Decision Insight - In-Sight Newsletter

Behavioral segmentation identifies which consumers are using your products, your category, or your line of business in similar ways. As in all segmentations, consumer clusters are formed indicating which groups of people behave in like ways, and in dissimilar ways to other groups. A powerful way to use segmentation is to determine which factors align similar people, perform the application to obtain segments, then examine those segments to see how consumers interact with your product category. The factors could include the channel they shop for your category, what products they purchase together, which products they select, how frequently they buy, and other such issues. Behavioral segmentation helps you understand how your products are being used, so you can maximize your impact in the marketplace.

A better view of the marketplace and defined customer groups will help you strategically grow a category or even create new ones. Do you need to re-position your product to better attract consumers who may use it for different needs? Do you need a new product in your line that will expand purchases and add to your bottom line? What other products, called affinity products, are being purchased or thought of while shopping for your product? All of these initiatives are best defined at the point of purchase level, not necessarily driven by marketing communications and media placement.

Another way to look at it is that most often behavioral segmentation is based on market basket data - a shopping cart of data based on discovery at the point of purchase. This data can be costly to collect at retail. In addition, you don't often get to understand how the same consumer purchases in multiple channels. Why not layer this segmentation analysis onto other research initiatives such as the concept refinement or product optimization phases, or a new product launch in the category? You'll get more bang for your research buck and you won't be left shelving binders full of segmentation data that you'll never use again.

At Decision Insight, we have found our simulated shopping tool to be a great way to collect market basket data to round out a behavioral segmentation. Using our online survey tool, SimuShop^®, we ask consumers to shop in multiple channels (e.g., grocery store, mass merchandise store, etc) to gain understanding of how each channel determines customer purchase behavior. Further, you can gain insight into how several hypothetical variations of SKU's (yours and competitors) influence consumer choices at retail. These insights can lead to greater shelf space for your brands and more targeted promotions at the point of purchase.