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This a cupcake restaurant. What information about the market do I want to research and know - and why? (What will help me serve them better. Demographics, travel patterns,  lifestyle, economic level, etc. 

May 14th, 2015

Food Marketing. Food products often involve the general marketing approaches and techniques applied the marketing of other kinds of products and services. In food marketing, topics such as test marketing, segmentation, positioning, branding, targeting, consumer research, and market entry strategy, for example, are highly relevant. In addition, food marketing involves other kinds of challenges--such as dealing with a perishable product whose quality and availability varies as a function of current harvest conditions. The value chain--the extent to which sequential parties in the marketing channel add value to the product--is particularly important. Today, processing and new distribution options provide increasing increasing opportunities available to food marketers to provide the consumer with convenience. Markting, services, and processing added do, however, result in significantly higher costs. In the old days, for example, consumers might have baked their own bread from locally grown flour. Today, most households buy pre-manufactured bread, and it is estimated that the farmer receives only some 5% of the price paid by the consumer for the wheat.

Demographics and Food Marketing. The study of demographics involves understanding statistical characteristics of a population.  For food marketing purposes, this may help firms (1)  understand the current market place (e.g., a firm interested in entering the market for sports drinks in a given country, or worldwide, might investigate the number of people between the ages of fifteen and thirty-five, who would constitute a particularly significant market) or (2) predict future trends.  In the United States and Germany, for example, birth rates are relatively low, so it can be predicted that the demand for school lunch boxes will probably decline.  Therefore, firms marketing such products might see if they, instead, can shift their resources toward products consumed by a growing population (e.g., bait boxes for a growing population of retired individuals who want to go fishing).

Food marketers must consider several issues affect the structure of a population.  For example, in some rapidly growing countries, a large percentage of the population is concentrated among younger generations.  In countries such as Korea, China, and Taiwan, this has helped stimulate economic growth, while in certain poorer countries, it puts pressures on society to accommodate an increasing number of people on a fixed amount of land.  Other countries such as Japan and Germany, in contrast, experience problems with a “graying” society, where fewer non-retired people are around to support an increasing number of aging seniors.  Because Germany actually hovers around negative population growth, the German government has issued large financial incentives, in the forms of subsidies, for women who have children.  In the United States, population growth occurs both through births and immigration.  Since the number of births is not growing, problems occur for firms that are dependent on population growth (e.g., Gerber, a manufacturer of baby food).

Social class can be used in the positioning of food products.  One strategy, upward pull marketing, involves positioning a product for mainstream consumers, but portraying the product as being consumed by upper class consumers.  For example, Haagen-Dazs takes care in the selection of clothing, jewelry, and surroundings in its advertisements to portray upscale living, as do the makers of Grey Poupon mustard.  Another strategy, however, takes a diametrically opposite approach.  In at level positioning, blue collar families are portrayed as such, emphasizing the working class lifestyle.  Many members of this demographic group associate strongly with this setting and are proud of their lifestyles, making this sometimes a viable strategy.  An advertisement for Almond Joy, for example, features a struggling high school student being quizzed by his teacher remarking, “Sometimes you feel like a nut, sometimes you don’t!”  Nowadays, by the way, social class is often satirized in advertising, as evident in the Palanna All-Fruit commercials while the matron faints because the police officer refers to the fruit preserves as “jelly.”

Demographics in the U.S. have significantly affected demand for certain food products.  With declining birth rates, there is less demand for baby foods in general, a trend that will continue.  Immigration has contributed to a demand for more diverse foods.  Long working hours have fueled a demand for prepared foods, a category that has experienced significant growth in supermarkets since the 1980s. 

Food Marketing and Consumption Patterns.  Certain foods—such as chicken, cheese, and soft drinks—have experienced significant growth in consumption in recent years.  For some foods, total market consumption has increased, but this increase may be primarily because of choices of a subgroup.  For example, while many Americans have reduced their intake of pork due to concerns about fat, overall per capita consumption of pork has increased in the U.S.  This  increase probably results in large part from immigration from Asia, where pork is a favored dish.  Consumption of certain other products has decreased.  Many consumers have replaced whole milk with leaner varieties, and substitutes have become available to reduce sugar consumption.  Beef and egg consumption have been declining, but this may be reversing as high protein diets gain increasing favor. Some food categories have seen increasing consumption in large part because of heavy promotional campaigns to stimulate demand.


May 13th, 2015

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