2. - Understanding the concept of segmentation - Knowing its implications - Identifying the relevant criteria for segmentation - Implementing market segmentation 1 Laurence Chérel - Catherine Madrid Tech De Co Bordeaux

3. Findings: When faced with a need, not all consumers adopt the same behaviour in satisfying it. THEREFORE: they choose various solutions to satisfy their need. 2 Laurence Chérel - Catherine Madrid Tech De Co Bordeaux

4. Generic market: eating breakfast  Main markets Substitute market  The solutions chosen can be: - Traditional bread - OR pastries - OR crispy bread - OR cereal - Or nothing at all Laurence Chérel - Catherine Madrid Tech De Co Bordeaux3 Traditional bread Pastries Crispy bread Cereal Nothing

5. This means that in order to satisfy the need to eat breakfast, consumers have various solutions at their disposal. They do not therefore adopt the same behaviour. The breakfast food market is segmented. 4 Laurence Chérel - Catherine Madrid Tech De Co Bordeaux

6. Segmentation consists in: - Determining the significant differences in consumer behaviour - In order to be able to group them into mutually exclusive uniform categories (= segments). - Each of these segments is likely to be targeted through an appropriate marketing strategy. 5 Laurence Chérel - Catherine Madrid Tech De Co Bordeaux

7. Total adult population 51 million (Insee.fr) Absolute Non- Consumers 20% who do not eat breakfast, i.e. 10,200,000 persons Relative Non- Consumers 33.2% eat foods excluding bread/crispbread, i.e. 16,932,000 persons 6 630 000 = customers of the main markets 46.8% eat bread or crispbread, i.e. 23,868,000 Professional market Pre-packaged and dry bread products + bread  Breakfast food market for the adult French population in relation to the project to launch honey crispbread

8. French Adult Population (51 million) Criteria 1: attitude towards having breakfast Criteria 2: type of users of breakfast products SEGMENT 1 SEGMENT 2 7 Laurence Chérel - Catherine Madrid Tech De Co Bordeaux NO = ANC (10,200,000 persons) YES = potential consumers (current customers + NRC) = 40,800,000 persons Users of spreads (23,868,00 persons) Users of self-sufficient products (16,932,000 persons)

9. The market is segmented by means of CRITERIA which must enable significant differences in behaviour to be identified. Several types of criteria linked to: 1 - the general characteristics of the consumer, 2 - the psychological characteristics of the consumer, 3 - goods and services consumption situations 8 Laurence Chérel - Catherine Madrid Tech De Co Bordeaux

10. 1 – Criteria linked to the general characteristics of the consumer: 1.1 - factors of the geographic environment:. Region, type of residence, size of accommodation, climate, etc. Example: the type of vacuum cleaner chosen varies depending on the type of residence (house or apartment) 9 Laurence Chérel - Catherine Madrid Tech De Co Bordeaux

11. 1.2 - sociodemographic factors:. Age,. Sex,. Family size,. Level of education,. Generation,. Etc. Example: the size of the family determines the choice of family car 10 Laurence Chérel - Catherine Madrid Tech De Co Bordeaux

12. 1.3 – economic factors:. Income,. Profession. NOTE: bipolar consumption interferes with segmentation by income. The consumer is prepared, for example, to:  make certain financial sacrifices in order to purchase products for pleasure.  become attached to the use value of a product when this product is only of functional value to him, independent of his income. 11 Laurence Chérel - Catherine Madrid Tech De Co Bordeaux

13. 2 – Criteria linked to the psychological characteristics of the consumer: 2.1 – factors linked to the individual:. His personality,. His values,. His beliefs,. Etc. Example: depending on the relationship the individual has with his pet, he will adopt a specific behaviour in the choice of feed. If the animal is thought of as a “child” of the family, his master will not choose an industrial feed. He will prefer to give it feed he prepares himself. If he places him in the role of family “pet”, he will instead opt for industrial feed by buying him biscuits. 12 Laurence Chérel - Catherine Madrid Tech De Co Bordeaux

14. 2.2 – factors linked to stages in the decision-making process:. Stage of becoming aware of a need Example: some men are aware of the need to use personal products.. Stage of information research to satisfy a need Example: when purchasing a computer, the information research process will vary depending on whether it is a 1 st purchase or a renewal purchase. 13 Laurence Chérel - Catherine Madrid Tech De Co Bordeaux

15. 3 – Criteria linked to goods or services consumption situations: These criteria are the ones we choose most often nowadays due to the specific nature of contemporary consumption which is often bipolar. 14 Laurence Chérel - Catherine Madrid Tech De Co Bordeaux

16. This segmentation is referred to as SITUATIONAL. The criteria chosen depend on the consumption situations or the use of the products. 3.1 – factors linked to the benefits sought by the consumer: Pleasure / Functionality Example: in the mobile telephone market, some people consider mobiles as utilitarian products while others think of them as an extravagance. 15 Laurence Chérel - Catherine Madrid Tech De Co Bordeaux

17. 3.2 – factors linked to types of use of the product:. Regular use / Occasional use Example: if the consumer uses a hair iron periodically, he will choose a simple, inexpensive device; if, however, he uses one almost daily, he will prefer a sturdy, easy-to-use product. 16 Laurence Chérel - Catherine Madrid Tech De Co Bordeaux

18. . Usage times Example: If the consumer wishes to eat compote: - during a break in his working day  compote in cups - at the end of a family meal  compote in bulk containers - at the end of a meal as a special dessert  in individual containers 17 Laurence Chérel - Catherine Madrid Tech De Co Bordeaux

19. NOTE: in situational segmentation, a single individual no longer belongs to one segment and one segment only; he switches between several segments depending on the situations of consumption or use. He is referred to as a “chameleon”. 18 Laurence Chérel - Catherine Madrid Tech De Co Bordeaux

20. 1 - Benefits of the segmentation process: * more adequately matches the product offerings of companies to the fulfilment of customers’ needs * optimises the allocation of marketing efforts *highlights new commercial opportunities 19 Laurence Chérel - Catherine Madrid Tech De Co Bordeaux

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22. 2 – Conditions for meaningful market segmentation:. The segments will be relevant and uniform if and only if: the groupings show actual differences in purchasing behaviours.. The relevant criteria for segmenting the market are those identified on the basis factors that influence the consumer’s behaviour. 21 Laurence Chérel - Catherine Madrid Tech De Co Bordeaux

23. 2 -(continued) Conditions for meaningful market segmentation. The segments must be accessible: the company must direct its commercial activities towards the segments.. The segment must have enough potential to justify specific commercial activities.. The segments must be stable over time: the differences in behaviour must not be short-lived. Laurence Chérel - Catherine Madrid Tech De Co Bordeaux22

24. 3 - Problems in choosing segmentation criteria:. The most illustrative criteria are often the least operative (i.e., enabling the company to effectively communicate with the sectors). RELEVANCEOPERATING VALUE Personality, values, age, sex, profession, Information research, etc.income, etc. Laurence Chérel - Catherine Madrid Tech De Co Bordeaux23

25. Laurence Chérel - Catherine Madrid Tech De Co Bordeaux24  ULTIMATELY, it consists in constructing a SEGMENTATION TREE based on segmentation CRITERIA in order to show the various market SEGMENTS.  Criteria will be chosen on the basis of their ability to highlight differences in behaviours.  Each segment will comprise individuals with like or similar behaviour in consumption or use of the product.

26. Segmentation criterion n°1 Segmentation criterion n°2 The total population is segmented on the basis of 2 criteria which identify 6 market segments and therefore 6 categories of consumers with different behaviours in the EC market. Laurence Chérel - Catherine Madrid Tech De Co Bordeaux 25 Total population Consumer group 1 Consumer group 2 Segment 1 Segment 2 Segment 5 Segment 6 Segment 3 Segment 4