Market segmentation in a recession: how UK consumers are reacting

Post found at http://www.20plus30.com/blog/2009/04/effects-of-recession.html and written by Dick Stroud.

Interesting because it reflects the general mood that things are changing and operations/marketing managers have to re-eveluate their market segments and associated instruments.

The branding consultancy Clear (part of M&C Saatchi) has divided the way UK consumers are reacting to the recession into eight groups. The original article was published in Marketing Week – unfortunately it is subscriber only.

The most extreme group are those who are “cutting back”. These tend to be older females on a lower income and have changed their behaviour the most, compared with any other group.

Other consumers that are living more cautiously are joining the “life on hold” tribe. These people are staying in more and cutting out big-ticket purchases such as cars.

This group are generally in the 35 to 54 age bracket. Vauxhall’s “You pay we pay” redundancy marketing campaign is an example of a company responding to the fears of this group.

There is another group who are slightly less pessimistic frame of mind. The groups have been divided into those who are trading off, those who are trading down and those who have the occasional treats.

Those who are “trading off” tend to be between 25 and 44 years old and might decide not to buy a new car in order to jet off for an annual holiday. Those who are “trading down” are still buying the same types of goods but looking for cheaper options, such as own-brand or searching for bargains in less pricey shops.

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The group that is probably least targeted by marketers – despite making up 42% of the population – is those that are still spending money and feeling positive about their own financial situation.

This group has been sub-divided into three segments – “it’s worth it”, “life goes on” and “on the up”. Marketers should take note of these groups, which are largely made up of male high earners. Of the “on the up” group, 37% bought a new car in the past two years and claim they won’t put off replacing it.

It is interesting to see how the “life goes on” group increased in the period until Nov 2008. I wonder if anybody has more recent data? What would be really interesting is to see an age breakdown of each of these groups.

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