An overview of the article
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.
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 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).
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).
Analysis of the reading
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 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.
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).
Conclusion
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 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.
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.
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.
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.
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.
Toften, K. and Hammervoll, T., 2013. Niche marketing research: status and challenges. Marketing Intelligence & Planning, 31(3), pp.272-285.
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