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Market Segmentation - Hot Pockets

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by

Kevin Tang

on 19 March 2011

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Transcript of Market Segmentation - Hot Pockets

Segments “Rural Farmer” Segment “Chinese Yuppies” Segment “The Professionals” Segment “Richie Rich” Segment A Second Class Citizen By: Jennifer Stellmacher
Jonathan von Ahnen
Kevin Tang Market Segmentation Marketing Environment
Cold Chain Logistics Regulators CHINA UNITED STATES
GROWTH "Home Appliances to Rural Areas"
- 2009 Regulators disparity 23% of urban population
Primary Segmentation Variables Geographic Location - Rural vs. Urban
Income Levels
Male 16-30 years old, average 23yrs
Earns <25000 (avg. 9500 Yuan)
Works laborious, dangerous construction, factory jobs
Migrates 8 months of the year, moving job to job frequently
Send 1/3 to 4/5 of earning back to family in rural area
Very little disposable income 25,000-40,000 Yuan
Secondary/University Education
Designers, factory workers, businessmen
Busy schedule for work & children
Aspire to improve life
Brands define “I made it”
Eats out at least 2x per week
Disposable Income 21% of urban population
50% of urban population 40,000 – 100,000 Yuan
Well-educated
Doctors, lawyers, entrepreneurs
Busy schedule for work & children
Open to Western brands
Eats out at least 2x per week
Moderate Level of disposable income
Orange County, China 6% of urban population 100,000+ Yuan
Investment Fund Managers, Political Officials
World travelers
Eat out at least 1x per day
High level of disposable income
-Multiple cars & homes
-Luxurious goods 5,135 Yuan average
Farmer, unskilled workers
Low level of education
Sustain off land
No disposable income
All meals at home
Multi-market Segmentation Strategy Constitute 71% of urban population
Food Consumption increasing 6.7% annually
Focus on markets with concentrated level target audience

“The Professionals”
“Chinese Yuppies”
Higher Revenue Potential
(Heavy-moderate buyers) Moderate Revenue Potential
(Moderate-light buyers, price
sensitive) Value Proposition: Convenient, quality, meal solution that will
ease busy schedules Introducing Hot Pockets to China Nestle and the Hot Pocket

Market conditions of U.S. and China

Segmentation of the market

Attractiveness of these segments

Targeting attractive segments
Founded by Henri Nestle in the mid-1860’s

Production of milk chocolate in 1875

Growth through acquisition and innovation Introducing Hot Pockets to China 80's FTW Hot Pockets Commercial fin. Recession five second rule? Major Player 25% Market Share of Frozen Food Inudsty Major Players Synear Population Density Henan Most populous Provice Urbanization Importance 47% as of 2010
Assumed annual Urbanization rate is 2.4%
How China will handle the situation?
Increase income will increase disposable income and spending $28B .04% Growth Industry entities-644 $5.7B Industry

27.3% Growth entities-3000+ (frozen foods) mature 70% grocery
wholesalers Sanquan Industry Revenue Generators 65% grocery 25% small shops Shoots and Giggles $1.5M USD "Big Splash" Bought as a status symbol Industry Revenue Generator March 12, 2011 Tibetan Mastiff Genghis Khan had one, legend says. So did the Buddha.

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