Market segmentation Case Study – ICI Fertiliser – Malcolm McDonald – Oxford College of Marketing

Market segmentation Case Study – ICI Fertiliser – Malcolm McDonald – Oxford College of Marketing


I want to tell you ladies and gentlemen
about And I’ve chose worst possible
product in the world and it’s the most unglamorous products its
fertilizer The ingredients are P N and K it
stink you put it in the bag when you’ve sold here it you rip it open and chuck it away you know on the floor and this goes back a few years now but
I was engaged by the international fertilizer association yes i lead a very
glamorous life ladies and gentlemen The international fertilizer association And the president he said to me before i started he said
oh he said professor mcdonald he said we have declared officially fertilizer
as a commodity so i got my pointer out and I said to this
guy i said you see this i said this is a pointer is not a magic wand i’m a
professor of marketing not a professor of miracles i said you just explained to me why when i
went on the internet i discovered that there was not one
single not one single manufacturer of fertilizers in the world
making one dollar of profit you’ve just explained it to me now part of this was a company called ICI
fertilizers who tried everything else and they got me in as a professor
of marketing and it was very simple they weren’t actually paying any attention to the farmer
market what they were doing was sort of dumping
their stuff into into their intermediaries and merchants And when i said you know who buys this stuff
they said merchants and i said yes yes i know that but who buys from the merchants
and they said oh they will buy on price and i said who
told her that they said the sales force And thats just not true now you’ll see that there are seven
blocks on there i’ve only put three blocks on to save boring the pants off you all uh… and i could go through all seven but this piece of segmentation research was very simple
very inexpensive and if you look at this guy some of you might
recognize him he’s the Arthur segment he is the price segment and no matter what anybody does he will buy on price doesn’t matter what you offer this guy
he will buy on price but he was only ten percent of the
market and i want to make this point to you all ladies
and gentlemen that is that all the research i’ve done on every continent in
the world for all of big companies in the world i have never found any market anywhere in
the world where the price segment is greater than ten percent can you see the point i’m making about
those companies that buy on price why are they doing it because they don’t
understand segmentation very simple and if you look at this character here
this character is david david is the show off farmer i’m obviously giving you thumbnail sketches
of them david likes white fences clean cows he likes plants that look luscious
the colours this one is uh… oliver, oliver is a
different character he is the technical farmer he’s driving around his farm on his tractor with an aerial attached
to a satellite and he’s actually analyzing the soil in
his fields and he’s mixing the p m and k to get the
maximum yield he thinks he’s Einstein this guy Now you just imagine you either send a direct mail shot or
on your website or a representative goes round or whatever if you actually said To david you started talking technical his eyes would glaze over if you went to oliver and started saying
put this on your crops will look nice his eyes would glaze over but guess what the whole industry all
over the world was doing price price price price price price
nobody bothered about the feelings of these people and when I C I Changed their research and development
totally it only took them six months before they
came the most profitable the only Profitable fertilizer company in the world
and they became the most profitable subsidiary of I C I again simple simple elementary market segmentation now the company that brought I C I
fertilizers finnish company I had a guy at cranfield not so long ago
and he told me they repeated the survey again across
western europe and the segments are exactly the same
segments do not change ladies and gentlemen the size of some have got bigger and some
got smaller But generally speaking the segments do not change over time

One comment

  1. That's a really interesting case study on market segmentation. Very enlightening and educational to know about how overlooking simple things such as market segmentation would have such drastic effects on organizational objectives.
    However, identify these segments is a challenge, and this is where college student's doing their homework on marketing case studies would find it difficult to properly segment the market. And it's best at this stage to get help from some professional homework help service having expertise in marketing subjects.
    http://classof1.com/homework-help/marketing-homework-help/

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