Market Segmentation of Grocery Companies

This assignment analyzes the market segmentation strategies employed by three prominent Australian companies: Woolworths, Coles Supermarkets, and Treasury Wine Estates Limited. It delves into their respective target demographics, evaluates their segmentation effectiveness, and ranks them based on their approach. The analysis also offers specific recommendations for each company to enhance their market penetration and cater to diverse consumer segments.

Running head: MARKETING AND ENTREPRENEURSHIP
Marketing and Entrepreneurship: Market Segmentation
Student Name
University name
Author Name

MARKETING AND ENTREPRENEURSHIP
Estimating income distribution in New Zealand’s Northern Territory
The organizations ahs to identify existing wealth distribution in North Island’s Northern territory
of New Zealand prior to the income distribution. In order ensure better profitability the company
has to evaluate the net worth of average household before investing money on the selected
market (Fagereng et al. 2016). The necessary information related to economic stability, poverty
or inequality of the region can be gathered from the Northern Territory government. The average
house hold income of the Northern Territory’s household reflects the socio –economic condition
of the country. Gini Coefficient could also be implemented by the organization to get
information related to the area’s wealth distribution (Hoeller et al. 2014). The Gini Index or Gini
Coefficient is the process of measuring statistical dispersion that represents the inhabitants’
wealth distribution. The income percentage of the people of Northern Territory will be carried
out against the cumulative income share. This process is effective in measuring the distribution
inequality. The result is expressed as the ratio between o and 1. The index works between the
perfect equality line and perfect inequality line. The Lorenz Curve between the two lines
indicates the coefficient. The higher coefficient highlights high unequal distribution. The
Coefficient can be measured through the formula: Gini Coefficient = A/A+B. A represents the
Lorez Curve and B is the area below the Lorez Curve. Line of equality is achieved when A is 0
and the more value A possesses, the more unequal the income distribution is (Bakare 2012). New
Zealand generally score low in Gini Coefficient which represents low level of inequality.
However, some scholars believe that Gini Coefficient fails to assess the data explicitly (Mori,
Nakata and Kaneda 2015). Here the Gamma Distribution application is useful to measure the
pattern of income distribution. There are parametric and non parametric estimation processes of
income distribution. The Gamma Distribution mixture can be used to overcome the issues of

MARKETING AND ENTREPRENEURSHIP
inflexibility. If such methods are used effectively the estimation could be successful which will
help the company to invest the right amount in the right place.
(Source: Stats.govt.nz 2015)
A company like Ananas Anam could invest on starting a new business in New Zealand
(Ananas-anam.com 2017). Their new revolutionary product Pinatex can consider entering into
the Northern Territory. The income inequality is low in the area and high per capita income
shows the country’s huge economic growth (OECD 2017). The consumer behavior of New
Zealand can work in favor of the business of new product like Pinatex (Nielsen.com 2015).
Majority of the citizens can afford expensive products. New Zealand has low unemployment rate

MARKETING AND ENTREPRENEURSHIP
that indicates positive future financial market for the company (Stats.govt.nz 2017). The Pinatex
product is based on Pineapple fibre and the harvesting of pineapple in the Northern Territory is
growing so it adds to the company’s advantages for doing business in the selected region.

MARKETING AND ENTREPRENEURSHIP
Comparison of market segmentation: Treasury Wine Estates, Woolworths and Coles
Supermarkets
Marketing segmentation is considered to an important part of organizational marketing
strategies. Through the market segmentation the companies divide their target markets in various
segments based on their characteristics, needs and consumer habits. Here for evaluating the
market segmentation the three selected companies are Treasury Wine Estates, Woolworths and
Coles Supermarkets.
Treasury Wine Estates offers a range of premium wines formulated in their vineyards of
9000 hectares (Treasury Wine Estates 2017). The route to market model has been followed by
the company to attract maximum segments of the consumers. Though they are trying to catch all
the customer segments but children, younger millennial and sick elderly people are excluded.
More than 70 brands of wine are distributed almost 30 million cases every day. 3500 employees
of the company actively participate in the corporate social responsibility practice where
community engagement and consumer satisfaction are encouraged.
Woolsworth is a supermarket chain that offers various products from grocery to alcohol.
They target every possible consumer group in of the market through their huge range of
products. The company has market capital of 26 billion (Woolworths.com.au 2017). The
company offers products for infants to elderly people which made them one of the biggest
retailers in the world. The company contributes significantly in the country economy. The
company claims to offer fresh and healthy food to the citizens, which gained it more profit than
its competitors. It has generated 59 billion dollar of revenue in 2016 (Woolworths.com.au 2017).
The marketing elements are focused on the price, place, product and promotion to decide their

MARKETING AND ENTREPRENEURSHIP
market segmentation. Woolsworth offers easily accessible quality products. The consumer
satisfaction is always prioritized by the company like during recession they provided the
customer with cost effective products. All mediums are used by the company to promote their
activities. They also offer discounts and other offers which help it to maintain its sustainable
consumer base.
Coles Supermarkets also targets the whole of the consumers instead of segments. This is
Wesfarmers owned popular super market chain in Australia. The company offers food, safety
equipments to alcohol. The Company’s acquisition of other brands has enhanced their business
methods. There are almost 100000 employees working in the organization serving millions of
consumers. The company has generated revenue of 33 million in 2016 (Coles.com.au 2017).
By evaluating the market segmentation of the three companies, they can be ranked as
following:
Rank of the Organization Name of the organization.
1st Woolworths
2nd Coles Supermarkets
3rd Treasury Wine Estates Limited
The Treasury Wine Estate should focus more on expanding their consumers. They must
invest of effective promotion to attract the millennial and high income citizens. As they focus on
their premium services, this strategy will enhance their high end consumers who will avail more
of their premium services.

MARKETING AND ENTREPRENEURSHIP
Coles supermarket and Woolsworth target full consumer section so they should increase
their production line. They can implement reverse integration process in developing new
products. The production cost should be minimized and cheaper products should be offered in
order to increase their target consumers.

MARKETING AND ENTREPRENEURSHIP
Reference
Bakare, A.S., 2012. Measuring the income inequality in Nigeria: the Lorenz Curve and Gini co-
efficient approach. American journal of economics, 2(1), pp.47-52.
Coles.com.au. (2017). [online] Available at: https://www.coles.com.au/ [Accessed 28 Aug.
2017].
Employment and unemployment. (2017). Stats.govt.nz. Retrieved 27 August 2017, from
http://www.stats.govt.nz/browse_for_stats/income-and-work/employment_and_unemployment.a
spx
Fagereng, A., Guiso, L., Malacrino, D. and Pistaferri, L., 2016. Heterogeneity in returns to
wealth and the measurement of wealth inequality. The American Economic Review, 106(5),
pp.651-655.
Hoeller, P., Joumard, I., Pisu, M. and Bloch, D., 2014. Mapping income inequality across the
OECD. Income Inequality in OECD Countries: What are the Drivers and Policy Options.
Introducing Piñatex™ - ananas anam. (2017). ananas anam. Retrieved 27 August 2017, from
http://www.ananas-anam.com/pinatex/
Mori, S., Nakata, D. and Kaneda, T., 2015. An Application of Gamma Distribution to the Income
Distribution and the Estimation of Potential Food Demand Functions. Modern Economy, 6(09),
p.1001.
New Zealand - OECD Data. (2017). theOECD. Retrieved 27 August 2017, from
https://data.oecd.org/new-zealand.htm

MARKETING AND ENTREPRENEURSHIP
The Changing NZ Consumer. (2015). Nielsen.com. Retrieved 27 August 2017, from
http://www.nielsen.com/nz/en/insights/news/2015/the-changing-nz-consumer.html
Tweglobal.com. (2017). Home - Treasury Wine Estates. [online] Available at:
https://www.tweglobal.com/ [Accessed 28 Aug. 2017].
Woolworths.com.au. (2017). [online] Available at: https://www.woolworths.com.au/ [Accessed
28 Aug. 2017].