Whether you have little or a lot of time dedicating yourself to Market Research, you have come across Socioeconomic Levels. These vary from country to country because it is not possible to establish a rule that applies internationally given the heterogeneity of national realities. In LATAM, some organizations that define these levels are the Brazilian Association of Research Companies (ABEP for its acronym in Portuguese) and the Mexican Association of Market and Opinion Intelligence Agencies (AMAI for its acronym in Spanish).
Classification rules are a powerful statistical tool that allows market analysts to design and obtain more and better findings in consumer data collection projects. However, like any tool it has its limitations. To contribute to a correct understanding of its scope, this week we list four considerations of socioeconomic levels.
They define groups. Although we live in the era of Big Data that offers us the possibility of individualizing many analyses, when we use the rules of socioeconomic levels we must understand that their use is limited to characterizing consumer segments. It is a bit fruitless to want to define an individual consumer as belonging to one or another socioeconomic level because by the very nature of the classification questionnaires they seek to know the conditions of a group of people and their private space; This statement is valid except perhaps when the person we are referring to in the example lives alone.
They describe homes. The basic segmentation unit for socioeconomic levels is the household. In the same building we can find from one to several homes (as is the case of condominiums or multi-family homes). The members of a household will have different needs, customs and income ranges depending on sociodemographic parameters such as age, gender and education. When it is necessary to individualize the socioeconomic characterization of people, more data and information is required, such as hobbies and employment, to name just a few.
They are updated periodically. Over the years, reality is changing. Some time ago there were no computers or internet access. Nowadays it is a satisfier that is taken into account in many rules because it is statistically valid to characterize each level. From time to time and with the help of census exercises or modules, whether public or private, organizations evaluate the questionnaires and scores continue to fulfill their purpose. If this is not the case, they are updated and therefore users must be aware of the latest current version.
They do not define income ranges. Although another purpose of socioeconomic levels is to serve as a basis for defining the general characteristics of each segment, it is also true that they are just that: generalizations. A parameter that is very interesting in this classification is the income range of each group. However, this exercise is quite controversial given that the amount of income can usually vary between regions and historical moments. To answer the question of the income of individuals and/or households, there are other methodologies and considerations that must be evaluated beforehand due to the risk that access to such data represents for both consumers and interviewers.
We know that the use of classification rules often arouses passions among some colleagues. This is due to the areas of opportunity in the knowledge of this valuable tool for the analysis and design of studies. When they are resolved, it is possible to obtain countless findings and solid starting points for fruitful investigations. Otherwise, there may be inaccuracies or reprocessing that may put investments in the matter at risk.
At Acertiva we have experts in understanding this and other tasks within Market Research in our region. If you intend to develop a market study in Latin America you can send us a message. We will answer you with the way in which together we will write your next tailor-made success story.
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