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Why Market Segmentation Needs to be Part of Your Brand Tracking Program

Better data quality and clarity on media effectiveness are just two benefits to introducing market segmentation to your brand tracking.
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Why Market Segmentation Needs to be Part of Your Brand Tracking Program

We’re often surprised to see big, expensive brand health or ad tracking studies survey everyone rather than just the target market the brand is trying to succeed with.

The most extreme example of this is asking non-users of your category to participate in the research. Unless yours is a rapidly expanding new category — where it’s reasonable to assume that today’s non-buyer is tomorrow’s new customer — you should focus your efforts on people who participate regularly in your category.

For example, while no one buys durables regularly, due to their long purchase cycles, the same idea translates into recruiting only recent buyers and near-term intenders.

Narrowing the focus of your brand tracker will give you more bang for your buck by only gathering opinions from people who are likely to have and to act upon them. It will also give you a more accurate assessment of the effectiveness of your advertising creative and media buy since people tend to not register or remember ads that are irrelevant to them.

To do this well, you will have to answer 4 key questions:

1. Should you only be brand tracking among your target segments?

Some brands narrow their focus so much that they only survey the demographic or psychographic target group they’re most focused on.

This ensures a deep understanding of the brand’s position or impact among the consumers who the marketing strategy and tactics have been designed for. Of course, it may also leave marketers blind to threats facing the large share of revenue that likely still comes from the rest of the market.

You may want to consider only excluding the lowest priority segments, and perhaps setting a maximum number of interviews among secondary priority segments. This allows you to get a comprehensive read of the relevant addressable market while allowing you to dive a bit deeper into your areas of focus. If you do tap those secondary targets, don’t forget to weight their answers accordingly when pulling total market results.

Either way, including your target segments as analysis groups in your brand tracker is an effective way to keep the market segmentation framework top-of-mind with internal stakeholders, boosting and prolonging engagement in a way that helps maximize the return on your segmentation investment.

2. Should the tracker’s target segments be demographically or attitudinally defined?

Some of our clients still define their target based solely on demographics and category volume (such as 18-to-29-year-old, heavy fast food buyers), but most have evolved to use a more attitudinal lens since it helps them understand how to win with their target.

Even so, many of those same clients have not incorporated their attitudinal segmentation typing tool into their tracking research — that’s a mistake.

If you have invested in a foundational strategic market segmentation study that divides consumers on the basis of their relevant attitudes and needs, and are making your business decisions with one or a few attitudinal target segments in mind, you should make the effort to track your market performance among those same targets.

That might mean adjusting your study qualifications to exclude some segments and setting maximums on others; or it might simply mean using your target segment(s) as a key analysis point in the reporting.

Here are a few other considerations to think about:

  • If your brand tracker is already ongoing, and the segmentation is attitudinal, insert the typing tool at the end of the survey so it doesn’t impact respondents’ mindset as they enter the survey. You won’t be able to screen people out based on it, but you’ll be able to filter your analysis to targets without putting trendability at risk.
  • If the base sizes of target segments are too small on a monthly basis, you can always do the segment-level reads every quarter.
  • Don’t be surprised if the segment sizes in your tracker do not perfectly align with the original market segmentation study sizes. Different screening criteria (or even just context effects) can lead to different segment sizes in the tracker. Over time, you’ll be able to see if segment sizes appear to be shifting.

3. Can including your market segmentation also improve the quality of your total tracking data?

Most markets are comprised of a consistent cohort of consumers that evolve very gradually over time. If you are surveying the “past three month of X” and the category is not highly seasonal, then you would expect the demographic and attitudinal segment makeup of your qualified respondents to remain stable from quarter to quarter. Examples of stable categories include dog food, toilet paper, banking, etc.

If the segment composition of your tracking data does not remain consistent when it should, then your key performance indicators are likely to fluctuate as a result of this random sampling error and mask (or masquerade as) real market shifts. That defeats the purpose of doing a brand or ad tracker.

You can control the demographic composition through a combination of targeted sampling and weighting — and many trackers do. However, they often don’t do the same with the proprietary attitudinal segments, even if they are being measured.

If your market is fairly stable, we recommend that you add the market segmentation to your weighting scheme to help ensure the consistency of your brand health, perception, and ad effectiveness metrics; but keep an eye on the natural fallout that you’re getting with each wave since a consistent trend in segment sizes could mean that your market is shifting.

Just as the targets for demographics should be updated annually or when a major market shift occurs (such as wide-scale dog adoptions during the pandemic), so too should the market segmentation targets when there is consistent evidence of a shift.

As a best practice, the first time you see a big shift in segment sizes, do a logic check: has there been a sudden market shock likely to have a big impact on one of the beliefs underpinning your market segmentation scheme? If not, then we’d assume this is a random sampling error and remove the shift through weighting. 

If it does seem like a real thing (such as a shift toward preferring eCommerce during the pandemic), then let your tracker’s segment composition shift right away, and start giving serious thought to evolving your market segmentation scheme.

4. Do you have room to include the segments?

If you built your market segmentation with a research partner who does not understand the importance of a highly efficient yet accurate typing tool, you may not be in a position to include the typing tool (i.e., golden questions) due to survey length constraints. If you are lucky enough to have done it with Material, it won’t take up a very large piece of survey real estate.

Even so, most trackers are over-full already, and the evils of long surveys are numerous; so we are not endorsing expanding your survey to bring in the typing tool. If you need to cut something in order to make room for your typing tool, take a closer look at your attribute perceptions battery.

Consumers typically have pretty vague perceptions of brands they use — and even vaguer perceptions of brands they don’t! All people have a cognitive consistency bias that tends to introduce a strong brand halo into the data (i.e., if a consumer rates you high on one thing, they tend to rate you high on other things as well). In other words, even if you think you’re getting 25 distinctly different impressions from consumers about your brand, you’re probably not.

Work with your research partner to cull the attribute battery down to 10-15 items that are the least redundant subset of the most impactful attributes that differentiate brands in the category.

Not only will this free up space for more incremental information (like the typing tool), but it will also improve the quality of your data by reducing break-offs that lower the representativeness of your sample while reducing respondent fatigue which can generate bad answers from those who remain.

If your perceptions battery is already succinct, you may need to have each person rate fewer brands. This may require dropping some brands from your focus or expanding your sample size to ensure you get enough responses for each.

In summary, if your segmentation typing tool is not in your tracker, start thinking about how you can add it effectively. Additionally, if you don’t yet have an attitudinal segmentation, we invite you to consider the ways it could help build your business.

About the author

Hilary DeCamp
As Chief Research Officer at Material's Insights Division, Hilary runs the advanced analytics function and personally specializes in market segmentation studies at Material. She leverages her 20+years of experience to consult with a wide variety of clients on study and questionnaire design, sampling and weighting, online data quality management, cross-cultural comparability, and analysis in report writing. She holds a BA in Quantitative Psychology from UCLA and earned her Masters in Marketing Research at the University of Georgia.

Read more by Hilary DeCamp
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