Geography, the most powerful segmentation tool

The traditional practice of marketers and media planners to segment their brand users by demographics and psychographics is no longer totally relevant in today's marketplace. It amazes me that a large portion of marketers' time is spent analysing how their customer profile differs from competing brands and by implication, how they will be the chosen brand by a specific segment within a category of users. Where we have found differences in the profile of users is by location.
Geography, the most powerful segmentation tool

Many marketing strategies look for small percentage characteristic deviations from competitive brands within the category. Ie. MasterCard - 48% male, 52% female. Visa - 53% male - 47% female. Therefore, the marketer's response is that 'MasterCard has a female skew. We should aim our efforts at females'. As a result, many miss the "big" picture. These differences are statistically irrelevant and could result in MasterCard not talking to 48% of its customer base!

No longer completely loyal

In mature markets, customers are no longer 100% loyal to one brand. Ninety nine percent of consumers shop from repertoires of brands they know and think well of. Each brand has some 100% loyal customers, but most buy or consider other brands more often (especially over time).

I mostly buy my groceries from Pick 'n Pay. However, when I come home late from work, I will shop at Woolworths or Spar, which stay open later - all these stores are accessible and convenient. I also buy fresh produce from Woolworths and enjoy the bakery section of Spar.

As consumers, we may choose different brands or retail outlets within our repertoires based on different expectations, needs, moods or wants but these variables are not predictable and are based on random behaviour. However, it is still the same person displaying this promiscuous behaviour.

Similarly, we all cross-shop for clothing at Edgars, Woolworths, Mr Price etc. So do I fit the "Mr Price profile" which is thought to be different to an "Edgar's shopper profile"? This not only holds true for retail outlets, but across brands in any category. A coffee drinker may buy Nescafé and Frisco over a period - which "profile" of user do they fall into?

The reality

The reality of any shopper behaviour is that brands compete in a market, not as individual brands. Marketers and media planners should define more clearly the profile of the market/category of users in which they operate.

As a product category, nappies should be aimed at 'people with babies', and not relegated to single/married mothers in LSM 7 - 10, living in urban areas etc.

Where we have found differences in the profile of users is by location. A retailer such as Shoprite may have an idea of what its shopper profile is based on demographics. In truth, a Shoprite shopper in Edenvale is very different to a Shoprite shopper in Chatsworth. However, the Woolworths, Checkers, Spar and Pick 'n Pay shopper in Edenvale all resemble the profile of Shoprite consumers in that area, and similarly the same is true for Chatsworth. An Edgar's shopper in Vereeniging has a very different demographic profile to the Edgars shopper in Sandton.

Very similar

In reality, shopper profiles of competing brands or stores within an area are very similar across all options within a category and in turn, these profiles resemble the profile of the area, and not as a generic 'one shoe fits all' demographic profile.

At NAB, our epiphany is that consumers with mental availability (high salience levels) and physical availability of the brand or retail outlet are more likely to use these brands or shop at these stores.

Understanding the category users/shoppers within different areas is more important to marketers than trying to own a segment based on demographics. Geo-demographic segmentation is invaluable when determining what product offerings to feature or what tone to use in your communication.

About Gill Randall

Gill Randall has successfully run the sales division of the Newspaper Advertising Bureau (NAB) (www.nab.co.za) as joint MD for over 10 years. Starting her career as a direct advertising representative for Caxton in 1982, Gill progressed to group advertising Manager of the East Rand papers in 1983. In 1987, she moved to NAB (then known as NMB - Newspaper Marketing Bureau) as a national advertising sales representative and hasn't looked back since. Her ever-present energy, passion for the industry and highly innovative nature has ensured the Caxton division continues to grow from strength to strength. Gill can be contacted at +27 (0)11 889 0610 or email .
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