A Study On Psychographic Profiling And Increased Sales Efficiency

Project and Seminar Material for Marketing

A Study On Psychographic Profiling And Increased Sales Efficiency

Chapter One


1.1 Background of the study

In market research and social science research in general, psychographic variables are attributes relating to personality, values, attitudes, interests, or lifestyles. Sometimes they’re referred to as activities, interest, and opinion variables [AIO]. Psychographics is any measurement and analysis of consumer’s mind that seeks to point out how they feel, think, react and reflect (Nelson 1971). According to some researchers, attempts to measure lifestyle are known as psychographics (Demby 1994). The term ‘lifestyle’ was first coined by Alfred Adler in 1929 and refers to an individual’s activities, interests and opinions (AIO) and the way they spend their time and money. Bauman (1990) opines that ‘lifestyles boil down almost entirely to styles of consumption’. Psychographic segmentation plays on the psychology of the potential customers and helps the seller determine how he must approach customers belonging to a particular segment (Ritu Narang 2010).

Psychographic segmentation should not be confused with demographic segmentation. Demographic segmentation primarily takes into consideration the age and gender of the targeted group of customers. It aims to group the market based on its similarities, whereas psychographics helps to understand how people are different. It’s about how people act and think and not about what they look like. The market segmented on the basis of demographic factors alone fails to capture the complete characteristics of the consumers, thus making it difficult for the marketer to draw a meaningful picture (Cooper 1984). The consumers in the same demographic segment possess different psychographic makeups. It has been widely recognized in marketing and retail literature that the measurement of attitude and beliefs enables marketers to predict consumer behaviour more accurately (Ritu Narang 2010). Thus the demographic and psychographic lifestyle approaches are highly complementary and work best together. People hailing from the same sub-culture, social class and even occupation follow quite different lifestyles. It is imperative to divide the market into various segments, and target each segment individually so as to maximize sales.

More customers are eagerly being openness to use new tech and new models of goods or services. Almost, using new models of goods or services are presenting variety group references which they have differences and similarities. Also, it can show effects of purchasing on customers’ personality and lifestyle as psychographic variables. So, the market segmentation can be conducted based on using psychographic variables to achieve better knowledge of customers and to distribute right products among the right people. Psychographic segmentation can portion customers to different classes of social and predict future needs and wants of people as marketing strategy.

1.2 Problem statement

As mentioned before Raaij and Verhallen (1994) demonstrated three approaches of segmentation that they are applied by similarities on responding consumers to specific situation of products or services. Those segmentations are forward, backward and simultaneous. Forward segmentation starts with relating to similarities of consumption products or services, backward segmentation starts by considering of similarities of consumers’ traits, and simultaneous is based on relationship between consumers’ traits and situation specific consumption patterns. It is distinguished that two categories of consumers’ traits which they are general and specific. The general characteristics are demographic, lifestyle and personality, whereas specific characteristics form with their attitudes, opinions, perceptions and preferences. Those characters are determined by analyzing consumer responses towards consumption of goods or services. However, the approaches of segmentations use relationship between values and behavioral response of consumers with their traits at the domain-specific level.

Orth et al. (2004) surveyed differences between perceived criteria and benefit sought for segmentation which uses lifestyle to emanate from benefit dimensions as values e.g. quality, price, social and emotional benefits. Also, support decisions and brand selecting have opposed with preferences, lifestyle segments, demographic and behavioral variables. Marketers consider to product consumption values as communication tools between product and consumers. In fact, product or service is considered as functional benefits, whereas brands are considered as consumer perceived positive and negative emotional benefits. Psychographic segmentations can identify costs of time and money.

1.3 Purpose of the study

The purpose of this study is to examine the impact of Psychographic profiling on sales efficiency. Specifically the study:

  1. To determine what patterns the Psychographic profiling can take and how effective are these pattern.
  2. To highlight on the various types of Psychographic profiling.
  3. To evaluate the effectiveness of Psychographic profiling through sales research.
  4. To suggest the ways and manners through which Psychographic profiling problems can be tackled and improved upon.

1.4 Significance of the study

TO PGDE/marketing students or would- be researchers, this will provide a pedestal upon which a better and improved research work can be build upon. To the employers and employees some of the suggestion made in this write up will be of immense benefit to them in terms of strategies development and increase in sales volume and profitability through the various strategies that is suggested. To other library users, this will be of immense benefit to them

1.5 Study hypothesis

The study hypothesis is:

Ho 1: There is no significance difference in the mean responses of staff on types Psychographic profiling and its effectiveness.

Ho 2: There is no significance difference in the mean responses of staff on Psychographic profiling media and factors to consider before choosing a profiling type.

1.6 Scope and Limitations of the Study

The study scope is limited to investigating the impact of psychographic profiling on sales efficiency. Limitation faced by the research was limited time and financial constraint

1.7 Organisation of study

The study is grouped into five chapters.

  • Chapter one gives an introduction to the study.
  • Chapter two gives a review of the related literature.
  • Chapter three presents the research methodology;
  • Chapter four presents the data analysis as well as interpretation and discussion of the results.
  • Chapter five gives a summary of findings and recommendations.

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