How To Market Your Capsule Coffee to Different Consumer Segments
In a study conducted in 2021, the global coffee capsule and coffee pod market was valued at approximately $27 billion. Estimates reveal that the value will grow to over $50 billion in the next decade. This growth creates an opportunity for new businesses to make a small fortune.
Consumers in any market are grouped into four major segments. They are:
- Demographic. Segmentation is based on consumer attributes such as age, gender, and income.
- Psychographic. This type of segmentation pays attention to psychological attributes like personality, lifestyle, social status, attitudes, opinions, etc.
- Behavioral. This segment pays more attention to the behavioral patterns of the consumers. They try to understand things that keep the consumers coming back.
- Geographic. The most apparent form of segmentation. Consumers are grouped based on the geographic region they live or work.
Understanding these core segments is crucial in developing the right marketing strategy for your private-label coffee brand. You must know the ideal client for your coffee capsules and understand what moves them, where they live, and their social circle’s influence over them.
In addition to the core segments, a July 2018 study conducted on Polish farmers revealed that the coffee industry is further divided into six specialized segments that can also inform your marketing efforts. They are:
- Responsible, aspiring to be connoisseurs (13.25%)
- Loyal coffee enthusiasts (17.00%)
- Pragmatic users (23.25%)
- Laymen (16.75%)
- Sophisticated connoisseurs (16.75%)
- Connoisseurs, but not at any price (13.00%)
Note: The numbers in brackets represent the fraction of consumers belonging to a specific group in a larger data set.
Let’s delve into these segments and understand how to market your brand to them.
Responsible, aspiring to be connoisseurs (13.25%)
This group of people consumes instant capsule coffee almost as much as they drink ground coffee. According to the study on Polish farmers, they tend to be younger than 35 and live in households with a net income of fewer than 500 euros.
These people are passionate about coffee and willing to pay slightly more for freshly ground coffee. To launch effective marketing campaigns targeted at these individuals, you must emphasize the freshness and origin of your coffee more than anything else.
Also, you must pay close attention to the price. They will buy your coffee if the pricing is slightly higher than regular coffee capsules but no more than that. They can not afford to overspend on coffee.
Loyal coffee enthusiasts (17.00%)
These are people who enjoy taking coffee. They can hardly go a day without a cup of coffee. Based on their coffee-drinking habits, it is safe to say they are attached to their favorite drinks. It is difficult for them to switch brands. They also take coffee advice from a small number of coffee experts.
This group of people supports ethical coffee sourcing, including proper working conditions for workers in the supply chain. Women dominate this group. They make up 57% of the total number of people in the group.
The net monthly income range is between 200 to 300 euros. They are also aged 45 or more. More expensive coffee does not mean better quality to these people, so they are reluctant to spend more.
Breaking into this group is more difficult. They do not have the budget for expensive coffee but form a loyal group, meaning they will continue buying from you for prolonged periods if you break their habits.
Your marketing campaigns could benefit from mentioning that you produce your coffee in ethical and humane conditions. This might help you sway individuals in this group from their current favorite brand of coffee.
Pragmatic users (23.25%)
Pragmatic users form the largest group of capsule coffee consumers. Most of the users in this group are young (between 16-24 years) and exhibit indifference toward the sustainability of the production process.
They do not show much regard for the materials used to pack the coffee, the working conditions of people in the supply chain, and other factors affecting the production process. They are attached to their favorite coffee brand, and getting them to change is difficult.
About 55% of the people in this group are male, and most of them are below the age of 35.
To sell to these people, you would need a new creative angle. They are not moved by sustainability and price. You need to find other interests outside of the coffee industry. These can be merged with coffee and then targeted toward them.
Laymen (16.75%)
Coffee laymen are probably what you think they are. Their knowledge of coffee is limited, but they love their cup of coffee. Their only concern is that the coffee tastes good and is easy to prepare.
They don’t believe spending more on coffee will give them better quality. However, they believe in sustainable business practices. More specifically, they believe the materials used to package their coffee should be environmentally friendly.
The majority of consumers in this group are aged 45 or more. The group also has slightly more females than males. Their net monthly income averages about 300 to 500 euros.
To sell to this group, it is important to emphasize the ease of preparing your coffee while maintaining a friendly price. It is also worth using environmentally friendly material that doesn’t affect the prices and mentioning it in your marketing material.
Sophisticated connoisseurs (16.75%)
People in this group love their coffee. However, unlike other groups, they are not loyal to one brand. They like to try out new things and enjoy different experiences. For them, it is not simply about the taste of coffee but the experience of preparing it.
They are critical of the looks of the packaging. The more information you can share with them about your coffee, the better. They enjoy all the small details about coffee and like to talk about them. Taking coffee for them is about the process as much as it is about the coffee itself.
The segment is dominated by women, who comprise about 57% of the group. They primarily live in larger cities and make significantly more money than their rural counterparts (upwards of 700 euros).
With these users, you can not dismiss sustainability. This detail does not go unnoticed. Your product may be quickly dismissed or ‘canceled’ if found to be engaging in non-sustainable business practices.
You can let your creative juices guide you when it comes to marketing. Share as much authentic information as you can with users in this group. Further, expensive is more likely to mean better quality with this group. Therefore, you can push the prices a little.
Connoisseurs, but not at any price (13.00%)
People in this group are also urban dwellers. They love their coffee but not at any price. The only form of sustainability they pay attention to is environmental friendliness. It is important to them that the packaging you use on your coffee is environmentally friendly.
Expensive doesn’t mean better quality to them. They are more likely to be loyal to one brand of coffee, which they’ll always buy unless it is out of stock at the store. In this case, they’ll pick the next best thing and move on.
This group also loves discounted coffee. They will certainly buy from you if they feel like they are getting a good deal.
Conclusion
Consumers have different priorities when it comes to their favorite products. Understanding what matters to your target market is crucial to your success in any business.
Targeting a smaller group of people where you think you’ll have the most impact makes it easier to find success in your private-label coffee capsule business. Targeting a wide audience is risky because it costs more to tend to and fulfill different consumers’ needs.
A wide target audience is more expensive to market to and takes time to understand and satisfy. You should pick a segment, study and understand it, and meet its needs. Then you can proceed to add another segment to your business. Rinse, repeat, and you’ll have a large market share in a few years.
