Demographics

Joran Hofman
April 4, 2021

What is Demographics?

Demography is the statistical study of a specific population, based on elements such as race, age, and sex. Demographic data points to socioeconomic information expressed in statistical language that includes education, employment, income, birth and death rates, and more.

Demographic data is very useful for companies to study how they can market to consumers and make strategic plans about future consumer requirements trends.

What is Demographic Segmentation?

Demographic segmentation divides the market into smaller groups based on demographic factors, such as occupation, gender, age, and income. Brands use this system to direct their resources to specific groups within that market instead of reaching the total market.

This separation of the market into smaller chunks allows companies to use their time and resources more efficiently since each of these chunks has a common variable. In this way, they can better analyze and understand the potential market and employ personalized advertising to ensure that a target group’s needs are met.

Why is Demographics Segmentation important in Marketing?

Through demographic segmentation, companies reduce the risks of campaigning for consumers with little interest, which rapidly increases ROI.

There are other important factors, in addition to a better ROI:

Build long relationships with clients

Reaching customers in a more personal way with personalized marketing using demographic data generates greater customer trust and loyalty towards the brand; they identify with it, which makes it likely that they will do business with the brand for a long time.

Improve services and products

When a company has a loyal customer base, it approaches products and services differently. When a more complete understanding of the target audience is obtained, it will possibly offer better products or services.

Improve marketing strategies

Demographic targeting gives the ability to be more specific with the marketing tactics. It leads to improved focus, more control over future advertising campaign plans, and better time, resource, and budget management.

What are the Types of Demographics?

When doing corporate marketing, demographic data is collected to better study the company's customer base. Among the variables collected for this study, the most common are:

Age

This is the most basic variable and the most important of all, motivated by the fact that people's consumption tastes constantly change according to age. Most of the marketing campaigns are designed with an audience determined by age.

This factor is sometimes used in relation to specific age categories or phases of a person's life cycle: newborns, infants, children, pre-adolescent, adolescents, adults, middle-aged, and older people. Many brands on the market have different collections of products aimed at different age groups.

Other times, age segmentation relies on generations: Gen X, Gen Z, Baby Boomers, Millennials, Gen Jones, etc. And it is that those who are part of these groups were born in close time intervals and grew up with similar experiences; they generally think similarly. Running a marketing campaign with the same offering and strategy targeting Millennials and Gen Xers will most likely produce unwanted results.

Gender

In this factor, there is not much to explain since it is obvious that women and men almost always have different needs, likes, dislikes, and ways of thinking. For example, most men are not interested in home appliances, and very few women are interested in home repair tool kits. When creating a campaign, these are key factors to take into account.

Occupation and income level

If a person cannot pay for a product or service, it makes no sense to focus on them.

This segmentation factor allows you to assess an audience’s purchasing power and find information about how people spend their money, both at the high and low levels. Some companies sell the same product but focus on different levels or payment capabilities, adding or removing features to the same product.

According to the occupation, this is important in the case of differentiation because there are resources aimed at different industries and jobs.

Ethnicity and religion

All ethnic, religious, racial, and national groups have individual cultures that bring conflicting beliefs, attitudes, interests, and preferences. This obviously influences both the response to marketing and buying habits.

Many transnational companies adapt their campaigns and products to each country, for example, McDonald’s, Pepsi, and Coca-Cola. 

Family structure or composition

This is another factor that can be very important since when the conditions of a family change, for some reason, generally the wishes and needs of that family also change. And of course, this greatly affects trade.

A single person does not have the same interests or priorities as a newly married couple or a family with several children.

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