A Study of Market Segmentation for Uk Frozen Food Industry Essay

A Study Of Market Segmentation For UK Frozen Food Industry Abstract The objectives of this study are to perform market segmentation for a SME in the frozen food sector. The study could form a basis of segmentation framework for a SME like Eden Farm, the framework once developed from academic literature would help to undertake a market segmentation in the frozen food industry with relevant segmentation criteria which would form a basis of targeting strategy for the company. In this Dissertation, the literature on Market Segmentation is reviewed and relevant criteria for segmentation in an industry are understood.

The typology from the literature identifying the variables for segmentation and relevant strategic tools for analysis of the sector is used to develop a framework for segmentation in the industry. The framework is applied to carry out a detailed segmentation of the markets for frozen food, an analysis is carried out to understand the target markets and strategic tools used to identify the target markets. Along with the segmentation of the markets, an analysis of the results is carried out and recommendations are provided for strategic growth of the company. Contents Abstract3 Acknowledgements3

We will write a custom essay sample on
A Study of Market Segmentation for Uk Frozen Food Industry Essay
or any similar topic only for you
Order now

Introduction3 Definition of the Company’s Issue3 Aims and Objectives of the Project:3 Literature Review:3 Review of Academic Literature for Segmentation:3 Market Segmentation:3 Definition of Market Segmentation:3 Segmentation Logic:3 The Segmenting-Targeting Framework:3 Segmentation Variables:3 Segmentation Criteria:3 Academic literature:3 Literature Review on segmentation in the food industry:3 Portfolio Analysis:3 Final Framework for addressing the Research Question:3 Research Methodology3 Research Objectives3 Research Approach:3 Research Strategy:3 Ethical Issues in Data collection3

Data Collection Methods3 Research Procedure3 Validity of strategic tools3 Project Report3 Company Overview3 Review of the issue in a business context3 Methodology for Research3 Data Analysis3 Frozen Food Market Analysis3 Analysis on Convenience Market3 Analysis on Cash and Carry3 Significance for Eden Farm3 Analysis on Symbol Groups3 Symbol Groups to be targeted3 Analysis on Forecourts3 Contract Catering3 Exports3 Target Customers for Eden Farm3 Market Attractiveness Criteria for the company:3 Business Competitiveness:3 Strategic Analysis for segment targeting:3 DPM Matrix:3

Recommendations:3 Implementation Issues:3 Critical Reflection and Conclusion:3 Review of Work Process:3 Reflection and critical analysis of the process:3 Limitations of the process:3 Conclusion and discussion of results in an Academic context:3 Bibliography3 List of Tables Page Table 1 Detailed Breakdown of Frozen Food Products37 Table 2 Recommended Customers for EF49 Table 3. a Market Attractiveness for Segments49 Table 3. b Market Attractiveness for Segments50 Table 4

Business Competitiveness Scores for Various Segments50 List of Figures Page Figure 1Market Share for frozen food34 Figure 2Frozen food market share by manufacturers36 Figure3Frozen food market share by products36 Figure4Comparison of market shares of products37 Figure5Market trends for desserts38 Figure6Convenience store sales40 Figure7Convenience store market share40 Figure8Sales of Eden Farm by Market Segment41 Figure9Sales Trends in catering47 Figure10DPM Matrix49 Introduction The project report considers customer segmentation for the frozen food industry and evaluates the opportunities for targeted growth in the sector for Eden Farm, a UK based distributor of frozen food. The retail food industry is dynamic in nature and is very competitive for the distributors. However, growth opportunities exist in the sector when a thorough analysis is carried out and the targeted segments are evaluated. Hence, the study identifies growth strategies in the sector by using segmentation framework and relevant analysis. Definition of the Company’s Issue

Eden Farm is a distributor of frozen food and ice cream across UK with a strong base in the North East and Yorkshire. The company’s prospect market is wholesale, cash and carry, symbol groups, CTN’s, forecourts, independent supermarkets. At the moment, the company is trying to increase its market presence in various sub sectors of the market. The frozen food retail is represented by many sub sectors and is composed of many market players. The business on the whole is variable across sectors and the levels of risk and opportunities for each sub sector and product is variable in nature.

The retail food industry is highly dynamic in nature and over the years, competition has increased and customer turnover has increased thereby reducing profit margins. The key to success in the sector is to understand the market structure well and selectively target the growth opportunities for profit by understanding the key criteria for growth and developing a framework for segmentation based on the company’s strengths. The company has to evaluate the market segmentation process and understand the customer needs to form a strategy driven approach for profitable growth.

There exist barriers for segmentation as firms lack an understanding of relevant literature for segmentation, the understanding of segmentation criteria, insufficient data and lack of understanding of criteria guided segmentation as a strategic tool. The same issues exists with the organisation, hence the project aims at bridging the gap between the real industry and academic framework for execution of segmentation. Knowledge of competitors and market is not sufficient to form basis of strategy.

The company needs precise criteria and parameters for segmentation to arrive at a strategy. Apparently, the company has an issue about creating a framework that helps selective targeting customers and which incorporates key parameters like risk profiles, turnover, profit potential, future growth opportunities. Hence, to address the firms overall issues, the report aims to conduct in depth analysis and research into the frozen food market in the UK and perform criteria guided segmentation for the market which could be used as a basis of recommendation for the company. The centre of the esearch would be a focus on markets, growth opportunities, and financial criteria for the segmentation implementation, new market opportunities and thorough review of relevant literature. Aims and Objectives of the Project: Based on the discussions about the company’s issues, the overall aim of the project is to analyse the UK Frozen food market by undertaking customer segmentation of the market covering Wholesale, Cash & Carry, Symbol groups, Forecourts, CTN, Independent supermarkets to understand the structure of the market and to explore growth strategies within the frozen food market.

The objectives of the business project can be subdivided as follows: . Understand market segmentation approach and relevant academic literature to adequately select criteria for segmentation, the relevant framework adopted by academia and its relevance in the industry, analyse the barriers for implementation of the framework and possible ways to overcome the barriers. . Get an overall understanding of the UK frozen food market, its growth, market structure. . To understand the various products within the frozen food segment and analyse the growth trends in various products. Undertake customer segmentation for wholesale, Cash & Carry, Symbol Groups, CTN, Independent supermarkets. . Select criteria for segmentation of the companies and the market to filter the target for growth opportunities. . Create a list of targets segments and products for the company based on analysis. . Identify company’s current position, its strengths and weakness within different segments and provide guidance for business growth. . Give recommendations with a prioritized list of targets and strategies for growth.

The business project is organized into three main sections. In the first section, we undertake literature review on market segmentation and the relevant criteria for segmentation, understanding this, we try to propose a framework for implementation of segmentation for the frozen food industry. In viewing the literature, we generate a research question and recommend a suitable methodology for the research. This is followed by a section wherein we understand the market, carry out segmentation based on various criteria, ndertake analysis on the prospective growth opportunities, analyse the company’s strategic objectives, market gaps, and current market position to arrive at a set of recommendations for the company. The final section draws conclusion for the dissertation and critically reflects the analysis and findings. A critical discussion covering the entire research, the possible barriers to research and future developments is done in the section. Literature Review: Review of Academic Literature for Segmentation:

The Academic literature for the research could be segregated into four main categories, the literature is divided into four main parts for purpose of relevance and clarity on the literature review and have a greater understanding on the segmentation process and its relevance to the industry. The literature could be categorised as follows: 1. Articles defining segmentation and explaining the logic of segmentation and the importance to the industry. 2. Articles that review the segmentation- targeting framework, understand various segmentation variables and help in understanding the segmentation parameters to understand any industry. . Articles that review the segmentation criteria to help and understand the targeting criteria for the industry and understand various segmentation attractiveness criteria for the industry. 4. Articles that review strategic tools for portfolio analysis to have a basis for effective targeting strategy. Market Segmentation: The first set of literature review consists of articles covering the definition of market segmentation, the benefits of market segmentation to the industry and the logic or rationale behind conducting market segmentation.

Main research and literature review related to this section is conducted by Green et. al (1988); Jobber (1998); Dibb (1998); Ferrell et. al, (2002); Brassington and Pettitt (2000);McDonald and Dunbar (2004); Lancaster and Reynolds (2005); Kotler and Keller (2006). Definition of Market Segmentation: “The identification of individuals or organisations with similar characteristics that have significant implications for the determination of marketing strategy” (Jobber, 1998,p. 171).

Segmentation involves consideration of consumer preferences and buying behaviour which needs to be analysed strategically and cannot be served by mass selling and branding approach Segmentation is an important and strategic tool for an organisation in identifying potential market gaps and helps to direct strategies at selected market segments (Dibb,1998). McDonalds defines market segmentation as “Market segmentation is the process of splitting customers, or potential customers, in a market into different groups or segments” (McDonald and Dunbar, 2004, pp. 34). A similar definition is given by Green et. l (1988) which says that “Market segmentation is the act of dividing a market into distinct group of buyers who might require separate products and/or marketing programs directed towards them” (Green et. al, 1988, pp. 672). Another definition by Lancaster and Reynolds (2005) defines market segmentation as “The process of breaking down the total market for a product or service into distinct sub-groups or segments, where each segment may conceivably represent a distinct target market to be targeted with a distinctive marketing mix” (Lancaster and Reynolds, 2005, pp. 84).

Most of the definitions of segmentation converge into similar concept of breaking down a market as per various parameters and segments to achieve a target strategy for the market. However, looking into the definition of segmentation, we now look into the rationale behind conducting market segmentation as given by academics and practitioners, the following section looks into the logic behind segmentation as given by various literature and sources. Segmentation Logic: Given the complexities of the current businesses, targeting the entire market at once without segmentation would involve loads of risks and higher costs.

Markets are not uniform across the businesses; effective segmentation would mean lower operation costs and higher market coverage (Ferrell et. al, 2002). A similar view is echoed by Brassington and Pettitt (2000) wherein the authors use the concept of an orange to explain the logic of segmentation. The orange as an analogy to explain segmentation explains that an orange when peeled is very convenient to eat rather than having a whole orange without peeling. In a strategic sense, the authors essentially mean hat segmentation of market would enhance profitability, growth thereby reducing risks and efforts (Brassington and Pettitt, 2000). Jobber (1998) further strengthens the logical argument by saying that “The objective is to identify groups of customers with similar requirements so that they can be served effectively while being of a sufficient size for the product or service to be supplied effectively” (Jobber, 1998, pp. 171). Market segmentation is a business sensible method of serving customers as per the group and the set criteria laid for segmentation.

Kotler and Keller further strengthen the segmentation logic by describing segmentation approach as a “Rifle approach” wherein efforts are focussed and aimed at a particular segment of customers for higher efficient and success. (Kotler and Keller, 2006). Lancaster and Reynolds (2005) give similar views on segmentation logic, the authors correlate segmentation with improved competitiveness in the complex markets and point that segmentation approach comes out from increased competition in the markets, varied demand patterns, and complex operations of organisations.

Detailed Segmentation of target markets would strengthen the targeting strategies (Lancaster and Reynolds, 2005). A step further, McDonald and Dunbar (2005) in their extensive work on market segmentation link segmentation process to corporate function. The success of an organisation is strongly linked to proper market definition, market segmentation and selective targeting of customers. Segmentation of markets would lead to definite identification of customers which are central to an organisations success.

McDonalds work and ideas on segmentation strongly identify with the ideas of other prominent marketers and academics, all the definition and ideas point to perhaps common understanding of the logic of segmentation, the summary of the benefits of segmentation to an organisation is as follows: 1. Segmentation enables targeted marketing, thereby the gaps in the market are analysed and opportunities for growth are understood. Hence, the market with the highest potential is identified which would help the company to focus on marketing efforts (Lancaster and Reynolds, 2005). . Segmentation aids Niche marketing strategy wherein the organization can achieve segment domination and market control over a definite market. Segmentation enables an organization to gain competitive advantage by enabling it to understand the market in a better way and focus on segments wherein the strength of the organization is greater (McDonald and Dunbar, 2005). 3. Segmentation of market makes the organization more cost effective, focused, and enables the organization to provide superior customer services.

The Segmenting-Targeting Framework: The process of market segmentation and targeting involves a thorough understanding of consumer characteristics with respect to consumption pattern, demographics, geography, socio economic variables and other variables. Once, the characteristics are understood, customers are clustered into segments based on similar characteristics. The target market is then judged based on various segment attractiveness criteria (Jobber, 1998).

The segmentation process has been described by various academics and practioners as a three step process, wherein the steps are essentially segmenting-targeting-positioning (STP) (Dibb, 1999; Lancaster and Reynolds, 2005; Kotler and Keller,2006; Patrick De Pelsmacker et al, 2007;). In reviewing the literature on segmentation and targeting, we arrive at the following logical sequence of segmentation: 1. Segmenting: The stage of identification of relevant segments using segmentation variables and clustering the variables into relevant segments. 2.

Targeting: The stage involves appraising market segments based on factors like growth rate, future growth, extent of competition, overall market size, customer preferences, etc. The targeting should be based on segmentation criteria available in the literature. Segmentation Variables: Segmentation variables are able to split the market into smaller sub sections wherein common characteristics of the sub groups are taken into account (Dibb et al, 1997). There are a number of segmentation variables suggested by various academics and practitioners; a detailed review of the variables is given in this section.

The section consists of articles contributed by Lancaster and Reynolds, (2005), Dibb et al, (1997), Randall, (1993), Kotler and Keller, (2006), Jobber, (1998), Richard Wilson et al, (1996), Mitchell S (1995), Patrick De Pelsmacker et al, (2007). Demographic Segmentation: The segmentation includes a variety of bases like age, sex, family life cycle, occupation, education (Lancaster and Reynolds, 2005). An interesting aspect of family life cycle segmentation is the idea of consumer life cycle and hases wherein purchase patterns are considered before segmentation, thereby giving varied details of product consumption and buyer habits (Dibb et al, 1994). The demographic segmentation can be much more complicated by the addition of variables like family size, social class, education and thereby linking all the variables together to identify market patterns (Randell, 1993). Demographic segmentation is efficient and gives insights into the market and is highly preferred means of segmentation (Kotler and Keller, 2006).

Similar views are given by Lancaster and Reynolds (2005). Geographic Segmentation: This form of segmentation acknowledges geographic location variations in consumption patterns (Jobber, 1998). Geographic segmentation could be achieved by regional breakdown of patterns which could incorporate factors like urban locations, climatic conditions, country wide distribution. Mintel has done several segmentation based on geographic variables like location, in the frozen food segment, Mintel has performed geographic segmentation of various distributors, consumption patterns.

Socio Economic Segmentation: Segmentation has also been carried out as per socio economic conditions like income, education, social status (Richard Wilson et al, 1996). Geo demographic Segmentation: This approach has been widely used by academics as well as industries. Various geographical and demographic variables are combined to reach at the segmentation stage. Geo demographic segmentation has been acknowledged and proposed by academics in their literature. Some of the references to geo demographic segmentation is in the literature proposed by Jobber (1998), Kotler and Keller (2006), Dibb et al (1994).

Mitchell S (1995) describes the process of segmentation as a clustering approach wherein clusters of people and markets are segmented together as to incorporate common variables like product preferences, background, location, etc. Behavioural Segmentation: The behavioural segmentation approach incorporates variables like usage rate, user status, benefits expected, occasional buying, customer loyalty. The segmentation approach takes into account the consumer behaviour and preferences, perception towards a brand.

Hence analysis of the buying behaviour would be able to segment the market as per consumer choices and preferences (Patrick De Pelsmacker et al, 2007). Similar views are expressed by Kotler and Keller (2006), Cannon (1992) wherein the authors propose the segmentation approach for a varied range of markets and segments. Segmentation Criteria: In the academic context, there has to be definite criteria for segment to be attractive. The overall attractiveness criteria for a segment to be attractive are Measurability, substantiable, accessibility, differentiable, actionable (Kotler and Keller, 2006).

The size and characteristics of a segment form the basis of measurement criteria for the segment. In addition, for segments to be useful, the segments should be substantial enough to be profitable and logical to serve. The criteria should be a basis of action for the segmentation to be attractive (Patrick De Pelsmacker, 2007). Reasonably similar views are expressed by Richard Wilson et al (1996) wherein the authors state that measurability and substantiable are key criteria for segmentation to be useful.

In addition, the authors also state that the condition of stability should be met in order to forecast future growth in advance with sufficient accuracy (Richard Wilson et al, 1996). The conditions for targeting strategies mentioned in the review above are very broad to reach any logical criteria for attractiveness to appraise market segments. A further review of academic literature is essential to arrive at the attractiveness of segmentation criteria. To arrive at definite criteria for the frozen food industry, we would review literature based on the following sources of information: 1.

Academic Literature 2. Industry Literature Academic literature: Academic literature lays emphasis on market attractiveness and company competitiveness as a basis for targeting criteria (Jobber,1998; Richard Wilson et al, 1996; Patrick De Pelsmacker et al 2007; Lancaster and Reynolds, 2005; Bonomo and Shapiro, 1984; McDonald and Dunbar, 2004; Doyle, 2000). Various academics put concrete views on targeting criteria, in analysing the views, the following section has a close review of the criteria. Jobber (1998) emphasis on market factors to assess market attractiveness.

Some of the market factors are “Segment Size, Segment growth rates, Price sensitivity, bargaining power of suppliers, bargaining power of buyers, barriers for market entry, barriers for exit, threat of new entrants, nature of competition, social trends, political issues competitive differentiation”(Jobber, 1998, pp. 188-189). These factors play a strong role in assessing overall market attractiveness of any segment. An analysis of the above factors would put the research in a strong position to understand the nature of market attractiveness criteria for various segments and the organisation.

Further to this, Jobber (1998) also stresses the importance of a firms capability, wherein the author mentions “Against the market attractiveness factors must be placed on the firms capability to serve the market segment” (Jobber, 1998, pp. 189). Firms capability could be assessed using our own analysis of a firms cost advantages, capabilities, other tangible factors. Richard Wilson et. al (1996) review market attractiveness criteria based on factors like the size of the segment, growth potential, profitability to be viewed against the backdrop of a firms individual capabilities.

Patrick De Pelsmacker et al (2007) lays strong importance to attractiveness criteria in his work. The author proposes a methodology for selection of attractive target group, the methodology could be summarised in his own words as “To evaluate segments companies have to look at four elements: size and growth of segments, structural attractiveness of a segment, objectives and budget of a company, and stability of market segments” (Patrick De Pelsmacker et al, 2007, pp. 133).

The author lays stress on financial turnover, profit potential and growth prospects of segments as important conditions for appraisal of market attractiveness. Further to it, the academic lays stress on the fact that structural attractiveness could be evaluated using Porters five forces framework. Lancaster and Reynolds (2005) propose a framework to appraise each segment based on factors like sales growth and profit potential, segment size, nature of competition. The decision to target any segment should be matched against in house company resources and company objectives.

The framework is similar to the one described by Jobber (1998), Richard Wilson et al (1996) and Patrick De Pelsmacker et al (2007). A slight variation exists in a framework proposed by Bonomo and Shapiro (1984), the researchers view market attractiveness as a function of segment profits wherein the profit generated by segments forms a key criteria for judging overall segment attractiveness, but the profits generated on each segment are analysed in depth by the framework which aims to calculate returns on total investments, overall segment margin and contribution by each segment.

The profitability analysis is then linked to organisational objectives and capabilities. However, most of the parameters specified by researchers are incorporated into frameworks developed in the 1990’s by other academics. An extension of the earlier frameworks, the market attractiveness criteria developed by Abratt (1993) includes factors like overall market size, growth potential, and nature of competition which are to be mapped against organisational capabilities like resource strengths and strategic intent of the organisation.

Further to the segmentation criteria, A framework put forth by Doyle (2000) gives segmentation criteria to assess market attractiveness wherein overall market size, growth rates, nature of competition, overall market stability are to be mapped against organisational capabilities. The framework proposed by Hooley and Saunders (1993) divides the factors for market attractiveness criteria into Market factors, Competitive factors, Economical factors and Environmental factors.

The market factors and economic factors are similar to those proposed by Jobbers (1998), MacDonald and Dunbar (2004) which are viewed in the next part of the literature review. However, the research puts socio-economic factors as environmental factors, but the factors are similar to other research. A concrete piece of segmentation attractiveness criteria is proposed by McDonald and Dunbar (2004), wherein the academics put forward a definite number of factors to be used to assess market attractiveness. The factors are distributed into segment factors, financial factors, technological factors, socio-political factors and competition factors.

The list of factors could be summarised as follows: . Segment factors: Size, growth rate, price sensitivity, cyclicality, season ability, bargaining power of suppliers. . Financial factors: Contribution margin, barriers to entry and exit, economics of scale, capacity utilization. . Technological factors: Complexities, patents, technological usage. . Socio-Political factors: Social trends, human behavioural factors, legal frameworks. . Competition Factors: Nature of competition, threat to entry and exits, threat of substitution. Source: McDonald and Dunbar (2004)

Analyzing the literature for segmentation criteria, it could be observed that very similar frameworks are proposed by Hooley and Saunders (1993), Jobber (1998) followed by MacDonald and Dunbar (2004). The market segmentation criteria proposed by most of the academics are similar in nature, in essence the academics try to evaluate the market attractiveness of the segments and judge it against organisational capabilities. The literature review carried out so far suggests that most of the academics tend to converge on similar views and factors for segmentation.

The next section tries to review the segmentation process carried out in the food industry. Literature Review on segmentation in the food industry: Market segmentation in the frozen food industry has not been carried out by any researcher so far, however, a few literature points to segmentation in the food industry. Consumer demographics and behaviour formed as a basis for segmentation to help marketing and promoting eggs (Funk and Phillips, 1990). A review of literature on food segmentation carried out by Asp (1992) highlights demographic segmentation approach for segmentation of food products developed by Pillsbury company.

However, very limited research into food segmentation has been done so far, specially for the frozen food industry. The limited literature available for the food industry nevertheless points to the fact that geo demographic segmentation is considerably used for segmentation in the food industry. Apart from the food industry, a market segmentation model with mixture regression was attempted by Marko and Sarstedt (2008), however, the criteria for the choice of segments possessed several difficulties in forming a regression model, sample size of the model could not be completely understood, and the model is still in nascent stage of development.

Portfolio Analysis: Portfolio Analysis help the organisation to correlate market attractiveness with the organisational strengths. The literature on portfolio analysis is reviewed from strategic marketing sources, the work of academics like Gerry Johnson et al (2006); Richard Wilson et al (1996); McDonald and Dunbar (2004); Porter (1985); Guiltinan and Paul, (1994) and Morrison and Wensley (1991). Portfolio Analysis provides varied framework for analysis. Models ike Boston Consulting Matrix (BCG), Directional policy matrix (DPM), The General Electric Multifactor Portfolio Model, Porter’s five force model are regularly used to make a basis for putting the market attractiveness criteria relative to organisational capabilities. BCG matrix growth share model allows business units to be mapped on a matrix with market growth rate and market share relative to competitors as the key criteria for targeting (Richard Wilson et al (1996).

The model allows the researcher to look into the future potential of markets, at the same time, the researcher would also analyse company’s competitive position by way of market share relative to its competitor. The matrix is constructed in a way to understand the potential for targeting as the four cells of the matrix give detailed insights into growth prospects and market share simultaneously, with cells giving an idea on low share and high growth; high share and high growth; high share and low growth; low share and low growth (Gerry Johnson et. l, 2006). However, the model comes with certain limitations, limitations as to the model could not be applied to all market segments, perhaps it could be used for strategic business units, the model has practical issues in deciding the clear guidelines on low share and high share (Richard Wilson et al, 1996; Morrison and Wensley, 1991). The GE multifactor portfolio model introduces a number of variables in a nine cell format, the key criteria in assessing the business unit is industry attractiveness and business strength.

The key criteria for industry attractiveness is market size, growth rate, competitive intensity, profitability (Porter, 1985). However, the model lacks precision as the weighting system of various factors is subjective (Donald R. Self et al, 2002). The model is rather restricted to company reviews instead of competitive analysis. The Directional Policy Matrix (DPM) model positions the segment as per market attractiveness and business competitiveness. The market attractiveness criteria usually incorporates a number of key attractiveness factors as discussed earlier in the literature.

The model indicates the business with the highest growth potential and relative business strength of the segment which would help the firm to target market according to overall market attractiveness (Guiltinan and Paul, 1994). The model overcomes some of the shortfalls of the BCG and GE model, in that the model tries to identify relative strength of the business with regards to potentially attractive segment (Gerry Johnson et al, 2006). The framework of market attractiveness and firm competitive is incorporated in the DPM, the framework has been extensively illustrated by McDonald and Dunbar (2004).

The model explores most of the market attractiveness criteria illustrated by various academics and the model could incorporate relevant attractiveness factors with precise weights allotted to each factor. Porters Five force framework is very relevant in analysing factors like bargaining power of buyer, bargaining power of supplier, degree of competition, threat of substitutes and barriers to entry and exits (Porter, 1980). These factors form a basis of criteria for assessing business competitiveness and market attractiveness.

The Portfolio Analysis Models as discussed above could form an important tool in decision making, decisions related to targeting of a segment. The view is supported by most of the academics and practitioners, however, amongst all the models available, DPM could be effectively used for targeting strategy as it incorporates various factors for market attractiveness, the business strengths could be analysed using various factors suggested by Hooley and Saunders (1993); Jobber (1998) followed by McDonald and Dunbar (2004).

The possible pitfalls of analysis and weight criteria of each factor of market attractiveness and business strength, the means of data collection and segmentation parameters as suggested by Weinstein, (2006) could be nullified by careful analysis and business understanding. Hence, we would use the DPM model to form a basis of targeting strategy for the business segments using various attractiveness criteria as discussed in the literature. Final Framework for addressing the Research Question:

An understanding of the issues facing the company and the aims and the objectives of the project puts forth a need to understand market segmentation process on a whole right from segmenting to targeting of possible market segments. The literature review conducted for market segmentation gives adequate details as to address the research area and company issue by way of the following research question: 1. What segmentation criteria should be used for segmentation and targeting of potential market in the frozen food industry? . What segments offer the greatest opportunities for selective targeting? The literature review so far conducted would be adequate to address the two research questions. A final framework for addressing the research question is developed as follows: 1. Identification of segments by selection of appropriate base for segmentation 2. Evaluation and Appraisal of market segments 3. Assessment of segment attractiveness 4. Selection of target groups 5. Analysis of target groups by using strategic management tools.

In adopting the framework for addressing the research question, we would follow the logical steps of segmentation of frozen food industry based on customers, market, products and analyse trends in the segments by way of literature review on frozen food. Thus, we arrive at a framework on market segmentation and targeting for frozen food industry, the framework would be a right step in addressing the research questions. Research Methodology Research Objectives The research is carried out to evaluate potential gaps in the market and come out with a valid set of recommendations on growth opportunities in the frozen food market for Eden Farm.

The research is to be carried out by the application of market segmentation principles and approaches using data from various sources in the frozen food industry. The results from the research would be used to make valid recommendations and conclusions. The main research question for our research is: What segmentation criteria should be used for segmentation and targeting of potential market in the frozen food industry? What segments offer the greatest opportunities for selective targeting? The research is Exploratory by nature.

An exploratory study allows to get new insights, seek an answer to the question and understand as to what goes on (Robson,2002). Exploratory research is flexible by nature and gives new insights into the research (Saunders et. al, 2007). Research Approach: In our research, we will use qualitative research techniques for analysis and data collection. We use a multi method qualitative study wherein we use data from varied sources and accounts for analysis. Qualitative research method is flexible in nature and gives insights into behavioural patterns and logical reasons for the patterns.

Considering our market research which involves definition and identification of growth opportunities using market segmentation which requires in-depth analysis and investigation, we decide to use qualitative methods. We are using our research to identify and define market segments and analyse behaviours and associated reasons behind it. Hence, we use a qualitative approach (Baker,2000). Research Strategy: Case Study Approach: Case study based approach involves empirical research strategy and uses a number of data sources as evidence for the research (Robson, 2002).

A case study based approach focuses on contemporary events and tries to answer research questions like how, why (Yin, 2003). An understanding of questions that are exploratory in nature is essential. More often, the what type of questions are exploratory. The questions are open to explore best answers to the research question (Yin, 2003). For an exploratory research, there exist different methods of research viz; an exploratory experiment, a case study strategy, a survey could be done to explore answers to the question.

For a research, the how and why type of questions seek explanatory research and the possible strategy for research is the use of case study, experiments, historical methods. However historical methods deal with the past and have no relevance for the future (Yin,2003). An experiment method for research is adopted when the researcher can observe and manipulate behaviour perfectly to reach at solutions (Yin, 2003), however organisations do not participate in experiments due to time constraints.

This leaves the exploratory study only with the case study strategy which is very relevant for research questions like what, how, why and when the focus is on contemporary situation with relevance to real context (Yin, 2003). Hence, we understand that case study is the only relevant method with us for conducting our research and asking questions like what and how which is the case with our research. The methodologies strength lies in its approach to analyse wide variety of data like “documents, artifacts, interviews, and observations” (Yin, 2003, p. 8).

The evidence could perhaps be qualitative or quantitative in nature which leaves the researcher with a wide choice for data collection (Eisenhardt, 1989). However we tend to avoid establishing relationship between various variables. The most important feature of a case study based method is that the researcher derives benefits from prior theoretical basis to arrive at an analytical stage (Yin,2003). However experimental studies rely strongly on statistic analysis and the aim of the research is to obtain a statistical result which is not the case with the case study based approach (Eisenhardt, 1989).

A case study based approach would allow a detailed analysis of the industry using various sources of data to understand the market, growth opportunities and trends, buyer groups, forecasts, etc. In our research, we could collect qualitative and quantitative data from various research and literature to understand the market and analyse the results. The approach would ensure flexibility of research and access to tested sources of information and research. Ethical Issues in Data collection There are no ethical issues in our data collection method, as we are not doing any questionnaire or interviews for our research.

However, the research involves an organisation, wherein certain data would be collected from the organisation for research and analysis purposes, confidentiality of the data would be an issue for the organisation as the data is valuable for the organisation and leakage of data to external sources could have serious problems for the organisation. Hence, the data is kept confidential and the research findings are kept confidential for a certain number of years. University guidelines on research ethics are followed while collecting data and a total confidentiality of company data is maintained.

Data Collection Methods The data collection for the research is done from various sources of data, some of the data sources are as follows: 1. Mintel: Extensive data related to market size, growth, structure, consumer trends, wholesale market, cash and carry, forecourts, UK retail sector and its subsectors market drivers, market analysis, five forces analysis, insights into various companies, recent happenings in the industry, etc. was collected and analysed for understanding the market and identifying growth opportunities and trends in the industry.

The data collected is qualitative and quantitative in nature, Mintel compiles its data from various sources like government agencies, industry organisations, company reports, international agencies, market research and survey. It uses comprehensive data analysis techniques to arrive at the results. The data provided by Mintel provides extensive insights into the current trends, growth opportunities, current and future trends, five force analysis, extensive details of companies and its strategies, SWOT analysis, strategies.

The data is capable of arriving at recommendations stage as it gives sufficient details of the industry and growth trends. However, a critical issue is the time lag of information as the data for some of the sectors is more than a year older, which would mean that the information is not current, however information from other sources has also been collected to negate the effect of time lag on information and the data is analysed using up to date information. 2.

Datamonitor: Datamonitor provides insights into market, the industry, the companies, market size, market segmentation, trends and forecasts, SWOT analysis. The source of information is reliable in nature as it forms a basis of primary data for major industries and data is collected from various sources and government agencies. The reports provide historical as well as future trends which helps us to analyse the data and market in a way as to give insights into the market and tap growth opportunities.

Market segmentation of the frozen food industry could be effectively carried out using the reports. However, the data is provided in US Dollars sometimes, which could be a source of error in analysing the trends as the currency conversion factor at the time of data collection and the present day between the dollar and the pound sterling is not the same. However, data is collected from other sources to negate the effect and carry out proper analysis. 3. Other sources of information: Others sources of information includes the British frozen food association, IGD, The Grocer.

The data collected from British frozen food association is very much up to date, gives insights into frozen food market and recent happenings, the size of the market and future trends. IGD data is very inclusive in nature and gives comprehensive insights into the market. Some vital data relating to the sector is collected from the grocer magazine which gives details of various companies, market structure and retail sector segmentation. The data when put together comprehends with others sources of data and gives in depth analysis of the market. 4..

Company data: The data collected from the company gives details about its market size, its sales pattern, customers, targets, etc. This helps to make suitable comparisons and analyse the strengths of the company, future strategies, and recommendations. 5. Various websites: Data was also collected from various websites of competitors and major players in the industry, export data, national population profiles was collected from relevant websites. The data when analysed allowed us to segment the market according to population demography and geography.

The extensive use of secondary sources of data gives the research a flexibility during the data collection and analysis stage, given the fact that the research uses multiple source of evidence, the data will need to converge to give results (Eisenhardt, 1989). Research Procedure The following steps would be followed for our research: 1. Data collection: We collect data from various secondary sources, the data relating to market structure, size, trends, historical and future trends, growth segments, competitors. . Data Analysis: The data once structured would be analysed from various perspectives. Historical data would be analysed, the industry structure studied, future trends studied and then market segmentation carried out. 3. Market segmentation: We use determinants suggested by academics and literature to arrive at valid criteria for segmentation. The criteria used would be demographics, market attractiveness, growth potential, etc, as suggested by various academics. 4.

Evaluation of potential targets and gaps in the markets: For this evaluation, we use various techniques like DPM and arrive at recommendation stage. 5. Business strategy: We use the analysis and techniques to give final business strategy for Eden Farm based on literature review and case study methodology. Validity of strategic tools The use of DPM technique to evaluate potential targets helps the analysis as the model puts the segment under consideration into its position of business attractiveness and relates it with its business competiveness which helps the company to identify suitable targets.

However a possible pitfall lies in the allocation of weights to each segment of the market which is subjected to bias, however a careful analysis would help us to reduce the drawbacks of the method. The method would help us to correlate academic literature and framework with our findings in a way as to strengthen our analysis on target segments. Project Report This section of the report provides an analysis of the frozen food market by way of application of the segmentation theory.

The data collected from primary and secondary sources is analysed to give an overview of the frozen food market, a detailed analysis on the company’s markets involving Wholesale, Cash and Carry, Symbol Groups, CTN’s, Forecourts, Leisure, Exports is done to arrive at adequate market screening criteria, understand the growth prospects in the market and to analyse the gaps in the company’s strategy by way of segmentation framework.

Analysing the market, suitable market attractiveness and business competitiveness criteria are evaluated to arrive at the target markets, wherein strategic management tools are used to arrive at a recommendation stage. The results of the analysis are documented in the final part of the report with an understanding of the work process, the limitations of the work procedure, the results in the context of academic literature and Academic conclusions.


Hi there, would you like to get such a paper? How about receiving a customized one? Check it out