1.0 Executive Summmary

This report was commission to examine the potential market segment of Snickers candy bar and identifying how the

The research of the report is to draw attention on the market segmentation for Mars’ Snickers. There are four potential market segments which is the On-the-go Worker, Candy Kid, Outdoor Lover and Chocolate Chiller market segment based on benefit sought, usage rate, age and use situational. The selected market segment is the On-the-go Worker because this group is easily determine by their job scopes, have a large market population and a growing market as the employment rate is increasing.The target consumer consumer needs is to relief the hunger and fulfilling the physiological needs of the Maslow’s hierarchy of needs. For perception, the quality of the product is perceived by intrinsic cues based on the colour of the chocolate. The product external influences apply positive message framing which explains the value that the consumer will obtain when consuming Snickers. humour emotional advertising appeals are used to attract the targeted market segment. The role of celebrities as the reference group on influencing the targeted market segment to make a purchase has been used to influence the On-the-go Worker Segment.

For the recommendation, the Snickers can apply the 4P’s Strategies, which are price, product, promotion and place to improve the sales of Snickers. For price, the company could use the different threshold theory by using lowering the price just a bit. Next is promotion by using the internet and printed medium. For product strategy, the ELM has been used by changing the packaging of the Snickers to draw away the attention from the central attributes. Lastly, place strategy can be used by putting the vending machine in all the office to ease the availability of Snickers among the targeted market segment.

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2.0 Introduction

2.1 Trend and market size

Nowadays, chocolate making industry has turned into one of the most

profitable industry with a huge potential to generate millions of profit given its

large demand by the consumers. Many trend changes in the industry had lead

the producers to produce chocolate that are in-trend in order for their chocolate

to be accepted. the confectionery market which consist of the cereal bar, sugar

confectionery, gum and chocolate, has shown a growing pattern in its market

value by 2.9 % increase starting 2003 until 2005 in United States with. In fact,

the main sector that contributed total revenue of 51.9% of the overall market

value, equivalent to US$13.2 billion is the chocolate sector (Baldonado, M.,

Hardwick, A., Houang, K., Moreno, N., Norashkarian, M., Trinh,B.,n.d.).

2.2 Market competitors

There are several major players in the confectionery industry that move

the industry to today’s achievement. According to Candy Industry (2006, as

cited International Cocoa Organisation, 2010), the industry had been dominated

by Mars Inc. with total sales of US$9,546 in 2005. For Cadbury Schweppes

PLC and Nestle SA, their total sales value that are generated is US$8,126 and

US$7,973; followed by Ferrero SpA with total sales of US$5,580 and Hershey

Foods Corp. of US$4,881.

2.3 Introduction on the Snickers by Mars incorporated

Snickers candy bar was introduced in 1930’s and owned by Mars

Incorporated. It consists of caramel, nougat, peanut and milk chocolate

(Snickers.com, 2010). It is the famous candy bar in the world; as it accounts almost

$2 billion sales a year of Mars alone (Docstoc.com, 2010). It also one of the energy

candy bar that can ease the hunger and providing the energy after being consumed

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3.0 Market segmentation

3.1 Segmentation bases

According to Schiffman et. al. (2008), market segmentation can be referred

as the method of “dividing a market into distinct subsets of consumers with

common needs or characteristics and selecting one or more segments to target

with a distinct market strategy”. They are segmented into similar characteristics

on the bases such as demographic, geographic, psychographic, sociocultural,

user related, benefit sought and hybrid segmentation.

For Snickers, the segmentation bases and the potential group of consumers

that can be used are as follows:

On-the-go

Worker

Candy Kids Outdoor Lover Chocolate

Chiller

Benefit

sought

Light food that

are easily

consumed yet

easing the

hunger and

energy-provider

Sweet taste of the

chocolate, and the

free gifts

provided with the

chocolate

Energy-provider

chocolate

Pleasure of

tasting the

chocolate

Use-

situational

During

breakfast, snack

and supper

For fun and

leisure

Before and

while doing

outdoor

activities or

sports

During free and

leisure time

Usage rate Heavy user Medium user Light user Light user

Age 20- 45 7-12 All ages All ages

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Based on the table, for the On-the-go Worker market segment, they are

the people around 20 to 45 years old who are at their peak of life, having a very

active lifestyle and dedicated their life for jobs. They do not have much time for

themselves to do the basic things, such as eating; as much of their time is spent

on working and moving from one place to another just to make sure that their

work are done. Because of that reason, they are preferring light food that are

easily consume and can be eaten fast but at the same time, can ease their hunger

and provide energy to do their daily works before the big meals such as lunch

and dinner. Because of the time constraint, they would eat snickers as an

alternative for breakfast, snack and during supper for the workers that are

working until late night to finish their jobs (Ng, 2008). Moreover, they are also

heavy users as their routine is repeated as they need to stay active every day.

The next potential group is the Candy Kid segment. This group is for the

children at the age of seven to 12 years old who love to eat chocolates and

candies during the childhood phase. They will consume the chocolate as they

enjoy the sweet taste of the chocolate and the free gift that are provided along

with the purchase of the chocolate. The chocolate will be consume during their

fun time and leisure; for example, during playing with the friends, reading books

and when sitting together with family. Because of their consumption level is not

very high as they are not consume it every time, this segment can be regarded as

the medium user.

Another potential segment that can be used is the Outdoor Lover segment.

This segment is for all ages of people who love doing sports and outdoor

activities such as, hiking, jogging, running and wall climbing. They will need a

chocolate that can provide energy as these kinds of activities will require a lot of

energy consumption. They will eat the chocolate before doing the activities to

gain some energy or to re-gain energy while performing the activities. They can

be regarded as light users as chocolate is consumed only when they are doing

the activities.

Lastly, Chocolate Chiller can also be considered as one of the potential

segment for Snickers. This segment can be recognised as the group of people of

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all ages who buy chocolate to savour every bite of the chocolate they tasted. The

benefit which is sought by this segment is the pleasure of tasting the chocolate

as they can enjoy every minute of eating it. It will be consumed during their

leisure and free time such as when watching movies, relaxing and hanging out

with friends. This segment will consume the chocolate frequently as they love

eating it, and because of that reason, it can be assumed that this segment is a

heavy user.

3.2 Targeted market segment

Based on the segmentation bases stated above, On-the-go Worker is the

most suitable market segment to be targeted by Snickers. The decision is made

by the identification criteria which require the marketers to measure and identify

some relevant characteristics (Schiffman et. al., 2008). For On-the-go Worker,

they can be easily determined by their job scopes such as businessman which is

always busy with the appointments and meetings. Another way to identify this

group is by their everyday’s lifestyles that are always on the rush for something.

The second reason why On-the-go Worker has been chosen is because the

market segment is large enough and suffices to ensure that it is profitable for

Snickers to penetrate the market. It is proved as the employment percentage was

at

Furthermore, stability criterion is also used in determining this targeted

market segment. The Bureau of Labour Statistic stated that there is an increment

in the employment rate recently despite of the global crisis (Brouwer, 2010). It

clearly indicates that the market has a high rigidity to be penetrated as it shows a

growing pattern in the segment size.

Another reason in choosing the On-the-go Worker is because it has high

accessibility. For this kind of group the best way of conveying message to this

market segment is via the internet as they depend on it for most of their work

purposes. Moreover, this group can also be accessed by via printed medium

such as business magazines that they always use for the work purposes.

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4.0 Positioning strategy

Product position is by comparing with the competitor’s product on how the product

is located in the mind of the customers (Kotler, 2007). The perceptual mapping of

Snickers is compared with other three competitor’s products as shown below:

According to the perceptual map above, the criteria used is based on the level of

calories and the availability of the product. The reason why the level of calories is

chosen because as the targeted segment is the On-the-go-worker, they need a candy bar

that rich with calories that can provide energy for them to move on with their busy

schedule every day before having their lunch or dinner. Moreover, as this is a low

involvement product, availability of it is very important as the consumer will not put a

high effort just to purchase the product as they will find the alternative for the product.

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High availability Low availability

Low calories

High calories

Hershey’s Crisp Wafer Bar (Hershey’s, n.d.)

Nestle’s Kit Kat (Nestle, 2010).

Cadbury’s Dairy Milk with Caramel

Mars’ Snickers

Another reason is because of the targeted market segment is a heavy user; they will

expect that the product is easy to get as they consume it frequently. Snickers is

positioned by using the specific benefit approach as it offers chocolate bar that contain

high calories that wil6l provide energy for the buyer. Snickers is at highest level on the

calories aspect with 280cal compared to other competitors but has a lower availability

in comparison with Kit Kat. Snickers should be repositioned more to the right in front

of Kit Kat as portrays in the perceptual map.

5.0 Analysis of the internal and external characteristics of target audience

5.1 Internal influences

The internal influences such as the needs and perception on the purchase

behaviour of the targeted market are important to be determined by the company

as they give a big impact on the purchase decision made by the targeted market

segment.

Needs can be defined as any requirement by the human being. Based on

Maslow’s hierarchy of needs theory, he states that the lower level that is

chronically unsatisfied will motivate our behaviour (Schiffman et. al, 2008). For

Snickers, the needs that must be satisfied is the physiological needs through the

provision of food. When the lifestyles of On-the-go Worker segment that always

busy with their works, they do not have much time to spend on eating breakfast

or supper. For the reason being, they will find another alternative that can at

least easing the hunger and providing energy but at the same time do not

requires much time for them to consume it. Then, to fulfill the food needs, they

will purchase Snickers as it is one of the easiest ways of easing the hunger and

providing them with energy.

Another part of the internal influences is the perception of the selected target

segment on the product which is Snickers. The consumer perception on Snickers

would be on perceiving quality, which is based on the intrinsic cues. When the

targeted market segment looks at the chocolate, they would perceive Snickers

that have a brown colour like the colour of cocoa to have a sweet taste and

crunchy when they see the peanut inside it (Snickers, 2010).

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5.2 External influences

In order for Snickers to tackle the On-the-go worker segment, they need to

consider some external influences such as the message framing, the emotional

advertising appeals and also the reference group that may influence the purchase

of the product by the targeted market segment.

Relating to Snickers, as it is a low involvement product, a positive message

framing is more advisable. Because of that, Snickers should emphasis on the

benefit that the targeted segment would gain if they consume Snickers

(Schiffman et. al., 2008) For On-the-go worker segment, one of the ways that

Snickers could use is by conveying the message that the energetic lifestyle that

the bar can provide if they consumed Snickers. Another way in framing the

message is by stressing on the ease of hunger that Snickers can offer when they

are very hungry while having a very busy day but they still need to go on.

Then, snickers could also deem to apply the emotional advertising appeals as

one of the way to influence the purchase by the On-the-go worker segment.

Again, as Snickers is a low involvement product, humour appeal would be more

suitable to attract this market segment by using relevant humour that is relevant

to the product. This is supported by the statement that factor such as the positive

attitudes toward the product, the relation between the humour used and the

product and the low involvement with the product could enhance the level of

persuasiveness toward the product (Perry, Jenzowsky, King, &Yi, 1997, as cited

in Lee & Chen, 2004). For example, Snickers could use an advertisement that

shows a man cannot move on with his busy everyday’s life when they are

hungry without consuming Snickers bar in a humourous way and relevant to the

product.

The third external influences that are important in influencing the

consumer to purchase the product is by the reference groups. One of the possible

approaches of reference group for snickers to persuade the targeted segment is

common person appeals that use the ordinary people in everyday’s situation. In

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order to attract the targeted segment, the celebrity has a direct connection with

the product and is perceived as an expert by the targeted respondent (Ohanian &

Roobina, 1991). For example, as the selected segment is On-the-go Worker,

Snickers could use the CEOs of famous companies to endorse their product. The

reason being is the lifestyles of the CEOs are much the same as the targeted

segment, in fact they are highly trustable by the targeted segment, based on their

achievement in their own field.

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6.0 Recommendation

For Snickers to reposition themselves towards more favourable position as

shown in the perceptual map above, they can apply the changes based on the

marketing mix theory; price, product, promotion and place.

For price, they could apply the differential treshold concept which is the

minimal difference between two stimuli that are noticeable or the just noticeable

difference (j.n.d.) (Schiffman et.al., 2008). For Snickers, they could apply the

positive changes by lowering the price just above the j.n.d. as the consumer will

notice the decrease in price that has been done for the product. Even though the

decreasing may be very small, such as 1 cent, the consumer will still notice the

different and it can increase the sale of the Snickers bar. For example, if the price

for snickers is $1, they could reduce it to $0.99. At the consumers side which is the

targeted segment, this will be seen as a large different in price but at the side of the

Snickers, they will regard this as a good marketing strategy as it will later boost the

sale.

Secondly, they could also used the place or distribution strategy; by making

the Snickers chocolate more available for the On-the-go segment. This can be done

by putting more Snickers vending machine at the place where the targeted segment

can be reached easily. Example is by putting the Snickers vending machine in

offices as the targeted segment spends most of their time there to get their jobs

done. By applying this, it will later increase the availability of the Snickers among

the targeted market segment, thus can reposition Snickers better that Kit Kat.

For promotion strategy, one of the effective ways to promote Snickers to the

targeted segment is via the internet medium. It is because as a today’s worker where

technology communication is essential in the working field, they will spend most of

the time in front of the laptop or computer doing their jobs. Snickers can use this

opportunities by promoting the candy bar through the internet; for example,

promoting in the Google ads column or any other website that are always being

used by this type of market segment. Another way is by the means of printed media

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that the On-the-go Worker will read such as the business magazine and business

newspapers. By using this way, they will be induced to consume Snickers more.

Next means that can be applied by the company to improve their marketing

strategy is the product strategy. Because of Snickers is low involvement product,

consumers do not really realise about the cognitive attributes such as the ingredient

used. Because of that, any changes made to the cognitive attributes will hardly

recognised. Because of that reason, Snickers could apply the Elaboration likelihood

Model (ELM) which stressing on the peripheral route to persuasion which stressing

on the ‘side’attributes to rather than the central attributes. For example, Snickers

could change the ‘unimportant yet realisable’ attributes such as the packaging of the

chocolate to something that are preferable by the targeted market segment. By doing

this, it will change the attitude towards product thus triggering the purchase

intention among the On-the-go Worker segment.

2734 words

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7.0 Reference

Baldonado, M., Hardwick, A., Houang, K., Moreno, N., Norashkarian, M., Trinh,B.,(n.d.). Rocky Mountain Chocolate Factory Location Analysis. Reitreved from http://www.acraretail.org/documents/rmcf/RMCF08_1stplace.doc

Cadbury.,(n.d). Get to know what’s inside. Reitreived from http://www.cadbury.co.uk/ourproducts/nutrition/Pages/NutritionInfo.aspx

Docstoc.com, (2010). History of Snickers candy, viewed March 30, 2010 from http://www.docstoc.com/docs/5800171/history-of-snickers-candy/

Hershey’s, (n.d.). HERSHEY'S Crisp Wafer Bars, Nutritional Information. Reitreived from http://www.hersheys.com/products/details/100Calorie/index.asp?name=WaferBars&id=00000012983-00000012983

International Cocoa Organisation, (2010). Who are the main manufacturers of chocolate in the world?. Reitreived from http://www.icco.org/about/chocolate.aspx

Kotler, P., Brown, L., Adam, S., Burton, S. & Armstrong, G. (2007). Marketing, 7th ed. Pearson Education, Frenchs Forest.

Lee, M. & Chen, Y.C., (2008). Effectiveness of Positive and Negative Reinforcements in Humor Advertisements Targeting Heavy and Moderate Drinkers. Retrieved from http://www.allacademic.com//meta/p_mla_apa_research_citation/1/1/3 /3/6/pages113369/p113369-3.php

Brouwer, K.,(2010). Jobs: Improving very, very slowly. Reirteived from http://blogs.marketwatch.com/fundmastery/2010/05/11/jobs-improving-very-very-slowly/

Nestle,(2010). Kit Kat 2 Nutritional Data. Retrieved from http://www.nestle.co.uk/OurBrands/nutritionalinformation.htm?category=confectioneryandcakes&brand=Kit%20Kat

Ng, L.,(2008). Time Management – Are you working late tonight? Retrieved from http://www.articlesbase.com/time-management-articles/time-management-are-you-working-late-tonight-341268.html

Roobina, O.,(1991). The Impact Of Celebrity Spokespersons' Perceived Image On Consumers' Intention To Purchace. Journal of Advertising Research. 1(31), p 46-54. Reitreived from Ebsco Host.

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Snickers.com, (2010). Snickers, viewed March 22, 2010 from http://www.snickers.com/default.htm

Schiffman, L., Bednall, D., Paladino, A., Ward, S., & Kanuk, L., (2008). Consumer Behaviour (4th ed.). NSW, Pearson Education Australia.

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Appendices

6.4.1 Picture showing Snickers Logo. Picture taken from

http://www.seeklogo.com/images/S/Snickers-logo-0DE4A406F9-

seeklogo.com.gif

6.4.2 Picture showing Mars’ Snickers candy bar. Picture is taken from

http://image3.examiner.com/images/blog/wysiwyg/image/Slideshow

-Snickers_476x357%282%29.jpg

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