Difference between revisions of "PSC"

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Consumers are too numerous, dispersed, and varied in their buying requirements to make it possible
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Consumers are too numerous, dispersed, and varied in their buying requirements to make it possible to serve all efficiently and in the same manner. At the same time, in today’s competitive landscape, companies follow more and more customised approaches to serve and satisfy the consumers which again drives their ever more differentiated wants. As a consequence, markets become “demassified”, dissolving more and more into “micro-markets”, characterised by different consumers purchasing different products in different distribution channels and attending to different communication channels. Segmentation aims at identifying such micro markets, i.e. groups of consumers that share the same expectations and behavioural patterns. The identification of the most attractive micro-markets, i.e. segment(s), for the company and its products therefore is imperative not only for successful commercialisation but also for new product development.
to serve all efficiently and in the same manner. At the same time, in today’s competitive landscape,
 
companies follow more and more customized approaches to serve and satisfy the consumers which
 
again drives their ever more differentiated wants. As a consequence, markets become “demassified”,
 
dissolving more and more into “micromarkets”, characterized by different consumers purchasing
 
different products in different distribution channels and attending to different communication
 
channels. Segmentation aims at identifying such micro markets, i.e. groups of consumers that share
 
the same expectations and behavioural patterns. The identification of the most attractive micromarkets,
 
i.e. segment(s), for the company and its products therefore is imperative not only for
 
successful commercialization but also for new product development.
 
  
Following a strategic approach to markets, the company distinguishes the major market segments
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Following a strategic approach to markets, the company distinguishes the major market segments based on the profiling of different consumer groups along their wants, consumption and purchasing behaviour; socio-demographic characteristics etc.; targets one or more of these segments; and develops products (and marketing programs) tailored to the profile and expectations of each selected segment.Tailoring starts with an understanding of the customers and providing them with the product and service they expect but, importantly, embraces also price, distribution and communication efforts to reach the target segment efficiently. The firm focus is on the buyers whom they have the greatest chance of satisfying. Having satisfied customers is at the basis for company success and the first step to repeat purchase and customer loyalty.
based on the profiling of different consumer groups along their wants, consumption and purchasing
 
behaviour; socio-demographic characteristics etc.; targets one or more of these segments; and
 
develops products (and marketing programs) tailored to the profile and expectations of each selected
 
segment.Tailoring starts with an understanding of the customers and providing them with the
 
product and service they expect but, importantly, embraces also price, distribution and
 
communication efforts to reach the target segment efficiently. The firm focus is on the buyers whom
 
they have the greatest chance of satisfying. Having satisfied customers is at the basis for company
 
success and the first step to repeat purchase and customer loyalty.
 
  
Evidence for new product development or new product commercialization success factors shows that
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Evidence for new product development or new product commercialisation success factors shows that the analyses of market segments, targeting, positioning and the alignment with the firms’ offer and resources are crucial to both new product development and new product commercialisation. It follows that segmentation helps companies to navigate an increasingly competitive market, to understand their customers better, to develop offerings that satisfy specific wants, and to address diversity in an efficient manner.
the analyses of market segments, targeting, positioning and the alignment with the firms’ offer and
 
resources are crucial to both new product development and new product commercialization (e.g.
 
Montoya-Weiss & O’Driscoll, 2000; Florén et al., 2017).
 
It follows that segmentation helps companies to navigate an increasingly competitive market, to
 
understand their customers better, to develop offerings that satisfy specific wants, and to address
 
diversity in an efficient manner.
 
  
The approach to developing a robust model to analyze the likelihood that new seafood product
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The approach to developing a robust model to analyse the likelihood that new seafood product launches will be successful follows this perspective. We develop both country specific consumer segmentations in Italy, Germany, France, Spain and the UK, as well as an overarching European segmentation useful for companies that are innovating and developing new fish products or have fish products on offer and would like to improve their commercialisation. The segmentations are based on latent class analyses of representative samples of consumers (800 in each of the five countries) who replied to an online survey in June-July 2017.
launches will be successful follows this perspective. We develop both country specific consumer
 
segmentations in Italy, Germany, France, Spain and the UK, as well as an overarching European
 
segmentation useful for companies that are innovating and developing new fish products or have fish
 
products on offer and would like to improve their commercialization. The segmentations are based on
 
latent class analyses of representative samples of consumers (800 in each of the five countries) who
 
replied to an online survey in June-July 2017.
 
  
Although the segment profiles by themselves are informative, the methodology used contains an
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Although the segment profiles by themselves are informative, the methodology used contains an additional step in order to help the company select the most appropriate target(s). In this second stage, multinomial regression matches product (and firm) attributes with the most attractive consumer segment(s). A comparison of the segment, i.e. consumer profile, with the product attributes will further inform the company on how to improve the product and/or its marketing effort in order to tailor more closely to segment wants and characteristics and ultimately launch and commercialise successfully. Figure 1 gives an overview of the success analysis model.
additional step in order to help the company select the most appropriate target(s). In this second
 
stage, multinomial regression matches product (and firm) attributes with the most attractive
 
consumer segment(s). A comparison of the segment, i.e. consumer profile, with the product attributes
 
will further inform the company on how to improve the product and/or its marketing effort in order to  
 
tailor more closely to segment wants and characteristics and ultimately launch and
 
commercialize successfully. Figure 1 gives an overview of the success analysis model.
 
  
'''Figure 1: The success analysis model at a glance'''
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'''Figure 1: The success analysis model at a glance''' [[File:Psc fig 1.JPG|center|Figure 1: The success analysis model at a glance]]
[[File:psc_fig_1.JPG |center| Figure 1: The success analysis model at a glance]]
 
  
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== The tool ==
== Methods ==
 
  
 
----
 
----
  
===Survey design===
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The PSC tool is being developed as a proxy for the multinomial regression algorithm created as a result of the research phase of the project. It presents the user with an interface to select the variables to be used in the algorithm which will calculate the profile and consumption probability of the product being analysed, and display to the user the results in a graphical, user friendly form.
 
 
Based on the objective of consumer segmentation, a questionnaire including socio-demographic,
 
geographic, psychographic and benefits/behavioural dimensions of consumers and their behaviour
 
was designed. It is built on previous literature (e.g. Ailawadi et al., 2001; Candel, 2001; Pieniak et al.,
 
2007; Verbeke et al., 2007; Verbeke and Vackier, 2005), on studies on consumer behaviour regarding
 
fish related products (EUMOFA, 2016; European Commission, 2016; ISMEA, 2014) and on qualitative
 
insight gained through explorative in-depth interviews with fish consumers in each of the countries
 
under study (performed in task 4.1.). Constant interaction with partners in all countries ensured
 
equivalence and adaptation of the questionnaire in case culturally-specific measures were needed.
 
The questionnaire was developed in English and cross-checked with a native English speaker from the
 
partner in the United Kingdom, to ensure the right use of words and concepts from the local culture.
 
Then, the questionnaire was translated to each of the languages of the remaining countries (Spanish,
 
Italian, French and German) and back-translated. The translators and back-translators were bilingual
 
in the target language and English.
 
 
 
The survey instrument was administered online. In order to keep the time to complete the
 
questionnaire manageable, different flows along the questionnaire were developed so that only
 
relevant questions and options were displayed. On average, the time needed to complete the
 
questionnaire was around 11 minutes, in line with recommendations regarding length of online
 
questionnaires.
 
 
 
 
 
===Constructs and Measures - Segmentation criteria===
 
  
Market segments are large identifiable groups consisting of individuals that are characterized by
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=== PSC home page ===
homogenous buying attitudes, preferences, purchasing power, usage patterns etc. Any of these
 
characteristics can be used to segment markets and to profile the consumers in the respective
 
segments.
 
We use combinations of sociodemographic, psychographic, benefit and behavioural criteria to build
 
and profile segments. Demographic variables have obvious potential as segmentation criteria. The
 
most commonly used variables include gender, age, income level, and educational achievement.
 
Frequently, use is made of a battery of demographic variables when delineating market segments.
 
Psychographic segmentation involves using "lifestyle" factors in the segmentation process.
 
Appropriate criteria are usually of an inferred nature and concern consumer interests and perceptions
 
of "way of living" in regard to work and leisure habits. Critical dimensions of lifestyle thus include
 
activities, interests, and opinions. In the food context examples include interest in cooking, looking for
 
new ways or recipes to cook etc. (e.g. Grunert et al., 1993). Behavioural variables pay attention to
 
patterns of consumption (e.g. low-medium-high usage rates) or loyalty with respect to brand/products
 
among others. Behaviourally defined segments may focus on a specific aspect of behaviour which is
 
not broad enough to be defined as a "lifestyle". Benefit segmentation aims at proactively defining an
 
(unfilled) need.
 
  
We apply a domain-specific segmentation base and integrate it with some general segmentation
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The suer can access the PSC tool home page by clicking the quick access link in the DSS homepage or by clicking the appropriate link in the top navigation bar.
bases; this is pragmatic and relevant for identifying within-country segments but also in order to
 
identify cross-country segments and related commonalities and differences.
 
The major segmentation categories with respective variables (illustrative) are show in Figure 2 .
 
  
'''Figure 2: Profiling consumer segments along socio-demographic, geographic, behavioural/benefit- and psychographic
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''PSC home page'' [[File:Psc home 1.png|center|PSC home page]] [[File:Psc home 2.png|center|PSC home page]]
criteria'''
 
[[File:Psc_fig_2.JPG |center| Figure 2: Profiling consumer segments along socio-demographic, geographic, behavioural/benefit- and psychographic
 
criteria]]
 
  
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Once in the PSC home page, the user must initially select 5 different attributes for the product being analysed in the ''Product attributes'' section. These are required attributes and must be selected before being able to see the results. Once these attributes are set, the user can additionally select more detailed attributes in the ''Other marketing attributes'' sections to increase the relevancy of the resulting analysed profile. Optionally, the user can also select preferred presentation formats in the selection box above the ''Perform product success check'' button, which will then be highlighted in the results page preferences graph.
  
In general, operationalization followed extant literature and market studies (e.g. ISMEA 2014;
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Behind the scenes, when the user clicks the button to perform the PSC, the tool wraps the attributes chosen by the user and hands over to the R language script developed in the research part of the project, which in turn calculates the multinomial regression for the given attributes and returns the results to the DSS tool.
EUMOFA 2017), the results from the explorative in-depth interviews, a pre-test (done in Italy with 91
 
respondents) and an iterative discussion with international researchers from the countries under
 
study. Seven point Likert-scales were used throughout the questionnaire. All Likert-scale questions
 
followed Friedman et al.’s(1993) recommendations on setting the negative statements on the left side
 
to avoid the “left side bias” generated by the positive statement. We briefly describe the criteria and
 
their measurement next (for more details please see the questionnaire in Appendix 1).
 
  
===='''Consumer sociodemographic data'''====
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=== The results ===
  
The sociodemographic variables we use include: age, gender, employment status, family composition,
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''PSC results page'' [[File:Psc results 1.png|center|PSC results page]] [[File:Psc results 2.png|center|PSC results page]]
education and income. Age is measured as a continuous variable from 18 years onwards. Family size
 
and structure are measured through two questions: first, respondents were asked to report the
 
number of people living in their household (including themselves). Since the presence of children or
 
elderly has been shown to be a major determinant of fish consumption and consumption patterns in
 
earlier studies, respondents then were asked to indicate also the age of each family member and
 
whether the member consumes fish.
 
  
Employment status is measured through a single selection question including the following categories:
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After a user click the button to perform the product success check, the results page will be displayed containing the description of the best matching consumer profile for the analysed product, as well as a graphical comparison of consumption probabilities for different product formats. The presentation formats selected in the previous page will be highlighted in the graph, and the selected attributes used for the regression will be displayed in the sidebar on the left.
full-time, part-time, self-employed, homemaker, retired, student, unemployed, other.  
 
The education levels are based on ISCED (UNESCO, 2012) and are re-arranged in the following way:
 
less than primary, primary and lower secondary education (ISCED levels 0-2); upper secondary (ISCED
 
level 3); university or college below a degree (ISCED levels 4-5); bachelor (ISCED level 6); Postgraduate
 
(ISCED levels 7-8). The income variable was introduced with options representing income levels from
 
very low to very high. Country-specific ranges were set for each income level (using secondary data
 
from e.g. Deutsches Statistisches Bundesamt, 2017; European Commission, 2016; Eurostat, 2017) and
 
allowance was also made for the fact that the UK has its own currency.
 
  
===='''Consumer geographic data'''====
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To account for potentially varying consumer profiles within each country, the geographical variables
 
are measured through three questions. In the first one, respondents were asked to identify in which
 
type of geographical area they live: urban (more than 50.001 inhabitants), intermediate (between
 
5.000 and 50.000 inhabitants), rural (less than 4.999 inhabitants). In the second one, respondents were
 
asked to specify if they lived in an area with a coastline or not. In the third question, respondents
 
reported their macro-geographical region of residence in their country according to the NUT3
 
classification (Eurostat, 2013).
 
  
===='''Benefits and behavioural measures'''====
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=== Segments description ===
The benefits and behavioural measures we include are consumer involvement in buying fish, places of
 
acquisition, fish attributes important to the selection, fish- and overall food expenditure, situations for
 
fish consumption, sources of information and past/expected future consumption behaviour.
 
Consumer involvement was used for screening as we included only those people who were at least
 
fairly involved in their household’s fish purchasing process.
 
  
Consumption frequency (i.e. usage rate) was based on Thong & Solgaard (2017) (never, few times a
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The table here below presents a summary of the segments identified in the single countries (and in the “total” EU countries) under study. Some segments are cross-national or pan-European (light blue, light red), while others are specific to a few (grey cells)/only one country (dark green). [[File:Psc table 1.png|center|Segment tables]]
year, once a month, 2-3 times a month, 1-2 times a week, 3-4 times a week, almost every day) and
 
included total fish consumption (i.e. fish consumption also in restaurants, canteens etc.), fish
 
consumption by species (salmon, cod, seabass, seabream, herring, trout, pangasius) and by formats.
 
Moreover, the usage rate was used for screening as only fish consumers were included in the survey.
 
  
The fish purchasing places and usage occasions were taken from the results of the explorative in-depth
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==== Italy ====
interviews and a continuous interaction with international researchers from the countries under study
 
(e.g. at home, for a barbecue, at the restaurant, at the supermarket, online, at the fishmonger).
 
We asked not only for the preferences of the attributes of the fish the consumers buy, but also for
 
their importance to the purchase in order to account for the fact that consumers usually have to make
 
a choice across attributes.
 
  
Food and fish products expenditure was measured through an open question in which the respondents
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'''The health & environmentally conscious''' consumer represents 13 % of the Italian consumers (trend: stable). Members of this segment are willing to pay (second highest expenditure for fish in Italy) for beneficial effects for both personal and environmental health. Predominantly women aged 50 + value items such as environmentally friendly, sustainability and natural ingredients, nutrients, easy-to digest characteristics highly. Appearance and traceability are also important to this segment, pointing to critical evaluation and check of quality/safety issues related to fish. They prefer wild fish, boneless and traditional recipes. Their favourite place of purchase is the supermarket/fishmonger which are also their sources of information. The segment’s usage rate is medium-high. Of note, consumers here like all fish species (although they consume sea bream and sea bass most) and buy a broad range of formats. The women and their small families (3 persons) reside in bigger urban centres, with children who are grown up but still live at home.
were asked first to report their monthly expense on food related products and second, their expenses
 
on fish products.
 
  
In order to understand the use of information sources, we asked respondents to report the frequency
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'''The brand-convenience-taste''' consumers reflect only a small but growing portion of the Italian market (7 %). This group of young consumers with small families declares to have a preferred brand and to favor taste over nutritional aspects. Highly important to them are availability of the fish, new formats, labels and omega 3. The consumers here also value fish products that take little time to prepare while nutrients or sustainability claims are of no importance to them. Consistent with a brand buyer is also the fact that these consumers are not self-efficacious– they rely instead on the familiarity and security that comes with a preferred brand and label (another aspect of “convenience”). In line with this profile is the supermarket as the only place of purchase, which is also, together with advertisements, the segment’s main source of information. People in this group live predominantly in rural areas of the country. The favourite species are salmon (ready-to-eat/to cook, fresh fillet), sea bream (fresh fillet) and cod (frozen fillet) with overall medium consumption and average expenditure.
of consulting various information sources (e.g. family members, fish seller, supermarkets and in-store
 
promotion, advertising, social media, medical advice, labels and information on the packaging of the
 
product etc.).
 
  
Regarding past/future consumption, a new measure was developed based on the explorative in-depth
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'''The self-efficacious cooking artist''' represents 14 % of Italian consumers (trend: growing). Here we find the self-efficacious (all items that point to knowledge and evaluation of fish score high) relatively young male who likes to cook, is creative in meal preparation and looks for versatility. Consistent with the passion for cooking, saving time in meal preparation is unimportant to him. He looks for healthy products (with traceability) but also for a reasonable price-quality ratio. He and his partner (or small family) live in coastal/rural areas as well as in urban centres. The favourite place of purchase is the supermarket or the fishmonger, the source of information is the label or the advice from the fishmonger. Chooses predominantly sea bream, sea bass and cod in a wide range of formats (except ready to eat). Fish expenditure is average, in line with the fact that those who have more knowledge of fish can find more alternatives among available products.
interviews and on some previous qualitative studies (European Commission, 2016; ISMEA, 2014). We
 
asked respondents to report changes (increase/decrease) in fish consumption over the past three
 
years/expected for the next three years. If changes were reported, we also asked to indicate the reason
 
for the change (e.g. income, available time for cooking, fish prices, health awareness, variety of
 
choices). Importantly, this information was used to estimate the future segment trend, i.e. stable,
 
increasing, or declining.
 
  
===='''Psychographics'''====
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'''The local connoisseur''' represents the biggest segment in Italy (24%/growing). This is the group of consumers who know everything about fish (high values across self-efficacy items), use its versatility and experiment with new formats or recipes. Relatively young women here (with small family) strongly emphasise the health-nutritional aspect and underline easy digestion. This group of consumers also favours local origin. They pay attention to environment and sustainability issues and indicate the preference for a (local) brand or seller. Emphasising value for money, they do not trade off quality for price (but would instead go for a cheaper species or stock the fish in order to be flexible). They prefer wild fish, are indifferent to bones, and are inclined to traditional preparation. Their consumption is medium-high (mainly sea bream, sea bass, less cod and salmon in a wide range of formats) with an expenditure that is the highest across all Italian segments. These consumers buy in the supermarket or at the fishmonger and do not indicate any sources of information.
The psychographic dimension includes attitudes, preferences, consumption motives and lifestyle.
 
Attitudes refer to the degree to which a person has a favourable or unfavourable evaluation towards
 
a product or behaviour. Following literature, the measure of consumer attitudes included bipolar
 
adjectives such as items regarding the source of the fish (wild/farmed), the price (expensive/cheap),
 
formats (frozen/fresh) and production level (processed/unprocessed) and other bipolar pairs such as
 
branded/unbranded, organic/not organic, natural/enhanced and EU origin/Outside EU origin.
 
  
Additionally, based on the exploratory in-depth interviews and the feedback of the international
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'''Price-wise convenience''' consumers (14%/stable) represented in segment 5 are very price conscious, reflected also in their low expenditure on fish. People here are not knowledgeable about fish. They strongly underline health, easy-to-cook characteristics and texture. In line with this profile is their fish selection – they favour cod and salmon (fresh and frozen fillets but also canned, smoked, ready-to-cook/ready-to eat). Both genders aged 54 + are represented here, mainly living with one grown up child in rural and urban areas. Preferably they buy in supermarkets which are, together with advertisements, also the source of information.
research team, the following adjectives were also added: local-origin/national-origin, familiar products
 
or producers/new products or producers, traditional products/products for special dietary needs.
 
Consumer motives as well as attitudes are extremely important in consumer research as they explain
 
the reasons behind consumer behaviours. We included quality and sensory appeal motivation items,
 
health motives as well as items related to price sensitivity and convenience motives and items related
 
to ethical and environmental concerns.
 
  
Life style includes factual and procedural knowledge, based on subjective perceptions and experiences
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'''The self-efficacious pragmatic fish''' consumers, a large (23%) and growing segment with high fish expenditure. They value the health benefits of fish, look for conservation and versatility. Preferences here bring together the health of both, individuals and the environment, added is a strong emphasis on value for money. Although this segment is knowledgeable about fish and its preparation, the profile seems to reflect a pragmatic instance of “having to eat and cook fish” without related pleasure of doing so. In fact, this segment has only two favourite species, namely salmon and cod, which they consume frequently, predominantly as fresh/frozen fillets. Women aged 45 + with small families, medium-high education and income represent the socio-demographic profile of this segment best.
which encourage enduring dispositions to behave in certain ways. Life style might transcend individual
 
products, but may be also specific to a product class (Grunert et al., 1993). In the present study, general
 
and fish specific items were included, e.g. I like to try new recipes, I always inform myself on the
 
nutrients I can assimilate from fish. We included convenience lifestyle items, ethical and environmental
 
and health items together with novelty and innovativeness statements. Self-efficacy items (e.g.
 
regarding the knowledge, evaluation and the preparation of fish) are present too.
 
  
===Sample===
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'''Indifferent''' consumers are the smallest group of consumers (6%/stable), represented by relatively young male with small family living in rural or intermediate areas of Italy. Their favourite place of purchase is the supermarket. They consult the label or ads for fish information. Species include sea bream and salmon and their expenditure is among the lowest across the segments.
The average apparent fish consumption per capita in the EU is the second highest in the world (at
 
around 22 kg/capita/year), and some individual EU Member States are among the highest fish consuming
 
countries in the world (EEA, 2016). The five selected nations under study had the highest
 
household expenditure and volume in fishery and aquaculture products in 2015, representing in total
 
the 72% of all consumer expenditures. Their importance is underlined also with the fact that they
 
covered around 86 % of the total EU fresh fish consumption in volume and 85 % in value in 2015
 
(EUMOFA, 2016).
 
  
Within-country representativeness was ensured using a stratified random sample (Lohr, 2010), which
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is more likely to produce a representative sample (Reynolds et al., 2003). Each country was divided
 
into different stratums for the sociodemographic variables described earlier, where the percentages
 
of the sample assigned to each sociodemographic stratum were established based on the total
 
distribution of the population of each country. The percentages for age, gender and geographical
 
regions were obtained from Eurostat (2017) and were established based on the population between
 
18 to 74 years old in 2016. Age was divided into five stratums: 18-24 years old, 25-34 years old, 35-44
 
years old, 45-55 years old and >=55 years old. The geographical regions stratums were defined
 
according to the NUT3 European classification of small regions (Eurostat, 2013).
 
Representativeness of the education categories from the ISCED outlined earlier in the countries was
 
established according to the OECD (2016, p. 43) as this source provided a more detailed classification
 
than Eurostat (2017). The measures were based on the population between 18 to 64 years old.
 
  
===Data collection===
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==== Spain ====
  
The target samples were 800 adults aged 18 and older from Italy, Germany, France, Spain and United
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Segment 1 represents '''brand/seller “dependent” high quality''' consumers who are not self-efficacious (23%/growing). The preferred “brand“ here is either the shop/seller or the brand itself. Consumers do not feel on the safe side regarding fish evaluation and preparation and thus rely on the trusted seller/brand of whom they learn. They give importance to inclusive health (individual and environment) and have a broad quality understanding for which they are ready to pay. This segment shows high fish consumption and the highest expenditure for fish. Consistent with the fact that they like to cook but do not indicate corresponding competence they go for a very limited range of species. They buy in supermarkets or at the fishmonger and listen to the advice of the fishmonger or seller. Women aged 46 + with small children (who eat fish) and low-medium education but relatively high income best represent this group of consumers. Favourite species are sea bream (whole/fresh fillet) and cod (fresh/frozen fillet, dried).
Kingdom. The respondents had to be fish consumers (no restrictions on frequency) of at least one of
 
the target species (salmon, cod, seabream, seabass, herring, trout, and pangasius) and be fairly or
 
completely involved in the fish buying process in their households. The data was collected through an
 
online survey developed on the Qualtrics platform. Before collecting survey data, a pilot test of the
 
survey was performed with partners and with 91 Italian fish consumers. The feedback provided was
 
used to improve the questionnaire. The final version of the questionnaire was launched in parallel in
 
all five countries to ensure data collection equivalence (Hult et al., 2008). The data collection took a
 
month, from June 23rd until July 24th, 2017.
 
  
Respondents were selected from a market research panel with qualifying demographic characteristics.
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'''Self-efficacious selfish brand buyer''' (23%/growing): also this group of consumers has a preferred brand/seller but it is, as compared to segment 1, self-efficacious. It is “egoistic” in terms of health orientation as only items which focus on individual health are important (while environmental attention is unimportant) to this segment. Men around 55 here take care of their family which lives in cities close to the coast. They are medium sea bass and salmon consumers who spend relatively little on fish.
They were sent an invitation to fill in with information on questionnaire length and the available
 
incentives. Each sample stratum from the panel base was proportioned to the general population and
 
then randomized before the survey was deployed. To exclude duplication and to ensure validity, every
 
IP address was checked using a sophisticated digital fingerprint and deduplication technology
 
(Qualtrics, 2014).
 
  
All data were collected through the online survey. Although online questionnaires present many
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'''The independent “good for me” connoisseur''' (9%, growing) values taste and nutrition equally. Members of this segment love fish (sensory appeal) and they value its benefits for health. They cross-check on labels and expect a guaranteed origin. In line with this, the segments favourite species is wild fresh sea bass which is consumed in high quantities. Women aged 48, living with family in cities at the coast are willing to spend for their selected premium sea bass which they preferably buy at the fishmonger or in the supermarket.
advantages such as reduced cost, time and access to unique populations they also have some
 
limitations such as the access to older and less educated consumer groups (Wright, 2006). For this
 
reason, some of the stratums percentages originally defined for education and age had to be slightly
 
modified, to reach the target of 800 respondents per country in a reasonable time frame. The changes
 
were always done by increasing mainly the percentage of respondents in the closest categories from
 
the one with the low quota response. On average, respondents took 11.4 minutes to complete the
 
questionnaire.
 
  
In total, 4414 completed and usable questionnaires were collected, from which 4000 were
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The consumers in the 4th and biggest (29 %, stable) segment in Spain are directed towards '''nutritional-digestive and inclusive health (360 degree-health)'''. Consistent with this emphasis is the importance given to origin and traceability. Value for money is crucial to this segment, and they value conservation. Their medium-high fish consumption is reflected also in a relatively high fish expenditure mainly spent on fresh sea bream and salmon (fresh/smoked). Young women here take care of their families with young children.
representative for each country (800 responses per country) and sample stratum, according to the age,
 
gender, education level and macro-geographical area. The main sample characteristics are reported
 
in Table 1.
 
  
'''Table 1: Sample characteristics'''
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'''(Salmon) Cooking artists (9%/stable)''', very young couples (24 +), like to cook and trust in their competence of fish (salmon) preparation, they are creative and experiment with new formats, and they emphasise versatility. None of the health related items is of importance. The young couples go mainly for wild salmon (medium –high consumption) in the supermarket. Salmon is the dominant species they buy in all formats. Consistent with the artist stance is also the (low) use of an exotic species such as herring. The main source of information is the seller.
[[File:psc_tab_1.JPG |center| Table 1: Sample characteristics]]
 
  
===Statistical Methods===
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'''The indifferent''' (7%/stable), with medium-low consumption of salmon and cod, spends little on fish. Typically consumers here are young male, small family size, low education level living in urban centers in the countryside.
===='''Exploratory and Confirmatory Factor Analysis (EFA – CFA) for questionnaire
 
validation'''=====
 
  
We followed the commonly used combination of exploratory factor analysis (EFA) and confirmatory
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====   ====
factor analysis (CFA) to validate our questionnaire. Construct validity of the items of the questionnaire
 
is investigated firstly with EFA to uncover the factor pattern underlying the questionnaire, and then
 
CFA is used to validate the factor structure provided by EFA. We performed factor analysis i) overall
 
and ii) within country (stratified analysis). Finally, we performed a multi-group confirmative factor
 
analysis to assess the measurement invariance (i.e. configural, weak and
 
strong invariance) (Meredith, 1993) between countries.
 
  
Factor analyses were performed using R (R Core Team, 2015) and the R-packages polycor (Fox, 2016),
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==== France ====
paran (Dinno, 2012), psych (Revelle, 2017) and lavaan (Rosseel, 2015).
 
  
All results confirm validity of our survey instrument: the EFA statistics, i.e. eigenvalue >1 and Horn’s
+
'''The good for me health''' consumer represents 29 % of the French market (trend: stable) that expects mainly health benefits from fish consumption and looks for guarantees in terms of sustainability certifications and traceability. Predominantly consisting of male in their fifties, highly educated and with high income, this segment appreciates “easy-to-cook” products and emphasises value for money. It is characterised by low-medium consumption and low expenditure for sea bream (either fresh fillet or ready-to-eat). Shopping for two, predominantly in supermarkets, these men use the label or the seller for information.
parallel analysis, identified seven factors for Europe and each individual country. By CFA, only the items
 
with high factor loadings were retained (83,3%) to maintain factor consistency. Overall, CFA fit indices
 
were adequate for both European and for single country analyses. Indices of unidimensionality
 
(AVE>0.2), reliability (omega>0.7) and general factor validity (rho>0.8) were satisfactory for each
 
factor, and the item–factor correlations (>0.4) proved high-quality specific factor validity for all items.
 
In addition, the indices were also satisfying in the CFAs stratified by country and in the multi-group
 
analysis, by retaining the same items. Finally, concerning multi-group analysis, the testing of the
 
measurement invariance showed a weak invariance, i.e. the factor loadings are equal across countries
 
(results are available upon request).
 
  
===='''Latent Class Analysis (LCA) and multinomial logistic regression for segmentation
+
'''The health oriented (selfish), (not creative) cook''' (23%/growing) is medium-high in fish consumption and the highest in expenditure. Women aged around 45 highly value the health benefits of fish, they like cooking and the variety and versatility that comes with many species and a wide range of formats (herring, cod and sea bream) in traditional preparations. They purchase in the supermarket for a small family and take information from the label and the seller.
and for matching consumer segmentations with products/firms'''====
 
  
Latent class analysis (LCA) can be viewed as a special case of model–based clustering for multivariate
+
'''The cooking artist''' represents around a quarter of fish consumers in France (trend: stable). This profile cuts across all ages, also the very young. They choose carefully, go for high quality for which they are ready to pay and they consult many information sources. Health is not on the agenda of this segment and they have no environmental concerns. They shop for sea bream at the supermarket or at the fishmonger. The couple prefers fresh, but they are flexible and willing to try different formats and recipes.
discrete data. It is assumed that each observation comes from one of a number of classes, groups or
 
subpopulations, with its own probability distribution. The overall population thus follows a finite
 
mixture model. When observed, data take the form of categorical responses as, for example, in
 
consumer behaviour surveys, it is often of interest to identify and characterize clusters of similar
 
individuals.
 
  
In the context of marketing research, one will typically interpret the latent number of mixture
+
'''Self-efficacious convenience''' consumer to whom, beyond inclusive health, convenience is central (31%/stable). They give importance to each and every aspect and thus represents very demanding consumers. This consumer critically checks the expected quality: reads labels and values certificates and guarantees. Medium consumption of varied fish species and broad range of formats (reflecting convenience), and second highest expenditure on fish. Relatively young women and men are representing the class, living in the countryside/intermediate cities in small families.
components as clusters or segments. In fact, LCA provides a powerful tool and the state-of-the-art
 
technique to identify market segments. In line with our objective, latent class analysis has been
 
suggested as a model-based tool for regular market segmentation (Wedel & Kamakura, 2000) and
 
international market segmentation (Steenkamp & ter Hofstede, 2002).
 
  
In the following we describe the standard latent class model and its parameter estimation and we
+
'''The indifferent''' in France are the smallest group of consumers (7%/stable). The class is on a medium-low level in fish consumption and the lowest expenditure for trout, salmon and cod. Prefer mainly in fresh and frozen formats. The segment is predominantly young singles or couple, living in the countryside in smaller cities.
report the problem of model selection and goodness of fit criteria. Subsequently, we present the
 
extension of the basic model which permits the inclusion of covariates to predict latent class
 
membership. We discuss three-step approaches for LCA with covariates. Lastly, we present the
 
empirical application.  
 
  
===='''The formal models of LCA'''====
+
In all segments salmon and trout is consumed. The species mentioned above distinguish the segments from this overall baseline consumption.
Let 𝑋 represent the latent variable and 𝑌𝑙 one of the L observed or manifest variables, where 1 ≤ 𝑙 ≤
 
𝐿. Moreover, let C be the number of latent classes and 𝐷𝑙
 
the number of levels of 𝑌𝑙. A particular latent class is enumerated by the index x, x = 1, 2, ..., C, and a
 
particular value of 𝑌𝑙 by 𝑦𝑙, 𝑦𝑙= 1, 2, ..., 𝐷𝑙.
 
  
The vector notation Y and y is used to refer to a complete response pattern.
+
====   ====
The basic idea underlying any type of LC model is that the probability of obtaining response pattern y,
 
𝑃(𝐘 = 𝐲), is a weighted average of the C class-specific probabilities 𝑃(𝐘 = 𝐲|𝑋 = 𝑥); that is,
 
  
[[File:psc_eq_1.JPG |center| equation 1 ]]
+
==== Germany ====
  
Here, 𝑃(𝑋 = 𝑥) denotes the proportion of persons belonging to LC 𝑥.
+
'''The cooking artist''' (12%/stable) is loyal to a brand/seller and gives importance to local origin. Consumers in this segment share the characteristics that cut across-countries for the cooking artist: they like to cook/are capable of preparing fish, value versatility, are creative and ready to try new formats. Taste here clearly dominates nutritional aspects (only Omega 3 is of importance). Consumers in this segment are not price sensitive, a fact reflected also in the highest fish expenditure across German segments. They prefer fresh fish, medium usage rate, mainly salmon but also the more “exotic” sea bream (the only segment in Germany) and sea bass. The class includes both genders, they are young, live with a small family with smaller kids in cities in the countryside.
In the classical LC model, this basic idea is combined with the assumption of local independence. The
 
𝐿 manifest variables are assumed to be mutually independent within each LC, which can be
 
formulated as follows:
 
  
[[File:psc_eq_2.JPG |center| equation 2 ]]
+
'''Healthy & environmentally-conscious''' consumers make up a third of the German market (growing). To consumers in this segment, a healthy diet and a natural product and the texture are central. Health here is inclusive of the environment, consumers value sustainability certification and put emphasis on a guaranteed origin. They are not self-efficacious and thus trust their “seller/brand”, but also consult the label and ask for guarantees. The group is ready to pay for the value they ask for, i.e. a healthy & environmentally safe diet, which is reflected in high fish expenditure. The class includes both genders aged over 54 involved in decisions and patterns of fish consumption (salmon, trout and sea bass; fresh and frozen); consistent with their health focus their consumption is medium high.
  
After estimating the conditional response probabilities 𝑃(𝑌𝑙 = 𝑦𝑙
+
'''The convenience- brand loyal''' consumer (23%/growing), looks for value for money. Brands provide the benefits she asks for: nutrients, sustainability certification, traceability, label. Ready-to-eat is emphasised which together with fresh formats may satisfied her want for creativity. Predominantly relatively young female living in a two-person-household in cities in the countryside with lower fish expenditure and medium fish consumption represent this cluster best. The members of this segment shop in supermarkets where they get information in-store, from the seller or from the label.
|𝑋 = 𝑥), comparing these
 
probabilities between classes shows how the classes differ from each other, which can be used to
 
name the classes. Combining the two basic equations (1) and (2) yields the following model for
 
𝑃(𝐘 = 𝐲) marginal probability:
 
  
[[File:psc_eq_3.JPG |center| equation 3 ]]
+
The fourth segment comprises '''healthy cooking artists''' who like variety. Being a premium segment in terms of expenditure, this profile unites the cooking artist with a focus on health. Versatility is important, but experimentation is also reflected in a broad range of species and formats. The socio-demographic profile of women over 54, with medium high education, in 2 person-households, is very much in line with this segment.
  
The model is formulated for nominal indicators 𝑌𝑙 and consequently a multinomial logit distribution
+
'''Cheap brand and taste''' consumer (16%/stable): People in this segment have learned the claims of their preferred brand (but they are not knowledgeable about fish), omega 3 and tasty, they are price-conscious and, overall, seem to go for an easy buy without much involvement or major decision criteria. Fish here offers the best compromise between health and taste. No importance is given to origin and traceability. Male in their forties (couple) spend little for medium-low consumption.
is hypothesized for the conditional probability to obtain 𝑦𝑙
 
to l-th, given the affiliation to the latent
 
class x, 𝑃(𝑌𝑙 = 𝑦𝑙
 
|𝑋 = 𝑥).
 
The conditional probability is parameterized as follows
 
  
[[File:psc_eq_4.JPG |center| equation 4 ]]
+
'''The indifferent''' present around 7 % of the market, predominantly young and single. Medium consumption, relatively high expenditure and a broad range of species and formats.
  
Where the linear term 𝜂𝑦𝑙
+
Of note, herring is consumed in all segments. The species mentioned above distinguish the segments from this overall baseline consumption.
|𝑥 = 𝛽𝑦𝑙 + 𝛽𝑦𝑙𝑥, the parameter 𝛽𝑦𝑙
 
is the intercept and 𝛽𝑦𝑙𝑥 is the effect of
 
the latent variable X on the indicator 𝑌𝑙.
 
  
In the same way, the probability associated with the latent variable X has a nominal logit distribution:
+
 
  
[[File:psc_eq_5.JPG |center| equation 5 ]]
+
==== UK ====
  
Similarly to cluster analysis, one of the purposes of LC analysis might be to assign individuals to latent
+
'''Healthy convenience''' consumers (22 %, growing) have their focus on “easy” to cook, to stock, to use (versatile). Health is also central, with a strong focus on digestion and environmental concern and the request for traceability. The segment is characterised by medium consumption and highest expenditure on fish across the segments. Women, aged above 50 with medium-high education and a 2-person household describe the segment best. Members of this segment appreciate wild fish; their favourite species are sea bream, sea bass fresh fillets, ready-to-eat, whole fish.
classes. The probability of belonging to LC x often referred to as posterior membership probability
 
– can be obtained by the Bayes rule,
 
  
[[File:psc_eq_6.JPG |center| equation 6 ]]
+
'''Selfish health & convenience''' consumers, the biggest segment (43 %, growing) are typically younger couples with medium – low income but relatively high expenditure on fish. They are informed and are consulting many information sources, do not trade off quality for price and are indifferent to brands, origin and traceability. The focus is on health, but also easy to cook, versatility, and conservation are important. Consume salmon and sea bass in medium quantity. This segment is similar to segment 1 in convenience but health is not inclusive and more focused on nutrients than on digestion and its information behaviour is more extensive.
  
The most common classification rule is modal assignment, which amounts to assigning each
+
'''Cooking artist''' (8 %/stable trend). Similar to her counterparts in the other countries, the British cooking artist likes to cook and to experiment with new formats. Taste is an important theme, while she is indifferent to health and environmental concerns; dietary issues are not important. British cooking artists are not really knowledgeable about fish. Women aged 44+ in small families with children eating fish do best describe the socio-demographic characteristics. Prefer wild, favourite species sea bream and cod. Given the low income she really likes and spends (over proportionally) for fish.
individual to the LC with the highest 𝑃(𝑋 = 𝑥|𝐘 = 𝐲).
 
  
The parameters of LC models are typically estimated by means of maximum likelihood (ML):
+
'''Self-efficacious & local ecologist''' (13 %/growing segment) are very young singles or 2-person households. They are knowledgeable and environmentally conscious. At the same time they give much importance to the local context. The segment members enjoy cooking and they trust in their meal preparation. Medium consumption of salmon, sea bream, sea bass, but with low expenditure.
  
[[File:psc_eq_7.JPG |center| equation 7 ]]
+
The segment of '''indifferent''' (14 %, growing) is composed of young male, single or in a household of two, and low to medium education. Prefer salmon and cod, ready to eat, ready to cook. Medium consumers, low expenditure.
  
Where i is a particular pattern of response, I is the number of all potential patterns of response,
+
In all segments cod is consumed. The species mentioned above distinguish the segments from this overall baseline consumption.
(𝐼 =∏ 𝐷𝑙𝐿𝑙=1) and 𝑃(𝐘 = 𝐲𝑖).
 
Among the most popular numerical methods for solving the Maximum Likelihood Estimation (MLE)
 
problem is the Expectation-Maximization (EM) algorithm (Dempster et al., 1977). The EM algorithm
 
treats the estimation of LC model parameters as an estimation problem similar to those for missing
 
data (i.e. multiple imputation). More details about the model and the parameter estimation are
 
provided in Lazarsfeld and Henry (1968), Goodman (1974); Haberman (1979), Clogg (1995), Agresti
 
(2002) and Bartholomew, Knott and Moustaki (2011).
 
  
An advantage of LCA as compared with other clustering techniques is the variety of tools available for
+
====   ====
assessing model fit and for determining the appropriate number of latent classes. In some applications,
 
the number of latent classes will be selected for primarily theoretical reasons. In other cases, however,
 
the analysis may be of a more exploratory nature, with the objective being to locate the best fitting or
 
most parsimonious model. The researcher may then begin by fitting a complete “independence”
 
model with C = 1, and then iteratively increase the number of latent classes by one until a suitable fit
 
has been achieved.
 
  
Parsimony criteria seek to strike a balance between over- and under-fitting the model to the data by
+
==== Europe ====
penalizing the log-likelihood by a function of the number of parameters being estimated. The two most
 
widely used parsimony measures are the Bayesian information criterion, or BIC (Schwartz 1978) and
 
Akaike information criterion, or AIC (Akaike 1973). Preferred models are those that minimize values of
 
the BIC and/or AIC.
 
  
BIC will usually be more appropriate for basic latent class models because of their relative simplicity
+
We construct 11 European segments which are briefly discussed here below.
(Lin and Dayton 1997; Forster 2000). Calculating Pearson’s χ2 goodness of fit and likelihood ratio chisquare
 
(G2 ) statistics for the observed versus predicted cell counts is another method to help
 
determine how well a particular model fits the data (Goodman 1970). The entropy of a model is also
 
used as a model selection criterion, either by itself or together with other statistics.
 
  
===='''Latent class with covariates (using multinomial logistic regression)'''====
+
'''The salmon fan''' segment (9 %/growing), in line with the only species it consumes, values highest omega 3, availability, versatility and value for money. These consumers also clearly favor taste over nutritional aspects. Consumers here are women in their forties, living in households of two persons with medium – high salmon consumption of all formats and relatively high expenditure. In terms of relative composition, this segment is very prominent in the UK (29 %).
  
In most LC analysis applications, one not only wishes to build a measurement or classification model
+
Segment two represents the '''self-efficacious inclusive health''' consumer, one of the largest EU segments (17 %, growing): knowledgeable people who appreciate the health-nutritional aspect of fish. Dietary considerations are not important (e.g. nr. of calories). Health includes the well being of the environment. People emphasise value for money, expect traceability and certification but are indifferent with regard to organic products. Male and female consumers aged around 50, with medium expenditure and fish consumption; favourite species are salmon, sea bream, cod with wide variety of formats. Germans make up 24 % of this segment.
based on a set of responses, but also to relate the class membership to explanatory variables. In a
 
more explanatory study, one may wish to build a predictive or structural model for class membership
 
whereas in a more descriptive study the aim would be to simply profile the latent classes by
 
investigating their association with external variables (Vermunt, 2010). The latent class regression
 
model (LCRM) generalizes the basic latent class model by permitting the inclusion of covariates to
 
predict individuals' latent class membership (Dayton and Macready, 1988; Hagenaars and
 
McCutcheon, 2002).
 
  
In the LCA literature two ways for dealing with covariates have been proposed: a one-step and a threestep
+
'''Cooks with inclusive health focus''' (11%) characterise segment 3. They enjoy meal preparation (but are neither creative nor knowledgeable of fish) and emphasise omega 3 and “easy-to-digest” attributes. Their overall important theme is individual and environmental health, and, importantly, animal welfare, which is cross-checked with label and certifications. The segment is not price sensitive and is ready to pay for the expected value. Relatively young men here take care of small families who live in urban centres in the countryside. Low-medium consumption, but relatively high expenditure on fish. UK dominated with 27% of consumers in this segment (trend: stable).
approach. The former involves simultaneous estimation of the LC (measurement) model of
 
interest with a logistic regression (structural) model in which the latent classes are related to a set of
 
covariates. An alternative estimation procedure that is sometimes used is called the “three-step"
 
approach: estimate the basic latent class model, calculate the predicted posterior class membership
 
probabilities and then use these values as the dependent variable(s) in a regression model with the
 
desired covariates. Since the one-step presents certain disadvantages – for example, it limits the
 
number of covariates that can be considered in the model (Vermunt, 2010) - we use the three-step
 
approach in order to avoid such limitation. In a subsequent step, this allows us to predict the consumer
 
segment and perform a matching between segmentation and firms’ characteristics, in order to detect
 
the best segment for the firm. According to this, the causal relationship firm-to-consumer segment will
 
be explained by multinomial logistic regression models where the consumer segment will be the
 
dependent variable and the selected covariates (i.e. organic, wild, cheap etc.) will be the choice
 
factors. Theoretical details and the generic equation of the multinomial logistic regression model are
 
reported in Agresti (2002). LCA and multinomial regression were performed using poLCA (Linzer &
 
Lewis, 2011) and nnet (Venables et al., 2002) R-packages (R Core Team, 2017), respectively.  
 
  
 +
'''Tasty and easy quality''' (8%). To this segment value for money is important as are “easy to cook” and quick preparation of meals. Availability and conservation is stressed, emphasising the time/convenience posture of the segment. Taste and texture are valued more than health aspects. No environmental concerns and also self-efficacy criteria are low/indifferent. Young male (early thirties) with medium-high education take care of small families. They prefer wild over farmed and spend much for taste and easy quality - high expenditure for medium-high fish consumption. Segment is mainly populated by French, Spanish and Italians (trend: increasing).
  
== Models ==
+
Segment 5 is the '''360 degree- health oriented''' segment (11%), which gives much importance to natural fish products. Also “easy to digest” and nutrients are of utmost importance, as is the absence of smell and a guaranteed origin. It is the only segment where people also have a concern regarding negative effects of farming. Consistent with this preference they favour wild fish. The segment is characterised by medium-high fish consumption with corresponding high expenditure. Women in their 50s in 2-people households with medium education represent best the demographic profile of the segment. Italians dominate this segment (trend: increasing ).
  
----
+
Segment 6, one of the smallest in EU (5 %), is characterising the '''innovative brand buyer'''. Consumers here have a favourite brand to which they are also loyal. “Claim”-related items are important but not supported by corresponding factual knowledge. People here are also the only ones to underline new dietary preparations (e.g. gluten free products), they prefer products that take little time for preparation, and they emphasise conservation and versatility. Time, overall, is an important factor for this group. The known brand is a response to this: choosing the familiar brand saves time in terms of reflection/selection and it is a guarantee for satisfied expectations. Consumption of this segment is high with corresponding highest expenditure across all segments. British, Italian and French women around 45, with small families make up this segment (trend: increasing).
  
 +
'''Indifferent''': the majority of indifferent consumers is divided among UK (31 %) and France (27 %), followed by Spain and Germany (15 % and 14 %, respectively), with a stable trend. Only 12 % of the class is populated by Italian consumers. This segment is characterised by male and female aged 18-40, with low education and medium-low consumption. Expenditure, not surprisingly, is the lowest.
  
 +
'''Healthy convenience''' (6 %). Segment 8 consumers look for easy to cook meals that take little time to prepare, appreciate conservation and general health/environmental benefits. Being demanding on all dimensions, they are ready to pay for the corresponding products. As confirmed by high fish expenditure, consumers do not trade off value for money. Here young dads with medium-high education take care of their bigger families’ health by balancing it with the need to have meals easily and quickly prepared (trend: stable). Only Italy is underrepresented (16 %) in this overall balanced segment.
  
== Reports &Data ==
+
This group –'''the local – natural brand/seller''' (5 %) - values “local” and natural highly. More than emphasising the presence of positive nutrients and elements, consumers here emphasise the absence of ingredients and substances. They are self-efficacious, trust a certain – local – brand or seller to whom they are loyal. They also stress availability. Fish consumption is medium – low, expenditure is at the lower level across segments. The socio-demographic show relatively young men and women in households of three holding a medium education level. German consumers account for 27 % of this small segment (trend: stable).
  
----
+
In this segment we find the '''cook with selfish health focus''' (8%) who likes taste and nutrition. Broader health, dietary or environmental concerns are not considered important. Consistent with enjoying the preparation and consumption of fish, this segment’s expenditure is medium-high with corresponding high expenditure. Relatively young Spanish women in small households without children best describe the consumers of this segment (trend: increasing).
 
 
 
 
== The tool ==
 
 
 
----
 
  
 +
'''Cooking artists''' (17 %, stable) are creative, like to experiment with new formats, like to cook and are self-efficacious. No environmental and health concerns. Women in their fifties in small households (2-3 members) with medium consumption and relatively low expenditure characterise this segment’s demographic profile. The majority of the class is made of Italians, while the minority comes from UK.
  
 
== References & Readings ==
 
== References & Readings ==
 
----
 

Latest revision as of 16:40, 22 October 2018

Product Success Check



Introduction


 

Consumers are too numerous, dispersed, and varied in their buying requirements to make it possible to serve all efficiently and in the same manner. At the same time, in today’s competitive landscape, companies follow more and more customised approaches to serve and satisfy the consumers which again drives their ever more differentiated wants. As a consequence, markets become “demassified”, dissolving more and more into “micro-markets”, characterised by different consumers purchasing different products in different distribution channels and attending to different communication channels. Segmentation aims at identifying such micro markets, i.e. groups of consumers that share the same expectations and behavioural patterns. The identification of the most attractive micro-markets, i.e. segment(s), for the company and its products therefore is imperative not only for successful commercialisation but also for new product development.

Following a strategic approach to markets, the company distinguishes the major market segments based on the profiling of different consumer groups along their wants, consumption and purchasing behaviour; socio-demographic characteristics etc.; targets one or more of these segments; and develops products (and marketing programs) tailored to the profile and expectations of each selected segment.Tailoring starts with an understanding of the customers and providing them with the product and service they expect but, importantly, embraces also price, distribution and communication efforts to reach the target segment efficiently. The firm focus is on the buyers whom they have the greatest chance of satisfying. Having satisfied customers is at the basis for company success and the first step to repeat purchase and customer loyalty.

Evidence for new product development or new product commercialisation success factors shows that the analyses of market segments, targeting, positioning and the alignment with the firms’ offer and resources are crucial to both new product development and new product commercialisation. It follows that segmentation helps companies to navigate an increasingly competitive market, to understand their customers better, to develop offerings that satisfy specific wants, and to address diversity in an efficient manner.

The approach to developing a robust model to analyse the likelihood that new seafood product launches will be successful follows this perspective. We develop both country specific consumer segmentations in Italy, Germany, France, Spain and the UK, as well as an overarching European segmentation useful for companies that are innovating and developing new fish products or have fish products on offer and would like to improve their commercialisation. The segmentations are based on latent class analyses of representative samples of consumers (800 in each of the five countries) who replied to an online survey in June-July 2017.

Although the segment profiles by themselves are informative, the methodology used contains an additional step in order to help the company select the most appropriate target(s). In this second stage, multinomial regression matches product (and firm) attributes with the most attractive consumer segment(s). A comparison of the segment, i.e. consumer profile, with the product attributes will further inform the company on how to improve the product and/or its marketing effort in order to tailor more closely to segment wants and characteristics and ultimately launch and commercialise successfully. Figure 1 gives an overview of the success analysis model.

Figure 1: The success analysis model at a glance
Figure 1: The success analysis model at a glance

 

The tool


The PSC tool is being developed as a proxy for the multinomial regression algorithm created as a result of the research phase of the project. It presents the user with an interface to select the variables to be used in the algorithm which will calculate the profile and consumption probability of the product being analysed, and display to the user the results in a graphical, user friendly form.

PSC home page

The suer can access the PSC tool home page by clicking the quick access link in the DSS homepage or by clicking the appropriate link in the top navigation bar.

PSC home page
PSC home page
PSC home page

Once in the PSC home page, the user must initially select 5 different attributes for the product being analysed in the Product attributes section. These are required attributes and must be selected before being able to see the results. Once these attributes are set, the user can additionally select more detailed attributes in the Other marketing attributes sections to increase the relevancy of the resulting analysed profile. Optionally, the user can also select preferred presentation formats in the selection box above the Perform product success check button, which will then be highlighted in the results page preferences graph.

Behind the scenes, when the user clicks the button to perform the PSC, the tool wraps the attributes chosen by the user and hands over to the R language script developed in the research part of the project, which in turn calculates the multinomial regression for the given attributes and returns the results to the DSS tool.

The results

PSC results page
PSC results page
PSC results page

After a user click the button to perform the product success check, the results page will be displayed containing the description of the best matching consumer profile for the analysed product, as well as a graphical comparison of consumption probabilities for different product formats. The presentation formats selected in the previous page will be highlighted in the graph, and the selected attributes used for the regression will be displayed in the sidebar on the left.

 

Segments description

The table here below presents a summary of the segments identified in the single countries (and in the “total” EU countries) under study. Some segments are cross-national or pan-European (light blue, light red), while others are specific to a few (grey cells)/only one country (dark green).
Segment tables

Italy

The health & environmentally conscious consumer represents 13 % of the Italian consumers (trend: stable). Members of this segment are willing to pay (second highest expenditure for fish in Italy) for beneficial effects for both personal and environmental health. Predominantly women aged 50 + value items such as environmentally friendly, sustainability and natural ingredients, nutrients, easy-to digest characteristics highly. Appearance and traceability are also important to this segment, pointing to critical evaluation and check of quality/safety issues related to fish. They prefer wild fish, boneless and traditional recipes. Their favourite place of purchase is the supermarket/fishmonger which are also their sources of information. The segment’s usage rate is medium-high. Of note, consumers here like all fish species (although they consume sea bream and sea bass most) and buy a broad range of formats. The women and their small families (3 persons) reside in bigger urban centres, with children who are grown up but still live at home.

The brand-convenience-taste consumers reflect only a small but growing portion of the Italian market (7 %). This group of young consumers with small families declares to have a preferred brand and to favor taste over nutritional aspects. Highly important to them are availability of the fish, new formats, labels and omega 3. The consumers here also value fish products that take little time to prepare while nutrients or sustainability claims are of no importance to them. Consistent with a brand buyer is also the fact that these consumers are not self-efficacious– they rely instead on the familiarity and security that comes with a preferred brand and label (another aspect of “convenience”). In line with this profile is the supermarket as the only place of purchase, which is also, together with advertisements, the segment’s main source of information. People in this group live predominantly in rural areas of the country. The favourite species are salmon (ready-to-eat/to cook, fresh fillet), sea bream (fresh fillet) and cod (frozen fillet) with overall medium consumption and average expenditure.

The self-efficacious cooking artist represents 14 % of Italian consumers (trend: growing). Here we find the self-efficacious (all items that point to knowledge and evaluation of fish score high) relatively young male who likes to cook, is creative in meal preparation and looks for versatility. Consistent with the passion for cooking, saving time in meal preparation is unimportant to him. He looks for healthy products (with traceability) but also for a reasonable price-quality ratio. He and his partner (or small family) live in coastal/rural areas as well as in urban centres. The favourite place of purchase is the supermarket or the fishmonger, the source of information is the label or the advice from the fishmonger. Chooses predominantly sea bream, sea bass and cod in a wide range of formats (except ready to eat). Fish expenditure is average, in line with the fact that those who have more knowledge of fish can find more alternatives among available products.

The local connoisseur represents the biggest segment in Italy (24%/growing). This is the group of consumers who know everything about fish (high values across self-efficacy items), use its versatility and experiment with new formats or recipes. Relatively young women here (with small family) strongly emphasise the health-nutritional aspect and underline easy digestion. This group of consumers also favours local origin. They pay attention to environment and sustainability issues and indicate the preference for a (local) brand or seller. Emphasising value for money, they do not trade off quality for price (but would instead go for a cheaper species or stock the fish in order to be flexible). They prefer wild fish, are indifferent to bones, and are inclined to traditional preparation. Their consumption is medium-high (mainly sea bream, sea bass, less cod and salmon in a wide range of formats) with an expenditure that is the highest across all Italian segments. These consumers buy in the supermarket or at the fishmonger and do not indicate any sources of information.

Price-wise convenience consumers (14%/stable) represented in segment 5 are very price conscious, reflected also in their low expenditure on fish. People here are not knowledgeable about fish. They strongly underline health, easy-to-cook characteristics and texture. In line with this profile is their fish selection – they favour cod and salmon (fresh and frozen fillets but also canned, smoked, ready-to-cook/ready-to eat). Both genders aged 54 + are represented here, mainly living with one grown up child in rural and urban areas. Preferably they buy in supermarkets which are, together with advertisements, also the source of information.

The self-efficacious pragmatic fish consumers, a large (23%) and growing segment with high fish expenditure. They value the health benefits of fish, look for conservation and versatility. Preferences here bring together the health of both, individuals and the environment, added is a strong emphasis on value for money. Although this segment is knowledgeable about fish and its preparation, the profile seems to reflect a pragmatic instance of “having to eat and cook fish” without related pleasure of doing so. In fact, this segment has only two favourite species, namely salmon and cod, which they consume frequently, predominantly as fresh/frozen fillets. Women aged 45 + with small families, medium-high education and income represent the socio-demographic profile of this segment best.

Indifferent consumers are the smallest group of consumers (6%/stable), represented by relatively young male with small family living in rural or intermediate areas of Italy. Their favourite place of purchase is the supermarket. They consult the label or ads for fish information. Species include sea bream and salmon and their expenditure is among the lowest across the segments.

 

Spain

Segment 1 represents brand/seller “dependent” high quality consumers who are not self-efficacious (23%/growing). The preferred “brand“ here is either the shop/seller or the brand itself. Consumers do not feel on the safe side regarding fish evaluation and preparation and thus rely on the trusted seller/brand of whom they learn. They give importance to inclusive health (individual and environment) and have a broad quality understanding for which they are ready to pay. This segment shows high fish consumption and the highest expenditure for fish. Consistent with the fact that they like to cook but do not indicate corresponding competence they go for a very limited range of species. They buy in supermarkets or at the fishmonger and listen to the advice of the fishmonger or seller. Women aged 46 + with small children (who eat fish) and low-medium education but relatively high income best represent this group of consumers. Favourite species are sea bream (whole/fresh fillet) and cod (fresh/frozen fillet, dried).

Self-efficacious selfish brand buyer (23%/growing): also this group of consumers has a preferred brand/seller but it is, as compared to segment 1, self-efficacious. It is “egoistic” in terms of health orientation as only items which focus on individual health are important (while environmental attention is unimportant) to this segment. Men around 55 here take care of their family which lives in cities close to the coast. They are medium sea bass and salmon consumers who spend relatively little on fish.

The independent “good for me” connoisseur (9%, growing) values taste and nutrition equally. Members of this segment love fish (sensory appeal) and they value its benefits for health. They cross-check on labels and expect a guaranteed origin. In line with this, the segments favourite species is wild fresh sea bass which is consumed in high quantities. Women aged 48, living with family in cities at the coast are willing to spend for their selected premium sea bass which they preferably buy at the fishmonger or in the supermarket.

The consumers in the 4th and biggest (29 %, stable) segment in Spain are directed towards nutritional-digestive and inclusive health (360 degree-health). Consistent with this emphasis is the importance given to origin and traceability. Value for money is crucial to this segment, and they value conservation. Their medium-high fish consumption is reflected also in a relatively high fish expenditure mainly spent on fresh sea bream and salmon (fresh/smoked). Young women here take care of their families with young children.

(Salmon) Cooking artists (9%/stable), very young couples (24 +), like to cook and trust in their competence of fish (salmon) preparation, they are creative and experiment with new formats, and they emphasise versatility. None of the health related items is of importance. The young couples go mainly for wild salmon (medium –high consumption) in the supermarket. Salmon is the dominant species they buy in all formats. Consistent with the artist stance is also the (low) use of an exotic species such as herring. The main source of information is the seller.

The indifferent (7%/stable), with medium-low consumption of salmon and cod, spends little on fish. Typically consumers here are young male, small family size, low education level living in urban centers in the countryside.

 

France

The good for me health consumer represents 29 % of the French market (trend: stable) that expects mainly health benefits from fish consumption and looks for guarantees in terms of sustainability certifications and traceability. Predominantly consisting of male in their fifties, highly educated and with high income, this segment appreciates “easy-to-cook” products and emphasises value for money. It is characterised by low-medium consumption and low expenditure for sea bream (either fresh fillet or ready-to-eat). Shopping for two, predominantly in supermarkets, these men use the label or the seller for information.

The health oriented (selfish), (not creative) cook (23%/growing) is medium-high in fish consumption and the highest in expenditure. Women aged around 45 highly value the health benefits of fish, they like cooking and the variety and versatility that comes with many species and a wide range of formats (herring, cod and sea bream) in traditional preparations. They purchase in the supermarket for a small family and take information from the label and the seller.

The cooking artist represents around a quarter of fish consumers in France (trend: stable). This profile cuts across all ages, also the very young. They choose carefully, go for high quality for which they are ready to pay and they consult many information sources. Health is not on the agenda of this segment and they have no environmental concerns. They shop for sea bream at the supermarket or at the fishmonger. The couple prefers fresh, but they are flexible and willing to try different formats and recipes.

Self-efficacious convenience consumer to whom, beyond inclusive health, convenience is central (31%/stable). They give importance to each and every aspect and thus represents very demanding consumers. This consumer critically checks the expected quality: reads labels and values certificates and guarantees. Medium consumption of varied fish species and broad range of formats (reflecting convenience), and second highest expenditure on fish. Relatively young women and men are representing the class, living in the countryside/intermediate cities in small families.

The indifferent in France are the smallest group of consumers (7%/stable). The class is on a medium-low level in fish consumption and the lowest expenditure for trout, salmon and cod. Prefer mainly in fresh and frozen formats. The segment is predominantly young singles or couple, living in the countryside in smaller cities.

In all segments salmon and trout is consumed. The species mentioned above distinguish the segments from this overall baseline consumption.

 

Germany

The cooking artist (12%/stable) is loyal to a brand/seller and gives importance to local origin. Consumers in this segment share the characteristics that cut across-countries for the cooking artist: they like to cook/are capable of preparing fish, value versatility, are creative and ready to try new formats. Taste here clearly dominates nutritional aspects (only Omega 3 is of importance). Consumers in this segment are not price sensitive, a fact reflected also in the highest fish expenditure across German segments. They prefer fresh fish, medium usage rate, mainly salmon but also the more “exotic” sea bream (the only segment in Germany) and sea bass. The class includes both genders, they are young, live with a small family with smaller kids in cities in the countryside.

Healthy & environmentally-conscious consumers make up a third of the German market (growing). To consumers in this segment, a healthy diet and a natural product and the texture are central. Health here is inclusive of the environment, consumers value sustainability certification and put emphasis on a guaranteed origin. They are not self-efficacious and thus trust their “seller/brand”, but also consult the label and ask for guarantees. The group is ready to pay for the value they ask for, i.e. a healthy & environmentally safe diet, which is reflected in high fish expenditure. The class includes both genders aged over 54 involved in decisions and patterns of fish consumption (salmon, trout and sea bass; fresh and frozen); consistent with their health focus their consumption is medium high.

The convenience- brand loyal consumer (23%/growing), looks for value for money. Brands provide the benefits she asks for: nutrients, sustainability certification, traceability, label. Ready-to-eat is emphasised which together with fresh formats may satisfied her want for creativity. Predominantly relatively young female living in a two-person-household in cities in the countryside with lower fish expenditure and medium fish consumption represent this cluster best. The members of this segment shop in supermarkets where they get information in-store, from the seller or from the label.

The fourth segment comprises healthy cooking artists who like variety. Being a premium segment in terms of expenditure, this profile unites the cooking artist with a focus on health. Versatility is important, but experimentation is also reflected in a broad range of species and formats. The socio-demographic profile of women over 54, with medium high education, in 2 person-households, is very much in line with this segment.

Cheap brand and taste consumer (16%/stable): People in this segment have learned the claims of their preferred brand (but they are not knowledgeable about fish), omega 3 and tasty, they are price-conscious and, overall, seem to go for an easy buy without much involvement or major decision criteria. Fish here offers the best compromise between health and taste. No importance is given to origin and traceability. Male in their forties (couple) spend little for medium-low consumption.

The indifferent present around 7 % of the market, predominantly young and single. Medium consumption, relatively high expenditure and a broad range of species and formats.

Of note, herring is consumed in all segments. The species mentioned above distinguish the segments from this overall baseline consumption.

 

UK

Healthy convenience consumers (22 %, growing) have their focus on “easy” to cook, to stock, to use (versatile). Health is also central, with a strong focus on digestion and environmental concern and the request for traceability. The segment is characterised by medium consumption and highest expenditure on fish across the segments. Women, aged above 50 with medium-high education and a 2-person household describe the segment best. Members of this segment appreciate wild fish; their favourite species are sea bream, sea bass – fresh fillets, ready-to-eat, whole fish.

Selfish health & convenience consumers, the biggest segment (43 %, growing) are typically younger couples with medium – low income but relatively high expenditure on fish. They are informed and are consulting many information sources, do not trade off quality for price and are indifferent to brands, origin and traceability. The focus is on health, but also easy to cook, versatility, and conservation are important. Consume salmon and sea bass in medium quantity. This segment is similar to segment 1 in convenience but health is not inclusive and more focused on nutrients than on digestion and its information behaviour is more extensive.

Cooking artist (8 %/stable trend). Similar to her counterparts in the other countries, the British cooking artist likes to cook and to experiment with new formats. Taste is an important theme, while she is indifferent to health and environmental concerns; dietary issues are not important. British cooking artists are not really knowledgeable about fish. Women aged 44+ in small families with children eating fish do best describe the socio-demographic characteristics. Prefer wild, favourite species sea bream and cod. Given the low income she really likes and spends (over proportionally) for fish.

Self-efficacious & local ecologist (13 %/growing segment) are very young singles or 2-person households. They are knowledgeable and environmentally conscious. At the same time they give much importance to the local context. The segment members enjoy cooking and they trust in their meal preparation. Medium consumption of salmon, sea bream, sea bass, but with low expenditure.

The segment of indifferent (14 %, growing) is composed of young male, single or in a household of two, and low to medium education. Prefer salmon and cod, ready to eat, ready to cook. Medium consumers, low expenditure.

In all segments cod is consumed. The species mentioned above distinguish the segments from this overall baseline consumption.

 

Europe

We construct 11 European segments which are briefly discussed here below.

The salmon fan segment (9 %/growing), in line with the only species it consumes, values highest omega 3, availability, versatility and value for money. These consumers also clearly favor taste over nutritional aspects. Consumers here are women in their forties, living in households of two persons with medium – high salmon consumption of all formats and relatively high expenditure. In terms of relative composition, this segment is very prominent in the UK (29 %).

Segment two represents the self-efficacious inclusive health consumer, one of the largest EU segments (17 %, growing): knowledgeable people who appreciate the health-nutritional aspect of fish. Dietary considerations are not important (e.g. nr. of calories). Health includes the well being of the environment. People emphasise value for money, expect traceability and certification but are indifferent with regard to organic products. Male and female consumers aged around 50, with medium expenditure and fish consumption; favourite species are salmon, sea bream, cod with wide variety of formats. Germans make up 24 % of this segment.

Cooks with inclusive health focus (11%) characterise segment 3. They enjoy meal preparation (but are neither creative nor knowledgeable of fish) and emphasise omega 3 and “easy-to-digest” attributes. Their overall important theme is individual and environmental health, and, importantly, animal welfare, which is cross-checked with label and certifications. The segment is not price sensitive and is ready to pay for the expected value. Relatively young men here take care of small families who live in urban centres in the countryside. Low-medium consumption, but relatively high expenditure on fish. UK dominated with 27% of consumers in this segment (trend: stable).

Tasty and easy quality (8%). To this segment value for money is important as are “easy to cook” and quick preparation of meals. Availability and conservation is stressed, emphasising the time/convenience posture of the segment. Taste and texture are valued more than health aspects. No environmental concerns and also self-efficacy criteria are low/indifferent. Young male (early thirties) with medium-high education take care of small families. They prefer wild over farmed and spend much for taste and easy quality - high expenditure for medium-high fish consumption. Segment is mainly populated by French, Spanish and Italians (trend: increasing).

Segment 5 is the 360 degree- health oriented segment (11%), which gives much importance to natural fish products. Also “easy to digest” and nutrients are of utmost importance, as is the absence of smell and a guaranteed origin. It is the only segment where people also have a concern regarding negative effects of farming. Consistent with this preference they favour wild fish. The segment is characterised by medium-high fish consumption with corresponding high expenditure. Women in their 50s in 2-people households with medium education represent best the demographic profile of the segment. Italians dominate this segment (trend: increasing ).

Segment 6, one of the smallest in EU (5 %), is characterising the innovative brand buyer. Consumers here have a favourite brand to which they are also loyal. “Claim”-related items are important but not supported by corresponding factual knowledge. People here are also the only ones to underline new dietary preparations (e.g. gluten free products), they prefer products that take little time for preparation, and they emphasise conservation and versatility. Time, overall, is an important factor for this group. The known brand is a response to this: choosing the familiar brand saves time in terms of reflection/selection and it is a guarantee for satisfied expectations. Consumption of this segment is high with corresponding highest expenditure across all segments. British, Italian and French women around 45, with small families make up this segment (trend: increasing).

Indifferent: the majority of indifferent consumers is divided among UK (31 %) and France (27 %), followed by Spain and Germany (15 % and 14 %, respectively), with a stable trend. Only 12 % of the class is populated by Italian consumers. This segment is characterised by male and female aged 18-40, with low education and medium-low consumption. Expenditure, not surprisingly, is the lowest.

Healthy convenience (6 %). Segment 8 consumers look for easy to cook meals that take little time to prepare, appreciate conservation and general health/environmental benefits. Being demanding on all dimensions, they are ready to pay for the corresponding products. As confirmed by high fish expenditure, consumers do not trade off value for money. Here young dads with medium-high education take care of their bigger families’ health by balancing it with the need to have meals easily and quickly prepared (trend: stable). Only Italy is underrepresented (16 %) in this overall balanced segment.

This group –the local – natural brand/seller (5 %) - values “local” and natural highly. More than emphasising the presence of positive nutrients and elements, consumers here emphasise the absence of ingredients and substances. They are self-efficacious, trust a certain – local – brand or seller to whom they are loyal. They also stress availability. Fish consumption is medium – low, expenditure is at the lower level across segments. The socio-demographic show relatively young men and women in households of three holding a medium education level. German consumers account for 27 % of this small segment (trend: stable).

In this segment we find the cook with selfish health focus (8%) who likes taste and nutrition. Broader health, dietary or environmental concerns are not considered important. Consistent with enjoying the preparation and consumption of fish, this segment’s expenditure is medium-high with corresponding high expenditure. Relatively young Spanish women in small households without children best describe the consumers of this segment (trend: increasing).

Cooking artists (17 %, stable) are creative, like to experiment with new formats, like to cook and are self-efficacious. No environmental and health concerns. Women in their fifties in small households (2-3 members) with medium consumption and relatively low expenditure characterise this segment’s demographic profile. The majority of the class is made of Italians, while the minority comes from UK.

References & Readings