The retail flower market is highly fragmented. Our analysis suggests that the primary competitor for C&C is a member of FTD: 800-Flowers (Exhibit 4). Even though FTD captured the biggest annual sales market share (59%), as a worldwide member-owned cooperative, its primary revenue source is fees collected from order processing, not direct sales. Within this model, individual members of the co-op form the core production stream. 800-Flowers represents the biggest competitive challenge to C&C’s flower mail delivery business model because…...; however, despite relatively similar annual revenue numbers ($16MM and $10MM respectively) and minimum pricing model ($35/per order), 800-Flowers and C&C have disparate core competencies and value …show more content…
Other key features whose importance varies based on customer segments are price, creativity in arrangements, personal service and assistance, reliability, and selection. In general, women account for a major portion of the small volume customers as either direct purchasers or as indirect consumers, since flowers tend to be purchased for women.
Segmentation
Based on the available data, customers could be segmented based on demographics (age, sex and income combination), purchase habits, channel preferences, and specific needs. Behavioral segmentation based on purchase habits is the best segmentation from C&C’s perspective. Deeper analysis indicates that within the segment of purchases made for personal occasions, there is a notable difference in the customer behavior when comparing purchases made for bigger events such as weddings or funerals, to those made for smaller occasions like birthdays. Also, there is value in further classifying general year-round purchasers into personal and corporate clients because of the difference in their spending capacity and needs.
We have evaluated different segment options based on relevant attributes such as growth potential, accessibility, loyalty, and other criteria (Exhibit 1). For example, even though the segment of customers who are buying flowers for weddings/funerals has huge revenue potential, it is not easy for C&C to convince that segment to place a mail
In light of an evolving market, faced with new competitors, and after a careful analysis of their current customers, the Vanguard Group (hereinafter referred to as “Vanguard”) realizes it must rethink its entire marketing strategy. However, in order to protect and leverage their competitive advantage, which is their low management fees, and to optimize the loyalty that their customers continuously demonstrate toward their organization, they must now target the most profitable segment for them, and develop the best way to serve and delight these customers.
Customer profitability was a determinant used for segmenting and targeting, studies were done on customers’ likes, dislikes and types of products they would benefit from and models were developed to determine their propensity to buy.
It needs to be a specific group of customers. Sometimes using stereotype images can help to describe a group, such as the “soccer mom.”
Market segmentation as a term came up to describe the concept that all customers are not alike. Because in hospitality industry marketing money and resources are limited, it has to concentrate on specific groups of people, or target market, to avoid waste in time, money and quality. As a result, it’s ensuring the highest returns. [1 pp19] The reasons why segmentation is so important for hospitality industry are – more successful use of marketing money, clearer perceptive of the needs and wants of special customer groups, more effective developing of service, greater correctness in selecting promotional vehicles and techniques. [1 pp173]
Demographic Segmentation fragments the market into categories according to different demographic factors, usually with regards to the wants and needs of multiple consumer groups. The
Identification of target markets is imperative to Qantas’s success. Mortished (2003) explains that Qantas uses Behavioural segmentation to select its target market. This allows for the market to be divided and products and advertising to be specifically aimed at the most responsive customers. Qantas divides its target market into two main groups; Business and leisure
Edible Arrangements brand revolves around family values and beliefs in an effort to appeal to one’s emotional side. Commercials emphasize family gatherings during the holiday season and special celebrations. Many times the fruit baskets are next to floral arrangements or chocolate rabbits, for instance, as a delicious healthy alternative to these choices. These commercials appear to be working and we capitalize on the commercials by advertising similar campaigns in local print ads which includes a $5 coupon when spending $50 or more. See Appendix A.
Market segmentation allows marketers to understand customers’ needs and identify target markets (Peter & Donnelly, 2011). Bright Light Innovations will be able to evaluate different segments to determine differential advantages in each of those segments. Furthermore, management will be able to determine any of the particular marketing mix for a more successful strategic plan. Market segmentation can be obtained by researching geographic data (zip code, region, etc), demographic data (age, occupation, nationality, etc), psychographic data (social status, personal type, etc), behavioral data (customer behavior), or any other data that can be beneficial to the research (Kawasaki, 2004).
The segmentation has been done on the basis of buying behavior of the customers. Knowledge of segment buying behavior can help redirect marketing resources for profit gain.
Customers are assets, and their values grow and decline. Segmenting customers based on their lifetime value is a powerful way to target them because marketing mix activities can then aim at enhancing customer value. (Ho, 2006)
As every customer has unique needs and expectations towards certain products, the ultimate goal of market segmentation is to organize customers into groups which allows targeting of customers with similar needs of and response to the products. The key is to minimize differentiation within each segment
Relying purely on socio-economic and demographic data only provides a partial glimpse into the needs, preferences and wants of a given target market. Psychographic-based segmentation research is often used for determining how potential customers' self-assignment to groups, unique interests and preferences for retail products and services influence and often predict their purchasing behavior and long-term loyalty (Bearden, Teel, Durand, 1978). Psychographics is the study of how customers assign
The main target group is female customers – 65 % of all customers. Women, according
Behavioral segmentation are particular behaviors based on the customer’s interests such as loyalty, customer’s interests and values. According to Perreault, Cannon & McCarthy (2015), “specific behaviors wary a great deal for different people, products, and purchase
‘Market segmentation represents an effort to identify and catergorise groups of customers and countries according to common characteristics’ (Keegan and Green 2016, p.228). For any business, it is crucial that they segment their market accordingly or they will risk forgoing sales opportunities. Fahy and Jobber (2015) identify the objective of market segmentation as distinguishing groups of customers with similar requirements so