Running head: MMGP ANALYZE MARKET TARGET MARKET 1

MMGP Analyze Market Target Market

BUSI 520 Strategic Marketing Management

Liberty University
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Explain what your firms target market(s) is(are).

Taco Bell is undertaking a targeted market strategy called multiple segment

specialization. One facet of multiple segment specialization is called selective specialization.

(Kotler and Keller (2016) discuss, With selective specialization, a firm selects a subset of all the

possible segments, each objectively attractive and appropriate (p. 265). The subsets Taco Bell

have chosen in the United States are: Millennials, budget-conscious buyers, and the healthy

eating faction.

The Millennials are a focused group due to both the large population of this demographic

and the amount of disposable income they possess. This target group typically does not want to

eat a full meal, so they snack several times a day. Krol (2014) describes this habit as, Some of

this demand is due to low cost choices, and some is caused by cravings (para. 6). Taco Bell has

had a high level of success in these markets. The corporate-level recognizes that a large part of

its customer base is the late-night crowd, which are typically Millennials.

Taco Bell has also targeted the budget-conscious consumers--one of its core groups--

Taco Bell revamped its value menu to include $1 items after prices for some offerings climbed

well past a buck (Morrison, 2013, p. 15). Three basic forms of value pricing policies are

typically used, as discussed by Hayes and Huffman (1995) as everyday value pricing, bundling,

and special value pricing. Taco Bell have applied all three of these strategies with the realization

of reaching their target. Each of the three approaches can be useful, dependent on the particular

goal at a point in time. An important factor is ensuring a profitable approach to value pricing.

The success Taco Bell has enjoyed with its value menu is a result of the use of customer

value perception. (Lewis and Shoemaker (1997) discuss the approach Taco Bell implemented,

Taco Bell did not use the cost based-pricing methods common in the industry. Instead, it took
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the approach of examining customer perception, and made no plans to drop its food quality (p.

46). Using this method, the company surveyed customers regarding what they would pay for an

item versus the traditional cost pricing method. This allowed Taco Bell to continue developing

profitable items that customers wanted to buy instead of simply offering company contrived

items that could be sold at a profit.

In addition, Taco Bell knows it must move beyond just millennials, it unveiled its pricier

Cantina menu, with ingredients meant to increase quality perception and appeal to the health-

minded (Morrison, 2013, p. 15). The introduction of the Cantina menu includes marinated

grilled chicken, an innovative and fresh guacamole, and several totally new ingredients.

Furthermore, Newell (2016) describes a move towards cage-free eggs and a reduction of sodium

by 15% will further enhance the reputation of Taco Bell being a healthy food alternative. The

fresh, high protein menu is focused on health-conscious consumers that are continually growing

as a large portion of the Taco Bell customer base.

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References

Hayes, D. K., & Huffman, L. M. (1995). Value pricing: How low can you go? Cornell Hotel

and Restaurant Administration Quarterly, 36(1), 51. doi.org/10.1016/S0010-

8804(99)80058-5.

Kotler, K & Keller, K. L. (2016). Marketing Management (15th ed.). Boston, MA: Pearson.

Krol, C. (2014). Market share trends. Nation's Restaurant News, 48(12), 32+. Retrieved from

http://bi.galegroup.com.ezproxy.liberty.edu/global/article/GALE%7CA374101951/afc5cf

3073b5ae33d0cb1df6a9d51768?u=vic_liberty.

Lewis, R. C., & Shoemaker, S. (1997). Price-sensitivity measurement: A tool for the hospitality

industry. Cornell Hotel and Restaurant Administration Quarterly, 38(2), 44-47.

doi:10.1177/001088049703800223.

Morrison, M. (2013). Marketer of the year 2013. Advertising Age, 84(30), 15. Retrieved from

http://ezproxy.liberty.edu/login?url=http://search.proquest.com.ezproxy.liberty.edu/docvi

ew/143 0276727?accountid=12085.

Newell, T. (2016). Taco Bell is now one of America's healthiest fast-food chains. Business

Insider. Retrieved from http://www.businessinsider.com/taco-bell-is-now-one-of-

americas-healthiest-fast-food-chains-2016-10.