MARKETING MANAGEMENT

PROJECT TITLE: PSYCHOGRAPHIC SEGMENTATION AND LIFESTYLE ANALYSIS OF YOUTH (GENTLEMEN)

LITERATURE REVIEW

SUBMITTED TO:

PROF. DEVASHISH DAS GUPTA

GROUP 6 - SECTION A PREYAS THACKER DEVANSHU KAKKAR AATMIKA RAGHAVENDRA M BHARATHI KHERA SABYASACHI ROUT PRIYANK KOTHARI PGP29026 PGP29031 PGP29036 PGP29041 PGP29046 PGP29051 PGP29056

INTRODUCTION The Word Web dictionary defines Lifestyle as a manner of living that reflects the person's values and attitudes. Also, the dictionary defines Psychographic as study of people's attitudes, lifestyles etc. for use in marketing. Thus in effect, it can be said the Psychographics can be said to be a study of lifestyles. The paper, however, suggests that there is an inconsistency in the modern definitions and operationalization of lifestyle. It further suggests that lifestyle is erroneously mixed with the word Psychographics. The modern definition of lifestyle assumes that there is a positive correlation between the inner feelings (say thought) and overt behavior (say action). However, the inequity in thought and action is one implication that contradicts the above argument. So, when the market analysts who are analyzing consumption pattern for example, assume that the thoughts, values and attributes define the consumption pattern, they may not be correct. Market is a place where a wide variety of buyers and sellers interact. The market is huge and it is very difficult for the sellers to cater to the need of all the customers. Hence some sellers target a particular group of people and market the product which suits that group the best. This ensures maximum sale, profit and also most importantly customer satisfaction. In the article, Attracting Consumers by Finding out Their Psychographic Traits by Abduljalil Sarli & Huam Hon Tat, the writers have done a research on primary study about psychographic segmentation. Marketers study people based on their similarities and differences to choose a target group. It studies when, where and how do people want to spend their money. There are various parameters for doing a psychographic and demographic segmentation. The lifestyles and personality traits involve activities, interests and opinions (AIO). Some of the parameters are forward, backward and simultaneous analysis, value based emotions, modern and non- modern buyers, etc. The lifestyle emphasis has been put on them on the various situations of the people involved. They have also made a point about personality values being more important than demographic factors. They stress on how an external or internal locus of control effects decisions. Psychographic segmentation helps marketers to adapt to consumers needs and wants. Market Segmentation is therefore dividing the market into different groups or segments based of certain factors which helps maximize profit and satisfy the customer. The purpose of segmentation is the concentration of marketing energy and force on the subdivision (or the market segment) to gain a competitive advantage within the segment. This helps to focus on consumer markets rather than business markets. Market segmentation is widely accepted as the foundation for the development of marketing strategy. Segmentation analyses can help identify optimal target markets and can help guide the development of product, positioning, and messaging strategies to reach the target segments.

In todays market when the inflation is escalating, financial planning becomes very important for the social well-being of a nation. Without proper financial planning, it becomes very difficult for the households to meet the basic expenditure which includes food, health, shelter and clothing. This study is meant to find out the influence of personality traits, genders and course majors on decision making dimensions of risk aversions, cognitive biases and socially responsible investing (SRI) criteria among Generation Y undergraduates. The personalization in consumer patterns is a phenomenon which the traditional criteria like SEC (SocioEconomic Classification) are able to explain lesser than before, owing to an evolving society. The paper suggests that we need to include other variables like Lifestyle, in order for market segmentation to be done properly. The SEC criteria alone dont suffice due to an increasingly heterogeneous society. THE LITERATURE SEARCH: Different researchers have different views on market segmentation. One paper says a consumers choice and decisions are largely influenced by values, social relationship and cultural allegiance. Another highlights the fact that the youth market is a swiftly growing market. The youth have their own unique pattern of consumption and culture. An important question that arises here is that are the Indians becoming brand conscious. This depends on the relationship between economic development, rise in per capita income, growing consumerism and proliferation of branded products. In the article Examining the role of various psychographic characteristics in apparel store selection: a study on Indian Youth, by Ritu Narang, she talks about the contribution made by various psychographic characteristics while making an apparel store selection. India has a very high rank in the development of retail. The study was made on the students from Lucknow, a tier two city. The study led to the division of these people in segments like: Confused Followers, Disinterested Introverts, Get Going Adopters and Independent Life Lovers, and the differences between these segments were found to be statistically significant. The objective of her paper is to identify various segments and then looking at how these segmentations influence the choice of the youth while choosing apparel stores. The study has used three statistical measures and has reached the conclusion that the youth are getting highly motivated by the brands and labels too in India. The study is restricted to making store choices in India as of now. The paper (Lifestyle and Psychographics: a Critical Review and Recommendation) further recommends the following approach as an alternative: Step 1 (Lifestyle Segments): Realize that same lifestyle means having same overt behavior. The segmentation can be done on basis of search, shopping and consumption behavior. Step 2 (Cognitive Style Segments): Sequential segmentation on basis of consistencies in cognitive behavior, including values, to precisely target firms marketing strategy.

The market segmentation can be done on various factors. They are: 1) 2) 3) 4) 5) 6) Geographical Behavioural Demographic Psychographic Distribution Media

These factors have various subdivisions based on which the research is carried out. The most important one is the Psychographic analysis. For the youth, these psychographic analyses are carried out mainly on their lifestyle and personality. A way to achieve a good psychographic segmentation is to first identify the statements that are more important (i.e., the statements that tend to explain or cause specific consumer behaviours). Factor analysis is a powerful technique to identify the statements and groups of statements that account for much of the variance in the attitudinal data set. Directly, and indirectly, these techniques can help you identify the most important statements (i.e., attitudes, perceptions, values). Then these statements become the inputs to the final segmentation analysis. Factor and cluster analysis are techniques to improve knowledge of market segments. The purpose of these articles is to introduce and explain the use of factor, cluster and discriminant analysis in a case of empirical psychographic segmentation. : Market segmentation requires an exhaustive survey of the population by preparing questionnaire based on some variables. Now further steps require mathematical and statistical tools to make the process more accurate and efficient. It is very difficult to take all those variables into account because many variables might be interdependent on which makes the study of some variable redundant. It can also increase the amount of time and money spent on the process. The research paper seeks to find whether psychological motivation promoted via public selfconsciousness and materialism has any impact on the United States young consumers compulsive buying behaviour. It is suggested that the young consumer is influenced by public self-consciousness indirectly through materialism. In order to build the social identity, they show tendency of increasing consumption. Increased consumption is seen as a way of building social identity. However, when increase of consumption is used repeatedly as the primary tool of building social identity, it results in a compulsive buying behaviour. It has been urged the future researchers in this regard to acknowledge the fact the present generation of young adults is far less a homogenous market compared to its predecessors, and so a larger sample be used to obtain conclusions. Today many companies are focusing on the marketing of their global brands. If the same marketing strategy can be adopted globally, it can save a lot of expenditure of customizing advertisement according to the different geographical regions. So this study mainly focuses on the effectiveness of

global advertisement on culture of India. India is chosen here because it provides vast mix of population with different religions, ethnicities, lifestyle, attitudes and behaviors. Specially, with respect to India, the retail boom brings tremendous opportunities for foreign as well as domestic players. The changing lifestyle of the Indian consumer makes it important for the retailers to understand the patterns of consumption. The changing consumption patterns brings changes in shopping styles of consumers and also the factors that drive people into buying at stores. It uncovers the motives that drive young people to shop in stores or malls. In an analysis of The subjective norm and lifestyle variables predict innovation in infused soft drinks. The results from the moderated mediation analyses indicate that both male and female young consumers prefer the innovation of drinks to suit tastes and be produced locally. The drinks should also have health and well-being benets. Lastly, for effective soft drinks advertising, it is recommended that beverage marketers should use trendy components in promotions. Peoples motives for shopping are a function of numerous variables, many of which are unrelated to the actual buying of products. Literature in marketing and related behavioural sciences suggests a breadth of consumer motives for shopping. A study conducted on Australian youth respondents examines what determined their choice of banks. It also looked at what factors influence their satisfaction, loyalty, and behavioral intentions with regard to their banking needs. Differences were found among the four clusters in terms of their interest in financial services, their usage, and their likelihood of switching. In addition, determinants of satisfaction, loyalty, and behavioral intention were primarily affected by satisfaction with employees and services rendered. The results indicate that as young people reach certain milestones, their needs become more multifaceted. Consequently, banks should be aware of these changing needs. FINDINGS: First, psychographic research, which deals with analysis of AIO, or values, or cognitive processes, furthers the cause of understanding the link with overt behaviour and should continue. Both lifestyle and psychographic research should continue parallel. Second, psychographic segmentation is a legitimate way to segment a market, if we can identify the proper segmentation variables (or lifestyle statements, words, pictures, etc.). Qualitative research techniques (focus groups, depth interviews, ethnography) become invaluable at this stage. Qualitative research provides the insight, the conceptual knowledge, and the consumers exact language necessary to design the segmentation. Also, The basis of market segmentation: a critical review of Literature by Sulekha Goyat deals with finding the best method for consumer market segmentation. It tells us about the chain of right marketing strategy to right marketing objectives to corporate objectives to finally gaining an edge over competitors. The strategy of dividing a market into homogenous groups is known as segmentation. It helps in concentration of marketing energy and force. After defining segmentation, she has described

the various steps involved in doing segmentation. The first requisite is choosing a product or a market. The second is defining the parameter for segmentation. The third step is defining the segmentation variables that are to be used. Fourth step according to her is creating a profile and then doing an analysis. Fifth step is selection of markets to be targeted. The final step is choosing the right marketing mix to bring maximum satisfaction to all parties concerned. She describes the basic requirements of segmentation as measurability, accessibility, stability and substantiality. After going through the mentioned three bases, she studies the different empirical and theoretical evidences in favour of market segmentation. For any marketing product to launch, market segmentation is very important. That is when the target market can be decided and proper marketing strategies can be framed to target that group and sell the product. Even for any existing product, market segmentation is very important as it will give us an idea about the changing patterns in the demands of the target group. Segmentation based on psychographic factors provides a much deeper insight into the consumer behaviour. Factor analysis should be employed into the study so as to reduce the number of variable to a few manageable. This is because some interdependent variables will unnecessarily increase the burden. Next step would to understand the patterns of demand for the product in the market. This can be done on one to one basis in which the behavior of each of the consumer is analyzed separately. But for that more time and money will have to be spent. So rather practically, it is feasible to form clusters, with the objects in the same cluster being as much similar as possible while the objects in one cluster should differ from other clusters. Cluster analysis and discriminant analysis will help this research. Such multivariate analyses have both gained popularity as well as faced criticisms stemming from the fact that the availability of computers makes the task easy and doesnt require much knowledge of the underlying theory. In is addition, it is more of an art than science. So that it can be easily abused. But still many companies have successfully put such analyses into the practice. Third, in the AIO (Activities-Opinions-Interests) classification: Activities: Although activity can mean any job performed: obligatory or voluntary, here, the usage of the word is confined to the activities performed in free time. Interests: The things of relative importance in the immediate environment. Opinions: The view of oneself and the world around

Fourth, the youth market is divided into various groups each having their own potentialities. Generally, this division is age based. Young people tend to develop brand loyalty at a very tender age. Also a very important finding is that they are able to influence purchases and decision making of others. Thirdly, they act as a change agent by influencing the society at large. They are independent and have their own set of rules of social behaviour. Lastly, their expenditure is also deciding factor. The eight major consumer characteristics are:

1) 2) 3) 4) 5) 6) 7) 8)

price conscious/value for money consumer; perfectionist/high quality conscious consumer; brand conscious/ price equals quality consumer; novelty/fashion conscious consumer; habitual/brand loyal consumer; recreational /hedonistic shopping consciousness; impulsive/ careless consumer; and confused by too much choice consumer

The various methods are: 1) Measurement: The present study seeks to measure the consumption styles of young consumers by using the CSI scale developed by Sproles and Kendall. 2) Confirmatory Factor Analysis: Before carrying out CSI, CFA was done to identify the different consumption profiles. There are different kinds based on these analysis. Those who look into the brand, those who look into price and those who are more bothered about the quality of the product. There are also indifferent. Consumers who do not like shopping all that much. This boils down to four main classifications and they are: 1) 2) 3) 4) Recreational seekers Brand conscious Indifferent Quality seekers

About the brand value in India, brand purchase in India varies across product categories. At present, consumer knowledge and use of foreign brands is low, and Indian consumers are price-sensitive. Indian consumers are experimenting with brands and would like more foreign brands to enter the Indian market. Modern retail is not spread equally across the country. It started in the south of India and large metro cities and has spread to smaller cities. In Global youth culture: A trans-disciplinary perspective by Jennifer Gidley, the author talks about the fact that 1 billion plus youth form a global village. She uses the U.N. definition of youth saying youth are the people from fifteen to twenty- four years of age. She talks about the various threats and opportunities provided to this group by globalization. She has also studied the role of the media as a global culture amplifier. What happens is that the singular voices become a common voice. Youth play an important role in dual career families with high disposable incomes. The results reveal that young consumers, tend to shop not from a utilitarian perspective, but from a hedonic perspective. Their key interests include getting product ideas or meeting friends. They also view shopping as a means of diversion to decrease depression or break the monotony of daily routine. In addition to this, they also go shopping to have fun or just browse through the outlets. Sensory

stimulants such as the background music, odour, or feel of the products also play an important role in shaping the shopping exercise of these individuals and could set off impulse buying activity in them. Also, this age category indulges in economic shopping and then the sensory stimulants are not able to sway them away. This requires a focus on the economic criteria used at the time of shopping. In Indian context, organised retailers from all around the globe are on a spree to set up shop in the Indian market. This has intensied the level of competition amongst the players and the Indian consumer has had the opportunity to experience a rapid exposure to brands. The number of working women is increasing in India. It accounts for the considerable increase in disposable income plus rising personal consumption for the dual-income family. Private consumption accounts for a large portion of the Indian economy. Indias transition to a high-growth path is very much an outgrowth of the emerging consumerism of one of the worlds youngest populations. On the other hand, the consequent time poverty necessitates changes in market basket composition and patterns. Hence, the objective of this paper is to understand the key motives behind shopping activities of the youth. Conscientiousness, openness and agreeableness are the main personality traits which were found to have a significant influence influences risk aversion, cognitive biases and SRI respectively and thereby on the financial planning. Gender and course majors taken were not very significant in financial decision making. Findings suggest that existing marketing tools such as integrated marketing communications and branding can be used in new ways to increase the perceived congruence between the generation Y consumer and the brand. This is necessary for creating a relationship with the brand leading to increased brand loyalty. The paper is important for marketers by indicating key focus areas for influencing brand loyalty of generation Y consumers, and tailoring loyalty programs. In addition, this paper gives marketers insight into how congruency between their brand and generation Y consumers can be created to develop a relationship between the brand and the customer and positively influence brand loyalty. CRITICISM AND REASONING In the article, The generalizability of psychographic segmentations, of Psychographic market segments across geographic locations, by Jack A. Lesser & Marie Adele Hughes, the authors have answered questions against the credibility and reliability of segmentation. The research data has been taken from across various markets and geographies and different methods for collecting data have been used like primary as well as secondary. The number of respondents questioned was more than six thousand. The number of people was first divided on the basis of pattern of life initially and then geographically. To do data analysis, first market clusters and cluster profiles were developed. The second step was checking the reliability of the data by putting it through various tests. The third stage in the process was assessing how rules were classified. The fourth step was analyzing the clusters formed across various markets. The fifth step that would come is identifying and evaluating the prototype segments across the markets. This led to the finding of seven types of shoppers found across the entire geography: inactive shoppers, active shoppers, service shoppers, traditional shoppers, dedicated fringe shoppers, price shoppers and

transitional shoppers. The various shopper types were found to be similar after the segmentation and the conclusion was arrived at by the help of a questionnaire. Overall, two important factors were uncovered. First, the highly internally validated dimensions used in the experimental research can be applied empirically. Second, the use of these variables could provide a better assessment of consumers demands for product innovation. Bibliography Title Spending their way to adulthood: consumption outside the nest Banking on the youth: the case for finer segmentation of the youth market Segmenting young adults through their consumption styles: a cross-cultural What is cool? Operationalizing the construct in an apparel context Attributes of young consumers' favourite retail shops: a qualitative study Between two worlds: critically exploring marketing segmentation and liminal consumers Implementation of a multi-brand strategy in action sports The influence of public self-consciousness and materialism on young consumers' compulsive buying Effectiveness of global advertisement on culture of India: an emerging market Determinants of customers' online purchase intention: an empirical study in India Encouraging brand loyalty in fickle generation Y consumers Are Indian consumers brand conscious? Insights for global retailers Author(s) Sarah Penman, Lisa S. McNeill Thomas Foscht, Cesar Maloles III, Judith Schloffer, Swee-Lim Ulun Akturan, Nuray Tezcan, Alexandra Vignolles Rodney C. Runyan, Mijeong Noh, Jon Mosier Toby C.Y. Yip, Kara Chan, Evon Poon Kevina Cody Chrysostomos Apostolopoulou Yingjiao Xu Giannoulakis, Artemisia

Rajesh

Kumar

Srivastava

Arun Thamizhvanan, M.J. Xavier Violet Lazarevic Arpita Mukherjee, Divya Satija, Tanu M. Goyal, Murali K. Mantrala, Shaoming Zou

Dimensions of Indian culture, core cultural Saikat Banerjee values and marketing implications: An analysis Accessing opportunities in apparel retail sectors in India: Porter's diamond approach Uncovering retail shopping motives of Indian youth Young Consumers: Insight and Ideas for Responsible Marketers Young consumers' views of infused soft drinks innovation Manveer Mann, Sang-Eun Byun Pavleen Kaur, Raghbir Singh

Ken Yien Leong Joyce Koe Hwee Nga

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Jake Ansell, Tina Harrison and Tom Archibald Richard L. Divine and Lawrence Lepisto Thablet A. Edris and A. Median

Chin-Feng

Lin

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