Question

A company that makes ground coffee has targeted heavy users in the past. However, it is considering switching to college students. It is considering switching target segments even though this group is comprised largely of people who have just started to drink coffee and don’t consumer anywhere near as much as the heavy users. What are the disadvantages of the heavy-user strategy? What is the term used to describe the college students the company is considering targeting? What are the advantages of targeting this college student segment?

Answer 1

Disadvantage of heavy-user strategy is that this company makes ground coffee which is quite a common good and can be easily produced by another competitor . So if suddenly this heavy-user segment change their preference and shifts to another company then this company faces a huge loss suddenly , also heavy users are very choosy and do not compromise a bit on quality . Also heavy-users tend to search for bulk discounts because they consume so much of coffee and it is a necessity product for them .

The college students segment can be termed as new users .

Advantages of targetting college student segment is that they are more in number . Although not heavy users but they are many in number than heavy users , so demand will be high . Also they get attracted towards fanciful advertisements and pay more .