White Papers: Consumer Segmentation

Attitudinal surveys often tell us the same story. Your category's consumers tell you they care about health issues and what their family eats and that they often seek out healthy and nutritious foods.

There is a thin line between what they believe and what they end up doing. They do want to maintain a healthy lifestyle and who doesn’t. However, the chain of events that tie attitudes to actual purchases can crack at any point in the consumer's purchase decision process.

The key – Consumer segmentation to understand the entire purchase decision process, from deeply held core beliefs and attitudes, to need states, to choice of multiple channels, to final purchase; and to account for as many of these factors as possible in the segmentation process. Through the above process, marketers can start understanding how some items keep vanishing from the shelves and why others repeatedly gather dust on the shelf.

A holistic approach allows marketers to understand their consumers by segmenting across the entire purchase decision process based on Attitudes, Demographics, Need States and Purchase Occasions.

Understand your Consumers better through Consumer Segmentation studies.

Related Topics: Customer Churn Analysis Demand Forecasting – Challenges Demand Planning Store Clustering Key Driver Analysis

Attitudes — Attitudinal data provide a deep look into consumers to help marketers understand why they do or do not purchase particular products. Marketers can use it to understand how consumers see products, not how we want them to see them. The problem with ending our consumer segmentation exercise here is that there are many steps between these core beliefs and product purchases. For many reasons, these core beliefs may or may not be reflected in purchases.

Demographics — High and low-income households, large families and singles, young and old, etc., regardless of how similar their attitudes, needs and channel selections may be, do not often buy the same products for the same reasons. A single set of beliefs may lead a group of consumers to purchase one product and another cluster of consumers to purchase another.

Need States — The need state defines what the consumer is trying to accomplish with a particular purchase. Need states can override attitudes or they can reinforce them. Consumer segmentations cannot be built purely on needs as thy may fail to capture the influence of demographic factors that may tie different purchases together.

Purchase Occasions — The channel options available at the time of purchase, product assortment/variety, price and how the products are shelved all interact with the need the consumer is trying to fulfill, their demography and core beliefs. Again this step cannot be analyzed in alienation. Good consumer segmentation must account for as many of these factors as possible, creating new segments that go deeper in understanding the purchase decision making process.

A successful marketing campaign needs to incorporate all elements of the marketing mix complementing each other. Brand positioning must be communicated clearly and to the right audience. Consumers must be able to find the product where and when they want it, in the right form and package size, and at a price that matches the expectations they have about the product's benefits. To execute in this way requires all the stakeholders from the manufacturer to the sales person on the floor to think about the end consumer in the same way consistently through the same looking glass.

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