ENVIRONICS ANALYTICS LAUNCHES DIVERSITY MICROMARKETING TOOLKIT

New Products to Help Marketers Serve Canada’s Multicultural Audiences

Environics Analytics, the marketing services company, today announced the release of a suite of tools to help marketers connect with Canada’s diverse communities. Called the Diversity Micromarketing Toolkit, the data and software products and services help companies and not-for-profits locate and appeal to Canada’s increasingly diverse population. The products include customized census data on ethnic and cultural groups from the most recent census; the PRIZM CE consumer segmentation system, with 12 of its 66 lifestyle types featuring significant ethnic presence; and an innovative software tool called OriginsCanada, which can predict the cultural, ethnic and linguistic origins of consumers based on their name alone.

The release of the new toolkit comes at a time when the Canadian population is becoming increasingly diverse. Between 2001 and 2006, close to 1.2 million people migrated to Canada, and nearly one in five Canadians are now foreign-born. Although immigrants tend to settle in Canada’s largest urban areas—Toronto, Vancouver and Montreal—the newcomers are also moving to smaller cities, such as Calgary, Edmonton, Ottawa-Gatineau, Quebec and Winnipeg.

While the number of foreign-born Canadians is increasing, the variety of their countries of origin is also rapidly expanding. Before 1961, almost 95 percent of immigrants came from Europe or the United States. Today, the largest groups of immigrants arrive from Asia and the Middle East. As a result, about 6 million Canadians, or 20 percent of the populace, report a mother tongue other than French or English. The third most common language spoken in Canada today is Chinese, surpassing the Italian and German spoken by earlier immigrant groups.

For marketers, the growing diversity of the populace raises new challenges. Depending on their product, a company may want to define an ethnic audience by language spoken, mother tongue or place of origin. In addition, settlement patterns differ by group—an important fact for direct mailers. In Toronto, where Germans tend to live dispersed throughout the city, a direct mail campaign would have to target 172,415 residents to find 10,000 German Canadians. However, reaching 10,000 Chinese Canadians would require a campaign covering only 31,429 residents because these residents tend to cluster together.

“Marketers need to understand the many ways to define groups when they embrace an ethnic marketing campaign,” says Jan Kestle, president of Environics Analytics (EA). “With the Diversity Micromarketing Toolkit, clients not only get the latest data and software but our expertise in ethnic-based target marketing as well.”

The Diversity Micromarketing Toolkit features three main services:

• OriginsCanada - Based on a breakthrough ethnic name coding system, this service allows clients to assign a heritage to a customer database based on the first and last name of each consumer. With OriginsCanada, clients can acquire lists for addressed mail based on the same name-coding technique. In addition, marketers can create customer profiles based on ethnic origin to target neighbourhoods, media and products.


• PRIZM CE – EA’s signature segmentation system classifies all Canadian neighbourhoods into one of 66 lifestyle types—12 of which are ethnic and represent 15 percent of all households. Because PRIZM CE links to all major media and marketing surveys and databases—including PMB, BBM RTS, NADbank, Polk, CFM, InfoCanada and Cornerstone—marketers can describe the lifestyle activities, media patterns and social values for their ethnic targets. Incorporating proprietary survey data from Environics Research, the system allows organizations to profile customers through such values as Canadian Identity, Cultural Fusion, Early Adoption and Importance of Price. This information further helps marketers reach customers with the best message and channel—whether it’s the Globe and Mail, an ethnic newspaper or both.


• Ethno-cultural census data – With the most experienced geodemographic experts in Canada, EA offers the deepest knowledge in applying different census variables and concepts to help an ethnic marketing campaign succeed. Company analysts can determine the best approach to defining ethnic customers—by characteristics such as mother tongue, place of origin or wave of immigration—and how to find them.

No matter the industry, EA can enhance the appeal of products and services within different ethnic groups or within subgroups of a single ethnic group. Compared to the national average, ethnic Canadians exhibit high rates for attending computer shows, basketball games, film festivals and theme parks. But EA’s data show behavioural differences within ethnic groups. Among PRIZM CE’s ethnic lifestyles, the Asian Affluence segment (40 percent Chinese and 7 percent South Asian) has a taste for theatre and classical music concerts. By contrast, the Newcomers Rising segment (9 percent Chinese and 18 percent South Asian) prefers video gaming, fast-food restaurants and rock concerts.

Because the influx of new immigrants offers forward-thinking companies challenges as well as opportunities, EA’s Diversity Micromarketing Toolkit can help executives and marketers address the ways that growing diversity affects their business. Using OriginsCanada, companies can analyze their customer database to determine if their products and services have an established following among specific ethnic groups and whether an ethnic marketing strategy would be profitable. By tapping the latest census data on settlement patterns, marketers can increase their penetration rates among newly arrived immigrant segments. And PRIZM CE can help companies compare the behaviours, lifestyles and values of the most recent immigrants to those of second- and third-generation ethnic groups. With EA’s Diversity Micromarketing Toolkit, marketers can better understand Canada’s varied population and position their products and services in ways that will best speak to the needs and desires of specific ethnic groups.

“You can’t treat the ethnic market as one group,” says Kestle. “Because PRIZM CE is linked to all the traditional and new media, we can help design marketing campaigns to reach the people most important to any business. We know which language to use, what message will work and which channel they prefer. It’s a very powerful system for reaching ethnic consumers.”

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About Environics Analytics
Environics Analytics is the premier marketing and analytical services company in Canada. Specializing in geodemographic segmentation, site modelling and custom analytics, the Toronto-based company provides businesses with data-driven market insights to help reach their customers more effectively. It also has the most experienced team of geodemographic experts in Canada. Environics Analytics is a member of the Environics group of companies, including Environics Research and Environics Communications Inc.

10 REASONS TO USE GEODEMOGRAPHY

By Jan Kestle, Founder and President Environics Analytics

Many believed the era of customer relationship management and one-to-one marketing would spell the demise of geodemography for marketing. But the opposite has occurred. Here are the reasons why.

Geodemography is a branch of market research that assigns the attributes of small areas – usually neighbourhoods – to the consumers who live within them and, based on this assignment, divides the consumer marketplace into meaningful segments that are locatable and reachable. The discipline leverages spatial and mathematical patterns in how people live and shop to help marketers make inferences about consumer behaviour. These techniques have been widely used since the early ‘70’s to answer the marketing questions: Who are my customers? Where do they live? and How can I best reach them?

During this same 40-year period, technology has put powerful computers on everyone’s desktop. Software systems that deliver modeling algorithms to the non-statistician are affordable and usable.

Geographic Information Systems (GIS) have gone way beyond simple mapping to bring location intelligence to business databases. And consumer marketers build large databases about their customers and know how to mine the information contained within them.

And yet the number of users and the range of applications for geodemographic cluster systems have grown – not decreased – during this period. Why, with all these new tools and lots of actual consumer information available, do marketers still use geodemography?
Here are 10 good reasons.

1. Everyone does not have unit record customer data. While large retailers, financial institutions and charities keep track of their customers and donors, there are still large numbers of businesses that do not collect much personal demographic information. Postal code collection programs in Canada are a popular way to understand how far customers travel. Combined with geodemographic segmentation systems, postal codes are a reliable way to profile customers in terms of demographics and behaviour.


2. Even among those businesses that have customer data, the data about individuals are incomplete. Except for businesses that offer financial services, customer income is usually not tracked nor is lifestage, household size or ethnicity. Yet all these variables are well represented in a good multi-dimensional cluster system. Privacy is also a primary concern for businesses and consumers. Geodemographic overlays are a privacy-compliant way to enrich transactional databases. Many analysts use the clusters as well as individual variables in custom models.


3. Geodemography leverages the rich survey data that exists in Canada. Government and non-government organizations conduct reliable national sample surveys on spending, media preference, technology adoption, leisure activities, tourism and many other aspects of day to day living. For most surveys, the sample size is sufficient to release data for Canada and the provinces and the larger markets. But these survey-based variables only become usable for trade area analysis and local marketing when they are combined with geodemographic segments – using typological inference. Because Canada has more than 1,500 good-quality census variables at the neighbourhood level, analysts can develop a robust segmentation system built on a broad range of reliable and comprehensive data. This allows an analyst to combine the survey-based measure by segment for a behaviour like “go the movies”, for example, with information on which segments live around a location to determine the viability of a new cinema. Without geodemography the amount of local marketing data would be greatly reduced.


4. While mining your in-house database helps grow your business based on cross-sell, up-sell and retention strategies, geodemography is the easiest way to define your best potential customers based on your existing file and find more people with a similar profile.


5. Media preferences of a consistent target group defined by geodemography can be determined across multiple channels. Since the popular segmentation systems in Canada are linked to media measurement surveys like PMB, BBM Canada RTS and NADbank, the segmentation system becomes a data integration tool amongst disparate sample surveys. Marketers can use these surveys to determine, for example, that a target group “reads the sports section”, “listens to traffic reports” and “uses the Internet” but “ranks low on TV”.


6. The results are executable. While much market research is descriptive and can help with product conceptualization, brand awareness and advertising, only geodemography can effectively link the customer, product and brand profiles to site selection, local marketing (including direct mail or flyer drops), merchandising, category management and media planning.


7. Clusters are easy for marketers and executives to understand. Cluster systems feature icons and clever nicknames for a reason. Claritas’ Shotguns & Pickups, MapInfo’s Kindergarten Boom and Environics Analytics’ Lunch at Tim’s conjure up images of groups of consumers much more readily than cumbersome descriptors like “upscale empty nesters in condos”.


8. Geodemographic segments are uniquely positioned for “mass” targeting. There are some products for which every consumer is a “target”. By developing cluster profiles of a product’s potential by market, companies can spend against who’s in each market – varying the spend on a market by market basis – but still marketing to all.


9. Results are measurable. Because marketers can tie segments back to the ground (stores, postal codes, markets, etc.), to channels and to their own transactional data, campaigns can be measured and modified on an on-going basis.


10. Adding the spatial dimension to the customer database means that it can be used for more than direct mail. This includes applications such as crafting advertising messages, defining product mix, selecting store formats or sites and planning media. As a result, large (and, in many organizations, still not justified) expenditures on developing customer relationship management (CRM) can be leveraged. And the fact that geodemography is inexpensive (compared to the database build and maintenance) makes it a good way to increase the return on the whole customer database investment. Some predicted in the late ‘90’s that the move to CRM systems, one-to-one marketing and household level models would mean the end of geo-based cluster analysis. This has turned out not to be true. In fact, what has happened is that the savvy marketers who embraced the “new technologies” continue to incorporate geodemography into their analysis and have developed more sophisticated ways to use it.

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Jan Kestle is founder and president of Environics Analytics and former president of Compusearch. Environics Analytics is a firm engaged in statistical and geodemographic analysis and is a provider of related tools that include its PRIZM CE cluster system. She can be reached at jan.kestle@environicsanalytics.ca. This article appeared in Direct Marketing News, December 2007. Used by permission.