Psychographics helps in identifying customersâ€™ state-of-mind and in piecing together a more useful profile of the target market. Hence, it is particularly useful in positioning/repositioning of products and in new product launch and brand extensions.
Firms incur deal of cost in new product launch. By incorporating psychographic analysis into its understanding of the consumers, the firm can increase its success rate in new product launch. Often, one key requirement in new product introduction and brand extension is locating the subtle variations that consumer desires. Psychographic analysis assists this task. Facts concerning buyerâ€™s needs, brand choice, motivations and attitudes, and perceptions and preferences, can be better explored via psychographic segmentation.
Segmentation of Car Buyers Based on Lifestyle
Throughout the 1990s, India was an evolving market for different types of passenger cars. Naturally, carmakers were discovering newer segments among car buyers.
One significant move has been the spotting of a segment based on lifestyle. By late 1990s, many car buyers in India were showing a preference for a station wagon, with suitable features. It was essentially a lifestyle-based phenomenon.
Passenger car firms in India, who were segmenting car buyers, using several relevant bases, including lifestyle came out with station wagons, as it suited the particular segment.
Several new offers emerged in the market in responses to the needs of this lifestyle based segment.
They included the following:
Ã˜ Baleno GLX Estate from Maruti.
Ã˜ Nubira Wagon from Daewo
Ã˜ Corsa Station wagon from GM.
Ã˜ Opel Swing from GM.
Ã˜ Siena Weekend from Fiat.
Among Psychographics, Lifestyle is a Major Base
Just as purchasing capacity/price preference forms a major base in demographic segmentation, lifestyle forms a major base in psychographic segmentation. Let us illustrate psychographic (lifestyle) segmentation, using the same example of passenger cars, which we used for illustrating demographic price preference segmentation.
The points above explain how passenger car firms in India came up with station wagons, based on lifestyle-based segmentation of car buyers.
To cite another example, Titan Watches segmented watch buyers on lifestyle, and created a sub-brand. Titan Fastrack .
Segmentation Based on Lifestyleâ€”Titan Watches
* When Titan created a sub-brand, Fastrack, under the Titan umbrella, it was on the basis of lifestyle-based segmentation.
* Titan felt there was an opportunity for a casual watch.
* Since Indian consumers do not believe in throwaways, the watch had to be fit for casual wear and yet serious. Fastrack filled the bill.
* For the new watch, Titan went in for a new positioning â€˜Fastrackâ€”cool Watches by Titan.â€™ It was a lifestyle-based positioning resulting from the lifestyle-based segmentation/targeting.
* Fastrack was targeted at the outdoor loving urban youth. To start with, 25 designs were offered. Later, Titan added Fastrack digital for this segment when digital was becoming the trend.
* Advertising, packaging and merchandising were all different for Fastrackâ€”young, vibrant and coolâ€”reflecting the lifestyle-based positioning.
* In fact, Fastrack was not the solitary attempt by Titan at segmentation with lifestyle as the base. The European Insignia watches, which were assembled by hand, with specifications that matched the Swiss counterparts, also belonged to this category. And, so did the Professional Sports Instruments 2000 range. The European Insignia was at the top of the premium pile, with prices ranging between Rs. 5,000 and Rs. 8,000. The Professional Sports Instruments 2000 range was meant for the sporty urbanite and was priced between Rs. 4,500 and Rs. 7,500.
Buyer Behavior Segmentation
Markets can be segmented on the basis of buyer behavior as well. Since all segmentation is in a way related to buyer behavior, one might be tempted to ask why buyer behavior-based segmentation should be studied as a separate method. It is because there is some distinction between buyersâ€™ characteristics that are reflected by their geographic, demographic and psychographic profiles, and their buying behavior. Marketers often find practical benefits in using buying behavior as a separate segmentation base in addition to bases like geographic, demographics and psychographics.
The primary idea in buyer behavior segmentation is that different customer groups expect different benefits from the same product and accordingly, they will be different in their motives in owning it and their behavior in buying it.