Article Review on Using Product and Retail Choice Attributes for Cross-National Segmentation

Larry Lockshin
Ehrenberg Bass Institute for Marketing Science, University of South Australia, Adelaide, Australia, and

Eli Cohen
Guilford Glazer School of Business and Management, Ben-Gurion University of the Negev, Beer Sheva, Israel and School of Marketing, University of South Australia, Adelaide, Australia

PREPARED BY: Abdu Kedir GSE/0062/03 Daniel Altah GSE/0076/03 Dawit Kebede GSE/0079/03 Dereje H/Gabriel GSE/0080/03 Elias Negash GSE/0081/03

Agenda
Summary
Key

of article:

points

Review

of article
based on cited article review criteria

Assessment

Evaluation
Grading

of article

based on sated criteria

Summary of Article

Paper type :- Research paper

This research adds to our knowledge about how to conduct segmentation studies across international markets. This paper contributes to marketing knowledge by using retail choice attributes including shelf information to segment wine consumers across 11 very different countries
The use of product attributes and key retail communication features resulted in a clear and useful segmentation scheme revealing different decision making heuristics or styles in each segment.
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Contd

Purpose:

The purpose of this research was to look at consumer decision-making styles or heuristics for wine product in cross-national segmentation using choice attributes including retail displays and communication methods. This study aims to use product attributes and retail display information for wine to develop cross-national segments for wine markets

Design/Methodology:

Contd

The study used consumers choice in wine stores to develop segments of consumers, based on the relative importance of 13 factors consumers use for the retail purchase of wine. The 13 factors selected were : the origin of the wine, Grape variety, Medal/award, Brand name, Matching food, Alcohol level below 13%, Information on back label, I read about it, Tasted the wine previously, An attractive front label, Promotional display in-store, Someone recommended it, Information on the shelf Data are collected from 11 countries using convenience sampling method, seven languages on five continents.
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Contd

The target for this research were wine drinkers in each country. The Sampling was limited to those consuming wine at least once per month, so the data represented only wine drinkers Best worst scaling (BWS) and latent class analysis (LCA) were used to develop the clusters. BWS is the cognitive process by which respondents repeatedly choose two objects in varying sets of three or more objects that they feel exhibit the largest perceptual difference on an underlying continuum of interest LCA extract several relatively homogeneous groups of respondents from heterogeneous data.
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Findings :

Contd

Three-cluster structure/segments provided a straightforward and robust segmentation across the 11 countries(Australia, Austria, Brazil, France, Germany,Israel, Italy, New Zealand, Taiwan, the UK, and the USA) The three segments reveal different ways in which consumers choose wines:
1.Cognitive-based segments : focuses on extrinsic factors which indicate wine quality and taste based on the cognitive understanding of how these factors relate to the actual wine. They consider objective information on the label. The key attributes are the grape variety, the origin of the wine, the brand , medals and awards, which can be seen as objective measures of quality
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Contd
2. Assurance-based segments: consists of attributes indicating previous knowledge (tasted before) or recommendation by someone else 3.In-store promotion-based segments: focuses on the package and display and is named in-store cues. These people do not cognitively assess the information, nor use previous experience in the purchase of wine products

Research limitations:

The samples that have been taken are convenience-based and do not represent the population of wine drinkers in each country.
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Practical implications :

Contd

The three segments found in this study provide clear guidelines for wine marketers depending on whether they work for small or large wine companies. Wine marketers concerned with cognitive segments or decisionmakers should clearly show the attributes ( like grape, variety, origin, brand name, and awards) on the label, as well as in their market communications. The second biggest segment Assurance-based segments focuses on risk-reducing strategies, such as recommendations and previous experience. Marketers aiming at this group need to provide sampling and other means for potential wine buyers to have a taste of the wine, such as by-the-glass promotions in restaurants.
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Contd

The third segment that is the In-store promotion-based segments suggests marketers use displays, attractive front labels, and back labels to help them make their wine choice decisions

Originality:

This research demonstrates that product attributes and retail communication devices like labels and displays can be used for cross-national segmentation.

Key words:

Retail trade, Marketing, Market segmentation

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Review of the article

Title of the article:
A

title ought to be well studied, a definite and concise indication of what is to come The title of this article is: Using product and retail choice attributes for cross-national segmentation The reviewers believe that the title given for this article is better if it would have been Using product and retail choice attributes for cross-national segmentation in the case of wine market

Abstract

An abstract is a mini report within the whole article report. It contains all the relevant and important point in a clearly and concisely manner. It is not simply a brief part of the entire report but it is a refinement of the research project outlining the methodology, major findings, and conclusions. In this article the researchers presented the purpose of their study, the methodology they used to undertake their research, the main findings of the research, limitations, practical implications of the findings, originality of the study, the key words included in the study, and the paper type in the abstract part of the research. Hence the researchers sufficiently presented the main contents of their article in the abstract part of the paper

Objective of the article

The objective of a research project summarize what is to be achieved by the study To become a good research the research objective should be simple, specific and measurable The objectives of a research delineate the ends or aim which the inquirer seeks to bring about as a result of completing the research undertaken. To this end the researchers clearly and exhaustively presented the objective in the abstract part of the research.

Contd

The objective of the study is :

To use product attributes and retail display information to develop cross-national segments.

The reviewers believe that some amendments need on the objective if it would have been To use product attributes and
retail display information to develop cross-national segments for wine marketers.

The entire article tuned according to these objectives and the flow of the article is very interesting .

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Research Question

With respect to research questions, though the researchers did not clearly outline the research question distinctively in the article.

Statement of the Problem

As part of the introduction part in the article , the statement of the problem is clearly stated as:

In an increasingly globalised world, cross-national comparisons are necessary for good marketing, but are often difficult to apply in practice.Previous research has focused more on brand and product usage and demographics as segmentation variables, which often resulted in hard to characterize segments that were not easy to implement across different countries

Literature review

A study should mention different theoretical ideas from contributing to further exploration or explanation of the study problem statement . It also analyze and compare previous study in light of the study methodology The literature review part of the article is clearly written as one distinct section. The authors have tried to include relevant studies in the area cited along in the various section of the article. Some literatures were discussed on the area of the research topics Literature on the following area were reviewed: Consumer decision-making heuristics Cross-national segmentation Factors in wine choice

Cont

Hence, the researchers summarized previous study made in line with their study They also analyze and compare previous study and they put their arguments clearly. Their literature contribute additional knowledge for cross-national segmentation .

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Methodology

The researchers made Descriptive type of research. The Data collection was made by a self administrated survey using Best worse scaling Best-worst scaling is a measurement method based on a theory of how humans choose the two most extreme items in a set of three or more items. BWS assumes that a person examines the options in a set, and chooses the pair of options that exhibits the largest differences on the underlying subjective scale of interest".
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Cont,

o o o

One of the major issues confronting international market researchers is scalar inequivalence. This mainly arises because of differences in response styles. Best Worst Scaling can effectively overcome a variety of problems in using rating scales across countries when measuring importance rating there is no response style factor Easy for respondent Item differentiation
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Cont. Respondents were asked to indicate the most and least important of 13 factors used in choosing wine from a retail store. Population definition The target population was wine drinkers in the 11 countries (Australia, Austria, Brazil, France, Germany, Israel, Italy, New Zealand, Taiwan, the UK, and the USA)

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Sampling techniques

Cont

Sampling is limited to those consuming wine at least once in a month The sampling technique to select the retail store is made by the researchers convenience three stores were selected from the largest metropolitan area of the countries. A systematic random sampling method was used to select individual respondents every third customer exiting the store. Sampling technique and the sampling frame has been clearly stated in the article
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Cont

o o

Sample size 2,744 individuals from the 11 countries The sample taken was not representative enough to the research objective for the following reasons : The samples are convenience based In some countries only three retail stores were selected
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Cont

Data collection method The questionnaire was a self administered survey The data collection was collected by trained data collectors sent with data collection guide. The survey was translated by a different native academic speakers from English into each of the languages for the 11 countries. It was then back translated and corrected for any errors before the final version was used.
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Cont

The data was analyzed using a latent class analysis to develop the segments Since this study used Best Worst measures of how consumers choose wines, the premise is that the population consists of a finite and identifiable number of groups or segments, each characterized by homogeneous importance weights for wine choice attributes. Segmentation is then based on how well each cluster predicts the choices made based on the importance weights.

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Cont.

In general ,Applying BWS and LCA enabled the researchers to achieve segmenting consumers cross-nationally based on choice criteria.

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Results and Findings

The target for this research was wine drinkers in each country. Those consuming wine at least once per month. To collect the data the survey was translated by a different native academic speaker from English into each of the language for 11 countries. In each country at least 3 stores were used to collect data in the largest metropolitan area. Respondents self-completed the questionnaires under the supervision of trained staff in each location.
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Contd

Tasting the wine previously is most important for 8 of the 11 countries, with Austria, Brazil, and France each having different most important factors.
Cluster 1 is labeled as cognitive cues and focuses on extrinsic factors which indicate wine quality and taste based on the cognitive understanding of how these factors relate to the actual wine. These people choose their wines by considering objective information on the label.

The key attributes are the grape variety, the origin of the wine, the brand, and medals and awards, which can be seen as objective measures of quality.

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Contd
Cluster 2 is labeled assurance cues and consists of attributes indicating previous knowledge (tasted before) or recommendation by someone else. These wine purchasers choose based on previous experience or recommendation and seem to be avoiding the risk of choosing an unknown wine.

Cluster 3 focuses on the package and display and is named in-store cues. These people do not cognitively assess the information, nor use previous experience. They use shelf-based promotions and the packaging to make their decision.
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Contd

The biggest segment in every country except Taiwan and the US (and tied for largest in Israel) is that of cognitive-based buyers. These buyers read the label and make decisions based on grape variety, origin, brand name, and awards. Interestingly, the grape variety is normally used on wines from the New World, but not wines from traditional wine producing countries, such as France and Italy. Wine marketers concerned with cognitive decision-makers should clearly show these attributes on the label, as well as in their market communications.

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Contd

The second biggest segment focuses on risk-reducing strategies, such as recommendations and previous experience. Marketers aiming at this group need to provide sampling (where it is legal) and other means for potential wine buyers to have a taste of the wine, such as by-the-glass promotions in restaurants. The third segment is the smallest, but represents a substantial group of buyers in Austria, Germany, Brazil, the UK, and the US. These buyers use displays, attractive front labels, and back labels to help them make their wine choice decisions. More research needs to be conducted in order to provide wine companies with clear ideas of label designs for specific segments of consumers.

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Contd

Generally the researchers collects the data which help them to attain the purpose of the study. The collected data analyzed based on variety of techniques, and each technique is described in the relevant section. The reliability of the data also checked and it shows good internal reliability. But we have a reservation on the number of respondents and retail shops.
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Managerial implications

A different interpretation of the results would suggest wine marketers could develop a range of packaging and promotions to reach each of the segments simultaneously. In a sense this is mass marketing, but with a varied assortment of cues being focused on the shelf in order to attract buyers, who use different purchasing strategies. The segments seem to differ in size between countries. Smaller wineries, which do not have the resources to follow this strategy, could decide to target only specific countries with a single marketing program. In contrast larger wineries would likely have a brand portfolio across multiple countries with different wines aimed at the different segments. There are also implications for channel strategy, where wines aimed for supermarket or discount shelves would be packaged differently to other brands sold through independent retailers. At the moment this does not seem to be the case.
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Contd

The major purpose of the research is to provide practical recommendation to managers. Hence, we believe that the researchers gives brief recommendations to managements based on their findings, even the results limited in their generalizability to the condition tested.

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Conclusion and Recommendation

As clearly stated in the Abstract, the purpose of this study is to use product attributes and retail display information to develop cross-national segments. So in this article customers are segmented in to three; cognitive-based, assurance-based, and in-store promotionbased. The researchers recommended the following points to the managers which will help them to develop crossnational segmentation.These are:

Wine marketers concerned with cognitive decision-makers should clearly show the attributes on the label, as well as in their market communications. Marketers aiming at assurance-based group need to provide sampling and other means for potential wine buyers to have a taste of the wine.

Contd

The third segment is in-store promotion-based. This is the smallest, but represents a substantial group of buyers. These buyers use displays, attractive front labels, and the like to help them make their wine choice decisions.

This finding show similarity of consumers across many different countries. This will facilitate cross-national marketing and adds to our understanding that cross-national marketing strategies are likely to be more successful than trying to adapt to each country. As we have seen in the article segments seem differ in size between countries. Smaller wineries, which do not have the resources, could decide to target only specific countries with a single marketing program.
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Contd
In contrast larger wineries would likely have a brand portfolio across multiple countries with different wines aimed at the different segments. Marketers must still work to understand their buyers in each country and decide whether the segment exists for their particular product or not. These conclusions and recommendations are directly related with the findings they got. In this case the researchers provide adequate conclusion and gave good recommendations regarding cross-national segmentation for wine markets.

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Limitation

The researchers used convenience-based sampling technique and do not represent the population of wine drinkers in each country. The researchers did not use price as a choice attribute, but other wine research found price to be very important in wine choice BWS is not applicable to all cross-national research problems. The method cannot replace intention measures, Multi-item scales, or direct evaluations as tools to use for other research problems, but it does make a useful additional tool for crossnational researchers to consider. Over all the researchers clearly stated the limitation of the research.
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Further Area of investigation

There is very little information on what makes a wine label attractive to different segments of consumers. More research needs to be conducted in order to provide wine companies with clear ideas of label designs for specific segments of consumers. An extensive literature review showed that few papers in consumer decision-making focus on heuristics; most build models using cognitive-based strategies, However evidence shows that many consumers everyday purchase decisions are most likely heuristic in nature. Therefore further research should be made in the area of heuristic purchase decision.

Contd

The Best Worst methodology employed here is not able to directly measure decision-making styles. Further research is therefore necessary to substantiate the actual decision-making heuristics revealed in the analysis.

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Reference

The total secondary data collection is being made from 53 different materials, The types of references materials used include: Journals - 33 Books - 13 Other publications - 7 Among these 19 (35.8%) of them are outdated by the conventional way of using reference materials which have been published ten and more years back.

Using journals is advisable for a research probably being more important than books. This is because the most up to date research and debates will be found in journals.

Contd

The reference citation in this article was made using Harvard style (authors name) All of the references which have been used and cited in the body of the article are included in the reference presentation parts of the paper

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Evaluating the Article

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Seq No

Article Review Criteria

Research topic match with the content of the article
Abstract contains all ingredients of the research

Weight (%)
10
10

Result
8
9

1
2

3
4 5 6 7 8 9

The objective of the study clearly defined

Methodology of the review versus the nature of the article Literature review properly addressed

10
15 15 15 10 5 5

9
13 13 14 10 5 5

Results and findings are properly addressed Conclusion and Recommendation Limitation of the study is stated

Thank you

Further area of investigation clearly highlighted

10

References usage and citation

Total

5
100
43

4
90