In a significant step aimed at enhancing the ability of businesses and organisations to make decisions related to customer segmentation, ACNielsen, a leading market research company, today unveiled a bespoke device called the Living Standards Measurement (LSM) classification system.

The new system goes beyond reflecting the affluence of people to include vital information on their living standards and lifestyles.

Commenting on the new system, Arun Joshi, Regional Head of ACNielsen, Eastern Europe, Middle East and Africa for Knowledge Management and Client Development, said: 'Whilst it is important for a marketeer to know who his customers are, what matters more is 'what they have' and 'what they do'. From a business perspective, the bottom-line is the way customers live and spend their money, not just how wealthy they are'.

'The birth of LSM classification was triggered by this requirement. LSM is a term that was originally coined by the World Bank and used to explore ways of improving the type and quality of household data collected by government statistical offices in developing countries.

'The new classification system developed by ACNielsen for the Middle East and North Africa region is an appropriate adaptation of what was followed in the World Bank study and is the result of intensive research and development,' he explained.

LSM was developed by a specialist team at ACNielsen led by Joshi and is meant to replace the current practice of socio-economic classification that has been followed for several decades. Although it has been an acceptable method, it is a system that relies strongly on a single-dimensional approach. With occupation being the key criterion to determine the economic status and hence the business potential of a customer, this method does not always offer the complete picture.

Elaborating on the importance of the system, Joshi added: 'Getting to know their customers, as well as targeting the right segments, has become an ever-growing challenge for businesses and media planners. To help them with profiling and grouping consumers, it has become imperative that they are equipped with a device that is of relevance in current times, simple to operate and most importantly, pliable enough to update swiftly.

'The new segmentation system classifies people across a total of eighteen classes, and is based on data related to a multitude of dimensions reflecting a wide spectrum of living standards and the diversity across the region,' he concluded.

Enthused about the launch of this new system, Piyush Mathur, Regional Managing Director of ACNielsen, Middle East, North Africa and Pakistan said: 'A key benefit of the LSM System, over the socio-economic system is that the marketing manager will now be able to use one common system to segment their customers across countries. The new LSM system will be introduced in Saudi Arabia, UAE, Morocco, and Egypt.'

'Introduction in these four countries forms the initial phase of this new initiative from ACNielsen', added Mathur, and highlighted their plans for the future, 'Over the next two years, we will extend the new LSM classification system to the rural part of the region as well as other countries in the Gulf and beyond'.