Analysing the organisational approach to segmentation,targeting and positioning - Assignment Example

?Analyzing the Organizational Approach to Segmentation, Targeting and Positioning Executive Summary Procter and Gamble also acknowledged as P&G is one of the leading packaged product providers in the world. The company operates globally and offers a variety of products under different brand names. Furthermore, in the highly dynamic business environment, marketing strategy is considered to be a crucial determinant for attaining competitive advantage and for gaining profitability with the aim of surviving at the marketplace. Thus, this paper consists of critical strategic analysis of P&G related with market segmentation, target market and positioning followed in different geographical regions. Table of Contents Executive Summary 2 Market Segmentation Strategy 5 Targeting Strategy 7 Positioning Strategy 9 Conclusion 12 Recommendations 13 References 15 Introduction Procter and Gamble, popularly known as P&G is the one of the leading consumer packaged products company. The company’s annual sales turnover is nearly US$84 billion with annual net earnings exceeding US$10billion. It has also established a brand portfolio of about US$25 billion. Additionally, the company offers a wide range of products which include household care products, grooming products, personal healthcare products and beauty products among others (Procter & Gamble, 2012). The company operates its business in almost all the continents across the world. Evidently, it operates in 180 countries located in different continents. The company offers its products through grocery stores, membership club stores, discount stores and through merchandisers. Moreover, the company employs in excess of 110000 employees globally. From the critical perspective, it has been identified that markets in which P&G operate are highly competitive due to the presence of global and local competitors. Despite high competition faced by the company, it has been able to sustain its business profitability and to establish itself as one of the renowned brands across the world. It is worth mentioning that the company’s primary mission and purpose is to offer superior quality branded products and services that significantly contribute towards improving the lives of its worldwide spread customers. Over the period of time, the company has prospered dramatically and is continuously able to improve its overall performance and thereby increase it revenue earnings capability. With due consideration to the above recognized facts, the paper intends to critically analyze P&G’s approach to segmentation, targeting and positioning. Furthermore, this paper entails certain valuable recommendations for the company so that it is able upheld its existing market dominance and superiority along with focusing on offering quality products to its long-list of trusted consumers. Market Segmentation Strategy It has been critically observed that as a key strategic differentiator from its close competitors, the company offers a wide range of products to its globally dispersed customer base. In general, the company’s business strategies are fundamentally focused on outsized scale operations, product innovation and development along with strong product branding in order to seek greater competitive advantages. The company’s strategy is continuously directed towards innovating new products and selling these products to its diverse assortment customers in order to attain sustainability and constant growth. Moreover, the company has made considerable investments worldwide and has significantly involved in joint ventures, acquisitions along with establishing alliances to enlarge their business operations and market reach (Graul & et. al., 2006). Additionally, the company operates under three major global business units namely P&G Household Care, P&G Family Health and P&G Beauty. Correspondingly, these global business units of the company are primarily separated into five major divisions which include Healthcare, Snacks and Coffee, Fabric Care, Baby and Family, P&G Beauty and Home Care (Graul & et. al., 2006). The market segmentation in the current business arena is often being perceived as one of the primary elements. Due to its global operations, the company’s marketing strategies undertake unique market segmentation strategies. Notably, the company operates in markets where there is a high degree of competition. Responsively, it has been identified that the company essentially segments its market on two primary bases which include segmentation based on demographic and geographic behavioral basis (Sehgal, 2013). It is worth mentioning that demographic market segmentation is related with dividing of consumers into segments that are based upon the demographic standards which may comprise age, family size, occupation, gender, income, nationality, education and social class among others. The market segmentation based on demographic values and standards are used by many business sectors including P&G due to the fact that it is often easy to identify and measure variables based on these segmentations (Garrett & et. al., 2011). The company in the United States largely segments its consumers based on ethnic differences and age along with making appeals to these segments to buy and use their products through various promotional tools and other product positioning strategies (Sandhusen, 2008). Moreover, its beauty care products are generally segmented on the basis of income and social classes. The company also segments its market based on the geographic factors. Generally, it has divided its markets into five major segments based on the geographic factors which comprise North America, Western Europe, Central & Eastern Europe, Middle East & Africa, Latin America and Asia. The company also segments its market based on the market maturity factor which includes developed market and developing market. In the recent times, the market segmentation based on behavior has been widely gaining popularity. Contextually, P&G also divides its market on the basis of behavioral segmentation. The company on the basis of behavioral segmentation intends to divide its customers based on their preferences, needs and behavioral characteristics rather than using merely a single dimension as its segmentation strategy (Garrett & et. al., 2011). It can be identified that P&G has been extremely careful with its market segmentation strategies. Unarguably, it can be stated that its market segmentation strategy is not limited to one group of customers or any specific market. Instead, the company intends to produce products according to the needs and the wants of different customer groups and geographic regions. In other words, the market segmentation strategies of the company duly emphasize on economic as well as luxury customers spread across the world. Targeting Strategy In the recent years, P&G has adopted ambitious growth strategy in order to reach more and more customers across the globe. The company recognizes its consumers and their expectations to be crucial and the most important factor for attaining mutual success (Procter & Gamble, 2009). Primarily, the goals of the company in the recent times have been to penetrate in emerging markets such as India and China which are highly populous. The company is predominantly witnessed to be aware of most of its customers’ needs and wants, thereby the company’s activities are duly focused on developing products in order to meet the different needs and wants of varying consumer groups. Moreover, the company targets people belonging to different age groups, genders and people with diverse lifestyle (Best & et. al., 2011). Additionally, the company not only targets the high income consumer groups in developed and emerging countries but it also intends to attract those consumer groups that are earning relatively low-income. Furthermore, it can be stated that the company substantially focuses on meeting the needs of female population across the world by offering a wide range of beauty care products. Thus, it has been identified that women population forms a large and key consumer base for the company’s most of the products (Procter & Gamble, 2012). P&G also targets men population as one of the potential customer groups for its products. The company has identified that men’s skin care is emerging as one of the rapidly expanding market segments dealing with beauty and personal care. Consequently, the company has widely been engaged in producing beauty and grooming products in order to avail the substantial advantages arising from the growing markets for both men and women beauty and grooming products. Evidently, the company has recently introduced Olay for men, which signifies that it is strongly determined to target the men population along with making due penetration to this segment as well so that the company can generate greater preferences from a diverse range of consumers. Moreover, the company’s target market strategy is also directed towards meeting the needs of children. Essentially, its products such as Pampers can be directly linked with its target market related with children. The company’s home care products such as Tide aims at targeting women population falling under the age group of 18-54. The major reason behind such targeting can be identified by the fact that most of the women population in between the aforesaid age group is engaged in making decisions relating to laundry products (Scribd Inc, 2013). Precisely stating, it can be recognized that the company’s strategy is primarily concentrated on targeting varied customer groups belonging to almost all age-groups ranging from babies to adult people of different genders. More specifically, the company targets women, baby, home-owners and stay-at-home parents. Positioning Strategy Positioning is one of the fundamental elements of marketing. In this regard, P&G has rendered significant efforts in order to position its brands lucidly in the minds of its target customer groups. P&G operates in highly competitive marketplaces where there are numerous competitors available to impose significant competitions to the company. It can be argued that the company follows one of the best brand management strategies. It efficiently distinguishes each of its brands from its other brands. This enables the company to avoid possible competition amid its brands and further aids the company to target different consumer markets along with imbibing varying benefits to the company. In the recent times, the company has been significantly considering the design of its products as one of the crucial components for strengthening its brand positioning at the marketplace. The company significantly uses product attributes in order to position its brands at the marketplace. For instance, P&G introduced disposable diapers under the Pampers brand which facilitated to distinguish its Pampers brand with other brands of its competitors in the minds of its target customers. Similarly, Head & Shoulders positions itself as purely an anti-dandruff shampoo. Moreover, the company follows product differentiation strategy by offering superior quality products than its competitors which facilitates it to establish itself as one of the trusted brands for its customers. In addition, the company’s positioning strategies are also focused on rendering attractive packaging in order to differentiate its products’ from the other major competitor active in the marketplace. The company also undertakes extensive promotional activities in order to build a strong brand image for its products (Luo, 2000). P&G’s promotional activities are generally focused upon country basis. Additionally, the company undertakes promotional activities according to its market segmentation strategies. It also engages copy strategy to position its products in the minds of its target customers. A copy strategy can be observed as the basis on which the company expects its customers to buy its brands over its competitors’ brands. The copy strategy clearly states the benefits that have been promised by the brand and inculcates the major basis for buying of the company’s brands. It is worth mentioning that this strategy facilitates the company to relate the merits of its offered products with its advertising. Moreover, it has been argued that an effective copy strategy saves substantial time in the course of positioning due to the reason that this strategy is based upon the customer expectations and their needs. Furthermore, the company also performs corporate social responsibilities as one of the primary tools of its promotional strategies which facilitates in improving its brand position at the marketplace. In order to derive a comprehensive as well as apparent notion about the customer perception regarding the company’s products perceptual mapping is being presented below: Perceptual Mapping Comments: P&G undertakes optional pricing strategies which includes product line pricing, competitive pricing, cost-plus pricing and distribution pricing. Additionally, it has been recognized that the prices of P&G’s products are not substantially high. Instead, the prices of its products are comparatively perceived to be low than its major competitors. On the other hand, the company claims to offer superior quality of products to its geographically dispersed customer base. It has been argued that it offers high quality beauty care products which have significantly changed the life of many women across the world. Evidently, the demands for the company’s products are increasing favorably in developed as well as emerging markets such as India and China (Leaders Magazine, Inc, 2012). Thus, it can be stated that the company offers the products that are of superior quality and relatively low priced than its competitors. Conclusion P&G deals in offering consumer packaged products. The company entails a wide array of brands under its flagship and offers products to more than 180 countries across the world. Over the years, the company has been able to expand its business significantly and it not only concentrates upon its operations in developed markets but it has been substantially engaged in offering a carried assortment of products in rising markets such as India and China. The company’s strategies have been primarily directed towards inventing and innovating products according to the needs and the changing trends along with customer preferences in order to attain continuous growth and better competitive advantages over its competitors. Notably, the company is faced with intense competitions from global as well as regional corporations while operating internationally. In order to mitigate the threat imposed by its competitors and successfully survive at the global marketplace, it has duly segmented its market. The market segmentation strategy of the company generally differs from one country to another. Essentially, the company segments on the basis of demographic, geographical and behavioral aspects. Demographic segmentation of the company usually divides the market on the basis of age, income and lifestyle. Behavioral segmentation relates with segregating consumers on the basis of their expectations and needs. Accordingly, the company’s target market encompasses all age groups ranging from babies to adult male and female population. Furthermore, it makes stringent efforts to position its brand in the minds of its target market customers. P&G pays significant consideration on quality of its products and undertakes widespread advertisement activities. Moreover, the company engages product differentiation and copy strategy in order to create demand consolidate its brand image. Precisely, stating the marketing strategies followed by the company can be regarded as highly efficient and appreciable. Recommendations It has been identified from the above discussion that P&G operates globally in diverse continents. Additionally, the company offers a wide range of products under different brand categories. In other words, the need for managing multi-brands is crucial factor for the company in order to retain and sustain the demands of all of its brands amid the targeted customer groups. Furthermore, it has been ascertained that the company usually emphasizes more on its beauty care products than other business segments. Thus, it is advisable that P&G should equally consider certain other segments as a crucial component of its business such as snacks, coffee and pet care products. Moreover, in order to profitably survive its business in highly dynamic business world where there exists greater product substitute, the company should constantly involve in innovating new products. In other words, it should make considerable expenditure on research and development (R&D) activities so that changing preferences and needs of the customers are identified and are duly met. Contextually, it is important to identify that effective and efficient market segmentation, target market and positioning are crucial in order to gain substantial competitive advantages over its competitors. Price of its products is another crucial factor that has significant influence on the positioning strategy. The company should carefully consider its pricing strategies without compromising with its products’ quality. It is advisable that it can compare the prices of its products with its competitors’ prices in order to ensure high shifting cost for its customers. References Best, A. & et. al., 2011. P&G Targets Emerging Markets to Stay Competitive. Thunderbird Student Voices. [Online] Available at: http://knowledgenetwork.thunderbird.edu/students/2011/08/22/pg-targets-emerging-markets-to-stay-competitive/ [Accessed April 01, 2013]. Graul, L. A. & et. al., 2006. Procter & Gamble, Unilever and the Personal Products Industry. University of Maryland, University College, pp. 1-85. Garrett, R. & et. al., 2011. Procter and Gamble (NYSE: PG). Trinity University. [Online] Available at: http://www.trinity.edu/smf/inc/reports/fl2011/pg.pdf [Accessed April 01, 2013]. Luo, Y., 2000. How to Enter China: Choices And Lessons. University of Michigan Press. Leaders Magazine, Inc, 2012. Fostering Diversity. Women Leaders Vol. 35, No. 1, pp. 33-34. Procter & Gamble, 2009. Our Values and Policies. Sustainable Development and P&G. [Online] Available at: http://www.pg.com/images/company/who_we_are/pdf/values_and_policies907.pdf [Accessed April 01, 2013]. Procter & Gamble, 2012. Operations and Suppliers. Supplier Engagement. [Online] Available at: http://www.pg.com/en_US/sustainability/operations_suppliers/supplier_engagement.shtml [Accessed April 01, 2013]. Procter & Gamble, 2012. P&G Annual Report 2012. Financial Highlights. [Online] Available at: http://annualreport.pg.com/annualreport2012/files/PG_2012_AnnualReport.pdf [Accessed April 01, 2013]. Sehgal, B., 2013. Touching Lives, Improving Lives. SlideShare Inc. [Online] Available at: http://www.slideshare.net/veni17sehagl/pg-9098095 [Accessed April 01, 2013]. Sandhusen, R., 2008. Marketing. Barron's Educational Series. Scribd Inc, 2013. Procter and Gamble’s Tide. Reasons For Marketing Strategy. [Online] Available at: http://www.scribd.com/doc/31305682/Procter-and-Gamble-Marketing [Accessed April 01, 2013]. Read More