Predicting market behavior: Are psychographics really better?
Richard C. Becherer D.B.A., Lawrence M. Richard Ph.D., James B. Wiley Ph.D.
Journal of the Academy of Marketing Science · 1977 · Volume 5 · Issue 1
Abstract
Research efforts exploring the benefits of life style variables over the more traditional market descriptors have for the most part ignored the question of prediction. If, as has been suggested, psychographics offer the researcher all of the advantages of demographic description combined with the richness and dimensionality of psychological characteristics and depth research, then they should prove to be superior predictors of market behavior. This research examines the predictive ability of life style variables in comparison to more traditional predictor variables in a service market. Using a random example of 1000 applicants for selected bank services, a psychographic profile was constructed through factor analysis. Psychographic, demographic, and combined models were developed with discriminant analysis to predict patterns of bank credit card usage. Results show life style variables to be excellent predictors of user patterns, superior to demographic variables.
Keywords
Linear Discriminant Analysis, Discriminant Function, Credit Card, Market Segmentation, Card Holder
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