Price segmentation - Price segmentation is another common segmentation used in market segmentation

analysis. Although segmentation by demographic also mentions household income, price segmentation
dives deeper. Personal income greatly impacts what people buy; someone with higher personal income
can afford to splurge on luxury products, while someone who is working class is more likely to save extra
income for a rainy day. This segmentation is popular for luxury brands, particularly automotive
companies like BMW and Tesla.

Time segmentation - Less common than other segmentation types, time segmentation can still be
effective. Physical stores have an open and close time, and their hours can impact sales. Some stay open
all year round, while others choose “dead” days, like Sunday and Monday, to close because of slower
sales traffic. Time segmentation also pertains to holiday sales and promotions, like Black Friday and
Cyber Monday. These happen only once a year, and customers spend more since they expect the time-
gated deals and sales.

Q) How to conduct your own market segmentation analysis

A) Despite the many segmentation types, market segmentation analysis can be effective without being
confusing. When getting started, make sure you have these four components:

1. Preliminary research

2. Segment your list

3. Create your study

4. Now, test!

• Preliminary research

This may be one of the longer points of your analysis, so be prepared. Preliminary research will require
getting to know your customers in-depth. Talking with them directly is the best way to achieve this. You
can talk in-person, on the phone, or (more commonly) through online surveys. The more information
you have, the easier it’ll be to segment your audience.

• Segment

Now that you have data about your customers, it’s time to segment them. You can choose based on the
above segmentation types (price, time, psychographic, demographic, and geographic). I’d advise not to
segment your customers into all of these segments; that’s when it gets messy and confusing.

• Create your study

When you’re creating your survey, be sure to ask a variety of questions related to the above segments.
Then, take the answers and determine the best ways to segment your customers. For example, if the
majority of your customers have high personal income, segmenting by price may be smart. If most are
thrifty shoppers, the time segment may be optimal because of (holiday) discounts. If your customers
seem to belong in more than one segment, that’s perfectly normal.

• Now, test!

Now that you have your data and your customers segmented, it’s time to make sure the segmentation is
useful. You can send out brief campaigns, discounts, or other marketing materials to see if it resonates
with the customers in your segments. If it doesn’t, you may need to go through your data again and re-
segment your customers.

• Final Thoughts

Market segmentation analysis involves understanding your customers based on specific characteristics,
both physical and behavioral. Companies use this analysis to create hyper-focused sales and
promotions. By focusing on the smaller segments (and what they value most), it’ll be much easier to
resonate with them. Customers are more likely to pay attention when an offering is tailored to their
needs at the moment, rather than showcasing an abundance of benefits that don’t particularly matter to
each individual.

INTRODUCTION OF MAGGI 2-MINUTE NOODLES

• Its a Brand of Instant Noodle made by Nestle India Ltd.

• It was Found by the Maggi family in Switzerland in the 19th century.

• Nestle launched Maggi for the first time in India in the year 1982.

The Brand is popular in :

Australia

New Zealand

Singapore

India

South Africa

Malaysia

• Nestle wanted to explore the potential for such an Instant food among the Indian market.

• It took several years and lot of money for Nestle to establish its Noodles brand in India.

• Now it enjoys around 90% market share in this segment.

Over the Years Maggi has Launched several products under its Brand Name.

ISSUES

Different phases product life cycle of Maggi

Why Atta Noodle was a Failure ?

Strategies taken to Establish new product category.

What measures NIL should take to sustain the image of a popular brand image.

Stage at which Maggi is in the product life cycle.

PRODUCT LIFE CYCLE

A Concept that provides a way to trace the stages of a product's acceptance, from its
introduction(birth)to its decline (death).
INTRODUCTORY STAGE

• High-failure Rates

• No Competition

• Frequent product and Modification

• Limited Distribution

• High-marketing and product costs

• Promotion focuses on awareness and Information

2-minute instant noodle was great success.

Market Penetration Strategies

• Promotional campaigns in school.

• Advertising strategies: - focusing on kids.

New product innovation according to the need of consumers:

Veg Atta Noodles

Dal Atta Noodles

Cuppa Mania

Availability in different packages:

50 gms.

100 gms.

200 gms.

Family packs (400gms.).

Conducting regular market research

GROWTH STAGE

• Increasing rate of sales

• Entrance of competitors

• Initial healthy profits

• Promotion emphasizes brand ads

• Prices normally fall

• Development costs are recovered

• 10 yrs back it enjoyed around 50% market share in this segment which was valued at around 250
crores.

• In order to improve sales , NIL changed the formulation of Maggi noodles in 1997.

• However, this proved to be a mistake, as consumers did not like the taste of the new noodles.
• In March 1999, NIL reintroduced the old formulation of the noodles, after which the sales revived.
Over the years, NIL also introduced several other products like soups and cooking aids under the Maggi
brand. Offered in more sizes, flavors, options

MATURITY STAGE

• Declining sales growth

• Saturated markets

• Extending product line

• Stylistic product changes

• Heavy promotions to dealers and consumers

• Prices and profits fall

• In 2003 Hindustan Lever Ltd was all set to take on Nestle's bestselling Maggi 2- minute noodles by
launching a new category of liquid snacks under its food brand, Knorr Annapurna.

• The new product, called Knorr Annapurna Soupy Snax, was priced aggressively at Rs 5 and had four
variants: two chicken options and two vegetarian.

• Like Maggi, Soupy Snax will be an in-between-meals snack and will be targeted at all age groups,
particularly office-goers. Many consumer products are in Maturity Stage.

DECLINE STAGE

If no product innovation brought

• Long-run drop in sales

• Large inventories of unsold items

• Elimination of all nonessential marketing expenses Rate of decline depends on change in tastes or
adoption of substitute products
Nike’s distribution channels

Speaking of Nike’s (NKE) distribution channels, the company also creates category-specific retail
destinations by partnering with footwear retailers such as Foot Locker (FL), JD Sports, and Intersport.

Sales to wholesalers are Nike’s largest revenue category. However, this category’s contribution to the
sales mix contracted from 83% in fiscal 2012 to 68% of revenues in fiscal 2019.

Nike’s fiscal year ends on May 31 but DTC sales increased from 16% to 32% during the same period. This
is significantly lower than the ratio of DTC revenues for Nike’s rivals in this space. Meanwhile, both
Wholesale and DTC are important distribution channels for Nike.

Nike Direct and distribution strategy

In its distribution channels, Nike focuses on direct selling to the consumer with Nike Direct. Comparing
Nike’s distribution channels, direct sales to the consumer provide higher margins than do sales to
wholesalers. Nike’s DTC sales have increased considerably, as has its contribution to its overall sales mix.

On a constant-currency basis, Nike’s sales to wholesale customers increased by 6% in fiscal 2019

compared to fiscal 2018. The company’s sales through Nike Direct expanded 13% over this period. The
company’s DTC sales rose to $11.7 billion in fiscal 2019, up from $5.3 billion in fiscal 2014. That’s a CAGR
(compound annual growth rate) of 17.2%.

Nike brick-and-mortar distribution channel

Nike’s DTC approach is two-pronged—the Nike-owned retail stores, which are the brick-and-mortar
stores, and its digital platform. Nike’s factory stores provide a premium product to consumers shopping
for value. Due to the value proposition involved, they tend to attract higher shopper volumes.

At the end of fiscal 2019, Nike operated 384 retail stores in the United States. Of these, 217 were Nike
brand factory stores, while 29 were Nike brand inline stores. Among the remaining stores were 109
Converse and 29 Hurley stores. Nike had six major distribution channels across the United States at the
end of fiscal 2019.

Looking at Nike’s international distribution channels, the company operated 768 stores outside the
United States at the end of fiscal 2019. Of these, 648 were Nike factory stores, while 57 were Nike brand
inline stores. The remaining 63 stores were Converse stores. Meanwhile, online sales have emerged as a
key distribution channel for Nike, as well as other companies in the space.
Nike’s growth

Incorporated in 1968, Nike has built a brand that has strengthened over the decades. The company is
positioned for further growth. Nike’s revenues increased from $27.8 billion in fiscal 2014 to $39.2 billion
in fiscal 2019. This translates into a CAGR of 7.1%.

The company is targeting annual revenue growth in the high single digits until 2023. Let’s examine the
key growth drivers that the company is banking on.

An effective distribution strategy would be key for Nike. Although sales to wholesalers accounted for
about 68% of Nike’s global revenues in fiscal 2019, the company has gradually worked to tilt its sales mix
toward direct-to-customer sales, which have comparatively higher margins.

DTC sales include sales through company-owned retail outlets and e-commerce sales. Meanwhile, Nike
expects to expand its online distribution channel further and expects 30% of its sales to come from
online sales by 2023.

Nike’s online distribution strategy

Nike’s focus on digital distribution is paying off. In fiscal 2019, the company’s digital sales increased 35%
year-over-year. In comparison, the company’s consolidated revenues increased by only about 7%.

Nike’s focus has always been on providing customers with well-constructed, uniquely designed
products. Most Nike products are leaders in their individual categories. The company invests extensively
in R&D (research and development) for new technologies and their applications for existing product
lines, depending on consumer preferences.

Nike’s product portfolio features premium products that command higher prices. This allows the
company to differentiate its products in the marketplace and charge higher prices than the competition.
Nike is also focused on providing a personalized customer experience.

Nike and China

Despite having operations in 190 countries, North America remains Nike’s biggest market. Notably,
North American sales constituted about 43% of the company’s total revenues worldwide in fiscal 2019.
Over the last few years, Nike’s sales in China have increased at a brisk pace, even as its sales growth in
the United States has moderated. China’s growing middle class and the growing sporting environment
are important revenue opportunities for brands like Nike.

Given the ongoing US-China trade war, Nike also risks tariff escalation from the Trump administration.
Despite the recent optimism in the US-China trade deal, we might have to wait until the tariff
uncertainty settles down.

Nike’s ongoing player endorsements and sponsorship deals with teams and global sporting events keep
the brand in the limelight, enabling it to showcase new products. A combination of product innovation
and pricing power spearhead the company’s efforts to stay ahead of the pack.

Given consumers’ increasing preference toward online shopping, both in the United States and globally,
Nike’s digital distribution strategy might be key to its success. Simply put, devising an effective e-
commerce strategy is key for all consumer companies, and Nike is no exception.

8) Are you concerned about the use of artificial flavouring and sweeteners in soft drinks

a) Yes

b) No

c) I am not sure
9) If there was a"clean" soft drink in the market with zero calories, zero caffein, zero sodium, vegan,
gluten free and free from artificial sweeterns, colours, flavouring and sugar would you consider
swapping your existing drink of choice for this

a) Yes

b) No

c) May be

d) I don't drink soft drinks

10) Of you buy canned Soft drinks how many do you tend to buy at a time

a)1

b)6

c)12

d)24

e)48

f) I don't buy cans of soft drinks