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Transform to the power of digital
Market Segmentation for a French Dairy CooperativeCC IndiaJan 2014
The objective of the analysis is to undertake market segmentation to identify new opportunities around the dairy world
3
DATA
Data provided on 38 countries:
Dairy consumption-Consumption of milk, butter, cheese,
cream and whey ( kg/capita/year weighted in milk
equivalent)
Demographics
Sources:
To segment the countries into different groups based on
similarities on account of dairy consumption
The segmentation should reflect regional behaviors and
specificities
CHALLENGES FACED
The average for some variables could not be calculated
due to lack of population data
Copyright © 2014 Capgemini Consulting. All rights reserved.
TOOLS USED
SPSS
MS Excel
Objective Cluster Summary Recommendations
OBJECTIVE
It was felt that there was a lot of untapped market potential
in the dairy segment globally
There was a need to understand the global scenario
BACKGROUND
Based on consumption patterns of four major dairy products the countries were divided into four categories
5
4.Countries with moderate cheese
and butter consumption
3.Countries with low dairy consumption
2.Countries with high milk consumption
Objective Cluster Summary Recommendations
Copyright © 2014 Capgemini Consulting. All rights reserved.
1.Countries with high cheese consumption
0.5 1 1.5 2 2.5 3 3.5 40
50
100
150
200
250 236
43
172
69
CLUSTER
0.5 1 1.5 2 2.5 3 3.5 40
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.1
0.38
0.72
0.15
CLUSTER0 1 2 3 4
00.10.20.30.40.50.60.70.80.9
1
0.89
0.750.67
0.89
CLUSTER
Whey consumption is not a determinant for these clusters and human development index(HDI) is taken as a proxy for some demographic variables
6
Copyright © 2014 Capgemini Consulting. All rights reserved.
Whey consumption was removed as it had an insignificant effect in differentiating clusters
Clusters are, therefore, formed are on the basis of consumption level of other products(milk, butter, cheese and cream)
HDI index is used as a proxy for the following variables due to high correlation(around 0.80):
• GDP per capita
• Engertic(Kcal/day/capita)
• Population from 0 to 5 in %
• Population above 70 in %
• Percent of rural population
Objective Cluster Summary Recommendations
AVG HUMAN DEVELOPMENT INDEX(HDI) AVG LACTOSE INTOLERANCE INDEX(LII) AVG DENSITY
CLUSTER 1 : European nations with the highest demand for cheese, high per capita GDP and the highest average density
7
Copyright © 2014 Capgemini Consulting. All rights reserved.
Cheese Cream
40%
47%
Top 4 consumers of cheese, constituting 40 % of the global cheese consumption
Belong to the top 7 cream consuming nations, representing 47% of the global consumption
Amongst the richest 5 European nations, and have the least LII value of 0.10
Average density, at 236, is the highest for this group
Objective Cluster Summary Recommendations
1.Countries with high cheese consumption
France
Italy
Germany
Netherlands
KEY CHARACTERISTICS
CLUSTER 2 : Top milk consuming nations, with a low density
8
Copyright © 2014 Capgemini Consulting. All rights reserved.
Milk
36%
Among the top 8 milk whole consuming nations, constituting 36% of the global consumption
Romania is a major outlier, being the top most milk consuming nation with 264 kg/capita/yr, followed
by Sudan at 167 kg/capita/yr
Has the least average density of 43
Objective Cluster Summary Recommendations
2.Countries with high milk consumption
Russian Federation
RomaniaIreland
Ukraine
USA Argentina
Sudan
KEY CHARACTERISTICS
CLUSTER 3 : Countries with relatively low consumption levels of the four dairy products, low per capita GDP and high lactose intolerance
9
Objective Cluster Summary Recommendations
Copyright © 2014 Capgemini Consulting. All rights reserved.
Cream consumption is negligible for most of the countries
Represents 43% of the global milk consumption, but none of these countries feature in the top 10 milk consumers,
indicating that the huge aggregate consumption is just the result of a large group
Countries with low levels of GDP per capita
Average LII value, at 0.72, is also the highest for countries within this group
…and 15 others
3.Countries with low dairy consumption
Belarus
Brazil
India
Bangladesh
Japan
Egypt
Kenya
Rwanda
KEY CHARACTERISTICS
CLUSTER 4 : Countries with moderate consumption of cheese and butter, but low consumption of whey and cream, with the exception of Canada
10
Copyright © 2014 Capgemini Consulting. All rights reserved.
These countries have positive but not very high consumption levels of milk, cheese and butter.
Canada is an outlier within this group, being the highest global consumer of whey(which is not a determinant in cluster
formation) and cream. Other nations in this group do not consume whey and have negligible cream consumption.
The average HDI index is 0.89 for this group
Other countries have the lowest LII of 0.10
Objective Cluster Summary Recommendations
4.Countries with moderate cheese and butter consumption
Australia
New Zealand
Canada
United Kingdom
KEY CHARACTERISTICS
The dominant demands for specific dairy products in different segments provide an opportunity to the French cooperative to undertake properly targeted strategies
12
Copyright © 2014 Capgemini Consulting. All rights reserved.
Objective Cluster Summary Recommendations
CLUSTER Milk Butter Cream Cheese Recommendations
HIGH CHEESE
Belong to the top 11
Belong to the top 7
Biggest 4 consumers globally
•Focus on cream and cheese•Higher prices could be charged•Low distribution cost
HIGH MILK Belong to the top 8
All have positive consumption
•Target Romania’s milk market
LOW DEMAND
22 belong to the bottom 27
18 belong to the bottom 21
17 belong to the bottom 21(10 do not consume)
Are the least 18 •Start at a small scale to assess the market•Offer cheaper products
MODERATE Belong to the top 13
Canada is the biggest global consumer
Belong to the top 14
•Target Canada’s whey market