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

Psychographics and its Limitations

• 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

Traditional 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

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

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

The Limitations of Psychographics Segmentation

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

Two Assumptions

• 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

Homogeneous & Heterogeneous Society

• 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

Conclusion