Integrating Psychographic Profiling For Improved Sales. A Case Study Of Shoprite
₦5,000.00

INTEGRATING PSYCHOGRAPHIC PROFILING FOR IMPROVED SALES. A CASE STUDY OF SHOPRITE

CHAPTER TWO

REVIEW OF LITERATURE

INTRODUCTION

Our focus in this chapter is to critically examine relevant literatures that would assist in explaining the research problem and furthermore recognize the efforts of scholars who had previously contributed immensely to similar research. The chapter intends to deepen the understanding of the study and close the perceived gaps.

2.1 CONCEPTUAL FRAMEWORK

Psychographic

Psychographics is the study and classification of people according to their attitudes, aspirations, and other psychological criteria, especially in market research it is a qualitative methodology used to describe traits of humans on psychological attributes. Psychographics have been applied to the study of personality, values, opinions, attitudes, interests, and lifestyles. Because this area of research focuses on activities, interests, and opinions, psychographic factors are sometimes abbreviated to 'AIO variables'.

Psychographics are applied to the study of cognitive attributes such as attitudes, interests, opinions, and belief, as well as the study of overt behavior like activities.

Psychographic studies of individuals or communities can be valuable in the fields of marketing, demographics, opinion research, prediction, and social research in general. Psychographic attributes can be contrasted with demographic variables (such as age and gender), behavioral variables such as purchase data or usage rate, and organizational descriptors sometimes called firmographic variables, such as industry, number of employees, and functional area.

Psychographic methods gained prominence in the 2016 US presidential election and the opposing campaigns of Hillary Clinton and Donald Trump, with the latter using them extensively in microtargeting advertisements to narrow constituencies.

Psychographics is the science of using psychology and demographics to better understand consumers (Kotler, 2010). Customers are classified into different groups on the basis of personality traits, Lifestyles, Values. People within same demographic group can exhibit different psychological profiles. When attitudes, motivations, personality characteristics and belief systems are analyzed statistically to determine groups with substantially different attitudes, the result is psychographic segmentation psychographic segmentation will help advertisers to target the most receptive audience for their message (Schiff man and Kanuk, 2008).

Psychographic Profiling

When a relatively complete profile of a person or group's psychographic make-up is constructed, this is called a "psychographic profile". Psychographic profiles are used in market segmentation as well as in advertising. Some categories of psychographic factors used in market segmentation include:

  • activity, interest, opinion (AIOs)
  • attitudes
  • values
  • behavior

Psychographic can also be seen as an equivalent of the concept of "culture" when it is used for segmentation at a national level

Psychographic Segmentation

Beatty, Homer and Kahle (1988) accomplished segmenting by “mirror approach” and using VALS and LOV process showed that measuring psychographic variables with ranking the values and identifying most important values. Beyond these, products or services are substantial of markets which can give value or personality according to consumers’ lifestyles and divide them along with their socio-status(Lin 2002).In 1994, Raaij and Verhallen segmented market substantially three approaches which they were forward , backward and simultaneous of relationships between consumer traits and situation of consumption patterns. Henderson and his colleague used empirical segmentation on the base of brand preferences in 1998, and Gralpois (1998) measured brand preference by loyalty and analyzed by Logit regression for clustering and estimated consumer satisfaction levels. Early 1990s, segmentation approaches were developed and formed by new ways, namely VALS, LOV, RVS (Rokeach Values Survey), APT (Association Pattern Technique), and mean-ends chain technique. In addition, Lin (2002) approved that combining segmentation variables like demographics and psychographics simultaneously can create precise information of sub-markets. Ahmad et al. (2010) presented that one of the best approaches for the better understanding customers is psychographic segmentation. Although the psychological traits are determined by lifestyles, personalities, values bounded dimensions; they are creating properly information consonant with Demographic characters. Since the researchers of marketing didn’t attain at the coincidence of psychographics definition, there is the greatest issues in the research marketing. In fact, psychographic segmentation is dividing mass market to specific submarkets that marketers can distinguish better own customers. In other words, psychographic segmentation is one of approaches to help marketers for two reasons. At first, it reveals homogenous submarkets. Next, it helps them to opting appropriate methods within target markets. The customers are portioned to groups at the market by psychographic traits (Kotler, 2009). Although, the consumers have different psychological needs and wants, the stakeholders and the investors are following opportunities from lifestyle or personality of consumers who are offered by goods and services properly. In general, psychographics is considered as measuring and analyzing some aspects of consumers’ feelings, thoughts, reflecting, lifestyles, personality and demographics. On the other words, it is giving tools to quantitative researches to measure psychological dimensions of customer situations or segmenting target market with common traits of consumer behaviors. Therefore, psychographic is based on internal traits of person or his/her lifestyle. Sometimes it is focused on specific area of consumer behaviors and sometimes on general issues. The variables of psychographics are chosen from standard criteria of lifestyles or personalities, and may be handmade. According to Beatty et al. (1988) psychographic criteria such as VALS, LOV, and values were measured difficultly. Each approach has own advantages and disadvantages to analyze clustering result as segmentation, but they can give precise information of consumer behaviors. Orth et al. (2004) surveyed differences between perceived criteria and benefit sought for segmentation, which use lifestyles to emanate them from benefit dimensions as value of quality, price, social and emotional benefits. They proved that support decisions and brand selecting have opposed with preferences, lifestyle segments, demographic and behavioral variables. Product consumption patterns are considered as communication of product and consumers by marketers. In fact, product or service is considered as functional benefits, whereas brand is considered as consumer perceived positive and negative emotional benefits. Psychographic segmentations can identify almost the expending levels of time and money. In other words, AIO levels of consumers confirmed useful information of lifestyles through each individuals as consumers who they how to do in their life, when and where spent their money and time. Tam and Tai (1998) applied psychographic segmentation at Chinese Female Markets in two phases which they were psychographic statements and improving typology of customers. Moreover, they stated that psychographic variables depend on time and circumstances of socio-economic situation and changeable. Also, a researcher should be applying rigorously existing similarities and differences among consumers.

Need for Psychographics

Over the past two decades 'psychographics' has received widespread attention in the marketing literature. Such prominence developed from the recognition that important demographic distinctions often simply did not exist in many product categories. Furthermore, even when they did, one could not intelligently decide how to attract any particular market segment unless one knew why the distinctions existed. Boote comments as follows - 'Interest in psychographics stemmed from the fact that consumers who shared common demographic characteristics may still have differed in their purchasing behaviour' (Boote, 1980 p 114).

Traditional Demographics

Traditionally marketers had used demographic data to develop market segmentation strategies and predict behaviour of individuals. There was, however, much disillusionment as to demographics' ability to define and describe segments and much less to predict consumer product or brand behaviour. (Yankelovich, 1964, p 83-90). In 1969 Barnett commented as follows 'Demographic analysis may be helpful for identifying market potential but it appears too insensitive for predicting specific brand choice' (Barnett, 1969). Wells, although recognizing the above limitations, was more concerned with demographics' poor descriptive ability - 'Demographics have been and continue to be extremely useful, but they are unsatisfying~ They lack colour. They lack texture. They lack dimensionality. They need to be supplemented by something that puts flesh on bare statistical bones.' (Wells et al, 1968). Clearly what was needed was to expand the traditional demographic measures into a more complete consumer profile.

Psychographics versus Demographics

With the birth of psychographics some marketers argued that psychographics had replaced the need for demographics in a segmentation study. In the authors opinion, this is, however, certainly not the case. It appears rather that marketers became dissatisfied with demographics as a means of predicting consumer behaviour so they sought other ways of defining and describing the target population (Boote, 1980 p 115). Psychographics is therefore frequently used together with demographics because of the rich descriptive detail they have provided researchers with for developing marketing strategies. (Lesser 1986 p 18-27) (Reynolds et al 1974, p 77) (Roscoe et al 1977 p 70-71) Ziff (1971 p 3) concludes as follows: 'In effect it has been understood that to attract or motivate a particular group of consumers it is necessary to know how they think and what their values and attitudes are as well as who they are in terms of their traditional demographic variables of age, sex, income, etc.'

Lifestyle

The concept of lifestyle patterns and its relationship to marketing was introduced in the early sixties by William Lazer. He defined lifestyle patterns as :'A Systems Concept -It refers to a distinctive mode of living in its aggregate and broadest sense... It embodies the patterns that develop and emerge from the dynamics of living in a society' (Lazer, 1962 p 140-151). In general, lifestyle reflects people choosing activities that represent the ways they wish to live. Marketers believed that different consumer's lifestyles should lead to differences in peoples consumption behaviours. Marketers therefore set out to measure consumer lifestyles primarily using a battery of Activity, Interest and Opinion questions (Wells et al, 1971 p 27-35). At the same time that lifestyle research was developing in marketing, there was still a concern that 'pure' lifestyle research (even together with 'pure' demographics) would not capture what was going on in consumers minds.

Gonzalez and Bello (2002) believed that psychographic and lifestyle traits are factors for usage of products or services which can gain from environment and society situations rather than standard characteristics. In fact, lifestyle is a list of relationship among casual behaviors which recognize casual traits of behaviors. Life has many stages for individuals; major roles of life can be formed in different times like wedding, finding job, education levels, different situations and other important factors that affecting life routes in important stages. Marketers should distinguish variety stages of life and accompany values in lifestyles(Tam and Tai 1998). Although segmentation on the base of lifestyle can lead towards important information, that is helpful for product positioning, perceiving multinational societies, and enhancing on international marketing. Those are not stable and continuously change(Wells 1975). The variables which are considered as psychographic variables have estimated variety of consumer behavior dimensions. Many existing studies investigated about psychographic segmentation that used in different circumstances of products and services. They conducted to several features, namely VALS and AIO. Most of them surveyed around lifestyles, values, and personality relationships (Gonzalez and Bello, 2002). Indeed, lifestyle is a psychographic variable which can be presented by individual’s activations, way of thinks, kind of lives and lifecycle, and performances in the responsing of his/her environment stimulates. In general, lifestyles can be demonstrated consumers’ characteristics and their tendency purchasing behaviors of relevant experiences from shoppings (Harcar and Kaynak, 2008). Also, lifestyle comprises activities e.g. spending money and time, interests like things which are less or more important in customer’s life and opinions that are the views of customer respect to the surrounding environment or his/her world. Hence, lifestyle variable is related to individual’s knowledge which allows to his/her characteristics to combine with his/her behaviors (Gonzales and Bello, 2002). Hur et al. (2010) believed segmenting market by lifestyle is studying of consumers’ feeling and their attitudes to specific products. Further, it is determining more details from situation consumption patterns and consumer satisfaction level. They pursued to survey relationship between lifestyles and special products with high tech for segmentation. They considered appliance markets and consumption situation of females as centered householders. Also, they used AIO measuring with consumer’s dietary life. Moreover, they found that standard segmentation by lifestyle can facilitate decision making or implement proper strategy at the market, it can describe behaviors which not explain by other variables as well. The analysis of lifestyle segmentation can estimate social changes. In addition, by distinguishing behaviors, feelings and purchasing behaviors can predict future of markets.

Marketers therefore also strongly desired to have more psychological information available.

Until that time two types of psychological information had been available: Personality Research Motivation Research.

Motivation Research

Motivation research was a technique much sought after in the 1950's. Pioneered by a psychologist named Ernest Dichter, motivation researchers believed that there were strong influences on consumers to purchase a product/brand that they were not even aware of. Wells comments as follows: ' Armed with projective techniques from clinical psychology and some existing notions from psychoanalysis, motivation research practitioners penetrated deeply into the consumers psyche, revealing for the first time to their astounded clients the 'real' reasons people buy their products' (Wells, 1971 p 162). Motivation research was, however, strongly criticized on the following grounds: 1) Motivation research suffered from poor methodology and relatively small samples were used to generate broad conclusions. 2) Data analysis was subject to poor methodology and poor computer technology. 3) Conclusions were not found useful for developing sound marketing programs. (Harrell, 1986 p 37) Conventional researchers therefore insisted that motivation research was unreliable, invalid, unobjective, too expensive and liable to be misleading. The motivation researchers replied that conventional research was sterile, dull, shallow, rigid and superficial. Disillusioned with what motivation research was accomplishing, a number of researchers came to believe that much larger samples were needed; they also developed the idea that researchers should look for direct correlations (eg. between attitudes and product preferences) rather than strive for insights about the unconscious.

Activities. Interests, and Opinions (AIOs)

One of the most widely used approach to lifestyle measurement has been AIO (Activities, Interests, and Opinions) Statements, which can be situation-specific or general. Consumers are usually presented with a list of statements covering different dimensions of lifestyle The following aspects were identified by Plummer (1974) in measuring people's lifestyles:

1. how they spend their time;

2. their interests, what they place importance on in their immediate surroundings;

3. their opinions in terms of their view of themselves and the world around them; and

4. some basic characteristics such as their stage in life cycle, income, education, and where they live.

Personality and Values

Lin (2002) believed that personality variables are more essential for segmentation than demographic factors. Therefore, one of the best ways to evaluate personality values is Rokeach Values Survey (RVS). Also, Personality values are due to behaviors and perceiving situations of specific product or service which different from other products and services. Hence, personal values are presented by behaviors or attitudes due from a category products and specific situations (Brunsǿ et al., 2004). Social identity of individual is a real imagine or a reference that a customer is a part of the context from who is he/she or how he/she would like to be(Reed, 2002, P. 255). Villani and Wind (1975) stated that Locus of Control (LOC) has two types personalities of people which first type believe that they can control their life by themselves (Internal Orientation), while the second type that the external factors (External Orientation) can affect their life. One of the recognizing factors at selfconcept patterns is its confirmation about interpersonal and external aspects of social situations .When one who uses from others’ view or their experiences in order to achieve own goals, it is called external aspect of self-concept, whereas interpersonal aspect less impact with others’ beliefs and he/she accomplishes in own ways . Products and their consumptions affect in both directions, namely, external and interpersonal of selfaspects .So products are very important traits which one possesses to form and support his/her identity. Almost the customers are openness for things that help them to improve their social identity and present their personality, as well as they can properly appear at their society .The study of Grewal et al.(2000, P.235) stated product functions which create social identity of a person, they are mentioned the following:

1- Establishing communication among relationships a person and others,

2- Gradually fitting a social position to a person who uses these products,

3- Helping to determine a central achievement for a person. Goldsmith (2002) considered customers who bought more at apparel markets; they attempted to achieve their desires via positive effects. Moreover, they revealed special traits such as their personality and social identities. Also, they fulfilled social status by reviewing internal and external status of self-concept and want to how appeared among their friends. They acted in different ways because specific clothes gave them specific values which used their affective and cognitive system. Their special traits like consciousness of product, tendency to new fashion, engaging with product, and being conductor their categories were correlated directly to the level of their shopping. According to analysis of Goldsmith (2002), these variables were due to their attitudes and personalities, and demographics that couldn’t be enough for determining factors for understanding consumers. So, the researcher should be taken advantage from psychological factors in order to segment target markets. The most important features for attracting consumers is to patronize of consumers by considering their values in the environment of products. Values are central concept of life that can influence on affective and cognitive system. Nowadays, mass media trigger special value on the base of psychographic variables because of efficacy of segmentation. Global marketing cause to change psychographic variables and values across the world(Beatty et al., 1988). In general, values are considered as psychographic variables which can be measured by justify of consumer behaviors respect to consuming patterns, tendency purchasing or response to environmental stimulates. Priority and posterior of values are compared across cultures and societies, because values are stated as individuals’ trait patterns that different people of societies have their inherent own values (Harcar and Kaynak, 2008). Studying of Divine and Lepisto (2005) stated that estimating comprehensively from a product or a service can be known as value of product or service. It’s important for consumer because of purchasing and satisfying that means what is receiving and what is giving. In fact, the perception of trading-off goods or service represents value of product that sacrificed by customer as paying the price .The useful elements for benchmark of consumer’s values are quality and price of goods or service. Values are considered as maintaining or supporting feelings which are important in our life. Values can be taken an important variable to measure of consumer satisfaction and better perception of consumer behaviors for marketers. Therefore, shopping values impact with consumers’ psychological states (Michon et al., 2005). So, the experiences of shopping and shopping environments can be influenced on purchasing behaviors (Stoel et al., 2004). The interaction of consumers with products or services depends on consumption experiences (Michon et al., 2008). This issue could be shown from internal and external of product values. Purchasing almost acts as giving benefit and gratify to consumers. In that case, purchasing values can consider as utility and hedonic aspects through customers when they have frequent experiences of shopping (Babin and Attaway, 2000). Customers who are perceived more values of excitements of purchasing and aware from fashionconscious; finally, social values give them motivation for purchasing.

Origination of Psychographics

The field of psychographics is said to have originated from a merger of the areas of personality assessment and motivation research (Mehrotra et al 1977 p 49-65). The merger yielded potential benefits overcoming the limitations of personality inventories and motivation research: 1) Psychographics promises to be less abstract and more directly related to consumer situations than standardized personality tests, and 2) Psychographic tests allow more efficient and apparently objective . measurement of consumers desires than do the long interview methods of motivation research. Also psychographics yields quantitative results (usually large sample sizes are employed) which can easily be submitted to statistical analysis. (Loudon et al 1988 p 487). Schiffman and Kanuk comment as follows 'It is the blending of the desirable characteristics of both motivation research and personality tests that gives psychographic measurement its distinctive appeal as a consumer behaviour research tool'. (Schiffman et al, 1987 p 143).

Lifestyle Versus Psychographics

Wells, (1974 p 319-320) suggests that up until the 70's the terms were used separately. Specifically the term psychographics was used to refer to studies that placed greater emphasis on generalized psychological and personality traits. On the other hand the term lifestyle focused more on broad cultural trends (Anderson, 1967 p 55-62; Lazer, 1963 p 130-139; Adler 1970 p 19-30) and on needs and values that were thought to be closely associated with consumer behaviour (Bemay 1971, p 189-195; Burger et al 1972 p 219-222; King et al, 1971 p 26-32; Myers et al, 1974 p 243-266; Plummer, 1971 p 38-41; Tigert 1974 p 181-212). This distinction appears, however, to have been lost on most consumer analysts. The terms over the last two decades have been and are continuously used interchangeably (Anderson et al 1984, p 405-411). Even Wells in his review of the subject in 1975 makes no attempt to distinguish between the terms (Wells 1975, p 227). Furthermore, there is evidence in the literature of overlap in what the terms are thought to mean. The end result is that during the past 20 years marketers have come to view psychographics and lifestyle research as so intertwined that it is hard to separate the two. Weinstein comments as follows: 'Today there is great controversy among both marketing practitioners and academics as to what constitutes psychographics and whether or not it is synonymous with lifestyle research.' (Weinstein 1987 p 109).

In the authors opinion there appear to be three different schools of thought on this matter:

1) The first school of thought views psychographics as complimentary to lifestyle. The majority define psychographics as a measure of lifestyle. (Hawkins et al 1992 p 326) (Reynolds et al 1974 p 73-84) (Loudon et al, 1988 p 118; Harrell, 1986 p 280-282). Specifically psychographics are viewed as: 'The systematic operationalization of lifestyles.' (Reynolds et al 1974) 'The quantitative measures of lifestyles.' (Hawkins 1992 p 326); 'The method of defining lifestyle in measurable terms.' (Loudon et al 1988 p 118).

2) The second school of thought view the terms lifestyle and psychographics as equivalent. They assume that they both measure the same thing. (Schiffman et al 1991 p 123; Engel 1990 p 670) 'Psychographics is alternatively known as lifestyle' (Schiffman et al, 1991 p 123).

3) The third school of thought separates lifestyles from psychographics (Anderson 1984 p 405-416; Wells 1974 p 319-320; Dorny 1971 p 200-201; Demby 1974 p 11-18; Williams 1982 p 106; Demby 1989 p 21). Domy summarizes their view points as follows: 'The terms psychographics should be reserved for measures that are truly 'mental' - attitudes, beliefs, opinions, personality traits etc. The analysis and classification of activity or behavioural reports from the consumers which are frequently classified as 'psychographics' should be given their own distinct term, such as lifestyle'( Domy, 1971 p 200-201).