Download - [Client] Global Segmentation by RI
[Client] Global Segmentation
Research International
April 2003
2
Our Objective is to deliver new insight to [Client] by
Establishing the need, occasion and people variables that
drive drink category choice
Delivering an understanding of how the needs vary across
countries
where are they most developed / relevant today?
where are they emerging and likely to be key to success
tomorrow?
Identifying at a country level (to reflect the different levels of
development by country) which categories best deliver against
each of the Need-states
Highlighting the local country cells we believe will be most
attractive to [Client] for future targeting
3
Taking previous research to the next level
Within previous research we explored important determinants
of drink category choice, as well as key consumption occasion
characteristics and target demographics
Our key criteria in revisiting the analysis are
To develop a global segmentation that gives a deeper
understanding of the drivers of drink category choice
while
Keeping the solution as simple and clear as possible
4
[Client] Global Issues
[drink type] shares are being squeezed by growth in functional
beverages and becoming increasingly reliant on heavy users
How can we protect and develop this significant category?
[drink type] is a well developed market where the opportunity is to
grow share of throat by increasing consumption and, in select markets,
stealing share
What are the key opportunity Need-states?
[drink type] categories are big global opportunities but there are major
differences across markets
How can we consider these categories globally?
Strategically, how can these be positioned to maximize the opportunity
for both?
The [drink type] category is small but growing, and shows signs of
increased competitive activity and NPD
How can these drinks be positioned for maximum advantage?
Where are the strongest opportunities for [Client] growth in the category?
5
[Client] Global Issues (2)
[drink type] are very small but also growing
Do they satisfy the same or different needs than [drink type]?
Are there noteworthy opportunities for new products?
The [drink type] category is driven by success in a few key countries,
but there is no clear global picture
Can we understand why?
6
Overview
7
Developing the CELLULAR framework
8
Our segmentation approach
This approach focuses on developing a segmentation which explains
and understands relevant category behavior, i.e. drink choice
We recognize that people’s needs may change from one
consumption occasion to the next
We recognize that the same need can lead to different drink choice
for different people or the same people on different occasions
Drink Choice is Not One-dimensional
Therefore, to really understand what is driving drink category choice,
we must consider who has what set of needs in what occasion
9
Approach
The CELLULAR framework is developed to help understand
what determines category relevant behaviour – in this case
what drives drinks choice
In deciding on the distinct need-states, we conduct statistical
analyses to ensure the need-states are associated with
different drinks choice (using CHAID and chi-square)
10
Approach
The same is true for both the other dimensions of the
CELLULAR structure
From the following occasion variables we were able to identify
a smaller number of dimensions that account for drinks choice (using CHAID and chi-square)
Activity when drink was consumed
Time of day
Who the person was with when he/she consumed drink
Where the person was when he/she consumed drink
What the drink was consumed with (on its own, snack, meal etc.)
11
Approach
The same process was followed for our person (socio-
demographic) variables
XXXXXXXXX
XXXXXXXXX
XXXXXXXXX
XXXXXXXXX
XXXXXXXXX
XXXXXXXXX
Using this statistical approach we identified the most
discriminating splits within the three dimensions of our
CELLULAR segmentation
12
Who
Occasion
Need-mode
1 = 18-34
2 = 35+
1 = Need-state 1
2 = Need-state 2
3 = Need-state 3
4 = Need-state 4
5 = Need-state 5
6 = Need-state 6
7 = Need-state 7
1 = Alone, no meal
2 = With friends, no meal
3 = Breakfast
4 = Lunch
5 = Evening meal
13
Three Dimensional Segmentation Solution Criteria
(but we can analyze the data using any or all dimensions)
Who - what are the “people”
variables that influence category behavior
Occasions -
Aspects of the occasion
that influence category behavior
Needs - What are the
consumer’s needs
when making the
consumption choice
14
Key Need-states
15
What is a Need-state?
A Need-state is a frame of mind
Need-states are strongly influenced by our specific needs in a
given set of circumstances (an occasion)
We change our Need-state in different circumstances to meet
different needs
16
The Global Drink Need-state landscape
1
3
5
6
Need-state 5
Need-state 2
Need-state1
Need-state 6
7
Need-state 4
Need state 7
Need-state 3
Refreshes me
Is not bad for me
Is fashionable
Revitalises me
Satisfies my thirst
Is a change
It combats dehydration
Is a pick-me-up
Is a good alternative to alcohol
Sociable drink
Is becoming acceptable
Quenches thirst
Is good for me
Is a treat
Has few additives
Is organic
Is sugar-free
Is sweet Contains vitamins
17
Global Need-state share of occasions studied*
9%9%
22%
7%25%
16%
12%
Need-state 1 Need-state 2 Need-state 3 Need-state 4
Need-state 5 Need-state 6 Need-state 7
18
Water CSDs
RTD Sports
Energy
Cola
Lemon-Lime
Orange
Key categories on the Need-state landscape
100% Juice
Juice
Drinks
Refreshes me
Is not bad for me
Is fashionable
Revitalises me
Satisfies my thirst
Is a change
It combats dehydration
Is a pick-me-up
Is a good alternative to alcohol
Sociable drink Is becoming acceptable
Quenches thirst
Is good for me
Is a treat
Has few additives
Is organic
Is sugar-free
Is sweet Contains vitamins
19
These are the basic needs that define all LRB categories
Needstate 1 - Need-state profile mean scores
8.7
8.4
8.3
8.1
7.9
6.1
5.8
5.7
3.5
3.3
Quenches thirst
Refreshes me
Combats dehydration
Is a treat
Is a pick-me-up
Revitalises me
Is good for me
Is sugar-free
Is a good alternative
to alcohol
Is organic
20
Because these needs are common to all drinks they are not
highly differentiating Need-state 1 - Need-state profile
It combats
dehydration
Refreshes me
Is a treat
Is not bad for me
Contains caffeine
Is a good alternative
to alcohol
Quenches my thirst
Is low in calories
21
Need-state Bubble Map – Interpretation (1)
Relative Category Share
Within each Need-state, we can look at the relative share of
each drink category versus share of the category at a total
study level
This is shown as a % difference
A positive score (to the right of the x-axis) means the category
has greater share in this need state versus average
A negative score (to the left of the x-axis) means the category has
a smaller share in this need state versus average
The y axis shows the category image profile against the key
needs of the segment – above the horizontal line indicates a
better match against these needs than against the other need-
states
The size of the bubble is the actual share of penetration in that
need-state
22
Juice Drink
Bottled Water
Sports Drink
Energy Drink
RTD Iced Tea
Cola
Flavored CSD
100% Juice
Relative Share of Category In This Need-State Versus Average (All Need-States)
-30.0 -25.0 -20.0 -15.0 -10.0 -5.0 0.0 5.0 10.0 15.0 20.0
RTD Ice Tea has a good match with the needstate, but relative less
penetration – potential growth opportunity
23
% Of Occasions
In This Need-
State
Index Vs. Total
Need-States
Morning / No Meal 17% 96
Breakfast 4% 70
Lunch / Dinner 17% 82
PM/No Meal… 62% 145
Passive 37% 74
Active 63% 130
100%
Occasion Distribution Within The Need-State
24
Summary of Key Attributes, Categories, and Occasions for
Needstate 1
Need State 1
Key Benefits Sweet
Nutrients
Energy
Tastes Good
NOT… Replenish
Improves mood
Relaxes
Indulgent
Key Categories Energy Drinks
Juice Drinks
Minor Categories Flavored CSD
Juice 100%
Sports Drinks
Occasions Breakfast
Active/Passive Active
25
How the Need-state Landscape
changes across countries
26
Needs State Segments within Country
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Brazil Italy Saudi S. Africa Thailand Poland Malaysia UK France Total
Needstate 7
Needstate 6
Needstate 5
Needstate 4
Needstate 3
Needstate 2
Needstate 1
27
Cellular Opportunity Analysis
GLOBAL VIEW
28
Exploring the CELLs
Need-states only tell part of the story
People & Occasions are also key…
Next stage is to identify and explore key CELLs
In understanding the key dimensions that determine drink
choice, we developed a framework with 70 marketing cells
(Age x Occasion x Need-state)
29
Key CELLs in terms of GLOBAL category opportunity -
Top 20 CELLs account for >70% of global occasions
Cell Share of
Occasions
Who When Need-state
225 (6.0%) 35+ With friends/No Meal Needstate 5
213 (5.9%) 18-34 Alone/No meal Needstate 3
125 (5.2%) 18-34 With friends/No Meal Needstate 5
111 (3.8%) 18-34 Alone/No meal Needstate 1
215 (3.5%) 35+ Alone/No meal Needstate 5
153 (3.1%) 18-34 Dinner Needstate 3
247 (2.7%) 35+ Lunch Needstate 7
241 (2.7%) 35+ Lunch Needstate 1
135 (2.6%) 18-34 Breakfast Needstate 5
153 (2.6%) 18-34 Dinner Needstate 3
Clearly, there is significant global opportunity for Needstate 5/ non-meal
occasions.
30
Exploring the CELLs
In diverse markets with different category and brand
penetration, it is more meaningful to explore cells at a country
level
We identify the local country cells we believe will be most
attractive to [client] for future targeting
The following charts profile key opportunity cells in BRAZIL
31
Cellular Opportunity Analysis
BRAZIL
32
XXXX categories are not yet developed in Brazil
Population 176,029,560
0-14 years: 28% (male 25,140,954; female 24,199,276)
15-64 years: 66.4% (male 57,424,151; female 59,409,928)
65 years and over: 5.6% (male 3,992,017; female 5,863,234) (2002 est.)
LRBs – 26% share of throat
CSDs – 86% of LRBs
GDP - per capita:
purchasing power parity - $7,400 (2000 est.)
Population below poverty line:
22% (1998 est.)
Inflation rate (consumer prices):
7.7% (2001) (2001)
Household income or
consumption by percentage share:
lowest 10%: 1%
highest 10%: 47% (1997) (1997)
33
[client] Issues - Brazil
XXXXXXXXXXX
34
Need-States in Brazil
The most prevalent Need-States in Brazil are:
xxxxxxxxxxxx
xxxxxxxxxxxx
xxxxxxxxxxxx
Overall, Need-state distribution in Brazil is similar to the
average across all countries studied, with these
exceptions:
More Need-state 1
But not the highest (S.Africa)
Less Need-state 2
But not the lowest (UK and Malaysia)
Slightly less Need-state 6
But not the lowest (China)
35
Needs States by Category in Brazil
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Brazil
Total
100%
Juice Juice
Drink
Energy
Drink RTD
Iced Tea
CSD Cola Flavored
CSD
Sports
Drink All LRBs/
Countries
Needstate 7
Needstate 6
Needstate 5
Needstate 4
Needstate 3
Needstate 2
Needstate 1
36
Profile of cell 225
37
CELL 225 – differentiating needs
Is indulgent
Improves my mood –
how I am feeling
Provides specific
nutrients/vitamins/flui
ds
Contains beneficial
additives
Good to drink in
company/socially
Is fun to drink
Mixes well with
alcoholic beverages
It has caffeine
Is sweet
Relaxes me
38
Single
65%
Married
31%
Other
4%
CELL 225
2
8
24
27
15
14
3
4
2
1
2
3
4
5
6
7
8
11
male
65%
female
35%
Gender
Marital Status
Children
43%
No
children
57%
Have children under 18
in household
Household Size (Mean = 4.3)
33
49
10
7
1
<900
901-1,800
1,801-2,700
2,701-3,600
3,601-4,500
Monthly Household Income (Mean = 1,345)
39
Top 5 brands drunk in Cell 225
58%
6%
6%
7%
7%
16%Brand A Brand B
Brand C Brand D
Brand E Other
40