Question

Given the growing concerns over childhood obesity and diabetes, candy manufacturers are looking into new markets. Candy is not just for children anymore and many companies are launching sweets developed specifically for adults. Adults expect higher quality in both taste and packaging, but they are also willing to pay for it. 1. Contrast the traditional market segment for candies - the "children market" - with the new segment - the adult market. (What are the needs and wants of these segments? what benefits is the typical consumer in each segment looking for? What are the major differences in preferences and buying behavior between the 2 markets? etc.) 2. Focusing on the adult market, identify and describe two distinct sub-segments of potential consumers in this market. Use the relevant segmentation variables for describing the typical consumer in each of these segments. 3. Suggest and briefly discuss a possible marketing strategy that could be successful for this product. What would be the key message for your communication strategy? your distribution outlets? pricing relative to a potential competitor, such as Godiva? In your opinion, what would it take for a company to gain a sustainable competitive advantage in this market?

Answer 1

Answer

            The fast food industry is experiencing high level of market rivalry. Such rivalry adversely affects the operations of organizations. When rivalry is high, organizations are likely to push prices down in an effort to attract more customers than their competitors. This reduces their profitability. They may also end up losing customers to such competing firms. In such a scenario, they may also be forced to engage in expensive advertising to win more customers, thus increasing cost of operations and pushing profits down. For instance, as a result of market rivalry, McDonalds was forced increase its advertising spending (Economist 2010).

Answer

1. The new candies market is targeting even adults unlike the traditional market that was predominantly for children. While the consumers in traditional markets did not make conscious purchase, the new markets have consumers who are very selective, especially in regards to health of such products.
2. In the adult candies market, consumers may be segmented in terms of behavioral segmentation and demographic segmentation. Demographically, some companies focus on developing candies for men. Others focus on candies that are attractive to women. In terms of behavioral segmentation, some firms focus on candies that are used for romance purposes while others are focusing on candies used in large events together with snacks

The key marketing strategy for the new candies market would be to communicate them as being health. Today, many customers have become conscious of lifestyle diseases. They are thus not willing to consume products that jeopardize their health. In terms of distribution they should be distributed near the counter in supermarkets so that customers can easily see them. Distribution increases the place utility of such products. This will increase the accessibility of such products. The price should be moderate, depicting them as valuable yet affordable. Demand for the products will increase if the products are affordable. To gain sustainable competitive advantage, firms should focus on quality in terms of health ingredients, packing and taste