Demographic and Psychographic Data for Kudler Fine Foods in Developing Its Marketing Strategies - Essay Example

?To Management Team From Re The importance of demographic and psychographic information January 29, This memo will provide an understanding of the importance of demographic and psychographic information for the company (e.g., Kudler Fine Foods) in developing its marketing strategies. Corollary, this memo will also elucidate when and how this demographic and psychographic information should be used in making marketing decisions that will enhance the company’s success in the market and enable it to achieve its marketing objectives. This memo will also detail aspects of demographic, psychographic data, and explain why the information is important to Kudler Fine Foods' integrated marketing communications plan (IMC). This memo will go into detail on how to develop a marketing plan that would be reliable to use throughout the various platforms of media that will focus on a particular market segment in order to increase Kudler Fine Foods’ customer base. To determine the importance of demographic and psychographic information for a company, it would be necessary to conduct an environmental analysis with reference to the age, education, and disposable income of the people residing in Kudler Fine Foods' geographical area will be conducted. The information derived from the environmental analysis will serve as the starting point of a marketing strategy that focuses on a subculture of the population that have similar socioeconomic status (Hawkins, Mothersbaugh, & Best, 2007) to afford the quality of food Kudler Fine Foods offers. The importance of determining the demographics of the population of the target market can be best illustrated with our experience in Encinitas. While Kudler Fine Foods has achieved relative success in Encinitas, data found in their demographics shows that would be ill advised to open a location, or spend advertising money 30 miles south in the city of Chula Vista as what the data will show below. Encinitas (2010) Persons between the ages of 18 and 65: 38.8% (Appx.) Bachelor’s degree or higher: 54.3% Per capita income: $48,226 Chula Vista (2010) Persons between the ages of 18 and 65: 45.1% (Appx.) Bachelors degree or higher: 26.4% Per capita income: $24,646 ("Quick Facts", 2012). The above demographic data reveals that while Chula Vista has a larger population between the ages of 18-65, they are less educated and earn wages far below the median income of those living in Encinitas. This tells marketers that they have less disposable income to spend or afford the premium offerings and prices of Kudler Fine Foods line of products. In short, there may be more potential customer in Chula Vista but only few of them can actually afford our products. Psychographic Information This demographic data may be important but is insufficient for Kudler Fine Food to develop an IMC plan that will be effective in marketing our products across a multitude of media formats. To be able to develop an effective IMC, it would necessitate to determine their related lifestyles. This would require a psychographic analysis (in addition to demographic analysis) in regard to what Solomon calls the three variables of activities, interests, and opinions (AIO’s). “Thus, Kudler Fine Foods can “boil down” a person’s lifestyle by discovering how he spends his time, what he finds interesting and important, how he views himself and the world around him” (Solomon, 2009, p. 240), and identify a general lifestyle segmentation that Kudler Fine Foods can target accordingly. Psychographic analysis of the market can be done through Kudler Fine Foods’ website where it can conduct direct surveys of current and potential customers for comparison to determine their AIO’s. For example, Kudler's marketers can ask on a scale of one to five, how important are sporting events to you, (activities); how important is your family’s health, (interests); the quality of a product is more important than its price, (opinions). This will allow Kudler Fine Foods to narrow geographic areas and be able to determine which media platforms can best cater to the interests of its current customer base. Positioning Strategy for Kudler Fine Foods The information gathered through demographic and psychographic analysis will help Kudler Fine Foods segment its market to make the company’s market positioning strategy more effective. Market segmentation is "the process of dividing a market into groups of similar consumers and selecting the most appropriate group(s) and individuals for the firm to serve" (Olson & Peter, 2008, p. 369). Market segmentation allows marketers to identify the basic segments of the market that potentially can be satisfied with their products or services. Once the market segmentation phase is completed, it would now be easier for us to develop a positioning strategy for our products. In developing positioning strategy for Kudler Fine Foods, the company should use the approach called "positioning by product user" or a class of users to position its products and compete against other brands to enhance its probability of success in the market. Several companies (e.g., Revlon and Johnson & Johnson) used this approach successfully. More specifically, Revlon’s Charlie cosmetics line was positioned through association with a specific lifestyle profile. Johnson & Johnson repositioned it shampoo from a product primarily used for babies to one used by people who wash their hair frequently and therefore need a mild shampoo. This new approach increased Johnson & Johnson's market share from three to 14%. The rationale for Kudler's decisions in positioning its products by user is that this marketing strategy target opens opportunities for additional marketing strategies. Through this approach, Kudler could also implement a strategy that goes after a large share of one or a few specific segments. For instance, Whole Foods Market, which is relatively small with its 186 stores compared to Kroger (2500 stores) and Wal-Mart (6,700 stores) has grown faster than Wal-Mart and Kroger because Whole Foods market has offered organic, natural, and gourmet foods to affluent consumers who would not purchase the above products at Kroger or Wal-Mart's stores (Armstrong & Kotler, 2009). Finally, deter,omomg the characteristics of the market through the demographic and psychographic analysis would enable Kudler Fine Foods to formulate an effective IMC that synchronizes its various its marketing effort and communication channels to deliver a clear, consistent and compelling message about the company and its brands to its various audiences and channels that includes its market, supplier, retailer, employees, stakeholders, interest groups, government regulating agencies and media making its marketing strategy effective in increasing its customer base. Works Cited McKee, Steve. “Integrated Marketing: If You Knew It, You'd Do It“. May 10, 2012. Bloomberg. November 26, 2012 http://www.businessweek.com/articles/2012-05-10/integrated-marketing-if-you-knew-it-youd-do-it Ruiz, Joseph. “6 Reasons Starbucks marketing communications strategy is so effective” . Strategic Marketing Solutions. . November 26, 2012 http://www.strategicdriven.com/marketing-blog/bid/67270/6-Reasons-Starbucks-marketing-communications-strategy-is-so-effective Sophie van der Vecht, Neni Pogarcic, Hidde van der Dussen, Tim Ensing, Dan Mackinnon and Lucia Suchankova. “Starbucks Coffee Company: An Integrated Marketing Communications Plan”. April 2006. Starbucks. November 26, 2012 http://www.marktonderzoekdoen.nl/bestanden/Starbucksv_Amsterdam.pdf Read More