Gone are the days when demographics were the primary marketing targeting resource. Information available through demographic analysis cannot solely be accounted for marketing strategy since it’s based on correlation, not causality. Demographics continue to be important within the marketing craft, but without the context of psychographics they have limited usefulness.
Psychographics refer to a set of characteristics shared by specific demographic markets that indicate lifestyle choices, buying habits, attitudes or opinions.
The Theta-Lambda worldviews that I’ve developed are an example of psychographic characterisation consisting of two personality types. The typical Theta (Θ) personality seeks affiliation and control whereas the Lambdas (Λ), seek achievement and uniqueness as an ultimate end goal.
As another example, SRI Consulting Business Intelligence classifies luxury consumers into three segments based on psychographics:
- Luxury as functional: This segment is composed of consumers who buy luxury products for their superior functionality and quality. They usually involve themselves in a longer decision making process in order to make rational and logical decisions, rather than emotional or impulsive ones.
- Luxury as reward: This segment purchases luxury goods in order to showcase their achievements. They are motivated by their desire to be successful and demonstrate this to others. They usually purchase ‘smart’ luxury that demonstrates importance while not leaving them open to criticism.
- Luxury as indulgence: This group’s purpose for luxury goods is to self-indulge. They are willing to pay a premium for goods that express their individuality. They enjoy luxury for the way it makes them feel, therefore have a more emotional approach to purchases.
The understanding of psychographics plays an important role within the luxury industry. Although there is no standard definition of luxury or classification of consumer psychological profiles, by understanding the importance of psychographic analysis, one can constantly redefine and refine the term ‘luxury’ in relation to individual customers’ views. By engaging in this analytical process, marketers are able to tailor a product and the marketing message in order to appeal to customers’ desires and motivations.
Luxury marketers should make note that the luxury consumer is always looking for newer ways to satisfy his/her continuously changing needs. Hence, the need to keep a close tab through insightful and concurrent psychographic research is of prime importance.