Lifestyle and Psychographic segmentation

One of the major problems of demographic segmentation is its lack of richness in describing consumers for market segmentation and strategy development. It lacks color, texture, and dimensionally when describing consumers, and it often needs to be supplemented by something that fills in the bare statistical picture. Consequently, many firms are looking for a better way to define markets. One of the newest, most exciting and promising approaches to selecting target markets is lifestyle and psychographic segmentation. Although the concepts of lifestyle and psychographic are often used interchangeably, they are not equivalent but are complementary.

The term life style is not new, but its application to marketing has been rather recent. Alfred Adler coined the phrase style of life over 50 years ago to refer to the goal a person shapes for himself and the ways he uses to reach it. From our perspective, lifestyle can be viewed as a unique pattern of living which influences and is reflected by one’s consumption behavior. Therefore, the way in which marketers facilitate the expression of an individual’s lifestyle is by providing customers with parts of a potential mosaic form, they as artists of their own lifestyles can pick and choose to develop the composition that for the time seems best. Many products today are lifestyle products that they portray a style of life sought by potential users.

How does the concept pf psychographics relate to lifestyles? Unfortunately, it is not an easy matter to define psychographics because there is no general agreement as to exactly what it is. It has to do with mental (psycho) profiles (graphics) or the profiling of consumers’ psychological processes and properties. Thus, it pertains to the consumer’s cognitive style. One of the more precise statements about its nature is the following: psychographics is the systematic use of relevant activity, interest, and opinion constructs to quantitatively explore and explain the communicating, purchasing and consuming behaviors of persons or brands, products and clusters of products.

Thus, psychographics may be viewed as the method of defining lifestyle in measurable terms. It should be noted, however, that there is some question about the use of psychographic instruments as a precise measure of the lifestyle of the individual consumer. Nevertheless, the basic premise underlying lifestyle research is that the more marketers understand their customers, the more effectively they can communicate and market to them. In many cases the primary targets of such marketing efforts are heavy users. Heavy users have traditionally been looked at demographically, but by incorporating lifestyle characteristics the marketer obtains a better, more true to life picture of such customers.

The technique of Lifestyle Segmentation:

Lifestyle segmentation research measures (1) how people spend their time engaging in activities, (2) what is of most interest or importance to them in their immediate surroundings, and (3) their opinions and views about themselves and the world around them. Together, these three areas are generally referred to as Activities, Interests, and Opinions, or simply AIOs.

In a typical large scale, life style research project, questionnaires are mailed to members of a nationwide consumer panel. The questionnaires solicit traditional demographic information, average usage rates for as many as 100 different products, media habits, and respondents’ activities, interests, and opinions. Approximately 300 AIO statements may be included, to which respondents indicate the extent of their agreement or disagreement on six point Likert scales ranging from definitely disagree to definitely agree. The following are typical of the AIO statements employed:

I have more self confidence than most of my friends

Our family is too heavily in debt today

I am a homebody

I like to e considered a leader

I would be willing to pay more for a product with all natural ingredients

I am an impulse buyer

My family is the most important thing to me.

Where do AIO items originate? They may come from institution, hunches, conversations, research, reading and group or individual in-depth interviews.

Armed with these three sets of data (AIOs, demographics, and product usage) the marketer constructs user profiles. The analysis involves relating levels of agreement on all AIO items with the levels of usage of a product and with demographic characteristics. Typically a pattern emerges in which AIO statements cluster together that is similar respondents are grouped together from a lifestyle perspective.