Wednesday, October 16, 2013

Forgo the Holy Grail

The religious and mythological uses of the term “Holy Grail” refer to bowls, cups, and other vessels. Beyond its religious and mythological meanings, “Holy Grail” refers to something difficult to obtain which is sought after because of its substantial significance. Retailers seek the Holy Grail of marketing segmentation which would allow them to get precisely the right sales pitch to each potential customer.
     Two possibilities are the demographic and the psychographic. Age, gender, and income level are demographic variables which influence purchase decisions. Young adults have different shopping habits from senior citizens. Women have different preferences than do men, and people living below the poverty line have distinctive budgets.
     Psychographics are people’s personal values and the shopping habits affected by those values. A psychographic analysis by Toyota found that, compared to prospects for GM and Ford large trucks, the Toyota large truck prospects were more likely to dine at steakhouses, shop online, own golf clubs, and subscribe to Runner's World. A collaboration of researchers at Columbia University, Advertising Age, and the Minneapolis Star-Tribune found that people most interested in buying fishing equipment also enjoy listening to Christian rock music and reading Southern Living. A psychographic analysis for the PowerBar sports nutrition line produced a recommendation that the products be displayed alongside personal grooming items.
     Researchers at University of Texas and Mindset Media set out to find whether demographic or psychographic variables are the Holy Grail. This was an ambitious journey. More than 45,000 consumers participated, and the consumer categories ranged from mobile phones to lottery tickets to newspapers to TV shows.
     The researchers found that demographics predicted better with television shows and psychographics predicted better with electronics purchases. More important than this, they were struck by how limited was the ability of either demographics or psychographics to accurately predict the best target marketing. The researchers’ suggestion is to use both in combination. When it comes down to it, demographics and psychographics are two ways of looking at the same thing. For instance, women generally have different personal values and shopping habits than do men.
     My suggestion goes beyond the idea of combining the two. I propose that you forgo the idea of demographics, psychographics, or the combination being ideal for retail marketing segmentation. Instead, get to know your customers as individuals whenever possible. That’s not the Holy Grail. Nothing is in retailing. But it’s as close as we’ll get.

Click below for more: 
Refine Your Psychographics 
Assess Shoppers’ Cloaks of Confidence

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