Demographic Segmentation
Demographic segmentation involves dividing a market into smaller groups based on demographic variables such as age, gender, income, education, occupation, and family size. This allows marketers to tailor their products, services, and marketing strategies to specific demographic segments, ensuring better alignment with the needs and preferences of different consumer groups.
8 Key excerpts on "Demographic Segmentation"
eBook - ePubMarketing Recorded Music
How Music Companies Brand and Market Artists
- Tammy Donham, Amy Sue Macy, Clyde Philip Rolston(Authors)
- 2022(Publication Date)
- Focal Press(Publisher)
...Marketing strategies are then easily tailored to particular geographic segments. For example, the label may use geographic segmentation to determine in which cities tour support money would be most effective. Demographic Segmentation Demographics are basic measurable characteristics of individual consumers and groups such as age, gender, ethnic background, education, income, occupation, and marital status. Demographics are the most popular method for segmenting markets because the information is easier and cheaper to measure than more complex segmentation variables, such as personality or consumer behavior. Fortunately, groups of people with similar demographics tend to have similar needs and interests that are distinct from other demographic segments. Age is probably the demographic most associated with changing needs and interests. Consumers can be divided into age categories such as children, teens, young adults, adults, and older adults. The segment of “tweens” (preadolescents between the ages of 8 and 13) has been added to the mix because of their enormous spending power. Tweens are expected to number 23 million by 2020 (Jayson, 2009). This age group accounts for $43 billion in disposable income; over half have a Facebook account, and 78% have a cell phone. The typical tween spends 8 to 12 hours per day consuming media of one form or another, and more than half of the girls age 10 to 12 want to be famous (Younger, 2014). Gender is also a popular variable for segmentation, as the preferences and needs of males are perceived as differing from those of females...
eBook - ePubCommercial Due Diligence
The Key to Understanding Value in an Acquisition
- Peter Howson(Author)
- 2016(Publication Date)
- Routledge(Publisher)
...For example, over half of all male underwear is purchased by women, which means the female buyer segment represents and important buyer group for manufacturers and sellers of male underwear. The five forms of market segmentation shown in Figure 5.1 have emerged as the most popular. They are used in CDD as proxies for differences in buyer behaviour that define different market segments. As mentioned above, some, or all, of the main approaches will be used but do not be surprised if what works as a basis of segmentation in one market does not work in another. Demographic Demographic variables include age, gender, stage of family life cycle, size and family type, income, educational level, race and nationality or combinations thereof. Clearly defined segments can be identified using demographic variables, but according to Beane and Ennis, 2 entire markets cannot usually be segmented by this method alone. Consumer Markets Age Age is perhaps the most widespread basis of segmentation in consumer markets. Demand is often age related for a number of reasons. Tastes and needs change as we grow older as does our income and stage of family life cycle. One of the appeals of age as a basis of segmentation is that it provides an easy way of measuring segment sizes. Case Study 18 demonstrates the use of age as a basis of segmentation. Case Study 18 Fitted Kitchens Not that long ago (really) biscuits were sold from tins and there was a grocery store on every street corner. Now the supermarkets dominate food retailing just as the electrical ‘sheds’ sell the bulk of the TV sets we buy and out of town carpet stores sell us most of our carpets...
eBook - ePubUnderstanding the Older Consumer
The Grey Market
- Barrie Gunter(Author)
- 2012(Publication Date)
- Routledge(Publisher)
...More and more, a segmentation approach is recommended, though there are differences in opinion on the most meaningful basis for segmentation. In this chapter, we focus on demographic characteristics as segmentation variables. A study of the demography of this age-group provides marketers with the means to understand older consumers as a generational cohort and to compare them, in terms of objective identifiers, with other age-groups. Demography is only one type of classifier. Gerontologists have found that older people can be differentiated in terms of the social roles they occupy, while social psychologists have provided valuable insights into how older individuals can be distinguished according to their attitudes, values, personality profiles and lifestyles they enjoy. The marketing of products and services to older consumers can benefit from an understanding of systems of older consumer segmentation which derive from each of these approaches. Demographic Segmentation can proceed by dividing older consumers according to age, gender, socio-economic class, level of education, marital status, or a combination of these and other such factors. In some studies, these variables have been used singly, while elsewhere they may be examined conjointly. Some researchers (e.g. Vishvabharanthy and Rink 1984) have suggested combining age breakdowns with other characteristics such as income, education or personality. Still others (e.g. Keane 1985) have recommended the use of lifestyle or psychographic variables in order to achieve a better understanding of the diversity of sub-segments among the older consumer. Lifestyle and psychographic segmentation of the older consumer market will be examined in more detail in Chapter 3. One review of more than 30 separate studies of segmenting the older market identified five critical segmentation variables: (1) discretionary income; (2) health; (3) activity level; (4) discretionary time; and (5) response to other people...
eBook - ePub- Paul Reynolds, Geoff Lancaste(Authors)
- 2013(Publication Date)
- Routledge(Publisher)
...Within a country, a market may be segmented into regions that normally represent an individual salesperson’s territory. 5.5.2 Demographic Segmentation This approach consists of a wide variety of bases, and some of the more common ones are age, income, sex, education, nationality, family size, family life cycle, social class/occupation, and type of neighbourhood. Demographic bases constitute the most popular bases for segmentation in consumer product markets (see Reynolds and El-Adley, 1995, 1997). The reason for this is that they are often associated with differences in consumer demand (i.e. they are meaningful). Family life cycle segmentation is based on the idea that typically consumers pass through a series of quite distinct phases in their lives. Each phase gives rise to, or is associated with, different purchasing patterns and needs. For example, the unmarried person living at home will probably have very different purchasing patterns to someone of the same age who has left home and recently married. Similarly, it is recognised that purchasing patterns of adults often change as they approach and then move into retirement. The subject is given fuller treatment in Chapter 6, but the stages are defined as: 1 Young 2 Young single, no children 3 Young couple, youngest child under 6 (Full Nest I) 4 Young couple, youngest child 6+ (Full Nest II) 5 Older couple with children 18+ at home (Full Nest III) 6 Older couple, family head in work, no children at home (Empty Nest I) 7 Older couple, family head retired, no children at home (Empty Nest II) 8 Older alone (in work) 9 Older alone (retired). A further development in the application of family life cycle has been developed by Research Services and termed ‘SAGACITY’. This combines life cycle with income and occupation in order to delineate different consumer groups...
- Robert E Stevens, David L Loudon, Henry Cole, Bruce Wrenn(Authors)
- 2013(Publication Date)
- Routledge(Publisher)
...MARKET SEGMENTATION The process of breaking up a market into smaller parts or segments is referred to as market segmentation. The basic premise is that the needs of constituents in one segment are different from those in another, and therefore different marketing strategies should be used to reach different segments. The results of the analysis should be an understanding of constituents' needs by segment and some insight into the types of strategies needed to meet those needs. This is the basis of the entire planning process if a constituent-oriented approach is to be used in planning. For each segment that is identified, two basic questions must be asked: (1) What are the identifying characteristics of that segment? and (2) What is its size? Answering the first question helps define constituents' needs and helps develop a profile of constituents for each segment—the qualitative side of the market. The answer to the second question provides information on the size or quantitative side of the market. Bases for segmentation include geographic, demographic, service usage, benefits sought, and stage in the family life cycle. The most commonly used are geographic and demographic variables. Geographic segmentation involves use of geographic areas such as county, state, regional, and national as the basis of segmentation. For many religious organizations, this is a logical framework. Many ministries and some large churches concentrate their missionary efforts on only a few counties. They may establish extensive efforts in a few areas and not do anything in others. They are using geographic location to segment the constituents they will serve through missions. Demographic Segmentation uses variables such as sex, age, income, and educational level as the basis for segmenting a market...
eBook - ePub- Richard M.S. Wilson(Author)
- 2010(Publication Date)
- Routledge(Publisher)
...In other words, while the marketing planner might well recognize that customer characteristics should determine strategy, all too often this is reversed, with managers focusing on the probable response of different segments to a previously determined strategy. Whilst, in the majority of circumstances, feedback will ensure that changes are subsequently made to the strategy to take account of the response received, it is often the case, that the approach taken is more similar to a strategy of product different than the normative approach which is typically advocated by writers in the area. Although, as we observed earlier, a wide variety of variables have been used to segment markets, the majority of these can be grouped into four categories. Geographic and geodemographic Demographic Behavioural Psychographic. Only rarely, however, can just one of these dimensions be used to segment a market effectively, something that is reflected both in Illustration 9.1 and in a comment by Wind (1978, p.318): In contrast to the theory of segmentation that implies that there is a single best way of segmenting a market, the range and variety of marketing decisions suggest that any attempt to use a single basis for segmentation (such as psychographic, brand reference, or product usage) for all marketing decisions may result in incorrect marketing decisions as well as a waste of resources. Illustration 9.1 Recommendations for the bases of segmentation Some of the most interesting work on market segmentation has been carried out in the USA by Yoram Wind (1978). One of the undoubted attractions of his work is its strong element of pragmatism and the recognition that he gives to the problems typically experienced by marketing managers in trying to develop and implement an effective segmentation strategy...
- William Winston(Author)
- 2012(Publication Date)
- Routledge(Publisher)
...After we select this laundry list of all potential groups or individuals which could be marketed to, a selection will be made of primary and secondary targets. These targets will be the most promising or cost-beneficial segments which should be addressed initially by the marketing plan. The segments are typically chosen by grouping key data classifications or trends. Segmenting a marketplace has typically been accomplished by the following boundaries: GEOGRAPHIC VARIABLES, i.e., regionalization, city size, county size, density, climate, etc.; DEMOGRAPHIC FACTORS, i.e., age, sex, family size, educational level, racial breakdown, population growth rates, family size, etc.; ECONOMIC FACTORS, i.e., occupation, labor force mix, income levels, wealth, consumption habits, poverty levels, insurance coverage, etc.; SOCIAL FACTORS, i.e., religion, nationality, cultural aspects, political philosophy, social class, etc.; and PSYCHOGRAPHIC/LIFESTYLE VARIABLES, i.e., individual values, interests, opinions, personality traits, habits, athletic activities, work, stress levels, recreational hobbies, behavioristic aspects of purchasing services, loyalty status to service, perceptions of services, awareness level of service, etc. EXAMPLES OF SEGMENTS As an example, potential segments for various types of health organizations are listed below: Preventive Dentistry Practice: financial district workers, upwardly mobile adults, business travelers, shoppers, families, etc.; Health Maintenance Organization: labor unions, corporate employees, families, young adults, etc.; Community Hospital: general population, physicians, local human service agencies, government agencies, media, planning agencies, etc.; Nursing Home: senior adults, families, hospital discharge planners, physicians, gerontology programs, community senior care programs, etc.; Same-Day Surgery Center: two-income families, physicians, local...
eBook - ePubInternational Marketing (RLE International Business)
A Strategic Approach to World Markets
- Simon Majaro(Author)
- 2013(Publication Date)
- Routledge(Publisher)
...Furthermore, it may enable a relatively small firm to hold its own in an industry in which it has to compete against giant firms. There are many conventional ways for segmenting markets. The aim here is to concentrate on those bases of segmentation which have international relevance and applicability. To enumerate a few important ones: 1 Socioeconomic and Demographic Variables Age, sex, family size, income, occupation, education, family life cycle; race, religion; social class, etc. In the UK the IPA system for segmenting markets has endeavoured to encapsulate a number of socioeconomic parameters into one package. Thus when we talk about segments expressed on a scale of six grades: A, B, C1, C2, D and E we know that members of each segment possess certain income, occupation and social status characteristics. Although the system comes under severe criticism from time to time owing to its lack of dynamism and failure to recognise important social changes in the marketplace it has fulfilled a vital role in the marketing world of the UK. It enables the average marketer to divide the market into categories which are well understood and well monitored. Thus he can easily establish not only who consumes what but also who reads a specific magazine, who is the audience for a certain TV programme—and all this in accordance with a classification which is standard amongst all marketers and their supportive services. With all the weaknesses of the system it is reliable, well understood and universally applied in those situations where a socioeconomic stratification of the British market is needed. The international marketer is less fortunate—he does not have access to a similar system on a global scale. He may find various types of segmentation systems in a number of countries but unfortunately they seldom lend themselves to comparability analysis. Furthermore in many countries no formal segmentation system exists...
