Psychographic Vs Demographic Segmentation

After careful consideration, analysis, and spending a reasonable amount of time and money on marketing research, we identify a substantial and actionable demographic segment. We have in our mind that this group of people needs our product and like a messiah, our product will make all their problems go away. After choosing proper design elements that will convey all the benefits of the product and appropriate launch time, we sit with our fingers crossed, holding our breath to see the sales rocket.

But it doesn’t take off as expected, and as we know, 95% of products fail in the first year of their launch, and there are approximately 30000 new products launch every year. Now there may be many reasons of the failure like the product didn’t perform as expected, slow economy, etc. but there is a chance that we didn’t understand segmentation and targeting in this new world of digitization

We have traditionally defined a target based on age, income, gender, etc. that are demographic of the segment, but we should also give importance to psychographic segmentation. When demographic segmentation says, ‘who is the buyer,’ psychographic tells ‘why are they buying.’

Although it is complicated to identify psychographic segments due to its subjective nature like values, beliefs, motivations, etc. as compared to demographic segmentation where traits are quantifiable.

For, eg. A meal kit delivery service like HelloFresh may only segment a population based on age, income, location, etc. If they look at psychographic data, they will discover that people should be health-conscious, fresh food enthusiasts to put in the effort to cook the food. Here come the attitude, interest, and beliefs towards the healthy option.

As marketers, we should see the importance of both types of segmentation and incorporate it during the initial market research process to minimize the chances of the product to fail. It will help us to

  1. Formulate strong marketing communication  
  2. Outperform competition
  3. Build customer loyalty

Developing a marketing plan keeping these points in mind will not only result in successful marketing but also help a marketer detect a segment that has similar attributes.

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