Market segmentation of the consumer market in South Africa

The consumer market can be segmented in various ways. This article concentrates on the calculation of the size of the South African consumer market, segmented by geographical area and demographic characteristics of households. Geographical segmentation is shown by province while the size of the South African consumer market is shown by population group, income group, life stage and life plane. The determining factors in segmentation of households by life plane and life stage are the level of education and age of the head of the household. Six life planes and five life stages are distinguished. In the absence of national expenditure data by Living Standards Measure (LSM®) group, segmentation by LSM group is explained by means of expenditure data of households in Gauteng. Ten different LSM groups can be distinguished, depending on the amenities owned by the household, services used by them and where they live. Segmentation by type of outlet where consumers spend their money is explained in the article according to two major types of outlets namely, formal and informal outlets, each further subdivided into four groups.