Nielsen New Approach for Indonesia Socio Economic Status to Share

New  Approach  for   Indonesia  Socio  Economic   Status  

Needs  Assessment   Background

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•  Current SES definition was adopted since 1970s, using one single measure: Routine Monthly Household Expenditure •  Nielsen received inputs from client and industry on the need of revamping the SES to be more relevant to their current needs •  While this measure was best at its time, recent development of society and consumer behavior require an updated approach to segment consumers based on their socio-economic status

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Needs  Assessment   Objectives • What we are aiming, to have relevant measure that well discriminate the Indonesian consumers in terms of social economic:

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• Work well in differentiating consumer behavior: purchasing power, product and brand purchase/usage, lifestyle • Valid for urban (metro, rest of urban) and rural • Consistent implementation across Nielsen’s products (consumer, and Media) • Using existing robust establishment survey • Relevant across areas/widely available

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ConsideraBon:  BPS  data   • To meet the above requirement of robust sample, we used BPS data i.e. SUSENAS. • SUSENAS also known as Economic Census was conducted by BPS once every two years. The study we used was the 2010 measurement

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• Using BPS data will provide continuity when data need to be updated due to change in society condition • BPS data is also an official source adopted by many parties

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Framework   Attribute Selection

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•  Latent Class Segmentation was applied to SUSENAS data in order to come up with respondents groups/ segments as well as to identify the relevant attributes forming the segments

Scoring System Development

•  As opposed to use a single measurement, scoring system was adopted as better SES indicator

Validation

•  Results is then validated through Nielsen Media Index and Nielsen Home Panel

•  Order importance of each attribute (resulted from Latent Class Segmentation) was used to develop the scoring system

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Framework   Attribute Selection

Scoring System Development

Validation

•  Selected attributes resulted from Latent Class Segmentation •  Source of drinking water •  Electricity power •  Type of fuel (for cooking) •  Ownership of Refrigerator

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•  Ownership of LPG Tube 12 KG •  Ownership of Personal Computer/ Laptop •  Head of HH Education level •  Monthly household expenditure (Total of Food and Non Food)

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Framework   Attribute Selection

Scoring System Development

Validation

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•  Determining the segment considering: • 

Number of segments

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Segment size in total and at area level (urban – metro/ non metro vs rural)

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Profile of each segment (cross-tabbing)

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Framework   Attribute Selection

Scoring System Development

Validation

•  Attribute Scoring •  Calculate Total Scoring from 8 attribute selected and come up with the range of score from 1 to 32

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•  Determining the segment considering: • 

Number of segments

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Segment size in total and at area level (urban – metro/ non metro vs rural)

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Profile of each segment (cross-tabbing)

•  Final Scoring Criteria

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Framework   Attribute Selection

Scoring System Development

Validation

•  Validation was conducted through Nielsen Media Index and Nielsen Home Panel to assess how this new SES align with other measurement on consumer behavior such as product and brand usage •  Nielsen Media Index is a large scale survey among n = 15,700 with respondents age 10+ years old

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•  Nielsen Home Panel

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Framework   Attribute Selection

Scoring System Development

Validation

•  Profile of each segment (cross-tabbing) •  Based on Media Index Data August 2011

•  Based on SUSENAS DATA in ALL AREAS (INDONESIA)

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•  Based on SUSENAS DATA in METRO AREAS

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Why  is  it  beQer?   Beyond Consumer Spending

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• Taken into account other attributes beyond consumer spending: • More accurate attributes • Reflecting lifestyle

Wide Coverage • Survey covered national • Attributes are relevant to all areas/work for varied areas

Better Differentiating • This new approach is able to differentiate not only mass consumer but also the upper class segment

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New  Consumer  SegmentaBon  

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