Geodemographic segmentation

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.

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 subgrous 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 60 million British consumersVerify source|date=September 2008. 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 Eurodirect.

ACORN system

A Classification Of Residential Neighborhoods (ACORN) 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.

MOSAIC system

Mosaic UK is Experian’s people classification system. Originally created by Richard Webber in association with Experian, it classifies the UK population into 11 main socio-economic groups and, within this, 61 different types.

Mosaic is also a global consumer classification tool. Classifying more than a billion consumers across a third of the surface area of the Earth, Mosaic is available in a myriad of the world's economies including China, North America, Europe and Asia Pacific. Mosaic Global is a consistent segmentation system that covers over 400 million of the world’s households using local data from 25 countries. It has identified 10 types of residential neighbourhood that can be found in each of the countries. The 10 types include:

geoSmart system

In Australia, 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 a 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.

geoSmart is currently available on Roy Morgan Research’s Asteroid and Nielsen Media’s Panorama Media’s Panorama media profiling systems. The geoSmart system currently classifies the Australian population into 7 main groups, and within this 54 segments, which are organised on the two dimensions of Socioeconomic Status and Family Orientation:

References

* [http://www.cartogen.co.uk/customersegmentation.htm CAMEO Household Classifications for the UK]
* [http://www.caci.co.uk/acorn/acornmap.asp ACORN Family Group Classification]
* [http://www.business-strategies.co.uk/sitecore/content/Products%20and%20services/Micromarketing%20data/Consumer%20segmentation/Mosaic.aspx MOSAIC Family Classification]
* [http://www.hispanicsegmentos.com Hispanic Segmentos]
* [http://www.rdaresearch.com.au/geosmart.php geoSmart Geodemographic segments]