Segmentation as the road to success?

Segmentation as the road to

success?

Defining target markets by their lifestyle profiles

Segmentation as the road to success?

Defining target markets by their lifestyle profiles

Author: Elianette Prakken (s1368397) Vinkenstraat 59-III 1013 JM Amsterdam e.prakken@gmail.com University of Groningen

Faculty Economics and Business Master thesis Marketing Management January 2009 Company: Beiersdorf NV Amalialaan 126c Baarn Supervisors:

Company supervisor: Drs. J. Kroese - van den Berg Faculty supervisor: Dr. B. J. W. Pennink

Co-assesor: Dr. L. M. Sloot

Table of Content

Executive summary……… Preface………..

1 Introduction and problem statement……….

1.1 Preface………. 1.2 Background………... 1.3 Problem statement……… 1.3.1 Research goal………. 1.3.2 Research questions………. 1.3.3 Sub questions………

1.4 Relevance of the study………..

1.4.1 Scientific relevance……….

1.4.2 Practical relevance………..

1.5 Research set-up……….. 1.6 Structure of the thesis………..

2 Introduction to Beiersdorf NV………..

2.1 Beiersdorf NV……… 2.2 Mission, objective and strategy of the company……….. 2.3 Derma & Personal Healthcare: Eucerin……….. 2.3.1 Background……….. 2.3.2 Product assortment………. 2.3.3 Market results………. 2.4 Competition……….. 2.5 Pharmacy market in the Netherlands………. 2.6 Summary……….

3 Segmenting the consumer market for Eucerin……….

3.1 Introduction………. 3.2 The market segmentation concept………..

4 Research Design……….

4.1 Introduction……….. 4.2 Methods of research……….… 4.3 Quantitative research to segment the Eucerin consumer market………... 4.3.1 Online questionnaire……….….. 4.3.2 Target group and scope of the sample………. 4.3.3 Design of the questionnaire………... 4.4 Data collection……….…… 4.5 Methods of data-analysis……….. 4.5.1 Factor analysis………. 4.5.2 Cluster analysis……….……… 4.5.3 Descriptive statistics……….………

5 Results of the analyses……….……

5.1 Characteristics of the respondents……….….. 5.2 Factor analyis……….….. 5.3 Cluster analysis and description of the different clusters……….

5.3.1 Segment 1: Monique Moderation……….……… 5.3.2 Segment 2: Christa Child……….………. 5.3.3 Segment 3: Caroline Career……….…..… 5.3.4 Segment 4: Helen Health……….……... 5.3.5 Segment 5: Angelique Appaerence……….……… 5.4 Descriptive statistics……….

6 Conclusions and recommendations……….

7 Discussion………..

8 Limitations and directions for further research……….……….

References……….

Appendices……….………

Appendix 1: Demographics Appendix 2: Communalities

Appendix 3: Total Variance Explained Appendix 4: Screeplot

Appendix 5: Rotated Component Matrix Appendix 6: Cronbachs Alpha

Executive summary

This research has been executed for Eucerin, a dermatological brand that is one of the brands that Beiersdorf brings on the market. The aim of this thesis is to build a segmentation base for Eucerin. By building up a segmentation base, the company will know more about her current and potential consumers and will be able to reach its consumers more effectively.

Segmentation has become one of the most fundamental concepts when building up an effective marketing strategy. The choice of a segmentation bases as well as the choice for the segmentation methods is of influence on the identification of segments.

Within this research, the consumer market of Eucerin is segmented based on lifestyle. The segments that are discovered are judged on their attractability. The data from the empirical part of the thesis is gathered by means of an online questionnaire. The first part of the questionnaire focuses on brand awareness and brand usage. The second part of the questionnaire consists of propositions with regard to Eucerin. In the third part, questions regarding awareness and usage of the different productlines of Eucerin can be found. In the fourth part, the questions are related to retail channels.

In addition, the questionnaire contains 45 ‘activity, interest and opinion’ statements. These statements form the basis of the segmentation. The other questions are used to complete the profiles of the different segments.

A factor analysis, a cluster analysis, an Anova test and different crosstabs have been conducted with a sample size of 595 respondents. The factor analysis shows that the 45 Activity, Interestes and Opinions statements relate to 5 different factors. These factors are: Appaerence, Career minded, Health oriented, Child oriented and Everything in moderation.

years old and middle educated. She is extremely beauty and fashion conscious. She wants to stay young and loves to groom herselves. She visits the pharmacist and perfumerien often.

Based on current Eucerin penetration, Eucerin awareness, Pharmacy penetration and user potential it becomes clear that Caroline, Helen and Angelique offer the most potential for growing Eucerin sales. To be able to reach these woman, it is recommended to conduct the following activities in the three focus segments:

- Increase Eucerin awareness

- Increase consideration and preference Eucerin - Increase pharmacy traffic

- Increase conversion in pharmacy

This can be done by different ways. First of all, the awareness of Eucerin should be heightened by being visible in advertisements. Door-2-door brochures, magazines and digital newsletters appear to be the ways how the above mentioned segments want to be reached. Therefore, focus should be on these media types.

It is important that the data file of current consumers or woman that are interested int the product is up-2-date and keep subscribers on this letter informed on a regular basis. Moreover, attach discount vouchers to the mailings to make sure that pharmacy traffic will increase.

Furthermore, it seems that sampling is an important reason for woman to start using Eucerin. To increase conversion from using a sample to actually buy Eucerin, samples can be combined together with sales offerings or discounts. This may lead to higher consideration, pharmacy traffic and ultimately conversion rates. It also might increase usage frequency, which in turn might overcome the fact that Eucerin is generally used as a side brand.

Preface

In the past few months, I performed a challenging research project for Beiersdorf in Baarn. The report of this research now lies before you and is the final product to finalise my Master Business Administration, with specialisation Marketing at the University of Groningen, the Netherlands.

As a marketing student, who is almost ready to enter the labour market, it was very interesting to coordinate and execute a project that is at the heart of Marketing. I experienced this graduation project as a great learning experience and an excellent preparation for my professional life. I would like to thank the people who contributed to that.

First of all, I would like to thank Beiersdorf and above all the Eucerin Team for the opportunity to perform this research. Especially, my great appreciation goes to my company supervisor Drs. J. Kroese - van den Berg for her time, feedback and practical advice.

At the university, my graduation process was supervised by Dr. B.J.W. Pennink. At this point I would like to thank him for his constructive feedback, which really improved the final result. In addition, I would like to thank Dr. L. M. Sloot for assessing this thesis.

Last, but certainly not least, I would like to thank my family and friends for their interest, encouragement and patience.

1. Introduction and problem statement

1.1 Preface

“Are you child oriented or do you live your life in moderation?” “Are you beauty oriented or price conscious?” More important, do you know which group your core consumer fits neatly into?!

Before a company can target her consumers effectively, knowledge of these consumers is necessary in view of the fact that every single consumer has different needs and wishes, different motives and preferences and wants to be treated differently. Market segmentation can play an important role here. Market segmentation is the process of identifying and breaking up the total market into groups of potential consumers with similar motivations, needs or characteristics that are likely to have homogeneous purchase behavior. It has become one of the most fundamental concepts when building up an effective marketing strategy. In the past few years companies more and more understood the relevance of having insights into their potential and current consumers. Insights in questions such as: Who is my consumer? What does he/she look like? What do they buy? Why do they buy? are needed in order to make decent strategic marketing decisions. By having an all-embracing segmentation base, this will in the end lead to a higher return on marketing and sales efforts and will ultimately lead to higher efficiency and sales.

1.2 Background

the bases for strategic marketing decisions - a decent segmentation - is still not available. Because of the high costs that are involved with carrying out a segmentation project, a segmentation study for this brand has never been executed. This means that Eucerin does not know exactly who their consumers are, why they buy Eucerin products, what type of skin they have, which products appeal to them, which products suits them best and how (by which media type) they want to be reached. Based on these missing insights, Eucerin is not capable of targeting their consumers efficiently. Knowledge of these consumers will be very valuable for Beiersdorf. To be able to serve their consumers more properly and to stay ahead of competition, it is crucial that a segmentation base will be developed. Since more marketing budget is given to this brand the last few years, it is now possible to perform this research. After the segmentation base is build up and different important consumer insights have been gathered, the segments which are most valuable/profitable for Eucerin will be chosen. With knowledge of these segments Beiersdorf (Eucerin) can serve them more properly and in the end raise their sales.

1.3Problem statement

1.3.1 Research goal

The main goal of this research is to provide / build up a consumer segmentation base for Eucerin in order to get better insights into the current and potential consumers and to better serve them in the future.

1.3.2 Research question

To start performing this research, the following research question is formulated:

1.3.3 Sub questions

In order to answer this research question, the following sub questions will be used: Theoretical research questions:

What are the different ways to segment a consumer market?
Which variables can be used to segment a consumer market? Empirical research questions (Case study):

How will segmentation take place?

On which variables will the Eucerin consumer market be segmented?
How do the different segments look like?

Which segments will be exploited to use as target markets?

How can Eucerin improve their marketing strategy to more effectively reach the chosen consumer segments?

1.4 Relevance of the study

1.4.1 Scientific relevance

Research with regard to segmentation is mostly concentrated on the business-to-business market. Little research has been done within the business-to-consumer market. Next to this, much of the information that is written is outdated. The studies within this field are also contradicting and no single/clear view with regard to the best way to segment a consumer market exists. Therefore, it is interesting to investigate the segmentation methods within the business to consumer market. In addition, it will be valuable to determine which segmentation method is most suitable when segmenting a consumer market within the Fast Moving Consumer Goods industry.

1.4.2 Practical relevance

In today’s competitive marketplace, locating and effectively targeting unique market segments is both a reality and a necessity. Eucerin has never carried out a segmentation study, although a decent segmentation can be seen as the most important starting point for strategic marketing decisions. This study will help to gain insight into the different segments that exist for Eucerin. Furthermore, this study will try to provide direction for Eucerin with regard to which segment to target. These recommendations will be based on four criteria. In addition, the segmentation base will help to formulate a recommendation with regard to strategic marketing decisions in an increasingly competitive world where insights in consumers is key to success.

1.5 Research set-up

The research will consist of primary and secondary data. The first part will consist of an overview of the literature with regard to segmenting a consumer market. This scientific background will be used as input by determining on which way the Eucerin consumer market will be segmented (content-related). In the second part, a segmentation study will be carried out for Eucerin. The results of this study will be used to better serve the consumers (business-related).

1.6 Structure of the thesis

The thesis will consist of seven chapters, where chapter one to three are the theoretical part of the thesis. Within the theoretical part, special attention will be paid to the relevant literature that has to do with the theoretical research questions. The empirical part will consist of chapter four, five, six and seven. Chapter eight is the last part of the thesis; in this chapter conclusions and recommendations will be given based on the research results.

The other chapters are:

Chapter 1: In this chapter, a short introduction to the subject is given and the problem statement with the theoretical and empirical questions is presented.

Chapter 2: Introduction to Beiersdorf. This chapter will be written to give some more insight in Beiersdorf, especially in the dermatological/ personal healthcare department. Next to this, developments and the current state of the pharmacy market in which Eucerin is operating will be presented.

Chapter 3: Within this chapter a theoretical framework will be presented with regard to the segmentation process. In this chapter, it should become clear how literature/theory fits in the research. Furthermore, this chapter will determine on which base the Eucerin market will be segmented.

Chapter 4: The empirical part will start here. The research set-up will be the starting point of the chapter. In this chapter attention will be paid to the different methods of research, next to this, arguments why a special research method has been chosen will be explained. The steps that need to be taken to bring the research to a good end and the used resources will be presented.

Chapter 5: Within this chapter the results of the different analyses will be presented. These results will be interpreted on the bases of the different research questions in order to answer the main question.

2. Introduction to Beiersdorf NV

This chapter starts with a general description of Beiersdorf NV; whereafter an extensive description of Eucerin will be given. Afterwards, the competition field will be shortly discussed. The chapter ends with an in-depth overview of the pharmacy market and the developments within this market.

2.1 Beiersdorf NV

Beiersdorf is a global consumer goods group that produces and markets a wide range of consumer products including health and beauty products (Data Monitor, 2008). In 1882, Pharmacist Carl Paul Beiersdorf established the Beiersdorf Company. The date of the patent document for the manufacture of medical plasters is taken as the date of the companies formation. Beiersdorf has its headquarters in Hamburg. However, next to the headquarters, more than 150 affiliates are present throughout the world. Beiersdorf employs more than 21.000 employees worldwide.

Beiersdorf has a clear goal: they want to be as close as possible to consumers. The focus of Beiersdorf is fulfilling consumer’s wishes and needs with regard to skin and beauty care. Beiersdorf therefore tries to provide consumers all over the world with forceful and innovative products. Beiersdorf had many international brands. Some of them are: Nivea, Eucerin and La prairie. Next to this, other brands such as Hansaplast, Labello, 8x4 and Florena are sold as well. (Company report Beiersdorf).

2.2 Mission, objective and strategy of the company

2.3 Derma & Personal Healthcare: Eucerin

2.3.1 Background

Eucerin is one of the leading derma-cosmetic brands in America and Europe. Eucerin works closely with dermatologists and Eucerin develops products for different skin needs. The effectiveness and skin tolerance of these products has been documented in clinical studies.

Isaac Lifschutz is the founder of Eucerin. In 1900 he made a world-shattering medical discovery when he developed Eucerin. Lifschutz managed to create an extreme long-lasting, smooth ointment with the name Eucerin (www.eucerin.nl). In the years that followed they tried to improve Eucerin constantly. This ultimately resulted in an additional amount of twenty patents. Prof. dr Unna, in those days the nestor of modern dermatology, found the Eucerin crème brilliant and described an euphoric note in 1907: "Thanks to its creamy texture and cooling effect, patients find Eucerin extremely beneficially – as do pharmacists for its durability and creamy consistency and doctors for the fact that it is so easy to prescribe" (Company report Beiersdorf). In 1911, the first product ‘Eucerin Powder’ was launched. Eucerin Soap followed in 1930. Another highlight was the pH5 Eucerin Crème. This crème focused on the importance of the skin’s own natural protective acid barrier in maintaining good skin health. Nowadays, this aspect still plays a key role in medical skin care. In the seventies, Eucerin achieved success with its medical pH5 body lotions. The pH5 Eucerin crème Shower oil was developed which was the first shower oil that protected skin from dryness during washing. Innovations followed each other up, and in 1996, Eucerin entered the most important area of skin care; face skin care. Today, Eucerin is a medical skincare brand with products for all skin types - offering a wide range of products designed for prevention as well as treatment (www.eucerin.nl).

Eucerin has a clear vision. Eucerin focuses on preventing and solving a wide range of skin-problems. The products of Eucerin are developed together with dermatologists and do not possess unnecessary ingredients. All products are clinically proven and have a high skin tolerance.

Next to this, only well documented skin-own fibres are used, which guarantees effective protection and care (Company report Beiersdorf).

2.3.2 Product assortment

‘Eucerin encompasses five different product lines, all developed for specific skin problems. 1) Sensitive Skin

2) Sensitive Facial Skin

These products are effective cleansing and care products with specific ingredients for the specific need of sensitive facial skin that is also prone to irritation. All products are perfume-free and without coloring agents.A special product within this product line is Anti-Redness. Anti Redness is developed for the most sensitive, red skin with couperose or rosacea. One important ingredient is Licochalcone; a calming extract which consists of intensive hydrating ingredients.

3) Anti-Age

Eucerin Anti-Age is for the mature skin and strengthens its physiological functions with dermatological effective ingredients. All products are perfume-free and developed to reduce signs of ageing.

4) Impure Skin

The products from Eucerin Impure Skin are developed for directly combating the causes of impure skin. They possess the unique ingredient acid which works anti-bacterial and hydrates the skin intense. Next to this, the products are suitable as supplementary acne treatment.

5) Dry Skin

Eucerin Dry Skin offers special solutions to dry and atopic dry skin problems. All of the products within this product line are perfume-free.’ (www.eucerin.com)

2.3.3 Market results

2.4 Competition

The competition within the derma-personal healthcare market is fierce. Eucerin has to cope with a few big players and other smaller players as well. Vichy and La Roche Posay (LRP) – both part of L’oréal – are the two biggest competitors of Eucerin. Next to these two brands, other smaller derma-cosmetic brands are available in the pharmacy. These brands all have a different focus and centre their efforts on different product groups which makes it hard to display the competition field and to determine which competitor to keep in mind when making marketing decisions.

Vichy: The products of Vichy all contain Vichy ‘Thermal water’. This special water is Bacteriological pure and is since the 17th age known in the medical world because of the therapeutically working. The products try to stimulate the natural protecting system. These products are only available in pharmacists. La Roche Posay: La Roche Posay is the first Dermatological Thermal Centre in Europe where more than 10.000 people with skin problems are being treated each year. These products contain ‘Thermal water’ as well. This water has an active ingredient – selenium – which has unique anti- free radical features. This water has calming, recovering and relieving characteristics. The products of La Roche Posay are only available in pharmacists. The competition field – focused per product group - is presented below:

Figure 3: C ompetition field Eucerin

Figure 4: MAT May 2007 vs MAT may 2008 (IMS MAT May 2008).

The graph below (figure 5) presents the market shares of Eucerin compared with La Roche Posay, calculated from may 2007 to may 2008. While La Roche Posay stays stable to a certain extent for the period of May 2007 till May 2008, Eucerin is growing. This is – as mentioned previously – mainly due to the introduction of Eucerin Anti-Redness and the sales within the Anti-Age segment.

Figure 5: Market share of Eucerin vs LRP (IMS MAT May 2008).

-2%

-41%

-4%

-37%

+ 20

Totaal Vichy Eucerin La Roche-Possay Biodermal Balneum

S a le s x € 1 .0 0 0

,-+ 114

2.5 Pharmacy market in the Netherlands

The pharmacy market in the Netherlands is completely different compared with the pharmacy market in other countries. It can be argued that the Dutch pharmacy-market is a bit conservative. The retailing concept is still under development (internal reorganization in mind-set), although pharmacists declare there is a strong will to change (Company report Beiersdorf). Furthermore, it can be concluded that the commitment of pharmacist-assistants is low and that the employees are not used to sell and advise products pro-actively. Pharmacists and their assistants need sales support in order to be actively involved in the selling process of Derma-cosmetics.

Within the pharmacy market in the Netherlands, the amount of pharmacies is growing (+2.3%) (Company report Beiersdorf). The total amount of pharmacies at the moment is around 1900 (AC Nielsen report, March 2008). There has never been reached such a growth within this branch compared with preceding years. Due to the growth in pharmacists, the average population rate per pharmacist has been decreased to 8.000 on average.

A couple of trends within the pharmacy branch will be described. First of all, it can be reported that the interest for the study pharmacy has been increased – after years of decreasing numbers of students. In 2006, a record number of 448 firs-year students have started with this study. The feminisation of the pharmacist branch can be seen within the students: 59% of the registered students are woman.

Secondly, more and more pharmacists are using a special robot that is able to collect medicines and delivers them at the counter. By doing this, the pharmacists and the assistants are able to pay enough attention to their customers. The internet pharmacist is a rising phenomenon as well. However, during 2007 several internet pharmacies came into bad light because of the heavy medicines that were written by digital consultation and the risks that exist with this way of medical consultation.

Another trend is that more and more pharmacists commit themselves to chains. When having a commitment with a chain - often linked to a wholesale - a pharmacist is capable of focussing their attention more at the ‘care task’. The commercial mode of operation can be given to the professionals within the chains. The market share of the public pharmacists grew compared with the pharmacist-holding general practitioners. In 2006, the market share was around 92%. The market share of generic medicines has been increased to 54% in 2006 as a result of the convenant of 2006/2007 (www.rabobank.nl).

of pharmaceutical prefixes) this means that the total of medicine usage will increase by 13% which offers chances for Eucerin, since more and more consumers will visit the pharmacist since they need more medicines (ww.cbs.nl).

Another trend that can be reported is the fact that more and more drugstore chains are planning to enter the pharmacist branch or have already entered this market. The results are mixed. Next to this, the internet-pharmacist continues to grow, again with mixed results.

When looking to the future, analysts report that commercial chain development andcollaboration will be key to success. Cooperation with other pharmacists, wholesalers or the general practitioner, will offer opportunities. The liberalisation of the market has resulted in the fact that existing market parties – particularly big pharmaceutical traders – have extended their market position by buying up and setting up pharmacist-chains. This development reduces the number of pharmacists owned by a pharmacist owner. The percentage of self owned pharmacists was 66% in 2006 compared to 70% in 2005 (www.rabobank.nl).

Another future development can be reported and has to do with the ‘Preference Policy’. This policy means that only the cheapest medicine alternative within a certain group medicine will be compensated by health insurances. On the one hand, this can lead to more over the counter sales because they will earn some more money from other things than medicines; on the other hand, since the pharmacists will earn less money presumably they can decide to add more and more products (e.g. from drugstores and competing brands) to their assortment (IMS report, may 2008).

The expectation is that pharmacists will experience more and more competition of mail order and the internet. The concept of internet pharmacy is based on the fact that up to 70% of the medications are reprise recipes. At this moment, the development within this category is not yet at full speed – mainly because of the fact that the biggest amount of consumers (elderly) not has access to the internet and besides, a lot of elderly attain much value to personal contact. Branch organisations and other stakeholders such as general practitioners are sceptic about the developments. The KNMP (Koninklijke Nederlandse Maatschappij van de Pharmacy) considers the internet pharmacist as dishonest competition, because the internet pharmacist provide no acute orders during evenings/nights and weekends, furthermore they do not provide counselling/advice conversations. Because of this the expensive, labour intensive operations are still for the apothecaries. Many general practitioners are also afraid for the upcoming internet pharmacists. They fear that patients order recipes and receive them without their whole medication file being examined by the doctor or apothecary.

2.6 Summary

Beiersdorf is a leading international company of branded consumer products for skin and beauty care. Their focus is on fulfilling consumer wishes, and, at the same time they want to increase their market share through qualitative growth. One of the many brands that is put on the market in the Netherlands is Eucerin. Eucerin is a derma-cosmetic brand, which products are developed together with dermatologists. Eucerin offers different product lines for different skin problems. The effectiveness and skin tolerance of these products are all documented in clinical studies.

Even though the derma-cosmetic market is under pressure with -1.9% MAT; Eucerin is growing, both in terms of profits as in market shares. Eucerin is the fastest growing brand with 114% and is remaining the 2nd _{position in the market.}

Looking at the competition field, it is clear that Eucerin has many competitors, all present at different product fields. Their two biggest competitors are La Roche Posay and Vichy. Although Eucerin performs better than La Roche Posay at the moment; it is important to keep a close eye on this competitor, since they are aggressively trying to broaden their distribution channels which will in the end have a negative impact on Eucerin.

3. Segmenting a consumer market

3.1 Introduction

Executing marketing in developed countries requires anticipating on consumers. Segmentation has become one of the most fundamental concepts when building up an effective marketing strategy. The choice of a segmentation bases as well as the choice for the segmentation methods is of influence on the identification of segments. Therefore, the selection of the right segmentation bases and the right segmentation method is of big importance (www.moaweb.nl). This chapter starts with a description of the market segmentation concept. Subsequently, the different ways how a market can be segmented and how different segments will be evaluated and selected will be presented.

3.2 The market segmentation concept

3.2.1 Development of the segmentation concept

3.2.2 Definition of market segmentation

Although a lot has been written about market segmentation, defining it is still rather difficult. Besides the fact that defining market segmentation is not easy, there exist two distinct theories with regard to the application of the concept within the literature. According to Plank (1985), market segmentation in the earlier years was meant for strategic orientation. However, when marketing literature extended, more qualitative techniques became available and segmentation was seen as a research-technique. In the article of Plank (1985), a distinction has been made between the definition of Kotler (1991) and the definition of Schiffman and Kanuk (1978). The definition according to Schiffman and Kanuk is based on the assumption that market segmentation is a process which is able to distinguish segments but next to this, assigns resources to the different segments. Kotler (1991) however, argues that segmentation is an analytic method for segmenting the market. After segments have been found, the best segments can be evaluated and selected by means of target marketing. This definition shows that segmentation is an analytic tool, where the segmentation process and the assigning process of the resources to the different segments are two different phases. The difference between these two definitions is not immense; both definitions focus on the fact that a market needs to be segmented in order to select the best segments. The difference is that Kotler (1991) sees it as a stepwise tool and Schiffman and Kanuk (1978) see it as a process. Although the definition of Kotler is used most often, more definitions can be found.

According to Barnett (1969), segmentation can be seen as a consumer group comprising a market for a product that is composed of sub groups, each of which has specific different needs or wants. When subgroups are identified, marketeers can improve marketing efforts by more closely approximating the needs of each subgroup. Fennel and Saegert (2000) analysed the definitions of twenty different books. Their analyses show that there are differences in the interpretation of the term ‘market segmentation’. They compared the term market segmentation on three different aspects, namely: ‘how formed’, ‘relevant collective’ and ‘basis/purpose of segmentation’. How formed means how the different segments are identified. Relevant collective is the method by which the consumers are segmented. Basis/purpose of segmentation meand what the goal/ purpose of the segmentation process is.

The literature illustrates that no univocal description exist for the term segmentation. Most of the authors have their own opinion/description of what segmentation exactly is (Plank, 1985, Dibb and Simkin, 1997, Fennel and Saegert, 2000, Kotler, 1991). However, as with most of the definitions becomes apparent; the thoughts that are behind the concept are that it is about segmenting a market, where some variables will serve as bases for segmentation. The segments that follow from this segmentation will be evaluated where after some of the segments are selected to approach.

3.2.3 Market segmentation as a strategy for organisations

Meyers (1996) has developed a strategic marketing planning process which forms the basis for developing marketing strategies (figure 6). When starting a strategic marketing planning process, an organisation will have a mission/target that needs to be reached. To be able to accomplish the goal; the organisation should identify which opportunities a market offers. To help identify the chances in the market, market segmentation can be helpful. That’s why the market segmentation process often is part of a strategic marketing planning process.

Figure 6: Strategic marketing planning process (Meyers, 1996).

The market segmentation process in literature is often described as a chain of three different phases that are all need to be fulfilled to be able to segment the market and to be able to develop strategies that fits with it (Kotler, 1997). The three different phases all consist of two core points (figure 7).

Figure 7: Identifying Market Segments and Selecting Target Markets (Kotler 1997).

The three phases are:

- Market segmentation: within this phase of the market segmentation process, the segmentation variables are selected who are of any importance for the research. A segmentation model will be build that will be used when segmenting the market. After the market has been segmented, the segments needs to fine-tuned with secondary information which will make the profiles as complete as possible.

- Selecting the target market: after segments are identified, the attractiveness of the different segments needs to be determined. After the different segments are evaluated on the bases of their attractiveness, the best segments will be chosen to use as target group.

- Market positioning: when target groups are selected, positioning concepts needs to be developed for every segment. The positioning concepts will be comparedwith the organisational objectives whereafter the positioning strategy that best fits the organisational objectives will be chosen.

The following paragraphs will shortly discuss the first and second phase of the market segmentation process. The last phase (market positioning) will not taken into account within the scope of this thesis. This phase is too immense to be able to handle this within the time lines of the thesis.

3.2.4 Advantages and disadvantages of segmentation

In business life, segmentation as marketing strategy is applied often. This is due to the fact that markets became more heterogeneous. On the other hand, another reason why many organisations segment their markets is because of the many advantages it brings along (Wind, 1978; Hooly and Saunders, 1993; O’Connor and Sullivan, 1995; Dibb and Simkin, 1997). An advantage, when carrying out segmentation, is that an organization will get a ‘clearer/more fresh view’ of already existing core markets. Next to this, insights can be gathered in the needs and the buying behaviour of the target groups. It can show which segments are the most attractive. Furthermore, company resources can be divided more optimal, where the most important segments will get the most resources. Appropriate marketing programmes can be developed and the organization will be more market focused. Transformations will be more visible and competitive advantage can be exploit since the organisation is capable of choosing segments that best fit the own resources.

segmentation in literature and in the field. Unfortunately, different disadvantages can be pointed out (Hooley and Saunders, 1993):

- Missing of scale advantages.

- ‘Tunnel vision’; too many attention focused at one segment as a result of which other segments are lost out of sight even though they can be profitable as well.

- Costs that are in line with the development of new strategies, since every segment ask for a different strategy.

Organisations should critically ask themselves whether they should segment or not. There should be a consideration between economies of scale and the costs for developing a single market strategy and the homogeneity of the needs of the market and the possibleassets (Hooly and Saunders, 1993).

3.3 Segmentation of the consumer market

The first step of the “Identifying Market Segments and Selecting Target Markets” model (figure 7) is market segmentation. The two core points within market segmentation are:

- Identification of the segmentation variables and segmenting the market

- Development of the profiles for the different segments.

To be able to segment the market and to profile the segments, a segmentation model needs to be set up (Wind, 1978). The segmentation model ensures that the segmentation process has a structure, since it shows the different phases before segmentation can take place.

3.3.1 Identification of the segmentation variables and segmenting the market

The segmentation model starts with the identification and selection of the segmentation-variables which will be used by segmenting the market. The identification and selection of the segmentation-variables are perhaps one of the most important decisions within the whole market segmentation process since these variables form the basis of the further course of the research. Since variables that are used for segmenting the consumer market possess other characteristics than the variables that are used in a business-to-business context, the literature makes a distinction between consumer segmentation variables and business-to-business segmentation variables.

- Geographic variables

- Demographic variables

- Psychographic variables

- Attitudinal & behavioural variables

Figure 8: Criteria to segment consumer market

Geographic variables:

Within this category the market can be split up into: Federal state, region, province, city, nation etcetera. This variables are mainly of importance when companies want to make decisions with regard to sales, distribution (choice for new place to settle down), and advertisements (choice between rural/regional media). Furthermore, international life-styles can be researched such as a cross-cultural research towards mentality.

Demographical variables:

Within this category, variables such as age/life phase, gender, children, income, occupation, education, religion and nationality are important. These are the most widely used segmentation variables since they coincide closely with people’s needs and wishes. These variables are also easier to measure then other variables. You need them anyhow as a verification point to be able to estimate the reachableness and target group.

Psychographic variables:

Within this category, variables such as social class, lifestyle and personality come into view. Lifestyle consists of the way people spend their leisure; the subjects they are interested in; the opinions someone has and the values they find important.

Attitudinal & Behavioral variables:

Within this category, the market can be divided, based on:

- Purchase occasion / use-moment (Regular, occasion, special occasion)

- Benefits sought (Quality, service, economy)

- User status (Non-user, ex-user, potential-user, first time-user, regular user)

- Usage rate (Light user, medium user, heavy user)

- Loyalty status (None, medium, strong, absolute)

- Readiness state (Unaware, aware, informed, interested, desirous, intending to buy)

- Attitude towards product (Enthusiastic, positive, indifferent, negative, hostile)

Our society has tremendously changed in the preceding years. Therefore, consumer segmentation must modify as well to be able to commit more effective marketing (Cendris, 2008). In the last couple of years,

the number of elderly, immigrants and working couples has increased considerably. This forces marketeers to segment differently. The Netherlands, just like every country in the world, is changing continually. There is a lot of ageing in the society and the Netherlands became more multi-cultural for example. Interests and lifestyles also go along with the time. This means that the basis on which to segment must grow along with this changed situation. For that reason, segmentation based on socio-demographics, the most used method, is inadequate within the current society. To be able to get a complete picture of the target group, more lifestyle features should be taken into consideration. Cases such as social class, level of education, income class etcetera are not sufficient anymore. The interests, opinions and activities of consumers are more and more important. When having insights in these attributes, this will lead to a better understanding of your consumer and makes it possible to employ marketing campaigns more effectively and efficiently.

Because a consumers lifestyle bears such influence upon his or her purchasing decisions, this concept has attracted researchers attention as a distinct and formalized basis for segmentation itself (Berkmans and Gilson, 1974). For markets within the Fast Moving Consumer Goods branche, lifestyle segmentation is a good choice. Lifestyles of consumers can be very predicting for their buying behaviour, media-consumption and their sensitivity for communication.

AIO item Statements faced in questionnaire 1. Price conscious - Ik maak me vaak zorgen over geld

- Ik let op speciale aanbiedingen in winkels - als ik boodschappen doe let ik op iedere cent - hoe duurder hoe beter (4) (reversed scored)

- Ik koop altijd het goedkoopste product voor gezichtsverzorging, los van het merk

2. Health oriented - Ik ben trots op mijn huidconditie

- Ik probeer mijn huid in de winter te beschermen - Ik zie er graag altijd goedverzorgd uit

- Mijn huid heeft regelmatige verzorging nodig - ik beschouw mezelf als gezond

- Als ik een merk heb gevonden dat ik prettig vind blijf ik daarbij - wat betreft schoonheidsproducten gebruik ik liever bekende merken dan huismerken

- ik koop liever producten die mijn huid basisbescherming bieden

3. Appearence: Fashion & Beauty conscious

- Ik bezoek regelmatig beautysalon - Ik besteed uren aan tutten

- Ik koop alleen producten die er aantrekkelijk uitzien in het schap - Ik koop alleen de beste merken die er zijn

- Ik gebruik anti-rimpelcrème als onderdeel van mn dagelijkse routine - ik heb het idee dat ik af en toe een spannend leven leid

- Ik vind het leuk om veel geld uit te geven aan schoonheidsproducten

- Ik blijf op de hoogte van de laatste mode - Ik doe wat ik kan om er jong uit te zien

- Wat schoonheidsproducten betreft wordt ik beïnvloed door reclame - ik beschouw mezelf een expert op het gebied van nieuwe

technologieën

- Het is noodzakelijk dat ik er altijd mooi uitzie - Ik zit regelmatig op het internet

4. Child oriented - Mijn kinderen komen op de eerste plaats

- Ik stel mijn gezinsbehoeften boven mijn eigen behoeften - Ik koop producten die het hele gezin kan gebruiken - Ik wissel vaak van merk

5. Career minded - Mijn carrière is een belangrijk deel van mn leven

- Mensen zullen waarschijnlijk zeggen dat ik ambitieus ben - ik plan mijn toekomst

- ik hou van verandering

- ik houd van een avondje stappen in de kroeg - Ik beschouw mezelf als bijzonder stijlvol

6. Everything in moderation - Ik heb niet genoeg tijd voor mezelf - mensen moeten me nemen zoals ik ben

- ik geef de voorkeur om milde baby producten te gebruiken voor mijn huid

- Traditionele waarden zijn zo gek nog niet

- Het geheim van je goed voelen is alles met mate te doen - Ik doe dingen graag op een vaste manier

- ik koop producten nooit impulsief - ik heb last van huiduitslag

Of course, in the end, the target group needs to be profiled on all the different descriptive levels. However, in this research the main focus is on psychographics, and especially on lifestyle, as a targeting criterion, because these data are of most value for brand and communication managers. Hornik (1989) argues that the basic premise of psychographics is that the more we know about people’s lifestyle, the more effectively there can be communicated with them.

3.3.2 Development of profiles for the segments

After the market has been segmented, the different profile outlines need to be developed in order to get a more complete picture of the target groups per segment. The profile outlines should be as complete as possible to make the marketing strategy easier to define. For the different profile outlines, other segmentation variables can be used as well, like for example demographic or geographic variables, or others who are able to complete the profiles. The elements that are taken into account in the segment-profiles should be relevant and sharp; they should be able to make a distinction between close looking segments. To be able to develop these profiles information is needed with regard to:

the segment in total (% sales total market, amount of customers, competitors, factors that influence the derivative demand)

communication behaviour

buying behaviour (buying criteria, price sensitivity)

3.4 Choosing target markets

The second step of the market segmentation process is choosing the target markets. The two core points of this phase are the evaluation of attractiveness of the segments and choosing which target market to approach.

3.4.1 Essential criteria for segments

The first step in evaluating and selecting the segments is to control whether segments live up to certain criteria. According to Dibb and Simkon (1996), segmentation can be carried out on several ways. However, for the segmentation process to be successful, segments should live up to certain criteria (Hooley and Saunders, 1993; Kotler, 1997). Segments need to be:

- Measurable: segments should possess characteristics that are measurable, such as purchasing power and scope.

- Substantial: the segments should be of sufficient scope in such that it is useful to approach these segments.

- Stable: the segments should be stable for a long time period.

- Actionable: it should be possible to develop effective marketing strategies for the target groups within the segments.

- Accessible: it is necessary that the segments can be approached in an effective way.

- Differentiable: the target groups within the segments should react on the same manner on a certain marketing strategy.

It can be argued that it is important that every single segment satisfies the requirements. When a segment doe not fulfill all the criteria mentioned above, it is very likely that the segment will not contribute to the development of a good strategy.

3.4.2 Evaluation theories

Which procedure to follow when evaluating segments can not be found in literature. Most researchers focus their efforts on the first step of the market segmentation process, namely to find out the best variable on which the market can be segmented. Sarabia (1996) argues that the literature with regard to the evaluation and selection of segments is undersized. Furthermore, she argues that the second step of the market segmentation process is often incomplete. Sarabia (1996) introduced a model to evaluate and select the segments and consists of four different analyses-phases.

- Sales potential

- Level of risk from the environment (social, political, technological, economic and cultural)

- Stability of the different segments

- Level of homogeneity within the segments

Phase 2: Analyses of the organisation in relation with the segments. This phase decides whether the organisation is capable of taking proper decisions. The most important variables within this phase are:

- Fervour for every segment

- In what way the organisation is proof against competition within the segments

- The level of change with regard to the marketing mix

Phase 3: Analyses of the effects that are caused due to the organisational decisions. In this phase, there will be looked which effects organisational decisions can cause when choosing a fixed segment. Two questions are important:

1) What is the effect of decisions on segmentation characteristics, when the decisions were truly taken?

2) What is the level of differentiation when the decisions were truly taken?

Phase 4: The final evaluation and construction of an evaluation matrix. Within this last phase, a final evaluation is needed of the individual segments. The used variables need to be checked one last time.

The model of Sarabia (1996) is very complex. A lot of time and effort is needed to find out the accurate information. A less complex way to evaluate segments is to evaluate them on certain factors (Hooley and Saunders, 1993). They argue that with the evaluation of segments attention must be paid to four different categories:

1) Market factors

2) Economic and technological factors 3) Competitor factors

4) Environmental factors

not all of them will be used since some of the analyses are not appropriate for certain situations and because they are time consuming.

It can be concluded that it is situation-dependent on which way evaluation of a segment will be chosen. The possibility exists that variables of the diverse theories are combined in order to have a situation-specific theory.

3.4.3 Selection theories

The amount of segments to be selected depends on different factors. First of all, the objectives of the organisation should be taken into account. Based on these objectives, there can be decided how many and which segments should be approached. Another factor is to look at the ‘match’ between the assets of the organisation and the segments. The best situation is to approach the segments that fit best the organizational assets. There are other factors that can play a role when selecting the segments. Some of those can differ per organisation. When looked at the objectives of the organization, a couple of strategies can be valuable in the determination of the amount of segments that will be selected.

Single segment. The single segment approach is the simplest way to determine the amount of segments, since only one segment is chosen to approach. The single segment approach looks after that an organisation collects al lot of knowledge with regard to their consumers. Because organisations specialize themselves, they can reach economies of scale. Within the single segment approach, the risks lies in the fact that when a segment does not offer enough profits, the organisation has no possibilities left and should start over with the search for other segments.

Niche marketing (Kotler, 1997, Kara and Kaynak, 1997). Segments consist of giant identifiable groups within a market. A niche market is a better defined market, in which the needs of the buyers not or not sufficient are served. Often, a niche market is small and is most of the time a subdividing of a segment that all have a specific set of needs and all want the same advantages. An attractive nice market has certain characteristics: - buyers need a specific and complete set of needs, - buyers within a niche market are willing to pay a higher price for the specific service, - there will be few competitors within this market, - the niche market should have enough volume to be profitable and to be able to grow in the future (Kotler, 1997).

Product specialization This strategy serves segments with only one product/service. This strategy takes care that the organisation builds up strong brand awareness. The risks lie in the fact that the product/service can be replacedby another product/service.

Market specialization. With this strategy, the organisation serves all needs of a certain customer group. The organisation can build up strong brand awareness within that customer group. A disadvantage is that the possibility exists that this customer group will cut down expenses.
Complete market coverage. With this strategy, the organisationserves the whole market. This is

only feasible for large organizations. An example of this is mass marketing.

Individual Marketing. The ultimate level of segmentation is individual marketing. With this strategy, segments are formed from one target group. By doing this, all segments can be approached just since the quotation is exactly synchronized on what the individual target groups want. A well known kind of individual marketing is Mass customization. Mass customization is the possibility to produce individual products/services en masse (Kotler, 1997).

Local Marketing. With local marketing, marketing strategies are adapted to the needs of the local target group. The reason for local marketing is that target groups differ at a local level. An example is that a national advertising campaign can miss its goal when adapted at a local level.
Micro Marketing. Micro marketing is based on the developments within the information

3.5 Research model

Below the research model for this study is presented (figure 9). The research will start with the management problem. Afterwards, data will be gathered. This will be done by an extensive literature research. Based on this information, the right segmentation method will be determined and a quantitative research will follow. This investigation ends with the selection of potential segments based on the following criteria: Use of cosmetic products, usage of Eucerin, awareness of Eucerin, pharmacy penetration and Eucerin potential. After the potential segments are determined, recommendations will be given how to reach these segments and how to make sure that sales will grow.

Important to note, is that the positioning decision and an extensive marketing mix proposition do not fall within the scope of this thesis.

Figure 9: Research model

Search for and select information Management needs Determine segmentation method Quantitative research Evaluation Description Creation of segments Conditions for segmenting Selection Marketing mix development Positioning decision

Segmentation research level

3.6 Summary

Since the article of Wendell Smith (1956), researchers and organisations started to realise that the market was no longer homogeneous. The target groups of the market differ in needs. Satisfying these needs can be done by many ways. Organisations more and more understood that not the whole market can be served with the same marketing strategy and/or the same product. Organisations should make choices with respect to which target group they are willing to approach and in the next phase they should adjust their marketing strategies and products to these specific target groups.

Due to the article of Wendell, the fascination for the segmentation concept grew enormously. It became one of the most important pillars within the marketing literature and has been used many times in many organisations. Although there is done a lot of research with regard to segmentation; there is no clear definition of the word ‘segmentation’ it selves. Different researchers all gave their interpretation of what segmentation is. The definition of Kotler (1997) has been used extensively within the marketing literature and is accepted as the definition of segmentation. According to Kotler (1997), segmentation is a process, namely the market segmentation process, which consists of three different phases. Phase one: market segmentation, phase two: selecting the target market and phase three: market positioning.

For the practical execution, Wind (1978) developed a segmentation model. This model discusses the most relevant issues when carrying out segmentation. The most important step is the choice of the segmentation variables. This forms the bases on which the market will be segmented. There are many variables which can serve as segmentation bases.

Within consumer segmentation variables, four different categories can be distinguished (Kotler, 1991). These four are: geographic variables, demographic variables, psychographic variables and attitudinal & behavioural variables. In this research, the consumer market will be segmented by means of lifestyle, which is a subpart of psychographic variables. After the market has been segmented, the different profile outlines need to be developed in order to get a more complete picture of the target groups per segment.

4. Research design

4.1 Introduction

Chapter three gave insight in the segmentation process. The chapter started more theoretic but became more practical in the end. This chapter will deal with the empirical part of the thesis. The method of research will be discussed, which will make the design of the research clear. Next to this, the methods that will be used to analyze the results will be discussed.

Beiersdorf has carried out an extensive research internationally with regard to the face- and body care market. Based on this research, women are segmented into seven different segments. These groups differ with regard to attitude and product and brand-usage. However, this research is not focused on the Netherlands, too general and cannot be applied on Eucerin specific. It has too little value for Eucerin to build a decent strategy upon this information.

Eucerin should – based on previous research – execute a new local research that will provide enough handles to coordinate and further improve the marketing policy.

The company objective is to extend the current market share by adapt to attitude and behaviour. The research objective is to develop consumer segments in order to better tune the current marketing policy. On the one hand, this research will give a description of the different segments, focused at lifestyle and complemented with demographics and usage of Eucerin and her direct competitors. On the other hand will this research have an ‘advising’ function; ‘how to approach the potential target group to heighten the buying intention’.

4.2 Methods of research

To be able to carry out a research, different methods can be used. Dependent of the research goal and factors such as time, money and expected results the method that fits the research best will be chosen. Some methods that are often used are Enquete; Experiment; Qualitative research; Quantitative research or Literature study (Maholtra, 2006).

4.3 Quantitative research to segment the Eucerin consumer market

Quantitative research gives numberbased insights and gives in general answers on questions that can be expressed in quantities. Furthermore, quantitative research is also used often to be able to judge certain products. To do statistical reliable pronouncements, large groups have to be interrogated. When executing quantitative research, this is always done by means of an enquete. Within this enquete/questionnaire, the research question or the problem of the initiator is operationalized into questions to the target group. The results of a quantitative research are usually presented within tables, graphs and percentages.

4.3.1 Online questionnaire

The research for Beiersdorf will be done by means of an online questionnaire. The choice for an online questionnaire is based on different aspects. According to Maholtra (1999), the internet is a good medium to acquire the needed information fast and flexible. Next to this, the speed with which the data are processed and are transparent is a big advantage. Moreover, the respondent can decide when he/she takes part in the research. Furthermore, online research is experienced as easy and user-friendly and there shall exist less ‘missings’ or ‘errors’ because of the builded quality controls within the system and the guardiance of the script. For our research it is essential to show some pictures; this is possible with online questionnaires as well.

4.3.2. Target group and scope of the sample

Since Eucerin is a dermatological brand it has very specific users. Therefore, the respondents who will be selected have to live up to certain criteria. There should be:

 Woman who use Eucerin

Under these respondents, woman will be selected that used Eucerin at least ones in the last 12 months.  Woman who buy face- and or body care products in the pharmacy

Under these respondents, woman will be selected who bought face- and or body care products in the pharmacy at least ones in the last 12 months

 Woman who have skin problems

Under skin problems, woman fall who have a greasy, mixed, dry to very dry skin, or a sensitive skin.

4.3.3 Design of the questionnaire

In the pre-screening part of the questionnaire, some specific questions were asked to decide whether the consumer belongs to the target group or not. Based on these outcomes, consumers were (or not) selected for the follow-up research. Consumers that used Eucerin (at least ones in the last year), consumers who bought certain body and/or face care products in the pharmacy and/or consumers who have a certain skin problem were selected.

The first part of the questionnaire focuses on brand awareness and brand usage. The second part of the questionnaire consist of propositions with regard to Eucerin. Within this part, the attitude towards Eucerin has been tried to discover. In the third part, questions regarding awareness and usage of the different productlines of Eucerin are asked. In the fourth part, questions are related to retail channels.

In addition to the usual demographics and questions about a variety of products and the other questions mentioned above, the questionnaire contained 45 ‘activity, interest and opinion’ statements to which the respondent indicated degree of agreement on a 7 points likert scale. For instance, the first statement is: “I regulary visit a beauty salon” and the respondent can answer on a scale that runs from 1 (definitely disagree) to 7 (definitely agree). The statements cover a wide variety of topics, including day-to-day activities, interests in fashion, health and cosmetics and opinions on many matters of general interest. Based on all these 45 propositions, consumers will be segmented. Please see for a detailed overview of the questionnaire appendix 9. The last part of the questionnaire focuses on different media channels and how consumers want to be reached in the future.

4.4 Data collection

The data will be collected – as mentioned previously - by means of an online questionnaire. In order to be able to select the right respondents for these questionnaires we will make use of the E-panel of Synovate. Synovate is a professional company that can help to meet our commercial challenges by gathering facts. For this research, we asked Synovate to distribute our questionnaire to their e-panel. Synovate invited people from their panel for participation by an email with the link to the research. The

Research target group N = 595

Pharmacy buyers and/or woman with skin problems

respondents who did belong to the described target group -and successfully passed the pre-screening - received an invitation for the continuation research. The data of the continuationpart was collected within 2 weeks.

4.5 Methods of data-analysis

Now the data collection plan has been described, this paragraph will portray which analyses will be relevant for this research.

4.5.1 Factor analysis

The first analysis to be executed will be a factoranalysis. From the raw data that Synovate has collected, the 45 AIO statements will be reduced to less factors by means of a factor analysis. By doing this, the large amount of variables - most of which are correlated - can be reduced to a manageable level. Relationships among sets of many interrelated variables are examined and represented in terms of a few underlying factors.

4.5.2 Cluster analysis

Like factor analysis, cluster analysis examines an entire set of interdependent relationships. The primary objective of clusteranalysis is to classify objects into relatively homogeneous groups based on the set of variables considered. (Beane & Ennis, 1987). Members of a certain cluster have equal scores on the measured variables. Doyle and Hutchinson (2007) argue that clusteranalysis is superieur to lineair regression analysis when executing market segmentation. The proces of clusteranalysis has been presented below (figure 10):

Figure 10: Model clusteranalyses (Maholtra, 2007)

In the first step, there will be decided which variables are taken into account in the cluster analysis. This is a very important step, since the presence of irrelevant variables or the missing of important variables can disturb the results of the research. The second step is the selection of an appropriate distance measure. Next to this, outliers should be detected and if found, deleted. The third step is the selection of a clustering procedure. For different situations, different methods are suitable. After these steps are succesfully fulfilled, the amount of clusters should be determined. This can be done by several ways. In this research, the amount of clusters will be based on the dendogram. After this step, the clusters have to be interpreted and the clusters need to be profiled. The final step is validation.

4.5.3 Descriptive statistics

5. Results of the analyses

5.1 Characteristics of the respondents

To be able to know which consumers took part of the online research; a few typical characteristics of the consumer groups will be described. In appendix 1 a complete overview of the characteristics of the respondents is given. All of the respondents are woman. Nearly half of these woman are between 50 and 64 years old. 33.3% of the respondents is between 35 and 49 years old. 18.8% of the woman has an age between 18 and 34 year. Around one third of the respondents is highly educated and 40.7% is middle educated. When looking at the household size of the different respondents; it becomes clear that 22% lives on her own, around 37% lives with a partner, 17% lives with a total of three, and nearly 20% lives with four or more.

Most of the respondents (30,1%) live in the western part of the Netherlands, whereas 24.2% in the southern part live. In addition, many woman (20.5%) live in the East of our country. 217 respondents (36.5%) work in the paid employment and 18.3% is housewife. A complete overview of the characteristics of the respondents is given in Appendix 1.

5.2 Factor analysis

The 45 propositions displayed in chapter three can be further analysed by means of factor analysis. By running factor analysis we will be able to look whether there are common grounds and we will be able to determine which common variables of the different propositions are appropriate to take further into the segmentation process. In figure 11, an important part of the output is presented: the KMO measure of sampling adequacy and Bartlett’s test of sphericity. The KMO statistic varies between 0 and 1. A value of 0 indicates that the sum of partial correlations is large relative to the sum of correlations, indicating diffusion in the pattern of correlations. This tells us that factor analysis then is likely to be inappropriate. A value close to 1 indicates that patterns of correlations are relatively compact and so factor analysis should yield distinct and reliable factors. Kaiser (1974) recommends to accept values greater than 0.5. Values above 0.9 are superb according to Hutcheson and Sofroniou (1999). Therefore, it can be concluded that factor analysis is appropriate for these data.