How Demographic Segmentation Can Help Your Business

In marketing it helps to analyze how people react to marketing efforts and their behavior toward purchasing a given product. Consumer products cater to different types of people, and knowing who will purchase these products and why helps manufacturers create better products, or market them properly. This is where demographic segmentation comes in.  While we'll cover the basics of demographic segmentation in this article, you can always find more detailed information with online coursework in business.

1. Segmentation
Segmentation is used in marketing study behaviors by grouping people with similar traits. Customers have different preferences, and knowing these differences will furnish marketing departments with necessary data to develop marketing plans. It is vital and strategic for a business entity to process segmentation and identify their target market. The data gathered such as individual lifestyles, attitudes, and morals make up a psychographic segment for example, and affects how the product will be advertised to cater to a set of consumers who have a need for these products. The marketing campaign will be tailored to reach out to the target market and furnish them with a product they can identify with.

2. Demographic segmentation

Gathering customer data such as a person’s age, his or her lifestyle, employment, the average size of a family, marital status, religion and life cycle are all part of the factors involved in a demographic segment. A detailed study of the population will show how individual preferences change as they mature or gain better living conditions as their income grows.

3. Business application
Manufacturing and marketing strategies have to use demographic segmentation if they want to be successful in producing products that consumers will want to purchase. Taking the data from the demographic segmentation, manufacturers can design products that are relevant to a majority of the target market. For example if you own a diaper business and the histogram shows that there is a lower mortality rate, that would mean more older people and fewer babies being born. Production for adult diapers has to be increased and advertising campaigns have to be designed to cater to that segment. In another example, your product may not sell as much as it used to, so analyzing your target market will tell you what factors have changed since you put out your product. Lifestyle or employment factors could be affecting your product’s sales. The lifestyle trends may have shifted, and customers feel they need more from your product, so you need to innovate or transform the existing product to keep up with their needs. Your business will greatly benefit from the information collected from demographic segmentation; to do the best possible job with the data you've collected, you may want to pick up some online business classes.

Demographic segmentation helps companies make crucial business decisions for creating and marketing products that will cater to the needs of their target markets.  The success and failure of a product and its marketing campaign will greatly depend on the data gathered. 


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