10.2: Identifying Target Consumers

Question 1

What is segmentation?

Answer 1

The process by which a company identifies the target consumers for the product

Question 2

What is a market segment (or segment)?

Answer 2

The group of consumers who will be attracted to a certain product

Question 3

Why is segmentation complex?

Answer 3

• Because everyone is different, the consumers in a particular segment will never be identical
• Aim is to choose a group who have sufficiently similar preferences and needs to create a meaningful segment that can be targeted by companies

Question 4

What are the four sets of variables on which segmentation is often based?

Answer 4

1. geographic
2. demographic
3. psychographic
4. behavioural

Question 5

What is a geographic variable?

Answer 5

• These relate simply to where the consumers live (e.g. a country, region or city) and whether they live in an urban or rural area
• Usually too broad and cover too wide a range of people to be meaningful on their own

Question 6

Name some demographic variables.

Answer 6

• age
• gender
• ethnicity
• family status (e.g. are they single? Do they have children?)
• income
• level of education (e.g. are they university-educated?)
• occupation
• socioeconomic status: this is an individual or family’s position in society relative to others based on their income, level of education and occupation

Question 7

Name some psychographic variables.

Answer 7

• lifestyle (e.g. people who like to go out to eat and drink, the health-conscious)
• personality (e.g. people who like to show off their wealth or knowledge of wine)
• values and beliefs (e.g. vegetarians, people who prefer products that are organic, environmentally-friendly or Fairtrade)
• interests (e.g. those who are interested in wines from a particular country or region)

Question 8

Name some behavioural variables.

Answer 8

• what benefit do they want from wine (e.g. quality, value for money, prestige)?
• when do they buy wine (e.g. regularly, only on special occasions)?
• where do they buy wine (e.g. supermarkets, specialist wine retailers)?
• how often do they buy wine and in what volume?
• what is their level of brand loyalty?
• what is their level of interest in wine (e.g. enthusiast, moderate interest, indifferent)?
• are they early adopters (i.e. people who are keen to buy new products when they come on to the market) or late adopters?

Question 9

How did Hall segment wine consumers?

Answer 9

1. wine lovers
2. wine-interested
3. wine curious

Question 10

Describe wine lovers.

Answer 10

those with a great interest in, and knowledge of, wine; high income and high level of education

Question 11

Describe wine-interested.

Answer 11

Those with a great interest in wine, moderate wine knowledge, university-educated with moderate income

Question 12

Describe wine-curious.

Answer 12

Those with a moderate interest in wine but limited knowledge, moderate income and medium level of education; they see wine as an opportunity to maintain social relation

Question 13

What is one common disadvantage of wine consumer segmentation models?

Answer 13

Because these models tend to be the result of academic studies with a relatively small sample size, they do not readily extend to the market as a whole

Question 14

Give an example of a specialist market research company that has created their own consumer segmentation models based on much more detailed data.

Answer 14

Wine Intelligence has created a series of models (known as ‘Portraits’) for various markets, including the UK, the USA and China

Question 15

Engaged Explorers

Answer 15

• Who: Younger, confident wine drinkers. High spenders
• Why: Part of lifestyle and social life
• Where: Wine shops and wineries
• What: Large repertoire, and enjoy trying new styles and regions

Question 16

Premium Brand Suburbans

Answer 16

• Who: Frequent drinkers, mid to older aged
• Why: Social situations
• Where: Supermarket
• What: Broad repertoire, but prefer domestics

Question 17

Senior Bargain Hunters

Answer 17

• Who: Older, infrequent drinkers but with good knowledge
• Why: Drink wine infrequently, mostly at home
• Where: Supermarket
• What: Stick to what they know

Question 18

Kitchen Casuals

Answer 18

• Who: Older, infrequent wine drinkers with little interest
• Why: Mostly at home for informal occasions
• Where: Supermarket
• What: Stick to what they know

Question 19

In addition to the portraits, what does Wine Intelligence provide?

Answer 19

A range of additional information to help companies understand these segments, breaking each down into demographic groups, level of involvement and their wine-buying habits, motivations and behaviour

Question 20

After a successful segmentation exercise, what does the company have? What’s their next step?

Answer 20

• identify the type of consumer who might buy a particular product
• make a realistic estimate of how much that consumers may be willing to pay for it, where the product is likely to sell and how best to market it

Question 21

Contented Treaters

Answer 21

• Who: Infrequent but high-spending
• Why: Social situations
• Where: Wine shops and wineries
• What: Know what they like and stick to mainstream varietals, preferably domestic

Question 22

Social Newbies

Answer 22

• Who: Youngest segment, drinking frequently but little knowledge
• Why: On-premise and social situations
• Where: Wherever is most convenient
• What: Enjoy trying new styles and regions