Each segment's profile influences price sensitivity, brand
selection, private label receptivity, channel selection and
switching, long-term customer value, basket size and trip
This segment has not managed to graduate high school and therefore
is either underemployed or marginally employed. Their median
individually earned incomes are about $20,000, and they earn less
than $25,000 as a group.
Surprisingly, 47.4% of American workers fit into this category
and their unemployment rate stood at 15.3% as of 12/2010.
This segment shops in a just-in-time manner, buying small sizes
and mostly inexpensive packaged food. Their approach is buying
cheap calories without much regard to health issues. They are very
price sensitive and their choices are driven by deals and
discounts. They make multiple trips to the store when they run out
and when there is money available to spend.
The insecure are marginally better. They have high school degrees,
earn between $25,000 and $35,000 on an individual basis and
represents 13.7% of the workforce. Their unemployment rate is 9.8%
which is slightly above the national average.
This segment tends to load up to save money and thinks long-term
in managing their food budgets. They are disciplined shoppers and
stick to the list. They search for bargains, use coupons
religiously and use multiple retail channels. To manage their
money, they are more oriented toward cooking at home. They are very
sensitive to changes in meat and dairy prices and therefore are
quick to trade down or trade out of meat and produce options.
With either some college or an Associate's degree, this segment is
in far better shape and represents the core middle-class consumer.
They earn between $35,000 and $75,000 and make up 27.5% of the
workforce. They are employed in medium-skill jobs or low level
management positions. Their unemployment rate of 8.1% is below the
Budget oriented as a result of a cultural change in their
behavior, this segment exhibits traditional middle-class values of
thrift, family and discipline. They are the ideal shoppers to be
influenced by the path-to-purchase model. They plan their weekly
meals carefully, combine both essentials and non-essentials
according to their value set, and are health conscious about food
choices. They include a few indulgences on their list and are open
to a few impulse purchases.
The sweet spot for marketers, the confident are well-educated
college grads that earn more than $75,000. These earners represent
just 11.4% of American workers. They work in the professional
roles, management and academia. Only 4.8% lack jobs.
This segment is driven by experiences in all aspects of their
lives. They are at the forefront of the "foodie" craze. They eat
for pleasure, for health or for some idealized vision of family
life. They are biased toward natural, organic or locally sourced
food. They shop at farmers markets, specialty retailers and grocery
stores that cater to their food sensibilities. They are big
consumers of more exotic type foods that enable them to experiment
and be creative in their meal planning. They do plan their
purchases but will buy on impulse if something interesting catches
Implications for Marketers
The effects of this recession will be long lasting in changing
purchase behavior just as the Great Depression changed behavior for
past generations. The combination of wealth destruction, tight
credit and structural changes in the composition of the economy,
have reoriented the future for the great middle class. With
education and skill sets being the key determinants in achieving
middle-class status, we are seeing some consumers falling further
behind and some surging ahead, creating essentially two consumer
economies, thus breaking apart the old mass market.
Marketers need to find a common marketing thread that allows
brands to communicate a common purpose that is relevant and
attractive to all segments. Mass brands that can find common cause
across the segments can create a culturally shared affinity that is
of interest for the entire spectrum of demographic groups.
Identifying needs that are universal and values that span the
continuum will enable marketers to remain relevant to all the
Building a flexible communications strategy that allows for
message and brands to align with shoppers and their context will
create a reason for consumers in each group to engage with the
brand on a sustained basis. This nuanced approach will allow
marketers the ability to get their brands in front of the best
shopper with the best message according to the needs of each
The media channel is as important as the retail channel. Each
segment demonstrates both unique and common media habits based on
education and culture. Mapping the habits of each segment and
aligning them with decision points in the process of brand
consideration is important in engaging shoppers at the right time
when they are in brand decision mode.
ABOUT THE AUTHOR
Bill Melnick is
director of strategic planning at SAI Marketing, a
shopper-marketing agency in Philadelphia. In addition to more than
20 years agency experience, he has held executive level positions
in marketing at Merrill Lynch, Conde Nast and CNBC. The full report
can be downloaded at www.saimarketing.com.