For a long time now, market segmentations have been used as an instrumental tool in understanding consumers, but they can often fail because they may not fully take account of how purchase decisions are actually made.
How we all make decisions in different categories can vary substantially. There are some categories – particularly those with low buying frequency – where it makes sense to segment the market based on the types of people (typologies) that exist.
You do this by grouping people according to their enduring relationship to the category on dimensions like category attitudes and behaviours, values or demographics. In other categories – those with high buying frequency – segmenting by consumer type isn’t enough – we must also understand the context of the buying situation.
Introducing Demand Spaces
Demand Space segmentation is an approach that brings together multiple elements of the decision-making process into a single framework. The functional and emotional needs that underpin the decision. Plus, the situational context in which the decision is made, as well as the characteristics of the person making the decision.
Done well, Demand Spaces give you a blueprint for understanding how consumers in your category make decisions. They help explain why consumers make the choices they do and highlight areas of unmet need that you can exploit.
In essence, Demand Spaces give you three things: a map of where you can win; clues as to how you can win; a footing for working out what you can win.
Through intentional design, Demand Spaces can be extremely useful for any business. They help generate value by providing a shared framework for comprehending how consumers make decisions.
Demand Spaces establish a common language that the whole business can use to understand consumer behaviour. They also give a structure for creating strategies aimed at succeeding when it matters most – in those pivotal moments that influence consumer choices.
Learn more in our ebook
To find out more about how to uncover opportunities for your brand with Demand Spaces, take a look at our comprehensive ebook where we unpick:
- What Demand Spaces are and how they work
- Selecting the right type of segmentation for success
- How to design a purposeful, data-driven approach
- Getting buy-in and turning insights into action
- Case studies and examples
