Demographic Segmentation

What Is Demographic Segmentation?

Demographic segmentation is a strategic approach in marketing that involves dividing a market based on the demographic characteristics of the target audiences. 

This strategy aims to learn what the target market needs so that you can offer the right products or services.

In analyzing the target market characteristics, you must cluster them into categories, such as education, age, gender, income, and so on. 

By knowing the demographic segmentation, you can provide what the target market needs, which later will increase customer loyalty to your business and revenue. 

The Advantages of Demographic Segmentation

Demographic segmentation in marketing offers many advantages. Below are the benefits you can take from implementing the marketing strategy:

1. Create Relevant Products and Services

The first advantage of this segmentation is to help you create relevant products and services since you already understand what the market needs. 

For instance, you are operating a fashion business targeting high-income women. Yet, after you analyze the market, you figure out that the competition in this cluster is high. 

To overcome this challenge, you decide to target a new audience, lower-income women, by releasing new fashion trends with adjusted prices. 

2. Fit the Marketing Message

Not only adjusting the products with the target market but knowing your segmentation will also help you to fit the marketing message. 

To market your products or services, you must understand customer behavior to deliver the message effectively. 

In this case, you can utilize relevant campaigns or ads as personal as you can to build a connection with the customers. 

3. Keep Demographic Data

After analyzing the market, make sure to always keep the data result so that you can develop your business and connect with the target audiences. 

You can gather data from market research, statistics, surveys, and many more. By obtaining demographic data, you can learn more about the latest trends or make business decisions profitable for the company. 

4. Develop Marketing Efforts

Since you already know the characteristics of your target market, you can develop and adjust your marketing strategies. 

One of the examples of demographic segmentation you can take note of is, let’s say you run a business in the spicy noodles sector. This food is popular among youngsters, especially women and college students. 

If you understand this demographic segmentation, you can make a marketing strategy relevant to the younger audiences and leverage trending things or unique social media content. 

Each demographic surely has its own approach, so you cannot make similar strategies for all clusters. That’s why segmentation clustering will help you to determine what kind of strategy is suitable for your target audience. 

5. Build Good Relationships with Customers

Last but not least, the advantage of demographic segmentation is building good relationships with customers. This is because the products and services you provide can answer the customers’ needs. 

Therefore, they will be more loyal to your business and repurchase your products. However, you must maintain the product and service quality so that your customers do not shift to competitors.

Types of Demographic Segmentation

To determine the demographic cluster, you can pay attention to the 6 variables below to match the characteristics of your target customers.

1. Gender

The first variable is gender. You need to know what gender matches your message and business so you can meet their needs.

This variable is important for certain businesses relying on gender perspective like the perfume business. This is because both men and women have their perfume fragrance preferences.

It could be that men prefer perfume with a strong aroma, while women choose a softer or sweeter fragrance.

By grouping target consumers according to their gender, you can determine what kind of perfume is suitable for both personas.

2. Age

Apart from gender, you can consider the age of potential customers. This is because some products or services may appeal to certain age groups but may not appeal to other age groups.

Additionally, not all marketing strategies are suitable for all age groups. For example, you sell cooking utensils. Of course, the cooking utensils sold have different marketing approaches between young and old age groups even though the products can be used by anyone.

3. Income

Income is a variable that you need to consider because it can influence a person's purchasing power and interests.

The target market with a higher income may tend to have an interest in purchasing expensive or branded goods.

On the other hand, the target market with a lower income might choose more economical goods.

Therefore, you need to choose the right marketing and sales strategy by considering whether the product you are selling has a price that suits the target market or not.
 

4. Occupation

Equally important to income, you must also consider the type of work your target market does. You can group demographics by job type, work location, and industry type. You can also combine job demographic data with income to get a clear picture.

5. Social Class

Regarding social class, three social classes have different approaches, namely the upper class, middle class, and lower class.

Upper-class people come from a group of individuals with high and established incomes. Usually, individuals of this class like branded goods.

Meanwhile, middle-class individuals have quite high incomes, but not as high as the upper class. They also sometimes have an adequate level of education.

Lastly, lower-class individuals consist of groups of people with low incomes whose access to education and the economy is not as good as the middle or high class.

6. Education

Lastly, the type of demographic segmentation that needs to be considered is education level. You can differentiate between elementary school graduates, tertiary-level graduates, or no education at all.

From these variables, you can determine products that suit the lifestyle of individuals with a certain level of education.