COMMERCE DEPARTMENT

DPM 10013 : PRINCIPLES OF MARKETING

CHAPTER 3: CONSUMER AND BUSINESS MARKET

CHAPTER 4: SEGMENTATIONS, TARGETING & POSITIONING

SESSION: SESI 1: 2021/2022

TUTORIAL EXERCISE 1

PREPARED BY :

NAME NO.MATRICS
MUHAMMAD AZIM HARITH BIN JOHARILA’ALA 10DLS21F1087
NUR AIN NABILA BINTI ARSHAD 10DLS21F1025
DENNIS A/L PITHER 10DLS21F1057
SHAFIQA BINTI NURUS SHAM 10DLS21F1072

CLASS: DLS1B

PREPARED TO: PENSYARAH,PUAN HASMIZA BINTI TAIB

SUBMISSION DATE: 26 NOVEMBER 2021

1) There are differences between the consumer market and the business market.
Explain SIX (6) characteristics about business market versus consumer market.
Company : IKEA KFC NIKE BMW

The number of buyers

The number of buyers in consumer market is large in total but the purchase size is small.
For a example, consumers will purchase NIKE shirts in a small quantity for their needs but the
quantity of consumer who purchase is larger than business market. The number of buyers in
business market are fewer but they normally buy in large volumes like in bulk purchasing. For a
example, KFC purchase chickens in large volumes for a production.

The buying process

The buying process in consumer market do not have formalized buying process and can
directly purchase the products. For a example, to buy a product in NIKE company we don’t need
to follow any command to purchase them. Meanwhile, business markets have formalized buying
processes for a purchase. For a example, there are more processes involved to purchase BMW
car such as information search and evaluation of choice.

Market segmentation

The market segmentation in consumer market based on demographic, behavioristic,

psychographic and geographic characteristics. For a example, NIKE clothing has segmented
their market by age and genders based on demographic segmentation. Then, business markets
segment their businesses based on the industry, ownership, level of technology and end market
reached. KFC has segmented their market for industry profit and for ownership.

Promotion techniques
 A suitable and effective promotion techniques used to consumer market are advertising
and sales promotion which needed to induce household consumers to purchase a firm’s brand.
For a example, NIKE clothing will make promotion such like 2 shirts for RM 35 for the
consumers. Business markets cultivates buyers in large corporation who make purchase
decisions. Promotion techniques to business market more to personal techniques such as
personal loan. For a example, IKEA use trade shows as a promotion techniques to show the
prospective value.

Market size

The market size of consumer market is large because the total volume and value of all
sales in consumer market is large. For a example, the purchase level in NIKE company is large
because of the more number consumers. Business markets size smaller than consumer market
purchase level is small .

Purpose of the purchase

The purpose of the purchase in consumer market is for their own or their household
consumption. As a example, consumers purchase cosmetics for their own and they will be the
final user. The purpose of the purchase for business buyers for further production of other
goods and services ,reselling, renting or supplying to others. As a example, KFC purchase
capital equipment goods for production of food.
2. As a marketing manager of the company, ascertain in four major bases for segmenting
consumer market.

Company: KFC

Geographic segmentation

Geographic segmentation divides the market into different geoghrapical units such as
nations,regions,states,counties,cities,neighbourhoods or climate.Marketers are able to identify
the needs and preferences of the local people based on their geoghraphical location.For
example,Kentucky Fried Chicken(KFC) in Canada has included the poutine in its menu since
poutine is a popular Canadian dish and most KFC stores located in predominantly Islamic
countries prepare foods in accordance with halal guidelines.

Demographic segmentation

Demographic segmentation divides markets on the basis of demographic variables such as

age ,gender ,family size ,income ,occupation, education, religion, race and
nationality.Marketers use demographic information to segment markets because it is widely
available and often related to consumers purchasing and consuming behaviour. For example, in
age segment,KFC main focus is to attract the young age groups because they are seen as
impulsive eaters that constantly looking for variety and new tastes of the food.By segmenting
the market using age,marketers are more certain of their target market and this leads to better
productivity and efficiency.Under these segmentation,KFC also focus on the income bracket of
consumers.Its products are mostly aimed at the well off with higher disposable income to spend
on premium fast foods.KFC has also segmented the children group by introducing the Zinger
Junior.
Psychographic segmentation

Psychographic segmentation divides a market into different groups based on lifestyle,

personality and social class characteristics.These variables are difficult to measure and often
lead to discussions of why they are sometimes used with other segmentation variables to
provide more detailed descriptions of market segments.In social class market,social class
divided into upper class,middle class and lower class.For example,KFC not only targeted their
products on upper class individuals but they also targeted on middle class individuals too.This is
because KFC wanted to expanded their market to all type of classes so everyone can taste their
products without involving their consumer’s status.

Behavioural segmentation

Behavioural segmentation divides purchasers into groups according to their

reactions,responses,knowledge and attitudes towards a product based on variable such as
occasion,benefit sought,application,usage rate,user status and brand loyalty.In brand loyalty
market,some consumers are absolutely loyal in the sense that they stick to one brand all the
time.For example,consumers that loyal to Kentucky Fried Chicken (KFC) would not buy other
brands of fast food regardless of the price and the free gifts offered.However,there are also
‘rotators’ that may stick into two or more brands.They are likely get influenced by price and
promotion that called as ‘deal sensitive’people.
3) Based on your answer in question 2, choose ONE base used by that company for
segmenting its markets and give a reason.

Company: KFC

Based on the answer to question 2, the base used by KFC to segmenting its their market
is geographical segmenting. The reason is because KFC can be the main choice of the public
by locating many branches in urban areas and public focus areas using geographical
segmenting.

This can also give benefit to KFC as they can further strengthen their brand all over the
place and can also give benefit to the customers by serving the best and delicious fast food to
everyone and anywhere. customers do not have to go far to get KFC because in their own
area .There are KFC branches nearby and easy to find and enjoy.
4) Targeting is the act of evaluating and comparing the identified groups, then selecting
one or more of them as the best prospects. By using a suitable example, describe
FOUR (4) strategies under selecting target market.

Company: KFC

The four strategies under selecting target market is undifferentiated marketing,

differentiated marketing, concentrated marketing or niche marketing, and micromarketing.

The instance that I choose is Kentucky Fried Chicken (KFC). As we know, KFC is a fast
food company that really familiar with people around world include Malaysia. They also provide
a lot of products which is food that can satisfied almost all kind of people segment.

Undifferentiated marketing

The first strategies under selecting target market that suitable to we talk to is
undifferentiated marketing that really we familiar with is fried chicken itself. As we know, for the
first time, the owner of KFC, Mr. Colonel Harland in 1952, he use this kind of market target to
sell his friend chicken to public which from his roadside restaurant in Corbin Kentucky during the
Great Depression. He used this way because to promote our product the first time, we need to
try sell the least first. It’s low risk and more suitable for the budget for the starter.
Differentiated marketing

Secondly, after the KFC be the franchise company, the product sell worldwide. Then, they
used the new strategies which is the differentiated marketing. Instead of sell the fried chicken,
they also sell another kind food that can satisfy the small society such as the vegetarian foods.
The whipped potatoes, the crispier fries, coleslaw and wedges are the food that obviously made
from vegetables. So, it shows that they can satisfy the minority society such as vegetarian to
enjoy the meals that they provide.

Concentrated marketing

Next, KFC also used the concentrated marketing to sell their product. Therefore, when
the new product want to be sell to the public, they will provide it to the package that they serve
to the costumer. As example, lately, KFC have produce new product which is Black Sesame
Balls. They promote it with serve the product in the family meals. So, at least, the costumer will
taste and perhaps they will repeat to have it another time. Even they also serve the Black
Sesame Balls on online purchase which is costumer that wish to have a delivery food to their
homes especially during the covid-19 situation these days.

Micromarketing

Last but not least, they also used the micromarketing target. It is because, as a franchise
that want to make their business growth worldwide, they need to satisfy the local people from
the place that they planned to opened their business. KFC target the audience which is from the
middle and upper middle class and they price their product accordingly. So, logically, they can
satisfy the costumer taste. They also make some research for every country if they want to open
their business there. For instance, in Korea, they have provide the kimchi sauce for the buyers
because of the Korean people really familiar with the kimchi even kimchi is the side dishes that
they always have in single houses there. Hence, the Korean people can come to their premises
to buy their product without hesitate. Even for Malaysian people, KFC franchise in Malaysia are
halal and all people can eat it without hesitate especially for Muslim people.
5. Show ONE differentiation positioning strategy used by the company.

Company: KFC

Positioning a marketing strategy that emphasizes serving a specific market segment by

achieving a certain position in buyers’ minds. A company can differentiate and position
themselves by providing superior customer value. They can differentiate themselves based on
product, services, channel, people or image.

KFC used services differentiation positioning strategy on speedy, convenient and careful
delivery. KFC started to make and create many foods and beverages based on customer’s
needs wants for a convenient. For a example, KFC introduces SPICY CHICKEN MEALS for
customers who wants. KFC improved their packaging to customer with full neat. Moreover, KFC
also used Food Panda service for a online delivery service to make things easier for customer
and the company fastened the delivery time to customer.