1.0 Situational Analysis/Current Marketing Mix
1.1 Current Product
The core benefit of the ‘Kraft Tiger Energy Choc’ (Kraft Tiger) biscuit is its nutritional value. These biscuits are fortified with the nine vitamins and six minerals recommended by the World Food Programme. They are enriched with Vitamins such as Vitamin A, B1, B2, B5, B6, B12, D, E, Calcium, Magnesium, Phosphorus, Zinc and Iron. These vitamins can help to fulfill consumer’s daily intake of vitamin nutrition in addition to keeping their stomach full.

The Kraft Tiger biscuits are distinctive in its packaging due to the images on the packaging- its Train, Tiger and Enermaxx. Also, customers can benefit from added information pertaining to the product on its nutritional value and its expiry date. Furthermore, Kraft biscuits have Halal logos printed on the back of the packaging to signify that this product is suitable for consumption for Muslims, which is one of the largest ethnic groups in Singapore. This unique combination helps Kraft Tiger to stand out from its competitor’s products.

To benefit customers, Kraft has developed a website where consumers can access to obtain information on Kraft products. The website allows customers to provide feedback directly to Kraft, based on their experiences with the product, in order for the company to improve their products. Upon purchase, the biscuits will be packed in a plastic bag for the customer’s convenience. As such, these services will bring additional value to customers.

A consumer is an individual or household who purchases goods and services for personal consumption (Armstrong et al, 2009, p. 162). Kraft Tiger’s consumers are mainly from Gen X who are in their 30’s, born between 1965 and 1976 (Armstrong et al, 2009, p. 90). These are mainly parents who would are the ones doing grocery shopping for their families and children. Thus Kraft Tiger biscuits would need to appeal not only to the person who eventually consumes the biscuits, but also to the person who purchases the product.

Kraft Tiger is a convenience product and there is a low level of involvement in the purchase of this product. This means that consumers are less hesitant and take very little time to purchase the product as compared to other complex products. Consumers are more likely to switch between brands if Kraft Tiger is not available. This is because consumers have a wide variety of biscuits to choose from in the supermarkets.

As Kraft Tiger aims to serve the mass market, Kraft has produced two makes and models of products for ‘Tiger Energy’ biscuit; they vary in packaging size/quantity. Kraft Tiger produces Choco and Susu flavored biscuits that are packaged in 42g, 76g and 240g. These biscuits are packed in different sizes for the convenience of the consumers.

Kraft has managed to make their brand name, logo and images – Train, Tiger and Enermaxx- stand out from other brands. Kraft’s unique ‘Tiger’ logo is easily recognizable and stands out. At an affordable price of $1.45 for a nutritious 240g pack of ‘Tiger Energy Choco’ biscuit, Kraft Tiger provides value for money, quality, quantity and vitamin nutrition for its consumers.

1.2 Current Pricing
As the market comprises of vast buyers and sellers who ‘trade over a range of prices, rather than a single market price’ (Armstrong et al, 2009, p. 361). Kraft Tiger is considered to exist in a monopolistic competition market. Most buyers are able to differentiate in seller’s products and, thus, they are willing to pay different prices for similar products such as Oreo biscuits, which are more expensive but have less in quantity (weight) as compared to Kraft Tiger. Furthermore, to set their promotions apart, sellers often come up with differentiated offers for specific customer segments, and in addition ‘to price, freely use branding, advertising and personal selling to set their offers apart’ (Armstrong et al, 2009, p. 361).

A price sensitive product such as Kraft Tiger can be seen as an elastic demand item as there are available competitor substitutes product in the market; such as, Tim Tam, Chips Ahoy and Oreo etc. Therefore, even a slight change in price would affect the sales of Kraft Tiger’s product; an increase (in price) would cause the consumer demand to drop; and in turn, a decrease would cause the quantity demanded to increase (Business Dictionary, n.d.).
The price of Kraft Tiger biscuits compared to competitors’ prices such as Mini Oreo Bite Size Biscuits (Cold Storage, n.d.) are about the same. This is because they are staple convenience products, which are bought often, consumed routinely and have low involvement in services support.

Health conscious consumers will look out for certain features and qualities when it comes to purchase decisions. These are often based on several reasons such as the nutritional values of the product and other feature such as the date of expiry, which is printed on the back of the product. It satisfies the need of the consumer as it shows the healthy shelve life left and nutritional benefits if consumed.

This also goes to show that business’ costs are important when they determine the price of Kraft Tiger as it is a price sensitive product which can be ‘easily substituted for a more economically priced alternative; price increases in this scenario would affect demand negatively’ (More For Small Business, 2009, para.1). Therefore, since Kraft has a well-established business brand and have been successfully marketing Kraft Tiger Biscuits at the current price for quite some time; their price should remain unchanged as it may affect the profitability of the business in time to come.

1.3 Current Distribution
Kraft Tiger can be found in retailer supermarkets throughout Singapore such as Carrefour, Shop & Save, Sheng Siong and Cold Storage. Supermarkets are the most frequently shopped type of retail store. They are large, low cost, low margin, high volume self-service stores that carry a wide assortment of food, laundry and other household products (Armstrong et al, 2009, p. 402). These supermarkets can be found island wide near shopping belts and heartland areas such as Orchard ION and IMM. These places are easily accessible and consumers tend visit them on a regular basis.

Kraft Tiger uses the indirect channel approach to reach consumers. Thus, consumers can only purchase these biscuits through intermediary retailers such as NTUC, Shop & Save, Carrefour, Cold Storage and Sheng Siong. The use of intermediaries increases efficiency by making biscuits available to target markets at a lower costs as Kraft would not need to set up their own network of distribution points. These intermediaries can also provide additional value through their contacts, specialization and scale of operation (Armstrong et al, 2009, p. 391). which may be useful to Kraft. This arrangement not only assists to reduce the number of channel transfers, but also addresses the needs of customers more efficiently and effectively. Kraft Tiger is a convenience product that is non-perishable, as it remains ‘edible, without spoiling, for long periods without special storage’ (Food Dictionary, n.d.). A ‘best before’ date has been printed at the back of the Kraft Tiger packaging to let its consumers know that it is a non-durable which has to be ‘quickly consumed or last for a short time, usually three years or less’ (Zantrio, n.d.). and tangible with minor services. It is a product which consumers purchase for their individual wants. Due to the nature of Kraft Tiger biscuits as a convenience product, it has to be distributed at an intensive level. This is to achieve mass-market selling where consumers can find this product easily.

1.4 Current Product
Traditional and non-traditional methods of promotion were used to promote Kraft Tiger Biscuits at Shop & Save. At $1.45 a packet, Kraft Tiger was being sold at a discounted price of $2.50 for a twin pack, instead of the usual $2.90 for 2, 240g packs. This discount appeals to the mass market, especially towards ‘moms looking to give their kids the best possible nutrition at the right price’ (Krafts Food Inc, n.d.) and moms who do grocery shopping for the family as well. Kraft also seeks to target the younger market that would find the distinctive Kraft Tiger logo and train; which is featured on both the front and back of their packaging, appealing (Krafts Food Inc, n.d.).

Kraft Tiger is trying rationally to appeal to its consumers through methods of promotion. Such can be seen from the way Kraft markets their biscuit products by printing the nutritional values on the back of its packaging. This would appeal to Kraft Tiger consumers, as they are aware of how nutritious the biscuits are, before making the decision to purchase it.

Kraft Tiger biscuits are displayed along the aisle of supermarket stores such as Shop & Save. Along with promotional messages such as “Twin Pack $2.45” which is displayed beneath the product; this helps to draw attention of customers to the product. Distinctive features such as the unique Kraft ‘Tiger’ cartoon mascot, ‘EnerMAXX’ logo and the ‘Train’, which is printed on the product packaging; also helps play a big role when it comes to use of themes as modes of promotion for Kraft Tiger biscuits. This would help consumers to easily associate the distinctive features to Kraft Tiger.

The promotions are sending the same messages out to their consumers as both the visual and taglines are similar.

2.0 Segmentation Theory
2.1 Define and explain segmentation
Segmentation divides a market into separate groups of buyers with different wants and needs. A market is vast and consists of buyers; these buyers vary in a few ways such as their ‘wants, resources, locations, buying attitude and buying practices’ (Armstrong et al, 2009, p. 229). For instance, buyers may differ in their mode of buying; while some may prefer purchasing from a physical location, others would rather order through phone, mail or even via the Internet. Therefore, to make use of the company’s limited resources more efficiently, Kraft should channel its resources to suit its target market.

2.2 Explain 3 benefits to Kraft Tiger using segmentation
Segmentation allows companies to identify its target market, differentiate its products according to its target market, and to position itself better against its competitors.

Firstly, segmentation allows Kraft Tiger to identify its target market. A target market is an ideal set of buyers with ‘common needs or characteristics’. A target market would be useful to companies such as Kraft, when it comes to the decision of whom they should serve (Armstrong et al, 2009, p. 242). For instance, since Kraft Tiger’s primary target audience is mostly parents aged between 35 to 46 year old, especially moms; thus Kraft Tiger is priced affordably to attract these target segment. Hence, segmentation will allow Kraft to understand its target audience better and cater to their needs.

Secondly, segmentation will enable Kraft to better differentiate its product from other brands more effectively. Product differentiation helps ‘a marketing organization to differentiate its physical product’ (Armstrong et al, 2009, p. 250). For example, since Kraft Tiger consumers are mostly parents or moms buying on behalf on their children as snack, the nutritional value of these biscuits will differentiate itself from other brands, as one of the key concerns would be the health of their children. Therefore, Kraft biscuits being vitamin fortified (Krafts Food Inc, n.d.) and the promotion of it as a healthy snack, would make it more appealing choice to its target audience.

Lastly, effective segmentation enables Kraft to better position itself in the market. Positioning helps to position a product positively, which in turn could make a significant change in the success of the marketing campaign. In this case, through effective target marketing and product differentiation – affordable vitamin fortified biscuits for families- allowed the company to be the “market leader in low cost-fortified biscuits” in Southeast Asia (Krafts Food Inc, n.d.). This may help to position Kraft Tiger more favourably amongst their target segment and generate better sales.

Therefore, effective segmentation is necessary to make use of the company’s limited resources more efficiently, and Kraft should channel its resources to suit its target market.

3.0 Target Market Identification
3.1 Geographic Segmentation
Singapore is an island near the southern tip of Malaysia, located about 137 kilometers north of the equator. With a land area of 710 sqm, it is one of South East Asia’s most densely populated urban cities. It is also the ‘most powerful economy of Southeast Asia and per capita the fifth wealthiest country in the world’
(Asiaweb Direct, n.d.). Singapore is known to be a food haven and biscuits tend to be a popular snack amongst Singaporeans.

Singapore’s city size in 2010 is 5,076,700 with a total of 3,771,700 Singapore residents, leaving 1,305,000 residents who are from other parts of the world (Department of Statistics Singapore, 2010). This is a large enough market for the sale of Kraft Tiger biscuits.

Urban cities like Singapore has ‘a faster pace of living, more commuting, higher incomes and a greater variety of goods and service that can be found in the small towns and rural communities’ (Armstrong et al, 2009, p. 95). As the lifestyle in Singapore is fast paced, Kraft Tiger has taken the initiative to package their products into different sizes of 42g, 76g and 240g so that it is convenient for consumers to snack on the go. This would also be beneficial to consumers who intends to consume the biscuits by themselves can purchase the 40g pack; or they could get a larger 240g pack if they wanted to buy and share it with others.

Climate in Singapore is hot and humid throughout the year. It has a tropical climate of 25°C to 33°C (National Environmental Agency, n.d). Kraft Tiger biscuits are packaged in sealed foil wrappers to ensure it would remain crisp even with the hot humid climate in Singapore.

3.2 Demographic Segmentation
Kraft Tiger’s consumers are mainly from Generation X whose age ranges from 35 to 46, born between 1965 and 1976 (Armstrong et al, 2009, p. 90). However, it is important to note that the main end users may include children, whom their parents are buying these products for, as they are likely to be unable to purchase these products on their own.

Most of their consumers are middle aged and married with children. They should be parents, especially moms, with children ranging from toddlers to teenagers. These parents tend to manage their household independently and are in-charge of doing the family’s grocery shopping. Most of them are also working individuals who may enjoy snacking on these biscuits in their offices. Thus, they are the purchaser of household goods whom Kraft should target.

With Singapore’s literacy rate at 95.9% and English ‘widely used in the professions, businesses and schools’ (U.S. Department of State, 2011). Kraft Tiger’s consumers are likely to be English speaking and highly educated, that is, at University level. Therefore, it is likely that they will be more health conscious and concerned about the nutritional level of their food due to their level of knowledge. Also, Kraft Tiger should continue to use English in their packaging and marketing, as it is their primary language.

The GDP per capita (in Singapore) is estimated at $62,100 (Central Intelligence Agency, 2011). Due to their high level in education, it can be inferred that Kraft Tiger’s consumers can earn an average income of $5000 - $7000 or more per month. Therefore, Kraft Tiger is affordable to its target market with its prices ranging from $1.15 to $1.45 per item.

3.3 Psychographic Segmentation
Kraft Tiger consumers tend to be thinkers who are motivated by their ideals of how the world should be. These parents are conservative and practical consumers who value functionality, value and durability in the products, which they purchase. Hence, Kraft Tiger’s products should be simple and value for money for consumers.
The consumers for Kraft Tiger can be considered under Conventional Family Life segment that consists of young families whose lives centre around marriage and raising a family. These people tend to do grocery shopping for their family. Therefore, Kraft Tiger should be marketing towards the parents, especially moms, who are buying on behalf themselves, their children or family.

Consumers of Kraft Tiger tend to have their lives revolved around work and family. They seem to be more concerned about themselves and their loved ones. As such, Kraft Tiger’s products should be catered not only towards the adults, especially moms, but also towards children in the families.

As shown above, Kraft Tiger’s target consumers tend to be conservative and practical people who put their family as their priority. They are likely to be the group of people who enjoys spending time with their friends and family. Thus, the promotion of Kraft Tiger product should be family-centric.

3.4 Behavioural Segmentation
Kraft Tiger biscuits are snacks that can be consumed throughout the day at home, on the go, or even at work. As Kraft Tiger is available in a variety of packaging sizes, which makes it convenient for consumers to bring it to work for consumption or even share it with their family and friends. Kraft Tiger biscuits serves as a personal usage product because of the nutritional benefits as it towards the consumer.

When purchasing biscuits such as Kraft Tiger Energy Choc, consumers tend to look out for the nutritional values, benefits which the product will provide and also the affordability of the product. Kraft consumers tend to be price sensitive, hence they would prefer low priced affordable biscuits.

Most Kraft Tiger consumers can be considered medium when it comes to loyalty statuses, as the demand for Kraft Tiger is elastic, and it is a convenience good with many substitute products readily available. As with some products, there may also be a small group of ‘strong loyals’, who would prefer Kraft Tiger biscuits for its quality, taste and packaging size etc (Exam Tutors, 2011).
Kraft Tiger consumers are exposed to its brands as well as its competitors. Furthermore, since it is a simple product, consumers are likely to be familiar to it. They also have existing warm commercials that help consumers develop favourable emotional connection towards the brand, to help differentiate Kraft Tiger from other its substitute products, rather than on pricing or packaging. Therefore, it is likely to be in the ‘preference’ stage where Kraft Tiger needs to further promote and focus its advertisements on highlighting its benefits, that is, affordable vitamin-fortified biscuits that are good for families (PowerHomeBiz, 2011).

References
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