Psychographics and its Limitations

By: Cheryl Kan • Dong Tianzhao • Karen Chen • Kelvin Lee • Ng ShiQi • Valerie Wong

Traditional Segmentation
• GEOGRAPHIC
– Variables like Continent, Country size, Climate etc

• DEMOGRAPHIC
– Age, Gender, Sexual Orientation, Family Size, etc

• BEHAVIORAL
– Benefit sought, product usage rates, brand loyalty, product end use, readiness-to-buy, etc

Evolution of Psychographics Segmentation
• Globalization
– changes in the socio economic structure – blurring of social class lines

– Market saturation
• leading to fewer physical differences between brands • tapping into emotional elements of decision-making

Evolution of Psychographics Segmentation
• Rise of the ‘creative class’ • Bringing about the cognitive elite (Herrnstein and Murray, 1994)
• A more technologically advanced society creates new breed of consumers and its associated emerging markets
-removing traditional criteria eg. race, gender or class -Making purchase or consumer decisions based primarily on evolved cognitive ability

The Limitations of Psychographics Segmentation
Costly and Time Consuming • costly to launch • difficult to implement on a wide scale • requires involvement of:
– Focus groups / Extensive Market Data collection – Intensive surveys – Anthropologists and psychologists needed

The Limitations of Psychographics Segmentation
Difficult to define and measure • Other factors of purchasing behaviours
– Age – Income – Economic situation

• No single psychographic analysis can be used universally

Two Assumptions
1. Percentage of customers conforms to a defined psychographic profile
– People don’t always think the same – Individual personalities & perceptions – E.g. hybrid cars

2. Members of psychographic group behaved as predicted
– Individual belongs to upper class might not go for luxurious cars or houses

Homogeneous & Heterogeneous Society
• Japan case study…
– Market is homogenous – Advertisers do not segment the market using psychographics – Fear of
• Implosion and the disability of psychographical segmentation to stimulate consumerism • Failure of campaign will be disastrous due to the homogenous nature of target market and consumers

Conclusion
• Researching into lifestyles, personalities and consumer mentality is resource-heavy and time/cost consuming. • Marketers and advertisers still exercise the implementation of psychographics with much success. This however is often to a niche market E.g. Porsche Cars • To achieve optimised results, psychographics should be used in tandem with other forms of segmentation and marketing/advertising tools

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