• Analysis of Market Segmentation

Market segmentation analysis is the study of customers, divided into smaller groups, to understand their
specific characteristics like behavior, age, income, and personality. It’s easier for companies to advertise
when they’re marketing a smaller segment of customers; this way, each campaign can be highly
targeted and precise to the characteristics of each group. How a company should showcase a product or
service depends on which group they’re targeting.

Q Why do businesses use market segmentation?

A) It’s the main reason any company will use market segmentation when offering promotions, sales, and
new products. When the company can hyper-focus on the details of segmented groups (rather than
customers at mass), leveraging the benefits is easier than ever.

Market segmentation creates the perfect environment for engagement, customer retention, and
acquisition. Because, when a company creates a campaign and sends to the masses, the responses will
be hit or miss — with a higher chance of missing than hitting. This is because people want specific things
at specific times, but only if the product, service, or promo ticks the right boxes.

Q Common types of market segmentation in the analysis?

A) There are actually many ways company’s can segment customer characteristics. But some are more
popular (and common) than others. Here are five of the more viable options to consider for your market
segmentation analysis.

Geographic segmentation- Segmenting customers by geography means understanding the environment

where the customer lives. Needs change based on your physical environment; someone living in Japan
may buy items to survive natural disasters like typhoons, tsunamis, and earthquakes. But people living
inland, not surrounded by water or have ever experienced an earthquake, are less likely to worry about
such dilemmas.

Demographic segmentation- Usually combined with geographic segmentation, demographic

segmentation is one of the most popular segmentation types used by companies. This segmentation
focuses on characteristics like age, gender, income, education, race, and more. It is arguably the most
simple segmentation applicable in market segmentation analysis.

Psychographic segmentation- Psychographic segmentation focuses on the behavioral traits influencing

customer buying habits. In this case, variables like personality, opinions, lifestyle, and values are tracked
and measured. Compared to the other two segmentations on the list, psychographic traits can be harder
to pin down. But it’s necessary for most industries, especially health and fitness.

• Life Cycle of Product

A product life cycle is the length of time from a product first being introduced to consumers until it is
removed from the market. A product’s life cycle is usually broken down into four stages; introduction,
growth, maturity, and decline.

Product life cycles are used by management and marketing professionals to help determine advertising
schedules, price points, expansion to new product markets, packaging redesigns, and more. These
strategic methods of supporting a product are known as product life cycle management. They can also
help determine when newer products are ready to push older ones from the market.

Introduction

The introduction stage is launching the product in the market, trying to develop a market for the
product and building product awareness. It is the most crucial stage for the survival of the product.

Growth

When a product enters the growth phase the sales and profits of the product take off, thereby reducing
the cost per customer. Increased number of customers lead to increase in sales and profit and seeing
the opportunity in this segment, more competitors start entering the market.

Maturity

As the competition gets more intense in the growth and maturity stage, the company tries to
differentiate its product from the competitors.

Decline

The decline stage of a product life cycle is associated with decrease in revenue due to market saturation,
high competition, and changing customer needs.

• Maggi- Maggi has been every Indians comfy food for more than 3 decades. Nestle launched Maggi in
the year 1982 as the first instant noodle brand in India. Although it was difficult to position Maggi in its
early years, it can easily be said that it has positioned itself so strongly in the minds of the consumer that
it has become a brand in itself.

The Maggi brand originates from Switzerland where in 1886, Julius Maggi created a recipe of flavours to
bring added taste to meals. This marked the beginning of Maggi brand and its convenient products. In
the year 1947, Nestle acquired Maggi.

• Distribution channel of brand

NIKE distributes its products through three major channels:

• By selling products to wholesalers in the US and international markets

• By direct-to-consumer (or DTC) sales, which include in line and factory retail outlets (see graph below)
and e-commerce sales through www.nike.com

•Sales to global brand divisions

• Retail partnerships

NIKE, Inc. (NKE) has also tried to create category-specific retail destinations by partnering with footwear
retailers such as Foot Locker, Inc. (FL), JD Sports, and Intersport.

• NIKE’s sales mix and retail slant

Sales to wholesalers are the largest revenue category. However, this category’s contribution in the sales
mix contracted from 83.3% in fiscal year 2012 to 79.2% of revenues in fiscal year 2014. DTC sales, on the
other hand, increased from 16.2% to 20.3% over the same period. This is significantly lower than the
ratio of DTC revenues for NIKE’s rivals in the space. In the most recent quarter, the respective ratios of
DTC revenue to total revenue for Under Armour Inc. (UA), VF Corporation (VFC), and Adidas AG (ADDYY)
were 25.3%, 23%, and 25.4%.

NIKE is focusing on direct selling to the consumer with its DTC initiative. Comparing NIKE’s distribution
channels, direct sales to the consumer provide higher margins than do sales to wholesalers. In fiscal year
2014, DTC revenues accounted for ~20% of total NIKE Brand revenues as compared to 18% in fiscal year
2013. On a currency neutral basis, DTC revenues grew 22% in fiscal year 2014 and 30% in 1Q15, year-
over-year.

The company is attempting to grow the DTC category to $8 billion in sales by fiscal year 2017, up from
$5.3 billion in fiscal year 2014. That’s an annual growth rate of 14.7%, compounded.

• Design questionair- primary data

collection
One of the most widely used research techniques can be defined as collecting data through written
questions. There are a number of different ways in which questionnaires can be administered; for
example: posted to the intended respondents or administered over the telephone or face-to-face. A
questionnaire design provides a quantitative description of trends, attitudes, or opinions of a population
by studying a sample of that population. From sample results, the researcher generalises or makes
claims about a population

To establish people's habits in relation to the consumption of soft drinks.

1) What is your age?

a) 18-24

b) 25-34

c) 35-44

d) 45-54

e) 55-64

e) 65-74

f) 75 or older

2) What is your gender?

a) Female

b) Male

c) Other(specify)

3) How health conscious do you consider yourself to be?

a) Not very

b) Very health conscious

4) What type of soft drinks do you consume?

a) Bottled water still

b) Bottled water sparkling

c) Pepsi/coke

d) Energy drinks
e) other(please specify)

5) How often do you consume soft drinks?

a) Never

b) Daily

c) Numerous times per day

d) weekly

e) monthly

f) only on special occasions

6) When choosing a soft drinks what influences your decisions?

a) calories

b) price

c) free from artificial flavouring and colouring

d) taste

e) other(specify)

7) Are you concerned by the level of sugars in soft drinks?

a) yes

b) no

c) i am not sure

• Different Sampling Methods

Sampling is a technique of selecting individual members or a subset of the population to make statistical
inferences from them and estimate characteristics of the whole population. Different sampling methods
are widely used by researchers in market research so that they do not need to research the entire
population to collect actionable insights.

It is also a time-convenient and a cost-effective method and hence forms the basis of any research
design. Sampling techniques can be used in a research survey software for optimum derivation.

For example, if a drug manufacturer would like to research the adverse side effects of a drug on the
country’s population, it is almost impossible to conduct a research study that involves everyone. In this
case, the researcher decides a sample of people from each demographic and then researches them,
giving him/her indicative feedback on the drug’s behavior.

Types of sampling: sampling methods

1) Probability sampling: Probability sampling is a sampling technique where a researcher sets a
selection of a few criteria and chooses members of a population randomly. All the members have an
equal opportunity to be a part of the sample with this selection parameter.
A) Simple random sampling: One of the best probability sampling techniques that helps in saving
time and resources, is the Simple Random Sampling method. It is a reliable method of obtaining
information where every single member of a population is chosen randomly, merely by chance. Each
individual has the same probability of being chosen to be a part of a sample.

B) Cluster sampling: Cluster sampling is a method where the researchers divide the entire population
into sections or clusters that represent a population. Clusters are identified and included in a sample
based on demographic parameters like age, sex, location, etc. This makes it very simple for a survey
creator to derive effective inference from the feedback.

C) Systematic sampling: Researchers use the systematic sampling method to choose the sample
members of a population at regular intervals. It requires the selection of a starting point for the sample
and sample size that can be repeated at regular intervals. This type of sampling method has a
predefined range, and hence this sampling technique is the least time-consuming.
D) Stratified random sampling: Stratified random sampling is a method in which the researcher
divides the population into smaller groups that don’t overlap but represent the entire population. While
sampling, these groups can be organized and then draw a sample from each group separately.

2) Non-probability sampling: In non-probability sampling, the researcher chooses members for

research at random. This sampling method is not a fixed or predefined selection process. This makes it
difficult for all elements of a population to have equal opportunities to be included in a sample.

A) Convenience sampling: This method is dependent on the ease of access to subjects such as
surveying customers at a mall or passers-by on a busy street. It is usually termed as convenience
sampling, because of the researcher’s ease of carrying it out and getting in touch with the subjects.
Researchers have nearly no authority to select the sample elements, and it’s purely done based on
proximity and not representativeness. This non-probability sampling method is used when there are
time and cost limitations in collecting feedback. In situations where there are resource limitations such
as the initial stages of research, convenience sampling is used.

B) Judgmental or purposive sampling: Judgemental or purposive samples are formed by the

discretion of the researcher. Researchers purely consider the purpose of the study, along with the
understanding of the target audience. For instance, when researchers want to understand the thought
process of people interested in studying for their master’s degree. The selection criteria will be: “Are you
interested in doing your masters in …?” and those who respond with a “No” are excluded from the
sample.

C) Snowball sampling: Snowball sampling is a sampling method that researchers apply when the
subjects are difficult to trace. .

D) Quota sampling: In Quota sampling, the selection of members in this sampling technique happens
based on a pre-set standard. In this case, as a sample is formed based on specific attributes, the created
sample will have the same qualities found in the total population. It is a rapid method of collecting
samples.

• Content Analysis
Content analysis is a research method used to identify patterns in recorded communication. To conduct
content analysis, you systematically collect data from a set of texts, which can be written, oral, or visual:

• Books, newspapers and magazines

• Speeches and interviews

• Web content and social media posts

• Photographs and films

Content analysis can be both quantitative (focused on counting and measuring) and qualitative (focused
on interpreting and understanding). In both types, you categorize or “code” words, themes, and
concepts within the texts and then analyze the results.

Q) What is content analysis used for?

Researchers use content analysis to find out about the purposes, messages, and effects of
communication content. They can also make inferences about the producers and audience of the texts
they analyze.

Content analysis can be used to quantify the occurrence of certain words, phrases, subjects or concepts
in a set of historical or contemporary texts.

Advantages of content analysis

• Unobtrusive data collection

You can analyze communication and social interaction without the direct involvement of participants, so
your presence as a researcher doesn’t influence the results.

• Transparent and replicable

When done well, content analysis follows a systematic procedure that can easily be replicated by other
researchers, yielding results with high reliability.

• Highly flexible

You can conduct content analysis at any time, in any location, and at low cost – all you need is access to
the appropriate sources.

Disadvantages of content analysis

• Reductive

Focusing on words or phrases in isolation can sometimes be overly reductive, disregarding context,
nuance, and ambiguous meanings.
• Subjective

Content analysis almost always involves some level of subjective interpretation, which can affect the
reliability and validity of the results and conclusions.

• Time intensive

Manually coding large volumes of text is extremely time-consuming, and it can be difficult to automate
effectively.

How to conduct content analysis

1. Select the content you will analyze

2. Define the units and categories of analysis

3. Develop a set of rules for coding

4. Code the text according to the rules

5. Analyze the results and draw conclusions