Business Report: Psychographic & Demographic Market Segmentation

This report analyzes the importance of psychographic market segmentation in relation to demographic segmentation, based on Alexandra Samuel's article "Psychographics are just as important for marketers as demographics." It discusses the concepts of market segmentation, target marketing, and brand positioning, emphasizing the value of understanding consumer behavior, lifestyles, and personality traits. The report argues that while demographic segmentation is useful for identifying target markets, psychographic segmentation provides deeper insights into why consumers make specific purchasing decisions. Examples from companies like Walmart and Harley Davidson illustrate the application of psychographic segmentation in real-world marketing strategies. The report concludes that both psychographic and demographic segmentation are equally important for developing effective and personalized marketing plans, and that marketers can use this information to enhance their competitive positioning in the market. Desklib provides a wealth of resources, including past papers and solved assignments, to aid students in their understanding of these concepts.

Running head: MARKETING SEEGMENTATION
Marketing segmentation
Name of the student:
Name of the university:
Author note:

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Executive summary
The aim of this report is to study the article titled “Psychographics are just as important for
marketers as demographics” by Alexandra Samuel. This article claims that psychographic
market segmentation is just as important as demographic market segmentation. The following
report analyzes in detail the contents of the article and performs a critical analysis of the
same. Personal opinions have also been provided with regards to the perspective present in
the article. Accordingly, recommendations have been provided in the report which point
towards direction for future research.

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Table of Contents
Introduction:...............................................................................................................................3
Discussion:.................................................................................................................................3
An overview of the topic........................................................................................................3
An overview of the article......................................................................................................4
Analysis of the reading...........................................................................................................5
Recommendations and conclusion.........................................................................................6
References:.................................................................................................................................7

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Introduction:
The main purpose of this report is to study various concepts related to market
segmentation, target marketing and brand positioning as mentioned in the article published in
Harvard Business Review titled, “Psychographics are just as important for marketers as
demographics”. The article, which was published by Alexandra Samuel, studies the concepts
of market segmentation which is the practice of segregating the target market based on
certain factors like demographics, psychographics, geographical factors and so on. The
process of psychographic segmentation includes segmenting the target market on the basis of
behavioral patterns, personality traits, common lifestyles and interests of the consumers.
Discussion:
An overview of the topic
Market segmentation refers to the process of segmenting or dividing the target
market of an organization into various groups, based on certain common characteristics
(Cross, Belich and Rudelius 2015). The main reason why marketers choose market
segmentation is because it would help in devising and implementation of effective marketing
campaigns and strategies (Solomon et al. 2014). The purpose of any organization is to sell its
products and services to a niche market. Division of the market into specific segments would
make it possible for an organization to come up with targeted market campaigns which
immediately appeal to the intended audience (Andaleeb 2016). The market segmentation
model comprises the four basic types of segmentation. They are – demographics,
psychographics, behavioral and geographic (Toften and Hammervoll 2013). Psychographic
market segmentation refers to the process of segmenting the market based on the common
and different traits, attitudes, interests, cultural and traditional values, personalities and the

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lifestyle patterns of consumers. The main advantage of psychographic market segmentation is
the detailed insight that an organization gains into the mind of the customer. This data could
later be used to develop specific and focused products and meet ever changing customer
demands (Ciribeli and Miquelito 2015).
An overview of the article
In the article, Alexandra Samuel claims that psychographics is just as important
as demographics when it comes to market segmentation. She argues that marketers are
accustomed to segmentation of the market based on age, gender, ethnicity and other
demographics. However, she claims that this information is not enough to meet the high
expectations of the customer. For any organization, it is important to understand the changing
attitudes and preferences of the customers, which is more subjective and consumer centric.
Such information would complement the data obtained from demographics and would enable
organizations to customize products and services based on consumer needs (Samuel 2016).
In order to prove her point, Samuel cites the example of the family tech markets.
Demographics could easily be used to understand why or which families are more likely to
purchase the goods and services. However, as Samuel’s research shows, the reason why
families purchase these goods would vary from family to family and would depend on a
number of factors. For example, some parents are more trusting of their children than others
and would be more open when it comes to purchasing technology for the whole family.
Samuel says that in the age of internet and social media, the importance of psychographic
market segmentation has become all the more poignant. There are a large number of online
marketing strategies and tools which organizations may make use of. Without psychographic
information, it would be nearly impossible for organizations to implement these marketing
tools. For instance, social media campaigns, search engine optimization and keyword

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targeting are just some of the options available which would help a company directly
communicate with this target audience. Inability to understand customer needs and demands
would put the organizations at a competitive disadvantage and would adversely affect its
brand positioning as well.
The article emphasizes mainly on the theory of psychographic segmentation. In
order to segment customers on the basis of psychographics would entail data on the conscious
and sub conscious beliefs, traits, priorities and motivations of customers. The process of
psychographic segmentation draws heavily on behavioral and also social sciences in order to
understand the decision making process of customers.
Analysis of the reading
Based on a personal opinion, I would like to say that the article by Alexandra Samuel
is indeed a good article with strong viewpoints and opinions which would aid modern
marketers. The article is also in compliance with the theories and concepts studied in
the module. In very simple terms, the article explains that psychographic segmentation is just
as important as demographic segmentation. Most books and theories suggest that segmenting
target audiences on the basis of demographics is more important. It is mainly believed that
segmenting the audience on the basis of gender, age and other such attributes would be more
beneficial because these attributes have an impact on the buying behavior and patterns of the
customers. However, this article asserts that psychographics is just as important. Instead of
generalizing customers on the basis of ethnicity, gender and age, it is important to gain
insight into the individual behavioral patterns of customers. This would enable organizations
to personalize service delivery to customers as well (Park and Jang 2014).
This can be better explained with the help of three examples. Walmart is one
company that makes use of psychographic segmentation. According to the marketing

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executives at Walmart, it is more important to study the lifestyle of customers since it would
help them gain insight into buying behaviors (Valentine and Powers 2013). Brands like
Walmart use lifestyle market segmentation to target middle class individuals who are more
inclined towards saving money. Some companies also segment the market based on the
personalities of the customers. For instance, Harley Davidson has a very specific niche
market. The company targets masculine, macho men who have a comparatively rough
lifestyle. Based on the personality of the customers, the marketing strategies would be
segmented. Some brands like Longines and other luxury brands would use psychographic
segmentation to understand what factors would trigger customers to buy these products. For
instance, certain customers would be more inclined to buy products which would elevate their
social class.
Recommendations and conclusion
Therefore, it can certainly be asserted that psychographics in market segmentation is
just as important as demographics. It would however be wrong to claim that one category of
market segmentation is more important than the other. This is mainly because both
psychographic and demographic market segmentation deal with distinct aspects of customer
behavior. While demographic market segmentation would highlight the niche target market
for a specific product or service, psychographic market segmentation would analyze why
these customers buy the product or service in question. As a matter of fact, both forms of
market segmentation are equally important (Hess and Doe 2013). It is usually believed that
demographics would be more important than psychographics. However, as this article states,
the latter is just as important. This information can further be used by marketers to gain
deeper insight into the factors that affect the customer buying decision and develop marketing
plans accordingly.

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In conclusion, it can be said that a close analysis of the article titled “Psychographics
are just as important for marketers as demographics” by Alexandra Samuel highlights the
fact that psychographic segmentation in market is equally beneficial to marketers. Simply
gathering customer data based on certain generalized attributes like age, ethnicity and sex
would be insufficient. Such data would enable marketers to simply understand who their
target market is. However, customers should not be generalized. Each customer is unique
with their own set of demands and expectations. It is equally important to gain insight into
what provokes a customer to buy a certain product or avail of a specific service. Such
information would not be possible without psychographic segmentation. This could further be
utilized by marketers to enhance their competitive positioning in the market.

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References:
Andaleeb, S.S., 2016. Market Segmentation, Targeting, and Positioning. In Strategic
Marketing Management in Asia: Case Studies and Lessons across Industries (pp. 179-207).
Emerald Group Publishing Limited.
B. Valentine, D. and L. Powers, T., 2013. Generation Y values and lifestyle
segments. Journal of consumer marketing, 30(7), pp.597-606.
Ciribeli, J.P. and Miquelito, S., 2015. Market segmentation by psychographic criteria: an
essay on the main psychographic theoretical approaches and its relationship with
performance criteria. Visión de Futuro, 19(1), pp.51-64.
Cross, J.C., Belich, T.J. and Rudelius, W., 2015. How marketing managers use market
segmentation: An exploratory study. In Proceedings of the 1990 Academy of Marketing
Science (AMS) Annual Conference (pp. 531-536). Springer, Cham.
Hess, M. and Doe, P., 2013. The Marketer's Dilemma: Focusing on a Target or a
Demographic?: The Utility of Data-Integration Techniques. Journal of Advertising
Research, 53(2), pp.231-236.
Park, J.Y. and Jang, S., 2014. Psychographics: Static or dynamic?. International Journal of
Tourism Research, 16(4), pp.351-354.
Samuel, A 2016, 'Psychographics Are Just as Important for Marketers as Demographics',
Harvard Business Review Digital Articles, pp. 2-4, Business Source Complete.
Solomon, M.R., Dahl, D.W., White, K., Zaichkowsky, J.L. and Polegato, R., 2014. Consumer
behavior: Buying, having, and being (Vol. 10). London: Pearson.

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Toften, K. and Hammervoll, T., 2013. Niche marketing research: status and
challenges. Marketing Intelligence & Planning, 31(3), pp.272-285.