Psychographics in Market Segmentation and Consumer Behavior

Introduction to Psychographics

Psychographics is a method by which one can analyze and understand a social group, obtaining information about the psychological responses of particular groups or individuals to given situations. Psychographics is understood as a medium for understanding the diverse beliefs, opinions, and interests of customers. It is also defined as profiling the perceptions, attitudes, feelings, and preferences of customers, and understanding the mental processes of customers in purchase decisions.¹

Psychographics is a very effective communication tool for marketers, on the basis of which appropriate marketing strategies can be formulated and implemented. It is believed that psychographics is perhaps a better method of understanding consumer behavior when compared with other behavioral tools such as psychodynamics, neuro-linguistics, and design psychology. According to Harold Finkleman, "Psychographics enables us to understand who we are in communication with, and how they would react to particular situations—whether in a positive or negative manner—and would thereby enable us to have an understanding of their decisions made on the basis of their lifestyles and values upheld."² It can also be used to anticipate the psychological response of specific individuals or audiences to almost anything.

Market Segmentation and the Limits of Demographics

Market segmentation is one of the key marketing activities, involving the classification of a population with the objective of identifying target groups upon whom marketing efforts can be focused. "Segmentation is essential for designing marketing and communication strategies to enable marketers to reach out to customers."³ A common method is the use of demographics, by which the market is segmented based on gender, age, education, occupation, income, marital status, and ethnic background. Demographics provides important information on the characteristics of the target market—for instance, whether the population is dominated by younger or older consumers, what the average level of education is, and how much average disposable income is available to potential customers. Thus, demographics provides basic information on market participants but stops short of providing information on the psychological profiles of customers. For example, with demographic data alone, it is not possible to know the sentimental factors involved in a middle-class salaried worker's decision to purchase an apartment.

Another method of segmentation is geographic, which classifies the market based on boundaries and regions.⁴ This approach also does not present a complete view of customer profiles. Psychographics is now recognized as an important and necessary tool in market segmentation because it attempts to unravel buyer characteristics more fully.

Psychographic Characteristics: Personality, Attitude, and Lifestyle

The characteristics addressed by psychographics include the personality, attitude, and lifestyle of buyers. Personality takes many forms—compulsive, extrovert, gregarious, adventurous, formal, authoritarian, ambitious, enthusiastic, positive, indifferent, negative, and hostile. "Understanding the personality of buyers empowers the marketer with inside knowledge of customer expectations and enables a decision on the right marketing approach." Gender-based psychographic profiles have been developed to gain deep insight into buyer behavior. For males, Wells suggested an eight-point psychological profile: quiet family man, traditionalist, discontented, ethical highbrow, pleasure-oriented, achiever, he-man, and sophisticated.⁵

Different strategies must be adopted for each of these groups if a marketer is to succeed. The marketer can group segments based on these psychological characteristics to evolve the right strategy. For instance, if psychographic segmentation reveals that a group of potential buyers are young extroverts, the marketer can design advertisements and commercials suited to that behavior. "In profiling personality, the pleasure-arousal-dominance model is popular among marketers because it tries to measure three basic and independent emotional states. Pleasure is a positive emotional state in which the customer is receptive to the marketer and inclined to buy."⁶

Arousal refers to physical and mental alertness and is used to measure the buyer's emotional responses to positive or negative stimuli. Dominance concerns control—when the buyer feels in command of their emotions. Personality traits such as anger, anxiety, and satisfaction can be related to these three emotional states. Additional psychographic attributes based on the pleasure-arousal-dominance model include relaxed, exuberant, and docile states. Color is another sensitive element in consumer behavior. "Psychographic profiling of color has identified three groups: the color-forward, who are fashion-savvy; the color-prudent, who take time in accepting new color trends; and the color-loyal, who do not accept color changes."⁷

Attitude is the second major characteristic of psychographics. "Segmentation of attitude is based on degree of brand loyalty, risk-taking ability, and the probability of purchasing a new product."⁸ Individuals' attitudes toward a marketer's products and services can be expressed in terms of personality traits. With respect to a potential buyer making a purchasing decision for a new product, attitude plays a significant role depending on whether the buyer is an innovator, adopter, or laggard. An innovator is more likely to make a decision faster than a laggard.

The third element in psychographic segmentation is lifestyle, which has three main dimensions: activities, interests, and opinions. Activities include work, hobbies, social events, vacations, sports, entertainment, and community interaction. A study of these attributes gives a picture of the general activities of the target segment. It is also important to understand the interests of buyers, which may cover family, home, profession, food, fashion, media, and entertainment.

Conclusion

In the increasingly competitive business scenario, it is imperative that marketers understand the social and psychological behavioral patterns of market segments. No doubt, demographics and geographic-based segmentation are important in market segmentation, but they do not address the psychological behavior of consumers, which can largely influence buying decisions. To quote a well-known marketing principle: customers do not buy products and services—they buy the benefits and results of products and services. This is a compelling reason for marketers to reach the minds of consumers, in order to succeed in the twin objectives of attracting and retaining them for a lifetime.

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