Customer Segmentation, Case Study Example

A memo is at this moment given in response to the concern raised about the limited number of deliveries made currently. As Fresh Direct, we would like to understand better our customers are segregated for us to be in a position of making maximum deliveries and hence maximize the profit margin.

Following the market analysis I did for Fresh Direct, our market is predominantly constituted of females, young families, and relatively older people between ages 30 and 55. Most of our customers are from New York, NU, CT, Philadelphia, and metro areas of DC. However, customer distribution in these areas is scanty.

Most of the customers of FD are from Manhattan and Brooklyn. It means, therefore, that we can come up with new techniques to increase our capacity for deliveries in these areas without investing a lot. As observed, FD has gained customer loyalty from its services in these regions, and therefore, it will be easy to get to the customers and also attract new customers.

From the data set following the market analysis, we believe that we can extend our reach in these areas as we will have support from the already established market in the region. We shall give discounts and send our product promoters and marketers to the identified areas where there are dense populations. I propose that we focus on areas such as Midtown, Lower Manhattan, Harlem, and Upper East Side because they are highly populated. In these areas, we are likely to get more customers for our products. In the same way, I propose that we focus on Bedford-Stuyvesant as it is more densely populated and is more likely to have a high purchasing power.

Thank you for your participation.

This memo is given to identify the customer segment that can be selected by Fresh Direct in an attempt to increase the sales volume. First, we will start by noting that Fresh Direct has a variety of customers who are segmented differently. There are female customers, the young, the slightly older, and the loyal customers who have different needs that should be catered. Increasing the sales volume will require that we identify the segment that has the highest potential in terms of consumption.

Following the market analysis carried out, it is evident that females are top in our consumer list. Therefore, our primary focus shall be the female customers and particularly those of an income above $125. With an extensive marketing campaign, it is possible to boost the number of female customers from 76% to a more significant percentage. An extensive campaign will enable Fresh Direct position itself in the minds of the female customers such that when they think of food product, the first company that comes to mind is Fresh Direct. Additionally, women are the ones who are majorly concerned with matters relating to food and groceries. Therefore, investing in making our products known by more women will be a positive effort in increasing potential customers, thus an increased sales volume.

Also, it will be essential to focus our marketing campaign on younger families are they are the future for this business. When we capture the attention and the interest of the young families as soon as they are young, they will grow with interest in our products, and they shall develop a habit of shopping with us. Further, every segment, no matter how small it is essential; thus, we shall put efforts in capturing more of the loyal customers and the old as they will also contribute to increased sales. Therefore, investing in expanding every segment will be essential for achieving increased sales volume.

Summary of analysis of key findings for the CEO

During the analysis of the market, I observed that most of our customers are females, young families, and relatively older people between ages 30 and 55. Also, most of these customers are concentrated in areas such as Manhattan and Brooklyn. Therefore, we thought that expanding our market from the already well-established ones would be less costly than trying to get into new areas where our products are not known. In areas such as Midtown, Lower Manhattan, Harlem, and Upper East Side, all in Manhattan and Bedford-Stuyvesant in Brooklyn, our market is likely to expand rapidly since they are highly populated. Also, our FD products are already known in these areas, and therefore, the already loyal customers will help in marketing the products and reaching out to new customers.

I, therefore, proposed to the COO that we deploy a team of marketers and product promoters who will promote and sell out the FD products in the identified areas. We shall take advantage of the large population in these areas as well as the already established market. The investment will be less costly due to the above-stated reasons and hence, favorable for FD. Our projections show that the idea will increase our market share to about 80%.

The younger families are the future of our business. These families have the possibility of an increase in the future, and their expansion will mean an increase in our market share. Thus, investing in marketing to get hold of a potential market that will grow in the future, and they will also form part of our current market. Investing resources for marketing targeting the loyal customers who have established the habit of buying from Fresh Direct will be essential to help maintain their loyalty towards our product in the market where a lot of substitute products exist.Following the analysis of the market segment selection, it is essential to note that every segment is crucial for an increased market share and sales volume. Therefore, setting aside resources that will be enough for all the sections will be of great significance. First, targeting more women will give us a broader scope of the market because women have the upper hand in matters about food and groceries.