Demographic Segmentation
A major tool in marketing, demographic segmentation is one of the easiest segmentation strategies to tap the potential market without wasting your resources. To know more about demographic segmentation and its variables, read on….
In marketing, it is very difficult for a single organization to satisfy the needs of all consumers, and hence the organization has to resort to market segmentation. Through market segmentation, the organization fulfills the needs of all consumers belonging to a particular niche instead of trying to fulfill the needs of the entire market which is virtually impossible. Before we move on to demographic segmentation, let’s take a brief overview of market segmentation as a whole.
Why Segment Your Market?
Market segmentation is basically the division of market into smaller segments in order to make marketing easier and avoid wastage of resources. The market is divided using one of the five segmentation strategies, namely behavior segmentation, benefit segmentation, psychographic segmentation, geographic segmentation and demographic segmentation. In case of geographic segmentation, the market is divided into various geographical regions. As a dealer of air cooling systems, geographic segmentation will help you target the tropical market wherein the consumer is expected to buy air coolers instead of targeting the colder regions away from the equator wherein air coolers are of no use. Market segmentation will help you identify your consumers and access them easily. It will basically help you tap the given resources, to satisfy the needs of a particular section of the market you cater to.
Demographic Segmentation: Definition Demographic segmentation is basically market segmentation executed by taking various demographic factors, such as age, gender, social class etc., into consideration. This helps the organization to divide the market into several groups, each having a common variable, and target each of these groups to enhance the performance of the organization. The word demographic is derived from the word demography, meaning study of population. This market segmentation strategy
aims at understanding the prospective market, and taking necessary steps to ensure that the consumer needs of a targeted group is fulfilled.
Demographic Segmentation Variables
Segmentation variables are basically factors which help the organization to determine the target group. In demographic segmentation, variables mainly consist of demographic factors such as age, ethnicity, occupation etc. Below we have given a list of demographic segmentation variables which are commonly used to divide the market into smaller segments.
- Age
- Gender
- Family size
- Family life cycle
- Income
- Occupation
- Education
- Ethnicity
- Nationality
- Religion
- Social standards
Based on these variables, an organization can decide which group would they cater to. For instance, an organization dealing in sports cars, will have to target the age group between 20 and 40 years, while an organization dealing in women magazines will focus on targeting the female gender.
Demographic Segmentation Advantages One of the most popular method of market segmentation, demographic segmentation has some benefits which make it the first choice in the marketing strategies
of various organizations. These advantages of demographic segmentation are
- The organization can easily categorize the wants of the consumers on the basis of demographic factors such as age, gender etc.
- Demographic segmentation variables are much more easier to obtain and measure compared to the variables of other segmentation strategies.
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- Successful Marketing Strategies Demographic segmentation helps the organization in understanding the customers and satisfying their needs. In a market driven by intense competition, market segmentation analysis
can be of great help indeed. This segmentation is basically based on the simple fact that you can’t please all consumers with a single product, you will have to identify the potential market, divide it into various segments and cater to the needs of each segment in order to become a successful business entity.
