Potato Nuggets

Marketing Segmentation

Understanding how Filipino consumers are grouped and targeted by this food business

Learning Objectives

Define market segmentation and its importance in the food industry
Identify the four segmentation bases with Philippine examples
Explain the STP process and apply it to the Potato Nuggets business
Analyze targeting and positioning strategies used by Filipino food brands

What is Market Segmentation?

Market segmentation is the process of dividing a broad market into smaller groups that share similar needs or characteristics.

Potato Nuggets Example:

Instead of marketing to all Filipinos, we segment our market into busy parents, students, young professionals, and party hosts - each with different needs and buying behaviors.

Why Segmentation Matters

Efficient Marketing

Spend marketing budget wisely by targeting the right audience

Better Product Fit

Create products that match local Filipino tastes

Higher Loyalty

Build stronger connections with customers

Repeat Purchase

Encourage customers to buy again and again

Example: Our Potato Nuggets can be positioned as a quick merienda for students, a party snack for celebrations, or a convenient meal solution for busy parents.

The STP Process

What is STP?

STP stands for:

Segmentation - Divide the market
Targeting - Select your segments
Positioning - Create your unique position

Potato Nuggets STP: Segment Filipino snack market → Target busy families and students → Position as "Masarap, Mabilis, Sulit!"

Four Bases of Segmentation

Geographic

Location-based

Demographic

Age, income, family

Psychographic

Lifestyle, values

Behavioral

Usage, benefits

Geographic Segmentation

Dividing the market by region, city, climate, or urban/rural areas.

Potato Nuggets Examples:

Metro Manila: Target convenience stores, food delivery apps (GrabFood, FoodPanda)
Provincial Cities (Cebu, Davao): Focus on supermarkets and school canteens
Rural Areas: Partner with sari-sari stores, offer family-size packs
Tourist Areas (Boracay, Palawan): Beach resort cafeterias, tourism season promotions

Demographic Segmentation

Dividing by age, gender, income, education, family size, and life stage.

Potato Nuggets Target Demographics:

Students (7-18 years): Affordable baon, fun shapes, small packs (PHP 20-30)
Young Parents (25-40 years): Quick meal solutions, family packs, nutritious options
Middle-Income Families: Value packs, bulk buying at Puregold, S&R
Young Professionals (22-35): Convenience, delivery-friendly, late-night snack

Psychographic Segmentation

Based on lifestyle, values, and personality traits.

Potato Nuggets Psychographic Segments:

Health-Conscious Consumers

Position: "Air-fried, Less Oil, More Potato!"

Marketing: Highlight baked options, real potato content, no artificial flavors

Convenience Seekers

Position: "Ready in 10 minutes!"

Marketing: Easy to cook, no prep needed, perfect for busy lifestyle

Socially Active

Position: "Perfect for every salu-salo!"

Marketing: Party packs, sharing size, Instagram-worthy presentations

Budget-Conscious

Position: "Sulit na sulit!"

Marketing: Value packs, promo bundles, affordable daily merienda

Behavioral Segmentation

Based on occasion, benefits sought, user status, and usage rate.

Potato Nuggets Behavioral Examples:

Occasion: Birthday parties, movie nights, family gatherings, after-school snacks
Benefits Sought: Quick energy, affordable treat, filling snack, kid-friendly
User Status: First-timers (free samples), regular buyers (loyalty programs)
Usage Rate: Heavy users (bulk discounts), light users (trial packs)

Steps in Market Segmentation

Identify Customer Needs: Research what Filipino consumers want in snacks
Group Customers: Create segments based on the 4 bases
Profile Segments: Describe each segment in detail
Evaluate Attractiveness: Assess size, growth potential, competition
Select Target Segments: Choose which segments to serve
Design Marketing Mix: Create 4Ps strategy for each segment

Targeting Strategies

Undifferentiated

One product for everyone

Example: Lucky Me Instant Pancit Canton - mass market appeal

Differentiated

Different products for different segments

Example: Potato Nuggets Regular, Spicy, Cheese flavors

Concentrated

Focus on one specific segment

Example: Gerber baby food - infants only

Micromarketing

Personalized to individual

Example: Facebook ads targeting Quezon City moms aged 28-35

Potato Nuggets Strategy: Differentiated - offer multiple flavors and pack sizes for different occasions and consumer needs.

Positioning Strategy

Creating a distinct and desirable image in the customer's mind.

Potato Nuggets Positioning Statement:

"For busy Filipino families and students who need quick, delicious, and affordable snacks, Potato Nuggets is the frozen potato snack that delivers authentic potato taste with convenient preparation, unlike other processed nuggets that taste artificial."

Positioning Pillars:

Quality: Real potato, crispy outside, soft inside
Convenience: Cook in minutes, available everywhere
Affordability: PHP 50-150 per pack, value for money
Filipino Taste: Flavors that match Pinoy preferences (sour cream, BBQ, cheese)

Benefits of Effective Segmentation

For the Business:

Clearer brand identity
Improved ROI on marketing spend
Better product development
Competitive advantage
Higher profit margins

For Customers:

Products that meet their needs
Relevant promotions and offers
Better shopping experience
Stronger brand loyalty
Value for their money

Summary & Reflection

Key Takeaway: Segmentation + Targeting + Positioning = Better Market Fit

Success Factors for Potato Nuggets:

Understanding diverse Filipino consumer segments
Tailoring product offerings to specific needs
Strategic positioning against competitors
Effective use of the 4 segmentation bases
Continuous market research and adaptation

Filipino Market Insight: Local food brands succeed by deeply understanding Filipino culture, taste preferences, buying behaviors, and economic realities. Potato Nuggets can thrive by serving as the affordable, convenient, and delicious snack solution for modern Filipino lifestyles.