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Market segmentation techniques provide a temporary commercial advantage to the marketers. Mostly firms use market segmentation techniques to attract the right customers. Its main objective is to increase the marketing efficiency by making efforts especially directed at the designated consumer segment and in a manner that is consistent with the segment’s characteristics. In this process the market is firstly reduced to its smallest consistent where the marketers can find common dimensions. It also reduces the risk involved in deciding when, where, how and to whom a product should be marketed. Segmentation also denotes the division of a set of consumers into persons having similar needs and wants. The market must be segmented before target marketing can be achieved.
Method Products’ market segment mainly consists of the customers who are interested in non-toxic home products that do not harm the environment. They are mostly the green consumers or those who buy products with a responsibility towards a green and clean environment or those with a green preference lifestyle. The general consumer of Method products is most likely to be female and between the age group of 25 to 50. Method Products sells better quality products whose prices are still low. The consumer segment of Method Products looks for better quality products and not for the absolute lowest prices. These customers are generally concerned with indoor pollution as well as personal and family health. Thus the market segment for Method Products consists of green consumers whose buying habits are aligned with their environmental concerns.
To further the market segment of Method Products, the green consumers who buying habits are aligned with their environmental concerns can be broken into different subsections. These subsections consist of four groups. The first group is the beginner group. This group is generally willing to try a new cleaning product that is green friendly, but this group tends to stick to the food portion of green conscious such as organic foods. This group consists of the most amounts of people. The second group is the occasional buyer of green products. The occasional buyer has some green products, but most of the products are still foods and other products that can be consumed. The third group is the regular buyer group. This group takes a conscionable action to ensure green products and green living is a way of life for them; however, they still stick more to consumables. The fourth group is the everyday group. This group is the most dedicated of all. This group lives a green lifestyle inside and out. They already use green products from all aspects of life, including cleaners and detergents.
Within these four categories, the categories are placed into one of two customer segments. The first customer segment consists of customers who have a green preference of lifestyle, who is female, 25-50, and is attracted, to attractive design and natural aroma. Customer segment two is an extremely concerned green consumer.
Method Products focuses on the first three groups, beginner, occasional and regular, which fall under customer segment one.
The market characteristics consist of four characteristics. These characteristics are geographic, demographic, psychographic, and behavioral (Young, 2011). Method is currently based on the west-coast, but it does not focus certain people geographically because parents who want better for their children live everywhere. The demographic focused on are parents, usually younger, and women. The psychographic is the way people think. Method Products aim towards people who think eco-friendly or green. These people want better for themselves and/or their family, but they don’t necessarily go green all of the time. The fourth characteristic is behavioral.
Firms generally identify target markets based on their affinity to the product. It is usually not possible to serve all the customer segments identified and therefore, a target market is identified where the consumers have the highest affinity to the product. Usually target marketing is based on whom your product is meant for and what is unique about the product.
The demand shifters in case of Method Products can be the availability of the substitutes and their prices as well as changing preference of the consumers. There are multiple competitors to Method Products due to the low barriers of entry. Its main competitor is Clorox GreenWorks. Some products by Method contain petroleum based ingredients, and the product is relatively less known to the mass market which makes it a harder sell to the target audience. Furthermore, there is a growing number of competitors. The price is also a shifter. Though Method is not extremely more expensive, it does tend to run higher in price than GreenWorks. The pressure being put by GreenWorks can also prove demand shifters for Method products.
As learned from the external demand factors in the situational analysis essay, the Method Product is not specifically designed for the extremely eco-conscious, rather it is designed for the mother who does not want their small children to be exposed to many chemicals, or a person who wants to just make a small difference. (Seerieeni, 1). Children are born every day. The demand for products that are not harmful to them is ever increasing, which in turn helps increase the demand for the Method Products. As the demand increases, so does the variety of products wanted from laundry soaps to hand soaps to even more household cleaners. Though there are competitors who offer green cleaning supplies, there is an unmet need for green cleaning supplies that look sleek enough to be put out in the open and not hidden underneath the sink.
When a firm aims marketing activities at a certain market segment, they are aiming at a target market (Young, 2011). Furthermore, the target audience is the advertising aimed at the group.
Marketing communication process begins with identifying audience that will be focused of the advertising and promotional efforts can include individuals, groups, niche markets, market segments or general public. Each is approached differently. Market segments will be focused on. This is a broad class of buyers. These buyers have similar needs (Young, 2011). The market is segmented different way and there are different ways to reach the customers within each segment. The larger the market segment, the larger the advertising technique needed. The techniques can range from personal advertisement to a broad based media such as magazines or television. Television advertising is not necessarily good advertising (Young, 2011). Though it can reach many people at one time, the same people may be exposed to many more messages at the same time, which means those who saw the ad may not necessarily act upon the information gained from the ad. Furthermore, the ad does not allow the company the ability to clarify any ambiguities in the information presented (Young, 2011).
Celebrities can be used in marketing and advertising to help grasp the attention of a potential buyer; however, when choosing a celebrity it is important to choose a celebrity that will be favorably received by the target audience; however, those with strong opinions will be less influenced (Young, 2011). This is a reason why Method does not use celebrities in their advertisements. Those who are ecologically concerned have a strong opinion about the Earth and how to sustain it, and would be less influenced by celebrities.
Ultimately a company wants to promote the product, so they use a persuasion matrix. This allows the company to know how the variables interact with one another so not to enhance one to the detriment of another (Young, 2011). Method Products must focus their advertising and marketing to the chosen target market of people who are aware of green products, but do not regularly purchase or use them. Method’s key positioning is to be a biodegradable cleaner that is non-toxic as well as inexpensive. The product is also aimed to be made out of attractive, recyclable packaging. So Method uses this positioning in their promotions. Since 2000 the look of Method has been changing, which has helped with people wanting to buy the product.
Method uses attractive packaging as a part of their promotions of the product. In 2004, the company launched a triple concentration detergent, the first available to the U.S. And in 2008, focusing on the target market of eco-friendly people, Method has bottles of 100 percent recycled plastic. They even refocused their target on parents, by creating a bottle with Disney in order to help drive the parent to buy the product because it is design friendly for their child (Packaging innovation spurs rapid growth, 2013).
Two main competitors are GreenWorks and Seventh Generation. Clorox has a mass target market across different demographic and physiological segments. Its target market is mainly focused on the health conscious consumers who are accessible and cost effective cleaning products (Miller, 2007). The consumers for Clorox belong to various income levels. GreenWorks by Clorox is a cleaner made of natural products like lemon and coconut. This product has also given Clorox a socially responsible image (Miller, 2007). GreenWorks by Clorox is non-allergenic and comes in a recyclable packaging. Clorox is sometimes misunderstood as chemically harmful. However, its chemical ingredients are very safe. GreenWorks by Clorox has been a bit successful at changing this image. Its target market now consists of people with an income level generally not higher than $80,000, who are looking for cost effective cleaners. This extended product line of Clorox, GreenWorks, has added those consumers to its target market who are looking for environment friendly products without paying a premium price (The Clorox Company Goes Green, 2010).
The general perception of green products among the consumers is that they are costly and come for a premium price. Thus we can see that overall, the main advantage for customers of Clorox is its cost effective products or its pricing strategy. Overall it is the green consumers who prefer low cost products that constitute Clorox’s target market.
The target market for Method Products is eco and price conscious people who want better out of their cleaning products, but not looking for the lowest price available. The target market will especially focus on women, with children, between the ages of 25 and 50 (Method Home, 2013). The average consumer of eco-products is from Generation Y. Generation Y is people born 1979-1994. This generation is socially conscious and ultimately concerned about the environment (Kotler-Keller, 2012). In order to reach this audience, it is important to keep the advertising simple. The advertising should focus on the reusability of the packaging and the benefit of the product to the Earth (Ottoman, 2010).
Generation Y gets a good bit of their information for products from entertainment and internet. In a way to reach Generation Y properly, Method sought the help from a San Francisco based firm Euro RSCG. The aim of the website is to create a “holistic online consumer experience (Gianatasio, 2009)” This not only helps with the eco-friendly nature of the brand, but it helps with advertising costs too. For instance, in 2006, Method spent $6 million on advertising; while in 2007, the brand only spent $2 million (Gianatasio, 2009). Turning to the internet advertising not only saves money, it saves paper for print ads and becomes even more eco-friendly.
Gianatasio, D. (2009, April 20). Method Picks Euro RSCG for Digital. ADWEEK Online. Retrieved from http://go.galegroup.com.ezproxy.liberty.edu:2048/ps/i.do?id=GALE%7CA208109779&v=2.1&u=vic_liberty&it=r&p=ITOF&sw=w
Kotler-Keller (2012). Marketing Management. Prentice Hall.
Miller, L. (2007). Products to Break the Chemical Habit and Get Eco-Friendly. The New York Times. Retrieved from http://www.nytimes.com/2007/07/19/business/media/19adco.html?_r=0
Ottoman, J. (2010). A smart way to segment green consumers. Retrieved from http://blogs.hbr.org/cs/2010/02/a_smart_way_to_segment_green_c.html
Packaging innovation spurs rapid growth. (2013, February). Packaging Digest, 50(2), 20. Retrieved from http://go.galegroup.com.ezproxy.liberty.edu:2048/ps/i.do?id=GALE%7CA322782026&v=2.1&u=vic_liberty&it=r&p=ITOF&sw=w
Serieeni, R. (2011). Drivers of preference: why consumers will buy green. The Huffington Post. Retrieved from http://www.huffingtonpost.com/richard-seireeni/drivers-of-preference-why_b_446061.html
The Clorox Company Goes Green (2010). ERB Institute. Retrieved from http://www.erb.umich.edu/News-and-Events/news-events-docs/09-10/Clorox%20Case.pdf
Young, G. (2011). Marketing promotions (1st ed.). New York, NY: McGraw-Hill.