Geodemographic Segmentation
Encyclopedia
In marketing
, Geodemographic segmentation is a multivariate statistical
classification technique for discovering whether the individuals of a population fall into different groups by making quantitative
comparisons of multiple characteristics with the assumption that the differences within any group should be less than the differences between groups.
) system is conducted by Consolidated Analysis Centers Incorporated (CACI). It is the first and leading geodemographic tool to identify and understand the UK
population and the demand for products and services. ACORN categorizes all 1.9 million UK postcodes using over 125 demographic statistics within England
, Scotland
, Wales
and Northern Ireland
and employing 287 lifestyle variables. The classification system of ACORN contains 56 types of household under the 14 groups in 5 categories.
is Experian’s people classification system. Originally created by Prof Richard Webber (visiting Professor of Geography at Kings College University, London) in association with Experian. The latest version of Mosaic was released in 2009. It classifies the UK population into 15 main socio-economic groups and, within this, 67 different types.
Mosaic UK is part of a family of Mosaic classifications that covers 29 countries including most of Western Europe, the United States, Australia and the Far East.
Mosaic Global is Experian's global consumer classification tool. It is based on the simple proposition that the world's cities share common patterns of residential segregation. Mosaic Global is a consistent segmentation system that covers over 400 million of the world’s households using local data from 29 countries. It has identified 10 types of residential neighbourhood that can be found in each of the countries.
These systems are consisted of the different types of businesses
, geoSmart is a geodemographic segmentation system based on the principle that people with similar demographic profiles and lifestyles tend to live near each other. It is developed by an Australian supplier of geodemographic solutions, RDA Research.
geoSmart geodemographic segments are produced from the Australian Census (Australian Bureau of Statistics
) demographic measures and modeled characteristics, and the system is updated for recent household growth. The clustering creates a single segment code that is represented by a descriptive statement or a thumbnail sketch.
In Australia, geoSmart is mainly used for database segmentation, customer acquisition, trade area profiling and letterbox targeting, although it can be used in a broad range of other applications.
The perceived advantages of OAC over other commercial classifications stem from the fact that the methodology is open and documented, and the data is open and freely available. This means that OAC is not a black box, nor is it expensive to use, in fact it is free.
OAC has a wide variety of potential applications, from locational analysis to social marketing and consumer profiling. The UK public sector are increasingly taking up OAC as it represents a real cost saving during a time of recession.
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
, Geodemographic segmentation is a multivariate statistical
Multivariate statistics
Multivariate statistics is a form of statistics encompassing the simultaneous observation and analysis of more than one statistical variable. The application of multivariate statistics is multivariate analysis...
classification technique for discovering whether the individuals of a population fall into different groups by making quantitative
Quantitative property
A quantitative property is one that exists in a range of magnitudes, and can therefore be measured with a number. Measurements of any particular quantitative property are expressed as a specific quantity, referred to as a unit, multiplied by a number. Examples of physical quantities are distance,...
comparisons of multiple characteristics with the assumption that the differences within any group should be less than the differences between groups.
Technologies employed
The information technologies employed in geodemographic segmentation include geographic information system and database management software.- Geographic information system: a business tool for interpreting data that consists of a demographic database, digitized maps, a computer and software.
- Database management software: a computer program in which data are captured on the computer, updated, maintained and organized for effective use and manipulation of data.
Principles
Geodemographic segmentation is based on two simple principles:- People who live in the same neighborhood are more likely to have similar characteristics than are two people chosen at random.
- Neighborhoods can be categorized in terms of the characteristics of the population which they contain. Any two neighborhoods can be placed in the same category, i.e., they contain similar types of people, even though they are widely separated.
Geodemographic segmentation systems
Famous geodemographic segmentation systems are Prizm (US), Tapestry (US), CAMEO (UK), ACORN (UK) and MOSAIC (UK) system. New systems targeting subgroups of the population are also emerging. For example, Segmentos examines the geodemographic lifestyles of Hispanics in the United States.CAMEO system
The CAMEO Classifications is a set of consumer classifications that are used internationally by organisations as part of their sales, marketing and network planning strategies. CAMEO UK has been built at postcode level and classifies over 42 million British consumers. It has been built to accurately segment the British market into 57 distinct neighbourhood types and 10 key marketing segments. CAMEO was developed and is maintained by Callcredit Marketing Solutions.ACORN system
A Classification Of Residential Neighborhoods (ACORNACORN (demographics)
ACORN is a geodemographic information system categorising all United Kingdom postcodes into various types based upon census data and other information such as lifestyle surveys....
) system is conducted by Consolidated Analysis Centers Incorporated (CACI). It is the first and leading geodemographic tool to identify and understand the UK
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
population and the demand for products and services. ACORN categorizes all 1.9 million UK postcodes using over 125 demographic statistics within England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
, Scotland
Scotland
Scotland is a country that is part of the United Kingdom. Occupying the northern third of the island of Great Britain, it shares a border with England to the south and is bounded by the North Sea to the east, the Atlantic Ocean to the north and west, and the North Channel and Irish Sea to the...
, Wales
Wales
Wales is a country that is part of the United Kingdom and the island of Great Britain, bordered by England to its east and the Atlantic Ocean and Irish Sea to its west. It has a population of three million, and a total area of 20,779 km²...
and Northern Ireland
Northern Ireland
Northern Ireland is one of the four countries of the United Kingdom. Situated in the north-east of the island of Ireland, it shares a border with the Republic of Ireland to the south and west...
and employing 287 lifestyle variables. The classification system of ACORN contains 56 types of household under the 14 groups in 5 categories.
MOSAIC system
Mosaic UKMosaic (geodemography)
Mosaic UK is Experian’s system for classification of UK households. It is one of a number of commercially available geodemographic segmentation systems, applying the principles of geodemography to consumer household and individual data collated from a number of governmental and commercial sources...
is Experian’s people classification system. Originally created by Prof Richard Webber (visiting Professor of Geography at Kings College University, London) in association with Experian. The latest version of Mosaic was released in 2009. It classifies the UK population into 15 main socio-economic groups and, within this, 67 different types.
Mosaic UK is part of a family of Mosaic classifications that covers 29 countries including most of Western Europe, the United States, Australia and the Far East.
Mosaic Global is Experian's global consumer classification tool. It is based on the simple proposition that the world's cities share common patterns of residential segregation. Mosaic Global is a consistent segmentation system that covers over 400 million of the world’s households using local data from 29 countries. It has identified 10 types of residential neighbourhood that can be found in each of the countries.
These systems are consisted of the different types of businesses
geoSmart system
In AustraliaAustralia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
, geoSmart is a geodemographic segmentation system based on the principle that people with similar demographic profiles and lifestyles tend to live near each other. It is developed by an Australian supplier of geodemographic solutions, RDA Research.
geoSmart geodemographic segments are produced from the Australian Census (Australian Bureau of Statistics
Australian Bureau of Statistics
The Australian Bureau of Statistics is Australia's national statistical agency. It was created as the Commonwealth Bureau of Census and Statistics on 8 December 1905, when the Census and Statistics Act 1905 was given Royal assent. It had its beginnings in section 51 of the Constitution of Australia...
) demographic measures and modeled characteristics, and the system is updated for recent household growth. The clustering creates a single segment code that is represented by a descriptive statement or a thumbnail sketch.
In Australia, geoSmart is mainly used for database segmentation, customer acquisition, trade area profiling and letterbox targeting, although it can be used in a broad range of other applications.
The Output Area Classification
The Output Area Classification (OAC) is the UK Office for National Statistics' (ONS) free and open geodemographic segmentation based upon the UK Census of Population 2001. It classifies 41 census variables into a 3 tier classification of 7, 21 and 52 groups. It is expected that a revised and enhanced version of OAC will becoming available with the release of the UK 2011 Census data in roughly 2013.The perceived advantages of OAC over other commercial classifications stem from the fact that the methodology is open and documented, and the data is open and freely available. This means that OAC is not a black box, nor is it expensive to use, in fact it is free.
OAC has a wide variety of potential applications, from locational analysis to social marketing and consumer profiling. The UK public sector are increasingly taking up OAC as it represents a real cost saving during a time of recession.