Identify and explain one type of market segmentation

QUESTION 1

CASE STUDY

THE VIRGIN GROUP

The Virgin Group is one of the world’s most recognised brands. Conceived in 1970 by Sir Richard Branson, the Virgin Group has gone on to grow very successful businesses in sectors ranging from mobile telephony to transportation, travel, financial services, media, music and fitness. Virgin Group wants you to enjoy life safe in the knowledge that we are working hard to make all of our products responsible and sustainable: the latest paperback from Virgin Books that you read in the park, the bottle of Sauvignon Blanc from Virgin Wines that you take to your friend?s for dinner, your favourite film on Virgin Media, or favourite song from Virgin radio international, the weekend away at a V Festival, the friends you meet online with Virgin Games and even the Virgin Balloon Flights or Virgin Experience days that you book to give yourself something special to look forward to. Virgin is a lifestyle brand and we want to ensure that your lifestyle can be a „sustainable lifestyle?.

BALLOON FLIGHTS For Balloon Flights, all customers have to travel to the launch sites which are usually in rural areas and only accessible by car, thereby contributing to the overall carbon footprint of the experience. Since Virgin Balloon Flights offer intangible gifts it?s important to create perceived value by sending gift vouchers and information packs to customers prior to their experience, which can often involve unnecessary amounts of packaging. Balloon Flights has introduced 100% recycled and recyclable paper for all its tickets and brochures. Last year Balloon Flights donated £1 to the Forest trust for every tonne of carbon produced during the experience, which was given to support projects conserving rainforests and ensuring long-term sustainable forestry management to maximise value to people, wildlife and the environment. Balloon Flights has taken this one step further by launching a range of designer clothes and bags called Bon Voyage! made out of recycled balloon envelopes with the sustainable products and services company Worn Again, which gives a percentage of its profits to the sustainable lifestyles charity Anti-Apathy.

WINES Virgin Wines recognises that a responsible approach to drinking is important and believes that “drinking is only fun when you don?t overdo it”. The company actively promotes the drink Aware logo and will be addressing ways of further promoting responsible drinking in the future. Since Virgin Wines works predominantly with smaller growers to source its wines, it supports those with limited marketing budgets and purchasing power, while giving them exposure and enhancing their return. Internet shopping and extensive, sophisticated supply chains allow customers to shop with ease for products from all over the world, often without the knowledge of where they come from or how they are made.

Virgin Wines believes that transparency is vital to know more about its wine so that its customers can make informed decisions about the type of products that they buy. For that reason Virgin Wines offers its customers the chance to engage with winemakers both online and at wine-tasting events. Virgin Wines also runs regular competitions, giving its customers the chance to win visits to its vineyards. In the future it plans to provide more information to customers by presenting individual profiles for each of its winemakers and their wineries in the Wine Zone section of its website and on its Facebook.

Virgin Wines? ambition is to increase the range of organic wines it carries, and it plans to achieve this by supporting a number of its growers through the complex and expensive process of becoming organic by guaranteeing to purchase their wine and thereby mitigating any risk to them. In addition, Virgin Wines is working with a cooperative of growers in the Cape in South Africa in order to develop a range of Fairtrade wines whose premium prices will provide the extra funds needed to support the development of a school classroom. (Source: Virgin Group Corporate Responsibility and Sustainable Development Report 2010)

1. Discuss the type of marketing philosophy adopted by the company. Support your answer with examples from the case study

2. Identify and explain one type of market segmentation that you believe is being adopted by the Virgin Group

3. Describe two other types of market segmentation that can be adopted by Virgin Group and explain the importance of market segmentation, targeting and positioning for the Group

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