Demographic segmentation is a market segmentation technique in which a company’s target market is divided into segments based on demographic factors such as age, gender, education, income, and so on. It assists businesses in better understanding their clients so that their demands can be met more efficiently. Rather than reaching out to the entire market, businesses may utilize demographic segmentation to focus their time and resources on the segments with the most likely to buy and hence the most valuable to them.
Types of Demographic Segmentation
Demographic segmentation can be done using various variables:
Because consumers’ preferences and requirements fluctuate greatly depending on their age group, age is one of the most important variables utilized in demographic segmentation. Digital marketing efforts that appeal to young adults or teenagers may prove to be the most effective when a business wishes to target this age group. Traditional marketing strategies, such as television and magazine commercials, are often preferred by older folks.
Consumer purchase decisions are heavily influenced by income levels. High-end and luxury products may be preferred by those with higher income levels. Individuals with lower income levels, on the other hand, may like to get the greatest price and are more likely to purchase low-cost goods and services. Organizations that cater to the masses or manufacture commonplace things will prioritize affordability. Luxury goods companies, on the other hand, will focus on high-income clientele who can buy their products. Manufacturers frequently consider their demographic segment while developing pricing strategies.
By race, ethnicity, and religion
Differences in attitudes may be reflected in racial and ethnic preferences. This will influence the types of marketing initiatives that customers will respond to. Furthermore, religion can have a huge impact on client choices, thus it’s crucial to know how your target market is religiously classified.
Individuals may identify with different parts of the gender spectrum, such as feminine or masculine, and this will influence their shopping decisions and preferences. You may adjust your marketing activities to better fulfill the needs of your customers if you know which gender your product or service appeals to.
Examples of Demographic Segmentation
Segmentation by income
Luxury firms such as Dior and Gucci frequently advertise their items in high-end lifestyle magazines aimed at the wealthy. Magazines like Marie Claire and Vogue fall within this category.
Segmentation by gender
Because sanitary napkins are mostly purchased by women, marketing campaigns for these items are geared to appeal to this demographic.
Advantages of Demographic Segmentation
1. Data that are readily available
One of the most notable advantages of demographic segmentation is that the necessary information is frequently available to businesses through census data. Government censuses are available in almost every country.
2. Increased Customer Retention and Loyalty
Demographic segmentation allows you to better understand and target your customers, perhaps increasing the number of customers who return for repeat purchases. As a result, it may boost consumer loyalty and retention.