Reports
Whose Reality? A response to the ISFA/Roche market study for salmon, June 2000
Mythologies behind the consumption of salmon
Situation/function of demand consumption for salmon
Peter Shelley, Executive Director of the ISFA has heralded the ISFA/Roche marketing study as the first ever consumer study for salmon and a pathway for salmon marketing for the next five years. The study entitled "The European Market for Salmon: what do consumers really want?" was based on the recognition that there was a need for the salmon industry to be market driven rather than production driven. It is expected that it will be the forerunner for further generic studies of the farmed salmon industry.
The study examined what consumers wanted and how they perceived salmon, focussing on three of the key European markets, France, Germany and the UK. According to Mr Andrew Cookson of GIRA strategic market research, who undertook the study, the aim was consumer perception, "their reality, not ours".
The key question, arising from this study, is whether "their reality" bears any resemblance to the reality of the market place? This document further discusses the issues raised in this report.
The following sections mirror those of the report: -
The reports' introduction states that it is almost a platitude to say that growth of salmon in recent years places it in the forefront of successful modern food products. This view is not quite correct, since whilst salmon production has exhibited rapid growth, the salmon farming industry is still clearly in its infancy. The signs, such as price pressures, relative modest growth levels of some markets and inconsistent quality, which might suggest that the market is maturing, can also be representative of other market conditions. This would appear to be the case with the salmon industry.
The three market signals, highlighted in the report, can be fully explained without reference to a maturing market. For the last ten years, salmon prices have been falling. This has been typically explained as being the result of over-production. The reality is that there is a direct link between volume production and price. As volumes increase, prices will fall and vice versa. This is a normal market response, however it has been misinterpreted by the salmon industry because from the outset salmon was perceived as a luxury product. Unfortunately, as volumes rise, it is simply impossible to maintain such a luxury image and therefore the plunging price became even more conspicuous. Salmon farmers who built their business on the expectation that they would be producing a luxury product became disenchanted, which in turn caused further market disruption. This has been read as a sign of a maturing market, but is rather an indication that the salmon industry has experienced the early growth pains of a rapidly expanding business.
The suggestion that there is only relatively modest growth in some markets is equally not necessarily a sign of a maturing market. This might have more to do with the type of production led strategies commonly operated throughout the salmon farming industry. For example, the Scottish industry has believed that the addition of a Scottish brand mark is sufficient incentive for consumers to want to buy their salmon. This has proved to be just not the case.
Finally, inconsistent quality is never an indication of a maturing market, but rather a by-product of an industry trying to maximise production, but giving little regard to the needs of the target market. This is the inevitable consequence of the type of production led strategies operated by the salmon industry. However, it should also be recognised that cold-blooded animals like salmon, will respond differently at the range of ambient temperatures found throughout the major salmon producing areas. This can lead to significant differences in flesh quality, which might be further enhanced by various production strategies employed by salmon farmers.
However, even if the market is not approaching maturity, as suggested this does not prevent the development of 'more' market led strategies. Instead, it should actually encourage and promote such development, not only because it can reduce the pressure on the market, but can also contribute to overall margins.
The report suggests that the global approach in which salmon is all things to all men is the surest way to 'devalorise' salmon. This is the inevitable outcome of the production led strategies adopted by the industry and the reality is that such 'devalorisation' has already happened and there is little the industry can do to change it. However, this does not mean that it cannot capitalise on such 'devalorised' products.
Salmon were selected as a candidate species for farming because salmon were perceived as a high value, luxury product for which consumers would be prepared to pay a premium price. However as production increased, it was inevitable that this image could not be sustained. Volume production and luxury image are incompatible, yet the industry has tried to maintain the image whilst at the same time undermining it by significantly expanding production. The proposition that product differentiation is essential is nothing new, but the past preconceptions of image have previously prevailed over and above the need for this urgent change.
The ISFA report states that its objective is to establish what needs consumers have that can be fulfilled by salmon products and how salmon should be differentiated so that they are perceived by consumers as an optimal meal solution. This aim reflects the continued call for the introduction of more market led strategies which would enable farmers to produce the exact product that consumers actually want rather than those that they think that consumers want. However, the need to react to consumer demands must be tempered by the necessity to implement a full marketing plan rather than highlight and rely on consumer opinion as the aims of this study would imply. This is because consumer views cannot be isolated from the issues of the wider market place. Taken out of this context, there is a potential danger that the consumer might not exactly know what he/she wants simply because of any prevailing unfamiliarity with the market place. This issue will be discussed in more depth in the conclusion.
The ISFA has selected three key European markets for its study. However one significant factor has not been highlighted and that is whilst the UK market ha s been identified as being one of the three most important in Europe, it is also the only one which is able to meet its own market demand. This is because it is the only key European market with its own producing industry.
The authors of the ISFA report state that they are only concerned with consumer's perception of salmon, as this is what dictates choice of product in the store. Unfortunately, this statement is extremely misleading as it is unclear as to whether this means that the consumers' perception dictates what salmon products the store stocks on its shelves, or whether it refers to the actual selection of the product of those already available in the store.
In the context of this study, which ultimately concerns market development, this statement must refer to the products, which the store selects. If this is the case, then this view is extremely erroneous. Whilst the views and responses of the consumers are very important within the context of the marketing mix, the consumer is not responsible for the ultimate selection of which products are stocked. This is the retailers' decision. It is only when the product is finally on the supermarket shelf, that the consumer is able to exert his or her view on the choice of products on t he market. If the product is what the consumer wants, then it will sell. If it is not, then it will remain firmly on the shelf.
The idea that consumers' perception of salmon can be the main driver of the market is equally mistaken. Consumers' perception is of interest, but consumer activity is much more important. This is why a market audit is such an important part of the marketing mix. It is much more meaningful to know which consumers are buying salmon, the sort of products these consumers are actually buying and the market trends for these purchases, than just their perception of a product.
The authors also state that the degree to which the study does or does not reflect reality as the producer or retailer understands it does not concern them. This is an extremely blinkered view, since the reality in relation to the producer and retailer, are an integral part of the market, which cannot, and must not, be ignored.
The reality of the market place is many times more critical to the future of the industry than any market perception. The report states the methods used in the study. These include: -
An initial qualitative programme of 30 non-directive, in depth interviews in each country. These interviews lasted 90 minutes each and the consumers was allowed to talk freely to express feelings and thoughts about food, meals fish and salmon, without direct questioning.
These interviews were analysed to extract the consumption drivers and brakes, which the authors describe as salmon's mythology. This relevance of this mythology will be discussed within the appropriate section of this report, however there must be some doubt as to how non-directive these interviews were. The mythologies refer to gender related attributes, which are not the sort of references used in common, every day language in relation to food. This terminology appears to be rich in market-speak and other buzzwords, which implies that the interviews if not directed, were heavily influenced.
A subsequent quantitative street survey of 300 salmon consumers in each country in which questions were posed about when and why salmon is eaten. Whether the results of this survey are representative of consumers in each country is open to doubt. The sample questioned in each country is very small and unlikely to be statistically significant. Market research is an exact science in terms of statistical representation and certainly in terms of the UK market, the number of interviews conducted is usually well over 1000. Scottish Quality Salmon recently commissioned a survey from MORI; a leading market research company and the sample size totalled 1945, well exceeding the sample used in this survey.
These surveys led to the following two analyses: -
Mythology: The report suggests that such mythologies represent the sector drivers and underlying ideologies that mean a product, such as salmon, is in tune with global consumer trends. Equally, it can refer to products that are positioned in opposition to the main drivers of consumption. However, mythology is a n unfortunate term in relation to these contexts, since mythology is usually associated with legends and stories not facts or the reality of the market place. The simple reality is that if the salmon industry does not produce the type of products which t h e market want, then consumers will look to other products which meet their needs. This is not a new idea but one which the salmon industry has largely ignored over the last decade, preferring to focus on issues such as country of origin, which are only minor influences in the consumer buying process.
The Mythological analysis is supposed to show what consumers think salmon really is. This is what is thought to influence the consumer and what makes them decide to buy salmon. However, the authors appear to believe that these mythologies drive the market irrespective of how pertinent or not they are to reality. This is mistaken. The reality of the market place is of paramount importance and is the major influence to driving the market forward. The salmon industry is littered with examples of consumer ideologies, which bear little resemblance to the realities of the market place.
The situation/ function analysis is supposed to provide a photograph of consumption today, which enables determination of not only w hen salmon is eaten but also why. However, at this stage of industry development when salmon products have not yet been particularly diversified, the relevance of this type of analysis needs to be questioned. After all, it is only two or three years since whole salmon was still perceived as the main market presentation. Salmon consumption is still relatively insignificant, as compared to chicken for example, that whether salmon is eaten for Sunday lunch or Monday night is largely unimportant. By comparison, other issues are far more consequential to the future for salmon market development. For example, many consumers and potential consumers still do not consider salmon to be a value for money everyday meal option. This is because the message emanating from the industry suggests that salmon continues to maintain an elevated market position, if not quite its previous luxury status.
The segments of demand identified by this study are grouped together in this analysis in areas of similar marketing mix, enabling products to be adapted to any given meal occasion. However, the salmon market is clearly a long way from requiring definition of whether a product will be intended for breakfast, lunch or dinner.
The authors describe this analysis as a powerful new tool , however, much of the information displayed in the schematic matrix of consumption is simply common sense as it applies to anybody, even salmon farmers, who consumes food. There is however a danger that such a matrix can predefine both meal functions and situations. For example, the matrix omits to include the easy to cook meal function within the dinner/couple/starter and dinner/party/starter meal situations, when as in the modern environment, such a consideration can be a major factor in meal selection.
The authors have highlighted that, from the outset, it is important to understand that a segment of demand is not the same as demand for a given product. The demand may be for a meal centred protein that is easy to cook and easily digestible, which could be met by salmon, but as the authors point out, it may also be met by a chicken breast or a hamburger steak. Yet, if this demand was for a fat rich, heavy protein, then salmon could never be considered as an option. Salmon producers must capitalise on the strengths of their product, which are already well defined. These predetermine the type of meal situation for which salmon is most appropriate and therefore this schematic matrix is largely irrelevant.
The market shares and percentages are the result of the 300-consumer survey in each country. Although this is a very small sample, the authors claim that the data provides a reliable hierarchy of demand. However, they also state that the figures are not necessarily a reflection of total national consumption. If this is the case, then the data can only be said to be relevant to the sample and not to national consumption.
The Mythologies behind consumption of salmon
The researchers discovered that consumers in all three countries perceive salmon in the same three positive Mythologies: Muscle, Individualistic and Feminine. However, these Mythologies appear to contain significant contradictions.
a) Salmon is perceived to be a muscle, full of force and vitality as associated with sport. It is neither a meat nor fish, but yet to grow it must have had room and strong currents. Curiously, if it were not a fish, why would it need strong currents to grow? Perhaps a more realistic interpretation, at least pertaining to UK consumers, is that there is an increasing desire to disassociate the food eaten with the realities of the farmyard. Consumers prefer to buy a sanitised pre-pack of muscle, whether it is meat or fish. The less like the animal from which it is derived the better.
b) Salmon is also perceived to be individualistic, a free lone fish swimming the ocean depths, yet at the same time, consumers also believe that salmon is not a fish!
c) Salmon is seen as being feminine, beauty without anxiety and threat. The association with gender is not new. Masculine products are those that are rich in nutrients, which may be perceived to sit heavily in the stomach. By comparison, feminine products are those that are light, even healthy. The rise in feminine type products may be associated with a greater awareness of live styles and health. It is not a phenomenon exclusive to salmon.
However, the authors of this study have perhaps overstated the relationship of this gender association. Their description of the "universe" of food has become extremely confused. Gender appears to have been extended into unrelated expressions of the marine environment and vegetables. Perhaps this might be better described as follows: -
According to the authors, all three of these elements are highly valorising (sic) for consumers and it is these positive consumer images which have driven consumption to levels unseen since the "invention" of yoghurt. Unfortunately, this view is mistaken. The dominant consumer driver responsible for the massive increase in demand is clearly the low price of salmon. Consumers now recognise that salmon offers real value for money.
The report suggests with the democratisation of salmon consumption and increased pressure for transparency in labelling and traceability, there is a risk of disappointing consumers that if the marketing messages sent out by processors and retailers contradicts these fundamental "Mythological perceptions. Sadly, the importance of these mythologies is being over-stated, since the past experiences of the salmon industry has clearly shown that the consumers have largely ignored the messages emanating from the salmon marketing organisations. These have largely focussed on the high quality image and national identity of salmon, especially that produced in the UK. Consumers have failed to respond to this message and are content to buy the salmon, which represents the best value for money. Salmon has become more democratised (popular) and this is simply because, due to the expanded production of the salmon industry, it is now much more widely available and affordable. These are the issues which matter to the consumer and the suggestion that there is increased pressure for transparency in labelling and traceability comes more from the producers who are keen to protect their own markets, than from the consumer.
The authors state that if consumers were disappointed then the market would stagnate and products would be devalorised, increasing pressure on margins throughout the supply chain. The reality of the salmon industry is that margins have been under pressure ever since 1989, when prices first collapsed. This is because the industry has remained committed to its production led strategies and given little regard to market development. However, margins have declined because of increases in production, not because of consumer disappointment. Margins can be regained but this must be through market development and innovation.
At the same time, salmon has lost its luxury image and thus can already be considered as devalorised. Consumers cannot be expected to hold any product in high regard, which is produced, in mass volume. This is why innovative product development is so important. Any product has a natural life cycle, which needs to be refreshed or developed in order to maintain its market presence.
The study has shown that the principal competitor for fresh salmon is chicken, although this can cross into other segments and be another fish. On rarer occasions, it could be beef or even a vegetable. A number of the journalists attending the press conference to launch this study were given the impression that this might even include lettuce. The main competitor for smoked salmon is ham.
The authors of the report suggest that the word 'competitor' could be misleading in the case of salmon and thus it requires definition. According to the report a competing product is one which the consumer will use as a substitute for the product either because the right presentation is unavailable or because there is a need to vary the products eaten.
It is quite understandable as to why chicken is perceived to be the main competitor to salmon, since chicken is also nutrient light and represents value for money. In fact, the broiler industry is often held up as the model for the future of salmon farming and therefore both salmon and chicken are seen as being similar. Unfortunately, this view of a competing product is based on consumer perception but it ignores the reality of the shopping experience. Most meat, whether it be beef, lamb, pork, chicken or turkey, now sold in UK supermarkets is pre-packed. These packs are grouped together in banks of chiller cabinets. By comparison, fish is sold either loose at a separate fresh fish counter or in pre-packs in another chiller cabinet.
Salmon consumption has grown, but not at the cost of chicken. Salmon sales have benefited from the fact that consumers have gone to the fish counter to buy more traditional species. If these are either unavailable or too expensive, then the consumer then might look for an alternative. The widespread availability of salmon has meant that its presence now dominates the fish counter so consumers will naturally consider salmon as an alternative to other fish, especially when they recognise that it now competitively priced. If supplies of fish are limited, the consumer might move to the fish pre-packs section and if these too do not meet the consumers need, only then might the consumer look to other protein sources? Chicken may be an obvious choice, but the consumer will have a whole array of different meats and presentations to choose from. Of course, meat is not the only competitor to salmon. The list could include fish, shellfish, meat, manufactured vegetable proteins, eggs, cheese or vegetables. Any product, which is bought instead of salmon, is potentially a competitor, where it is either a substitute or to vary the meal options.
The authors suggest that it is essential to study products like chicken to benefit from their market experience. This is not a new idea, but one the salmon industry has consistently ignored.
The Image of Farming
The authors suggest that in no country, is the consumer really aware of what salmon farming is. The research shows that French consumers do not believe that the salmon they buy is farmed. However, it is just as likely that most British and German consumers think about salmon in exactly the same way.
The report suggests that knowledge of farming is a key element in any awareness programme and such programmes are clearly necessary. However, the reality is that most consumers would like to remain divorced from the idea of farming. They prefer to know as little as possible about the origins of the food that they eat. Ideally, their food should bear as little resemblance as possible to the animal it comes from.
Choice criteria
The authors suggest that the importance of brands, origins and quality labels vary enormously depending on the meal situation when the salmon is to be eaten. The authors recognise that they are generally unimportant in most meal situations, except those, which may be a highly valorised, pleasure meal. However, even in these cases, such criteria may well be overstated.
In the case of salmon, brand image has never been a feature since there has been no or little investment in brand development and support. A leading British company attempted to brand their salmon several years ago, but failed because consumers recognised that the product was identical to that which was unbranded and no worth the extra cost. The failure was blamed on the distance between processor and the market place, but this was only an excuse as many processors are based in obscure locations.
Country of origin is often perceived as being an important factor in the salmon buying process, but the reality is that most consumers do not care about the origin as long as the fish represents value for money. Many sections of the industry continue to focus on origin, even though the last ISFA market survey clearly showed that it is unimportant to the consumer.
Quality marks are also perceived as being important to the buying process, but most consumers know little of the background to these marks and exactly what they signify. Instead, the consumer prefers to delegate responsibility to the supermarket to maintain a quality standard of the salmon they buy. This issue is discussed in the section pertaining to retailer attitudes.
The Situation / Function analysis of demand for salmon products
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 actually 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.
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 demonstrates 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 resulted 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 and 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.
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 becomes 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 with 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 true 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 population.
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 about 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 completely 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 salmon 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, but 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 should 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 aspects, 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 nothing 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 salmon, 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 neutrality 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 hostess is more likely to make a meal using fillets or steaks rather than the whole fish. This is more reminiscent 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.
France & Germany.
France & Germany are mentioned in this review only with reference to the idea of family health and childrens growth as these are so heavily accentuated in the UK section.
The authors of the report suggest that only the UK market has a specific demand segment for family health. Yet, when meal functions are also considered, it is interesting to note that Germany records an even greater response than that generated by the UK market. It is possible that this is not reflected in the demand segments because German consumers have reacted to a less developed market for salmon and are simply unaware of the potential possibilities for further development of salmon products.
By comparison, the French market has not considered health to be an issue it may be interesting to consider similar responses to other non salmon products to identify whether this is a national trend or again unawareness of the potential to develop salmon to create a new market demand. Whilst health does not appear to be a specific issue, the French consumers have identified a demand segment for childrens growth. The authors have proposed a playful form of salmon to respond to this market demand. This is intended to amuse children during meal times. The reality is that the industry should encourage the new consumers of the future with products to which they can relate. This is the way to introduce salmon at the earliest possible stage and hopefully create a lifetime loyalty. What is surprising is that the authors do not relate this demand to the UK family health segment in which similar ideas also exist.
A Situation / Function analysis of smoked & FPP salmon demand in the UK.
The authors have stated that the market for smoked salmon and further processed products is a very different to that of fresh and frozen. However, it is clearly a market, which is changing rapidly. This is because smoked salmon has been perceived to be a way of adding extra margin to the basic salmon raw material. The problem has been that production of smoked salmon has increased so rapidly, that like salmon itself, the product has become ubiquitous and hence has lost some of its luxury image.
The comparison of market share of the main demand segments does not show a great difference between the three target countries. The only real variance is the UK market includes a segment for health. This is similar to the demand segment for the fresh and frozen products and probably reflects the same attitude.
It is interesting to note that the five-year trend for the neutrality segment for each country differs markedly. In France, the trend is upwards, in the UK down, whilst in Germany, demand is expected to stagnate. These three very different prognosis for the most basic demand segment indicate that there is confusion about market positioning of smoked salmon. It also illustrates the industry's reluctance to recognise its dependence on one main added value product. This is demonstrated by the fact that this section, which considers smoked salmon and FPP, concentrates on almost exclusively on smoked salmon and slight variations. This can be seen by the fact that in each of the tables examining the marketing mix, the authors have been unable to cite specific examples under the product headings and instead have used meaningless terms like 'a pleasant product' or 'a functional food'.
The UK market.
The rather surprising finding of this study is that the most significant meal situation for smoked salmon in the UK market is for the home made packed lunch. Whilst smoked salmon has clearly been devalued by its widespread availability, it is still unlikely that these findings reflect the true consumption pattern of UK consumers. Despite its falling price, smoked salmon still retains some of its luxury status, hence the inclusion of the so called 'classy' demand segment and this has prevented a complete devaluation to being a packed lunch product. This demand is more likely to be met by canned salmon or even salmon paste.
Interestingly, the commercial sandwich sector, which has not been included in this study, must reflect national consumption preferences, but whilst virtually every other ingredient combination is available, salmon, whether fresh or smoked rarely features in ready made sandwiches. Marks & Spencer, the leading supplier of sandwiches, do offer both salmon and smoked salmon varieties, but these are both only recent additions to their range and only account for a minor proportion of sandwiches sold.
It is also significant that sandwiches feature in both fresh and smoked salmon marketing mixes, but the apparent differences in perception between the two simply confirms the reason why such consumer surveys can be unreliable. In the fresh salmon demand segment, sandwiches are cited as a product within an ingredient demand, whilst for smoked salmon they are place din their own segment. The percentage share between the two ranges from 3 to 22% and this variance is too great to be indicative of a lack of significant consumer testing.
Retailer attitudes to salmon and salmon products
As they are at the cutting edge of the business, retailers clearly have a much better appreciation of the realities of the salmon market than that held by most consumers and sadly, of many producers as well.
What is clear from the retailer attitudes is that salmon is equal to or much more important than other fish in all three countries. This is not difficult to understand as can be seen from the stated buying criteria. Farmed salmon offers both predictable and consistent, price, quality and availability, criteria, which cannot be met by wild caught species. Certainly, in the UK market, the fishmonger has become totally dependent on supplies of salmon to sustain the viability of the business.
Whilst, salmon is so important to the retailer, it does have some perceived disadvantages for them. The main three include an apparent consumer weariness, which may be due to the fact that the French market is the main target market for all European producers. This concentration of supplies underlines the urgent need to diversify the market away from salmon as a basic ingredient. The second is price, which relates to the fact that salmon producers are still unable to let go of their previous preconception of salmon as a luxury product. The key market for salmon is as an every day meal option and salmon prices need to reflect this need. The final disadvantage is the view that salmon is not child friendly. Since most producers view their target consumer as being in the older age groups, this is not surprising. It also conflicts with the consumer response that salmon is chosen because of the family health aspect and that it is good for growing kids. Obviously, one of these perceptions is incorrect and since the sample size used in this survey was so small, it must be the consumer response, which has been misunderstood.
The authors of this report claim that the French market is mature and the demand segments already well differentiated. It has already been suggested that this view may well be mistaken. This is apparent from comparisons of the French and British retailer's perception of their fastest growing sectors. In France, the fastest growing sector is for 'heart of fillet' or just another presentation on the basic raw material theme. By comparison, the fastest growth in the UK market is for meal solutions, a highly differentiated product range. This is a market area, which is not exclusive to salmon, but is across the whole protein sector. The differentiation of the market through meal solutions clearly will widen the potential market for salmon to embrace many more consumers who would otherwise never consider buying either fish or salmon.
The final group of retail attitudes relates to the importance of certain aspects of salmon production. The first is to quality certification. This is the approach taken by sections of the Scottish industry. It is clear that supermarkets believe that most of their customers trust the supermarket to make the buying decision on their behalf and extra reassurance is unnecessary. In addition, most of these schemes are not understood by consumers and therefore have no relevance to the consumer direct. If there is a problem with the product, the consumer will probably revert back to the store rather than the original supplier, as in generally implied by consumer legislation.
Origin is also a contentious issue, which appears more important to the producer than the consumer. This was also apparent from the last ISFA market survey. Most consumers are more interested in t he price than the origin of the salmon they buy and this is reflected in the attitudes of the retailer.
Colour is a subject, which is under continual review by the industry. The clear message however, is that colour can be modified to meet individual needs.
What is clear from the retail attitudes is that whilst there is a general consensus about most of the issues raised, there is a general disagreement as to how sales can be increased. The answer will ultimately depend on how the future development of t he market. Past experience has shown that attempts at national, generic and quality promotions have all failed, whilst price related offers produced a consumer response. This is a subject in its own right, which merits much further discussion.
According to Mr Andrew Cookson of GIRA strategic market research, who undertook this study, the aim was consumer perception, "their reality, not ours". However, it is clear that any attempt to engage in more efficient marketing of salmon cannot segregate consumers away from the wider market place. Producers, processors, retailers and consumers all have a part to play in developing the marketing mix.
It has often be said that the past problems of the salmon industry have been due to an unwillingness to move from production led strategies to those which are more market led. This would mean that the producers start to produce the type of products that consumers actually want rather than those that they think the consumer wants. However, it is dangerous to expect that the consumer should have an intricate knowledge of the market. In many cases, the consumer does not know what they want until they actually have it. The driving force for innovative development therefore cannot come from consumers al one, but rather from a combination of all those involved in the supply chain. Non can abdicate responsibility.
The frontispiece summary page of the report states that "Our study aims to show processors and retailers how to target real demand and profit from prevailing, favourable consumer trends". This clearly suggests that the producers, in the form of their international association, would prefer to relinquish their part of the process.
Marketing is about ensuring the right product, is available at the right price, at the right time and at the right place and, most importantly, that the producer can do this profitably. Thus, the producer is inextricably linked into the market process. They must also be the driving force to take the industry forward.
This report shows that whilst consumers must be part of the marketing process, they cannot be the dominant force, nor can they relied on to provide an accurate assessment of the realities of the marketplace. Instead, they can be much better utilised either endorsing or rejecting specific product ideas and promotions. This is not a question of their realities or ours. What is needed is an all encompassing assessment of the marketplace, which not only takes into account the needs of the producer, processor, retailer or consumer, but also the realities of the market place.
References
More efficient marketing of fresh, frozen and smoked salmon in France, the UK and Germany. Breaking the mould of current practice to win new markets and further develop existing ones.
Abstract of a Qualitative & Quantitative Consumer study carried out in 2000 by GIRA for the International Salmon Farmers Association with the support of Roche Vitamins Europe Ltd.
ISFA, GPO Box 293, Hobart, 7001, Tasmania, Australia.
Roche Vitamins Europe Ltd. Basle. Switzerland.
Gira Consommateur, 71 rue Pierre Semand, 93130 Noisy-le-Sec, France.