“Why did they do that?”  When we think of consumer behaviour, this is perhaps the easiest to ask but one of the hardest to answer! 

Market segmentation is the process of grouping or dividing an audience into subgroups based on commonalities and shared characteristics. Occasion-based segmentation looks specifically at the different events which drive purchases. This can be calendar events like Christmas, daily events like breakfast, or life events like a wedding. It could also be events that are tied to consumer needs, like the need to relax, the need to socialise etc or simply just the need to top-up on food.  By identifying patterns of buying behaviour, brands can pre-emptively market and promote their services, increasing customer acquisition, retention and growth. 

Why it’s important 

We know that people’s behaviour changes at different points in time, but consumer-based segmentation largely ignores this. In the large majority of categories , consumer behaviour is dependant on context, what you do depends on where you are, who you’re with etc. Occasion-based segmentation tries to answer two very important questions. They ‘why’ someone is purchasing, and the ‘when’ it will happen, allowing you to sell the upsell specific benefits, to the right consumer at the right time.  

Where it’s most effective 

Use cases for Occasion-based segmentation include; new product development, brand and shopper strategy, marketing and communication and general growth strategy. One of the key advantages is that its flexible in its scope. You can have a wide or narrow focus. You could go as broad as looking at category trends in the marketplace or as narrow as segmenting on related products within a category and their relationship to different consumers, channels or occasions. 

It’s most often applied at a category level, which enables you to discover new opportunities and understand your performance vs your competitors. In tends to work better in categories where there is a lot of customer interaction and purchase intent will vary for example; coffee, alcoholic beverages, going out to eat, personal care items, app purchases, and video/streaming. 

“In order to better understand their market, many FMCG brand incorporate occasion. Without this lens, it’s almost as if you’re assuming that a consumer will buy the same products no matter the event.” Paul Carney, Managing Director 

Where it’s less effective 

Typically, Occasion-based segmentation works best where there is a wealth of transactional/ behavioural data that can be mined. Where a category is less frequent such as new laptops or car purchases there may not be enough variation of buying intent in which to segment customers. Saying this, you could see a practical application in separating out cars for families vs first time buyers, but this could probably be done through a more traditional segmentation approach.  

 


If you are a brand looking to understand which events trigger purchases and the people who will affected by these events, why not find out more about our Demand Spaces tool?