What is the difference between demographic segmentation and psychographic segmentation?

• A. Demographic uses age, gender, income; psychographic uses lifestyle, values, personality.
• B. Demographic uses lifestyle; psychographic uses age.
• C. Demographic uses geographic location only; psychographic uses purchase history.
• D. Demographic uses customer satisfaction; psychographic uses brand loyalty.

Answer: (B)

Understanding how these two segmentation approaches differ comes down to the type of consumer data used to divide the market. Demographic segmentation groups people by observable, measurable characteristics such as age, gender, income, education, family size, and occupation. These are numbers and categories that are easy to collect and compare across groups.

Psychographic segmentation, on the other hand, looks at the psychological factors that influence behavior—lifestyle, values, interests, attitudes, personality, and social class. These traits help explain why people buy or not buy, beyond who they are in demographic terms.

In practice, you’d combine both: for example, identifying young professionals (demographic) who value efficiency and status (psychographic) can guide product features, messaging, and channels that resonate with that group.

Some options mix these concepts by swapping attributes (for instance, assigning lifestyle to demographic or age to psychographic). Those mix-ups don’t reflect how segmentation is defined because they place the wrong type of information in each category.