Segmentation is key to identifying the right target markets. As a start-up company, SOCIAL LITE Vodka...

 

Transcribed Image Text:

Segmentation is key to identifying the right target markets. As a start-up company, SOCIAL LITE Vodka knew it had to be extremely focused on segmentation. Its alcoholic beverages were made with 100 percent natural flavours, were unsweetened, and had only 80 calories. Two great flavours were available: Lemon Cucumber Mint and Lime Ginger. SOCIAL LITE co-founder Neetu Godara said they had to very quickly identify who would fall in love with the products.1 You might think it would be easy to determine the target market for a new alcoholic drink. In this day and age of heightened health-consciousness, SOCIAL LITE Vodka is the type of product that could appeal to a wide variety of consumers. So it would seem like an obvious choice to use a psychographic approach to segment the market, based on health and wellness. Sugar is in the news every day and it's not hard to find groups of people who read labels when shopping for new products. Although the product appeals primarily to women, SOCIAL LITE Vodka was started in Toronto by two men-Dan Beach and Kevin Folk-in their kitchen as they were mixing drinks. They wanted to be able to enjoy a drink that wouldn't impact their ability to go for a long run the following day. Given their Ontario roots, you might wonder why the entrepreneurs decided to launch their product in Alberta. After all, other geographical regions in the country offer much higher population density. Godara says Alberta was chosen because liquor stores there are privately owned, not government-owned, which makes it easier to get products listed. Still, there were challenges. With 1,400 independently owned locations, it took a lot of phone calls to convince store managers to carry the products. Logistically it would have been far easier to sell into the Ontario market via government-owned Liquor Control Board of Ontario (LCBO) stores. And the Ontario geography was on their radar from day one. But convincing the LCBO was a slow process. In the meantime, the Alberta launch allowed SOCIAL LITE to get its products into affluent urban centres such as Calgary and Edmonton. Success in Alberta paved the way to move farther west into British Columbia, where the liquor market is half publicly and half privately owned. Three years later, after seeing sales results that proved the market for the products in Western Canada, the LCBO agreed to list SOCIAL LITE Vodka. For SOCIAL LITE, segmentation bases such as psychographics or geographics were an important part of identifying and describing potential target markets. But marketers need to consider more than just one segmentation base to find the right target markets. Godara notes that, demographically, you can target whomever you like. For example, an ideal target market might include women in their mid-thirties to late fifties. But you also need to consider if their psychographic profile indicates that they seek out healthy products and carefully watch what they eat. When segmenting the overall market, Godara says you also need to consider the retail environment in which your product will sell. The reality is that the ready-to-drink category skews heavily to a younger crowd. If you stop to think about store placement, ready-to-drink products are found in the cooler aisle. And the vast majority of traffic in that aisle is under the age of 25. While older women matched the demographic profile for the products, behaviourally, it was going to be harder to attract them in-store. Age became an important demographic variable, together with a focus on psychographics in SOCIAL LITE's segmentation analysis. Multiple target markets were identified, with "Socialite Andy" being primary. You will read more about other segments later in the chapter. Having identified appropriate target markets, the company turned its marketing efforts to positioning its products in the minds of target consumers. SOCIAL LITE Vodka focuses on functional benefits and taste, as a way to socialize without regret-have fun without having to worry about calories, sugar, artificial ingredients, or gluten. With benefits like these, Godara knew that SOCIAL LITE would soon be on everyone's lips. Competitors took note, too. And in spite of over 20 brands now offering unsweetened vodka beverages, SoCIAL LITE is LCBO's fastest growing with over 234 percent growth in the last year.2 Segmentation is key to identifying the right target markets. As a start-up company, SOCIAL LITE Vodka knew it had to be extremely focused on segmentation. Its alcoholic beverages were made with 100 percent natural flavours, were unsweetened, and had only 80 calories. Two great flavours were available: Lemon Cucumber Mint and Lime Ginger. SOCIAL LITE co-founder Neetu Godara said they had to very quickly identify who would fall in love with the products.1 You might think it would be easy to determine the target market for a new alcoholic drink. In this day and age of heightened health-consciousness, SOCIAL LITE Vodka is the type of product that could appeal to a wide variety of consumers. So it would seem like an obvious choice to use a psychographic approach to segment the market, based on health and wellness. Sugar is in the news every day and it's not hard to find groups of people who read labels when shopping for new products. Although the product appeals primarily to women, SOCIAL LITE Vodka was started in Toronto by two men-Dan Beach and Kevin Folk-in their kitchen as they were mixing drinks. They wanted to be able to enjoy a drink that wouldn't impact their ability to go for a long run the following day. Given their Ontario roots, you might wonder why the entrepreneurs decided to launch their product in Alberta. After all, other geographical regions in the country offer much higher population density. Godara says Alberta was chosen because liquor stores there are privately owned, not government-owned, which makes it easier to get products listed. Still, there were challenges. With 1,400 independently owned locations, it took a lot of phone calls to convince store managers to carry the products. Logistically it would have been far easier to sell into the Ontario market via government-owned Liquor Control Board of Ontario (LCBO) stores. And the Ontario geography was on their radar from day one. But convincing the LCBO was a slow process. In the meantime, the Alberta launch allowed SOCIAL LITE to get its products into affluent urban centres such as Calgary and Edmonton. Success in Alberta paved the way to move farther west into British Columbia, where the liquor market is half publicly and half privately owned. Three years later, after seeing sales results that proved the market for the products in Western Canada, the LCBO agreed to list SOCIAL LITE Vodka. For SOCIAL LITE, segmentation bases such as psychographics or geographics were an important part of identifying and describing potential target markets. But marketers need to consider more than just one segmentation base to find the right target markets. Godara notes that, demographically, you can target whomever you like. For example, an ideal target market might include women in their mid-thirties to late fifties. But you also need to consider if their psychographic profile indicates that they seek out healthy products and carefully watch what they eat. When segmenting the overall market, Godara says you also need to consider the retail environment in which your product will sell. The reality is that the ready-to-drink category skews heavily to a younger crowd. If you stop to think about store placement, ready-to-drink products are found in the cooler aisle. And the vast majority of traffic in that aisle is under the age of 25. While older women matched the demographic profile for the products, behaviourally, it was going to be harder to attract them in-store. Age became an important demographic variable, together with a focus on psychographics in SOCIAL LITE's segmentation analysis. Multiple target markets were identified, with "Socialite Andy" being primary. You will read more about other segments later in the chapter. Having identified appropriate target markets, the company turned its marketing efforts to positioning its products in the minds of target consumers. SOCIAL LITE Vodka focuses on functional benefits and taste, as a way to socialize without regret-have fun without having to worry about calories, sugar, artificial ingredients, or gluten. With benefits like these, Godara knew that SOCIAL LITE would soon be on everyone's lips. Competitors took note, too. And in spite of over 20 brands now offering unsweetened vodka beverages, SoCIAL LITE is LCBO's fastest growing with over 234 percent growth in the last year.2