Definition of 'Demographics'

Studies of a population based on factors such as age, race, sex, economic status, level of education, income level and employment, among others. Demographics are used by governments, corporations and non-government organizations to learn more about a population's characteristics for many purposes, including policy development and economic market research.

Demographic trends are also important, as the size of different demographic groups will change over time as a result of economic, cultural and political circumstances.

Investopedia explains 'Demographics'

Segmenting a population into demographics allows companies to assess the size of a potential market and also to see whether its products and services are reaching that company's most important consumers.

For example, a company that sells high-end RVs would want to know roughly how many people are at or nearing retirement age, and also what percentage of them will be able to afford the product. This information will help the company to decide how much capital to allocate to production and advertising.

http://www.investopedia.com/terms/d/demographics.asp

What are Psychographics

Psychographics are the attributes that describe the personality, attitudes, beliefs, values, emotions, and opinions of customers, and prospective customers.

Demographics describe "who" people are, Psychographics explain "why" they buy (and how to win their attention and motivate them to buy).  By creating Psychographic Profiles, marketers are able to understand the motivational and non-conscious drives of a target audience.  In market research and social science research,psychographic variables are sometimes referred to as interest, attitude and opinion variables.

When a thorough assessment of a person or group's psychographic make-up is done, it is called a psychographic profile. Psychographic profiling in market segmentation includes areas such as lifestyle, culture, subculture, ethnicity, values, beliefs, hobbies, religious or political affiliation, and nearly every factor that involves subjective preferences as opposed to external classifications. Psychographics uses a host of analytic techniques derived from the psychological and sociological sciences. Good psychographics and psychological profiling can be difficult to do, since they require both empathy and a familiarity with psychology and psychological techniques, rather than with just a simple application of standard market research techniques to subjective consumer experience.

Source: http://www.marketsegmentation.com/what_are_psychographics.html