How should a new company segment the market for introducing a line of precooked food items?
Market segmentation is the process of breaking down the group of people identified as your potential customers into smaller groups. Precooked food items, which have become very popular in recent years, appeal to many different segments.
"Market segmentation is the process of identifying and targeting groups of individuals who are similar to one another. Markets can be segmented in many different ways: by product or service needs, by sensitivity to price, by geographic area, by demographic segment, or by psychographics and lifestyles. Successful segmentation depends on understanding what consumers need, how groups of consumers differ from one another, and how consumers decide among products."
For example, one segment that should be targeted would be the single person, living alone, who does not have the inclination or the time to cook. This product serves the needs of this group of customers by providing cooked food that can easily be heated and served with little fuss, and provides the opportunity for the customer to store the food and have it readily available, unlike takeout food, this food is already on hand and easily prepared and ready to eat.
Another segment that this product would appeal to would be the busy mother who doesn't always have time to cook from scratch meals for her family. This product could fill in the gaps when the busy mother has to take her children to after school activities such as Soccer games, dancing classes, piano or any number of activities that parents drive their children to every day after school.
A full meal could be prepared around the precooked items, or the precooked items could be an ingredient which allows the meal the appear as homecooked and fresh, unlike takeout or fastfood. The need that is served by this product is that the customer can easily take the precooked, let's say chicken out, put together side dishes and then serve a full meal with little or no fuss or time.
Precooked food also appeals to a population of people who don't know how to cook or season food, therefore, they need a product that provides choice and flavors that can be heated at home. These precooked foods can substitute for the lack of cooking knowledge of the customer and they often come with recipes that suggest combinations for the precooked foods.
College students who live on campus and have microwave ovens and refrigerators would be another market for precooked food. It offers them an available alternative to the dining hall, especially to off hours when they get hungry and the food services on campus are closed.