Sponsored
Picture: SUPPLIED/EBONY+IVORY
Picture: SUPPLIED/EBONY+IVORY

Category leaders are positioned with pinpoint purpose, not randomly conceived. In the fourth lens in the Ebony+Ivory series on marketing segmentation in SA, it emerges that media agencies must interpret multiple data streams. Their role is to identify which market a brand can grow its share of category. 

Inertia is not an option in effective socioeconomic measure (SEM) segmentation, and only by using all the available data is it possible to calibrate new segmentation benchmarks. 

Media planning is all about market segmentation. Marketing managers can grow their product and brand slice of the market by basing their media strategies on this intelligence, as it points to which market segment to communicate for a better chance at volume.  

Using SEM cluster segmentation to navigate through all the open-source industry data provides us with agile insights and the reassurance that the revised socioeconomic segmentation variables show a consistent interpretation of the SA marketplace and media landscape.

In this article, Ebony + Ivory explores what this can mean for products and brands, by discovering some market realities in sample categories of beverages, banking, food and groceries. 

Growing fusion adoption for growth strategies

When it comes to fast-moving consumer goods (FMCG) product and brand information, the release of the four-way multi-fusion database Fusion 2020 filled many of the gaps left by the demise of  all media and products survey (AMPS) in 2016. 

In an earlier module, the importance of data fusion in aggregating insights across multiple studies was reviewed. This is particularly valid when data from studies that capture longitudinal insights are combined — actual behavioural data captured over a number of days, weeks or even months, rather than the traditional single event, single source questionnaire “snapshot”, which harvests a respondent reply once at a fixed point in time. 

In digital media, this might derive from using cookies for measurement of social media features or to analyse traffic. In television viewing, these longitudinal insights come from television audience measurement (TAMS) Peoplemeters, which capture and report real-time viewing behaviour. 

In this instance, the branded FMCG information in Fusion 2020 derives from Nielsen consumer panel services (CPS) or the Nielsen home panel

In SA, the panel consists of 4,000 households that are audited monthly on actual purchases for the year. Using a systematic overlay of bar code scanning, cross-referenced with till slips and bin-audits, this equates to more than 210,000 actual “purchase events” during the course of the year. As such, CPS audited data provides an accurate mirror of actual market share at any point. 

Based on CPS data, Fusion 2020 database reports on 191 FMCG categories and 2,200 brands (light, medium and heavy consumption), as well as publisher audience measurement survey (PAMS) branded information on retail outlets (food and groceries, clothing, furniture and appliances), financial institutions and motor vehicles. 

Household SEM truths from banking to beverages 

In an earlier module, the inflexion point from “unbanked” to “banked” was a good indicator of a person being employed and economically active in the formal sector. 

Using Fusion 2020 data, this engagement with the banking sector at a branded level can be evaluated. Capitec is the financial institution with the largest footprint in every SEM segment, with the exception of SEM C5, where Absa is the largest brand.  

Picture: SUPPLIED/EBONY+IVORY
Picture: SUPPLIED/EBONY+IVORY

There are similarly reassuring patterns in the retail sector. 

Boxer superstores and Cambridge Food stores are well positioned against the lower end SEM C1 and SEM C2. At the top end, Woolworths retains pole position against SEM C5 with Food Lovers Market and Checkers/Checkers Hypermarket starting to provide competition in that space. Checkers is presumably competing in this space with its new FreshX concept stores.

Picture: SUPPLIED/EBONY+IVORY
Picture: SUPPLIED/EBONY+IVORY

With clothing purchases, the SEM model again reflects the data’s ability to provide a reassuring representation of the retail market. Woolworths dominates in SEM C5, but with increased competition from Cape Union Market. As expected, PEP Stores, Ackermans and Jet are well positioned at the lower end of the market, with Mr Price dominating the middle market. Unexpected entrants to this clothing market segment are Clicks and Dis-Chem. 

Yet it is the granularity of data at the product and brand level that generates tremendous value. While it’s not feasible to examine detailed insights across all 2,000 brands in Fusion 2020 data in one article, the robust versatility of SEM segmentation by a top-line evaluation of the carbonated soft drinks market (CSD) can be illustrated.

Picture: SUPPLIED/EBONY+IVORY
Picture: SUPPLIED/EBONY+IVORY

Looking at a simple selection of the SEM clusters, Coca-Cola, Sparletta and Fanta are predictably reported in the top three positions, but the robustness of the data is illustrated by the shifts in branded CSD consumption among smaller brands. 

In SEM C1, the first challenger brand in at number four is Stoney Ginger Beer. From SEM C3, Sprite claims that position, with Twist knocking Stoney out of the top five brands. In SEM C5, the surprise entry into the big five is Kingsley, also displacing Stoney and Twist in the top five ranking. 

The breakdown of branded insights by light, medium and heavy consumption provides an additional layer of valuable data for segmentation and planning purposes. 

Once again within the CSD market, two challenger brands are evaluated in terms of determining relative strengths and weaknesses. Both Stoney Ginger Beer (6.7-million consumers) and Kingsley (5.1-million consumers) show a strong volume contribution from SEM C3, and a diminishing contribution to sales at both extremes of the market.

Picture: SUPPLIED/EBONY+IVORY
Picture: SUPPLIED/EBONY+IVORY

The most interesting and functional narrative is delivered by evaluating the ratio of medium-heavy users relative to light users. Kingsley has a power ratio of • = 1.6. This is at its highest (• = 1.8) in SEM C3. In simple terms, trial is more likely to be converted to regular consumption. From SEM C4, however, this ratio declines rapidly (• = 1.4) and though this is still a positive yield, it does suggest a need for communication into this SEM C4 segment.

Using global best practice data fusion techniques, this data set is growing in both representation and functionality each year. When it comes to new data and research, there is only one real option open to advertising strategists and media planners in SA. 

Contact Ebony+Ivory here >>>

About the Ebony+Ivory series about marketing segmentation in SA

Drawing data and insights from the most recently published industry database PAMS 2019 (released in April 2020) and the Nielsen Fusion Study 2020 (released in November 2020), we interrogate the SEM model through four lenses: people and places; purchasing power; products; and platforms.

This article was paid for by Ebony + Ivory.

Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.