Thus our final segmentation contains four categories :
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Social drinkers
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Penny pinchers
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Conoisseurs
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Experimenters
Market segmentation
To establish the segmentation of the spirits market we started brainstorming together. We thought about different types of spirits consumers and completed a segmentation sketch after conducting research on the internet and interviews in bars. Before continuing the analysis, we would like to clarify that this segmentation is only that of the spirits market and does not include the beer and wine one.
Our initial idea was a simple segmentation based on socio-economic and demographic factors like age, revenue or gender. However, we rapidly eliminated this solution as these factors didn’t correctly segment the market Indeed, when analysing people with a high revenue there is no element directly linking them to having an excellent alcohol culture and vice versa. Segmenting the market from an age point of view didn’t seem relevant as two individuals who are the same age could have a radically different drinking behaviour, depending on their culture or education for example. Finally, segmenting based on genders isn’t the optimal solution. The chart clearly indicates that spirits consumption seldom differs between men and women (13% vs 9%).
After discussing a more geographical segmentation like segmenting consumers based on where they drank (at home, at bars, at parties, at friends’ houses, etc.), we concluded that it was not relevant. Undeniably, there are too many types of bars that have different customers and customer behaviours to segment it this way.
This ended up giving us a psychographic segmentation based on lifestyle and the type of consumer.
The first segmentation sketch we determined was the following :
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« Penny Pinchers »: consumers who do not pay attention to the type of alcohol they are drinking, let it be taste wise or quality wise. Their only criteria is the price of the alcohol.
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« Family drinkers »: Consumers who like gathering themselves with their family while drinking alcohol.
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« Experimenters »: this category regroups drinkers who have an insatiable curiosity, who always want to experiment new things and love to innovate.
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« Connoisseurs »: this category describes consumers who are alcohol experts. They have excellent knowledge in this field and know exactly why and when they drink a certain type of alcohol or cocktail at a certain time.
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« Social drinkers»: these people enjoy drinking in groups and they are strongly influenced by their surroundings and love following fashion and trends regarding alcohol.
Following our initial analysis of the market, we conducted six interviews in different bars and alcohol shops in Brussels. These interviews were set up to allow us to understand the market and the consumers’ needs in addition to finding out why certain types on alcohols were gaining ground over the past few years. We of course asked questions on the bars’ clients and enquired if the interviewed person could give us his own market segmentation. This procedure would allow us to compare our segmentation with the one of experimented barmen and shopkeepers. Finally, an important element to clarify is that our interviews were conducted in Brussels so a certain bias exists with regards to the market in its whole as bars in the capital are quite different from those in Wallonia and Flanders.
After the gathering of all the information we could confirm some of our hypotheses and eliminate others. It was clear that each bar had its own precise customer base with regards to age, gender, revenues, etc. However, most barmen confirmed our segmentation by relating it to their client’s behaviour.
In most of the bars we went to, clients are starting to interest themselves to what they are drinking as they start asking questions regarding their drink, search for quality spirits and taste new things. Interestingly this phenomenon does not only concern the older part of the population but also younger drinkers. This last element corresponds to our initial decision not to segment the market based on an age, gender or revenue point of view.
Another piece of information retrieved from the interviews related to the importance of trends. During each interview, the barmen confirmed that certain consumers clearly follow tendencies and let themselves be influenced by other drinkers. They will drink this or that drink only because the cocktail or spirit is trendy or put forward by influential people like the barman.
The connoisseur’s category was also brought up. It is important to note that we went to places famous for a certain type of alcohol which was gin in this case. It is thus normal that certain connoisseurs go to these bars as their spirits range is much larger. These barmen wanted to shade the definition of this segment by saying that certain people thought they belonged to this category as they would order specific drinks almost wanting to show off. However the barman, as the expert, thought totally otherwise as the drink the consumer ordered was not a good combination of ingredients. This segment clearly exists but one must not overestimate the number of people inside it.
Finally, one category was debated more often while we were conducting interviews. Indeed we noticed that the family drinkers segment was not relevant in our market segmentation as, after further thought and discussion with the barmen, it overlaps with every other segment. It is clear that people drink in family, but depending on the type of drinkers in the family and the importance alcohol has in their lives, the members with drink different types of alcohol. Therefore we decided to eliminate this segment from the market segmentation.
Once the catergories were determined qualitatively, we proceded by creating a survey to confirm our market segmentation and understand who to target. The survey confirmed our ideas as people recognised themselves in our categories. Morover, our decision to omit the socio-economic, demographic and geographic segmentation was the right path to follow.
Indeed, in the survey, when isolating people who drank spirits and considered themselves as experimenters the following age distribution was found:
Before finishing the segmentation, quantifying the segments is a necessary step. After analysing the results, our predictions were quite correct as customers identified themselves within the market segmentation. Here are the results obtained:
Final categories
Survey's inputs
Even though these results may seem incorrect regarding the huge place experimenters take, after further reflexion, we have the intuition that the results could have some truth to them. Indeed, when considering the alcohol market as a whole, people who fall into the penny pincher segment often drink beer as it is a cheap alternative to spirits. Indeed, in Belgium, beer is the cheapest way to consume alcohol and people who just want to buy cheap alcohol drink beer most of the time. This is due to the high taxation of spirits in comparison to that of beer and wine. In addition, we were quite surprised when analysing the results as almost 60% of consumers were experimenters. However, this follows the ideas we received when interviewers with consumers as they all want to try new products. When going out, consumers often ask the barman for advice and like trying new and fashionable drinks.
The chart confirms that a category of drinkers (experimenters) is not impacted by the age of the consumers as they are equally distributed (except for the 55+ers as less people of that age participated).
Preferred drink between men and women in 2013