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Psychographic Segmentation In Practice
Markets consist of buyers, and it is common sense that those
buyers differ in one or more respects. They may differ in how
they want a product delivered, where they want to buy it,
their available resources, their buying needs, or their
location. Any of these variables can be used to segment a
market.
Psychographic variables have been a popular
segmentation variable, particularly in consumer marketing of
fast moving goods. In psychographic segmentation, buyers are
grouped according to variables such as Social Class,
Lifestyle, or Personality. Marketers infer or
research differences in the approaches of buyers to their
products based some elements of these factors.
Social Class
In the US, the broad social classes are described as Lower
lowers, Upper lowers, Working class, Middle class, Upper
middles, Lower uppers, and Upper class. In Western societies,
class is determined mainly by personal income or wealth,
occupation, education, and family background. At face value
these would seem like factors that would have a strong
influence on the amount and form of consumption of a
particular product. The equivalent UK classification is:
A Upper Middle Class
Upper managerial, admin, or professional
B
Middle Class
Intermediate managerial, admin, or professional
C1
Lower Middle Class
Supervisor, junior managerial, admin or professional
C2
Skilled Working Class
Skilled manual workers
D
Working Class
Semi- and unskilled manual workers
E
Subsistence
State pensioners, widows, casual workers
Certain product areas have been found that are
strongly influenced by social class and background. These
include cars, home furnishings, leisure activities, and
reading/media habits. There is convincing data to show
that social class is a good predictor of market behaviour in
these product categories.
There are several problems for the practical
marketer attempting to using these class distinctions:
1 They are fluid over time.
Particularly in post-industrial societies, the increase in
incomes in many of these categories has blurred the
differences between the classes. In addition, people are
defining themselves less in these terms than they did in the
past.
2 They are less discriminating than they were.
In the US, the majority of the population
describes themselves as middle-class, and while sociologists
may find it useful to produce sub-segments of this large group
of people, in practice this does not help marketing decision
making. So, the car brands purchased by upper, middle and
lower class people are certainly different. However, with so
many people in the middle class, this is not a useful
discriminating factor.
3 The world has moved on.
In post-industrial markets, everyone demands
and can often afford most of the products that are available.
There are still some exclusive brands around, but the trend
this century has been towards mass prestige - stylish brands
that are within the reach of most of the working population,
even at a slight stretch. Also, as markets globalise,
marketing directors need segments that will work globally.
This Anglo-Saxon view of society has no relevance in China or
India.
So Social factors may play some role in
psychographic segmentation, they can be of limited practical
use in consumer marketing.
See
We're all middle class now - London Times
Lifestyle Factors
Peoples interest in various products can be
determined by their lifestyles, and indeed people can often
express their lifestyles through the goods that they consume.
There are several companies who conduct large scale surveys of
consumers and then predict the lifestyle classification of
people by the postcode in which they live. Here are some
examples.
The Insight Value Group has produced a
classification of people based on a survey of their outlook
and their social values. The classification draws heavily on
Maslow's hierarchy of needs. The groups are:
Self actualisers
Focused on people and relationships, individualistic and
creative,
enthusiastically exploring change, 'in a framework of
non-prescriptive
consideration for others'.
Innovators
Self-confident risk-takers, seeking new and different things,
setting
their own targets to achieve.
Esteem seekers
Acquisitive and materialistic, aspiring to what they see are
symbols of
success, including things and experiences.
Strivers
Attach importance to image and status, as a means of enabling
acceptance by their peer group, at the same time holding onto
traditional values.
Contented
conformers Want to be 'normal', so follow
the herd, accepting of their
circumstances, they are contented and comfortable in the
security of
their own making.
Traditionalists
Risk averse, guided by traditional behaviours and values,
quiet and
reserved, hanging back and blending in with the crowd.
Disconnected
Detached and resentful, embittered and apathetic, tending to
live in
the 'ever-present now'.
The National Readership Survey (NRS) in the UK
has had a similar classification of consumers in the past. I
has now moved to a more granular system which provides data
each of the following lifestyle attributes of readers.
Marital
status
Single, married, divorced, separated
Children
in household 0-23 months
2-4 years
5-10 years
11-15 years
16-20 years
21+ years
Education
Terminal education age, Highest Qualifications achieved
Tenure on
home
Owned outright
Mortgage/loan
Rented from Council
Rented from someone else
Rent free/tied house
Motoring
Numbers of cars, owned, company, leased
Travel
Number of holidays, destinations, business travel
Future
Plans
Getting married
Having a baby
Retiring
Moving job
Moving home
Buying a new car
Spending £500 or more on home improvements
For more details visit the
NRS site
If you are lucky enough to be marketing to
people getting married or retiring, then this data will help
you to target your customer segment very effectively through
media advertising. However for much of FMCG marketing, getting
effective data is a much more complex task and it requires the
collection and mining of masses of data to match heavy user
segments to various combinations of lifestyle factors.
In the UK CACI classify all 1.9 million
postcode using its ACORN tool. This tool looks at a
combination of the demographic and lifestyle characteristics
of the people living in a postcode and uses this data to
classify them. In all, ACORN examines 125 demographic
characteristics and 287 lifestyle variables to produce the
classification.
There are three levels to the classification.
At the highest level, the groups are:
Wealthy Achievers
Urban Prosperity
Comfortably Off
Moderate Means
Hard Pressed
The second level contains 3-4 sub-divisions,
and the third level can contain 6 further categories. To see
the full map visit the
CACI
website.
This is a complex classification and is
expensive to use, but it is very discriminating between
customer targets and it allows you to target customers and
prospects in a way which is unusually granular.
Personality
The concept of personality based segmentation
is that marketers endow their brands with a personality that
matches the personality of the consumer. There is some data
from the advertising industry that suggests that this has
worked successfully in categories such as cosmetics,
cigarettes, insurance and alcoholic drinks. However there is
also research form the car industry in the US to suggest
efforts to use personality segmentation have been a failure.
Brands do have personalities and they do
attract different types of people, but that is not
segmentation, targeting and positioning in the way that it is
generally understood and operated. There are several
proprietary tools available on the market that will segment
markets by personality type, but there is a general lack of
practical case studies to support the approach.
Conclusion
Psychographic segmentation has demonstrated its
use as a practical marketing tool in consumer markets. In
general more than one type of variable is used to build the
segments, and demographic data is usually needed, mixed by
psychographics. Social class can be a strong discriminating
characteristic when mixed with other factors. Large scale
schemes, like the ACORN classifications are extremely useful,
if expensive and complex. There is less convincing evidence
about the use of personality as a practical segmentation
variable. Psychographic segmentation suffers from the
drawbacks of any a priori segmentation. The most serious
problem is that consumers are constantly changing, so the
segmentation framework needs to change to keep up. For example
the ACORN classification above is different to the one that
they used four years ago. CACI have to conduct a significant
amount of research to update the model regularly. So what
happens when there is a significant change like the economic
downturn? Peoples attitudes and circumstances change quickly
and it is difficult for fixed segmentation frameworks to
accurately reflect this. On the other hand, behavioural based
schemes can capture the results of these changes as they
effect buying patterns, allowing the marketer to respond. Of
course behavioural segmentation is not practical in every
market and a priori methods such as psychographic segmentation
become the only practical approach.
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