LSMs and the gaping hole in market segmentation
I have always advocated for a re-evaluation of the current market segmentation model in South Africa. Besides the fact that it is outdated – it was formulated in 1989 – demographics in the last couple of decades have completely evolved. Although the variables were edited throughout the years: 1993, 1995, 2000; the model needs more than edited variables. The advent of social media and digital has brought a complete turnaround in the media landscape. The place of the consumer is more central and renders the consumer more powerful than 2 decades ago.
While the thinking behind traditional LSMs can be appreciated for the time when they were formulated, for today’s world the concept needs an complete overhaul. Seth Godin calls them tribes: interest led grouping within the consumer landscape. MD of Echo, Peter Langschmidt had a rant on Adlip, calling the current LSM structure ageist and racist. An interesting talk, check it out and share your thoughts:
You can also check out a brief history on the development of Living Standards Measure (LSMs) on the SAARF website.