Lifestyle Segmentation: When Is It Appropriate to Use?

Lifestyle segmentation is a process in which consumers are divided into groups based upon similar lifestyle beliefs and activities. This way, a business can better determine how to reach a majority of consumers in the most profitable way(s). In contrast to other segmentation variables (demographic, geographic, and behavioral), lifestyle or “psychographic” segmentation places great emphasis on personal values and individual preferences rather than single, simple variables — physical, geographical, or behavioral characteristics. By grouping consumers together according to their lifestyle mindset, companies can better understand why they act the way they do. Plus, personality types and worldviews are typically consistent across all cultures: they don’t significantly change with time. Here’s what you need to know about lifestyle segmentation. 

Let’s Start With Examples

Your personality type affects almost every aspect of your life and behavior. Instead of just leaving it there, let’s break it down into more specific aspects:

• Food, Beverage, & Nutrition - When you’re browsing the supermarket aisles, you likely gravitate towards your favorite foods. These preferences are driven by culture, taste, and habit. Dietary behaviors and preferences tend to be stable over time. Though they can change radically for a diet, these tastes are normally influenced by a person’s personality type and marketing tactics targeted towards them. Our Segmedia division has conducted many years of painstaking research to develop a personality-based model that strongly predicts decision-making processes and behaviors. So, when you launch a new product or want to do more consumer research in this field, lifestyle segmentation may make more sense than demographic segmentation.
• Health & Wellness - The way you take care of yourself is also consistent over a long period of time. Your lifestyle and mindset directly affect your health and happiness. For example, if your company is trying to capture more customers in the health and wellness space, you’re better off using lifestyle segmentation to learn more about pain points and purchasing decisions.

• Pharmaceuticals & Health Devices - Did you know that patients of particular personality types manage disease-free wellness the same way they manage a disease? It’s true that differences in behavior may be contextual to a certain condition, but underlying motivations and behaviors all tie in back to your personality group. Instead of conducting pharmaceutical market research for a specific condition, you can optimize your positioning and messaging for a certain personality type to reach a larger audience in a more effective way.

When Is It Appropriate to Use Lifestyle Segmentation?

Lifestyle segmentation, perhaps more than any other type of segmentation, has the potential to shed light on the motivations behind consumer behavior. Other variables (demographic, geographic, and behavioral) describe consumers: what they look like; where they live; how much money they make; when they shop; etc. However, they don’t reveal much about why consumers behave in certain ways. Lifestyle segmentation is one of the only ways a business can come to understand the life principles guiding consumer decisions. Thus, it’s one of the only tools that businesses can hopefully build strategies that influence their audience in a deeper way. Our Natural Marketing Institute division provides strategic consulting services that track and predict the changes in consumer attitudes and behaviors across many industries. It’s especially critical to use lifestyle segmentation if/when:

• High Involvement Purchasing is at Stake

Lifestyle segmentation makes it easier for businesses to identify the rationale driving consumer purchasing decisions; as a result, making it easier for them to influence consumer behavior.

• Customer Retention is Critical 

Too often, companies don’t recognize or appreciate the power of shifting lifestyle trends, especially the changes that occur individually among their customers. Segmenting a market by lifestyle helps businesses remain fully informed of their customers’ changing lifestyle preferences. By doing this, it’s much easier to find ways to rework products and messaging so a brand continues to offer what their customers desire, even as those customers continue to change.

• Market Expansion is a Goal

Similarly, identifying the factors that motivate consumers to buy is a great way to expand into new markets. Lifestyle segmentation highlights the beliefs that drive consumer purchasing behaviors so companies are able to develop new products and create better marketing materials, thereby, expanding their appeal.

So You’ve Segmented, Now What?

Once you’ve segmented your audiences based upon their lifestyle beliefs and activities, it’s time to perform the appropriate testing and analysis.  When you test after segmentation, here are some topics you may be interested in:

• Product and category usage trends
• Consumer target profiling
• White space analysis
• Product driver and attribute analysis
• Communications strategy
• Corporate social responsibility strategy
• Channel shopping patterns

After the testing results are analyzed, the possibilities are almost endless as to what you can do with the data. You can apply what you’ve learned to marketing campaigns, strategy development, targeting, value chain analysis, and more.

Ready to Learn More?

Lifestyle segmentation is a valuable tool for companies looking to fully develop their buyer personas and create winning marketing mixes. To learn more about using market research to garner meaningful data, how to segment your market, and how to make the most out of the resources you have, please contact Research America.