Subject: Segmentation, targeting, and positioning strategies in Godiva
Segmentation is an important marketing tool allowing to identify customer interests and the best ways to meet them without compromising the organizational needs. Positioning is used to create a particular product perception and influence the way potential consumers regard the brand. If the approach to segmentation and positioning is selected correctly, the influence of the brand on consumers may be powerful.
In the given report, the results of segmentation, targeting, and positioning techniques used by Godiva are presented. The major aims of the report include the identification of
- specific characteristics of the premium segment,
- best strategies suitable for the given segment,
- possible weaknesses and strengths associated with them.
Segmentation and Targeting
Godiva is specialized in the manufacturing of premium-quality Belgium chocolate. Thus, it is targeted towards customers with higher levels of income who value delicious and high-quality products and are interested in the authenticity of their food. For them, purchases and food consumption serve as opportunities to obtain meaningful experiences. Thus, they consider the taste and ingredient composition of products as important as their overall style and appearance.
As stated by Bastien (2015), the consumers of premium-quality goods aim to receive the greatest possible number of product values at the best possible price. Kristianto, Ajmal, and Sandhu (2012) define value as a ratio between benefits and costs. The more functional and emotional benefits a customer gets, and the more an experience or a purchase are associated with cost efficiency, the greater level of customer satisfaction can be achieved. Thus, in the case of Godiva, the quality-to-price ratio plays a significant role in the success of its marketing efforts.
Premium segment is associated with major competitive advantages as the marketers can charge “a relatively higher price against the competing brands” (Rajagopal, 2013,p. 99). However, to rationalize the price choice, the organization must invest in the improvement of the quality of customer relations and the product itself. The specific practices that Godiva employs to add customer values include product design and differentiation, fast shipping and delivery, personalization of orders, etc. By using these activities, Godiva aims to develop customer loyalty and increase the profitability of long-term customer relationships.
Positioning
Belgium chocolate is commonly associated with the highest quality and supreme taste, and Belgian and French chocolatiers are regarded as the best professionals in the industry. Godiva actively utilizes these symbolic meanings in its branding strategy to form positive perceptions of products. Moreover, it offers unique services and rituals which meet the psycho-emotional needs of the target consumer group.
The company’s pricing strategy is largely based on the mentioned brand features. To increase product and brand awareness, Godiva puts them in a high-value category. Its prices range from $9.75 for a small 4-piece box of chocolate 7% for a 2.6 oz chocolate bar to over $130 for the larger customized sets (“Chocolate,” n.d.). As Ries (2012) states, a high price for the product conveys “a psychological message related to value: things that cost more are assumed to be of higher value” (para. 1).
The brand-based and value-driven pricing allows Godiva to realize the price of the brand as an asset, increase the influence of the brand on potential customers, gain superior profits, and so on. Godiva’s example shows that the effective brand development and promotion define the price of the product because the longer the brand takes a leading position in the market, the higher the price for the products is. Consequently, the given approach can lead to the growth of brand equity (Jakhotiya, 2016).
Table 1: Godiva’s SWOT analysis results regarding its strategic choices in marketing.
References
Bastien, V. (2015). Marketing to a high-end consumer, using the luxury strategy. Entrepreneur.
Chocolate. (n.d.). Web.
Jakhotiya, G. P. (2016). Strategic planning, execution, and measurement (SPEM) a powerful tool for CEOs. Portland, MI: CRC Press.
Kristianto, Y., Ajmal, M., & Sandhu, M. (2012). Adopting TQM approach to achieve customer satisfaction. The TQM Journal, 24(1), 29-46.
Rajagopal. (2013). Marketing decision making and the management of pricing: Successful business tools. Hershey, PA: Business Science Reference.
Ries, L. (2012). Here is how to position your product as a premium brand. Entrepreneur.