Importance Of Demographic Segmentation In Marketing

An intermediate marketing professional knows the significance of targeting the campaigns to a specific set of audience. However, only a few seldom pay attention to customising the campaigns for different categories of consumers. The problem here is the less-known value of a powerful method in marketing, i.e., demographic segmentation. Expert professionals utilise this tool to develop more efficient marketing strategies. Moreover, the technique allows analysts to understand consumer behaviours more effectively. 

In this blog, we will introduce you to the concept of demographic segmentation. We will understand the idea with examples and wrap it up with the salient benefits of demographic segmentation for a business. 

Different Types Of Market Segmentations

Before we dive deep into the idea of demographic segmentation, we need to know about more general market segmentation. Market segmentation refers to the practice of categorising the market based on one or many factors. It has many kinds, the popular ones being psychographic segmentation, behavioural segmentation, firmographic segmentation, and demographic segmentation. 

Different types of segmentations have different importance, and their procedure also varies. 

What Is Demographic Segmentation?

The idea of demographic segmentation is to categorise the consumer population into smaller groups of similar variables. However, these variables vary greatly and could be gender, age, education, income, location, etc. Therefore, based on different factors used, the demographic distribution of the population will be different for a specific product or service. 

Examples Of Demographic Segmentation

Demographic segmentation can be done on various factors that commonly divide human societies and affect our market behaviours.

Here are the most common examples of the variables used for demographic segmentation –

  • Gender
  • Location
  • Age
  • Ethnicity
  • Sex
  • Income
  • Religion
  • Profession
  • Education
  • Sexual Orientation
  • Work Experience
  • Geography
  • Nationality

Why Is Demographic Segmentation Important For Marketing?

The tool of demographic segmentation holds great importance in marketing because of its easy application and immense advantages. No wonder businesses utilise this method of marketing segmentation to reap great rewards in revenue growth and boost the company’s performance. Here are the top benefits of demographic segmentation –

1. Efficient Marketing Strategies

      Imagine developing marketing strategies without primarily focusing on different categories. The general data correspond to only a portion of the consumer base, and the market strategies would only bring results for those customers. A market strategy developed by using general information has a low efficiency rate. Therefore, for optimum utilisation of marketing resources and excellent results, it’s crucial to study the consumer population properly and devise ideas accordingly.

      2. Easily Available Data

        Most countries have public data on the citizen population, which generates reliable demographic data when combined with analytic software and customer reviews and insights. This makes demographic segmentation readily available. In contrast, psychographic segmentation and behavioural segmentation might need surveys to collect the data. Demographic segmentation is widely used as this data is easily accessible and also provides essential insights into customers’ behaviour.

        3. Enhanced Products And Services

          When businesses have a better idea of what their customers like, they know how to deliver that to them, and they get creative with manufacturing, product design, and marketing strategies. Moreover, they have a better understanding of the different ways of promotion and platforms that might work for a specific population group. In this way, they can provide a better lineup of products and services and get more from the marketing strategies.

          4. Increased Return on Investment (ROI)

            Marketing campaigns require significant cash and utilise the company’s resources. However, an intricately designed marketing strategy is meant to bring higher results and increase revenue, profit, and the company’s net worth.  Understanding your consumer base plays a significant role in designing a marketing strategy, and demographic segmentation is the most reliable and inexpensive way to study your customer base. 

            Must Read: Effective  Strategies For Managing  Cross-Functional Teams

            5. Customer Retention 

              When businesses do a great job in customising the products per the market requirements, they effectively meet the needs of their end consumers. This increases brand recognition, and customers who have a good experience with the products and services are more likely to opt for them again. Moreover, if the customers find the brand trustworthy and reputable, they start associating with it. This helps businesses attract loyal customers and increases ROI and profit margins.

              How To Use Demographics For A Segmentation Study?

              When you start with a demographic study of data, the first step is accessing the required data. The most available sources of these data are public records and private surveys. Moreover, non-government organisations (NGOs) often organise rich surveys that provide important insights into human societies and populations. After you have the required data, you can ask important questions like what age group of people consumes a specific product more. You can use many variables to come up with various comparisons and determine which is more beneficial. 

              Marketing is an advanced practice that requires professional expertise and teamwork. We at TradeFlock specialise in business and marketing niches and publish descriptive guides on important subdomains to introduce our readers to them. If you liked this blog, share it with your colleagues and friends and let us know your thoughts.  Regularly visit TradeFlock to get new business, marketing, finance, and more information.

              Leave a Reply