Psychographic segmentation considers the psychological aspects of consumer behavior by dividing markets according to consumer attitudes, beliefs, values, interests, opinions, lifestyle, and hobbies. It also focuses on personality traits such as introverted or extroverted behavior. Many of the variables used in psychographic segmentation are useful in and of themselves, but they become more robust when looked at in terms of a consumer’s lifestyle.
A consumer’s lifestyle refers to the ways in which they like to spend their time, money, and/or energy. Those interested in lifestyle segmentation want to know: What motivates consumers? What values do consumers have? What are consumer core beliefs? What are consumer attitudes? What drives consumers to make conscious and/or unconscious decisions?
For example, a small coffee manufacturer may want to know how coffee fits into a consumer’s lifestyle. They may be interested in knowing whether consumers have a positive or negative attitude about drinking coffee. For those consumers with positive attitudes towards drinking coffee the company may want to know how much coffee these people drink in a week. They may also want to know when they drink coffee during the day and on what days they drink coffee. The company may be interested in the time of day these consumers drink coffee and the form of coffee they drink (i.e., hot or cold). Do they drink hot coffee in the morning and then consume cold coffee in the afternoon and evenings? Why do they consume coffee in the morning? Is it for the caffeine content to give them a ‘boost’ or do they enjoy the aroma and the way it makes them feel? Do they brew their own coffee, or do they buy it on the way to or from work? Answers to these questions will help the company to determine how coffee fits into the consumers daily life. Knowing these answers will help the company to target those consumers most favorable to the products and services the company has to offer.
Firmographic segmentation is used primarily in the business-to-business (B2B) area to segment organizations. It considers organizational characteristics such as industry characteristics, company size, number of employees, customer base, geographical location, technological sophistication, and profitability. Just as with consumer segmentation, firmographic segmentation seeks to better understand the target companies in terms of their needs and wants.
Organizations conducting firmographic segmentation would seek answers to probing questions like: How many employees does the target company have? How many locations does the company operate from? What percentage of the market share in an industry does the company currently have? Are company sales in a growth phase, declining, or remaining relatively stable? Answers to these questions will help an organization to segment the industrial market so it can focus on those companies that are best suited to benefit from the organization’s products and services. For example, a small software company specializing in human resource solutions for small businesses may wish to segment the market based on company size in terms of the number of employees or they may focus on startups.