10.2: Identifying Target Consumers Flashcards
What is segmentation?
The process by which a company identifies the target consumers for the product
What is a market segment (or segment)?
The group of consumers who will be attracted to a certain product
Why is segmentation complex?
- 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
What are the four sets of variables on which segmentation is often based?
- geographic
- demographic
- psychographic
- behavioural
What is a geographic variable?
- 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
Name some demographic variables.
- 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
Name some psychographic variables.
- 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)
Name some behavioural variables.
- 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?
How did Hall segment wine consumers?
- wine lovers
- wine-interested
- wine curious
Describe wine lovers.
those with a great interest in, and knowledge of, wine; high income and high level of education
Describe wine-interested.
Those with a great interest in wine, moderate wine knowledge, university-educated with moderate income
Describe wine-curious.
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
What is one common disadvantage of wine consumer segmentation models?
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
Give an example of a specialist market research company that has created their own consumer segmentation models based on much more detailed data.
Wine Intelligence has created a series of models (known as ‘Portraits’) for various markets, including the UK, the USA and China
Engaged Explorers
- 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
Premium Brand Suburbans
- Who: Frequent drinkers, mid to older aged
- Why: Social situations
- Where: Supermarket
- What: Broad repertoire, but prefer domestics
Senior Bargain Hunters
- Who: Older, infrequent drinkers but with good knowledge
- Why: Drink wine infrequently, mostly at home
- Where: Supermarket
- What: Stick to what they know
Kitchen Casuals
- Who: Older, infrequent wine drinkers with little interest
- Why: Mostly at home for informal occasions
- Where: Supermarket
- What: Stick to what they know
In addition to the portraits, what does Wine Intelligence provide?
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
After a successful segmentation exercise, what does the company have? What’s their next step?
- 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
Contented Treaters
- 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
Social Newbies
- 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
