fusion point research Marketing Research Reports

Marketing to Consumer Insight in CPG

Understanding Their Role

Consumer products companies must build an understanding of the wants, needs and behaviors of potential buyers. Since it is impossible to understand the views of millions of different individuals, researchers categorize consumers into market segments, or groups with similar wants and needs. Segmentation makes consumer understanding more manageable, and allows marketers to target attractive subgroups in the marketplace. Approaches to segmentation differ by company and include:

 

  • Demographics (age, gender, ethnicity, etc).
  • Geographies (zip code, neighborhood, driving distances, etc.).
  • Lifestyles or attitudes (“Upward Bound”, “Urban Achievers”1 , “Golden Years”, “Dorms to Diplomas” 2 , “Believers” 3 etc.,) created by third party data analysis companies.
  • Usage (light, medium and heavy users).
  • Loyalty (loyal customers, competitive customers, deal seekers, etc.).

 

Researchers must develop a deep understanding many different types of consumers, from young children to the elderly, wealthy and poor, urban and rural, etc. Since they cannot intuitively understand these diverse groups, they invest heavily in market research such as focus groups and surveys, and partner with large research organizations such as Nielsen, Kantar, Ipsos, Westat and IRI.4 5

 

Consumer insight informs many business decisions across the entire organization, including new product development, packaging, advertising, retailer relationships and strategic planning. The department must understand and collaborate with all of these internal customers.6

 

Many consumer product purchases are made with relatively little deliberation by the shopper. Although many factors might influence a consumer’s choice, carefully weighing all of these factors for every product would be far too burdensome for buyers. Consider, as an example, a consumer choosing an afternoon snack. There are many attributes to consider, such a sweet or salty, hot or cold, taste, texture, freshness, calories, nutrition, sustainability, availability, price, etc.,7 but most consumers make their decision quickly based on an existing set of perceptions. Consumer insight professionals must have expertise in understanding how consumers roll all of these product attributes into a smaller set of perceptions that actually drive purchases.8

“Frankly, the pace of change in these consumer markets today is faster than I've ever seen it….”

- Ken Powell, CEO of General Mills.9

1Examples from Nielsen’s PRIZM segmentation. See: www.nielsen.com

2 Examples from Ersi’s Tapestry segmentation. See:www.esri.com

3 Example from SBI’s VALS segmentation. See: www.strategicbusinessinsights.com

4 Michel, Mark. An Introduction to the Consumer Products Industry . Edited by Kristina Michel, 2011.

5 Honomichl, Jack. “The 2013 Honomichl Top 50 Report. (Cover Story).” Marketing News 47, No. 6 (2013): 26 – 100. EBSCOhost(88931896).

6 Ibid.

7 “Snack Attack. What Consumers Are Reaching for Around the World.” Nielsen N.V. September 2014. Available at: www.nielsen.com

8 Tybout, Alice M. and Calder, Bobby J., ed. Kellogg on Marketing . 2nd ed. John Wiley and Sons, Inc., 2010.

9 Abigail Stevenson. “General Mills Goes Natural & Gluten-Free.” CNBC. July 15, 2015. Available at: www.cnbc.com

 

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Copyright © 2016 Fusion Point Research, Inc.

Consumer products companies invest significant resources in understanding consumer behaviors, wants, needs and perceptions. These insights drive many business decisions across the entire organization.
fusion point research Marketing Research Reports
Consumer products companies invest significant resources in understanding consumer behaviors, wants, needs and perceptions. These insights drive many business decisions across the entire organization.
  • Demographics (age, gender, ethnicity, etc).
  • Geographies (zip code, neighborhood, driving distances, etc.).
  • Lifestyles or attitudes (“Upward Bound”, “Urban Achievers” , “Golden Years”, “Dorms to Diplomas” , “Believers” etc.,) created by third party data analysis companies.
  • Usage (light, medium and heavy users).
  • Loyalty (loyal customers, competitive customers, deal seekers, etc.).