The final project for Marketing Research and Decision Analytics. We investigated the potential for Lutiplen (neutraceutical product) within the Mexican Market using segmentation, multiple linear regression, and van Westendrop's Price Sensitivity analyses. This is a pilot study for the company to determine the feasibility and potential segmentation for launching this product.

1. VEPINSA
LUTEIN MARKET STUDY IN
MEXICO
Erik Gielen
Rodrigo Castañón Menéndez
Alicia Marcela Rivas
Katherine Stookey

2. About this templateINDUSTRIAS VEPINSA
Founded in Sinaloa, Mexico, in the 1960’s
Natural pigment manufacturer for the poultry industry
Strong focus on R&D for the develoment of new products

3. About this templateINDUSTRIAS VEPINSA
VESPINSA produces, sells and distributes world-class natural pigments extracted from:
(Capsicum annuum)
Red Peppers
(Tagetes erecta)
Marigold Flower
(Bixa orellana)
Annatto Seeds
(Hibiscus sabdariffa)
Roselle Flower

4. Increased Competition in the pigment market
Diversification / Search for new revenue streams
Lutein potential
CURRENT SITUATION

5. THE OPPORTUNITY
The body does not produce Lutein
Found in food like broccoli, carrots, eggs, etc.
Antioxidant

6. PROBLEM
● Lutein started growing in markets like USA, Australia, UK
● Lutein is unknown in the Mexican market.
● VEPINSA suspect that high advertising expenses must be
done to make people aware about the product and benefits

7. QUESTIONS
1. What is the optimal segmentation and what are the most
defining characteristics of the potential market?
2. What, if any, are the significant correlations between
attributes?
3. What is the expected conversion rate per segment?
4. What is the optimal price with upper and lower boundaries?

8. SURVEY AND ANALYSIS
● 84 people surveyed
● Between 40 and 65 years old
● Mainly female Mexicans
◉
● Exploratory Analysis
● Segmentation and Classification Analysis
● Linear Regression
● Van Westendorp’s Price Sensitivity

9. EXPLORATORY ANALYSIS
● 70% have university degree
● 81% exercise at least once per week
● 84% are interested in a free sample
● 92% show interest in the product
● Most people shop at the supermarket
The 92% who are interested in trying indicate there is sufficient
demand/want and potential market for the product

10. SEGMENTATION & CLASSIFICATION
0
0.2
0.4
0.6
0.8
1
1.2
Antioxidents
History of vision problems
Interested in free sample
Interested in taking
antioxidents
Interested in tryingLutein
Optomitrist vists
Preventive medicine
Take Supplements
Sum of Cluster 1
Sum of Cluster 2
Sum of Cluster 3
Sum of Cluster 5
Sum of Cluster 4
Sum of Cluster 6
From a K-means segmentation:
6 distinct clusters were formed

11. Let’s review some concepts
SEGMENT 1: “THE AVERAGES”
There is no differentiating attributes
from the segmentation variables.
Recommended for future research to
identify other variables for
segmentation
SEGMENT 3: “THE EXPERTS”
There is a high willingness to purchase.
They take supplements as preventive
medicine and have above average
knowledge about lutein. They seem to
have a semi-below average willingness to
pay.
THE SEGMENTS
SEGMENT 2: “THE NO’s”
They are not interested in taking any
supplements nor interested in trying
nor are they willing to pay. They have
average knowledge in both
antioxidants and lutein.
.
SEGMENT 4: “THE I DON’T CARE”
They have no interest in trying the
product and have no interest in a free
sample.
SEGMENT 5: “THE WHY NOT”
This segment does not take any
supplements, have no history of vision
problems and do not go to the optometrist
often. Yet they are interested in the
product and a free sample.
This segment takes supplements and
visits the optometrist and are highest
in knowledge about antioxidants but
not lutein
SEGMENT 6: “THE ALMOST THERE”

12. SEGMENTATION DESCRIPTION
33%
7%
12%
11%
18%
19%
Cluster 1 Cluster 2 Cluster 3
Cluster 4 Cluster 5 Cluster 6
Segmentation variable / Cluster Overall Cluster 1 Cluster 2 Cluster 3 Cluster 4 Cluster 5 Cluster 6
Take Supplements 0.464 0.286 0.333 0.8 0.444 0.0667 1
History of vision problems 0.548 0.857 0.667 0.7 0.667 0.0667 0.25
Optometrist visits 0.823 1.05 0.667 0.8 0.889 0.255 1
Preventive medicine 0.119 0 0 1 0 0 0
Antioxidents 0.798 0.643 0.833 1 0.556 0.933 0.938
Interested in taking antioxidants 0.929 1 0 1 1 1 1
Lutein 0.262 0.143 0.167 0.8 0.222 0.0667 0.375
Interested in trying 0.893 1 0.167 1 0.556 1 1
Interested in free sample 0.845 1 0.333 1 0 1 1
Willingness to pay 236 237 58.3 191 128 271 356

13. ONE
Out of the 22 independent variables
(attributes and demographic
responses), only 2 were statistically
significant concerning the interest of
the product.
You can also split your content
TWO
Exercise and Interest in free sample
were strongly correlated to interest
in purchasing the product.
LINEAR REGRESSION

14. Use charts to explain your ideasEXPECTED CONVERSION RATE
4%
12%
3%
12%
3%
0%
5%
10%
15%
20%
25%
Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Segment 6
Expected Conversion Rate (ECR)
Combining the results from the linear and segmentation
analysis, the Expected Conversion Rate (% of customers
likely to purchase the product after the free samples) for
each segment was calculated.
1.04%
-1.56%
0.11%
-1.13%
1.49%
0.04%
Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Segment 6
% Change from Average ECR
Percent change from the average ECR of 2.62% across
the data set. 1 has the second highest % change but will
not be targeting due to the undefined characteristics.

15. FINAL TARGET
Based on the average weighted conversion
rate of 19.5%, it can be seen that roughly
49% of the ECR for the target segments 3, 5,
and 6 will account for 9.51%
19%
32%
49%
ECR Breakdown
Segment 1 Segment 2 and 4 Segment 3, 5, and 6
EXPECTED CONVERSION RATE

16. VAN WESTENDORP’s PRICING
The optimal price is 300.00 pesos for a monthly supply of lutein with an upper
boundary of 399.00 and a lower boundary of 299.00.

17. VAN WESTENDORP’s PRICING
Considering only our target: Segment 3, 5 and 6: pricing moves up to 499.0 pesos

18. RECOMMENDATIONS

19. OPTIMAL SEGMENTATION & CHARACTERISTICS
1
SEGMENT 3: “THE
EXPERTS”
SEGMENT 6:
“THE ALMOST THERE”
SEGMENT 5:
“THE WHY NOT”
31% of
market
49% of
market

20. SEGMENT 3: THE EXPERTS
◉ Active users of preventive medicine
and supplements
◉ Highest knowledge of Lutein and its
benefits
◉ Prices Sensitive
◉ Start product introduction initiatives
with this segment:
◉ Lower investments in product
education
◉ Focus on sampling and product
placement initiatives
◉ Price Sensitive: play with discounts and
value size packaging to create higher
value for their money.
◉ Position product where they actually
purchase for supplements
CHARACTERISTICS STRATEGY

21. SEGMENT 6: THE ALMOST THERE
◉ Highly educated in antioxidants
◉ Don’t have any knowledge on Lutein
◉ When explained, they possess one of
the highest interests of trying the
product
◉ They have the highest willingness to pay
◉ Invest in product education: ATL, BTL and
sampling
◉ Consider bundling with antioxidants
◉ Research purchasing patterns and position
products in more exclusive channels:
pharmacies and department stores.
◉ Try to pursue differentiated pricing in
segmented points of sale.
CHARACTERISTICS STRATEGY

22. SEGMENT 5: THE WHY NOT
◉ Do not consume supplements
◉ Does not use preventive medicine
◉ Average knowledge on antioxidants
◉ Show high interests in Lutein when
benefits and uses are explained
◉ Leverage on initial earnings from cluster 3
and 6 as significant investments are
needed for product education
◉ Creative in ways of introducing the
product
◉ Ideas: added Lutein to their actual
consumer goods like powdered shakes
◉ Create B2B alliances to penetrate easier
like creating a special product to health
stores, juice bars and cafes.
◉ Seek to position the product either in
regular or any variation of their
presentations in Supermarkets and local
stores
CHARACTERISTICS STRATEGY

23. CORRELATIONS BETWEEN ATTRIBUTES
2
Sampling
A must!
Exercise
Target customers into
health
Position in health
stores, gyms and
juice bars

24. EXPECTED CONVERSION RATES
3
Segment 3 Segment 6 Segment 5
>50 728,6501,550,320
MC:
47%
31% of
market
49% of
market
225,881
CR: 18.5%
41,788
CR: 20%
357,038
71,407

25. OPTIMAL PRICING
4
Segment 3
191 Pesos
Segment 6
271 Pesos
Segment 5
356 Pesos
:
◉ Tendency to answer towards a lower price
◉ Van Westendorp brings upper and lower limits based
on indirect inquiries to avoid bias
◉ Still consider potential elasticity from segment 3
◉ Start with upper price boundary and not from the
lower price boundary as start with low pricings makes
it impossible to increase prices in the future.

26. CONSIDERATIONS
• Survey results were mostly female respondents
• The survey sampling was only focused on limited age brackets
• Results are just an initial market snapshot
• Accurate samples in terms of age brackets, gender, and size is needed
• Analysis limited to attributes in survey: test hypotheses to understand
relevant attributes
• Conversion rates might also be higher when undergoing other initiatives
besides sampling
• Next steps would be research for: product positioning strategies,
packaging preferences, double check pricing, and segmentation by
regions

27. MODEL LIMITATIONS
• Linear regression should be redone with different attributes to confirm if
this analysis is correct and if there are other relevant variables
• Van Westendorp gives an optimal price from the customer point of view
and this price need to be double checked with the company´s expected
return on the investment as the price calculation does not consider cost or
profitability
• Segmentation analysis needs at least 300 respondents in order to have a
more realistic segmentation also considering that there needs to be a
better sampling quality

28. THANK YOU!
ANY QUESTIONS?