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TGI’s SELs are a viable alternative to LSMs

05 May 2014


The marketing world has long been challenged with developing a consistent means of segmenting populations into discrete groups based on their social and economic status. LSMs (Living Standards Measures) are common currency in the marketing and research landscape. Less known but equally, if not more useful, are TGI’s SELs (Socio-Economic Levels) segmentation tool for which Ask Afrika own the local license. SELs are a viable alternative to LSMs with more comprehensive segmentation. They are a valuable insights tool for marketers, researchers and brand owners alike, providing an understanding of not only a consumer’s potential to spend, but the social context in which this potential is held.

The selection and weighting of robust TGI samples is based on global best practice. The annual local sample size is 15 000 and global sample size is 800 000. SEL’s present a harmonised approach to socio-economic classification across multiple markets and works alongside national classification systems. Unlike most socio-economic grading which use the household basis, the Global TGI SEL is based on individual spending power and SEL groups are based primarily on consumption variables.  The relevance of this is that not all members of a household fall into the same socio-economic class. Looking at socio-economics rather than economic levels in isolation provides the marketer with valuable information so that they can target their campaign to their desired consumer and talk to the person rather than just talking to their wallet.
 
The importance of local measures is rooted in providing marketers and researchers with a common reference point. Local measures are created on the basis of the local economic environment and respects national cultural concepts. These measures also take into account the evolution and marketability of certain categories and products within that environment. Ask Afrika have recently launched TGI Township in SA as these communities are misunderstood to a large degree. Understanding and appreciating the nuances of township consumers will empower brands to successfully tap into this market. With TGI Global SEL, TGI users worldwide are given a unique and consistent way of directly comparing segments of the population.

The development of a global social economic classification system is not intended to replace or challenge the local definitions already in existence. Rather, the desire of global marketing and consumer insights teams to directly compare national social economic grades across countries has highlighted a significant need for the development of a standard global system. Along with the expansion of brands and media beyond the boundaries of individual countries, the need exists to make direct comparisons between the social economic status of brand users and potential users in different parts of the world.

Developing countries rarely use income as a measure of spending power due to limitations related to accurately collecting income data. Even in countries where income is considered a reliable and accurate measure of spending power, the issue remains that it does not take into account social influences such as the person’s or household’s social position within the population, which is considered a key influence in consumer behaviour.

Socio-demographics play a large role in consumer behaviour. A Lottery winner is likely to have a different approach to spending than the person born into a wealthy family, or the person who built their own profitable business from scratch.

So how does SEL differ from LSM?

  1. LSMs have been developed as a tool to measure macro or gross changes in the living standards of a given population over time. They are calculated from the collective living standard of a household, and all members of that household will fall into the same LSM group.
    TGI SELs, on the other hand, are based on a score allocated to an individual, and different individuals in the same household can fall into different SEL groups.

  2. Once allocated to a designated LSM group, an individual’s propensity to be a valuable consumer is not able to be assessed. A young student, earning no income, but living in a household where the main earner has a substantial income, will be assumed to have the same value as a potential consumer as the head of the household.
    With TGI SELs, the individual’s potential to be a valuable consumer is reflected by the SEL group to which that person as an individual is allocated.
In essence, LSMs and SEL’s measure different aspects, and they have different applications. LSM is a local measure based on a household level consumption and income. On the other hand, SEL provides a socio-economic view of the individual consumer which can be applied and compared globally.

TGI Global SEL in action
Analysing a global brand, such as KFC, by SEL’s, allows for cross-country comparisons as well as an understanding of the local market. Analysis of TGI data shows that the social economic profile of KFC consumers are fairly flat in the USA and slightly skewed to lower social economic individuals. In Great Britain and South Africa, the brand is positioned within the middle social economic groups. In China, the brand is skewed towards higher social economic profiles. This highlights the differing profiles of a brand, in terms of consumer potential, across different markets. This is an important consideration when adopting strategies to communicate with these individuals, grow within a market or retarget the brand.


 
In summary, SEL groups are mainly based on consumption variables. It classifies individuals based on their consumer behaviour. It offers a harmonised approach to socio-economic classification across multiple markets and works alongside national classification systems.

 
About TGI and Ask Afrika:
TGI research, for which Ask Afrika own the South African copyright, has an annual single source sample of 15 000 locally and 800 000 globally. It has a global geographic coverage of 67 markets and measures services and products, media and brands.  Ask Afrika’s knowledge of brands is extensive and as owners of the local TGI license, they are the leaders in brand expertise in South Africa. TGI can provide a commercial alternative to industry media measurements and is the perfect vehicle for brand positioning. 
 
Over a period of almost two decades, Ask Afrika has grown to be the largest independent South African market research company.   The company focuses on local relevance, benchmarked against the global context. Ask Afrika is a member of WIN/Gallup International and ESOMAR.
 
Apart from their large South African footprint, Ask Afrika also operates in a dozen African continental territories.
 
Ask Afrika is well known for delivering strategic and large scale field projects and for creating benchmarks for industry. With regards to service excellence Ask Afrika is the preferred research partner across industries to co-craft customer service strategies through meaningful research methodologies across the value chain and customer service touch points.
 
Their exclusive product suite includes the Ask Afrika Orange Index®, Trust Barometer™, Radio Moods™, TGI (the Target Group Index), TGI Icon Brands and TGI Township, The Digital Barometer, The Lite Data Collection, The Behavioural Sciences Package and Gateway. Ask Afrika is proud of their exceptional service delivery with offices based in Pretoria and Stellenbosch. For more information please visit the website: www.askafrika.co.za
 
Ask Afrika is well known for delivering strategic and large scale field projects and for creating benchmarks for industry. With regards to service excellence Ask Afrika is the preferred research partner across industries to co-craft customer service strategies through meaningful research methodologies across the value chain and customer service touch points.
 
Their exclusive product suite includes the Ask Afrika Orange Index®, Trust Barometer™, Radio Moods™, TGI (the Target Group Index), TGI Icon Brands and TGI Township, The Digital Barometer, The Lite Data Collection, The Behavioural Sciences Package and Gateway. Ask Afrika is proud of their exceptional service delivery with offices based in Pretoria and Stellenbosch. For more information please visit the website: www.askafrika.co.za