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Because of its characteristics directly related to the standard of living of families, Consumer Potential has a place of high importance in the data set typical of Geomarketing analyses.
Simplified analyses can be performed taking into account a family's income class, but the distribution of income in the form of expenses and its stratification into categories and subcategories make Consumer Potential a closer indicator of sales potential in a region.
The amounts are expressed as total expenses in Reais (R$, BRL) per month.
Overview
The Consumer Potential data has a unique and official source, which is the POF (Family Budget Survey), which underwent an update in 2017-2018.
IBGE begins research on the consumption patterns of Brazilian families
Excerpts from the article:
The POF has been carried out since the 1980s and detected the main changes in the consumption habits of Brazilians, such as the increasing importance of meals away from home and, more recently, the growth of digital consumption, related to the popularization of cell phones and the internet.
Research is important to know which goods and services are part of the household consumption list and what weight they should have in calculating the inflation index.
Consumption patterns change, so research has to be redone periodically.
Some items come out and others are standard. The vinyl record was on the list in the 1980s, for example, now we have music streaming services.
Updating the weighting structure of the indices is necessary so that they reflect more faithfully how the price level affects our society and our economy.
The POF is a non-regular survey, that is, it does not follow a fixed schedule of updates, but rather the movement in the consumption habits of Brazilian families.
Its main focus is based on the Consumer Price Indices, a monthly control carried out by the IBGE of the prices of all goods and services consumed by the population.
Therefore, its official structure follows an approach to measuring inflation, giving different importance to the items with the greatest impact on the inflation index and the lowest to the replaceable items.
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Methodology
The POF is a household sample survey, which mainly aims to measure the consumption structures of families, that is, the composition of the family budget compared to the income of that household.
Aspects that are raised by the research:
Characteristics of the Household and Residents
Find out characteristics of residents (education, color or race. sex, age) and of households (wall covering, roof material, use of running water, etc.).
It is filled out by the research agent, in an interview with a resident.
Work and Individual Income
Residents' income and occupancy.
Possession of assets
Make an inventory of the durable consumer goods present in the household.
Record information about goods whose consumption is less frequent, such as vehicles, animal treatment, health expenses, etc.
Frequent consumption
Preferably filled out by a resident.
Only if he can't, does the agent take charge.
It is important for residents to record expenses, trying to remember or save invoices, for example.
Record for seven days the purchases that serve the whole family and are frequent, such as food (bread, meat, milk, etc.), cleaning supplies, charcoal for barbecues, etc.
Individual consumption
Each resident records individual expenses they made, also for 7 days, in a personal purchase block.
Other purchases made individually, such as personal hygiene products, among others, are also included.
Assessment of Living Conditions
Subjective information about how the resident assesses living conditions, in terms of the amount of food, neighborhood, housing, etc.
From it, it is possible to draw a profile of the living conditions of a population taking into account the structure of their domestic budgets.
Mapfry chose to approach the structure of the family budget in an uncomplicated way that is closer to reality, corresponding to the way in which families make their choices between expenses and their income.
Family budget management is made up of choices between real and aspirational needs.
Although the data are represented in real amounts available by region, their internal structure is determined by the income and family composition of the households, in order to have an understanding of the per capita amounts available for consumption.
This is an active area of research, so we are still developing and improving our methodology for assigning Consumption Potential to locations.
The Consumer Potential categories are organized into 12 main breaks and 32 subcategories:
View a detailed matrix of the articles contained in each Subcategory
Update
Among the numerous pieces of information from the POF, the main one is the general structure of the budget, which indicates how families are prioritizing some categories of consumption over others.
This information is less subject to fluctuation.
Based on the structure, we can update the values related to income and family composition based on the Mapfry projections based on the Census and its updates.
This allows us to provide an always up-to-date view of the amounts in Reais (R$ BRL) available for consumption in the regions and their opening into categories and subcategories.
Why does Mapfry open information in just 12 categories?
We know of cases of other suppliers that present information in 80 or even +100 categories and even allow opening in individual items within the subcategories.
We prefer to consolidate information rather than disperse it for the benefit of information consistency.
The POF is a survey that requires several visits to homes being researched, quite unlike the Census, which is carried out with just one visit.
For practical reasons, the POF sample area is more restricted, to facilitate the frequency of researchers.
This does not compromise the statistical validity of the research, which is representative on higher scales, such as at the State and Municipal levels.
However, when we talk about extrapolating the result to areas smaller than their original statistical representation, such as neighborhoods (Weighting Area) or city blocks (Census Sectors), extra care must be taken to ensure that the data does not express untruths.
It was this care that we took when consolidating the categories into typical consumption pillars and moving away from preferences and particularities derived from the sample.
Why is Consumer Potential important?
People need goods and services to lead their lives.
The sum of the income of the people who work in a family will be reflected in the family budget, amounts in reais available for consumption.
The sum of people living in a family will be reflected in consumption needs.
Therefore, the structure of a budget will be given by income and family composition.
A family with five people and an income of two minimum wages will have a different budget structure than a family with the same income and only two people.
In the second case, if there are fewer people to consume the basic items, a part of the income may be directed to other items preferred by those people.
Knowing these values indicates the size of that market for some categories.
Based on the size of a market, its total available for consumption, a study can estimate a share captured or to be captured, its Market share or fair share, and thus have a vision of the possible billing in that place.
Information that is not taken into account by the methodology
As stated, this is information essentially derived from POF, under a new order of factors that better reflect the way in which families decide their consumption.
Information derived from credit card spending at points of sale, cash payments, or PIX transactions is not taken into account.
In addition, we do not collect information on the average revenue of commercial establishments and other companies operating in a region.
All information used to compose this information is in accordance with current legislation, especially the protection of personal data.