One A Day Vitamin Brand from Bayer Explored 5 Choices
This One A Day case example gives context to the question “What are the most actionable customer segmentation approaches for growth strategy?” The brand required we focus on branding and messaging applications.
The first step is to clarify the objectives and how the segmentation will be used. Depending on the intended usage, the answer may be, “It depends.” With One A Day, we were introduced by the advertising agency, and asked by the brand team at Bayer to explore five different approaches. We worked with them to evaluate the results and determine which best fit the brand’s needs around messaging and growth strategy.
Designing the Customer Segmentation Approaches to Leverage Available Data
We designed the data analytic approaches to address the high-priority issues raised by the Bayer team in the work objectives. We used the existing data set to get as much value as possible from it, rather than conducting new research.
Data available included:
- demographics such as age, household income, gender, education, employment, ethnicity, regionality
- psychographics such as health condition concerns, personality characteristics, lifestyle characteristics, diet followed
- attitudes such as health attitudes, multi-vitamin attitudes
- behaviors such as: past 12 month purchases, number taken per week, share of pills, incidence of taking multivitamins, channels purchased from
- brand interactions such as: brands ever used, past 12 month usage, past month usage, lapsed users and loyalty
Customer Segmentation Explored 5 Approaches to Find the Most Actionable
The five approaches which were explored were:
1. Demographic Customer Segmentation Approaches: Age and/or Gender-Specific Segmentation
In the multivitamin category, age and gender are both determinants of the product formulation. Tactically, this approach is very easy to understand and practical for media buying, direct marketing and internal communication. A potential disadvantage lies in treating all people of the same age and gender as similar in their motivations and needs, and looking for a message that can appeal to all.
The demographic approach with age and gender is useful for product segmentation, as evidenced by the years-long popularity of age-specific multivitamins. For instance, Centrum Silver claims to be the #1 multivitamin brand that is “specially formulated and helps support bone strength in women and muscle health in men.” Centrum offers non-gender specific Centrum Silver Adult as well as Centrum Silver Men’s and Centrum Silver Women’s.
A few of the findings included:
- Younger women ages, 18-24 and 25-49 tend to be more worried about their health, especially when compared to younger men.
- Compared to men, women are more likely to say they keep up with the latest health issues
- Men are more likely to enjoy exercise
- Women are more likely to be dieting
- Younger men are more likely to agree that multivitamins provide them with energy
- Younger men and women are more likely to want a gender-tailored multivitamin, while older consumers preferred an age-tailored multivitamin
After reviewing the data, the conclusion was that this approach yields some useful insights on health concerns and attitudes, but was not discerning enough for One A Day target selection for marketing and messaging.
2. Specific Age (50-59) and Needs-Based Customer Segmentation Approaches
The second approach was to subsegment the adult ages 50-59-year-old market on needs-based criteria, including attitudes and loyalty. Similar to the first approach, age is an “easy to understand and apply” variable for media buying, direct marketing and internal communication.
This approach also provided advantages over approach one in that it considers that motivations and needs can be different within a group of people of a similar age.
Four factors created the needs-based groups within the 50-59 segment:
- Factor 1: Health and exercise commitment
- Factor 2: Disease and additional supplements
- Factor 3: Doctor reliance, exercise
- Factor 4: Weight
Many consumers within this age range shared similar needs and concerns. Top health concerns were arthritis/joint pain, fatigue, and needing to lose weight. Their behaviors, however, towards addressing the issue are quite different.
Five segments emerged from the data analysis. Of these, two segments: “Health Committed” and “Disease Fighters” were much more proactive about prioritizing exercise and healthy eating, alternative medicine and nutritional supplements. By comparison, two other segments “Casual Simplifiers” and “Older Nutritionals” were unable or unwilling to make many behavioral changes to support their health. A middle segment, “Confused Vulnerables,” was more reliant on experts, like doctors, to direct them.
While somewhat attractive, in this case, the data set did not provide a sufficiently robust sample of these consumers, and so the segments that emerged were not distinctive enough for messaging. This approach was eliminated for the final selection.
3. Needs-Based Customer Segmentation Approaches (Across Adult Age Categories)
This analytic approach found five factors were the most meaningful.
- Factor 1 was health and exercise commitment.
- Factor 2 was disease and additional supplement use.
- Factor 3 was doctor reliance and prescription interaction concerns.
- Factor 4 was weight, activity and stress considerations.
- Factor 5 was confusion, weight and occasional use.
Looking at the outcomes, we found that there were marked difference in terms of their lifestyle and approach to health, diet and exercise.
Six needs-based segments emerged from this data analysis. The first three segments were healthier, exercised more regularly, and had fewer weight management issues. These three segments felt more in control of their health and less worried.
- “Alternative Health Electors”
- “Healthy Committed Exercisers”
- “Young Upbeat Simplifiers”
By comparison, the other three segments felt less in control of their health and avoided exercise, but claimed to recognize the importance of diet. Of these, one segment, “Disease Fighters,” is most interested in learning about health issues and alternative medicine, a trait they share in common with Alternative Health Electors.
“Alternative Health Electors,” “Healthy Committed Exercisers,” and “Disease Fighters” take more supplemental products, including single entity vitamins, mineral supplements, and herbal supplements. For example, more than 70% of consumers in these segments took mineral supplements and single entity vitamins in the past year. As a result, these three segments spend more on supplements than the other three groups.
This segmentation approach emerged as the most actionable for the needs of the One A Day brand at the time. There were several potential target segments for the brand to work with.
|Alternative Health Electors||Not a primary target for OAD. Too involved for a ‘mainstream’ brand like OAD|
|Health Committed Exercisers||May be an interesting target for OAD if it addresses and complements their active lifestyle, ensures their long-term health and helps combat their stress. Physician reco would be helpful (e.g., endorsement).|
|Young Upbeat Simplifiers||Can be a good target for OAD. Relatively young, so their health concerns were less pronounced. They are looking for a brand that makes it easy (the OAD promise).|
|Nutritional Insurers||This segment is looking for basic nutritional insurance from a MV and is a more difficult target for OAD in that they may not value anything beyond private label.|
|Disease Fighters||This segment can be a target for OAD if they are positioned to be a MV with a ‘plus’ that also combats disease.|
|Confused Vulnerables||This segment is not a highly attractive primary target, given their confusion and low involvement. Will likely respond somewhat similarly as Disease Fighters, but would also value a physician reco.|
4. Refinement of Previous Customer Segmentation Approaches
This work refined three segments (“Aesthetically Focused,” “Natural Women,” and “Peter Pans/Mega Men”) into six distinct new segments. One subsegment that emerged, the “Hardcore Natural Women” were very heavy supplement users. While it found some interesting differences, it ultimately was not selected by the brand team as the most useful approach.
5. User Profiles of One A Day (OAD) and Centrum Brand Users
The last approach of profiling brand users was never intended as a choice for the customer segmentation. The intent was to provide additional insight into the brand users. At the time, One A Day regular users were considerably younger than the category average and younger than Centrum brand users. There were also some insights for specific One A Day products underneath the overall brand name.
The market has continued to evolve and expand. In 2019, Centrum Silver was around $165 million in sales, while Centrum (non silver) was around $55 million. For Centrum, the age-based approach still dominates this brand. Bausch & Lomb’s PreserVision was around $195 million in sales. One A Day had two sub brands in the top ten: One A Day VitaCraves at $66 million in sales and One A Day Womens at $50 million. Airborne, which focuses on immune support, weighed in at $149 million.