Value-based consumer segmentation: the key to sustainable agri-food chains

Abstract

Purpose – The final consumer has the exclusive right to define what constitutes value in a product or service. Under increasing pressures of globalization and urbanization, a consumer-focused approach to performance improvement in supply chains can lead to more satisfied consumers and improved returns to growers and retailers. This paper aims to demonstrate that such an orientation, though lacking in agri-food supply chains in developing countries, can mitigate threats to food safety, consumer health and environmental quality. Design/methodology/approach – Data were collected through random survey intercepts (n=418) at different retail outlets for fresh vegetables in Nairobi, Kenya in 2010. Multi-step cluster analysis (Ward Method, K-means) was used to classify fresh vegetable consumers, in terms of their product, production and marketing process preferences. Findings – Four heterogeneous segments in terms of value preferences, behaviour and personal profiles (p<0.05) were derived. They were labelled Prestigious Shoppers (25 per cent), Market Enthusiasts (18 per cent), Ethics Crusaders (41 per cent) and Safety Sceptics (16 per cent). All segments expressed high or moderate preferences for product quality. In addition, the Prestigious Shoppers expressed a moderate preference for customer service. Market Enthusiasts attached the highest values to market conditions and customer service. Ethics Crusaders most highly preferred customer service, while Safety Sceptics most highly preferred safe production. Research limitations/implications – Since it is difficult to predict consumer behaviour precisely, these findings may be contextual. Yet, the segments have unique value preferences despite actors treating them as homogeneous. Ignoring these differences can lead to unsustainable attempts to improve chain practice and policies. Originality/value – This paper is the first of its kind. It advocates for use of universal value profiles as a basis for development of consumer-focused strategies for sustainable performance improvement in agri-food chains in developing countries.