To enrich basic demographic and geographic profiles, advertisers use psychographic methodology, or lifestyle research. Such research aims to understand the current or likely future lifestyles of particular types of consumers for the purposes of profiling, selecting, serving and/or influencing markets.

Although practitioners regularly interchange the terms psychographics and lifestyles, a distinction between the two concepts is warranted. The term psychographics refers to the methods used in lifestyle research to profile markets. The term lifestyle refers to the pattern of living that shapes how and why people choose to spend their time, money and energy.

Market segmentation

Market segmentation, or the separation of the mass market into more meaningful clusters, is a fundamental marketing task. Within each cluster, audience members share common needs or lifestyles, and those needs or lifestyles trigger particular responses to certain marketing and advertising strategies. The shared traits within one market segment separate its members from those in other clusters displaying different needs, habits or preferences.

In the earliest attempts at market segmentation, demarcations were based on crude demographic and geographic variables such as age, income, gender, occupation, region, climate and ZIP code. Marketers began to realize, however, that such variables failed to explain certain differences in buyer reactions to various marketing mixes.

William Lazer's seminal 1963 article, "Life Style Concepts & Marketing," introduced the notion of lifestyle patterns as determinants of market behavior. As a result, lifestyle research was quickly embraced by advertisers.

In the early 1970s, William Wells and Doug Tigert grouped psychographic variables into three categories: activities, interests and opinions. Messrs. Wells and Tigert used questionnaires (known as AIO scales) to rank such activities as work, hobbies, entertainment, sports and shopping; family life, fashion and recreation were among the wider set of variables included under interests.

In the decades since those initial studies, psychographic research has progressed to collecting opinions concerning social and other issues of the day, future perspectives, self-perceptions, personality traits, politics, business and economic climates, confidence in the economy, personal outlooks on relevant conditions, products, culture and other factors.

Applications

Knowledge of lifestyles factors into creative advertising strategy and media planning. Such knowledge also helps shape usage stereotyping (recommended situations, conditions and times when a product or service is especially useful) and other customer strategies. Microsoft, for example, when competing with America Online for Web surfers and advertisers, enhanced customer value by configuring its network to reflect the interests of particular consumers. Thus, Web users were linked quickly to advertisers serving their lifestyles.

In addition, psychographics is often applied by designers when shaping the form, outward appearance or packaging of products. Lifestyle profiles also influence consumer sales promotions, determining the types of premiums offered and the kinds of prizes given away through contests and sweepstakes. Distribution strategies, affinity and continuity programs, retail store image and ambiance, merchandising tactics and Web links are all grounded in lifestyle profiles.

In general, psychographic analysis assists researchers in tracking shifts in the consumer psyche and assessing the fit between the needs of a market segment and the company's capability to satisfy those demands.

In advertising, psychographic profiles can help identify ways to present particular brands to consumers so those persons will link the products with their lifestyles. Media planners consider lifestyle profiles when selecting the appropriate media for their ads.

Lifestyle considerations now permeate the full spectrum of marketing and ad planning activities, and the classes of variables included under the umbrella of psychographics have also expanded. Psychologists continue to produce a steady stream of creative techniques that probe deeper into the psychology of consumers.

Gathering data

Psychographic research is based on either general lifestyle dimensions or specific product-market measurements. General lifestyle research uses questionnaires asking a broad cross section of questions that need not be directly related to narrow product-market factors. This type of barometric research permits advertisers to track shifts in psychographic variables over time, identifying the precursors of market change. General studies are typically considered to be secondary data, since they are fielded first by research firms and later sold to advertisers.

Secondary data on lifestyles can also be found in books and government documents. For example, Lifestyle Market Analyst is a bound reference guide published by Standard Rate & Data Service that provides profiles of audiences defined in terms of lifestyles, demographics and geography.

Profiles of lifestyles are found in syndicated studies published by marketing research firms and advertising agencies. SRI International in Menlo Park, Calif., publishes "Values & Lifestyle Segmentation 2" (commonly referred to as VALS2), the most widely used psychographic tool for segmenting markets in the U.S. VALS2 segments the adult U.S. population into eight groups?actualizers, fulfilleds, believers, achievers, experiencers, strivers, makers and strugglers?and these profiles are based on differences uncovered in the attitudes, motivations, lifestyles and resources of the various sectors. Profiles, in turn, are used to predict the receptivity of different segments both to advertising messages and products or services.

Psychographic profiles are found in syndicated geodemographic studies as well. Typically, geodemographic studies (also known as psychodemographic studies) segment the mass market on such dimensions as geography, demographics and the media usage, lifestyle choices, possessions and purchasing behavior of consumers.

The "Sourcebook of ZIP Code Demographics," published by CACI Marketing Systems, contains statistics on all residential ZIP codes in the U.S. It provides information on population, gender, age distributions, ethnicity, households and families. CACI's ACORN Clustering System provides information on specific populations as small as block groups (250 to 550 households), blocks (25 to 59 households) and ZIP+4 groups (six to 25 households). The PRIZM system by Claritas Inc. and Strategic Mapping's Cluster PLUS 2000 divide U.S. neighborhoods into 62 and 60 clusters, respectively.

These types of studies are based on the notion that people living within the same local area are more likely to share characteristics and act in similar ways than individuals dispersed across the U.S. However, they also uncover real differences within neighborhoods.

Product market-based psychographic instruments are designed to investigate a narrow set of areas directly related to the product market of interest to a particular advertiser. Typically, these studies are considered primary research because they are conducted at the request of an advertiser and are designed around a narrow set of preordained variables specifically related to the product market in question.

A product market-based psychographic study is considered most meaningful to advertisers that seek specific insights into how and why a certain product category fits into the lifestyles of selected target audiences. For example Cahners In-Stat Group, a digital communications research firm, identified five potential customer groups for wireless telephone services that could not be distinguished on the basis of demographics alone.

Psychographic studies are conducted across the globe. Some advertisers have found success in global advertising (i.e., one message transferred uniformly across countries), but many others use psychographic research to adapt their messages to the cultural nuances of a country or region. For example, SRG/Nielsen identified several segments within the Chinese market: the "little emperor" group (one-child families), "Chinese yuppies" (professionals with disposable incomes), "working women" who use convenience products and the older, more conservative "practical minded" sector.