In this example of market segmentation, the overall drink market has been considered. The overall drink market refers to any cold beverage, including: sodas, juice, energy drinks, milk-based drinks, water, sports drinks, and so on – but not alcohol products. While some of these product categories would be considered indirect competitors, they can be all clustered into the same overall market.
The purpose of this market segmentation example is to demonstrate that while consumers are all buying some form of beverage, their needs and situations are different across the market segments, which means that they are seeking different product benefits.
In this market segmentation example for drinks, eight different market segments have been identified. This example is using a mix of situational influences and primarily a benefit segmentation approach. There are eight market segments identified in this example, as follows:
- Really thirsty
- On the go
- Need a boost
- Variety seekers
- Health focus
- Hold the sugar
- Just feel like it
This group of consumers is seeking a fairly straightforward functional benefit from their consumption of a beverage. They are in a situation where they simply need to quench their thirst. In this case, they would be attracted to fairly simple styles of beverages, such as water or juice.
This segment is less likely to be attracted to milk-based drinks and drinks containing caffeine. They would be attracted to packaging words such as “refreshing" and “hydrating".
On the go
The on the go market segment is a busy group of consumers who tend to eat and drink while they are traveling. This is a growing segment and is quite common across a range of convenience foods markets.
Because of this approach to their lifestyle, these consumers often look to a beverage as a meal replacement. Because they are typically quite time-poor during the day, they do not always have time to consume a meal and a “filling" beverage is a good alternative. Therefore, for this particular market segment, convenience foods represent an indirect competitor to a beverage.
This market segment would be seeking a fairly substantial type of beverage, such as a milk-based drink, a thicker juice mixture, or a larger serving of a more traditional soft drink.
Need a boost
This particular market segment, in this example, consists of those consumers are feeling rundown or tired during the day, or consumers who need a kick start to their day. Traditionally, coffee would be the prime beverage products solution, but increasingly cold beverages are encroaching on this consumer need.
These consumers would be highly attracted to energy drinks, some sports drinks, vitamin water, and even some traditional soft drinks containing larger amounts of caffeine.
Variety seekers are consumers that have limited product loyalty and tend to consume a broader selection of beverages, primarily depending upon their taste and situation at the time.
Variety seekers are fairly common market segment in most food markets. They tend to be brand switchers by definition, but are often heavy users as well. The goal is to try and increase share-of-stomach by offering a broader product range with different flavors and varieties.
The health focused market segment consists of consumers who tend to make all their food and beverage choices based upon being healthy and eating well.
In the cold beverage market that would be primarily attracted to water, vitamin water and juice. They tend to be quite brand loyal, relying upon brands that they know and trust and have a reputation for providing health benefits.
Compared to other market segments, they are more highly involved in the purchase decision, but can be attracted to a new brand on rational health benefits – often communicated through packaging or in-store displays. They are less responsive to sales promotions and special offers outside of their normal brand choices.
In this example market segment, consumers are looking for products that are helpful when they are undertaking sporting events, such as running or playing some form of organized sport, or working out at the gym.
They differ from the “health focus" market segment example in that these consumers do not necessarily look to eat healthy for every meal or drink. Instead they seek functional benefits of beverages when they are involved in strenuous or endurance activities.
They are attracted to simpler product solutions such as water for regular training sessions or they are more likely to utilize sports drinks that offer the benefit of fast water replacement or some form of energy boost. The packaging of the drink is also a consideration, both in terms of the shape and size of the bottle (for example, easy to hold while running) and the lid dispenser (looking for a container that offers a no spill solution).
Although outside of their sports activities these consumers mimic the consumer behavior of the other market segment (such as the variety-seekers segment), when purchasing a suitable drink for their sports activities they are likely to be highly brand loyal to products offering clear functional benefits.
Hold the sugar
The next market segment in this example is highly attracted to diet drinks. These consumers may have particular needs such as weight loss goals or being diabetic, but in most cases they are looking to cut some calories from their daily diet.
This market segment differs from the “health focus" segment as they are not necessarily pursuing general health and well-being goals. As a result, they are quite attracted to no sugar flavor varieties of traditional soft drinks in particular and are less interested in bottled water.
This consumer segment tends to be above average purchasers in terms of quantity (that is, these consumers are heavy users) and is quite responsive to discounts and other sales promotions. However, this market segments is relatively brand loyal.
Just feel like it
This final market segment are consumers who, primarily due to situational factors and/or habit, are attracted to drink products for enjoyment and refreshment, rather than for any functional benefits. In their case, these consumers are not necessarily seeking health or thirst benefits.
Instead they are more likely to enjoy drinking their favorite beverage. These consumers are more attracted to traditional soft drinks and can be quite emotionally loyal to the brand – for an example, you should read about the launch of the New Coke product.
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