Psychographic Segmentation

Psychographic Segmentation is one of the many different approaches taken in dividing the market into segments. It divides the market into groups based upon social class, lifestyle and personality. It is based upon the assumption that types of products and brands an individual purchases will reflect that person's characteristics and patterns of living. Social class is the single most used variable for research purposes, and divides the population into groups based on the occupation of the Chief Income Earner, as such it can be seen as a socioeconomic scale.

An example of this is the National Readership Survey in the UK. The following chart summarizes the socioeconomic scale: Social Grade Description of Occupation Example Upper Management Company director Middle management Middle manager C1 Supervisory Bank Clerk C2 Skilled manual Labor Plumber Semi- & unskilled labor Laborer Pensioners and Unemployed Unemployed, Retired This scale operates on the assumption that individuals in similar positions of authority and income will have similar interests and attitudes.

For example, when marketing automobiles, the President of the company (Social Grade A) will have different reasons and motivations behind the purchase than the company's janitor (Social Grade D). While the lower social grades will be sensitive to such things as dependability and affordability, the executive is more likely to choose a car based upon style or prestige. Lifestyle segmentation involves classifying people according to values, beliefs, opinions and interests.

There is no one standardized lifestyle segmentation model, instead market research firms and advertising agencies are constantly devising new categories, which will best help target possible consumers of their clients' products. The company Young & Rubican provide an example of lifestyle with their Cross-Cultural Consumer Characterization, abbreviated as the 4 Cs. Here are brief descriptions of the categories within the 4Cs. Resigned: Rigid, strict, authoritarian and chauvinist values, oriented to the past and to resigned roles. Brand choice stresses safety, familiarity and economy.

(Older) Struggler: Alienated, Struggler, disorganized - with few resources apart from physical/mechanical skills (e.g. car repair). Heavy consumers of alcohol, junk food and lotteries, also trainers. Brand choice involves impact and sensation. Mainstreamer: Domestic, conformist, conventional, sentimental, passive, habitual. Part of the mass, favoring big and well-known value for money 'family' brands. Almost invariably the largest 4Cs group. Aspirer: Materialistic, acquisitive, affiliative oriented to extrinsics.. image, appearance, charisma, persona and fashion. Attractive packaging is more important than quality of contents.

(Younger, clerical/sales type occupation) Succeeder: Strong goal orientation, confidence, work ethic, and organization.. support status quo, stability. Brand choice based on reward, prestige - the very best. Also attracted to 'caring' and protective brands.. stress relief. (Top management) Explorer: Energy - autonomy, experience, challenge, new frontiers. Brand choice highlights difference, sensation, adventure, indulgence and instant effect - the first to try new brands. (Younger - student) Reformer: Freedom from restriction, personal growth, social awareness, value for time, independent judgement, tolerance of complexity, anti-materialistic but intolerant of bad taste.

Curious and inquiring support growth of new product categories. Select brands for intrinsic quality, favoring natural simplicity, small is beautiful. (High education) These categories show that each consumer has a particular attitude towards life, and that attitude helps guide the individual's buying decision. For example, Internet ventures and dotcom enterprises would be very attractive to Succeeders but hold very little allure for the Resigneds. The prestige of designer clothing labels would attract Aspirers but probably alienate the Reformers.

The development and use of the 4Cs and other scales allows the marketer a glimpse at why consumers make the purchases they do. Psychographic segmentation also uses personality as an influencing factor. Personality reflects a person's traits, attitudes and habits. Porsche Cars North America, for example, long knew the general demographic of the Porsche owner: a forty-something male college graduate earning more than $200,000 a year. After extensive market research, Porsche determined that there were five basic personality types that bought Porsches.

This more effective segmenting led to a refined marketing campaign that led the company out of a seven-year slump to report a 48% increase in sales. Another technique for segmentation is by motive. Motive means appealing to the consumers' emotional motives, specifically the desire to care for loved ones. State Farm Insurance provides us with an excellent example of motive.

The ad shows a baby's two feet, with a caption that reads "ten good reasons for buying life insurance." This ad appeals to the need to provide for one's family, and also makes a direct but subtle connection between that need and the company. Proctor & Gamble markets eleven different laundry detergents based upon motive. Each brand has a different position in the market based upon the motivation of the person buying it.

Is it for a large family with active, sports-oriented children? There is Cheer, for tough cleaning and color protection. Is it for baby clothes? Maybe Ivory Snow will fit the need. Is the buyer a college student low on cash? Try Dash, the value brand. Carol Morgan and Doran Levy of Strategic Directions Group have taken a step in the psychographic segmentation of an often overlooked demographic in today's market: the baby boomer generation.

Their method of segmentation, which is the culmination of twenty years research, divides the boomer generation into four distinct categories, which they call the Upbeat Enjoyers, the Insecure, the Threatened Actives and the Financial Positives. The Upbeat Enjoyers comprise 34% of the demographic. They are characterized as being optimistic about themselves and their financial future. The next largest segment (29%) is the Financial Positives. They are frugal and avid.