MARKET SEGMENTATION

Market Segmentation

Market Segmentation of Fast Food Organisations in UK

Introduction

A key objective of marketing is to define market segments so that the product can be differentiated from rival products to serve the needs of a given segment in the best way possible. In this comparative cross-national study, US and Canadian consumers' preferences for and perceptions of fast-food restaurants using correspondence analysis and multidimensional scaling were explored. These analytical techniques are particularly appropriate for analysing positioning of fast-food restaurants across different countries.

Market Segmentation of Fast Food Organisations in UK

At the level of values and attitudes, similar segments can easily be defined and found in different countries. At the level of behaviour, however, there are more difficulties in finding similar behavioural patterns. The traditional segments hold traditional cooking and food values. Technically there is no problem in finding traditional European segments. However on the level of factual food-related behaviour there are vast differences between the separate traditional segments: the traditional Italian housewife spending half a day in the kitchen for meal preparation where home-made pasta is central, whereas the Greek traditional uses feta, the Greek cheese, for all kind of applications. In terms of behaviour there are, then, vast differences between “similar” segments. The modern segments, however, are more similar to one another, both in values and in corresponding behaviour. The rather strict demand for similarity between individuals within and between countries both in consumer values and in behaviour makes a domain-specific approach more demanding but also more suitable for implementation than a traditional approach.

More consumers are looking for convenience in their food purchases, while busier working lives have also benefited fast-food sales. The opportunities to purchase fast food are also extending, with a wider range of outlets now serving sandwiches, snacks and hot food. Traditional high-street sites have been joined by more outlets in transport terminals, by the roadside, in leisure venues and shopping centres. Standalone sites from the global fast-food brands are also facing growing competition from sales in supermarkets, high-street stores, convenience stores and petrol forecourts. Major obstacles to sales growth during 2004 have been growing concerns about obesity and the negative media coverage of the fast-food industry.

Sandwiches form the largest market segment contributing 36.5% of all sales in 2004. Sandwich sales have benefited from the trends towards shorter lunch breaks and the corresponding demands for light lunches and snacks. Rapid expansion of chains such as Subway and Benjys has also helped sales, along with more variety in the fillings and bread types available.

The second-largest segment is burgers, which is recovering after a year of poor sales in 2001. Menu diversification means that traditional burgers now take a smaller share of sales. Burger outlets, in particular, have tried to counteract the negative publicity associated with obesity by introducing healthier foods such as salads, fruits, more vegetarian options and healthier breakfasts. The strongest growth in 2004 occurred in the pizza market driven by increased sales in the home delivery category. New product developments (NPDs) have also helped ...