Segmenting, Targeting, Positioning – part 2

Ambro’s Customers

Let us take a closer look at Ambro’s customers. In our previous post we targeted them at 20-40 year old consumers. These generations are often tagged as generation X (age 35-55) and generation Y (age 15-35). Even though based solely on age, these groups sometimes have some distinct characteristics:

• Generation X (1960-1980):
  The generation X'ers usually possess more purchasing power due to their longer time in working life - and thus Ambro is interested in them. Generation X’ers are active community members but often tend to spend their money on safe investments, such as a house or on their families. The latter sounds a little bit less attractive for Ambro, since buying the product requires "taking risk" - buying something totally new. 
• Generation Y (1980-2000):
  By and large, generation Y people are characterized by a positive attitude towards change. The older end of the generation may be living the busiest time of their life: studies, stepping into the working life and young children. Many of this generation like to stay connected 24/7 through their social networks. For Ambro, it is good to notice that this generation may better fit the products’ brand image of offering a new, easy experience for eating food. (Cui et al., 2003)

Can we tell more about Ambro’s customers? Can we identify any more target groups? Because Ambro does not contain enough proteins - merely vitamins - top sporters are not a target segment. But, today we brainstormed a bit and came up with the following possible segments:

1. Single people, interested in health, who live alone and would prefer the easy alternative for a breakfast or when they are sick. Ambro could be even more convenient for them if was sold in ready-mixed packages. However, this may not be possible due to high sending costs (distribution channel discussed later) and the fact that the product contains no preservatives.
   
2. (private) Hospitals who might value the convenience of these nutritious ready-made meals, especially for patients who are only allowed to consume liquid food.

Upon closer consideration however, we think that Ambro might be too expensive for hospitals, and also not tasty or nice enough for regular patients. Next to the yoga segment that was previously mentioned by Ambro itself, our first proposal of single people might be interesting too. But then again, the this segment is very broad and therefore not as easy to reach as the (a) extremely busy people with interest in health or (b)Fitness and Yoga enthusiasts.  

So, as we said before, we believe it is the best for Ambro to focus on only one segment in the beginning.  We believe that the segment of high-earning, time-poor and extremely busy - but young - consumers would be strategically most important sector. Due to the vast size of the US working population (+/- 140 million of which 44 million in management positions) we believe the target market, even though a niche one, to be large enough. Targeting at higher income is also better suited to the premium status of Ambro since the consumers are less price sensitive (Jones et al, 1994). 

Other reasons for this segment to be strategically the most important are that they (a) are likely to be easily reached because of living/working in the large cities, (b) are likely to have more purchasing power than the fitness and yoga enthusiasts, and (c) have multiple incentives for buying the product - lacking time and needing fast meals while being perfectionists also regarding health. 

To summarize:

•  Segmenting:   Achievers and Innovators
• Targeting:       20-35 year old professionals with academic education, extremely busy (working)      lives, interested in healthy eating, and who can be segmented as achievers.
• Positioning:    Premium, healthy, easy and quick meal substitute.

However, if Ambro wishes to target two segments at once, they should consider a push-and-pull strategy. This means trying to find overlapping marketing tactics and activities which would suit both the target segment we have chosen and the Fitness & yoga enthusiasts. With this strategy, they would push their marketing activities towards the segment of extremely busy people interested in healthy eating, and at the same time pull the segment of fitness & yoga enthusiasts along. However, this requires thoroughly thought marketing tactics in order to reach both segments.

As discussed earlier, Ambro is a new product with no direct competitors. It stands out from the differently targeted Soylent through its focus on organic ingredients, and because Ambro is not meant to substitute every single meal.

Sources

Wright, R. (2006). Consumer Behaviour, Thomson Learning: London.

Jones, E., Chern, W.S. & Mustiful, B.K. (1994). Are Lower-Income Shppers as Price Sensitive as Higher-Income Ones?: A Look at Breakfast Cereals. Journal of Food Distribution Research: 82-92.
Cui, Y., Trent, E.S., and Sullivan, G.N.M. (2003). Cause-related marketing: how generation Y responds. International Journal of Retail & Distribution Management, 31(6), 310-320.