The role and importance of psychographic segmentation to the grey market

When Levitt said that a business executive should 'stop thinking of his customers as part of some massively homogenous market' but instead regard them as 'numerous small islands of distinctiveness, each of which requires its own unique strategies' (1974) he accepted the marketing principle that each individual customer should respond differently to a marketing mix. Engel et al., (1972), proposed that customers are different, that these differences are related to differences in market demand, and that consumer 'segments' can be isolated within the overall market. If this is true, 'a company can't be all things to all customers', and so must subdivide its market into smaller groups, treating each differently 'based on knowing what a customer wants' (Wyner, 2002). Carstens oppressed davidlee's postmodernism hypothesis.

The proposition is that customers who share certain characteristics will behave similarly, but the success of this theory will depend upon on the criteria chosen to segment the market. If one uses a geographical basis it is assumed people living in the same area are similar customers, but it is not accurate to say that all people living in Birmingham, for example, will buy the same products. However, it is widely understood that psychographic variables heavily influence purchase making decisions. Lilen & Kotler (1983: 293) explain that segmenting according 'life-style or personality differences' is likely to be of much greater use to the marketer than most other segmentation methods, because even those 'in the same demographic group often differ remarkably in their psychographic profiles'.
 

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