Consumer segmentation

Understanding your target audience will increase your company's financial performance. The desires of your consumers depend on social status, occupation, and income level. At the same time, up to 85% of consumers are ready to change a brand, provided that they are offered something better. What exactly to offer to different categories of consumers is the task of consumer segmentation research

Segmentation of the target audience is the division of consumers into segments, determination of motivation, identification of the shares of segments in the portfolio of the company / competitors / in the market as a whole.

Segmentation is possible according to various parameters, but the most commonly used division is according to the behavioral principle and according to the 5W principle (Sherrington method). In addition, for each of the consumer segments it is recommended to evaluate the financial capacity: the market (company) turnover provided by each segment.

Using this data, you can identify the most profitable segments (often 80% of revenue comes from, relatively speaking, the first 3 segments out of 10), analyze the saturation of segments with competitors’ offers - and ultimately select those on which you should primarily focus your marketing efforts. This will bring the maximum possible financial result for the company.

The minimum size of a representative sample for such projects per region is 800 questionnaires. By region we mean any territory for which separate analytics is required (this could be, for example, a city or a country as a whole). In cases where it is necessary to separately consider and compare data from, for example, 2 cities, the minimum sample is 1600 questionnaires. The minimum period for such a survey is 1 business day.

The cost of a project to divide the target audience into segments consists of the cost of the qualitative stage (number of focus groups or in-depth interviews), the cost of collecting a selected number of questionnaires (payment is taken only for fully completed questionnaires) and the cost of analytics (usually no more than 10-15% from the cost of data collection)

You can calculate the cost of one questionnaire yourself using our calculator (you will need to enter the number of open and closed questions in the questionnaire, quotas)

The cost of such a study is from 2000 £ (the cost is indicated for a minimum sample).

To assess segmentation, qualitative (in-depth interviews, focus groups, observations) and quantitative techniques (surveys) are used.

Sherrington’s 5W methodology is based on dividing the target audience according to the following parameters:

1. What? In fact, what assortment is this segment of consumers interested in
2. Who? Description of socio-demographic characteristics. For example, a married couple with children under 16 years of age
3. Why? Motivation of this consumer segment, reasons for purchase, reasons for choosing a supplier or outlet
4. Where? Places of sales, distribution channels where a given segment of consumers is looking for a product or service
5. When? Situations in which a need arises for this segment. For example, moving, having a child, etc.

BCGroup's research on target audience segmentation is structured as follows:

1. A BCGroup specialist clarifies the reasons that necessitated such a study;
2. An NDA (confidentiality agreement) is signed between BCGroup and the company;
3. A BCGroup specialist agrees with the customer on the final version of the guide for in-depth interviews and focus groups, as well as survey questionnaires;
4. BCGroup conducts a qualitative stage of the research and, based on its results, adjusts the questionnaire for the quantitative stage;
5. BCGroup specialists conduct the quantitative stage (personal, telephone or online survey) in a short time (it is possible to survey up to 5,000 people per day);
6. Next, the BCGroup employee transfers the data array to the customer’s representative in Excel or SPSS format;
7. After 5-10 days, a BCGroup employee sends an analytical report to the customer based on the results of the segmentation performed