How does Kinder segment its markets?

Different Kinder products evolve different consumer buying behaviour as well as product requirements. Consumers and organisations all have different needs in products and services, different abilities to buy those products as well as willing and authorities. Therefore, taking this into account, organisations sometimes decide to focus on a specific target group. The varying characteristics, needs, wants and interests mean that there are a few markets where a single product is satisfactory for all. This is called market segmentation.

Kinder Surprise is aimed for the child population mainly. There is, however, an older population which can purchase these products as well, but the main age of focus is 3-12 year olds. Those who buy the products for those without the ability of the buying power are parents. Thus, we can also say that Kinder Surprise is targeted to both children and their parents. The idea of the advertisement campaigns is to target children, however packaging, for example (multipacks, etc.) can target their parents (whole families). Kinder Surprise are sometimes divided by gender: pink packaging stands for girls, and the blue one for boys. This is a demographic segmentation. The segmentation variables used here are the following: age, gender, ethnicity, family size.

The packaging of Kinder Surprise on normal days is different from that of the Christmas. Therefore, behavioural segmentation is used in order to attract more customers by reaching different needs. Brand loyalty and volume usage are the variables for this segment.

Psychographic segmentation is also applied in a sense that Kinder chooses which toys to put inside a Kinder Surprise following the recent trends on cartoons children watch, or characters that are popular. Existence of different lifestyles in different countries and personality attributes are the variables of this segment.

As already mentioned before, the set of toys is always changed as well as packaging because of such reasons as constantly changing trends or during the period of holidays (Christmas holidays, Easter, New Year’s Eve, etc.) Cultures differ by a geographical location, therefore trends are likely to change as well. For instance, Easter is a quite important holiday in Italy, a lot of attention is paid to the development of the products particularly in that area than in any other country. Same applies to New Year’s Eve in Russia. Kinder also segments by geographical locations. Region, climate and market density are the most important variables for this segment, according to which the project is marketed. Dependant on the climate, Kinder Surprise is substituted in hotter countries by Kinder Joy.

Taking into account Kinder Surprise is targeted to many markets, designing more than one promotional message (for children and their parents), it can be concluded, Kinder uses differentiated segmentation targeting strategy to market the product. As an example, on the picture below it says “Create a personalised storybook with your child as the star”This piece on the webpage of Kinder is targeted to children’s parents, to encourage them use Kinder products in order to create a book for their own children. Differentiated marketing strategy is when a company creates campaigns that appeal to at least two market segments or target groups. What is also important, differentiated marketing strategies can target more than two segments, as Kinder Surprise does: demographic, behavioural, psychographic, geographical.

 

I will now introduce you to another term, which is brand positioning. It is about organisations and their desire on the way of looking into customer’s eyes. For example, do customer view you as a quality brand? Or a firm selling unique, valuable products? Positioning is an establishment of a brand in relation to the other ones in the perception of consumers. The position strategy that Kinder has includes both informational (advertising when physical information about the product is given) and transformational (mentions the benefits for the consumer). The version of both strategies combined is called two-sided positioning . According to, “Kinder is positioning itself by representing the benefits for both parent and child”.

There are some cases when companies focus on the wrong segments, the result of which could be an enormous loss of money, incapability of reaching the required target group, severe competition.  Therefore, it is essential for the chosen segments to be effective.

There are main requirements/criteria for a market segment. These are the criteria which apply to Kinder Surprise:

• Homogeneous (consumers allocated to each segment should be similar in some relevant way) – the consumers are similar because they might come from the same family (parents and children), their needs don’t differ much.
• Measurable (data should be available to measure the size of the market segment  – the data must be available in research agencies such as Euromonitor, etc. The data is measurable and includes size, purchasing power, profiles of segments.
• Substantial – the focus of the product is concentrated on a stable customer group. Segments of Kinder Surprise are large and profitable enough to serve.
• Accessible – each market segment is easy to communicate and reach. Kinder Surprise is sold in almost every supermarket/hypermarket/duty free shops, etc. The target groups are reached using TV commercials. The target markets of Kinder Surprise are effectively reached and served.
• Actionable/practical (implementing a distinctive marketing mix for each market segment) – this applies to the fact that Kinder packaging can be changed according to gender or holidays in a country. Effective programs are designed to attract markets Kinder targets.

Marketing research and opportunities it brings to Kinder Surprise

For my marketing assignments I choose Kinder Surprise as a product of investigation. Kinder Surprise is a part of well-trusted family company Ferrero, which produces confectionery products for adults as well as kids. In this post, I would like to tell you about marketing research and how valuable it can be for businesses (in particular for my brand of interest - Kinder). Enjoy reading :)

Before any product is launched, a company producing or delivering it might be interested in how successful it will be in a certain market in the future. The process of understanding and analyzing the competitors, clients, behavior of individuals, market trends and marketing environment is called marketing research . With the help of good research material, marketing opportunities and problems will be identified. To find the needed information, a research should be done, by means of collecting data from the target groups for instance. However, large companies, such as Ferrero, would not start interviewing people by themselves, they use service of outside agencies which specialize on market research. Such services are called syndicated data services , which are organisations that collect general information and sell it to clients.

"No research without action, no action without research" - Kurt Lewin

One of those agencies is Nielsen which measures consumer buying preferences. It monitors shopper behavior across demographics, stores, media  etc. for more than 250,000 households in 25 countries . Key business trends by product, category, channel or market can be examined using Nielsen services. For their retail measurement services point-of-sale technology sales and price data from major retail chain are obtained.

With the help of Nielsen, Ferrero can get a full understanding of the situation on the market of chocolate, in particular chocolate for kids. They can know the market share for specific sectors, total sales in a product category, sales of Ferrero’s own brands (Kinder, Tic Tac, Ferrero Pralines, Nutella) and sales of important competing brands (Mars, Nestle).

Ferrero can buy mainly primary data collected by Nielsen in the form of interviews, surveys because it is more reliable and requires time and effort. The information provided to Ferrero from Nielsen is extremely useful, as it tells whether Ferrero should improve its products in case sales of new Christmas packaging drop in comparison with the previous year’s (for instance). Secondly, they can provide insights into how changes in product offerings (Christmas packaging of Kinder Surprise for different years), pricing or marketing would change sales. Thirdly, if acquainted with upcoming or previous trends, the manufacturer of Kinder can make decisions on the popularity of toys amongst children and have a more specific focus. There is a lot more to this, such as Cultural Analysis, Social Media Research, looking for businesses to sell to, Demographic Research, New product Development .

Another example of a marketing research agency is the GfK company. It is German largest market research institute, and the fourth largest after Nielsen. Their strategy is to understand market dynamics and consumer behaviors to enable clients (such as Ferrero) to create winning strategies. They offer point of sales panels (what do customers buy, when and where), audience tracking (what do consumers watch, hear, read), custom research (why do they buy and what do they want), consumer panels (how do they behave and buy).

GfK deals with consumer habits, behavior, perceptions, attitudes, providing a profound understanding to a client (Ferrero/Kinder) of how consumers experience the brand, company and its services.

GfK can generate data about key consumer trends and point ideal target audiences, identify market opportunities and help Kinder develop growth strategies. This helps to drive the performance of a business. The impact of online and offline advertising could be evaluated and optimized if that is needed. GfK can try to evaluate the unique selling point of Kinder Surprise, how they compare it with other products and make customers keep coming back. For instance, they can find out whether it is more successful to place a stand with Kinder Surprise in the confectionery department or next to the cashiers, or why customers buy a Kinder Surprise substitution instead of it itself. They can also find out whether children are more interested in SpongeBob or Dora the explorer, in order to know which toys to put in a Kinder Surprise egg. 

Did you like the blog? More about the market research process itself on: https://www.youtube.com/watch?v=Zq391bgs6h0