Comparison of demographic, geographic, psychographic and behavioural approach to customer segmentation

Abstract

A combination of four types of segmentation criteria - demographic, geographic, psychographic, and behavioural - is often used for customer segmentation. However, less attention is being paid to how these particular criteria influence the segments structure. The study aims to investigate the influence of criteria types on customer segments, investigate differences between segments and investigate the influence of segmentation criteria in case of combination. Two-step cluster analysis revealed that: a) from the demographic criteria education has the biggest influence on cluster structure; b) using only geographic criteria leads to low quality clusters; c) the influence of psychographic criteria gradually diminishes; and d) from the behavioural criteria frequency and monetary show the biggest influence. In combination, behavioural and psychographic criteria showed the biggest influence on the segments.