Demographic Segmentation

12 Key excerpts on "Demographic Segmentation"

• 

  eBook - PDF

  Applied Marketing

  • Daniel Padgett, Andrew Loos(Authors)
  • 2023(Publication Date)
  • Wiley

    (Publisher)

  As you should expect, it costs more to get fruit from Brazil to Ohio, which drives the price up at the store, and not all customers will pay the higher price. Some will, but you need to know how many and which ones. Additional variables such as income, healthy lifestyle, social class, and others will likely also be important in this case, so geographic segmentation by itself might not be sufficient for effective segmentation. This is one example of why marketers often use a combination of variables to segment a market. Demographic Segmentation Marketers can differentiate customer groups in a market based on their personal characteristics such as age, income, gender, race, education, marital status, religion, nationality, and so on, which is referred to as demographic seg- mentation. Demographic Segmentation is the most widely used category of segmentation variables and is typically the first approach companies use, primarily because it is easy to apply, and demographic information is often readily available. In many cases, it is also quite relevant, since in many markets demographic differences are closely tied to differences in customer behavior. Demographic Segmentation Distinguishing customer groups based on their personal characteristics such as age, income, gender, race, education, marital status, religion, nationality. 6.1 Segmentation 121 As an example, consider age. People of the same age share many of the same experi- ences. World events, music, television, movies, and sports are all shared experiences that are tied to generations. Consider your age group and how your experiences might be different from people a generation or two older. Do you remember a time before texting? The Internet? Your parents do. They even remember a time before computers, cell phones, and hybrid cars. Your grandparents remember a time before ATMs when customers had to go into a bank to make a deposit, withdraw cash, or get a loan.

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  Applied Marketing

  Connecting Classrooms to Careers

  • Daniel Padgett, Andrew Loos(Authors)
  • 2019(Publication Date)
  • Wiley

    (Publisher)

  As you should expect, it costs more to get fruit from Brazil to Ohio, which drives the price up at the store, and not all customers will pay the higher price. Some will, but you need to know how many and which ones. Other variables such as income, healthy lifestyle, social class, and others will likely also be import- ant in this case, so geographic segmentation by itself might not be sufficient for effective segmentation. This is one example of why marketers often use a combination of variables to segment a market. Demographic Segmentation Marketers can differentiate customer groups in a market based on their personal characteristics such as age, income, gender, race, education, marital status, religion, nationality, and so on, which is referred to as demographic seg- mentation. Demographic Segmentation is the most widely used category of segmentation variables and is typically the first approach companies use, primarily because it is easy to apply, and demographic information is often readily available. In many cases, it is also quite relevant, since in many markets demographic differences are closely tied to differences in customer behavior. As an example, consider age. People of the same age share many of the same experiences. World events, music, television, movies, and sports are all shared experiences that are tied to generations. Consider your age group and how your experiences might be different from people a generation or two older. Do you remember a time before texting? The internet? Your parents do. They even remember a time before computers, cell phones, and hybrid cars. Your grand- parents remember a time before ATM machines when customers had to go into a bank to make a deposit, withdraw cash, or get a loan. They probably read the newspaper and might even have gone to the drive-in movie theater as children. Marketing tries to tap into these shared experiences of different age groups to engage customers.

  Sign up to read

  Learn more about book
• 

  eBook - ePub

  Understanding the Older Consumer

  The Grey Market

  • Barrie Gunter(Author)
  • 2012(Publication Date)
  • Routledge

    (Publisher)

  Many businesses have become firmly entrenched in this market, while others are developing new products and services as well as adapting marketing strategies to make their offerings more appealing to older customers. But there is considerable debate among advertisers and academics about how best to take advantage of these new marketing opportunities. Moreover, there is a very real problem in determining how to reach older consumers. With respect to media strategy, a critical consideration is that media usage by older consumers, as a group, is low compared with other demographic groups. As for creative strategy, a paramount question is whether it is more appropriate to view older consumers as constituting one market or several market segments. The issue of whether the older consumer comprises one fairly homogeneous market or several heterogeneous segments, has received increased attention from marketers in recent years. 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. Income levels ranged from the poor to the super-affluent; health from poor to excellent; activity level from limited to engaged in work, recreation and social activities; discretionary time from non-involved to committed to activities; and response to other people ranged from sociable to seeking separation (Bone 1991).

  Sign up to read

  Learn more about book
• 

  eBook - ePub

  Strategic Marketing Management

  • Richard M.S. Wilson, Colin Gilligan(Authors)
  • 2012(Publication Date)
  • Routledge

    (Publisher)

  Joseph and Yorke (1989 , p. 12) have said:

  “It must be recognized that despite claims from commercial companies, there are inaccuracies within all the geodemographic systems. Many of the errors are bound up firstly with the difficulty of matching EDs to postcodes and secondly trying to reflect as far as possible the changes in housing since the last census.”

  8.9 Demographic Segmentation

  The second major method of segmentation, and probably the one most frequently used, rests on the assumption that markets can be subdivided into groups on the basis of one or more demographic variables such as age, sex, income, education, occupation, religion, race, nationality, family size and stage reached in the family life cycle. Here, we will concentrate on just three of these variables: age and the family life cycle; income and occupation; and sex.

  An undoubted attraction of Demographic Segmentation is the wide availability and easy interpretation of the data, and it is this – together with the fact that not only can most consumer markets generally be divided relatively easily along these lines, but also that purchase behaviour often correlates highly with Demographic Segmentation – that have combined to make it such a convenient, easily understood and frequently used approach. In recent years, considerable attention has been paid to the ways in which specific demographic variables can be used more effectively, with the result that variables such as age and life cycle, income, and sex have all been greatly refined. As an example of this, firms such as Lego, Toys ‘R’ Us and the Early Learning Centre give full recognition to the differences that exist between children of various ages, with the result that toys are now designed to fall into highly specific age categories. In this way, not only is the development potential of the child maximized, but the task of choosing toys by parents, friends and relatives is made infinitely easier. A similar, if perhaps rather more esoteric, recognition of the importance of age and life cycle is reflected in the marketing strategies of various petfood manufacturers who, over the past few years, have developed different dog foods for puppies, adult dogs, older dogs, overweight dogs and dogs with ‘sensitive stomachs’. More frequently, however, the significance of life cycle is reflected in the notion of a family life cycle(FLC), the details of which are illustrated in Figure 8.5

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  Applied Marketing

  • Daniel Padgett, Andrew Loos(Authors)
  • 2021(Publication Date)
  • Wiley

    (Publisher)

  As you should expect, it costs more to get fruit from Brazil to Ohio, which drives the price up at the store, and not all customers will pay the higher FIGURE 6.1 North Face jackets keep you warm no matter what your location. Patti McConville/Alamy Stock Photo 6.1 Segmentation 111 price. Some will, but you need to know how many and which ones. Additional variables such as income, healthy lifestyle, social class, and others will likely also be important in this case, so geographic segmentation by itself might not be sufficient for effective segmentation. This is one example of why marketers often use a combination of variables to segment a market. Demographic Segmentation Marketers can differentiate customer groups in a mar- ket based on their personal characteristics such as age, income, gender, race, education, marital status, religion, nationality, and so on, which is referred to as Demographic Segmentation. Demo- graphic segmentation is the most widely used category of segmentation variables and is typically the first approach companies use, primarily because it is easy to apply, and demographic infor- mation is often readily available. In many cases, it is also quite relevant, since in many markets demographic differences are closely tied to differences in customer behavior. As an example, consider age. People of the same age share many of the same experiences. World events, music, television, movies, and sports are all shared experiences that are tied to generations. Consider your age group and how your experiences might be different from people a generation or two older. Do you remember a time before texting? The Internet? Your parents do. They even remember a time before computers, cell phones, and hybrid cars. Your grandparents remember a time before ATMs when customers had to go into a bank to make a deposit, withdraw cash, or get a loan. They probably read the newspaper and might even have gone to the drive-in movie theater as children.

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  Marketing (AU), P-eBK

  • Greg Elliott, Sharyn Rundle-Thiele, David Waller, Ingo Bentrott, Siobhan Hatton-Jones, Pete Jeans(Authors)
  • 2020(Publication Date)
  • Wiley

    (Publisher)

  Geo-demographic segments enable intense and specific targeting of small groups. Organisations such as Pacific Micromarketing have developed analysis tools based on publicly available data such as the census, which, when combined with proprietary analysis tools, enable it to produce precise profiles of the residents and businesses located in closely identified geographical areas. Such analyses are particularly useful to retail businesses that could choose to vary their product offerings based on the distinctive demographic characteristics of the area in which they are situated. For large supermarket chains, there is an opportunity to vary their product range based on, for example, the ethnic characteristics of the local customers. This may be necessary to compete with local retailers, such as delicatessens, that may have established market share based on their particular appeal to these ethnic market segments. While some psychographic systems suffer because they are conceptual in nature, do not reliably measure personality or do not effectively link relevant personality traits with consumer behaviour, other psychographic systems are grounded in empirical research and do effectively measure and link personality to purchase decisions. Marketers with this insight will select a more focused target, will be able to isolate the features and benefits the target desires, and will develop communications that motivate the target to action. Behavioural segmentation Geographic, demographic and psychographic segmentation are all based on ‘consumer characteristics’. These consumer characteristics are relatively unchanging over time or between product categories. As such, they are reliable, but they may not provide the most useful insights or provide timely evidence of emerging trends in purchase behaviours or the consumption of particular products.

  Sign up to read

  Learn more about book
• 

  eBook - ePub

  International marketing in times of sustainability and digitalization

  • Erika Graf(Author)
  • 2023(Publication Date)
  • De Gruyter

    (Publisher)

  Tab. 5.1 .

  Tab. 5.1: Common segmentation methods.

  Method	Examples
  Geographic segmentation	Multi-country regions (Europe, Americas, Asia, etc.), countries, regions within countries (north, west, south, east), cities, streets and neighborhoods
  Demographic Segmentation	Age, gender, profession, education level, income, social class
  Psychographic segmentation	Lifestyle, personality, attitude, interests, opinion
  Behavioral segmentation	Purchase occasion (self-buy, gift, special occasion) purchase behavior (brand loyal, brand switching, purchase channel and location, purchase frequency)
  Benefit segmentation	Convenience, status, performance, value for money

  Source: Author’s table

  Geographic segmentation is a natural choice in international marketing. Accordingly, it is also widespread. Nevertheless, there are considerable differences between individual customer groups even within national borders; differences in the purchasing power between rural and urban regions or cultural subgroups in a country are examples. Some countries span several time zones, while in others different languages are spoken: in China, Mandarin and Cantonese; in Switzerland, German, French and Italian; in Canada, English and French, to name just a few examples.

  The advantage of Demographic Segmentation is that the necessary data is readily available and accessible. Statistics on age, gender, place of residence, occupation, educational level and income are obtainable through official governmental statistics. People in the same age groups, income levels and educational attainment have a number of commonalities, even across national borders. In many cases, however, demographic variables have limitations. People in the same age group may have different lifestyles, beliefs or interests that make them more responsive to certain products and services and less responsive to others. Therefore, it is advisable to complement geographic and demographic data with other segmentation variables, such as psychographic characteristics (Green & Keegan, 2020

  Sign up to read

  Learn more about book
• 

  eBook - ePub

  Strategic Marketing Planning

  • Richard M.S. Wilson, Colin Gilligan(Authors)
  • 2010(Publication Date)
  • Routledge

    (Publisher)

  This work on the ACORN system of classification has led subsequently to a major reassessment of the ways in which geographic techniques might be used in the most effective way. One result of this has been the development of a variety of other geodemographic forms of classification, the common element of which is their use of census enumeration district (ED) data. ACORN, for example, uses regularly updated census variables that take account of the demographic, housing and social aspects of EDs. Their clustering techniques then enable customers to be matched to an ACORN type and, by the postcode, to the relevant ED.

  Other geodemographic systems are broadly similar to this, although each uses a variety of other variables. MOSAIC, for example, includes financial data at postcode level and then relies on aggregated individual addresses within a postcode to reduce the errors encountered in matching postcodes to EDs. Other systems, base their clustering techniques on a larger sample and improvements to the grid referencing of EDs so that they more accurately match postcodes. Such developments represent a very real attempt to overcome some of the inevitable problems and inaccuracies of geodemographic analysis.

  9.9 Demographic Segmentation

  The second major method of segmentation, and probably the one most frequently used, rests on the assumption that markets can be subdivided into groups on the basis of one or more demographic variables such as age, sex, income, education, occupation, religion, race, nationality, family size and stage reached in the family life cycle. Here, we will concentrate on just three of these variables: age and the family life cycle; income and occupation; and sex.

  An undoubted attraction of Demographic Segmentation is the wide availability and easy interpretation of the data, and it is this – together with the fact that not only can most consumer markets generally be divided relatively easily along these lines, but also that purchase behaviour often correlates highly with Demographic Segmentation – that have combined to make it such a convenient, easily understood and frequently used approach. In recent years, considerable attention has been paid to the ways in which specific demographic variables can be used more effectively, with the result that variables such as age and life cycle, income, and sex have all been greatly refined. As an example of this, firms such as Lego, Toys ‘R’ Us and the Early Learning Centre give full recognition to the differences that exist between children of various ages, with the result that toys are now designed to fall into highly specific age categories. In this way, not only is the development potential of the child maximized, but the task of choosing toys by parents, friends and relatives is made infinitely easier. A similar, if perhaps rather more esoteric, recognition of the importance of age and life cycle is reflected in the marketing strategies of various petfood manufacturers who, over the past few years, have developed different dog foods for puppies, adult dogs, older dogs, overweight dogs and dogs with ‘sensitive stomachs’. More frequently, however, the significance of life cycle is reflected in the notion of a family life cycle

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  Principles and Practice of Social Marketing

  An International Perspective

  • Rob Donovan, Nadine Henley(Authors)
  • 2010(Publication Date)
  • Cambridge University Press

    (Publisher)

  Most segmentation begins with a primary initial segmentation base (e.g., users versus non-users of brand A, outgoing young males, retirees, etc.), and then these may be further sub-segmented by attitudes to the desired behaviour change, media habits, geographic location and so on. That is, regardless of the base(s) chosen for the initial segmentation (e.g., age and sex), the segments are also usually described or profiled on as many other variables as necessary to better understand the chosen segment(s). For example, we may segment teen smokers by age (13–16 years, 17–19 years) and sex, but then, within each segment we could further segment by employment status and occupation. We could further profile the different sub-groups on their leisure activities (e.g., type of music pre-ferred, indoor versus outdoor orientated, passive versus active leisure pursuits, etc.) and so on. Table 10.1 Common bases for market segmentation Attitudinal Positive, neutral, negative Behavioural Frequency, intensity, regularity Demographic Age, sex, income, education, religion, ethnicity, occupation, family life cycle Epidemiological Risk factor status Geographic State, region, city size, density (urban, suburban, rural, remote), climate, local government area, postcode, census collectors’ district Motives and benefits sought Varies by issue (e.g., avoid disease, sensory enjoyment; peace of mind, etc.) Psychographic Values, lifestyle, personality Readiness stage Stages of change Socio-demographic Social class SEGMENTATION AND TARGETING l l l l l l 254 Segmenting kids Carolyn Heath, of the kids marketing consultancy, Logistix Kids, suggests segmenting children according to the stages of development when planning how to communicate with and motivate kids (Ligerakis 2001 ): sensory: 0–2 years; • perceptual: 3–7 years; • analytical: 8–12 years; • reflective: 13–16 years.

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  Marketing Hospitality

  • Cathy H. C. Hsu, Tom Powers(Authors)
  • 2002(Publication Date)
  • Wiley

    (Publisher)

  Demographic Segmentation: Effectiveness. Demographic data are readily available and are one of the least expensive forms of information. They are also often related to the way customers choose hospitality services. Case Study 4.1 illustrates several hos- pitality operations’ efforts to target specific markets based on demographic character- istics. The use of several demographic variables together to define a market segment can further enhance their effectiveness. Obviously, not all 30-year-olds behave the same way. Some are rich; some are poor. Families headed by 50-year-olds vary in their behavior not only according to income, but also according to family structure. Families with children at home or in college usually have less disposable income than families without dependent children. Therefore, the statistics of any single demo- graphic capture only one dimension. CASE STUDY 4.1 Targeting Specific Markets Based on Demographic Characteristics Because of increased competition, many hotels target specific markets based on their unique needs for physical products as well as for intangible services. Choice Hotels International has designed rooms in Econo Lodge and Rodeway Inn hotels with the special needs of mature travelers in mind. These “Senior Friendly Rooms” feature brighter lighting, levered door handles and faucets, in-room coffee makers, large- button telephones and TV remote controls, and large-digit alarm clocks. Sleep Inns, also franchised by Choice Hotels, offer an oversized walk-in shower and brighter light- ing. Mike Cothran, Rodeway Inn brand management vice president, noted, “We know that Rodeway Inn hotels have special appeal for value-seeking guests, particularly

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  MKTG

  • Charles Lamb, Joe Hair, Carl McDaniel, , Charles Lamb, Charles Lamb, Joe Hair, Carl McDaniel(Authors)
  • 2020(Publication Date)
  • Cengage Learning EMEA

    (Publisher)

  All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. market density, or climate. Market density means the number of people within a unit of land, such as a census tract. Climate is commonly used for geographic segmen- tation because of its dramatic impact on residents’ needs and purchasing behavior. Snowblowers, water and snow skis, clothing, and air-conditioning and heating systems are products with varying appeal, depending on climate. Consumer goods companies take a geographic ap- proach to marketing for several reasons. First, firms continually need to find ways to grow. Target’s growth strategy includes opening smaller stores in urban loca- tions such as San Francisco; Chicago; Washington, DC; and New York City. These stores are designed to provide quick-trip shopping, customized product assortments, and services tailored to customers living in large cities. 3 8-4b Demographic Segmentation Marketers often segment markets on the basis of demo- graphic information because it is widely available and often related to consumers’ buying and consuming behavior. Some common bases of Demographic Segmentation are age, gender, income, ethnic background, and family life cycle. AGE SEGMENTATION Marketers use a variety of terms to refer to different age groups. Examples include newborns, infants, young children, tweens, Millennials, Generation X, Baby Boomers, and seniors. Age segmen- tation can be an important tool, as a brief exploration of the market potential of several age segments illustrates.

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  Consumer Behavior and Culture

  • Joao Heitor De Avila Santos(Author)
  • 2020(Publication Date)
  • Society Publishing

    (Publisher)

  Source: Image by Wikimedia Commons. This type of segmentation has become an important part of the marketing strategies for the business due to the increasing demand for the products from the young generations. Older people used to buy only the things that are required for their living. However, the young generation known as millennials has needs and requirements different from older people. They are tended to buy products that are needed for their daily living and apart from that the products that are essential for a better lifestyle are also bought by younger people more often. There are various processes developed for psychographic segmentation such as mirror approach. As per Beatty, Homer, and Kahle (1988) the psychographic segmentation can be done using a mirror approach and with the help of processes such as LOV and VALS. Apart from these, the values and personalities of the consumer are dependent on the product that they buy and the services that they consume. Thus, on the basis of these factors, the marketers place the consumer into socio-status subgroups as per their lifestyle. 8.3.1. Lifestyle The traits of lifestyle and psychographics are not inherited traits of a consumer these are developed by the people as per the society they live in and as per their surroundings. The casual traits of behavior are considered to be the relationship of different behavior of the consumer based on their lifestyle. A marketer is to provide appropriate products and services to the consumer that is linked to their different stage of life. A consumer’s demand Psychographics, Lifestyle, and Changing Customer Demands 209 changes as they grow, at a young age they spend their money on so many different things but as they grow their spending decisions become more rational. This is the part where marketers have to do much more work. A marketer identifies the needs and requirements of a consumer at different life stages.

  Sign up to read

  Learn more about book