A Preliminary Look at the Mass Market, Mass Affluent and Wealthy in Barbados

AE Quarterly December 2017

This article is a first attempt at understanding the size and spending potential of the three main consumer markets in Barbados – the mass market, the mass affluent and the wealthy. Historically, companies seem to have defined their market somewhat intuitively. They have a general understanding of the price points that their customers are comfortable with, and adjust their marketing appropriately. While approaching segmentation this way has some advantages – such as testing prices and maintaining a close relationship with customers – the main disadvantage is that it limits the ability to plan ahead. Without an understanding of how target markets are changing, companies will find themselves planning with the inherent assumption that the future will be similar to the present. It is for this reason, in my opinion, that, from retailers’ accounts in the Barbados press, the 2017 Christmas season was less profitable than they had expected. They didn’t take into account how some segments were evolving, and, in this case, shrinking.

Popular Approaches to Defining Consumer Market Segments

The specific definitions normally used to delineate the mass market, the mass affluent and the wealthy segments of the consumer market vary by country, though the broad concepts remain consistent. Generally, the mass market represents the lower- and middle-income segments, the mass affluent is the upper-end of the mass market and the wealthy are the high-income segments. In addition to income, these segments encompass two additional elements – investable assets and net worth – that give more context than simply income earned. Investable assets are liquid assets (such as cash on a bank account and any items or financial assets that can be sold for cash within a short time frame) available to be invested, and net worth is the value of what is remaining after an individual deducts what they owe (i.e. their liabilities) from what they own (i.e. their assets). In short, income (after all deductions) would usually be placed on a bank account where it becomes part of investable assets, which in turn are a subset of a person’s net worth.

The reason why income alone is not sufficient to determine which segment an individual falls into is because it does not take into account spending power. For example, someone with little to no income may still have incredible spending power if they inherited significant wealth. Similarly, someone with a high income may have limited spending power if the bulk of their income is used to repay debt. It is for this reason that the income data frequently presented in government and development bank statistical reports are not ideal for marketing analysis without some manipulation. One common practice is creating income brackets that were developed to support some type of policy-related analysis. Barbados is a good example of this. In its labour market report, income brackets are presented with inconsistent ranges, as shown below.

Bracket (weekly earnings)Size of income bracket
NoneNot applicable
Under $200$200
$200 – $499$299
$500 – $999$499
$1,000 – $1,300$300
Over $1,300unknown
Not stated

It is possible to request more granular data rather than use the summarised information in the labour market report, which is what we did to standardise the size of income brackets.

Another common challenge occurs when the sample of income earners is broken into groups of roughly the same number of persons. The income brackets are therefore adjusted to show the lower and upper boundaries of the income earned in each group, and, as such, it is common to have wide differences in the size of the income ranges. This is a popular approach used by international development organisations, such as the World Bank, as it allows for comparison between countries. When done in this way, however, it can be misleading to assume that the group in the middle of the distribution represent the middle class as referenced in marketing. Often, this is not the case.

The approach that tends to be popular in marketing literature is to determine an income cut-off point (or a level of investable assets or net worth). Persons are then categorised based on where they lie relative to this cut-off point. For example, in the United States of America, the mass affluent segment is assumed to be persons with investable assets of US$100,000 to US$1,000,000 and an annual household income over US$75,000. Since the cut-off points do not change, this approach allows for analysis of how each segment has grown or shrunk over time. Unfortunately, this approach would only make sense in countries where inflation and the cost of living are relatively stable over time. If significant price changes are common, this approach loses some analytical power.

Ideally, defining each segment would be done by understanding what the typical lifestyle of each segment costs, and what level of income or assets/net worth would be required to cover those costs. This analysis would be done on an ongoing basis, implying that while the dollar value of definitions of the segments may change, the purchasing power that they are meant to capture would not.

Preliminary Estimates of Income Brackets for Consumer Segments

For Barbados, no reliable source of investable assets or net worth is available. From the income data within the BSS labour market statistics, we see that the distribution of the sample does not conform to a normal distribution curve, as it is skewed to the left. The midpoint of the sample (the red line) falls within the $400 to $499 per week income level), which implies that 50% of the sample earns under $25,000/year. At Antilles Economics, we have typically used $25,000/year as our cut-off for lower-income earners because it is the same one used by the Government of Barbados and these persons are exempt from paying personal income taxes.

Source: Barbados Statistical Service and Antilles Economics

Lower income earners only represent one portion of the mass market, the other being middle income earners. To determine the middle-income earners, we first have to determine what will delineate middle income from wealthy persons. Since the upper echelons of the mass market are the mass affluent, what we are in fact determining is the difference between mass affluent and wealthy. One criterion we have found useful is that the mass affluent must be earning 50% more than the median GDP per capita of the area in question. For Barbados, the GDP per capita in 2015 was Bds$31,629.41, implying that the mass affluent must be earning at least $47,444.11/year. Using the same labour market statistics, we estimate that the mass affluent earn between $900 – $1,300/week (or $46,800 – $59,800/year) and represent 11.0% of the market. The entire mass market, therefore, earns from under $200/week to $1,300/week and represents 93.5% of the consumer market. The wealthy account for the remaining 6.5%.

Next steps

This analysis only considers net income, which has important drawbacks. In 2018, Antilles Economics is embarking on a project to understand the size, spending habits and purchasing power of consumer segments in Barbados. From this research, we expect to be able to determine the level of investable assets and the net worth of individuals within each segment, as well as their income levels. Our clients will therefore have access to the most complete description of consumer segments in Barbados. To receive status updates about this project as well as to be alerted when the report becomes available, please email Stacia at

About the author(s)

Stacia Howard is the Managing Director of Antilles Economics.

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