Grocery stores have to meet certain general standards in order to be successful.
However, they do segment their marketplace in the sake of profit, store
policies, or marketing strategy. There are three major segmented groups in the
customer population, they are:
1) Time- pressed and convenience seekers. This kind of customer is probably younger, with
the highest amount of children, students, or/and urban with low income. They look
for the fastest shopping experience possible. Stores that try to cover this
niche use time saving strategies such as online shopping, child care services
in stores for free, self checkout, gas station basic grocery, drive through, several
cashier lines, or they place the most basic products near the exit and cashier.
These services tend to be more expensive. This niche market accounts for approximately
36.70% of buyers.
2)
Sophisticated. They look for quality and good service experience. Usually
middle-aged, elders, with higher education and income above average. They count
for 29% of the grocery customers. Companies meet their expectation by offering
a fine final product experience. Grocery companies also pay attention to
location, since this kind of customers usually are in wealthy zones. Obviously, the good service, organization, and the rare products are going to be
reflected on the prices.
3)
Middle Americans. Their main interest is the
price/value factor. This group is middle-aged, with the highest amount of High
School graduates, and average income. They count for 35% of buyers. In order to
reach them, companies use product augmenting, credit and frequent shopper
programs, special offers, and low pricing.
Grocery companies use a combination of these characteristics most of the
times, but they definitely have these three groups in mind when they plan their
marketing plan. They base it in geography and demographics depending what kind
of products they sell and what kind of customers they are targeting. There are
remarkable differences among grocery stores that have chosen a specific group. For
example, Publix and many others have different styles of stores for wealthy neighborhoods and average wealth zones. Of course the stores that target sophisticated
customers are more expensive and have a better customer service. Segmentation is
a big tool for grocery store’s marketing plan.
I totally agree with the fact that some stores with a differentiated style choose to target wealthier segments of people. This ties in to our support of Whole Foods for our final project. They have decided to target a somewhat wealthier market of people, but this allows them to raise prices because the people can afford what they want to buy, which is organic food.
ReplyDeleteWould you say that a supermarket like Whole Foods exclude 2 out of the 3 of these segments, and if so, isn't this hurtful for the company overall?
ReplyDeleteWell, they would be losing a lot of business if they just neglect any of those segmentation. I think they cover all of them, however, they specialize on wealthier-"healthier" customers. In order to succeed in such a competitive industry they surely have to have the three categorizations in mind.
ReplyDeletenot necessarily. a greater quantity of goods sold does not necessarily make for more profits. by whole foods having such good margins they do not need to sell as much as a lower priced store would have to sell to make the same profits. therefor whole foods can afford to exclude people to a certain extent.
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