5. The Situation / Function analysis of demand for salmon products.
5.1 Why this new method?
The end of social imitation.
The authors suggest that consumers no longer buy products, as they did in the 70s and 80s, because the brand "valorises" them as a given social group. This might have been the case in the 40s and 50s, but the shopping revolution, which began in the 1960s with the rise of the major supermarkets, undermined any attempt to associate brands with social class. The possible exceptions occurred only at the highest social strata. The 70s and 80s did not bring an end to social imitation; it had already long disappeared. The idea that a neighbour will think that you are a better parent because you buy a specific brand is one, which does not feature in the modern household and maybe never did.
Only "adaptation" sells products.
The authors imply that products must be adapted to the specific meal occasions, however, this already happens in the market place, although the divide between the so call neutrality and valorised situation is not clear-cut. It is not necessary to have quality, brands, packaging an d dreams to produce a valorised pleasure meal. With a bit of culinary skill, even the cheapest salmon fillet can be transformed into a gastronomic delight.
A matrix of segmented consumer demand.
The matrix of segmented consumer demand has already been discussed in terms of a schematic representation, which shows when and why products are consumed. The authors suggest that the different segments - consumption universes - (as distinct from the universe of food already described), represent the differing needs of the consumers, but this matrix is not product specific. This is not surprising since every consumer has a different taste profile as to what he or she likes to eat and when he or she does so.
Two different universes: Neutrality and Valorisation.
The authors describe the two key categories, which they believe cover most demand segments
Neutrality meal occasions are compared to filling up the car. This is simple refuelling without any emotional involvement unless there a problem would arise which would subsequently deter further purchases. Unfortunately, it is impossible to divorce food consumption from any emotional involvement. The comparison with refuelling a car is erroneous, since if it were so simple, consumers would be prepared to buy a basic nutritional meal and continue to eat it every day, without change. This is how cars are refuelled, but not people.
Consumers might want to buy easy to cook, accessible and digestible food, that has little waste, but they choose the foods they act ually like to eat, that give them pleasure and satisfaction. Consumers are people and not machines and therefore there must be an emotional involvement in choosing the food they eat.
Valorised meal occasions are said to be those which bring the consumer something more that the basic nutrition. The idea that emotional involvement will bring repeat purchases is no different whether the food is for a basic meal or the most sophisticated dinner party.
The differentiation of demand segments might be better described in terms of market position, which in turn might also reflect the evolving market place for salmon. Initially, salmon were chosen as a potential candidate species for farming because they had a perceived luxury image and a high market value. This can be compared to the valorised pleasure meal cited by the authors of the report. Salmon was often served as a centrepiece at wedding receptions and other such family occasions as well as business functions and society events. Salmon was the food to serve.
However, as production has expanded, the luxury image of salmon has been devalued. Salmon has become more widely available and the price has fallen accordingly. Salmon has evolved from being a luxury dish into an everyday meal option. Using the terminology of the report, salmon has thus changed from being a perceived valorised product to one of neutrality. The demand segments identified by the consumer interviews simply reflect how much each market has reacted to this change and the speed that these changes have come about. These issues will be further discussed in the next section.
The importance of "health".
Whilst the researchers found that each country had a "health" meal function, only the UK market identified a separate demand segment where health is a consumption driver in its own right. This is supposed to be related especially to children's health. This issue will be discussed in relation to UK consumption.
5.2. A Situation / Function analysis of fresh and frozen salmon demand in the three countries
The authors state that whilst there are some important similarities between countries, there are several remarkable differences. These differences will be discussed first followed by the similarities. The main focus of discussion will be the UK market.
The overall analysis of the three countries indicates that the French market is the one, which has moved the furthest away from the idea of salmon as a luxury product, towards salmon as an everyday food. This has occurred because all the European salmon producers have targeted France as their primary market. In addition, the French hypermarkets have helped diversify consumption.
The UK market is very similar to the French market with a significant move towards salmon as an everyday food, which has been encouraged by the willingness of British supermarket chains to vary the many ways in which salmon is offered to the consumer.
By comparison, the German market has largely retained the image of salmon as a luxury type product to be used for special meal occasions. The Germans have still to recognise the value for money opportunities to use salmon as an everyday meal option.
This interpretation of the every day meal market for salmon is reflected in the neutrality consumption figures resulting from the consumer interviews. The respective figures for the French, UK and German markets are 60%, 46% and 18%. However, the interpretation of the take up of this segment in these three markets, may well be very different. This will be discussed in the next section.
However, reference should be first made to the five-year trends highlighted in the comparison of the main demand segments. These suggest that for neutrality, the German market will grow, but the French and UK markets will stagnate. This demons trates a clear lack of understanding of the market for salmon since the markets can only continue to evolve with more and more consumers beginning to recognise that salmon is a value for money product suited to every day consumption. In terms of the overall market for fish, salmon is the new cod.
The authors of the report also indicate that the pleasure segment in both France and UK will grow, whilst that in Germany will shrink. The reality is that the smaller pleasure segments in France and the UK have re sulted from a decline in that segment of the market. These segments will continue to decrease as a share of the overall market, not grow.
The importance of fillets.
The report suggests that fillets now dominate the market place in all three countries a nd despite the variety of presentations, the authors believe that without market development, fillets will become a commodity product. However, such evolution is inevitable, irrespective of development or not.
The report illustrates the importance of fillets to each market, and rather surprisingly, the largest consumer is the UK, a market, which also exhibits the greatest daily neutrality. This conflicts with the data of market share for all salmon products, which indicates that France has the largest neutrality segment.
5.2.2. The analysis of the UK market and demand segments for fresh and frozen salmon.
The authors of the report have stated in the section headed "the meaning of our figures", that whilst the data gives a reliable hierarchy of demand for the 300 consumers tested, they are not necessarily a reflection of national consumption. It is questionable as to how representative these findings really are? The discussion of this section may therefore have little relevance to the reality of the market place.
There is little doubt that most UK salmon consumption does occur for the evening meal. Both parents in the typical family now work and with children at school, there is little opportunity to eat lunch together during the week. Thus, the evening b ecomes the main time when the family can sit down together, although such occasions are continually undermined by the presence of TV and outside activities.
Whilst the overall picture of meal situations does reflect UK salmon consumption, the situation wi th regard to meal functions is not so clear. The changing lifestyle of the UK consumer does mean that there is a need for easy to cook meal options, in many cases, the easier the better. However, the meal function relating to health may not reflect the tr ue state of the market.
Salmon is clearly a healthy eating product. It is low in fat, but rich in essential omega- 3 fatty acids. Salmon producers often try to promote their products into this section of the market place. It is therefore not surprising that 36% of meal functions are perceived to be in this sector. However, where the reality of the marketplace and the consumer perception diverge is over the question of children's health.
The results of the survey appear to suggest that the major driver of this segment is a concern about children's health. This is different to both the French and German perceptions of their markets in which children's health does not appear.
By comparison, the reality of the market place would suggest that ideas about children's health and salmon consumption are unlikely to co-exist. Instead, this segment is more likely to be part of the daily neutrality, which would push this neutrality segment up to 83% of the market, far exceeding both the French and German markets. This would better reflect the current state of the UK market. However, there is still a long way to go before the market even starts to approach maturity. This is because in terms of consumption per head, salmon is still a bought by only a minority of the po pulation.
Although salmon sales are still relatively small, there is a definite pattern to the way it is bought. According to research carried out by the Scottish Salmon Board, only 40% of the population buy salmon and of these, 60% of salmon purchases are made by the section of the population who are aged over 45. The typical salmon consumer is older with a family who have grown up and left home. Thus, most salmon sales are skewed away from the family situation and most especially from those with children . Clearly, this conflicts with the consumer perceptions apparent from this survey.
This view that the health segment is actually just an over stated extension of the daily neutrality, or everyday meal option appears to be confirmed by the statement that there must be absolutely no pin bones that can stick in children's throats. Any concern about pin bones does not just affect children, but all consumers. However, this health issue also seems to confuse the authors of the report, since they appear unsure abo ut the appearance of a salmon steak (with bones) within this segment. This is justified by the statement that a T-bone steak isn't dangerous for children either. This shows a total lack of understanding of the market place. Firstly, salmon bones are comple tely different from those of a T-bone steak as they are much smaller and easily swallowed, but equally, it is highly unlikely that any parent would serve a T-bone steak to their children. This is because it is generally a very large portion and usually quite expensive.
The authors' confusion over the family health segment becomes even more apparent with their reference to salmon 'en croute' . They found that the second largest demand segment for this product was family health. They conclude that it is the s almon bit that is healthy, whilst the pastry makes it more attractive (to children?). This demonstrates a clear lack of understanding about the market position of salmon products. Salmon 'en croute' is considered to be a typical gourmet dish, ideal for dinner parties. Whilst the price of such dishes has fallen recently, because salmon generally is cheaper, it is still not yet an everyday meal option for families with children. The inclusion of pastry is more comparable to that of Beef Wellington and is not intended to make the salmon more attractive to children.
However, it is not just the family health segment, which is confused. When the researchers compared the top three fresh and frozen salmon products tested in the UK, an interesting comparison can be made between the most and third most popular products. These are a salmon fillet and a pack of two salmon fillets. The only apparent difference between the two is that one is a single salmon fillet and the other a pack of two. Yet, the consumer perception about which market segments these products fit highlights some confusion.
Why does a 2 pack of salmon fillet not figure as highly a single fillet in family health, yet is much higher for daily neutrality, which should be the largest segment? The answer is that the sampling is clearly inaccurate, since there is little difference between the two products.
It is therefore clear that the demand segments proposed for each of the most popular products may not reflect the true market positions. It is possible that the optimal marketing mixes, which the authors have proposed, may also be inaccurate. Their table (5), which illustrates the marketing mixes for fresh and frozen products, suggests how products may be packaged, priced and communicated to the market place.
a) The largest segment of demand found in the UK market is given as family health. It has already been suggested that this perceived valorised segment should be reclassified within daily neutrality. This is because consumers can eat healthily, but do not necessarily eat specific foods as part of a health programme. There is already confusion in the UK market concerning the healthcare claims of certain nutritional products. Salmon is certainly rich in omega-3 fatty acids but cannot be classified as a healthcare product. Consumers do buy salmon because it is perceived as being healthy, bu t so are other oily fish like sardines, trout, mackerel and herring as well as other light meal options such as other non-oily fish and chicken. Salmon is not any different to any of these products.
In terms of the product, a guarantee of no bones is no guarantee of health, other than if the consumer should choke to death on a bone. As already discussed, the key health aspect of salmon is omega-3 fatty acid content.
According to the authors, the packaging of salmon aimed at this segment of the market sho uld be reassuring to the mother. This message is unclear since the segment could cover a variety of options. Is it reassuring because it has no bones, or because it is rich in beneficial fatty acids? Is the packaging designed to reassure the mother that the salmon is good for kids or for the whole family? The potential exists to confuse the consumer and actually deter sales rather than encourage them. In the analysis of the French marketing mix, there is a small segment identified as being good for children . This suggests that salmon be offered in playful forms, which amuse the kids. This would be a much better way of encouraging the younger end of the market to eat salmon, as many kids do not understand the health aspects of food. Getting the kids to even eat salmon must take priority over the message.
The relative price of the salmon will inevitably be low since that is the general trend in salmon pricing. Adding specific value is the only way this can be increased. Perceived values, such as the health as pects, are unlikely to be sufficient incentive to raise the price at all. This will apply equally to all products covered in this section.
Distribution of these products is proposed through either the fishmonger or the supermarket and in one later example , the superette(?). The reality is that the only outlet for fish in the UK market are fishmongers and the supermarket, but over the last decade the mix between the two has changed significantly in favour of the supermarket. The retail fishmonger is fast disappearing from the British high street because of competition from the supermarket, but also because supplies of fish are also diminishing and fishmongers are finding it difficult to continue trading.
The final section refers to communicating the message to the consumer. In this example, the message is family health and kid's growth. The simplest way that this message can be transmitted to the consumer is on the pack itself, since the promotion of such diversified products would be extremely costly unless it was aimed at the mainstream market.
b) The second largest demand segment is for daily neutrality, the so-called non- emotional refuelling. The products suggested include fillets and steaks, as they are easy to prepare. However, fillets can be used to make the most sophisticated gourmet dishes, which could equally fall into the daily pleasure demand. There is therefore a danger that is the consumer could be confused if the simplest presentations are targeted at specific market sectors, whilst ignoring others.
The authors recommend that the packaging for such products is easy to open and close, yet most salmon in this form is packed with only one or two pieces. This means that once the pack is opened it is usually discarded. There is clearly no need for a re-sealable pack for this type of product.
In terms of communicating this product segment to the consumer, the message is easy to cook and handle, however, even for such a basic product; there is no reason why the health benefits cannot be included too.
c) Available/distress is given as the heading for the third most popular demand segment, but the authors provide no clarification as to what this means. Presumably, it refers to the need to retain some product in the freezer for times when there is nothi ng else in the store cupboard to eat. This could take the form of any presentation of salmon, but would be typically fillets or steaks. It has been suggested that these are presented in a family pack, but any bulk packaging would do. This type of product is already available in the UK market and priced more competitively than the twin pack. The authors of the report have suggested that the positive attributes of this pack be communicated by a '3 for the price of 2' offer. However, this implies a much discount than that this type of pack already achieves and therefore the authors are being too generous with this suggestion.
The use of special offers, such as '3 for the price of 2' are not new to the UK market. Such offers have been used extensively over the last ten years. These include BOGOF buy one, get one free (whole fish, steaks and fillets), up to 33% extra weight free and straight money off price discounts. These have further increased the popularity of salmon and encouraged new consumers to try salmo n , when perhaps, they would have never considered doing so previously. One of the simplest price-related marketing tools was used to help sell whole salmon, especially when the price first fell and consumers were unable to relate price per weight to the cost of the whole fish. Fishmongers priced up fish individually so the consumer could see exactly how much he/she would have to pay without having to ask. Many consumers would feel that once they had to ask the price and get the fishmonger to weigh the fish, they were almost obliged to buy it. Whole fish pricing avoided this dilemma, whilst making consumers aware how cheap salmon is.
d) The fourth demand segment is that of daily pleasure. The authors have suggested that a product such as 'seasoned slices' best represent this segment. Although the UK market is already well developed in terms of innovative products, this is not one of them, unless this refers to marinated fillets or escalopes. Clearly, for such a product, the packaging must be sufficiently robust to retain all the ingredients inside.
The recommended message to communicate such a product is that it is a tasty dish, which simplifies life. This message is confused, since the idea of a simple life is one that is surely associated with daily neutr ality rather than daily pleasure. Putting a ready meal in the oven to heat through is more reminiscent of the idea of quick refuelling rather than a pleasurable experience. The concept of taking pleasure from a meal must involve the ritual of preparation and not just the eating. Instead, the message must be one that conveys that such products are like a restaurant meal but served in the home. Equally, the message can also suggest that his is something worth paying extra for.
e) The fifth demand segment is the dinner party, for which whole salmon is the suggested product. The idea that whole salmon is now served at a dinner party is dated. The modern host/ess is more likely to make a meal using fillets or steaks rather than the whole fish. This is more remi niscent of the special occasion, where a whole salmon is presented as part of a cold buffet, than the dinner party.
The modern consumer is even more likely to buy the correct number of recipe dishes from the supermarket and serve these, than use a whole fish. The only reason consumers now buy whole fish is because the price per kilo is so much cheaper than that of fillets and the whole fish can be cut up into the required number of portions and any extra frozen for later consumption. It is unlikely that consumers buying whole fish would be also buying into a message that salmon will make a successful party, at a time when the overriding message emanating from the salmon market is that salmon is an ideal choice for an every day meal option.
f) The final demand segment is that of the ingredient. It is suggested that basic (?) or canned salmon is ideal for use in sandwiches and salads. The Scottish salmon industry have always rejected the idea that canned salmon is a competitive product to fresh Scottish salmon, even though the UK imports over 24,000 tonnes of canned Canadian and Alaskan Pacific salmon. This is perceived to be a totally different market, although the reality is that most consumers will see salmon as being salmon.