| nder what the difference is between demographics | | | | 1980 by Arnold Mitchell. Mitchell’s system |
| and psychographics? | | | | placed consumers into one of 9 lifestyle clusters |
| In a nutshell, demographics allow marketers to | | | | which he referred to as VALS. Though his |
| describe who buys, but psychographics enables them | | | | original system has been modified throughout the |
| to understand why people buy. That is the crucial | | | | years, it was originally based on the splicing together |
| difference. | | | | of perspectives from two well-known social |
| Demographics are observable measurable segments | | | | scientists, Abraham Maslow (psychologist) and David |
| of a populations characteristics such as age, family | | | | Riesman (sociologist). |
| size, gender, race, ethnicity, income, and education. | | | | Today instead of directly referring to the original |
| These segments have long been used to create | | | | VALS system, many marketers segment using |
| consumer profiles out of any given population. A | | | | generational names such as Baby Boomers, Gen X |
| demographic segment however does not take into | | | | and Gen Y. |
| account the important of one’s culture on | | | | With psychographics, once the larger lifestyle |
| ones behavior. | | | | segments are determined, the market researcher |
| Continually evolving, the effects of culture on | | | | must then ascertain which segments are producing |
| consumer behavior have long held great depth and | | | | the bulk of customers for a particular product. This |
| breadth. In essence understanding a culture is a lot | | | | action follows an old business rule, that of the 20/80 |
| like putting your finger on the pulse of a | | | | split. For those not familiar with the 20/80 rule, in |
| society’s personality. It is an important | | | | marketing the rule dictates that 20% of a product or |
| element in diagnosing the overall health of any | | | | services’ users accounts for 80% of the |
| marketing plan. | | | | volume of the product or service sold. To better |
| Unlike demographics, psychographics uses | | | | analyze the life segment data and determine who the |
| psychological, sociological and anthropological factors | | | | products 20% are marketers look at things such |
| to determine how the market is segmented by the | | | | as patterns of usage and the attitudes of heavy |
| predilection of groups within the market as well as | | | | users towards the product. Not all heavy users will be |
| their reasons to make a buying decision, hold a | | | | the same. It is well known that different people have |
| certain point of view or employ a medium in a | | | | different reasons for doing the same thing. It is the |
| particular way. It was developed circa 1960’s | | | | market researchers job to use what they learned |
| and 1970’s as part of an effort to address | | | | from both demographic and psychographic research |
| the shortcomings of relying purely on demographics | | | | to better understand those various reasons. |
| to create consumer profiles. It took the information | | | | In conclusion, in order to be successful in |
| gleaned by the broader demographic segmentations | | | | today’s world marketers need to employ both |
| and further divided it based on cultural related | | | | demographic and psychographic data into their |
| markers such as values, activities, interests, opinions | | | | marketing plans. Though both are needed it is good |
| and overall lifestyles. | | | | to understand that the critical difference between |
| There are many segmentation systems used through | | | | demographics and psychographics is the type of |
| the psychographic research field. Perhaps the most | | | | information gathered. |
| renowned segmentation system was created circa | | | | |