Usually when we think of segmentation, we think about groups of people. They will all be looking for different things, so the segments will orientate themselves within your business category in different ways. There may be a group that’s a little overwhelmed by the complexity of the category service or product – they want simple solutions and reassurance. And there may be another group that’s comfortable with complication – they might actually value such things as advanced technology, multiple options, independence.

We refer to these people-based segments as ‘typologies’. What your brand needs to give them is stable from one category interaction to the next. For example, the washing machine I want today is, broadly speaking, the washing machine I want tomorrow. These typologies are easy to understand and communicate with – and they make good overall targets for brand platform development.

What’s my motivation?

But think about it. Who we are with, where we are, what we’re doing – even our mood – can have an influence on what we buy.

Imagine you want to interest Kristina in a particular drink. But she likes to relax over a glass of Barolo with her partner on a Wednesday evening, get lively with mates and margaritas on Friday, then drink Bollinger at a birthday party on Saturday. How do you shape your approach?

Within many product and service categories, what people want varies considerably from one occasion to the next. When the answer to the question “What does a specific consumer want from my category?” is a resounding “It depends”, you may need to develop an occasion-based lens through which to view your typology.

The typology may be driven by your stable orientation and attitudes within the category, while the occasion-based lens focuses more on the internal motivations or ‘need states’ that vary from one category interaction to the next.

Need states are relevant to many categories – think snacking, alcohol, holidays. Within the retail category, these occasion-based need states are often branded as ‘shopper missions’. Ultimately, we want to understand what consumers are thinking – or what their needs are – at a specific moment of purchase or consumption.

Why are they buying that?

Many retailers have a huge amount of information on what people buy, such as what their shopping basket is like, how it changes, and what products are bought at the same time. But this basket information doesn’t give any clues as to the ‘why’ – the motivations behind purchases.

This is why we advise our clients to use consumer motivation as the bedrock of any occasion-based segmentation. You need to understand the needs, motivations and pain-points at specific moments in their buying pattern.

Many FMCG companies are beginning to incorporate ‘occasion’ into their understanding of their market. Without this lens, you’re assuming a consumer buys the same product across all occasions.

You should consider occasion segmentation in any repertoire market – where people buy different brands or products for different situations.

Now it gets complicated

However, it’s not all about needs and how we feel at a specific moment in time. Some of our decision-making is because of who we are, and how we generally feel about something. For example, two friends having the same ‘need’ while at a bar – such as winding down after work –could choose completely different drinks because of their:

• Demographics – We know red wine is more popular with men, and rosé more popular with women.
• Attitudes – Health-conscious consumers versus hedonists
• Category behaviours – Some people know more about wine.

We need to understand both the consumers and their consumption occasions. Which, of course, can complicate matters. It’s often the case that we create seven or eight consumer segments, and ten different types of consumption occasion. And 80 individual combinations of these two things can be a bit overwhelming.

The matrix reloaded

Our 20 years of experience have helped us come up with a demand-based tool that helps you deal with this complexity. The matrix of segmentations that we design and deploy for our clients has shown us that typologies are fine for managing brand targeting and communication strategies. But occasion- or needs-based segments allow for more granular portfolio management, new product development (NPD) activities and local brand activations.

We’ve found through our analysis and experience in over 1,500 segmentations that needs are the most culturally-stable dimension. This means they’re perfect for global strategy. In our next blog, we explain the benefits of the matrix in more depth.