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To cite this article: Damir Kovačić , Marija Cerjak , Jerko Markovina & Robert Črep (2010)
Psychographic Segmentation of the Zagreb Apple Market, Journal of Food Products Marketing,
16:3, 293-308, DOI: 10.1080/10454446.2010.485094
ROBERT ČREP
Croatian Agricultural Extension Institute
293
294 D. Kovačić et al.
INTRODUCTION
Being at the final stages of negotiations for accession to the European Union,
near future will probably bring many changes to the food market in Croatia.
As Croatia joins the common market, food producers will have significant
opportunities to present their products to a large number of consumers,
but they will also be faced with a strong competition from the European
food industry. In this period, one of the biggest challenges to Croatian food
producers will be the issue of adaptation to significant changes that will
certainly happen once conditions in the market change as a result of EU
membership. The adaptation to new conditions may be difficult as many of
Croatian farmers and small-scale food producers do not know much about
modern approaches to marketing and do not use marketing efforts to gain
a better position in the market and thus better sales and revenues. Today,
Croatian apple producers are still protected from global competition. To
import apples to Croatia, a customs fee of 15% is charged on the value of
imported goods and additional 13.5 Euro per 100 kilograms of imported
apples in the period between September 15 and February 20. The liberal-
ization of import that is expected as a result of entering a single European
market requires a new approach to the market and an adequate marketing
strategy for domestic producers of this fruit. The possibility of using psy-
chographic market segmentation as an approach suitable for Croatian apple
producers will be explored.
Market segmentation, also called benefit segmentation, is a process in
which it is possible to identify market segments based on benefits that
people are seeking in consuming a given product (Haley, 1968). As Haley
describes in his seminal work on segmentation (1968), benefit segmentation
divides a heterogeneous population into homogeneous groups on the basis
of product benefits consumers perceive as important and this approach pro-
vides a direct measure of the differences in preferences among customers
and offers a more action-oriented analysis for managers.
Experience with this approach has shown that benefits sought by
consumers determine their behaviour much more accurately than do demo-
graphic characteristics or volume of consumption. Market segmentation is
based on being able to measure consumer value systems in detail, together
with what consumers think about various brands in a certain product cat-
egory. Market segmentation is a well-established and documented method;
however, several recent works have stated that some modifications to the
approach should be made in order to achieve valuable results. In their
recent account of segmentation studies in Harvard Business Review titled
“Rediscovering Market Segmentation,” Yankelovich and Meer (2006) argue
that segmentation has been an extensively used method over the years but
they also note that, due to unsuitable application, segmentation can also
yield results that are not very useful or meaningful. To avoid getting results
that make no practical sense, Yankelovich and Meer give a set of instructions
The Zagreb Apple Market 295
sample size for each of the three supermarkets would be n = 130 and with
some backup surveys the total size of our sample was 426 consumers.
Market segmentation was done by using factor and cluster analysis.
The respondents’ attitudes about buying and consuming apples and the
importance of fruit for maintaining good health were used as criteria for
forming clusters. The attitudes were presented in the form of an item pool
of 11 statements.
Respondents’ task was to rate them on a Likert-type scale from 1 to 5,
where 1 meant full disagreement and 5 meant full agreement with a partic-
ular statement. Out of 426 participants in the sample, the data of 421 were
valid for factor analysis. Principal component extraction method was used
with Varimax rotation and Kaiser normalization. Factor loadings higher than
0.4 were used in order to place original variables into a specific factor.
Extracted factors were used as entry variables for the cluster analysis.
Cluster analysis was conducted in two steps. In the first step, Single link-
age (nearest neighbour) method (see Backhaus, Erichson, Plinke, & Weiber,
1996.) was used. Based on these results, seven respondents were eliminated
from further analysis. In the second step, Ward procedure was used. In
both steps, squared Euclidian distance was used. Using the “elbow” crite-
rion, three segments were found. Discrimination analysis was used to assess
the suitability of factors for cluster analysis, and t-values were used for the
interpretation of clusters.
For a detailed description of clusters, variables of respondents’ buying
behaviour were used. The differences between segments, depending on the
type of variable, were tested with the following parametric and nonparamet-
ric tests: Chi-square test, ANOVA, LSD (Fisher’s LSD) test, and Games-Howell
test. All analyses were calculated using SPSS statistical software (Version 13.0,
2004, SPSS Inc, Chicago, IL).
RESULTS
Sample Characteristics
Sample characteristics are presented in Table 1.
More than half of respondents (55%) have a favourite apple variety. The
biggest proportion of respondents prefer Idared (16%) and Golden Delicious
(14%), followed by Granny Smith (6%) Jonagold (4%) and Jonathan varieties
(4%). Almost 90% of participants buy apples at least once a week. More than
half of the sample buy apples in the supermarkets (55%), one-third at city
markets (31%) and only 3% directly from producers.
Regarding the frequency of consumption, close to half of respondents
eat apples every day, while only 7% eat apples less frequently than once a
week. Apples are most frequently consumed fresh (96%), as a snack (84%)
and much less as a dessert (16%).
The Zagreb Apple Market 299
n %
Attitudes about
General attitude about Indifferent
the importance of
apples consumers
apples for health
Attitudes about
The importance of fruit
consumption of
and vegetables for Heavy consumers
fruit and
maintaining good health
vegetables
The first factor is dominant and explains 21.75% of the total variance, while
all four factors explain 63.16% of total variance.
The solution with four factors was used as a starting point for cluster
analysis. Three clusters were extracted:
1. Practical consumers
2. Indifferent consumers
3. Heavy consumers
Every day
Taste is also the most important attribute for indifferent consumers (4.6).
However, more importance is given to the appearance of the apple (4.1) than
the smell (4.0). The lowest ratings are given for the colour (3.8) and size
(3.2) of the apple. Generally, this segment shows lower ratings for intrinsic
attributes of apples than other two segments.
Respondents in the third segment (heavy consumers) show high ratings
for all intrinsic attributes. The most important attributes for them are the
taste and smell of the apple (4.8 and 4.6 respectively). They also place
more importance to variety (4.6) and appearance of the apple (4.2), and less
importance to the colour (3.7). Similar to other segments, they also give the
least importance to the size of the apple (3.3).
Description of Segments
Practical consumers are the largest consumer segment (43.3%) found in this
research. They mostly have a positive attitude toward apples, but they are
not highly involved in buying. A similar group of consumers was identi-
fied in Shim et al (2001) in the Japanese fruit market—practical consumers
who are moderately involved in buying fruit. This name for the segment is
appropriate because it reflects the “mainstream” group of consumers who
fall between the extremes of indifferent and heavy consumers.
In their diet, practical consumers prefer fruit and vegetables and con-
sider them to be important for maintaining good health. Practical buyers
mostly prefer Golden Delicious (21%) and Idared (14%) varieties of apples
and they buy them often. For practical consumers the most important intrin-
sic attribute of apples is the taste (4.82), while the most important extrinsic
attributes are the method of production (4.31) and origin of apples (4.18).
They mostly prefer domestic apples and reduced use of chemical pro-
tection means (ecoproduction). They are less price sensitive than heavy
consumers.
The Zagreb Apple Market 305
Practical and heavy consumers pay most attention to taste and smell
of apples, therefore the sensory quality of apples is the basic requirement
for serving these consumer segments. Competitiveness can be achieved by
clearly designating the origin—an apple produced in Croatia. Furthermore,
apples produced by biological or integrated methods of production should
be targeted to practical consumers. The satisfaction of heavy consumers can
be increased by offering branded apples. Buyers in these two segments
prefer standard apple varieties, Golden Delicious and Idared. However, the
assortment should eventually include other varieties of similar taste in order
to reduce the space for imported apples.
Heavy consumers are more price sensitive and with them there is
not much space for price differentiation of supply. However, it would be
possible to achieve higher prices with practical consumers by offering high-
quality apples, and apples produced with “eco” and integrated production
methods. Labelled and adequately displayed apples are the basic assump-
tion for differentiation of the 443 offer in the supermarket. Traders should be
offered additional beneficiations in order to get them to pay more attention
to an adequate display of products, meaning that apples should be neatly
presented at all times to avoid the confusion between different producers’
packaging.
Media advertising, taking into consideration the cost/benefit ratio can
be used in the situation when an apple producer is being introduced in a
trade chain for the first time. Advertising can also be used in the situation
of assortment expansion, introducing “eco”or integrated production apples
and/or introducing a new brand of apples. The best way to encourage sales
in supermarkets is promotional tasting and promotional discounts.
It would also be useful to set up displays and to organize the distri-
bution of promotional fliers from time to time. Activities that contribute to
establishing the trust between producers and buyers, such as Open Days
and Apple Festivities are the best way to build and maintain a positive
image. All these marketing efforts could also draw the attention of the
indifferent segment of the market and thus create an even wider buying
population.
Based on the results of this research and authors’ previous experi-
ences, it is possible to estimate future developments of apple retail market
in Zagreb, as well as in Croatia. However, we should take into consideration
the fact that these estimates are based on complex relations and relatively
uncertain indicators. Nevertheless, it is possible to predict the following:
● Demand for high-quality apples will increase as many buyers express the
need for quality and safety of fruit.
● The key criteria for buying apples will be their quality, price/quality
ratio, information about the product, displaying and labelling of apples
at the point of purchase, shopping convenience and salesperson-buyer
relationship.
● Competitive advantage can be achieved through differentiation of the
supply and innovation: introduction of extra quality apples, expand-
ing the assortment, introducing new varieties of apples, introduction of
domestic and eco apples, offering apples from integrated production, and
introduction of branded apples.
Finally, we should mention some limitations of the study and possible future
directions of similar research.
The limitations of this study are mostly tied to sampling issues. First,
in conducting the cluster analysis it was not possible to clearly separate
consumers into groups but only to make an approximation. The main reason
for this is the method of respondents’ selection. In our research, respondents
were exclusively those who buy in Zagreb supermarkets and they may be
a more homogenous group than other consumer groups. A similar problem
was encountered by Mahler (1991).
Second, respondents in our sample have a higher education level
(49.8% with completed college education) than city of Zagreb average of
22.5% (Croatian Census, 2001). Probably the reason for this is that highly
educated respondents are more communicative and more likely to partic-
ipate in the survey. Furthermore, we did not include a direct measure to
determine if respondents buy apples only for themselves or for a small or
large family which can also be very valuable information.
Regarding the future directions for similar studies, it would be inter-
esting to include a sample of respondents who currently do not consume
apples in order to understand the reasons why they are nonconsumers and
how they can be persuaded to become consumers.
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