Psychographic Segmentation: Opportunities and Challenges
There are four major types of market segmentation; geographic segmentation, demographic segmentation, psychographic segmentation, and product-related segmentation. Of the four types of market segmentation, psychographic segmentation is the only one that provides a listing of consumers who share similar attitudes. This information can be extremely valuable to marketers, especially when used in conjunction with demographic information.
Psychographic segmentation is defined as a “market segmentation strategy whereby the intended audience for a given product is divided according to social class, lifestyle, or personality characteristics” (ALLBusiness). Psychographic segmentation presumes that consumers who have a similar social class, lifestyle or personality should be marketed to as a group. Psychographic lifestyle segmentation groups individuals who have similar attitudes, interests, or opinions (known as AIO).
Bill Gerba, the CEO of Wirespring (a digital signage company), states that “savvy marketers are successfully employing psychographic techniques to communicate values, ideals and opinions to the right group of shoppers” (Wirespring, 2006). An outstanding example of this is a company called CoMedia Corporation. CoMedia Employs a psychographic technique they call CPG, which stands for Concentric Psychographic Groups. CPG is similar to niche marketing, but defines a market by its psychographic habits instead of conventional demographics (CoMedia).
The travel industry is another example of the opportunity for marketers to successfully employ psychographic techniques to reach what has become a very diverse consumer group. Customization is becoming the name of the game when it comes to travel. There are a growing number of psychographic characteristics that are of interest to travel marketers. For example, travel marketers have discovered a new psychographic method of determining a...