Psychographic segmentation: Definition
Psychographic segmentation is defined as a market segmentation technique where groups are formed according to psychological traits that influence consumption habits drawn from people’s lifestyle and preferences. It is mainly conducted on the basis of “how” people think and “what” do they aspire their life to be.
Any organization which intends to understand their consumers’ thought process can divide their target market according to this segmentation method. Psychographic market segmentation is one of the most effective segmentation methods other than demographic segmentation, geographic segmentation, and behavioral segmentation.
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Examples of such traits are social status, daily activities, food habits, and opinions of certain subjects. For example, to monitor the sleep habits of people, a sleep survey is conducted. The sleep survey template consists of various questions about the sleeping habits of a respondent which helpin drawing conclusions about what habits impact sleep and the factors that cause sleeplessness.
A product/service based organization has to keep its customers in mind as these products are created for the customers’ consumption. Customer demands and expectations play a pivotal role in designing and developing a product. These demands and expectations evolve with time and customer understanding also evolves with an increase in family income or age or any other demographic examples. An organization will be able to perform better if it understands its customers’ psychology and it will be able to provide market-driven products.
The power of big data influences most of the decisions made for psychographic segmentation.
- When a customer approves an application to access personal information or a cookie on a website, they start leaving their digital chain that is usually tracked to observe purchasing habits, and they are used to analyze attitudes, personalities, lifestyles, etc.
- Organizations can access psychographic information precisely by tracking a user’s activity on social media, online platforms, online product purchases or use of mobile applications.
- A significant amount of detailed information about a user is accessed by social media websites, search engines, and mobile applications.
- Big data not only allows the collection of details about the applications and devices used by a customer but also provides real-time access to personal information such as access control data or personal characteristics along with phone numbers, private messages, social media presence and other data saved on a user’s phone.
- User’s online behavioral pattern, time spent on each of the sites, reviews posted about restaurants or hotels, visited locations along with any payments done online are tracked using big data.
- Digital platforms access this information to create detailed plans for psychographic targeting and also influence online behavior. It is safe to say that with big data, they know who their visitor is, what does this visitor does online, and also why they do what they do.
- Organizations can implement big-data methods such as linear or logistic regression to understand and map psychographic traits to customize their website layout, color theme, and products according to the tracked psychographic qualities.
Psychographic segmentation variables
Conducting psychographic market segmentation is a critical task for business development and thus, needs special attention. Every individual has varied demands and opinions. Brands must focus not only on dividing the market based on psychographics but also to connect with their target market on the basis of psychographics.
There are five psychographic segmentation variables on the basis of which hom*ogeneous segments can be prepared for proper research – Personality, Lifestyle, Social Status, AIO (Activities, Interests, Opinions), and Attitudes.
Personality: Market researchers can conduct a segmentation based on personality to form a group of people with similar personality traits. New products/services can be launched to cater to various personalities and new features also can be developed for the analyzed personalities. A few defined personalities are: creative, emotional, friendly, opinionated, introvert, extrovert, etc. help organizations to filter their customers in a systematic manner.
Customer personality and purchasing habits are strongly related. For businesses to develop products that add value to customers based on their habitual needs – is key towards creating a successful product/service
An organization can use this psychographic segmentation variable to develop products according to most of the customers’ personalities which can help in boosting sales. In the past, many liquor, laptop, car, perfume brands implemented their customers’ personalities for better marketing activities.
A market researcher should ask this question: “In general, what personality would your prospective consumers have?” to understand which product/services would work better with their target market and develop marketing strategies accordingly.
Lifestyle: Various resources have to be invested if multiple products are to be created for multiple markets. But, product resources can be saved if segmentation is done on the basis of lifestyle, product development can be made more credible.
For example, if a shoe manufacturer intends to design shoes for various sections of the market such as athletes, office-goers, students, etc. Dividing groups according to customers whose lifestyle revolves around cycling or running, those individuals who prefer formal shoes, and similar other segmentation. This way, the manufacturer can produce shoes the cater to every lifestyle, i.e. likes or dislikes, and which in turn will help in building a brand that develops shoes for every market segment on the basis of lifestyle.
Social status: In most cases, the social status of people primarily decides the products they use and their preferences (in general). Each social class has its choice of clothes, shoes, food, cars, electronics, etc. For example, elitists would generally prefer solitaires, luxury cars, holiday homes, etc. A luxury car brand would target only the elitists and not the middle-class of people. This segmentation type can be helpful for brands that have a niche product/service to offer which will not be helpful to all social classes.
Activities, interests, and opinions: This psychographic segmentation is based on what activities are the customers inclined towards, which topics are they enthusiastically interested in or what are their opinions about specific matters. These parameters are called AIO (Activities, Interests, and Opinions).
There are some viewers who love watching stand up comedies and there are some who prefer Narcos or Wild Wild Country – be it thriller or comedy, the common activity here is watching online shows. Depending on the preferred activity, a researcher can determine preferred products and services and build marketing strategies to cater to varied activities, interests, and opinions.
Attitudes: An individual’s attitude is molded by the way he/she was raised and their cultural background. Each prospective customer will have a different attitude which can be a variable for psychographic segmentation.
Groups are created by dividing customers on the basis of thoughts and attitudes. Attitude is an intangible parameter that provides insights into the basic nature of a customer. Each customer exhibits different attitudes – a person belonging to a high-income group will prefer dining at premium restaurants and drive a Mercedes Benz and a middle-class individual will be bothered more about saving a few extra bucks and not on luxury. A marketer has to keep these points in mind while deciding the target market for an upcoming product feature or a new product.
Psychographic segmentation examples
Here are a few examples of psychographic segmentation:
- A common example of psychographic segmentation is a luxury mobile-manufacturing brand that specializes in customization.
- These mobiles are not available for people from every class. A certain standard of living and family income is essential to be able to purchase an expensive mobile that is customized for each customer.
- By using psychographic market segmentation, the marketing team of this mobile-manufacturing brand can divide the target market according to their social status first and then on the basis of lifestyles, attitudes, or personality.
- They can also evaluate the same variables for their competitor’s target market as well for the better selection of a market for their branding activities.
This example can be extended to other markets as well. The organic food industry is one of the fastest-growing industries that focuses on a specific target audience. Here is again where psychographic segmentation can play a major role.
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Psychographic segmentation advantages
Here are the advantages of psychographic segmentation:
- Understand consumer behavior by analyzing their personalities, lifestyles, or social status.
- This segmentation type is important when customization of products and services is involved.
- As it provides details about factors such as lifestyles, interests, opinions, etc., it is much more effective than geographic or demographic segmentation.
- It is an extension of behavioral segmentation and offers options to divide the population-based into attitudes or opinions as well.
FAQs
Psychographic examples include grouping customers based on social status, interests, and opinions. For instance, an auto manufacturer might use psychographic segmentation to learn what its customers care about to create products and marketing campaigns geared toward those individuals.
What are the advantages of psychographic segmentation? ›
Advantages of psychographic segmentation
- Creates better understanding of the consumers. ...
- Reveals hidden attitudes. ...
- Allows for more targeted messaging. ...
- Creates opportunity for product repositioning.
Psychographic examples include grouping customers based on social status, interests, and opinions. For instance, an auto manufacturer might use psychographic segmentation to learn what its customers care about to create products and marketing campaigns geared toward those individuals.
What is a real world example of psychographic segmentation? ›
A common example of psychographic segmentation is a luxury mobile-manufacturing brand that specializes in customization. These mobiles are not available for people from every class.
What are the cons of psychographics? ›
One of the most common drawbacks with psychographic segmentation is making insights that are over-assumptions, not meaningful enough, or not relevant enough to be compelling. For example, a B2B marketing agency is designing an ad campaign targeting an audience of web developers.
What is an example of psychographic segmentation at Starbucks? ›
Starbucks is a big fan of psychographic segmentation, and this largely defines their relatability as a brand. For example, they have the, “Non-coffee drinkers who still want to socialize” (catered too by selling frappuccinos and sandwiches in-stores), and the.
What is an example of psychographic segmentation for restaurants? ›
Psychographics: This includes factors like interests, beliefs, hobbies, etc. These factors allow restaurant owners to recognize people with similar interests to what their restaurant is offering. For example, A sports cafe can identify and segment people who love sports, making it easier to find their target customers.
How does Nike use psychographic segmentation? ›
Nike uses psychographic segmentation to focus on customers according to activities, their personalities, lifestyle, and overall interests. In terms of their activities. Nike focuses on the people who enjoy engaging in sports. The company is passionate about sports, and it makes products suitable for sports lovers.
How does Coca Cola use psychographic segmentation? ›
The psychographic element of the Coca-Cola market segmentation is categorized into different groups based on lifestyle, personality, or values. The behavioral variable is the final element in Coca-Cola's marketing segmentation.
What are 3 types of psychographics? ›
3 types of psychographics. The main types of psychographics are interests, activities, and opinions. You can split that into subcategories as well. (Attitudes are slightly different than opinions; lifestyle and behavior are slightly different than activities).
Get started. Psychographic segmentation is the research methodology used for studying consumers and dividing them into groups using psychological characteristics including personality, lifestyle, social status, activities, interests, opinions, and attitudes.
What is an example of a psychographic in advertising? ›
For example, demographic information might tell you something about a person's age, but psychographic information will tell you that the person is just starting a family and is in the market for baby products. Oftentimes, consumers are guided by their attitudes and subjective perceptions when making purchase decisions.
Does Netflix use psychographic segmentation? ›
Netflix's target consumers are divided into segments based on demographics, behavioural intents, and psychographic segmentation. Netflix's target clients are young adults, teens, and low-middle-income families, according to demographics.
What is psychographic segmentation of H&M? ›
Psychographic segmentation means segmenting the market based on customer interests, personality, lifestyle, social status, etc. The target customers of H&M are the group of people who are excited about the recent fashion trends and want to buy these fashionable clothes and accessories at an affordable price.
How does Apple use psychographic segmentation? ›
Apple Psychographic Segmentation
20% of owners of both an iPhone and iPad say that “switching ecosystems would be harder than switching banks”. They are also loyal: nearly 85% of iPhone owners plan to buy another one. An Apple customer profile demonstrates characteristics as an 'aspirer', 'succeeder', or 'explorer'.
What is psychographic segmentation criticized for? ›
Psychographic segmentation has been criticized by well-known public opinion analyst and social scientist Daniel Yankelovich, who says psychographics are "very weak" at predicting people's purchases, making it a "very poor" tool for corporate decision-makers.
How does psychographic segmentation affects consumers behavior? ›
Psychographic segmentation allows you to develop new insights based on questions you might never have considered. For example, you can learn whether your customers value price or brand name, and you can also see how different discounts affect buying behavior.
What is psychographic segmentation lifestyle? ›
Psychographic segmentation. Psychographic segmentation classifies consumers on the basis of individual lifestyles as they're reflected in people's interests, activities, attitudes, and values. Do you live an active life and love the outdoors? If so, you may be a potential buyer of hiking or camping equipment or apparel ...
What are the psychographics of Chick Fil A? ›
The typical Chick-fil-A customer is white and between 45 and 54 years old, according to data provided by analytics firm Numerator. These customers tend to be either adult couples, or large, young families. They likely live in the suburbs, with a high income and a full-time job.
What is psychographic segmentation of KFC? ›
KFC has divided the market into following psychographic segmentation: Classified by Social Class: Upper, Middle and Lower Class. Classified by Lifestyle: Luxury and Extravagance. Classified by Personality: Highly social, food loving, modern and ambitious individuals.
Dove uses psychographic segmentation. Dove goals to create a psychology in women where beauty incorporates all ages, body shapes and size. 'You are beautiful the way you are' is the message Dove promotes and wants every woman to believe. The target group of Dove is especially women above 18 years old.
What is psychographic segmentation of Dominos? ›
Psychographic segmentation takes into account the lifestyles, attitudes, traits, belief etc. of the customers. The lifestyle of the people who order pizza from Domino's is mostly that they want quick food, or they love eating out.
What is psychographic segmentation of luxury? ›
Luxury brands focus on psychographics segmentation by observing their consumers' lifestyles. Over the years, most luxury brands target customers whose lifestyles are mainly models, singers, film stars, etc.
Is vegan a psychographic segmentation? ›
Psychographics can help you segment consumers who are on the vegan, vegetarian or 'flexitarian' diets. Perhaps they are simply health-conscious or just curious eaters.
How does Zara use psychographic segmentation? ›
Zara's Psychographic Segmentation
A Zara customer analysis from a psychographic standpoint shows that Zara customers are highly style conscious, tech savvy and value their unique identity. They want the latest fashions, but also want to express their individuality and enjoy a personalized shopping experience.
What psychographic segments does lululemon serve? ›
Lululemon customer demographics includes people in their mid-teens to mid thirties, both women and men. They are largely yoga and/or fitness enthusiasts who value work-life balance and a fit and active lifestyle.
What brand uses psychographic segmentation? ›
Top brands like Apple, utilize psychographic segmentation to create a brand personality that fits into the perception of their users. With psychographic data, Apple can communicate luxury, minimalism, and class to its target audience and also create marketing strategies for the different psychographic segments.
What are the psychographics for Pepsi? ›
For example, Pepsi-Cola is positioned as soft drink that tastes good and has a pleasantly refreshing impact.
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| Type of segmentation | Segmentation criteria | PepsiCo target segment |
|---|
| Psychographic | Social class | Working class, middle class and upper class |
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Psychographic segmentation: Adidas is able to strike a delicate balance in providing apparel and sportswear for both the upper and middle social class. They offer high-end products as well as items produced to meet the needs of upper-middle-income earners.
What are the Big 5 psychographics? ›
The Big Five Personality Traits. OCEAN = Openness, Conscientiousness, Extroversion, Agreeableness, and Neuroticism.
Psychographic Segmentation Based on Marital Status and Family. This kind of psychographic market segmentation includes marital status based segmentation. Products like baby food, baby diapers, baby soap, baby lotion and other baby products target married individuals who are potential buyers for such products.
What are examples of psychographics in fashion? ›
Psychographics: personality, style/subculture tribe, daily habits, goals and values, attitudes/beliefs. Factors in purchase decisions and online behaviors: types of products, occasions. Favorite brands. Sources of information: magazines, blogs, websites, social media accounts.
What is an example sentence for psychographics? ›
Examples of psychographics
Understanding the demographics and also psychographics of social media users will help us more effectively connect our brand story to the needs and behavior of the social consumer.
What is an example of psychographic quizlet? ›
What are examples of psychographics? Psychographic information might be your buyer's habits, hobbies, spending habits and values.
What is psychographic segmentation Amazon? ›
Psychographic segmentation is marketing based on the needs or wants of your customers.
Is psychographic segmentation based on consumers? ›
Psychographic segmentation refers to the process of segmenting your customer base based on customers' thoughts, beliefs, perceptions, and habits. These psychological traits can be drawn from observing the lifestyles and preferences of your contacts and trying to think about the why behind the actions they take.
What companies use demographic segmentation? ›
Examples of demographic marketing segmentation
It's well known that massive companies like Facebook and Instagram use extremely specific demographic segmentation to help advertisers effectively target their users. Think of your own encounters with social media advertisem*nts.
What is Zara's customer segmentation? ›
ZARA's target consumer is often between the ages of 18 and 40, with a medium-high income. Furthermore, it targets customers based on their fashion awareness. They are frequently busy individuals, which is taken into account in ZARA's strategy, which aims to get customers to buy on impulse.
What is Iphone target market segmentation? ›
Apple's target audience consists of middle-class and upper-class users who can pay higher for products that provide them with an incredible user experience. This means that these users have a higher disposable income and are willing to pay more for as high-priced products as Apple's.
What is psychographic segmentation and its importance? ›
Why is psychographic segmentation important? Psychographic marketing enables you to engage with multiple target audiences in the ways that will make the biggest impact for each one. This approach saves time and money on approaches that might fall flat and makes it easier to relate to the groups you care about.
But market segmentation enables a business to target different groups of customers by adapting their services and marketing collateral to suit each targeted segment best, resulting in much-wanted brand advocacy and long-term growth. The potential to reach new customers through social media has never been greater.
Why is psychographic segmentation better than demographic segmentation? ›
The main difference between demographic and psychographic targeting is that demographic segmentation—as well as geographic and behavioral—focuses on quantifiable and visible information. Psychographic marketing focuses on internal and intrinsic characteristics.
Where is psychographic segmentation used? ›
Psychographic segmentation is the research methodology used for studying consumers and dividing them into groups using psychological characteristics including personality, lifestyle, social status, activities, interests, opinions and attitudes.
What are the 3 advantages of price segmentation? ›
The advantages of price segmentation are as follows: increased profit due to the increased number of customers targeted, increased market share as customers from various groups are willing to pay for the product, and flexible pricing as companies can study market response and modify pricing for segments that showed no ...
What is segmentation by benefits example? ›
Companies that produce athletic footwear use benefit segmenting to divide customers into professional runners, trail runners, and recreational runners. They provide properly cushioned, lightweight, flexible, and stable shoes for professional runners.
Why psychographics is better than demographics? ›
Using demographics alone to target your social media ads can be hit and miss. With psychographic segmentation, you can drill down into the exact kind of person you want to target. Use social media platforms' in-built tools to target ads accurately and precisely.
