Investigacin Sobre Segmentacion Por Beneficios Buscados

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Journal of Marketing Education
DOI: 10.1177/0273475399211005
1999; 21; 34 Journal of Marketing Education
John A. Schibrowsky, Robert H. Collins and James W. Peltier
Bootstrap Benefit Segmentation as an Experiential Learning Activity
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APRIL 1999 JOURNAL OF MARKETING EDUCATION
Bootstrap Benefit Segmentation as
an Experiential Learning Activity
John A. Schibrowsky, James W. Peltier, and Robert H. Collins
This article introduces an experiential learning activity
designed to provide business students with an understanding
of benefit segmentation, product positioning, and target mar-
kets. This bootstrap benefit segmentation method can be
taught without the need for primary data. It makes benefit
segmentation available as a short-term experiential activity
that can be accomplished in one or two class meetings or as
an assignment prepared outside of the classroom.
The new American Assembly of Collegiate Schools
(AACSB) curriculum guidelines (1993) stress the impor-
tance of providing students with the necessary competencies
or skills needed to become successful businesspeople. To
meet this challenge, business curricula must establish learn-
ing environments that ensure that the classroomand the real
world are comparable (Nofz 1990; Schibrowsky and Peltier
1995). This perspective will inevitably result in an increase in
educators use of experiential activities to provide students
with meaningful experiences and skills.
While the importance of experiential learning activities
has been lauded for more than two decades, this new support
by the AACSB makes experiential learning experts valu-
able members of the faculty. More educational approaches
that provide students with the opportunity to gain practical,
hands-on experiences need to be identified (Benson 1993;
Hood and Young 1993; McBrierty and ONeill 1991;
Schibrowsky and Peltier 1995; Peltier, Schibrowsky, and
Kliemenhagen 1995; Robinson and Haynes 1991).
One of the biggest challenges facing marketing educators
is creating a mix of both short-term and long-term experien-
tial activities that provide students with an exposure to a wide
range of real-world business problems. While many of the
semester-long experiential projects provide excellent real-
world opportunities, many of the short-term (1 or 2 weeks)
class projects often limit the extent to which students can
learn valuable real-world skills.
The purpose of this article is to present an experiential
learning activity that has proven quite successful in enhanc-
ing students understanding of segmentation, product
positioning, and target markets. This approach does not
require the use of primary data or those fancy statistical
analysis tools often associated with benefit segmentation.
Moreover, this activity can be done in as few as two class
meetings or as an outside-of-class assignment. The authors
have successfully used this classroom technique for a wide
range of product categories and audiences. It is perhaps easi-
est to use this technique with common grocery store items,
which are familiar to most students, but common services,
such as fast-food items, can work just as well. In addition,
more sophisticated products of special interest to members of
the class can be used successfully. These have included an
equally wide range of professional services, health care pro-
viders, sports teams, and travel/tourism products. The activ-
ity has been successfully used in the introductory marketing
course for both undergraduates and MBAstudents, as well as
advanced seminars in product management and planning and
advanced marketing management. The final product ranges
froma three- to five-page freestanding segmentation paper in
a basic marketing course to an integral section in a major
semester-long project in advanced courses. In addition, the
technique has been appropriately modified and successfully
used in both executive/management development programs
and consulting assignments for a broad range of clients oper-
ating at different levels of sophistication and background.
34
John A. Schibrowsky is an associate professor and department chair in the
Department of Marketing, College of Business, at the University of Nevada,
Las Vegas. James W. Peltier is a professor in the Department of Marketing,
College of Business and Economics, at the University of WisconsinWhite-
water. Robert H. Collins is a professor in the Department of Marketing, Col-
lege of Business, at the University of Nevada, Las Vegas. Address all
correspondence to Robert H. Collins, Professor of Marketing, College of
Business, University of Nevada, Las Vegas, 4505 Maryland Parkway Box
456010, Las Vegas, NV 89154-6010; phone: (702) 895-1036; e-mail:
collins@ccmail.nevada.edu.
Journal of Marketing Education, Vol. 21 No. 1, April 1999 34-43
1999 Sage Publications, Inc.
WHY BENEFIT SEGMENTATION?
In the 40 years since Wendell Smith (1956) first estab-
lished the idea of segmentation, it has become one of the key
ideas in marketing strategy (Rudelius, Walton, and Cross
1985; Wind 1978). During the past four decades, a wide range
of segmentation bases has been suggested. The bases include
geographic, demographic, behavioral (heavy-half), personal-
ity, psychographic, and benefits sought (Haley 1968, 1983).
Of the various segmentation approaches, demographic seg-
mentation is the most often employed segmentation tech-
nique by both industry and educators. The reasons are two-
fold. First, it is the easiest method to employ. The segmenter
simply selects a demographic group, then develops a product
and marketing program to meet that groups needs. Second,
most business students have only been exposed to demo-
graphic segmentation. The net result is a large number of
educated marketers who have not been exposed to
benefits-sought segmentation but only to demographic
segmentation.
The problem with demographic segmentation is that it
assumes that all consumers with the same demographic pro-
file have similar wants and needs. This is seldomthe case and
is the major reason why demographic and psychographic seg-
mentation often fail (Duboff 1987; Helfgot et al. 1988). There
is little theoretical or empirical support for the view that
demographics or psychographics are highly correlated with
consumers wants or purchase behaviors (Fullerton and
Dodge 1992; Greenberg and McDonald 1989; Rudelius,
Walton, and Cross 1985).
The benefits-sought approach has always had an advan-
tage over the other methods of segmentation, since it is based
on causal factors (reasons for purchase) rather than descrip-
tive factors (Day, Shocker, and Srivasan 1984; Haley 1968;
Peltier and Schibrowsky 1992; Young, Ott, and Feigin 1978).
When benefit segmentation was first introduced in 1961, the
notion was uncomplicated. The best way to partition a market
into homogeneous groups of demand was to concentrate on
causal factors (reasons for purchase) rather than descriptive
factors (Haley 1968).
The problems associated with teaching traditional benefit
segmentation and employing it in business settings are two-
fold. The first problem is that it is difficult to execute. Over
the years, marketing researchers have recast benefit segmen-
tation as a sophisticated market research exercise requiring
primary data collection and complicated statistical analysis
(Johnson 1971; Lautman 1991; Wedel and Steenkamp 1992;
Wind 1978). While this traditional approach to benefit seg-
mentation has yielded a large number of positive results (e.g.,
Harvey 1990; Lautman 1991; Rudelius, Walton, and Cross
1985), it is so cumbersome that it is often impractical in both
practice and classroom use.
The second problemis consistency. Since benefit segmen-
tation is a multivariate post hoc approach, the results vary
from study to study (Green 1977; Greenberg and McDonald
1989). While well-designed benefit segmentation analyses
will yield similar results, they seldom yield the same set of
segments. This is due, in part, to differences in designing and
executing the research project along with differences in inter-
preting the results along the way. As Greenberg and McDon-
ald (1989) note, contrary to popular belief, data-driven, mul-
tivariate segments are not real; they are simply intellectual
constructs. The resulting segments are not totally objective or
statistically reliable.
Both of these problems have severely limited the teaching
and use of benefit segmentation in the classroom. This article
proposes a different approach to teaching the concept of
benefit segmentation. It describes a procedure for performing
a benefit segmentation analysis without collecting primary
data. The process is designed to use secondary data to perform
the benefit segmentation analysis. This method is referred to
as bootstrap benefit segmentation since it relies on surro-
gate information. It is elementary enough to use as an experi-
ential learning activity in a Principles of Marketing course yet
powerful enough to predict the introduction of Diet Mountain
Dew, superpremiumroot beers, and low-calorie sports drinks
in the soft drink market.
This approach allows marketing educators to expose the
student to benefit segmentation. In addition, it helps tie the
idea of segmentation to the marketing concept and a market-
ing orientation. The result is an analysis of the market that
provides the marketer with the information needed to develop
marketing strategies that take advantage of the diversity of
wants and needs in the marketplace.
THE DISTINCTION BETWEEN MARKET
SEGMENTS AND TARGET MARKETS
Market segmentation is defined as a process of clustering
people with similar wants and needs into groups. As such, a
market segment is a group of customers, with similar wants or
needs, who will respond to a marketing mix in a similar way
(Perreault and McCarthy 1996, p. 92). This similarity in
wants and needs should result in similarities in brands consid-
ered and purchased. The resulting segments should be groups
of prospective buyers with a homogeneous demand (similar
wants and needs) (Haley 1968).
Target markets are defined as a (similar) group of custom-
ers to whom a company wishes to appeal (Perreault and
McCarthy 1996, p. 48). Target markets are typically
described using demographics and psychographics since
media is often purchased using these as criteria. Target mar-
kets and market segments are related but they are not the
same.
JOURNAL OF MARKETING EDUCATION 35
BENEFIT SEGMENTATION STEPS
AND DATA REQUIREMENTS
The steps presented in Table 1 have a proven track record
in both classroom activities and in consulting projects. They
are the result of numerous segmentation projects in product
categories ranging from breakfast cereals to a multifunction
entertainment facility. Through all these projects, the process
has proved to be extremely adaptable. An example using rice
is presented in the appendix to illustrate the process. We
highly recommend that relatively simple markets with a lim-
ited number of segments be used for class projects.
The data to support this segmentation exercise are rela-
tively easy to come by and can be gathered by student groups
or provided in-class by the instructor. If the class gathers the
data, it is simply necessary to send themto local stores to col-
lect data on all of the products they can find in the category.
The process can be most efficient if the instructor assigns
various stores or chains to student groups. This ensures a wide
variety of data collected and that stores outside of the tradi-
tional student housing areas also will be selected.
Students need to bring to class a listing of all of the brands
that they can locate in the market, as well as available package
sizes and prices for each brand (including store brands and
private labels). To make the most efficient use of class time,
unit prices (on a per ounce basis) for each stockkeeping unit
(SKU) should be calculated ahead of time, and the lists should
be combined and compiled into one master listing of the
brand offerings available in the product category.
If instructors do not require this data collection effort as an
out-of-class assignment, instructors will need to collect the
data themselves. However, having students collect the data is
much preferred, even for nontraditional classes. The reason is
simple: involvement in the data collection gives students a
feel for the diversity and richness in the product category that
they may never have known before. In the rice example (see
appendix) prior to the grocery store trip, they are confident
that rice is rice. Its white, fluffy, and a commodity. One
rice is the same as the next. Afterward, they realize that rice
products are designed to meet a variety of wants and needs.
Gathering the data in the marketplace gives the average stu-
dent a much better feel for the offerings than just a straightfor-
ward table presented on overheads in class. In addition, stu-
dents are quick to become experts for the product category,
making the project more involving.
Step 1: Define the product category.
First, the product category must be defined. This estab-
lishes the boundary of products and customers that will be
considered in the analysis. Sometimes it helps to list products
and brands that are included and not included in the product
category.
Step 2: Identify the focal behavior that prompts the purchase and
usage of the product.
This step attempts to answer the question, Why do con-
sumers buy this product? Students should identify who pur-
chases and uses the product, when the product is used, how
often it is used, how it is used, and why it is used. Do not let
the students rush through this step. A little extra effort at this
point can add some real insight in later steps.
Step 3: List the benefits sought by consumers.
The next step is to have the class list the benefits sought by
the consumers. When primary data are being collected, this is
often accomplished by using focus groups. In class, this is
typically accomplished with a brainstorming session. The
key at this stage is to get the students to focus on benefits
sought rather than product attributes offered.
Once the benefits have been listed, they must be classified
as qualifying or determining benefits (Perreault and McCar-
thy 1996, p. 100). Aqualifying benefit is one that is relevant
to including a certain customer type in a product-market.
The qualifying benefit creates a reason for the consumer to
buy in the product category. These benefits are prerequisite
for a brand to be considered for purchase. Brands that fail to
provide these benefits will not be considered by consumers.
Adetermining benefit is one that actually affects the cus-
tomers purchase of a specific product or brand in the
product-market (Perreault and McCarthy 1996, p. 100). A
36 APRIL 1999
TABLE 1
BENEFIT SEGMENTATION STEPS
1. Define the product category.
2. Identify the focal behavior that prompts purchase or usage of
product.
3. List benefits sought.
Classify the benefits as qualifying and/or determining.
4. Build and name potential/logical/feasible segmentation bundles.
5. Evaluate the potential segmentation bundles.
Determine the brands positioned toward each segment.
Check for over- or undersegmentation and other possible
misspecifications.
Repeat steps 1-5 as many times as
is necessary to correctly segment the market
6. Provide a description of the segments in terms of consumption
patterns and other related information.
7. Describe each segment in terms of
a. Demographics.
b. Socioeconomic variables.
c. Geographic.
d. Other factors.
8. Evaluate the segments in terms of
a. State of want satisfaction.
b. Market potential.
9. Identify target markets.
determining benefit creates a reason for the consumer to buy a
specific brand. Some benefits might be both qualifying and
determining. While qualifying benefits are requirements
needed to become a viable alternative in the product class,
determining benefits are the focus for benefit segmentation,
since they constitute the brands selected by consumers.
Step 4: Construct and name the segment bundles.
Next, the determining benefits must be combined into
benefit bundles. This is the key activity in the benefit segmen-
tation process. When primary data are being collected, this is
often accomplished by using focus groups and/or collecting
preference data. If this project is being conducted as an exten-
sive class project, the class can proceed by conducting focus
groups of current purchasers. If the project is being conducted
in class, the following approach is a beginning point.
Start by asking individual students why they buy a particu-
lar brand. If the product category is something that students
do not typically buy, bring some typical customers to class
or ask students to find and personally interview some cus-
tomers using the process described below. Get themto talk in
terms of the benefits sought. If they mention benefits that
were not mentioned in step 3, go back to that step and make
the correction. One structured approach for this task is to
frame the discussion in context of a multiattribute utility
(MAU) model, focusing on the importance weights. This pro-
cess typically yields a variety of single and multiple benefit
segments, and the activity is very similar to the investigative
work done in focus group research. Go around the class until
you have exhausted the differences in the class. Note that this
step is likely to yield differences across sections. This is all
right since the next step is designed to verify the segments.
The construction of benefit bundles takes persistence and is
seldom accomplished in a single attempt.
Once the benefit bundles are formed, they must be labeled.
The names should depict the important benefits of the seg-
ment. Good names help these consumer groupings come to
life (Greenberg and McDonald 1989); bad names impede the
process. Avoid cutsie names like Betty the gourmet and
Bob the big drinker. While lifestyle researchers such as DDB
Needhamuse these names, they shift the focus away fromthe
benefits sought.
Step 5: Check for misspecifications.
At this point with traditional benefit segmentation, the
market researchers would survey customers to collect data
about the importance of specific benefits and brands pur-
chased. The data would be used to verify the segments pro-
posed in step 4. With the bootstrap approach, existing brands
are used to verify the proposed segments. To perform this
analysis, the existing brands are positioned toward the pro-
posed segments. This is accomplished by comparing the
products attributes and the segments benefits sought. When
finished, the results are analyzed in an attempt to identify pos-
sible misspecifications. This approach is based on the
assumption that the difference in brands in the product cate-
gory reflect differences in consumers wants and needs (see
Figure 1). This assumption has been employed by a number
of researchers in the past (Day, Shocker, and Srivastava 1984;
Grover and Srivastava 1987; Srivastava, Alpert, and Shocker
1984; Srivastava, Leone, and Shocker 1981).
The first step is to identify brands that do not match up
with any of the proposed segments. In this case, the benefits
associated with these brands have not been grouped into a
segment. This suggests that additional segments might
improve the analysis.
The next step is to determine if the proposed segmentation
structure results in brands positioned to multiple segments. If
this condition exists, it signals the possibility that the pro-
posed segmentation structure has resulted in an overseg-
mented market and does not necessarily indicate a problem.
However, the situation does indicate that the proposed seg-
ments do not match the current brands and marketers are cur-
rently using one brand to satisfy multiple segments. In new
product development classes, we often encourage students to
oversegment markets in order to identify new niches.
The third step is to determine if the proposed segmentation
structure results in firm(s) with two or more brands posi-
tioned toward the same segment. This finding suggests that
FIGURE 1: Segmentation and Product Differentiation
one firmhas two or more brands positioned to meet the needs
of the same segment. Logically, this seldom makes sense
since these brands would be in direct competition and canni-
balize each others sales. The firm probably believes that
each brand offers unique benefits and is positioned toward a
different segment. When this multibrand situation exists, it
suggests that the proposed segmentation structure has under-
segmented the market. However, in some cases, the segmen-
tation structure might be accurate. There are some situations
where a marketer might develop multiple offers for the same
segment. This is most likely to happen in situations where
consumers are heavy users and seek variety. An example
would be the breakfast cereal market. Consumers want the
same benefits but also variety. A firm like Kelloggs might
position multiple brands in a segment to offer consumers
variety without losing sales to the competition.
The final check is to compare the marketing mixes of the
brands that are positioned toward each segment. Brands that
are positioned toward the same segment are in direct competi-
tion and are satisfying the same wants and needs. They should
have similar marketing mixes. These brands should possess
coinciding features and attributes. Their prices should be
comparable. They should be distributed the same way and
should end up in the same locations. The promotional strate-
gies should be similar in terms of target audience and mes-
sage. Large discrepancies in any of these marketing mix ele-
ments signal possible misspecifications and should be
scrutinized.
When misspecifications are identified, the student should
go back through steps 1-4 to spot problems and make changes
in the segmentation bundles to better fit the available brand
information. The process must be repeated until the student
feels confident that the proposed segmentation bundles cap-
ture the difference in wants and needs across the potential
consumers of the product category.
Step 6: Provide a description of the segments in terms of con-
sumption patterns.
Once the segments capture the variation in customers
benefits sought, they are characterized in terms of differences
in consumption patterns between the segments. The informa-
tion developed in the analysis of focal behaviors provides a
good starting point. The student should focus on identifying
the key differences between segments.
Step 7: Describe the segments in terms of demographics.
Next, the segments must be described in terms of demo-
graphics, socioeconomic variables, geographic factors, and
other pertinent variables. With no primary data available, the
bootstrap approach must be employed. One approach that has
proved to work especially well in our classes is to use a sec-
ondary source of information such as Simmons Market
Research Bureaus Study of Media and Markets. This data
source covers a wide variety of product categories, ranging
from grocery store products to financial and travel services.
Typical demographic, socioeconomic, and media usage pro-
files are available onall major brands inthe product category.
Versions of this data source that are only a couple of years
out-of-date and no longer suitable for client purchase are
available to university libraries in either bound or CD-ROM
formats at a very reasonable cost.
1
The data on the leading
brands in the segment can be used as surrogate for a whole
segment. It should be noted that demographics are being used
to describe the segment, rather than as a segmentation base.
This step is necessary to identify target markets (Yuspeh and
Fein 1982). Recall that the segments represent groups of ho-
mogeneous demand, rather than similar demographics. The
marketer cannot communicate directly to the staples seg-
ment. Instead, target markets that contain a considerable
number of members of a segment must be identified (Yuspeh
and Fein 1982).
Step 8: Evaluate the segments.
The segments should be evaluated to determine satisfac-
tion levels and segment size. If the members of the segment
are happy with the current set of product offerings, they are
not likely to switch to new offers and would not be good tar-
gets for a new product offering. Since primary data are not
available, secondary information must be used to evaluate
satisfaction. Some key signals of dissatisfaction include
brand switching, unstable brand shares, and new products
positioned toward the segment.
In addition, segment size must be estimated. Since the seg-
ments have been developed using the benefits sought, there is
no direct way to determine the size of each segment. A boot-
strap approach must be employed. One way to obtain an esti-
mate of the size of a segment is to use the sales levels of the
brands positioned toward each segment as a surrogate mea-
sure of the size of the segment. If brands are positioned
toward multiple segments, the sales must be divided between
the segments. These sales figures are available froma number
of sources including Advertising Age, the Census of Retail
Trade, Survey of Buying Power, Simmons Media/Marketing
Service, Nielsen Retail Index, Selling Areas Marketing Inc.,
trade journals, and trade associations. It might take some
detective work, but the numbers are nearly always available
andhelpstudents tobecome competent business researchers.
Step 9: Identify target markets.
When employing a benefits-sought approach to segmenta-
tion, target markets must be identified. Target markets are
described using demographics and psychographics, since
they are the basis for media purchases. The approach is
straightforward. Target markets should be selected on the
38 APRIL 1999
basis of the likelihood that the targeted group contains a high
proportion of the individuals from the desired segment. This
is accomplished by matching up the demographic descrip-
tions of the segments with reachable target markets. The
higher the proportion of individuals from the desired seg-
ment, the more efficient and effective the targeting effort will
be. In the ideal situation, the target will contain an extremely
high proportion of the desired segment. In the worst-case sce-
nario, the target will contain a proportion of the desired seg-
ment that is only slightly higher than a mass marketing
approach.
BENEFIT SEGMENTATION PITFALLS
The segmentation steps make the process appear simpler
than it actually is. The following tips are intended to help the
faculty member to alleviate reoccurring difficulties.
Focus on Brands Rather than Customers
With brand information used to verify the process it is
natural for students to focus on categorizing differences in
brands rather than focusing on customers. The net result is an
exercise in recognizing product market structures rather than
identifying customer segments. The teacher must continually
remind the students to focus on customers and benefits rather
than product attributes and brands (see Surasky 1994). Recall
that step 3 encouraged this activity.
Rush to Finish
Steps 1 through 5 are seldom completed without the need
for adjustments. In most cases, two or three iterations are
needed. The teacher must recognize that students are likely to
defend the first set of segmentation bundles rather than
endeavor to make improvements.
Failure to Focus on Benefits
Whenever students end up with untenable results, go back
to the focal behavior and benefits sought. Typically, the stu-
dents have failed to focus on the underlying assumption in
benefit segmentation: differences in benefits sought lead to
differences in purchase and usage behaviors.
Outlier Brands
Typically, a few brands seem to be outliers that cannot be
positioned toward any segment. The task can be completed
by including a catchall segment. However, students must
carefully evaluate each of these outlier brands. The benefits
should be identified, since these brands often supply insight
into the future directions of the market.
Variations among Students
Students are likely to come up with a number of variations
of segments for any product category. This does not necessar-
ily mean that one group of students is correct and the others
are wrong. They are simply different interpretations of the
same situation. This same result is likely to occur if two
research firms conducted independent data-driven benefit
segmentation analyses (Greenberg and McDonald 1989).
The differences should be discussed to see where and why
they differ.
Misspecification Indicators
When evaluating the proposed segments for misspecifica-
tions, a number of indicators are employed. These guidelines
do not automatically signify that something is wrong.
Instead, they should be viewed as symptoms of possible prob-
lems. Since the indicators focus on the existing brands, the
differences imply that the analysis does match the marketing
strategies of the firms in the market. In each case, the problem
area should be investigated to understand why the discrep-
ancy exists.
Missing Information
Whenever secondary data (i.e., brand shares or demo-
graphics) are unavailable, the students must attempt to make
expert judgments based on their review of the literature and
understanding of the market. However, every effort should be
made toidentifyavailable secondarysources of information.
CONCLUSIONS
Benefit segmentation is a powerful strategic marketing
tool. However, few students are exposed to it. The basic rea-
son for this is the difficulty involved in performing the task.
Instead, most students are exposed to demographic segmen-
tation because it is easy to demonstrate in a classroomsetting.
The process can be accomplished in one class meeting. The
only problem with demographic segmentation is that it often
fails (Duboff 1987; Helfgot et al. 1988). There is little theo-
retical or empirical support for the view that demographics
are highly correlated with consumers wants or behaviors
(Greenberg and McDonald 1989). As a result, demographic
segmentation seldom leads to homogeneous groups of
demand. Firms and students using demographic segmenta-
tion instead of benefit segmentation are operating at a distinct
competitive disadvantage. They are using old technology,
when newer, more effective approaches are available.
The bootstrap benefit segmentation approach alleviates
many of the disadvantages associated with teaching the tradi-
tional approach driven by primary data. First, the bootstrap
benefit segmentation approach is relatively easy to teach to
students who do not have a strong mathematical preparation.
The idea of individuals being divided into groups on the basis
of their benefits sought is intuitively appealing and the math
is minimal. Second, the activity can be conducted quickly. If
the instructor provides the secondary data to the students, the
exercise can be completed in one or two class periods. Asking
students to collect and compile the required data outside of
class will necessarily add to the time required for the exercise.
Third, our students indicate that this experientially based
exercise is a pleasant, as well as meaningful, learning experi-
ence. In too many cases, students feel that they know about
market segmentation but do not have the foggiest idea on how
one actually segments a market. This exercise seems to leave
them with a sense of satisfaction and accomplishment that
simply explaining the process in class does not provide.
40 APRIL 1999
APPENDIX
Example Using Rice Benefits Sought
1. Define the product category.
For the rice market, all dry, frozen, and instant rice products purchased by the end user will be considered. As defined, the market does not
include industrial/commercial purchasers or prepared rice products such as takeout from the Chinese restaurant.
2. Identify the focal behavior that prompts purchase or usage of the product.
Rice is used by both male and female adults. Rice is a starch that can be consumed as a part of any meal or as a snack, although most rice is
consumed at lunch or dinner. Rice can be consumed as a part of the main meal, a side vegetable, or included in a dessert. More rice is consumed
by certain racial or ethnic groups, and in certain regions of the country.
Rice is prepared in a number of different ways. Rice can be boiled or steamed in a pot, or a specialized rice cooker can be used for prepara-
tion. Inaddition, various instant rice products are available, as well as frozenor boil-in-the-bagrice products. Rice canbe servedplainor flavored.
As a starch, rice competes with other common starch products, such as pasta and potatoes. For some consumers, these products may be the
preferred product and rice an acceptable substitute. For other consumers, rice will be the preferred product and a part of almost every meal. In
this situation, there may be no acceptable substitutes.
3. List benefits sought.
Classify the benefits as qualifying, determining, or both. There are a number of benefits associated with rice. Some consumers see rice as
a low-priced starch that is central to their diet. Other consumers see rice as offering nutritional benefits, especially those who may be con-
cerned about low-fat alternatives. Certainly rice products can offer a change of pace fromthe usual starches, such as potatoes and pasta, for
many consumers. In addition, rice products may be seen by some consumers as relatively easy to prepare or as requiring little preparation
time.
These benefits may be classified as qualifying, determining, or both (see Table A1). For example, the fast benefit is only provided by instant
or precooked rice products. It is a determining benefit since it limits which brands a consumer would consider for use. Some benefits, such as
nutritious, are both qualifying and determining benefits. The distinctive nutritional qualities of rice are not found in the quantities in other
starch products and this makes nutrition a qualifying benefit.
TABLE A1
QUALIFYING AND DETERMINING BENEFITS
Qualifying Benefit Determining Benefit
Low-priced starch X
Nutritious X X
Easy to prepare X
Fast X
Change of pace X X
Taste X X
4. Build and name potential/logical/feasible segmentation bundles.
While hundreds of potential benefit segments are feasible, the actual number to consider is dramatically less because of natural associa-
tions. For example, low-price starch and easy to prepare do not logically fit together, but fast and easy to prepare are difficult to separate. Table
A2 lists six potential segments and their related benefit weights. These were derived from an in-class discussion. Note that there are separate
and distinct segments for low price and nutritious. In addition, there are two sets of similar segments that have been developed where ease of
preparation and fast or change of pace and taste are important benefits.
TABLE A2
POTENTIAL SEGMENTATION BUNDLES AND THEIR RELATED BENEFIT WEIGHTS
Rice Benefit Bundles
Segments and Weights
1 2 3 4 5 6
Low-priced starch 10 3 3 3 2 3
Nutritious 2 10 3 3 3 3
Easy to prepare 2 2 10 7 3 10
Fast 2 2 7 10 3 10
Change of pace 3 3 3 3 10 10
Taste 3 3 3 3 5 5
The rice segment names are based on the benefits desired (see Table A3).
TABLE A3
RICE SEGMENT NAMES
Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Segment 6
Primary Benefits Primary Benefits Primary Benefits Primary Benefits Primary Benefits Primary Benefits
Low price Nutritious Easy to prepare Fast to prepare Change of pace Change of pace
Fast and easy to prepare
Secondary Benefits Secondary Benefits Secondary Benefits Secondary Benefits Secondary Benefits Secondary Benefits
Fast to prepare Easy to prepare Taste
Name Name Name Name Name Name
Staple Health conscious Fast In a hurry Change of pace Fast and easy
Change of pace
5. Evaluate the potential segmentation bundles.
Determine the brands positioned toward each segment. Check for over- or undersegmentation and other possible misspecifications. The
available brands were positioned toward the proposed segments. Note that if a number of brands cannot be positioned toward any of the pro-
posed categories, then additional segments are needed to complete the task.
6. Provide a description of the segments in terms of consumption patterns and other related information.
In the rice example, the staple segment provides a good illustration. This segment of rice buyers tends to consume the majority of their rice
as a part of their main meal and probably considers rice to be an important element of many entrees. They likely serve rice every day and may
serve it more than once a day. They represent a majority of the heavy users of rice.
Consumers of rice products may belong to different segments on different occasions. For example, they may consume rice as a staple on
most occasions but switch to a flavored rice product as a side dish to complement a particular main dish they are serving. Since this occasion
calls for the benefits of change of pace and taste, they are part of the change-of-pace segment for this particular occasion.
7. Describe each segment in terms of demographics and so forth.
To accomplish this task, representative brands are used as surrogates for the category. For example, the demographic and geographic data
for Mahatma can be used as a surrogate for the staple segment. Using the Simmons Market Research Bureau data and applying the bootstrap
method, the demographic/geographic descriptions of the staples, change-of-pace, and fast segments are summarized in Table A4. Note that
these segment descriptions have some intuitive logic to them and will have high face validity with the students. For example, the staples seg-
ment is racially diverse and contains a significant representation of ethnic groups (Black, Asian, Hispanic) who have a rich tradition and his-
tory of high rice consumption as a part of their diet. These ethnic groups tend to be located in rental housing located in the metropolitan areas of
the southern and western portions of the country. The large family sizes are also consistent with heavy product use in this category.
Interestingly enough, this is a market segment where benefit segmentation is probably a stronger predictor than standard demographic
measures. The demographics are mixed and probably indicate a bimodal population, perhaps a combination of upscale and down-market
groups where the benefit of a low-priced starch that is part of a traditional diet serves to bridge the two groups and unite themas a common mar-
ket segment with similar needs.
TABLE A4
DEMOGRAPHIC MAKEUP OF SELECTED SEGMENTS
Segment 1 Segment 5 Segment 3
Staple Change of Pace Fast
Age 23-34 25-34 45-54
Education High school and college College graduates Some college
Employment Professional/managerial Precision craft Technical/sales
Family Married, parents Married, parents Married, parents
Race Black, other White White
Geographic location South, West West, Midwest Midwest
County size Metropolitan central city Suburban Nonmetropolitan
Income More than $75,000 More than $40,000 Between $30,000 and $40,000
Less than $20,000
Household size Five or more Five or more 3-4 persons
Own or rent Rent Own Own
8. Evaluate the segments in terms of (a) state of want satisfaction and (b) market potential.
Consider the staple segment as an example. For the most part, the brand shares are stable and there appears to be limited brand switching.
In addition, there are fewnewbrands positioned toward this segment. It can be concluded that this segment is relatively well satisfied. While
this is a relatively large segment, it would be difficult to establish a new brand in this segment.
9. Identify target markets.
Considering the change-of-pace segment, a primary target would be 25- to 34-year-old parents living in the suburbs of a western or mid-
western city with incomes of more than $40,000 and a large family. Asecondary target might be 35- to 44-year-olds with a similar profile but
smaller families. Anewtarget might be college students, since they often need a low-priced and nutritious starch as a part of their diet but sim-
ply do not have the time or inclination to include prepared rice as a regular food item. Of course, this group is currently eating french fries, so a
message noting that rice is available in various flavors might be successful.
42 APRIL 1999
NOTE
1. The entire data set is available to academic institutions for a fee of
$500.00 from Simmons Market Research Bureau, Inc., 3802 Corporate
Drive, Tampa, FL 33619, 1-800-223-7920.
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