Report: Segmentation, Targeting, and Positioning for Cadbury Company

This report analyzes the segmentation, targeting, and positioning (STP) strategies of Cadbury, a leading chocolate company. It defines market segmentation, explores consumer and business market segmentation bases (geographic, demographic, psychographic, and behavioral), and outlines the crite...Read More

Running Head: UNDERSTANDING SEGMENTATION, TARGETING AND
POSITIONING 1
UNDERSTANDING SEGMENTATION,
TARGETING, AND POSITIONING

UNDERSTANDING SEGMENTATION, TARGETING AND POSITIONING 2
Task 1- Segmentation, targeting, and positioning
In this study, I have been assigned with the task of writing a report as a sales and marketing
manager by explaining the segmentation, targeting and positioning and how it will be applied
to the company. The company that has been taken into consideration for this study is
“Cadbury”.
1. Understand segmentation in consumer and business markets
A) An explanation of the following
How to define a market
In order to sell products and services, a company targets a particular market which based on
the nature and behaviour of consumers. A market is basically a place, where buyers and
sellers accumulate to make a deal. However, targeting a particular market does not mean that
a company is excluding individuals who do not fit into the criteria (Dunbar, 2010). Rather
defining a particular market is helpful for an organisation to concentrate on their marketing
dollars as well as brand message. Some of the ways by which the target market can be
defined are as follows:
- Observing the present consumer base
- Checking out the competition
- Analyzing the product and service of the company
- Choosing particular demographics for targeting
- Considering the psychographics of the target
- Evaluating the decision
How to map a market

UNDERSTANDING SEGMENTATION, TARGETING AND POSITIONING 3
The market highlights the various kinds of position that a particular product or service could
take within market on the basis of two dimensions that are essential for the consumers. Some
of the dimensions consist of Necessity vs. luxury, light vs. heavy, high price vs. low price and
etcetera. The market mapping is mainly done by studying the different market situations that
are presented on the map for identifying the trend and parallel variables customers and
product or service. The market mapping helps to spot out the gaps in a market, and it also
encourages using market research (McDonald & Wilson, 2016).
Deciding to what level a market can be segmented
It has been observed that there are various ways of the market segmentation. However, there
is 4 main type of market segmentation that is commonly used by famous companies all across
the globe. Once a firm decide the product that they will be going to make then the market
segmentation is decided by them. The ways by which a market can be segmented are:
evaluating which markets or market that the company wants to pursue, qualifying the chosen
market or markets, and gathering as well as analyzing the data on the market that is selected
by the company. The different kind of segmentation of market can be done as follows:
Demographic segmentation, psychographic segmentation, behavioral segmentation, and
geographic segmentation.
The bases for segmentation that can be used for consumer markets
The top four bases that are used for segmenting consumer market are as follows: Geographic
segmentation, demographic segmentation, behavioral segmentation, psychographic
segmentation.

UNDERSTANDING SEGMENTATION, TARGETING AND POSITIONING 4
Demographic segmentation- It divides the markets into groups that are based on variables
such as family size, age, gender, education, income, occupation, nationality, religion, and
race.
Geographic segmentation- It is the segmentation that is completely based on the geographical
units of the consumers such as regions, nations, neighborhoods, and states.
Psychographic segmentation- It mainly pertains to the personality traits and the lifestyle of
the consumers. In the case of certain products, buying behavior mainly depends on lifestyle
and personality characteristics.
Behavioral segmentation- in this segment the buyers are mainly divided into certain groups
with regards to their attitude, knowledge towards the response, or use of the specific
products. Behavioral segmentation consists of the segmentation on the basis of occasions,
user status, usage rate loyalty status, buyer-readiness stage, and attitude.
The bases for segmentation that can be used for business markets
It has been observed that just like for the consumer markets the business markets needs to be
segmented so that the company will have the ability to develop a marketing program that is
quite successful. The main segmentation bases for the business markets tend to vary a little in
terminology, but they are quite same in application and concept to the process of segmenting
the markets of the consumers. The main segmentation base that is used in the business
markets consists of the following: business description, geographic location, demographics,
culture/personality and operating or the behavioral practices (Philip Kotler and et al., 2009).
The criteria for meaningful and measurable segments
There are certain criteria required for the measurable and meaningful segments. It will not
only make sure that the consumers are more likely to identify the products and purchase but

UNDERSTANDING SEGMENTATION, TARGETING AND POSITIONING 5
they will also find out the products that are proper for their lifestyle. Furthermore, it also
reduces the wastages of resources as well as the quantum of time spent on marketing. The
criteria are as follows: substantial, measurable, differentiable, accessible, and actionable.
The benefits of segmentation
It is quite evident that there are a huge amount of benefits that are related to segmentation.
One of the main benefits of the segmentation for the businesses is that it tends to help them in
terms of gaining a competitive advantage in the marketplace by analyzing different consumer
groups and also by targeting particular products for meeting their demands. Other benefits
consist of the following: Enhancing the competitiveness, market expansion, retention of
potential consumers, enhancing profitability and having better communication.
B) In order to apply segmentation, targeting and positioning to our organization, your
report should include an explanation of the following:
The ways to identify the segments most likely to purchase the products of the company
There are some of the ways by which Cadbury can ensure that the consumers will be
purchasing the products of their company. The following are some of the ways:
Personalization- Understanding how various groups of consumers will be affected by the
offers given by the company (Dibb, 2010).
Predictive- The Company can use the historical behavior pattern of their consumer in order to
influence and predict their intention for purchasing the product
Purchasing behavior- It is one of the most important elements that will inform the company
that a consumer will buy their products or not.

UNDERSTANDING SEGMENTATION, TARGETING AND POSITIONING 6
Usage- The products that are most used by the consumers will also inform the company that
they are likely to buy their newly launched products.
The organization’s business strategy and the ways it may affect which segments we
would choose to target
One of the main purposes of the Cadbury revolves around “make today delicious”. It has
been observed that Cadbury is the market leader in the business of chocolate so it is quite
evident that their business strategy is also quite unique from their other competitors. The
business strategy for the company is as follows:
- Maintaining image leadership[ via a superior marketing mix
- Increasing depth of consumption, targeting the day-to-day chocolate consumers via
the generating impulse
- Enhancing the consumption of chocolate among consumers through low price
chocolate packets and also focusing on distribution channel of the firm.
- Building a competitive edge in business of sugar through bringing within market
efficient and qualitative sugar added products.
A system that could assist the organization in targeting
The system that would be assisting the Cadbury in terms of targeting is the scoring and
weighting approach. The Scoring is usually done using a point spread where each point has a
meaning that can be easily understood and applied by evaluators (Tanner & Raymond, 2015).
Positioning with regards to the organization’s brand values
Brand value basically refers to various characteristics of the brand for which it is famous
within the market – example reliability, quality, and etcetera. In selection of values for
Café Cadbury, the aim is to make sure that those values are selected that spreads the message
‘chooses Cadbury'. The main values are premium, novelty, high quality, friendly service, and

UNDERSTANDING SEGMENTATION, TARGETING AND POSITIONING 7
appeal towards the adults, contemporary and relaxing. Keeping the above-mentioned brand
values of Cadbury the positioning of the company will be creating a position in the
marketplace for their products. The company will be giving consumers premium offers
through consumers will be able to experience 3D environment. This would mean consumers
will be able to get a real physical environment.
C) Finally please conclude with an explanation of the following:
Elements of the extended marketing mix can be used for supporting the product
positioning
There are some of the elements of the marketing mix that can be quite helpful for supporting
the positioning of the products to a great extent. The main elements that will be helping the
company in their product positioning are as follows: Promotion and process.
Positioning problems that can be encountered by Cadbury
It has been observed that there are some of the positioning problems that are encountered by
each and every company when they tend to position their products in the marketplace.
Cadbury may also face some of the problems related to the positioning of their products in
the marketplace. Some of the positioning problems that the company can encounter are as
follows:
- The position the company achieve may not be the position that they sought
- Although Cadbury is an established brand still they may struggle to describe what
they will be going to offer their consumers? In terms of the new products
- Cadbury may also choose to describe their new practice in their language but not by
the client’s language.
- They may also have a problem with the competencies with which they will be fighting

UNDERSTANDING SEGMENTATION, TARGETING AND POSITIONING 8
- The problems regarding the competing brands in the chosen product category
- If one of the main people leaves the firm the opportunities in terms of the positioning
also dries up
It can be suggested the problems regarding the positioning then they can use the perpetual
mapping as it is one of the most widely used technique with regards to when deciding for
the positioning. With this particular technique the perception of the target consumers with
regards to the different brands in the given product category are found and plotted and
then a perpetual map is developed (Lynn, 2011).
The challenges organizations may face when repositioning a product
In terms of repositioning also the company may face some of the challenges. Repositioning is
not at all a simple task or simple decision that can be implemented in a successful manner.
The following are some of the repositioning challenges that can be faced by Cadbury during
repositioning their products:
- One of the main challenges is the developmental costs: The investment in
communications and advertising production costs, altering any other communication,
the repackaging expenditure such as websites and etcetera. Furthermore, if the
product repositioning is supported by various product improvements, then the upfront
development costs associated with the product repositioning will be even greater.
- Confused positioning- If the repositioning is not properly executed then the end
outcome is quite likely to be a confused positioning. The target market will have the
confused type of understandings and messages about the product.
- Change in perception- Repositioning requires that a different perspective of the
current products shall be infused in the mindset of consumers as compared to the

UNDERSTANDING SEGMENTATION, TARGETING AND POSITIONING 9
perception that is currently within their mind. A change is overall perception would be
required.
- Cost and time- This has to be kept in mind that repositioning requires whole lot of
efforts in terms of cost as well as time. It is a slow and steady process and will come
with time.
How organizations can de-position competitors
Organizations such as Cadbury can de-position their competitors by some of the ways.
Firstly, the real qualitative picture of the competitors products can be drawn in fron of the
consumers and this can be effective when the consumers are having too much faith on the
level of quality of competitor’s products. Secondly, Cadbury can consider launching a
challenge where they may ask the people taste the chocolates after hiding the brand names
and they must also ask which one tastes better and if they love Cadbury’s taste then they can
de-position their competitors quite easily (Weinstein, 2013).

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References
Dibb, S. (2010). Market Segmentation Success–Making it Happen!. Strategic
Direction, 26(9).
Dunbar, I. (2010). Market Segmentation: How to Do It, how to Profit from it. Goodfellow
Publishers Limited.
Lynn, M. (2011). Segmenting and targeting your market: Strategies and limitations.
McDonald, M., & Wilson, H. (2016). Marketing Plans: How to prepare them, how to profit
from them. John Wiley & Sons.
Philip Kotler, Kevin Keller, Dr. Mairead Brady, Malcolm Goodman, Mr. Torben Hansen
(2009). Marketing Management: Prentice Hall.
Tanner, J., & Raymond, M. (2015). Principles of marketing. University of Minnesota
Libraries Publishing.
Weinstein, A. (2013). Handbook of market segmentation: Strategic targeting for business
and technology firms. Routledge.