also for the early teenage segment to
make meals on their own. This functional aspect has been highlighted in one advertisement by
a brand in the same product category. Indeed such consumption pattern has been exhibited by
the target market, and especially in small families living independently.