1. CATEGORISING THE CRAFT BEER
PRODUCT ASSORTMENT
FE6006 FOOD MARKETING RESEARCH DISSERTATION
111222987
PAUL O’SULLIVAN
WORD COUNT: 10,738
AUGUST22, 2016
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1 Executive Summary
This research endeavoured to address current industry shortcomings in relation to the
sale of craft beer in off-trade premises. An investigation was conducted to evaluate potential
procedures aimed at elevating the craft beer shopping experience and improving retailer
performance.
A series of semi-structured interviews containing a product sorting exercise were
applied to uncover different consumer categorisation processes. The key insights stemming
from this primary research were employed to develop three craft beer assortment. These
served as the focal point in subsequent intercept interviews conducted in an independent off
licence.
Respondents highlighted concerns regarding the lack of organisation and structure in
two of the assortments, implying confusion, frustration, and abandonment of purchase
intentions as by-products. The lack of clear categorisation and neglect of point of sale led to a
context of hyperchoice, which resulted in unsatisfactory shopping experiences.
In contrast, the third assortment received positive feedback from respondents, noting
that the structure and clear use of category headings improved the purchaser’s ability to
navigate the category more efficiently. Many respondents shop with pre-determined purchase
intentions and the use of categorisation reduced the complexity associated with achieving
these specific shopping missions.
Provenance played a central role in the categorisation of the assortments. The
capacity to distinguish between products from different regions was described as a critical
concern for most respondents. Furthermore, style of beer and brand were reported as crucial
influences in the purchaser’s decision making process.
It was a possible concern that imposing such structure on a category with hedonic
nature like craft beer would detract from the shopping experience. However, the ability of
purchasers to cross reference products by country of origin and style of beer added to the
exploration experience which is an essential consumer attraction.
The evidence suggests that it is possible to impose a structure on the craft beer
assortment to achieve a balance between hedonic and utilitarian shopping value. A number of
marketing implications are suggested which pertain to improving the shopping experience by
reducing the perception of clutter and increasing the perception of variety. Recommendations
are made to areas deserving of further research to progress the understanding of this topic.
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List of Figures
FIGURE 1: RANGE OF PRODUCTS FROM CARLOW BREWING COMPANY 8
FIGURE 2: "A VERY IMPERIAL WINTER", PRODUCED BY 8 DEGREES BREWING 8
FIGURE 3: SELECTION OF CRAFT BEERS IN HURLEY'S SUPERVALU, MIDLETON, CO.CORK 9
FIGURE 4: EVALUATION OF A CATEGORY'S HEDONIC POTENTIAL 16
FIGURE 5: CATEGORY'S WHICH DO NOT DELIVER SUFFICIENT UTILITARIAN SHOPPING VALUE 17
FIGURE 6: SAMPLE OF CRAFT BEER CARDS FOR SORTING-EXERCISE 20
FIGURE 7: COMPARISON OF NUMBER 21 OFF LICENCE MIDLETON CRAFT BEER SELECTION 24
FIGURE 8: IMAGES USED FOR INTERCEPT INTERVIEWS 25
FIGURE 9: RESEARCH PROGRESS FROM INITIAL INVESTIGATION TO PRACTICAL APPLICATION. 27
FIGURE 10: PARTICIPANT A PRODUCT GROUPINGS, HEADINGS, AND STRUCTURE 30
FIGURE 11: PARTICIPANT B PRODUCT GROUPINGS, TITLES, AND STRUCTURE 31
FIGURE 12: PARTICIPANT C GROUPINGS, HEADINGS, AND STRUCTURE 32
FIGURE 13: PARTICIPANT D GROUPINGS, HEADINGS, AND STRUCTURE 33
FIGURE 14: PARTICIPANT E GROUPINGS, HEADINGS, AND STRUCTURE 35
FIGURE 15: SUMMARY OF ASSORTMENT SELECTION INFORMATION 37
FIGURE 16: THEMES ASSOCIATED WITH ASSORTMENT A, B, AND C (FREQUENCY OF MENTIONS) 38
FIGURE 17: THE EVOLVING IRISH IDENTITY (BORD BIA, 2015) 41
FIGURE 18: EXAMPLE OF LOCAL BEER PROMOTIONS: KERRY CRAFT BEER 42
List of Tables
TABLE 1: PROFILE OF INTERVIEW & SORTING-EXERCISE PARTICIPANTS 21
TABLE 2: SEGMENTATION OF CRAFT BEER CONSUMERS 23
TABLE 3: PROFILE OF ASSORTMENT SELECTION EXERCISE RESPONDENTS 36
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2 Introduction
This research endeavours to answer two questions associated with consumer
behaviour and the purchase of craft beer in off-trade retail, the findings of which will have
implications to consumers, retailers, and craft beer producers. The initial purpose of this
research was to explore and understand the consumer categorization processes used to
evaluate the craft beer assortment in an off-trade retail environment. Subsequently research
was conducted to address the question of how to best organise the craft beer assortment to
ensure optimal shopper satisfaction and induce a desire to purchase by meeting the needs of a
variety of shopper segments.
This research is relevant given growing mainstream interest in craft beer and evolving
consumption habits, which will illustrate the indispensable need for off-trade retailers to
advance and satisfy shopper’s needs.
A background and rationale section will follow the introduction and has been
provided to contextualise this research. The evolution of craft beer in Ireland is detailed, and
data is provided to outline the industries growth potential. A framework is provided which
highlight’s the changing consumption patterns of Irish consumers and the response of
retailers to this market shift, thus justifying this study.
The literature review will follow the background and rationale section. The relevant
literature and industry reports which have helped guide this research are discussed in this
section and will further justify this study. The literature review will focus on consumer
behaviour in the retail environment.
The methodology is contained in Section 5 and will describe in detail the research
techniques which were applied and provide a justification for their use. This section
concludes by outlining the progression of research throughout this study.
Following the methodology, the analysis is described in section 6. This section will
outline how the key insights from this research were extracted from the data.
A discussion of the findings ensues in section 7, outlining these critical insights
obtained from analysing the data. The paper finishes with a discussion on the marketing
implications of this research in section 8, any limitations of the study are explained in section
9, and a short conclusion is found in section 10.
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3 Background & Rationale
This research stems from the growing popularity of craft beer amongst mainstream
consumers, the increased adoption of craft beer products by off-trade retailers, and evolving
consumer behaviour in relation to craft beer in the Irish market. This section will provide
background context and rationale for the purpose and relevancy of this research.
In Ireland, the craft beer market has steadily evolved from a niche one in the early
1990’s towards growing mainstream appeal today (Hennessy & Jensen, 2014). The Irish
market is following the trend of other markets such as the United Kingdom and in particular
the United States, where the craft beer markets have developed considerably. The rapid
growth in popularity of craft beer has resulted in the emergence of numerous new micro-
breweries, which in turn has led to an explosion in the craft beer offerings available to the
consumer in the Irish market. Irish legislation defines a micro brewery as one that is
producing less than 30,000hl of beer per annum (Euromonitor International, 2015).
Craft beer accounted for 1.2% of total beer production in Ireland in 2014, by 2016 it
is forecast to reach 3.3% (Independent Craft Brewers of Ireland, 2015). The significant
increase in production has been a result of the additional micro-brewers which have been
established in Ireland in recent years. In 2012, there were just 12 craft beer producers in
Ireland, this has risen to over 60 micro-breweries at present (Taylor, 2015). The craft beer
market was expected to achieve a turnover of €39.6m in 2015, a considerable increase on the
€23m the market achieved in 2014 (Independent Craft Brewers of Ireland, 2015). Given the
estimated rise in production for 2016, the value of the Irish craft beer market will likely
surpass these figures. The increasing interest in craft beer from mainstream consumers should
attract new producers to the market, who will seek to capitalise on the potential growth
opportunities available.
The potential for further expansion of Irish market is highlighted by examining the
developments of markets such as the U.S. In 2014, American craft beer accounted for 11% of
the total beer produced by U.S. breweries (Independent Craft Brewers of Ireland, 2014). The
Irish market also had half (5) the number of micro-breweries per million population in 2013
in comparison to the U.S. (10), and less than one quarter that of our closest market the U.K.
(Independent Craft Brewers of Ireland, 2014).
In conjunction with rising numbers of craft beer producers, microbreweries are also
expanding their range of products. In 2013, the average microbrewery had 3 to 4 regular
product lines, however, an increasing percentage of producers have 5 or more regular product
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lines (Independent Craft Brewers of Ireland, 2014). For example, Carlow Brewing Company
produce a variety of different beers on a regular basis as shown below (Figure 1: Range of
Products from Carlow Brewing Company).
Figure 1: Range of Products from Carlow Brewing Company
Microbreweries attempt to satisfy the consumers desire for a diversity of flavours and
styles, which is a significant appeal of craft beer. In fact, 72% of the respondents in a study
conducted by O’Connell (2015) stated that they drink craft beer for “more interesting
flavours than standard beers”, outlining an opportunity for producers to meet the needs of
their target market. In addition to a variety of regular products, micro-breweries also
incorporate a number of “seasonal” or “limited edition” beers into their portfolio’s to add
further diversity (see Figure 2: "A Very Imperial Winter", produced by 8 Degrees Brewing).
Figure 2: "A Very Imperial Winter", produced by 8 Degrees Brewing
Seasonal products, such as these, are often only available in a select number of outlets
for a limited time. This air of exclusivity adds to the identity of craft beer as a premium or
specialty product which have resulted in off-trade retailers dedicating a specific section of
their premises to craft beer products. Many off-trade premises now stock a small, yet diverse
range of craft beer products, with a specific focus on locally produced beers (Euromonitor
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International, 2015). As a specialty product, craft beer demands a premium price and is often
only purchased by single bottle as opposed to been sold by case which is common practise
with most mainstream beers. Consequentially, the craft beer section of an off-trade premises
is often kept separate to the retailer’s mainstream beer products. Supermarket off-licences,
such as Hurley’s pictured below (Figure 3: Selection of Craft Beers in Hurley's SuperValu,
Midleton, Co.Cork), will often stock a small selection of craft and world beers with the
majority of space allocated to Irish craft beer products.
Figure 3: Selection of Craft Beers in Hurley's SuperValu, Midleton, Co.Cork
However, with the increasing popularity of craft beer and availability of new products
on the market, off-trade retailers are allocating even more space to craft beer products to
satisfy consumer demand for variety and choice. From a financial perspective, craft beer
products typically have a higher margin than mainstream alternatives which would encourage
the retailer to promote their craft beer offerings. A number of independent off-licences have
responded to changing market demand and begun to stock a much wider range of craft and
world beer products than would be available in the typical supermarket off-licence. For
example, Number 21 Off-Licence in Midleton Co. Cork has a dedicated craft and world beer
refrigerated unit with over 300 different products available in an attempt to deliver value to
the target audience.
Given the relevant infancy of the craft beer market in Ireland, and the rapid pace of
development it has undergone, there has been little research conducted on the impact a
selection of such a wide variety of products has on the consumer. In addition, from a retail
perspective, there is need for investigation on how to categorise such an assortment of
products to achieve optimal shopper satisfaction and purchase intentions. This is particularly
imperative in light of the growing shift in consumer behaviour towards at-home socialising
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(Euromonitor International, 2015). As stated previously, one of the dominant appeals of craft
beer is the variety of offerings available to the consumer, which has enabled retailers to
leverage this hedonic capacity. It is imperative to explore what factors determine how a
shopper categorises a craft beer assortment, thus evaluating the craft beer shoppers internal
categorisation structures (Morlaes, Kahn, McAlister, & Broniarczyk, 2005).
From a retail perspective, it is important to understand the underlying logic of how
shoppers group products into homogenous subcategories based on a perception of similar
attributes or characteristics. This becomes of particular significance when the assortment in
question is as diverse as the craft beer category. An understanding of the context in which
shopper’s choice a certain craft beer is needed to fully appreciate the different shopper
motivations, and thus to organise the craft beer assortment accordingly to elevate shopper
satisfaction.
Thus, this research is necessary to uncover the rationale behind a shopper’s
categorisation of products. Furthermore, it will seek to establish a framework for managing
heterogeneous product assortments based on an understanding of shopper behaviour.
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4 Literature Review
4.1 Hyperchoice & Shopping Stressors
In Section 3, it was identified that little research had been conducted on the impact a
wide assortment of heterogeneous craft beer products has on the shopper’s ability to navigate
the category and make a satisfactory purchase. Consumers of craft beer are often attracted by
the variety of products available, however, when certain circumstances arise too much choice
can produce potentially noxious outcomes (Mick, Broniarczyk, & Haidt, 2004). Mick et al
(2004), state that the following conditions lead to a state of consumer hyperchoice: “there is
an ever-increasing amount of buying, amidst an ever-increasing amount of purchase options,
amidst an ever-increasing amount of stress, amidst an ever-decreasing amount of
discretionary time”. When the consumer is faced with a large assortment of heterogeneous
options, the variety offered may be initially appealing, but ultimately the increased cognitive
strain of processing the vast information they are being presented with will ultimately lead to
confusion, stress, regret, or even possibly abandonment of purchase intentions.
Shoppers need to experience some stress (eustress) which will encourage them to
make a purchase, but the aforementioned ‘choice overload’ can be overwhelming, and the
results can be destructive (Aylott & Mitchell, 1998). The vast permutations of beer may
paradoxically inhibit choice; this is the so called ‘suffering of choice’. This presents a
dilemma for off-trade craft beer retailers to offer their shoppers enough variety to evoke
eustress which will encourage them to make a purchase, however, they need to be cautious
not to force the shoppers to process too much information which could result in negative
outcomes. Consumers today are living fast-paced lives (Bord Bia, 2015), thus is should not
be assumed that the craft beer shopper will be happy to spent time browsing the category.
Time-stress has been proven to relate to poorer quality decisions, and reduce the amount of
information processed by the shopper (Mick, Broniarczyk, & Haidt, 2004) (Aylott &
Mitchell, 1998). This time pressure is another crucial factor which impinges on consumer
decision make. People often purchase impulsively based on hedonistic desire, rather than
conducting extensive information searches (Babin, Darden, & Griffin, 1994). Therefore,
excessive dissemination of information may not translate into behavioural change. Copious
amounts of information will not increase the incidence of purchase.
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4.2 Assortment Variety
In contrast to the concern of a heterogeneous assortment potentially resulting
hyperchoice, some off-trade retail outlets may uncover another issue. Given the plethora of
new craft beer offerings being produced at present, some may find that a shortage of physical
space to stock a large variety of craft beers to meet the shopper’s hedonic needs. Research
has shown that the structure of an assortment can moderate the variety which is perceived by
an individual with the actual variety available (Khan & Wansink, 2004). This evidence is
supported by the findings of Morales et al (2005), in that the range as perceived by the
consumer and their ultimate shopping satisfaction is dependent upon the organisation of the
assortment both internally by the consumer and externally by the retailer. Retailers must find
congruence between the physical structure of their craft beer assortments and how the
consumer structures the category internally, thus increasing perceptions of variety.
The foundation for this thinking lay with an understanding of how the purchaser
shops the category. Consumers can be considered as cognitive misers when evaluating the
options on offer from a specific category. They will develop cognitive maps (or schemas
(Alba & Hutchinson, 1987)) in order to organise the information involved in learning about a
product class, and will then process the new information they receive concerning the product
class according to these maps (Chase & Simon, 1973) (Morlaes, Kahn, McAlister, &
Broniarczyk, 2005). Ultimately, shopping satisfaction is dependent on the external structure
of the assortment being similar to the cognitive maps used by shoppers to evaluate the
assortment or else by meeting the shoppers hedonic or utilitarian shopping needs (Morlaes,
Kahn, McAlister, & Broniarczyk, 2005).
4.3 CategorisationProcesses
As eluded to earlier, consumers assess assortment variety based on their internal
categorisation structure and the external store layouts (Morlaes, Kahn, McAlister, &
Broniarczyk, 2005). The challenge for retailers, is to analyse and understand how consumers
organise their thinking about particular product alternatives, which has been termed the
categorisation process (Gutman, 1982). Gutman (1982), describe the consumer process of
organising a set of stimuli into clusters to reduce the information load and allow for further
processing (Tversky, 1972) (Gati, 1978). With a heterogeneous product category, such as
craft beer, it is logical to assume that consumers would organise the category into specific
homogenous subcategories or clusters to allow them to cope with the information load and
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process the alternative options (Gutman, 1982). By exploring how the craft beer shopper
defines different parts of the category, and how they formulate these parts into a logical
hierarchy to aid decision making, it is possible to build a Shopper Decision Tree (Efficient
Consumer Response, 1997) which will help the retailer organise the assortment in a way that
is compatible with the shoppers internal categorisation of the assortment.
Essential to this thinking is an appreciation of the product features which consumers
value and use to formulate these groupings and choose between the varieties within that
product class (Nielsen, Bech-Larsen, & Grunert, 1998). Nielsen et al (1998) constructed
hierarchical value maps to track and investigate the motivation to purchase a specific type of
vegetable oil from within the complete assortment of products in the category. Off-trade craft
beer assortments currently lack structure which would facilitate efficient consumer
categorisation. Thus an investigation into the motivations of the off-trade craft beer shopper
to choose certain products over alternatives is necessary to improve the organisation of the
category and increase shopper satisfaction. Nielsen et al (1998) utilised the laddering
technique while interviewing respondents to develop a set of categories of similar responses
which were used to construct an implication matrix which laid the basis for the construction
of their hierarchical value maps. This process facilitates the clear understanding of consumer
purchase motivations and the identification of salient product features which can be used to
develop an optimal assortment categorisation.
It has been shown that the presence of categories can help reduce cognitive strain on
shoppers and have a positive influence on shopper satisfaction (Mogilner, Rudnick, &
Iyengar, 2009). Mogilner et al (2009) investigated the effect of categories on purchasers
whom had pre-existing preferences within the choice set, but also with purchasers who had to
engage in preference construction due to unfamiliarity with the choice set. The
‘categorisation effect’, i.e. the presence of categories, was found to have a positive impact on
the shopper’s satisfaction, irrespective of the level of familiarity with the overall category
(Mogilner, Rudnick, & Iyengar, 2009). In addition, Mogilner et al (2009) found that even
when the categories do not provide inherent information about the available options in the
assortment, the number of categories presented lead consumers to feel a greater level of
satisfaction with their choice. The presence of the categories allowed the choosers to infer
differences in the various options they are presented with, which resulted in a higher level of
perceived variety, and in turn lead to greater satisfaction with the chosen option (Mogilner,
Rudnick, & Iyengar, 2009). In terms of craft beer, this literature is relevant given the wide
scope of familiarity and knowledge of the category amongst consumers and shoppers alike,
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and the current lack of categorisation practises within the off-trade craft beer industry.
Mogilner et al (2009) conclude by adding categories to the array of visual clues utilised to
influence the consumers perceptions of variety (Broniarczyk, Hoyer, & McAlister, 1998)
(Hoch, Bradlow, & Wansink, 1999) (Khan & Wansink, 2004) (Morlaes, Kahn, McAlister, &
Broniarczyk, 2005) and to improve the novice shoppers decision-making experience when
faced with a wide assortment of options (Chernev (a), 2003) (Chernev (b), 2003), which is
paramount to encouraging new consumers to engage with the craft beer category in the off-
trade retail environment.
The variety of craft beer options available on the market is continually increasing,
however it is only feasible for retailers to hold a certain level of stock-keeping units (SKU’s)
given competitive and financial pressures which demand the adoption of ‘efficient
assortment’ (Broniarczyk, Hoyer, & McAlister, 1998), and restrictions on space allocation
existing within retail outlets. The use of efficient categorisation could increase the shopper’s
perception of variety on offer, despite SKU and physical space restrictions. Broniarczyk et al
(1998) found that they were able to reduce the number of SKU’s by 25% without negatively
affecting assortment perceptions, once the space dedicated to the category remained constant
and only low-preference SKU’s were eliminated. Thus it may be theorised that off-trade craft
beer retailers could increase the assortment variety as perceived by shoppers through range
planning and categorisation, without the need to increase the physical space allocated to the
category or the number of SKU’s.
4.4 Hedonic & Utilitarian Shopping Value
Shoppers want to be seen as “smart shoppers”, thus an essential way to satisfy these
desires is to understand what the shopper wants to gain from a trip, i.e. the shopping mission.
To fully appreciate this, retailers must acknowledge that shoppers will have both hedonic and
utilitarian shopping needs. Hedonic needs are associated with the fun, multi-sensory, and
emotive aspects of shopping, whereas utilitarian shopping value is task-driven and associated
with acquisition of products or information in an efficient manner (Jones, Reynolds, &
Arnold, 2006). In terms of craft beer, a wide assortment of heterogeneous craft beer products
would most likely satisfy the craft beer shoppers hedonic needs, but having to navigate the
category to make a satisfactory purchase could take time and potentially negatively affect the
shopper’s perception of utilitarian shopping value. Based on this rationalisation, retailers
must understand both values and attempt to structure their craft beer assortment in a manner
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that will allow them to leverage both the hedonic and utilitarian potential of the category in a
balanced manner.
Babin et al (2004) put forth the Perceived Shopping Value Scale as a measure of
experiential (hedonic) as well as the instrumental (utilitarian) outcomes for shoppers. Off-
trade craft beer retailers will have to identify the optimal point on the scale whereby the
shoppers hedonic and utilitarian needs will be satisfied in order to enhance the performance
of the craft beer product category.
However, it is crucial to understand that shoppers will belong to distinct segments
(Arnold & Reynolds, 2003), each of which may have specific needs that may potentially
clash with the needs of other segments. Arnold & Reynolds (2003) identified 5 segments in
terms of hedonic shopping motivation: The Minimalists, the Gatherers, the Providers, the
Enthusiasts, and the Traditionalists. As of yet, there has been insufficient research carried out
in this area to investigate the distinct needs of various craft beer consumer segments in
relation to off-trade purchase motivations. This study will attempt to build on the work of
O’Connell (2015) and seek to explore if certain segments (as outlined by O’Connell, 2015)
have distinct motivations in the off-trade craft beer purchase space.
A detailed understanding of the different craft beer consumer segments and their
specific shopping missions will have the potential to improve retail strategy decision-making
by facilitating a more efficient method of differentiating shoppers and allowing for more
effective targeting (Black & Westbrook, 1985).
4.5 How Shoppers Shop
For retailers, it is essential to understand that shopping can be considered as both
work, but also as fun (Babin, Darden, & Griffin, 1994). Shopping should not be evaluated
solely on the basis of replenishment or the acquisition of goods/services in an efficient
manner. These factors are crucial for re-patronage intentions, however they are insufficient to
generate re-patronage anticipation and other crucial outcome variables such as word-of-
mouth referrals and shopping satisfaction (Jones, Reynolds, & Arnold, 2006). These different
outcomes satisfy a distinct shopper motivation, or the way in which a shopper appraisess the
value they have received: utilitarian (efficient/replenishment) or hedonic (emotive/fun)
(Jones, Reynolds, & Arnold, 2006) (Babin, Darden, & Griffin, 1994) (Arnold & Reynolds,
2003). The goal for retailers is to examine their store and evaluate the areas in which
utilitarian motivations should be satisfied, and identify the areas where they can leverage the
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hedonic aspect of shopping. According to Babin et al (1994), in the shopping context, the
consumer is both intellectual and emotional, and such exchange environments have economic
and festive implications (Sherry, 1990).
It is possible to evaluate the hedonic and utilitarian capabilities of certain categories
by examining an industry report by IGD (2015) which has been based on shopper insights
and implications. As seen below in Figure 4: Evaluation of a Category's Hedonic Potential,
World Foods is a category that has high hedonic potential and one that 69% of shoppers
enjoy shopping for. In addition, 63% of the respondents in this study reported that they like to
spend time browsing this category (IGD Shopper Vista, 2015). Craft beer as a category is
comparable to World Foods and speciality foods as outlined in the Background & Rational
section of this paper. Thus, it is possible to opine that craft beer is a category where there is
high hedonic potential, and as referred to earlier this is leverage by producers and retailers by
offering shoppers and consumers a myriad of products to choose from.
Figure 4: Evaluation of a Category's Hedonic Potential
Source: IGD (2015) Category Benchmarks: Insights and Implications
The wide variety of options available in the craft beer, and World Foods, category is
appealing to consumers as highlighted above. Given this industry data, it would be expected
that these are categories that allow for satisfactory shopping experiences. However, the
World Foods category is referenced as the one that causes the most confusion for shoppers as
seen below (Figure 5: Category's which do not deliver sufficient utilitarian shopping value).
This would indicate that although this category delivers hedonic value to shoppers, shoppers
do not have sufficient information to navigate the category, thus they suffer from confusion.
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When shoppers are presented with a wide assortment of products that lack organisation or
structure, the potential for information overload can lead to poorer quality choice outcomes
and a dissatisfactory shopping experience (Mick, Broniarczyk, & Haidt, 2004).
Figure 5: Category's which do not deliver sufficient utilitarian shopping value
Source: IGD (2015) Category Benchmarks: Insights and Implications
4.6 Summary of Literature Review
Having reviewed the literature relevant to this research, and analysed pertinent
industry reports, it is possible to construct a clear picture of the problem this research has
aimed to address. Craft beer is growing in appeal to mainstream consumers in Ireland
(Hennessy & Jensen, 2014). Producers have responded by increasing the number of offerings
they create to target specific consumer niches. Growing consumer numbers and higher
margins have attracted retailers, who have increased the number of SKU’s they offer in off-
trade premises to meet the consumers demand for variety and hedonic value (Zeithaml, 1988)
(Jones, Reynolds, & Arnold, 2006) (Westbrook & Black, 1985).
However, the variety which is initially novel and appealing has increased the
complexity of the shopping experience and constrained the shopper’s ability of making a
satisfactory choice. This is due to the increased stressors caused during the shopping process,
such as time stress, information overload, and the increased cognitive strain of having to
process a wide range of choice options (Mick, Broniarczyk, & Haidt, 2004) consumer
alienation may ensue.
Research has shown that the presence of categories in an assortment has increased
shopper’s ability to make a satisfactory purchase (Mogilner, Rudnick, & Iyengar, 2009), and
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by increasing the congruence between these external categories and the shoppers internal
categorisation process (Morlaes, Kahn, McAlister, & Broniarczyk, 2005) it is theoretically
possible to optimise the craft beer shopping experience and deliver both hedonic and
utilitarian shopping value thus increasing the shoppers re-patronage intentions and
anticipation (Jones, Reynolds, & Arnold, 2006).
Section 5 will now address the research methodology which was utilised for the
purpose of this study.
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5 Methodology
Marketing research involves the “identification, collection, analysis, dissemination,
and use of information that is undertaken to improve decision making related to identifying
and solving problems in marketing” (Malhotra & Peterson, Basic Marketing Research: a
decision-making approach, 2006). The purpose of this research is to investigate the
categorisation of the craft beer product assortment. This investigation is aimed at contributing
to the knowledge on consumer behaviour in relation to the purchase of craft beer in off trade
retail environment, and ultimately improving the shopping experience and retail performance.
As the literature suggests, when consumers are faced with a set of stimuli, they will
organise them into a set of clusters to cope with the information load and allow for further
processing (Gutman, 1982). The craft beer category has a plethora of product varieties,
producers, brands, and styles which make for a difficult process of organising them into
groupings of similar traits within the mind of the consumer to allow for further evaluation
and processing. In addition to this, you must factor in the consumer or shopper’s personal
value system, their motivations, needs, and general familiarity and knowledge of the
category.
Based on this context, and guided by the literature in Section 4, a qualitative study
was deemed most suitable to approach this research question. A qualitative study is an
“unstructured, exploratory research method which provides insights and understanding of
the problem setting” (Malhotra & Peterson, Basic Marketing Research: a decision-making
approach, 2006). To analyse the internal categorisation structure (Morlaes, Kahn, McAlister,
& Broniarczyk, 2005) of the consumer in relation to craft beer, a quantitative study was
deemed inappropriate as it would not allow for a proper subjective investigation which this
exploratory research requires.
As outlined, the dual purpose of this research was to firstly investigate the different
craft beer categorisation processes used by consumers in off-trade retail environments to
differentiate between the various offerings they are presented with, and secondly to explore
how this information can translate into more efficient category management processes which
will improve the shopping experience and increase retailer profits.
The initial aspect of the research included a series of semi-structured interviews
which involved a sorting-exercise to explore how consumers engage with and deconstruct an
assortment of craft beer products (heterogeneous) into smaller categories which they deem to
be similar in characteristic (homogenous). Utilising the data attained from this initial
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research, three different craft beer assortments were pictured and a number of brief intercept
interviews were conducted in which respondents were asked to choose the assortment which
offered them the best opportunity of making a satisfactory craft beer purchase. We will know
discuss in more detail the methodology behind both types of primary research.
5.1 Initial Research:Categorisation
It was decided that semi-structured interviews would offer the best possibility of
gaining a detailed picture of how consumers differentiate craft beer products into specific
groupings, and allow for exploration of the participants behaviours, motivations, values, and
beliefs for doing so (Smith, 1995). The advantage of semi-structured interviews is that they
provide for more insight into the personal world of the respondent, and also offer
opportunities to gain a greater depth of understanding by probing into interesting avenues
which arise from the discussion. The intention of using this form of interview is to discover
how many categories can be devised, what types of categorisation techniques are applied,
but, also to gain insight into the underlying motivations, beliefs, attitudes, and feelings of the
respondents on the topic (Malhotra & Birks, 2007).
Given the visual and interactive nature of off-trade environments, a sorting-exercise
was proposed as it would allow participants to engage with the various options and categorise
them according to their internal categorisations structure. The use of sorting cards as props
would allow for respondents to move the options freely and group them in the way they felt
most logical. Guided by the work of Nielsen et al (1998), the sorting exercise was considered
appropriate to gain access to the participants purchase motives and product perceptions. By
examining work on means end chain and perceptual mapping (Nielsen, Bech-Larsen, &
Grunert, 1998) and practical theory on the Shopper Decision Tree (Efficient Consumer
Response, 1997), the aim was to develop a picture of the steps taken (and why) by a craft
beer consumer when deciding on what product to purchase in an off-trade environment.
Figure 6: Sample of Craft Beer Cards for Sorting-Exercise
21. 21
As shown above (Figure 6: Sample of Craft Beer Cards for Sorting-Exercise), 50
products were selected for the exercise and printed in colour onto white A4 card which were
then cut into individual cards per product. Within the 50 craft beers selected for the exercise,
all were in glass bottles and either 500ml, 355ml or 330ml in volume. To allow participants
to differentiate between the various size of the products, the cards for the 355ml and 330ml
products were narrower than the 500ml alternatives. The price of the bottle was included in
the picture of the products and the only other information that was given on the card was the
alcohol percentage of the product. In terms of the products selected, a variety was selected to
include different styles, country of origin, alcohol percentage, flavour, brand, and a number
of gluten-free beers were also included. Cider was excluded from this selection on the basis
that it was assumed by the researcher to be regarded as a separate category than craft beer (an
exhaustive list of the products can be seen in Appendix 12.4).
Five participants were selected for the interviews and sorting-exercise based on
convenience sampling, and the researchers pre-existing knowledge of the participant’s
interest in and knowledge of craft beer. Although a concern with convenience sampling,
similarity between participants was avoided by selecting participants that had varying
knowledge and experience of the research topic, and also different socio-economic
backgrounds (see Table 1: Profile of Interview & Sorting-Exercise Participants). This number
of respondents has been suggested to be sufficient to allow the researcher to gather ample
data for analysis and also allow one to build a clear mental profile of each case and the
pertinent data gathered from each interview for later analysis (Smith, 1995). In line with the
recommendations proffered by Smith (1995), an interview schedule was prepared in advance
to guide the researcher and facilitate a higher quality interview which would produce richer
data for analysis.
Table 1: Profile of Interview & Sorting-Exercise Participants
22. 22
The interview schedule outlined the critical areas needed for the purpose of this study,
and also included fields of questioning that would lead to information that will be valuable
for subsequent research (see Appendix: Schedule for Interview & Sorting Exercise). A
number of areas of interest were included in the schedule which were intended to act as
prompts to initiate dialogue on specific areas of interest which arose from reviewing relevant
literature and discussions with the researcher’s academic tutor as well as the manager of a
local off-trade retailer. Topics such as price of the items, size of the bottle, and alcohol
percentage are examples of the areas included in this section.
The interviews took place in Sage Restaurant Midleton. An empty room above the
Restaurant was used for participants B, C, D, and E to ensure privacy. Respondent A was
interviewed in the restaurant at a time when it was closed and the empty room was
unavailable. This location was chosen as it was familiar to the participants and would help
them feel relaxed, which has been suggested as good practise (Smith, 1995). At the beginning
of the interview, each respondent was given information on the study, the purpose of the
sorting-exercise, and it was noted that the exercise would be video recorded to assist with
analysis at a later time. Although there was no strict interview plan followed, the interviews
typically took the following format:
Participants were given information on the study and the exercise was
explained to them.
They were asked to sign a consent form and fill out a brief screening form.
The interview/exercise began.
Participants were instructed to analyse the selection of cards they were given
and put them into groups of cards which they deem similar.
Participants were asked to provide a name or ‘category heading’ for each
group.
Lastly, participants were directed to organise the different groupings in a way
they felt most logical: i.e. arrange the groups as they would expect to see in an
off-trade premises.
Participants were requested to fill out a short screening form to ensure that they had
previously purchased craft beer in an off-trade retailer, to evaluate their craft beer purchasing
habits, and to gather fundamental demographic information (a copy of the Screening Form is
available in the appendix: Product Sorting Exercise Screening Form). Perhaps the most
crucial aspect of the screening form was the segmentation question in which participants
23. 23
were asked to identify what craft beer means to them why they drink it. Participants were
given 6 options to chose from. These were adopted from the work of O’Connell (2015) which
were attained from Data monitor (2013). The 6 segmentation questions devised by O’Connell
(2015) stem from two industry reports on craft beer which study craft beer consumption
motivations (Canadean, 2013) (Datamonitor, 2013). These questions are presented below
along with the consumer segment they relate to (see Table 2: Segmentation of Craft Beer
Consumers). This information was collected to evaluate if there were preference similarities
amongst respondents within the same consumer segment. If a link existed between a specific
consumer segment and a certain assortment categorisation, it would illuminate an interesting
area for further research.
Table 2: Segmentation of Craft Beer Consumers
The interviews were video recorded to provide an audio record to further analyse at a
later time, exhibiting how the participants interacted with the cards, how much time they
spent examining each one, and also enabling the researcher to evaluate the participants non-
verbal behaviour when asked about certain aspects (Smith, 1995). Given the familiarity of
participants with the interview location, and their rapport with the interviewer, they did not
have any concern with the interview being recorded.
The 5 interviews provided valuable information for this study but they also resulted in
vital direction for the subsequent research; essentially, they specified a number of
categorisation possibilities for the craft beer product assortment.
5.2 Subsequent Research:Assortment Preference
As mentioned, the initial semi-structured interviews provided a framework for
organising the craft beer assortment in-line with the categorisation processes used by
24. 24
consumers. The next stage of this research was to utilise this information on the different
categorisation methods possible, develop them into a visual representation and investigate
their appeal to a larger sample. As a result of the initial sorting exercise, three different
assortment categorisations were produced:
1. An Assortment categorised by style of beer.
2. An Assortment categorised by country of origin.
3. An Assortment categorised by alcohol percentage.
Following discussion with the manager of the Number 21 Off Licence chain, and
having carried out secondary research on the possibility of a craft beer assortment that is
categorised by alcohol percentage, it was deemed unnecessary to use this method in the
second phase of the research due to the belief that this would not be feasible in practical
application.
Fortunately, at the time this research was being conducted, Number 21 Off Licence
Midleton decided to remerchandise their craft beer selection which allowed for a ‘before and
after’ comparison to be made as seen below (Figure 7: Comparison of Number 21 Off
Licence Midleton Craft Beer Selection).
Figure 7: Comparison of Number 21 Off Licence Midleton Craft Beer Selection
Pre Re-Merchandising At Present
Given the revision of merchandising strategy of this assortment and for the purpose of
convenience, it was decided to use both of these assortments for the intercept interviews. A
25. 25
third alternative assortment was devised based on the information gathered from the sorting-
exercises. This assortment would be categorised by both country of origin and by styles of
beer. The assortment was constructed by merging individual pictures of craft beer products
together to emulate the craft beer assortment of an off-trade retailer. This mock-up included
Point-of-Sale signage that indicated the different categories based on country of origin and
style of beer. To allow respondents to identify the different categories in the other assortment
options, pseudo point of sale and category borders were included in the pictures to
differentiate between the categorisation strategies (see below Figure 8: Images used for
Intercept Interviews, a larger copy of the images used for the study can be found in the
Appendi (Images Used for Subsequent Research:)).
Figure 8: Images used for Intercept Interviews
Option
A.
Option
B.
Option
C.
An intercept interview technique was applied for this phase of research as it would
provide for a sufficient sample when conducted in an off-trade premises. Given the focus of
26. 26
this research was on off-trade retail, the intercept interviews took place in Number 21 Off
Licence Midleton with the permission of the store manager. 32 intercept interviews were
conducted between the 10th August 2016 and the 16th of August 2016, each approximately 5
minutes in duration. Respondents were approached when they were observed to be browsing
or purchasing from the craft beer section in the premises, and asked if they would like to take
part in a brief exercise for academic purposes. Respondents were given information on the
purpose of the research, asked to fill out a consent form and brief questionnaire (similar to the
screening form used in the initial research), and the selection exercise was explained to them.
Once respondents had completed the consent form and questionnaires forms, they
were asked if they would allow the exercise to be voice-recorded for analysis purposes to
which only 2 respondents declined. Given the nature of intercept interviews and the desire to
minimise interference with respondents shopping, voice-recording was utilised to allow the
interviewer to focus on the exercise without the need to record notes.
A projective technique (Malhotra & Peterson, Basic Marketing Research: a decision-
making approach, 2006) was utilised for the exercise in which respondents were asked to
project themselves into the scenario of shopping for a craft beer in the three options they
could see in the images: A, B, and C. Respondents were allowed time to evaluate the three
options carefully, and then asked to select the option which they felt afforded them the best
opportunity of making a satisfactory purchase. After the respondents had identified their
preferred option, they were asked to explain their choice and following on from this the
interviewer used follow-up questions to probe further into any interesting responses that
arose. The aim of the projective technique was to uncover the underlying motivations,
beliefs, attitudes or feelings that influenced the respondents decision (Malhotra & Peterson,
Basic Marketing Research: a decision-making approach, 2006). Knowledge of this
information would prove paramount in transferring the theory from this report into practical
application which will improve the craft beer shopping experience in an off-trade
environment.
This section concludes with a brief visual summary of the research progress from
initial investigation and problem identification, to primary research, and onto subsequent
research.
27. 27
Figure 9: Research progress from Initial Investigation to Practical Application.
As outlined at the beginning of this section, this research has endeavoured to follow
the fundamental principles of market research as outlined by Malhotra and Peterson (2007)
by identifying a problem, conducting research to gather data regarding said obstacle. In the
following section we will analyse this data with the aim of improving decision making and
solving the problem to improve performance.
28. 28
6 Analysis
This exploratory study had the dual purpose of first identifying the potential
categorisation processes possible for an off-trade craft beer assortment, and secondly to
investigate the practical application and attractiveness to shoppers in an off-trade
environment. Section 5 outlined the research process undertaken to gather information to
address these questions, which included two separate data collection techniques and
exercises. The section will detail the analysis which was conducted and highlight the
pertinent information stemming from this process.
6.1 Sorting-Exercise
6.1.1 Participant A
Participant A was a 25-year-old male who works as a hotel stock controller. He
typically purchases craft beer from independent off-licences approximately once per month
and self-classified himself as a craft beer Upgrader (O'Connell, 2015) (Canadean, 2013)
(Datamonitor, 2013). Participant A grouped the products by country of origin and style as
follows (see Figure 10: Participant A Product Groupings, Headings, and Structure):
Irish Craft Selection
o IPA, Pale Ale, and Blonde Ale
o Stouts & Dark Ales
Beer of the World
o Beer of the USA
o Beer of Britain
o Asia Beer
Gluten Free
Interesting Tipples
This participant took time to study each card individually and began by grouping
them by “separating the Irish from the non-Irish”. This sense of provenance was a
prominent theme in this interview. It became evident that country of origin was the initial
basis for his grouping early in the interview. When he was unsure about one of products he
would ask “where is this from”. The participant’s interest in origin was a explained when
29. 29
interviewer asked about the reason for separating the Irish products from the non-Irish
products:
“I think if you are selling beer in Ireland, you should be
promoting Irish beer first and foremost”
Provenance played a key role in this participants initial grouping, following that the
categories were broken down into subcategories based on the type of beer. Once this process
was complete the participant had 12 groupings with gluten-free beers allocated their own
section. When asked how he would organise the grouping in an off licence the participants
first response was to put “the Irish ones at eye level and international ones above and below
it”, reinforcing the theme of nationalistic pride touched on earlier.
The participant was then asked about the gluten-free products and stated that they
should “be kept separate, regardless of where they are from….it doesn’t matter where they
are from, I would just promote them”. Another group of products that broke from the
general categorisation used by this participant were the alternative beers and those with
higher alcohol. They would be given their own category. Interestingly, when discussing these
type of products, the participant used terms such as “weird” and “novelty items”.
Novelty was another theme which emerged from this interview, with the participant
jokingly saying that the beers from Britain could be called “Borris Beers”, but settling on
‘Beers of Britain’ because it had “more of a ring to it”. Tied into this discussion was the
aspect of bottle-labels, which the participant stressed was “important when buying craft beer
there is always an unknown factor… so if something catches your eye you’re more than
likely going to go for it over something that looks awful”. With this statement, it was
possible to develop a rough sketch of this Participants Decision Tree (Efficient Consumer
Response, 1997) in terms of craft beer:
Country of Origin
o Style of Beer
Interesting/Appealing Label
The Participant had not mentioned price as a factor during the interview, when asked
if he had considered the price of the items when grouping them, he responded that from his
“point of view he wouldn’t be going in buying by price… it doesn’t matter if you are going
for 1-2 bottles… I think people are more in it for the taste and trying something new”.
30. 30
Figure 10: Participant A Product Groupings, Headings, and Structure
6.1.2 Participant B
Participant B was a 23-year-old male who is a student and part-time waiter. Typically
he would purchase craft beer 4 times a month from an independent off-licence, and
categorised himself as an ‘Explorer’ (O'Connell, 2015) (Canadean, 2013) (Datamonitor,
2013). This participant grouped the products by country of origin and brand in the
following way (see Figure 11: Participant B Product Groupings, Titles, and Structure):
Irish Home Brews
American Big Guns
Tis the Season to get Tipsy
Weird World Beers
Gingers an acquired taste
Are you really coeliac
Brexit will make these more expensive
Belgian Beauties
Participant B also started by grouping the products by country of origin as he
conceived it to be more logical and ‘easier’. He began with four groups based on regions
(American, Irish, British, Rest of World) due to the fact that “it’s easier to do it by country so
you can go in with the purpose of buying from a specific region”. This highlighted a key
theme that emerged from this interview, Participant B based his categorisation on the premise
31. 31
that consumers go into an off-trade retailer with a specific type of product in mind and not to
browse the category and decide at the shelf.
With the assortment divided by country of origin, Participant B would then organise
each sub-category by brand as opposed to style of beer. When asked to explain this rationale
he stated that “doing it buy style would get messy… sometimes you would go in knowing
that you liked a beer from Wicklow Wolf but you’re not sure what one… people will
remember what the bottle looked like and that they liked it”.
Novelty also arose in this interview when the Participant suggested keeping the
“funky ones” in a different section of the fridge along with seasonal brews and giving them a
“witty or punny” heading. Gluten-free products would also be given their own category
regardless of country of origin, and these along with the “funky ones could be placed in the
bottom corner of the fridge as people looking for these would know what they are looking
for”. This is another indication that Participant B enters an off-trade premises to purchase
craft beer with a pre-determined product in mind as opposed to browsing the category for
inspiration. Adding to this, he based his categories on “people knowing what they want
before they go into a shop… then a lot of it is what catches your eye”.
Figure 11: Participant B Product Groupings, Titles, and Structure
6.1.3 Participant C
Participant C was a 26-year-old student of public health and a part-time waiter. He
would usually purchase craft beer from a supermarket off-licence 2-3 times per month and
categorised himself in the Upgrader craft beer consumer segment (O'Connell, 2015)
(Canadean, 2013) (Datamonitor, 2013). The basis for Participants C’s categorisation emerged
from his background as a public health student, stating “the first thing that came to my mind
32. 32
was health so categorising them by alcohol percentage… in Ireland people are becoming
health conscious and want to know how much they are consuming”. The main feature used
to categorise the assortment for this participant was alcohol content and then within these
groupings he would organise the products according to style of beer.
Figure 12: Participant C Groupings, Headings, and Structure
6.1.4 Participant D
Participant D is a 23-year-old male who manages tenders for an electronic firm. He
noted that an independent off licence would be where he would typically purchase craft beer
approximately once a month. By choosing the second option in the segmentation question,
Participant D classified as an ‘Explorer’ (O'Connell, 2015) (Canadean, 2013) (Datamonitor,
2013). The products were grouped according to country of origin and style of beer as follows
(see Figure 13: Participant D Groupings, Headings, and Structure):
Stout
Gluten Free
All the Pale Ale’s
IPA’s from Around the World
Red Stuff
Le Lager
Who Knows
With the names given to each section, it is evident that novelty and country of origin
shaped Participant D’s categorisation. The ‘IPA’s from around the World’, ‘Le Lager’, and
33. 33
the ‘Who Knows’ grouping headings indicate sense of playfulness but also provenance.
Participant D joked about the names of many of the beers and when a certain unfamiliar
product emerged he seemed puzzled, declaring “who knows… I don’t know what they
are…. Weird ones”. These products were grouped in the ‘Who Knows’ category, although
some options (such as the Ginger Pale Ale and the Single Malt IPA) caused some confusion
about whether to be grouped with the ‘IPA’s from Around the World’ or with the ‘Who
Knows’. When the participant had finalised his arrangement he was asked which way he
would organise them in an off licence fridge. This caused the participant to doubt his
groupings and suggest that he would probably “group them by country in an off licence and
then maybe do them by style”. The participant appeared to think that it made more logical
sense to have them referenced by country and then by style of beer, once again touching in
the theme of provenance.
Figure 13: Participant D Groupings, Headings, and Structure
6.1.5 Participant E
Participant E was the only female participant to take part in the grouping exercise and
stated that she would have a high level of knowledge regarding craft beers. She was a 29-
year-old Barista and would typically purchase craft beer 3 times per month from a
supermarket off licence for convenience purposes. Interestingly, she categorised herself as a
‘Locavore’ meaning she usually chooses “craft beers that are connected to a particular area
or region she is drawn towards” (O'Connell, 2015) (Canadean, 2013) (Datamonitor, 2013).
Her groupings were based on style of beer and country of origin with some certain exceptions
34. 34
to this logic as seen below by the category headings and structure (see Figure 14: Participant
E Groupings, Headings, and Structure):
Pilsner (earlier drinks, lighter easier to drink)
International
Yanks (American or American Influenced)
Stouts (Sunday drinks)
Ales that would keep a farmer happy
Rua
Good & Strong like (anything over 5.5%)
Can’t drink beer, yes you can (free-from beers)
If you don’t really like the taste of beer (flavoured ones and weird ones)
As with the other groupings, provenance, novelty and playfulness were evident
themes in this interview. This is displayed in the names given to the groupings, such as
‘Good and Strong like’, and ‘Can’t drink beer, yes you can’. However, when Participant E
was explaining what type of beers she would put in certain groups, she made reference to
specific consumption occasions such as ‘Stouts on Sundays’ or ‘Pilsners earlier in the day’.
When asked for an opinion on the labels of the bottles she replied that she “doesn’t
like the gimmicky labels because I don’t want to give them the satisfaction of picking their
beer for the label”. This suggests that for certain consumers a threshold may exist for the
level of novelty, with certain labels veering on kitsch. This participant also experienced some
confusion regarding the placement of certain “silly flavoured beers”, and these went into the
‘If you don’t like the taste of beer’ category. Again, Gluten-free and free-from beers were
grouped together regardless of style or country of origin. Higher alcohol content beers were
given their own group also, the participant mentioning that she “doesn’t like buying a beer
and then noticing that it is 6.6%... that annoys me”. For this reason, any beer that was above
5.5% was put into the ‘Good & Strong like’ category. Price does not play role in her choice,
stating that she “doesn’t really look at the price as I’d only be buying one or two”.
35. 35
Figure 14: Participant E Groupings, Headings, and Structure
6.1.6 Sorting Exercise – Key Insights
Having analysed the 5 interviews, it is evident that the participants all had some form
of categorisation preconceptions regarding craft beer. These appear to stem from the steps
taken by the individuals when they are analysing an assortment to make a purchase, as shown
below:
Participant A – Country of Origin and Style of Beer
Participant B – Country of Origin and Brand
Participant C – Alcohol content and Style of Beer
Participant D – Country of Origin and Style of Beer
Participant E – Style of Beer and Country of Origin
Out of the 5 participants, 4 stated that country of origin and style of beer were
important product characteristics that they would use to sort the beers. Interestingly, 4 of the
participants (A, B, D, E) allocated a category for gluten free products, but also an individual
category for interesting, seasonal or ‘weird’ beers.
We will now investigate how this information was utilised for the selection exercise
which followed this initial research.
6.2 Assortment SelectionExercise
Following the 5 sorting-exercise’s and utilising the information which emerged for
these, 32 intercept interviews that were carried out for this study in an off trade premises. A
36. 36
summary of respondents is presented below in Table 3: Profile of Assortment Selection
Exercise Respondents, and the key pieces of information from this are illustrated in Figure
15: Summary of Assortment Selection Information.
Table 3: Profile of Assortment Selection Exercise Respondents
37. 37
Figure 15: Summary of Assortment Selection Information
As suggested by Figure 15: Summary of Assortment Selection Information,
Assortment B proved the most appealing option to respondents, of whom almost 60% were in
the ‘Upgrader’ consumer segment. Almost 79% of the ‘Upgrader’ segment choose
Assortment B. Independent Off Licences were the preferred off-trade format for 53% of
respondents with a further 9% visiting both Independent and supermarket off licences. Over
two thirds of respondents were male and these ranged from the 18-20 bracket to the 66+
bracket. Given the clear preference for Assortment B, and with a mere 22% of respondents
preferring Assortment C, analysis of the recordings from the intercept interviews was
conducted to identify the pertinent information which can justify these selections.
Resulting from this analysis, it was possible to develop hierarchical value maps
(Nielsen, Bech-Larsen, & Grunert, 1998) for each of the assortments to highlight the key
themes that emerged from the analysis (see Figure 16: Themes associated with Assortment A,
B, and C (frequency of mentions)), and a discussion on the key insights will follow.
3%
75%
22%
PreferredAssortment
Assortment A
Assortment B
Assortment C
53.1
37.5
9.4
INDEPENDENT OFF. SUPERMARKET BOTH
%ofRespondents
PreferredPremises
69%
31%
Gender
Male
Female
59.4
25.0
3.1 0.0 3.1 9.4
%ofRespondents
ConsumerSegments
38. 38
Figure 16: Themes associated with Assortment A, B, and C (frequency of mentions)
39. 39
7 Discussion of Findings
As mentioned, Assortment B was the most appealing option for 75% of the
respondents. Incorporating a structure based on county of origin and style of beer, it differed
from Assortment A and C which were categorised by Country of Origin and Brand. The
categorisation of Assortment B and the utilisation of clear point of sale materialised as the
dominant appeal of this assortment to respondents.
Stemming from the central theme of organisation and structure, a number of other
themes arose which manifest in a desire for increased utilitarian shopping value. Terms such
as ‘quicker’, ‘easier’, and ‘clearer’ became prominent throughout the intercept interviews.
Respondents reported that it was “quicker and easier to find a beer with the layout and
signage” (Respondent 23), highlighting a valuable need for more efficiency in the shopping
process. A number of key insights which revolve around the necessity for more utilitarian-
focused assortments are expanded on next.
7.1 Clutter, confusion, and stress
The use of category headings and the structure of the assortment also reduced the
perception of ‘clutter’. In contrast, Assortment A was often referred to as ‘cluttered’, with
one responded suggesting “there is too much going on in A, I’d get flustered if I saw too
much” (Respondent 10). Although Assortment C was considered more appealing than
Assortment A by most respondents, the variety of choice’ available added to a sense of
shopping stress for some respondents, with Respondent 31 suggesting that Assortment’s A
and C would “turn me away from shopping for a beer”. It became clear that hyperchoice had
impaired the ability of many respondents to make a satisfactory purchase, and the use of clear
category headings in Assortment B appeared to alleviate this concern.
7.2 Planned purchases
The categorisation of Assortment B enhanced the purchaser’s ability to navigate the
assortment more efficiently, as Respondent 14 noted; “it would be nice to have a bit more
order for somebody who wants something specific”. As suggested by Participant B in the
sorting-exercise, it was apparent in the intercept interviews that many people go to an off
licence “knowing the type of beer they wanted beforehand” (Respondent 27 & Respondent
40. 40
18). These examples of planned purchases demand a more shopper friendly assortment which
allows for quick and easy navigation without causing cognitive strain or distress (Mick,
Broniarczyk, & Haidt, 2004). Assortment B provides an opportunity to shop by country, shop
by style of beer, or to cross reference both of these features in a way that doesn’t overwhelm
the shopper with information.
7.3 Experimentation
In contrast to shoppers with planned purchase intentions, many sought inspiration
from the assortment and looked to experiment with their choices by browsing the options
available. Referring to this process, “I’d experiment with styles of beer, the way these are
laid out would encourage you to try out a few styles, maybe one from each row”. Enjoying a
variety of styles and flavours is a central attraction of craft beer to many consumers, and this
categorisation process allows for this hedonic potential to be leveraged by retailers.
7.4 Block Sectioning & the Irish category
Respondents who preferred Assortments B and C agreed that it is imperative to
categorise Irish products together and promote them by positioning them at the centre of the
assortment. Provenance was a reoccurring theme throughout this research, and though outside
the possibility of this research to explore that avenue in greater detail, it is clear that retailers
have an opportunity to utilise this trait within their assortments to improve the shopping
experience and improve performance.
7.5 Style vs. Brands
There is evidence in this research that certain respondents are style-orientated while
others are brand-orientated. This orientation ultimately depends on the shopper’s decision
tree (Efficient Consumer Response, 1997), and what steps they take to make their choice.
Brand acts as a risk reducer for certain respondents, “you might have a few brands in your
head that you know you like” (Resp. 6), whereas style is more relevant to others, “I’d go to
style first as I’d know the type of beer I wanted”. Based on this research, categorising the
products by style as opposed to brand emerged as the preferred method.
41. 41
8 Marketing Implications & Recommendations
Craft beer continues to attract mainstream consumers in Ireland and throughout the
world, with part of this phenomenon explained by a desire for variety and choice. In addition
to this, the consumption experience is evolving with more and more consumers choosing to
socialise at home as opposed to traditional on-trade premises (Euromonitor International,
2015)(Euromonitor International, 2015) (Euromonitor International, 2015). In response to
this shift, retailers have enhanced the variety in their offerings to meet these changing market
needs (see Figure 17: The Evolving Irish identity (Bord Bia, 2015)).
Figure 17: The Evolving Irish identity (Bord Bia, 2015)
This research suggests that the use of categories in a craft beer assortment has a
positive influence on the shopping experience, and reduces negative factors such as clutter
and confusion. There is currently a lack of application of categorisation in the off-trade retail
industry, which is reducing the potential success of retailers.
Country of origin appears to be a prominent categorisation method for most
respondents in this research, so there is an opportunity for retailers to develop this potential.
The use of point of sale to differentiate between different categories has proven to be
positively received in this research. Retailers should aspire to highlight the various origins of
their products in a practical manner by utilising category headings in their assortments.
Irish products should be given preference when developing category plans as
provenance was a central theme in this research. There is also argument for retailers to
42. 42
promote local craft beers through point of sale by allocating a specific section for local beers
(see Figure 18: Example of local beer promotions: Kerry Craft Beer).
Figure 18: Example of local beer promotions: Kerry Craft Beer
Without sufficient categorisation, the perception of clutter appears to be a concern
which is causing distress for many shoppers. In particular, new consumers could be
negatively affected by the perceived lack of structure within the category and this may be
inhibiting growth potential.
The method of categorisation employed for Assortment B of this research proved
appealing to respondents as it allowed for cross-referencing between country and beer style.
However, there are questions regarding the feasibility of such a categorisation technique in
Ireland due to space limitations in premises and available SKU concerns. In the US, however,
there has been cases of craft beer sections that are categorised by style which have performed
well (Market Watch Magazine, 2015). There are potential negative effects of categorising the
assortment in this way which need to be considered, mainly what are implications for brand
development if the products a divided between categories within the assortment.
From a theoretical viewpoint, this study has proven favourable to the use of distinct
categorisation within the craft beer product assortment. There is an urgent need for further
exploration of this topic with practical trials to investigate the effect of categories on the
shopping experience and on retail performance.
43. 43
9 Limitations
Since work began on this exploratory study the best effort has been made to minimise
the potential limitations which may occur, however certain impediments do exist. As with
any exploratory study, caution must be taken when attempting to generalise the insights
which have emerged from this research. Given the nature of this study and the time
restrictions put in place, a small sample size was necessary which also detracts from any
generalisations which may be made.
The subjective nature of this study relies on the ability and experience of the
researcher to develop deeper meaning from the data which has been collected. Despite efforts
to consult relevant literature and practise care when analysing the data, it is noteworthy to
mention that insights reported in this study may reflect the level of experience of the
researcher.
In terms of the Assortments used for the intercept interviews, it is possible that images
used may have influenced the respondent’s choices. The lack of artificial context of
Assortment B may have skewed the results, however the researcher had requested that
respondents judge the image on the categorisation and layout as with Assortment A and C.
44. 44
10 Conclusion
This research was conducted with a dual purpose to explore and understand the
consumer categorization processes used to evaluate the craft beer assortment in an off-trade
retail environment, and subsequently, to investigate the important aspects of developing a
superior and consumer orientated craft beer assortment. To address these questions, a number
of semi-structured interviews were performed which included a product mapping/sorting
exercise. This data was then utilised to develop three craft beer assortments which were used
for intercept interviews. A number of key insights emerged from the analysis of this data,
which pertain to essential influencing factors impinging on shoppers’ purchase decisions.
A demand for balance between hedonic and utilitarian needs developed as a central
motif in this research. Respondent’s aiming to improve the efficiency of the shopping process
referenced a desire for more structure within the craft beer assortment. This aspiration was
predominantly relevant to shoppers with planned purchase preconceptions. The extensive
variety on offer is appealing to the shopper, but its presentation in the service scene causes
confusion and stress.
The results of this research indicate that country of origin (provenance) was central to
the internal categorisation structure of the majority of respondents. Following this, style or
beer and brand were important to the purchaser's choice process. The categorisation used by
many respondents mirrored the decisions they would make at the shelf to make a choice, i.e.
the Shopper Decision Tree.
In conclusion, this research established a shortcoming with current marketing strategy
and has endeavoured to overcome it. Variety is attractive and choice is appealing, however,
cognitive constraints exist that limit the shopper’s ability to process the plethora of options
available. This research has proposed a solution of aligning the consumers internal structure
with the external structure of the assortment, thus returning the consumer to the core of the
category planning process.
45. 45
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12 Appendices
12.1 Schedule for Interview & Sorting Exercise
Schedule for Interview & Sorting Exercise
Key Outcome
How do you organise these products into groups… what process and reasons do you
use to differentiate these groups?
Important Considerations
Explain the purpose of the study, the purpose of the exercise, and that it is
been recorded so that it can be referred to for analysis.
Request that they fill out the consent and screening form.
Allow the participant time at the beginning of the exercise to start sorting out
the cards… this will help them relax and start thinking about the topic.
Question areas that are pertinent:
Why group certain products together?
If making a large number of groups, could you combine any groups that are
similar? Why are they considered similar?
Once they have created groups… can they give a name or ‘heading’ to the
group?
Ask them to arrange the groups in manner that would seem logical to them in
an off-trade environment
Areas that could lead to interesting data:
Have they considered the size of the bottles?
What do they think about the interesting bottles… where have they put them?
Is price an important factor to them?
Is ABV important to them?
What factors ultimately influence the beer they decide to buy in an off-trade
environment?
ALWAYS ALLOW THEM TO SPEAK, LISTEN CAREFULLY TO WHAT THEY
SAY AND PROBE FOR BETTER QUALITY ANSWERS AND UNDERSTANDING
AVOID LEADING QUESTIONS, ASK OPEN, NEUTRAL, JARGON-FREE QUESTIONS
49. 49
12.2 Product Sorting Exercise Screening Form
Categorising the Craft Beer Product Assortment
Product Sorting Exercise Participant Screening Form
1) Do you consume craft beer?
Yes.
No.
If Yes - please complete the remaining parts of this questionnaire.
If No – thank you for your time.
2) Have you ever purchased craft beer from an off-trade premises (off-licence,
supermarket, on-line, etc.)?
Yes.
No.
If No – please skip to question 4.
3) Which ONE of the following do you typically use to purchase off-trade craft beer from
most often?
Independent Off-Licence
Supermarket Off-Licence
Other, please specify:
4) Approximately, how many times per month would you visit an off-trade premises to
purchase craft beer?
50. 50
5) Please choose from the below statements the ONE you feel best describes craft beer
to you and why you drink it:
I drink craft beer for more interesting flavours than standard beers…
I like to experiment with craft beers by trying lots of them…
I like to drink craft beer because it’s a bit more sophisticated and there’s more to it than
standard beers…
I drink craft beer to show my dissatisfaction with the giant corporate beer companies…
I drink craft beer for the story behind the beer…
I usually choose craft beers that are connected to a particular area or region that I’m drawn
towards…
Demographics
6) Gender:
Male
Female
Transgender
Other:
7) Please circle you approximate age: 18-20, 21-25, 26-34, 35-49, 50-65, 66+
8) Name:
9) Participant Number:
Thank you for your time.
