In April 2024, L'Oréal[1] announced it was restructuring its global marketing strategy, pivoting away from mass-market segmentation towards “cultural communities built around shared values.” Rather than focusing on broad demographics like age or gender, the brand aimed to understand what drives customer identity at a deeper, psychological level. This shift was neither isolated nor superficial—it marked a broader trend among brands seeking relevance in an era where audience complexity outpaces traditional models.

This raises the question: What happens when the demographic map is insufficient?

The answer lies in reshaping marketing rules—transitioning from reach to resonance, from generalisation to nuance, and from product-centricity to value-centricity. Central to this transformation is the emergence of psychographic data, values-driven alignment, and a more agile, innovation-ready approach to brand strategy.

Understanding the Core Concepts: From Demographics to Psychographics

Traditional marketing has traditionally divided audiences by age, gender, income, or location. However, these demographic markers reveal little about a person’s motivations, desires, or decision-making style. 

Conversely, psychographics delve into the inner landscape: beliefs, attitudes, motivations, aspirations, lifestyle choices, and emotional triggers. A psychographic profile aims to reveal what people value, how they make decisions, and what narratives they connect with.

This distinction is not semantic—it is strategic.

According to Kotler and Keller (2016)[2], psychographics enable marketers to explore why consumers make purchasing decisions, not just who they are. For instance, two 32-year-old women in Melbourne may share similar incomes and education levels. Yet, one might value individual freedom and environmental sustainability, while the other prioritises community tradition and economic security. A demographic perspective identifies similarities; a psychographic perspective reveals divergence. Another example is Nike, which promotes performance and personal excellence, appealing to competitors, achievers, and optimists, while Allbirds focuses on environmental consciousness and simplicity, targeting eco-idealists and mindful consumers. Both companies cater to similar age groups, but reach vastly different psychographic profiles.

This evolution lays the groundwork for 

• Improved Targeting: Psychographic segmentation enables brands to craft messages that resonate authentically, increasing the relevance and effectiveness of campaigns.

• Enhanced Engagement: By tapping into what truly matters to consumers, brands can create content and experiences that stand out in a crowded marketplace.

• Stronger Loyalty: Aligning brand messaging and offerings with customer values fosters trust and emotional connection, turning buyers into loyal advocates.

Technological Lens: The Rise of Psychographic Segmentation and Data Personalisation

The technological enabler of this shift is the explosion of data analytics capabilities. Platforms such as Meta, Google, and TikTok no longer serve as mere ad distributors—they are behavioural laboratories. Algorithms can now detect what users like, why they like it, when they engage, and how their emotional states change over time.

Psychographic segmentation increasingly uses AI tools that analyse:

• Search behaviour

• Social media sentiment

• Purchase patterns

• Content interaction

• Language usage and emotional tone

Firms like Resonate and NielsenIQ are pioneering integrated platforms that combine values-based segmentation with predictive modelling. This allows marketers to identify audiences who “might buy" and predict when and why they might do so—and how to ethically and effectively trigger that moment.

Strategically, this opens a new dimension of personalisation—what Gartner (2024) calls “empathic AI.” Unlike surveillance-style tracking, empathic AI leverages data to reflect and respond to emotional context, offering relevance without intrusion.

Economic and Business Lens: From Product Differentiation to Identity Alignment

The traditional competitive edge was established on product features, pricing, and placement. Although these factors remain important, they are no longer sufficient in a saturated and emotionally fragmented marketplace.

What increasingly matters is alignment with consumer identity.

Consider how Patagonia has woven environmental activism into its brand DNA. Its values aren't just optional but core to the business model. Customers don't merely buy jackets; they engage in a movement. Similarly, Nike’s strategic use of athlete activism (e.g., the Colin Kaepernick campaign) resonates with a segment of consumers who prioritise social justice over neutrality.

A report by Deloitte (2023) found that 57% of consumers are more loyal to brands that demonstrate values aligned with their own. This trend is particularly strong among Gen Z and Millennial consumers, for whom choosing a brand expresses personal identity rather than just consumption.

In this context, brand equity becomes less about logo recognition and value resonance. Marketers must, therefore, shift from transactional to transformational frameworks, building awareness and allegiance.