LSM no longer relevant to advertisers, says Added Value

The industry, and the marketers it serves, must identify ways to define target market segments in a more holistic manner that encompasses both intrinsic and extrinsic variables.


“In the early 1990s when I started working in market research, there were huge disparities in the market in terms of acquisitions and it made sense to use a system based on household acquisitions to segment it,” says Thuli Motaung, Added Value project director.

Today, however, field recruiters often complain they can’t find households matching the LSM 1-2 criteria, even LSM 3-4 households are difficult to locate. And, with much of the South African population falling into the LSM 5-7 bracket, there is danger of homogenising consumers if marketers rely on LSM alone to segment this market.

Then and now

“I remember walking into a home in a rural area in KwaZulu-Natal about 10 years ago on an ethnographic immersion. The place was a true reflection of a LSM 2 dwelling: there was no electricity or running water, the house was built from mud and had a thatch roof, and it was sparsely furnished with an old couch, a table, a paraffin stove and shining stainless steel pots and pans,“ says Motaung.

A recent return visit highlighted the impact access to basic services, as well as urbanisation, has had on residents’ lives ... and their LSM score. Some 94% of South Africans now have access to electricity, and young city-dwelling family members often hand down their modern appliances to rural relatives, so microwaves, fridges and cellphones are readily found in a mud hut.

Consequences

As a result of these changes, consumers who would have previously fit the LSM 1-4 bands are ticking more and more boxes on the LSM grid and moving into the LSM 5-7 bracket.

So, there is a growing need for measurements that go beyond LSM, that differentiate consumers attitudinally and psychographically, to take into account geographic location, education level, lifestyle, attitudes to life, attitudes to products and brands, and so on. 

In light of this, when seeking to understand this target market, marketers must use a more granular approach that taps into a holistic view of who these consumers are beyond their personal material acquisitions. There are richer variables that define a consumer far more succinctly than does their TV set, car or refrigerator – attitudes being just one.

Typology to the rescue

By using typology to segment the brand’s target market, marketers are able to tap into the bull’s eye consumer and align the brand to their core needs. Intimate variables such as values, attitudes, lifestyle, personality traits and behavioural traits, can go a long way to ensure the best respondents are recruited and groups are as homogeneous as possible.

This means that each piece of research needs to be treated as unique based on project requirements, brand or product challenge, and target consumer. Recruitment questionnaires need to be tailor-made accordingly. 

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