Identifying Consumer Types

For any business, having information about who your customers are, their behaviour, location, habits and so on is important in planning and marketing. The techniques now used to gather such information are very sophisticated and demonstrate the importance of the knowledge-driven economy. Having knowledge of your consumers represents some element of power!

This resource will look at the main classifications of consumer types and some of the techniques that a business might employ to gather information about their consumers.

 

 

To start this section, think about your own family and their circumstances:

·                 What is the combined income level of your family (i.e. the incomes of your parents/guardians where appropriate - this need only be a broad categorisation)?

·                 Where does your family do their main grocery shopping?

·                 How many times a month does your family go shopping for non-food items?

·                 What are your family's five favourite non-food shops?

·                 Does your family have an Internet connection?

·                 Where does your family live?

·                 What type of accommodation do you live in?

·                 Does your family own their own home?

·                 What is the age range of your family?

·                 What sporting and leisure activities do your family enjoy?

The above are typical questions that any market research survey might seek to find out. It represents basic information about consumers that any business would be interested in knowing. Such information allows the business to be able to classify customers in different categories called market segments.

A market segment is a group of customers from the market that have similar sets of characteristics.

These characteristics can be defined as:

·                 Demographic:

o                    This will include details about age, occupation, educational background, income, gender and family size.

·                 Geographic:

o                    This will include details about where people live - not just the region but might include post code groups, whether it is a rural or urban area, whether it is an estate, private housing, and so on.

·                 Benefit:

o                    Why do users use a particular product/brand as opposed to any other? What common characteristics are there of people who use particular brands/products? For example, the magazines 'Total Guitar' and 'Guitar Techniques' are both magazines aimed at people who have an interest in guitars and playing guitars but cater for very different markets.

• Psychographic:
  • This will include classifications according to various definitions of social class, personality type, lifestyle and so on

• Behaviouristic:
  • This looks at the typical behaviours of groups of customers and includes details about frequency of purchase, loyalty to particular products or brands and so on.

Gathering information on customers to provide a profile of the likely characteristics of the segment has grown in sophistication in recent years. In addition to the information that is available via primary market research, there are a growing number of secondary sources of information. An obvious one is The National Census. This is carried out every 10 years and provides a wealth of information for businesses to use. (http://www.statistics.gov.uk/census/)

In addition to this, there are a number of organisations that will provide detailed information about markets and particular products and services. One of the most well known of these is Mintel (http://reports.mintel.com/). If you wanted to find out some information about the market for adult soft drinks in the UK then Mintel has a report that will tell you virtually everything you need to know about that market. Alas, this sort of information comes at a price and you will have to pay nearly £1,000 to get it. For a business, however, this sort of money can represent a very cost effective way of getting detailed information about its market and its product.

There are other sources that have developed to provide business information. Up My Street (http://www.upmystreet.com/) provides a range of information on local neighbourhoods. This information might be used by an individual wanting to check out property prices, local restaurants, schools and so on. Businesses will provide information targeted at particular post codes to facilitate contact between the consumer and the business.

For example, if I wanted to check out electricity or gas suppliers in my area, whether I can access broadband, digital TV, information about home insurance and so on, I can enter details about myself via their Web site and be directed to a particular business that can offer the things I am looking for.

Businesses can also buy information from specialists in the field. Experian (http://www.experian.co.uk/) compile information about credit worthiness of individuals along with all manner of details about customers and their characteristics. By using the expertise that Experian has, a business can find out who their customers are, their behaviour and buying patterns, and all the factors we identified in the list above. In so doing, the business can make informed decisions about promotion campaigns, investment in advertising and marketing to maximise the return on the investment - in other words, generate maximum sales revenue in relation to the cost involved.

Experian has developed a product called Mosaic that helps identify market segments. The product classifies 24 million households in the UK into 11 groups, 61 types and 243 segments. You can get some idea of the depth of the detail involved by going to the Mosaic UK homepage (http://www.experianbs.com/Content.asp?ArticleID=566) and selecting the link to the Mosaic UK group and type descriptions.

A similar organisation providing information is CACI. CACI have developed what is called a geodemographic tool called ACORN (http://www.caci.co.uk/acorn/) to help businesses get information about, and understand, their consumers. ACORN classifies 1.9 million UK post codes and generates 287 different lifestyle variables that a business can use to profile its customers.

You can get some idea of how it works by using the trial facility. I entered my postcode into ACORN and found out, amongst other things, that people in my postcode area have a higher than average likelihood of using a PC, are more likely to use online shopping, highly likely to use a PC for home finance and have a laptop! I could have gone into more detail not only about PC usage but also about credit cards, holidays, insurance, eating out, cars, etc. etc.

 

A similar organisation providing information is CACI. CACI have developed what is called a geodemographic tool called ACORN (http://www.caci.co.uk/acorn/) to help businesses get information about, and understand, their consumers. ACORN classifies 1.9 million UK post codes and generates 287 different lifestyle variables that a business can use to profile its customers.

You can get some idea of how it works by using the trial facility. I entered my postcode into ACORN and found out, amongst other things, that people in my postcode area have a higher than average likelihood of using a PC, are more likely to use online shopping, highly likely to use a PC for home finance and have a laptop! I could have gone into more detail not only about PC usage but also about credit cards, holidays, insurance, eating out, cars, etc. etc.