Double Segmentation to identify key opportunities
A confectionary company was looking for recommendations on the best possible renovation strategy to leapfrog its main Best-in-Class competitor and achieve a position of market leadership. What did the R&D and Marketing teams have to do to strengthen their product offering, drive consumer loyalty and gain market share?
SAM used its Double Segmentation Analysis approach to analyse the results of a Central Location Test (CLT) among consumers who are frequent users of 6 products, both their own and those of the competitors. Consumers first did a blind test of the 6 products, for which they rated their overall liking and perceptions of taste, appearance, smell and texture. Second, they assessed the 6 corresponding brands and packaging, giving their opinion on brand image, brand attributes and also packaging sensory attributes, usage qualities and the attractiveness of claims.
The Segmentation was performed on these 2 parts of the evaluation, each time examining where our client was positioned in its competitive environment: first, a Segmentation on blind preferences, which highlighted 2 clusters of preference; one cluster which liked our client’s product very much, and the other one which liked it less. The second Segmentation focused on the overall liking scores of brand and packaging, dividing consumers into 3 groups: active favourers of our client’s brand & packaging, undecided consumers who liked all brands & packaging at the same level, and competitor favourers.
This Double Segmentation approach allowed SAM to give very specific strategic recommendations. To target active favourers, their core consumers, we recommended that our client targets product innovation to drive greater satisfaction. However, taking into account the risk of losing consumers already highly satisfied by the product, we built a scenario of range extension instead of product alteration.
While it may be possible to gain new customers by targeting the ‘undecided’ group, our analysis showed that marketing of the current product was where the budget should be spent rather than in research and development.
Through the application of the double segmentation, and analysing the dynamics between product and brand/packaging allowed SAM to give precise recommendations to our client R&D and Marketing’s.
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