arket segmentation is a concept in economics and marketing.

A market segment is a subset of a market made up of people or organizations with one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function. A true market segment meets all of the following criteria: it is distinct from other segments (different segments have different needs), it is homogeneous within the segment (exhibits common needs); it responds similarly to a market stimulus, and it can be reached by a market intervention. The term is also used when consumers with identical product and/or service needs are divided up into groups so they can be charged different amounts. The people in a given segment are supposed to be similar in terms of criteria by which they are segmented and different from other segments in terms of these criteria. These can broadly be viewed as 'positive' and 'negative' applications of the same idea, splitting up the market into smaller groups. Examples: Gender Price Interests

While there may be theoretically 'ideal' market segments, in reality every organization engaged in a market will develop different ways of imagining market segments, and create Product differentiation strategies to exploit these segments. The market segmentation and corresponding product differentiation strategy can give a firm a temporary commercial advantage.
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1 "Positive" market segmentation 2 Positioning 3 Using Segmentation in Customer Retention

3.1 Process for tagging customers 4 Price Discrimination 5 References

[edit]"Positive"

market segmentation

Market segmenting is dividing the market into groups of individual markets with similar wants or needs that a company divides into distinct groups which have distinct needs, wants,

behavior or which might want different products & services. Broadly, markets can be divided according to a number of general criteria, such as by industry or public versus private. Although industrial market segmentation is quite different from consumer market segmentation, both have similar objectives. All of these methods of segmentation are merely proxies for true segments, which don't always fit into convenient demographic boundaries. Consumer-based market segmentation can be performed on a product specific basis, to provide a close match between specific products and individuals. However, a number of generic market segment systems also exist, e.g. the system provides a broad segmentation of the population of the United States based on the statistical analysis of household and geodemographic data. The process of segmentation is distinct from positioning (designing an appropriate marketing mix for each segment). The overall intent is to identify groups of similar customers and potential customers; to prioritize the groups to address; to understand their behavior; and to respond with appropriate marketing strategies that satisfy the different preferences of each chosen segment. Revenues are thus improved. Improved segmentation can lead to significantly improved marketing effectiveness. Distinct segments can have different industry structures and thus have higher or lower attractiveness [edit]Positioning Once a market segment has been identified (via segmentation), and targeted (in which the viability of servicing the market intended), the segment is then subject to positioning. Positioning involves ascertaining how a product or a company is perceived in the minds of consumers. This part of the segmentation process consists of drawing up a perceptual map, which highlights rival goods within one's industry according to perceived quality and price. After the perceptual map has been devised, a firm would consider the marketing communications mix best suited to the product in question. [edit]Using

Segmentation in Customer Retention

The basic approach to retention-based segmentation is that a company tags each of its active customers with 3 values: Tag #1: Is this customer at high risk of canceling the company's service? One of the most common indicators of high-risk customers is a drop off in usage of the company's service. For example, in the credit card industry this could be signaled through a customer's decline in spending on his or her card.

Tag #2: Is this customer worth retaining? This determination boils down to whether the post-retention profit generated from the customer is predicted to be greater than the cost incurred to retain the customer. Managing Customers as Investments. [1] [2] Tag #3: What retention tactics should be used to retain this customer? For customers who are deemed save-worthy, its essential for the company to know which save tactics are most likely to be successful. Tactics commonly used range from providing special customer discounts to sending customers communications that reinforce the value proposition of the given service. [edit]Process

for tagging customers

The basic approach to tagging customers is to utilize historical retention data to make predictions about active customers regarding: Whether they are at high risk of canceling their service Whether they are profitable to retain What retention tactics are likely to be most effective

The idea is to match up active customers with customers from historic retention data who share similar attributes. Using the theory that birds of a feather flock together, the approach is based on the assumption that active customers will have similar retention outcomes as those of their comparable predecessor. [edit]Price

Discrimination

Where a monopoly exists, the price of a product is likely to be higher than in a competitive market and the quantity sold less, generating monopoly profits for the seller. These profits can be increased further if the market can be segmented with different prices charged to different segments charging higher prices to those segments willing and able to pay more and charging less to those whose demand is price elastic. The price discriminator might need to create rate fences that will prevent members of a higher price segment from purchasing at the prices available to members of a lower price segment. This behavior is rational on the part of the monopolist, but is often seen by competition authorities as an abuse of a monopoly position, whether or not the monopoly itself is sanctioned. Examples of this exist in the transport industry (a plane or train journey to a particular destination at a particular time is a practical monopoly) where business class customers who can afford to pay may be charged prices many times higher than economy class customers for essentially the same service.

.0 Introduction Foster's Group Limited (FGL) is a global premium-branded beverage company dedicated to delivering quality products enjoyed by millions around the world every day. FGL is a leading global drinks company, with a portfolio of wine, beer, spirits, ready-to-drinks, ciders and nonalcohol brands. Foster's and Carlsberg Breweries A/S (Carlsberg) today entered into a long-term agreement for Foster's to brew, market, sell and distribute Carlsberg's beer brands in Australia. FGL is widely regarded as a policy leader in areas such as alcohol tax, liquor licensing and responsible consumption and is a regular contributor to government and also FGL has a proud history of contributing to the community. FGL in the community program builds on this legacy by contributing to the communities in which we live and work, both directly and through our employees. FGL employs over 10,000 workers around the world, has market capitalisation of $10.8 billion and is an Australian Security Exchange (ASX) Top 100 company. FGL has strong long term strategies to develop into a worlds leading alcoholic beverage company that is focus on improvement in core drink brands, improve global supply chain in terms of cost, quality, flexibility and reliability and innovation is key to growth strategy of company with regional focus (Fosters Group Limited, 2009). 2.0 PEST ANALYSIS A good way of looking at the wider environment is to do a PEST analysis because complex environment also exist outside an organisation and can strain immense pressure on the way in which it can operate. Although this environment does not exist as a pleasant physical presence its effects are often very powerful (David Needham and Robert Dransfield, 1997). 2.1 Political Environment of India According to its constitution, India is a sovereign, socialist, secular, democratic republic. India has a federal form of government. The legal framework of India is based on English common law with regional application which accepts compulsory ICJ jurisdiction with reservations. General election in India takes place every five years which means that India has a rather stable political system. The candidate who gets the majority coalition is elected to be the prime minister. India as a politically stable country can be an advantage for FGL to start operating there as there will be no fluctuation in the business framework. Indo-Australian government trade and economic relations today are active and there are lot of opportunities to exploit the Indian economy and FGL could take the advantage of exploiting these opportunities. Also, there are growing numbers of Australian companies operating in India across a wide range of sectors and this is a proof that India and Australia have good trade relations (Central intelligence agency, 2009). 2.2 Legal Environment of India During the past years, the government of India has reduced controls ...

osters Group Marketing Plan 2005 Table of Contents Executive Summary Page 3 Situational Analysis Page 4 SWOT Analysis Page 4 Our Mission Page 4 Our Values Page 5 Our Vision Page 5 Our Goals Page 5 Our Target Market Page 5 Marketing Objectives Page 5 Marketing Strategies Page 6

Projected Expenditure on Marketing Page 6 Market Research Page 7 MarketingHow and Where? Page 7 Implementation, Monitoring and Controlling Key indicators of effectiveness Page 8 Controls Page 8 Research Page 8 Financial Forecast Page 9 Earnings Summary Page 9 Executive Summary The following integrated marketing plan provides an outline for what is needed to pursue a successful expansion into the Asian beer market. To date, lack of marketing has been the catalyst for our poor returns in this region. To remedy this, we need to spend a good deal of money establishing ourselves as a serious brand in this region. The Asian market is potentially the most lucrative of all markets where we operate, and to date, has been little more than a drain on our resources, offering little or no returns. Through an extensive marketing campaign, including sponsorship of popular events in Asia, such as Soccer championships, and an extensive TV advertising campaign, we can establish ourselves as the leading beverage choice throughout Asia, to add to the titles we already hold in Great Britain and Australia, to name but a few. Our financial situation is clearly in a state where this form of expansion can be easily supported, given We have very healthy profit margin It is a very lucrative market We are a global company, and need to look globally in terms of distribution We have a very broad target market with our wide range of beers, and this will assist in many areas, most notably with our marketing, as we are able to reach such a broad spectrum of people who make up our target market. Our marketing campaign outlined in the following report is for the next three years, and it will be evaluated on a monthly basis, giving room for change as it is needed, and our close alliance with our market researchers will ensure that change is implemented where it is needed. There is no reason why, with proper marketing; that the Asian region can not develop into the most lucrative and valuable market in which Fosters operates. If the marketing is effective, we can reach as many people in this sole market, as almost all of our other markets put together.

Situational Analysis (1) Foster's Group is a premium global multi-beverage company delivering a total portfolio of beer, wine, spirits, cider and non-alcohol beverages. Our products inspire global enjoyment and are enjoyed by consumers all over the world. We are strong throughout Australia, UK and North America, and are looking to expand our brand even further, looking specifically at the massive potential market that exists in the Asian region, which to this day has returned poor sales figures. We have a very healthy profit margin, with a net profit of almost $800m in the 2003/04 financial year, and this will allow us to fund an extensive marketing campaign through Asia, which will hopefully increase sales to build a strong following there. SWOT Analysis Strengths Well established brand name Wide range of brands offering variety The quality of products we offer Our Price committed to competitive pricing Weaknesses Poor returns in Asia region Size global company harder to manage Understanding of Asian market many differences require thorough research Opportunities Through marketing, to take advantage of large Asian market Threats

 Competition exploitation of Asian market Terrorist events such as 9/11 having ramifications for business Changes in consumer preferences Our Mission (1) Fosters Mission is to work together, respecting each other, our heritage, diversity, skills and knowledge to: Build premium quality, first-choice brands Deliver service excellence to customers and consumers Generate superior returns for shareholders Create an inspiring workplace Be welcomed in the communities in which we operate Our Values (1) Energy and Passion Leadership and Teamwork Learning and Innovation Safety and Quality Integrity and Accountability Our Vision (1) To be the leading premium branded beverage company inspiring enjoyment, responsibly around the world. Our Goals (1) First choice brands for consumers (leading brand portfolio in relevant market targets to come) First choice employer for our people (2005 target = Inspire Survey score of 65%) First choice investment for shareholders (top quartile ASX performer and Corporate Reputation Index targets to come) Target Market Our target market is very broad because we have a wide range of brands throughout the world that appeal to many different people. Separately, however, our beers will be aimed at mainly a male market, between 18 and 70. Our wine range will be targeting both sexes, slightly older, about 30 to 70 years. Our spirit range will most probably attract a younger audience, and will therefore be aimed at both sexes between the ages of 18 and 40. Overall, however, we feel our products appeal to a mass market, consisting of both male and females of no specific demographic in the Asian region, 18 years and over. Marketing Objectives Over the course of the next three years, we hope to be one of the leading brands of beverages in the Asia Pacific region, and to be generating considerable returns from this portion of our worldwide market. We can break our target markets in Asia (and throughout the world for that matter) down into two subgroups, primary and secondary. Primary is those who havent tried Fosters beverages, and secondary, those who have. The aim of our marketing effort is to encourage people who havent; to try our brand, and to instill a sense of brand loyalty into those who have, and ensure Fosters is the brand they choose in future. Marketing Strategies Product: Our products are widely varied, from beers, to wines, to spirits, all in varying price brackets. We believe this allows us to be able to reach a very large market. In the Asian market, we will primarily be looking at marketing our beers to begin, as research shows that beer would be the most popular and easiest to market, as it is cheap enough to be accessible to a wide range of consumers. Once we have a foothold, and a reasonable market share with these, we will look to expand our marketing to include our wine and spirit ranges. We will attempt to market our products as being available to anyone anywhere. Price: The price range of our many beer labels is our main advantage over our competitors, as we have a number of different price ranges, ranging from the cheaper run-of-the-mill beers like VB, to the more expensive, premium brands, such as Cascade. This gives us a huge potential market, as it virtually eliminates the income portion of the demographic. Our beers are not exclusive to any income range, and are therefore readily available to all. Promotion: In many other countries, such as Great Britain and Australia, we have gained major exposure through our sponsorship of major sporting events such as the Grand Prix and the Melbourne Cup. This has worked very well, as in Great Britain we are one of the leading brands, and in Australia, we are the leading brand. We plan to sponsor some similar events throughout the Asian region, such as Soccer, which is very popular in many Asian countries, and launch an extensive TV marketing campaign which will identify with our target market, and encourage them to purchase our product. The major problem for us in Asia in the past has been lack of funds and marketing for our products, combined with the high price of importation, and through a multi-million dollar marketing campaign, we hope to remedy

at least half of this problem. Place: Part of our problem in Asia to date has been the high cost of importation into the region, and we have attempted to solve this by setting up breweries in the region. Whilst this may be expensive initially, in the long run, because of the sheer size of the market, the cost is relatively insignificant. Our distribution is to be as wide as practically possible, to tie in with the image of our products being accessible to everyone anywhere, and we hope to be sold in every liquor store in Asia, to further enhance this image. Projected Expenditure on Marketing: Currently, we are not breaking even in the Asian region, so it is necessary that an extensive marketing campaign takes place, and money is spent to ensure our survival in such a potentially lucrative market. Our current profit margin worldwide is $799.3 million, so it is reasonable to assume that we will be able to spend a large amount on marketing in Asia. $343 million was spent on marketing in total in 2004, and it is expected that that figure will increase dramatically because of our Asian effort. It is projected that a figure in the range of $250-300 million will be spent on marketing in the form of sponsorship and advertising, in order to gain the exposure we need in the region. Market research: Research conducted in four Asian countries, namely Thailand, Vietnam, China and Korea, showed an increasing amount of beer consumption per capita in all four places. Vietnam was the best, with an estimated figure of 62.5L by 2005 (2). We also plan to enlist the services of many specialist companies such as Beverage Trends to conduct research on the trends of consumers, as well as having our own market research team. This should provide the marketing team with valuable information and give insight as to the best way to market our product and reach out to potential customers. MarketingHow and Where? Fosters will market itself through a number of methods, the most notable being through sponsorship of major sporting events, similar to our strategies in other regions throughout the world, and through extensive TV advertising. We will attempt to sponsor some of the more popular and widely watched sporting events in Asia, such as Soccer championships, and we will also run a series of adverts on TV which will identify with our target market. Both of these marketing strategies will work closely with, and be linked to, our market research program, in order to identify with consumer demands better and create both brand loyalty, and a strong bond with consumers. Implementation, Monitoring and Controlling Quantative Analysis Key indicators of the Effectiveness of our Strategies: In the next twelve months, we hope to increase our sales in Asia to the point where we are actually making money on this long term investment, and through sponsorship and extensive advertising, we believe this is a very achievable goal, given the success of current brewers in the region. Within three years, we want to be one of the top three brewing companies trading there. This is very achievable given the amount of money and resources that we are willing to put into the market. We will consider it a success if, after the first year, we have a market share of 5-6%, and it will be considered a success if, after the third year, we have a market share of 25% or more. This figure should put us into the top three beer brewing companies in the region, and will make the operation a major success. If Fosters manages to gain a foothold, and grow similarly to what we have in India (3), the possibilities are almost limitless. Controls: This marketing plan will be controlled using many different mediums in order to ensure the effectiveness of such a system; including the consistent monthly monitoring of performance in comparison to forecast objectives such as budgets, sales statistics and cost analysis. This will create a system that ensures we are constantly in-touch with the current situation, and it is adaptable to change if the need arises. Research: Our continued communication with the companies researching the market on our behalf, as well as our own market research team, will ensure that we are always receiving the latest, most up to date information, and will allow us to adapt to different situations according to our strategic plan

Financial Forecasting: The 2004 Fosters Annual report shows that we are in a very stable financial position, and in a good position to pursue expansion. Our net profit is sufficient to warrant extra expenses on marketing efforts throughout Asia. Our projected financial forecast for the year 2005 is very promising, and again shows an improvement on the figures of 2004, and these were an improvement on the previous year. Financially speaking, Fosters looks to be in good shape. Please see our annual report for further financial information. Earnings Summary (Forecast 2005) (1) EBITAS ($m) 2005 2004