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