You Are What You Eat

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Sodexho Marriott cooks up changes in campus dining with an inventive segmentation program.

Huntington College is a small, liberal-arts school, located in Huntington, Indiana, not far from the Dan Quayle museum. Affiliated with the Church of the United Brethren of Christ, the student body tends to have a traditional, conservative streak - until it comes to dining. That's what Sodexho Marriott, the campus food service provider, discovered when it tried out a new marketing program to uncover the dining preferences of Huntington students. Now, instead of serving pita pockets or turkey sandwiches at lunch, the students are treated to roast beef with carmelized onions on a baguette or shrimp jambalaya with jalapeno cornbread.

How did Sodexho Marriott discover that many Huntington students were craving adventurous new meals, rather than just the old college favorites? Through an ambitious new segmentation program called LifeSTYLING, Sodexho uncovered groups of students at Huntington whose lifestyles and backgrounds strongly suggested that they would enjoy more innovative dining options. By better addressing the tastes and demographics of the students it serves, Sodexho hopes to significantly boost sales.

LifeSTYLING is a proprietary tool which allows Sodexho to use the zip codes of each student on a campus to segment the student body into six different groups: Trend Setters, Star Gazers, Fun Express, Time Liners, Metro Fusion, and Main Streamers. Each group has its own set of lifestyle characteristics which determine the type of menu items they like, brands they prefer, hours they want to eat, and collateral marketing tools (such as promotional displays) which would be effective in reaching them.

"I would have expected more than just six cluster groups, but these six provided the clearest differentiation," says Meridith Heckmann, senior director of market research, who spearheaded the creation of LifeSTYLING at Sodexho's higher education division. "We have yet to find a school where we have misrepresented the composition of the student body using this system."

The two main variables among the six groups are the types of cuisine they enjoy, from traditional to innovative, and the amount of money they are able or willing to spend on meals, from price-sensitive to price-insensitive (see chart 2). For example, Trend Setters want innovative meals and don't mind paying more for them, while Main Streamers are seeking traditional meals and value. In addition to these two overriding variables, a host of specific food and brand preferences provide a solid foundation to develop menus and marketing direction on each campus.

So far, Sodexho has analyzed 35 campuses with LifeSTYLING and has found that five main patterns in the mix of segments predominate. For example, at Oklahoma City University, Star Gazers account for 30 percent of the student population, Trend Setters, another 30 percent, followed by Fun Express (20 percent), Main Streamers (9 percent), Timer Liners (6 percent), and Metro Fusion (5 percent). The main pattern here is Star Gazer, Trend Setter, and Fun Express. Using the data from these three LifeSTYLING segments, a Sodexho menu team came up with a distinct menu template to match this pattern. The menus created for each of the five patterns are named Contemporary, Global, Moderate Mix, Spectrum, and Classic, and they reflect commonalities among the segments within each pattern. While there are some basics that are `must-haves' among all patterns, such as chicken noodle soup, these templates unveil subtleties such as whether cheddar or gorgonzola cheese on the burgers will appeal to more students at a particular school.

Sodexho has additionally used LifeSTYLING to analyze the retail food court needs of five large public universities this past summer, and is testing 27 more this fall. The results of this analysis will be used to retool the mix of national brands offered in the food courts, such as Burger King or Taco Bell, Jamba Juice, or Starbucks.

Satisfying student palates is not only important to Sodexho, but also to college administrators who sign the food service contracts. Creating an attractive dining service operation is a key goal of administrators, as it keeps students on-campus and contributes to the overall college experience. "Eating is not just about food, it's a social experience for the students," says Gene Kellogg, vice president for consulting and business development at Sodexho.

The results of some LifeSTYLING analysis has served as a wake-up call to some Sodexho district managers, such as Glenn Kvidahl at Indiana State University. After running the zip codes of the student body, Kvidahl found that while a large percentage of students fell into gastronomically conservative groups, a surprising 24 percent were Trend Setters. "When we looked at what we were offering in the food court, it was all geared towards the Main Streamers and Time Liners - Burger King, Taco Bell, Subway," he says. "Now we are looking into adding a brand like Starbucks which will appeal to the Trend Setter." Sodexho is even considering opening a kiosk to sell sunglasses in the retail food court to gain a greater share of the Trend Setters' disposable dollars.

Of course, even Heckmann admits that LifeSTYLING cannot be the only insight brought to bear on a particular campus. "We do situation analysis on each campus also, and our unit managers fill out copious amounts of information on each school," she says.

The intelligence that LifeSTYLING provides did not come easily; creating a student-specific, food service segmentation tool was a complex task. Work on the program began two years ago, when Sodexho was searching for a "new millenium" strategy to increase sales at existing accounts, land new contracts, and keep current clients happy. Sodexho turned to customer segmentation, an increasingly important tool to marketers as they try to build a seamless framework between research, marketing, sales, and customer service areas. Segmentation aids in this endeavor by grouping consumers and businesses with uniform preferences, behaviors, or characteristics into clusters, which can be targeted with similar products, services, and customer service solutions.

Of course, Sodexho could have conducted extensive surveys on each campus to glean dining preference data, but it would have been expensive, time-consuming, and difficult to pitch to existing and new accounts. In contrast, a program such as LifeSTYLING allows mass customization for all existing accounts, as well as prospective new ones.

Creating LifeSTYLING involved three major steps: Finding a database of student information that would provide a deep enough picture of student activities and brand preferences; crunching the numbers to create the segments; and injecting data on food and beverage tastes into those segments.

The initial data for the segmentation was gleaned from Student Monitor's Lifestyle and Media Survey, one of the largest tracking databases of intelligence on the college market, with a wide range of information on student trends and lifestyles. In September of 1999, Sodexho teamed up with customer segmentation experts at Claritas, a leading provider of database marketing services, who used Student Monitor's data to create six major groups of students, similar in activities, attitudes, interests, and product usage. In order to easily sort students into their respective groups, the six segments were linked to Claritas's PRIZM program, a widely-used segmentation and targeting system that uses zip codes to cluster consumers into one of 62 lifestyle groups. This enabled Sodexho to quickly allocate any student to his or her lifestyle segment once they knew the student's home zip code.

Next, Sodexho conducted an in-depth food and beverage survey of several thousand students in the winter and spring of 2000, and inserted the results into the database to determine each group's preferences in areas such as portion size, taste, brands, hours of service, portability, familiarity, price, and dining atmosphere. And voila, LifeSTYLING was ready to be put to use.

While segmentation programs are used by numerous marketers, Sodexho's effort is unique in that it applies this technique to the niche market of college students. "This was a compelling and effective way to place students into lifestyle-based segments without surveying each student customer," says David Tedrow, assistant vice president of analytical services at Claritas. "It allowed them to take their primary research, the limited food and beverage survey, and apply it to a much larger universe." The program is also a creative example of how to use a systematic plan of segmentation to address an area as idiosyncratic as food preferences.

Now that the system has been tested on 40 campuses over the summer, with more being added this fall, the real evaluation is currently underway as students are back in schools, trying out the altered menus, and as Sodexho begins changing the retail food courts. "LifeSTYLING is a work in progress, and we are continually gathering research to refine the program," says Heckmann. But Sodexho has set ambitious goals for the project. Kellogg intends for the program to result in a 100 percent sales increase in the retail food courts over the next 3 to 5 years. Now that's a lot to chew on.

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