Qualitative Segmentation vs. Quantitative Segmentation in a Water Use Market: A Cost Benefit Approach

Abstract

Attention has been directed towards audience segmentation due to the added value that it may deliver to a social marketing program. Segmentation offers one means to better utilise limited resources to enhance reach in groups most at need in social marketing projects. While the importance of segmentation is well known, its application in social marketing practice remains limited, and research considering different segmentation approaches is inadequate. In this social marketing project, qualitative and quantitative segmentation approaches were specifically applied to the water use market of residents in the United Arab Emirates. In addition, this project critically evaluated qualitative and quantitative segmentation approaches using cost benefits analysis from the perspective of executive decision makers. Three studies were conducted. First, a qualitative study was conducted using focus groups with participants representative of the water use market of the UAE. The purpose of this study was to segment the water use market using a qualitative approach and generate insights into factors that influence water consumption behaviours. The qualitative study identified four distinct segments on two segmentation bases: participants’ habits and beliefs. These segments were characterised as (1) comfort users; (2) careless users; (3) contradictory users; and (4) price sensitive users. This study further identified factors that influence residents’ water consumption behaviour such as education, accessibility and restrictions, technology, and pricing. In the second study, survey data were gathered to segment the water use market using a quantitative approach. A sample of 1,350 respondents was obtained (875 online, and 475 paper survey). Two-step cluster analysis was employed to segment the water use market based on 19 segmentation variables drawn from demographic, geographic, psychographic, and behavioural bases. A new, augmented model of the Theory of Interpersonal Behaviour (TIB) was used to guide the quantitative segmentation study. This model incorporated newly identified constructs such as religiosity, policy, price, and accessibility in addition to TIB’s main constructs (awareness/knowledge, attitude, facilitating factors, social norms, emotions, habits). Three main segments were generated based on the main criterion of the participants' consumption habits, namely (1) normal users (25% of the total sample, who shared the characteristics of low income, single, living with family, good attitude, low emotional affect, and low water consumption habits); (2) conscious users (half of the sample, characterised by high income, high education level, living inside the campus, high attitude and emotion, religiosity, and average consumption habits); and (3) careless users, characteristically young single students living in campus dormitories, having good attitudes, influenced by friends, and consuming large amounts of water. In the third formative study, semi-structured interviews were conducted to capture executives’ opinions on the more effective segmentation approach to the water use market in an assessment of the costs and benefits of qualitative and quantitative methods. Results indicated that decision makers found the quantitative, over the qualitative, segmentation approach offered greater accuracy in segmentation, and deeper insights about the characteristics of each segment, which, in generating segments for a larger pool of participants, justified its higher cost. This social marketing project makes several theoretical, contextual, and method contributions. It employed an augmented model of the TIB in the field of social marketing by adding new constructs, such as religiosity, and identified the degree to which the TIB constructs explained the variance in water consumption behaviour within a defined community. Furthermore, social marketing principles were utilised in a developing country (the UAE) applying and assessing a qualitative approach to market segmentation and empirically evaluating data-driven segmentation that provided insights into the influencing factors of water consumption behaviours for differentiated segments. Lastly, this research imported a managerial tool, cost benefit analysis, to evaluate the efficacy of qualitative vs. quantitative segmentation approach contributing to executives’ decision-making capabilities.