MARKET SEGMENTATION

Market segmentation

Market segmentation

Terms Of References

On the 7th of October, our agency was assigned an investigation on the reasons that companies segment their customer base, the major trends that could affect the business in the foreseable future, and the factors that should be evaluated before the expansion in UK.



Procedure

In order to obtain up to date relevant information and responses, the following procedures were adopted by the McDonald's Marketing Managers.

Secondary Data

In order to get secondary data relevant to our investigation subject, the McDonald's Marketing Managers searched for information in libraries, financial newspapers, the internet (McDonald's Web Site), the company's annual reports and the company's journals.

McDonald's Marketing Managers visited the libraries of Middlesex University in Hendon, to research information from previous published reports of McDonald's, to reveal their financial information, and the future product plans. The agency also researched additional data, in order to examine the Brand's positioning in the market and the possibility of success in case of expansion in oversea markets (UK).

The Internet was another useful resource for our investigation. We gathered valuable information about the management, the finance and marketing, the products and the general function of the company, and we collected useful charts showing the current position of McDonald's and the economy in UK.

A number of financial newspapers were searched to collect up to date information on McDonald's and investment prospects in UK.

The Company provided us with last year's annual reports, journals and financial reports that were conducted by other agencies and departments.

Primary Data

In order to obtain primary data, the McDonald's Managers visited some McDonald's branches in the UK in order to gain an understanding about the treatment that the staff provides to the customers with different culinary habits.

The quality and quantity of the products and service offered were inspected and some of the employees were interviewed in order to find out their views on how to serve the customers that have different preferences.



Findings

“The essence of successful segmentation lies not in fragmentation but in building an excellent understanding of the market place” Sally Dibb, Warwick Business School. “The identification of individuals or organizations with similar characteristics that have significant implications for the determination of Marketing Strategy is called Market Segmentation” (David Jobber, principles and practice of marketing). Marketing segmentation consists of dividing a diverse market into a number of smaller, more similar submarkets. The objective is to identify groups of customers with similar requirements, so that they can be served effectively while being of a sufficient size for the product or service to be supplied efficiently. Usually, particularly in consumer markets, it is not possible to create a marketing mix that satisfies every individual's particular requirements exactly. Market segmentation provides a commercially viable method of serving these customers by grouping those with similar needs together.

Now why do companies segment their customer base? The gains of marketing segmentation are of vital importance for the companies. First of all, market segmentation provides the basis for the selection of target ...