Understanding customers- analysing customers using mosaic - Essay Example

? UNDERSTANDING S- ANALYSING S USING MOSAIC Table of Contents Section Introduction 3 Section 2: Analysis of the Mosaic Profile System 3 Section 3: Data and information reports by Experian 6 Section 4: Importance of segmentation 10 Section 5: Business case study 12 Section 6: Summary 13 References 14 Section 1: Introduction Satisfying the needs and requirements of customers is the key to success for any organisation now-a-days. Most of the companies try to target a specific group of people after developing a segmentation strategy to group people based on certain parameters. This is an important marketing strategy followed by organisations because it helps in catering to the specific needs of customers in a more effective and efficient way. It helps to increase customer loyalty and thereby thwarts customers from switching to the products offered by other companies. Mosaic UK is a useful tool utilised by many companies to develop their segmentation strategy based on the consumer classifications provided in the Mosaic profile system. First of all a detailed analysis of the Mosaic profile system developed by Experian plc is presented in this study. Next this study would include analysis of information reports prepared by Experian related to three retailers operating their business operations in United Kingdom. The customer profiling related to each of the three retailers would be compared to have an idea about its impact on the different marketing strategies followed by the organisations. Segmentation of customers is an important marketing strategy followed by the business organisations and its importance has also been included in this study. Next this report takes help of a case study for suggesting some consumer marketing ideas for some fashion retailers who might be interested to target a specific Mosaic Group. Section 2: Analysis of the Mosaic Profile System Experian plc has developed a system which helps in classification of the households in UK and has been named as Mosaic UK. It is a type of geo-demographic segmentation system which is available commercially. Consumer classification reports prepared through Mosaic UK are helpful in understanding the Behaviour, demographics and lifestyles followed by all the households and individuals present in UK. Understanding the consumer behaviour patterns in different parts of UK is critical to the success of any organisation because it helps the companies to develop products that best satisfy the particular needs and requirements of the customers. Mosaic UK is helpful to the organisations in three ways: The companies are able to increase the values of its customers through in-depth understanding of the behavioural patterns of their customers in UK The value of a particular location in which a company targets to sell its products is also increased through the development of proper marketing mix using information from Mosaic UK Mosaic UK is also helpful in assessing the risks associated with investing in a particular location in UK Thus Mosaic UK developed by Experian is thus an important tool to segment and classify consumers in UK based on various characterising features. The latest version of Mosaic UK that is available in the market now helps in classification of consumers present in UK into 67 different types which are spread over 15 distinct groups of people (Experian Mosaic, 2010). A brief overview of each of the 15 groups of people identified through Mosaic UK is given below: Group A: Alpha Territory – This type of group comprises of the most influential and wealthy individuals staying in UK. Group B: Professional Rewards – The managerial and executive classes of people are categorised in this group. Group C: Rural Solitude – This type of group includes people living in isolated cottages and small villages in UK. Group D: Small Town Diversity – This type of group are classified as people living in small and medium sized towns in UK. Group E: Active Retirement – This group of people are aged over 65 years and are spending their retired life with similar group of people. Group F: Suburban Mindsets – This group comprises of people who are middle aged and stay with their family members. Group G: Careers and Kids – This group of people represents the young couples staying in UK. Group H: New Homemakers – This group of people stay in newly built homes in UK. Group I: Ex-Council Community – Enterprising and practical people make up this identified group of UK Mosaic. Group J: Claimant Cultures – These are the most dependent and deprived group of people living in UK. Group K: Upper Floor Living – This group of people represents the lower income group in UK. Group L: Elderly Needs – The pensioners constitute this group of people in UK. Group M: Industrial Heritage – These are the conservative and traditional minded people. Group N: Terraced Melting Pot – This group of people are not well educated and are engaged in routine jobs for their livelihood. Group O: Liberal Opinions – This group of people comprises of well educated young professional who are liberal in their views. Section 3: Data and information reports by Experian This sections deals with the analysis of market research reports that have been prepared by Experian related to three of the retailers operating its business activities in UK. The three companies chosen are Marks and Spencer, Primark and John Lewis. The reports that have been studied here comprises of customer profiles related to each of the three companies. Each of the report has been prepared to classify the customers on the basis of the number of people who have opted to shop for ladies clothes in the past 12 months. Marks and Spencer Group plc is a multinational company which runs its retail stores in UK and abroad. It is headquartered at London and was founded in the year 1884. It is engaged in the business of offering wide range of products like apparels, clothing accessories, beauty products, etc. through its departmental stores (Yahoo Finance, 2012). Figure - 1 Source: (Experian, 2012a) Figure - 2 Source: (Experian, 2012a) The TGI profile of customers who have visited Marks & Spencer stores to shop for ladies garments have been indicated in the figures 1 and 2 above. The age group has been chosen to be adults who are 15 years old or more. The figures indicate that Marks & Spencer have targeted the Mosaic groups F, D and B mostly in UK to offer its ladies garments. This implies that the target group of customers of Marks & Spencer mostly include middle aged people and living in suburban region or small towns in UK. The customer base relative to these groups is comparatively less than what has been targeted by Marks & Spencer. The other major customer bases who like shopping for ladies garments in Marks & Spencer include the Mosaic groups I, M and N. All these facts indicate that the company has primarily targeted the middle aged customers who have suburban mindsets and their offerings related to ladies garments have been differentiated mostly on this basis. Primark is a cloth retailing multinational company which operates its business in Ireland and abroad. It is headquartered at Dublin, Ireland and was founded in the year 1969 (Primark, 2012). Its products mainly include apparels, accessories and footwear and have its presence in UK as well. Figure – 3 Source: (Experian, 2012b) Figure - 4 Source: (Experian, 2012b) The TGI profile of customers who have visited Primark stores to shop for ladies garments have been indicated in the figures 3 and 4 above. The figures indicate that Primark has mostly targeted the Mosaic groups F, I and N to offer their products in the form of ladies garments in the past 12 months. The customer bases relative to group F is similar to the percentage of customers targeted by Primark. However in groups I and N the customer base is comparatively low than what has been targeted by the company. These groups represent mostly the people living in ex-council community neighbourhoods of UK or are the disadvantaged people who are dependent of State for their livelihoods. The other major customer bases who like shopping for ladies garments in Primark but have not been targeted by the company are the Mosaic groups D, M and B. These groups represent people living small and medium sized towns in UK or are traditional minded and are mostly middle aged people. All these facts suggest that the ladies garments offered by Primark mostly attract middle income grouped customers who are middle aged. John Lewis is engaged in the business of operating its departmental stores in various parts of Great Britain. It was founded in the year 1864 and is headquartered at London. John Lewis and Waitrose runs a unique partnership business named as ‘John Lewis Partnership’ and operates in the retail sector of UK (John Lewis Partnership, 2012). Figure – 5 Source: (Experian, 2012c) Figure – 6 Source: (Experian, 2012c) The TGI profile of customers who have visited John Lewis stores to shop for ladies garments have been indicated in the figures 5 and 6 above. The above figures indicate that the company has targeted mostly the Mosaic groups B, F and O. It implies that the company have targeted people having diverse characteristics. However these target groups have not corresponded with the actual customer bases who have visited John Lewis stores to shop for ladies garments in the past 12 months. The other major groups of customers who have preferred shopping for ladies garments in John Lewis stores but have not been targeted by the company to that extent include Mosaic groups D, H, J and N. This implies that the product offerings of John Lewis do not correspond with the likings of the customers targeted by them. Section 4: Importance of segmentation Most of the marketing strategies developed and employed by different organisations are meant for creating competitive advantage in the market. Hunt and Arnett (2004) suggests that market segmentation is one of the key market strategy employed by most of the organisation and this market segmentation strategy supplemented with resource-advantage (R-A) theory can help any organisation to have a superior financial performance and gain competitive advantage. Market segment strategy is used in general as a tactical strategy employed by managers of companies to identify certain groups of people who have the potential to become prospective customers of the companies based on their wants, needs, preferences and tastes for a product. However, if we look at the broader perspective, segmentation strategy can be viewed as a strategic process which can serve various purposes of an organisation. Segmentation strategy process can be utilised by the companies for various purposes as defined by Hunt and Arnett (2004) and are given below: Identification of factors on the basis of which segmentation will be done Those factors or bases identified will further help in identification of potential market segments Developing a segment portfolio or combination of segments that will serve as strategic alternatives for the organisation. Each of the strategic alternatives identified would require ascertaining of the relevant resources that are required for the alternatives. Assessment of the resources that is available with the organisation. Based on the assessment, the best alternative is required to be selected by the organisation which would help in the identification of a particular market segment or segments. The company needs to ensure the availability of resources necessary for the target segment(s). Effective positioning strategies or plans are required to be formulated by the company to facilitate its services or product offerings in the targeted segment (s). Development of marketing mix which would be suitable for each of the segments that would be targeted by the organisation. Hence segmentation is an integral part of the marketing strategy developed by different organisations to offer their products. Segmentation leads to the development of marketing communication strategy because based on the characteristics of each of the segments of customers identified by an organisation, it is required to develop different communication means to offer the same product to different customer groups. Segmentation can be helpful to a marketer to develop an effective marketing strategy for an organisation in a number ways as depicted below: Designing product lines in accordance with the existing market demand Identification of major market trends in an effective manner Developing effective promotional strategies for the most profitable segments of market identified by the organisation Market segmentation also helps in selecting the appropriate advertising media that corresponds with specific communication patterns relative to each market segment Section 5: Business case study Depending on a particular Mosaic group the marketing strategy and the marketing communication mix developed by the marketers who wish to sell their products to the identified target customers would differ. The concept of market segmentation is basically related to product differentiation. The products offerings by different companies change with the change in market segments and are designed to meet the specific needs and requirements of the people belonging to a particular market segment. If we take the example of fashion retailing and if a retailer wants to target the Mosaic group O which represents well educated young professional who are liberal in their views, the marketing strategy and product offered to them would be different from other groups. In order to attract younger people to the stores, the retailer needs to design its products in accordance with the tastes and preferences of the younger generation customers. It is suggested that the products should be promoted to the targeted customers depending on their lifestyle and living trends. This would ensure increased revenues for the company as well. Section 6: Summary This research study mainly dealt with customer profiling and segmentation aspect of marketing strategies followed by business organisations. The Mosaic profile system prepared by Experian has been described in details. The UK Mosaic customer profiling system can be very helpful for companies to develop their marketing strategy based on the particular group of customers having similar kind of tastes and preferences towards a particular type of product offered to them. This report also highlights the analysis of three TGI Mosaic profiles relative to the three retail companies in UK. A business case study has also been included in this report which gives an example of how a particular Mosaic group can be effectively targeted by a company. References Experian Mosaic, 2010. Optimise the Value of your Customers and Locations, Now and in the Future. [pdf] Available at: [Accessed 16 October 2012]. Experian, 2012a. TGI Profile: M&S. Mosiac UK. Experian, 2012b. TGI Profile: Primark. Mosiac UK. Experian, 2012c. TGI Profile: John Lewis. Mosiac UK. Hunt, S. D., and Arnett, D. B., 2004. Market Segmentation Strategy, Competitive Advantage, and Public Policy: Grounding Segmentation Strategy in Resource-Advantage Theory. Australasian Marketing Journal, 12(1), pp. 7-25. John Lewis Partnership, 2012. Our History. [online] Available at: [Accessed 19 October 2012]. Primark, 2012. Company History. [online] Available at: [Accessed 19 October 2012]. Yahoo Finance, 2012. Marks & Spencer Group plc (MKS.L): Profile. [online] Available at: [Accessed 19 October 2012]. Read More