Characterization and segmentation of forest essential oil products in Indonesia

Abstract

The COVID-19 pandemic has increased global awareness of importance of leading a healthy and balanced lifestyle. This is reflected in the growth of the essential oil market for lifestyle, beauty, and daily remedies. Unfortunately, there is limited domestic products to meet the growing demand for essential oils. Lack of information in determining the market segmentation was identified as one of the causes of underdeveloped domestic products. This research identified market segmentation and characterization of essential oil products derived from Indonesian forests. A total of 500 consumers were interviewed from 2020 to 2021 regarding their consumption patterns and knowledge of essential oil products. A two-step cluster analysis approach was also used to determine segmentation and characterization. The results of the study show that consumer segmentation of essential oils is determined by income and education levels, awareness of a healthy and balanced lifestyle, and access to information. As a result, demand for essential oil products will rise along with the higher socioeconomic status and access online shopping. Consumers in this segment obtain products from online markets, which typically offer imported products alongside limited local products. Therefore, the advantages of local products need to be disseminated to reduce imports, particularly those made from materials derived from Indonesia's forests.