Data-driven marketing strategies have overtaken the traditional mass marketing strategies. Business entities are increasingly using data not only in market segmentation but also in the determination of what products to produce, how to market the products, and how to price them. As a consequence, the currently applicable marketing strategies are considered to be more fluid, and there is the need for marketers and business professionals to increasingly consider value creation in marketing strategies that they employ (The Nielsen Company, 2015). In light of this understanding, this paper presents marketing segmentation, and value proposition for a recommended retail shopping bag herein referred as iBag Shopping.
Brief Description
The iBag Shopping brand and product is a biodegradable shopping basket targeted to the millennial shoppers among other environmentally conscious customers in Vancouver. The retail brand is manufactured from biodegradable materials; meaning that it is easily decomposed by bacteria. The design of the product is such that if left in water or wet for more than two hours, then it automatically starts to break down at the lowest level of pressure. The product, if well maintained, is reusable. However, the users would be required to ensure that the product is kept under dry conditions to use it for longer periods. The printing on the bag is made by use of soy ink; hence, ensuring that the manufacture of iBag shopping eliminates the use of harmful materials and hence enhancing environmental sustainability.
Plastic waste has been a major concern for the city of Vancouver. In 2016, the City of Vancouver proposed to ban the use of plastic bags and plastic cups to curb the growing menace of plastic waste in the city. While plastic wastes ought to be recycled, reports from the city indicate that the collection and recycling of the plastic bags have proven to be a complex consideration and it is this consideration that plastic waste levels have continued to grow. Additionally, research indicates that supermarkets and grocery stores are the major sources of plastic bags; hence, the need considers handling the problem at the source (The Nielsen Company, 2015). People are willing to spend an extra dollar for the purchase of an environmentally friendly bag to replace the plastic bags that are freely issued by the supermarkets and other grocery stores.
Potential Market Segment
The potential market for iBag Shopping retail brands can be evaluate based on various market segmentation profiles including geographic, demographics, psychographics, and behavioral profiles.
Geographic Profile
The city of Vancouver is an increasing environment conscious city. In 2016, the city announced its intentions to get rid of plastic bags in line with its strategy of cutting 2008 plastic waste by half by the year 2020. The city is still focused on the deliberations on how plastic waste can be reduced and eliminated. Several recommendations were given on how the plastic waste can be eliminated with there being bins for plastic waste and organic waste in the city. Some grocery stores have started issuing returnable plastic bags to minimize the levels of plastic waste. However, these strategies have not been effective in the reduction of plastic waste as many people still do not dispose into the bins required and many other people do not honor the return programs provided by some supermarkets and grocery stores in the city (The Nielsen Company, 2015). Considering these factors, the designing of reusable, biodegradable shopping bags is considered an appropriate solution to the problem in Vancouver.
Demographic Profile
Vancouver has a population of 610,000 while the greater Vancouver metropolitan region has a population of 2.561 million (World Population Review, 2016). About 25% of the population are millennials and persons who are more willing to spend more on environmentally sustainable initiatives. The population of more than 152,500 millennials in the city represents a good starting point for investment in biodegradable iBag shopping products, and it is for this reason that the product was designed (World Population Review, 2016).
Psychographic Variables
The Millennials are considered to be more environmentally conscious and less brand sensitive (Goldman Sachs, 2016). The implications of this finding are that the Millennials will willingly try using a new product in the market and more so if the product is environmentally sustainable. The implications area that so long as the product meets the preferences and interests of the mentioned interest group, then it is likely to attract a large market share (The Nielsen Company, 2015). Considering that the iBag Shopping products are a little costly as compared to the plastic bags, it is important to target the millennial population in the region as compared to other customer segments that may be more price sensitive (Goldman Sachs, 2016).
Behavioral Variables
Millenials gather around a product or brand only if meets their interests and preferences and secondly if the product or brand creates a buzz in social media (Goldman Sachs, 2016). Consequent to this finding, the new product shall be marketed exclusively on social media networks and then distributed via the wide network of grocery stores and supermarkets in the region (The Nielsen Company, 2015). Essentially, this helps not only in driving a spirited campaign against plastic bags pollution but also the creation of a strong following for the iBag Shopping products and hence strong sales revenues.
The Value Proposition
The iBag Shopping products offer the customers an environmentally friendly solution to the plastic pollution menace that has resulted in excessive pollution in water bodies and threatening levels of global warming. The product is reusable if properly handled meaning that the customer does not have to purchase a new bag every time they go for shopping. The use of soy ink in printing does not only make the bags attractive but also environmentally sensitive. The organization is working towards ensuring that the cost of the shopping bags is shared between the supermarkets and the customers; hence, pushing its price to less than 50 cents. Returns from the bag will be dedicated to dealing with environmental issues hence leading to ecological betterment.
Revenue Potential
The iBag Shopping product shall be retailing at a price of $1 with the costs shared between the retailer and the customer. If fully adopted by the grocery shops and supermarkets in the region, the new product is set to attract $3 million with the direct costs not exceeding 20% of the product’s total costs. The producer enjoys tax rebates from the government since the product is 100% biodegradable; hence, maintaining the company’s costs low.
Conclusion
In conclusion, this report presents new retail brand targeted towards the provision of environmentally sustainable shopping bags that shall be targeted towards the millennial population in Vancouver. The value proposed by the new 100% biodegradable bags includes a reduction in the use of plastic bags in the city of Vancouver. The new retail product targets revenues not less than $3 million in a year under the assumption that each person in the target population purchases up to 20 bags in a year.
References
Goldman Sachs. (2016). Millennials: Coming of age. Retrieved from http://www.goldmansachs.com/our-thinking/pages/millennials/
The Nielsen Company. (2015). Green generation: Millennials say sustainability is a shopping priority. Retrieved from http://www.nielsen.com/ca/en/insights/news/2015/greengeneration-millennials-say-sustainability-is-a-shopping-priority.html
World Population Review. (2016). Vancouver population 2016. Retrieved from http://worldpopulationreview.com/world-cities/vancouver-population/
