Posted in Marketing and Strategy Terms, Total Reads: 388
Demography studies a population based on various factors. Each of these factors is known as a demographic variable (such as age, race, sex, economic status, level of education, income level, employment etc.) Demographic segmentation is a prominent market segmenting method. Segmenting the population based in demographics allows companies to get an estimate about the potential market size.
Uses of Demographics in marketing
1. Identification: Common demographic variables include age, gender, income etc. Companies usually divide customers into different age brackets such 18-24, 24-30 etc. and try to broadly define the lifestyle choices of the age groups. They also classify customers based on the income, such as low income, middle income, high income etc.
2. Obtaining data: Demographic data is probably the easiest form of data available to an organisation. The census data provided by the government is very exhaustive.
3. Market segmentation: Companies use demographics to identify the key buying groups for a particular product or service.