Demographic Segmentation: What is It?

Demographic segmentation involves splitting the audience on categories such as location and age.It is easier to focus on character traits like age and gender.

However, you can also focus on non-character traits such as family structures and income.

These are more useful for retailers to target an audience that will be interested in purchasing and availing of the specific services and products.

On the other hand, business-to-business marketers, specifically rely on occupational segmentation to ensure their products reach people with purchasing power.

So generally, this form of segmentation looks into who your audience is but what will be of more importance to you depends on your business needs and model.

This may sound a lot like targeting your audience, however, segmentation is different.

Let’s find out how!

Difference between Targeting and Segmentation

Segmenting a market is the first before you begin to target them.

Segmentation is the practice of making groups on the basis of the different traits that people share.

It allows you to collate your customers so that you can promote your products to them in the best way.

After segmentation comes targeting.

You target an audience that you can reach in a segmented market.

Hence, targeting and seh=gmenting essentially work together.

Though, segmentation comes before targeting.

This is understood by the STP marketing model.

First, you Segment the audience by dividing the market into different groups.

Next, you focus on which segments i.e. the groups you need to specifically target.

All of this combines to guide the product Positioning and marketing mix to reach and appeal the specific audience you want to focus on.

This could mean that an organic food store uses demographic data by age to target a younger audience.

However, they realize that their biggest buyers are older people.

So they can still look into ways to appeal to the younger segment by making the marketing more youthful and reaching them through the social channels they frequently use.

You can always choose to not go for any particular segmentation.

However, then will you get the results you want?

Segmenting according to demographics certainly has its own set of benefits to give you the results you desire.

Let’s dig deeper into that below!

Advantages

Allows you to recognize changes in your audience

While carrying out demographic segmentation, you can look into what your audience tends to buy.

This will allow you to know about the new demographics that are buying from you and how you can think out of the box and target them.

Speaking of targeting…

Improving the effectiveness and targeting of ads and content

The segmentation allows you to target the most relevant customer for your product.

For instance, you cannot target pork to Muslims.

Instead, by using advertising technology, you can target the ads to the demographic segments that will most care about it.

This way, you can reduce any wastage on the excessive advertising budget.

And will also be able to target wisely.

Improve Personalization

When the market is segmented, you can convey different messages to different demographics.

The same product can be marketed differently to a variety of customers.

For instance, a car can be a family-friendly vehicle but advertisers also show it as ideal for adventure for young bachelors.

Personalization hits the nerve. It can go farther.

Personalizing your message and a copy can persuade potential customers to finally make a purchase.

Around 80 percent of consumers tend to buy from companies that personalize their messages.

While personalization is important, uniqueness is too.

Know what makes the segments unique

Demographics can help in identifying what specifically makes your audience tick.

Each person’s life situations and interactions are unique, so demographics can lead you to that in order to specifically target them.

Better product relevance

Due to personalization, product relevance increases as well.

Those that see your ads and marketing will be presented with relevant products to them and are, therefore, more likely to buy from you.

Disadvantages

Not everything is perfect.

Hence, with the advantages of segmentation, there’s also a fair share of cons.

It isn’t for everyone

It depends on whether demographic segmentation is the best type of market segmentation for your e-commerce store or other business.

That depends on what are you eventually selling, whether your business is small or big and who is your main audience.

Some other strategies may work better than looking into the demographics.

For instance, for an online clothes shop, having more data can lead you to behavioral segmentation which gives a more personalized outlook.

Hence, you need to see which option is better for your marketing needs.

Not using the correct demographic variables

You will not need all demographic variables to get an idea about your target audience.

For instance, segmenting by age for selling food is not that useful.

Though doing so for income for high-end luxury items makes sense.

Demographics still play a crucial role in making your target customer, however, it may not be enough.

You may have to combine other forms of market segmentation to get a full idea of how to approach your products.

Less Range

Demographics are guilty of showing a limited range.

You have two people in the same demographic segment, it could be their age or gender, with completely different wants and needs.

Hence, being in the same segment does not denote that you want the same things.

So they cannot be the most accurate measure of what the audience segment eventually wants.

Therefore, having a mix of other market segmentations along with demographics is a good idea.

Audiences can want different things based on their needs and mentality.

That said, demographics are one of the basics of identifying your potential customer.

Let’s figure out how you can use it.

You can get them from private surveys or public records.

There will be richer details in private surveys whereas public records are easier to find.

The typical demographics for every business include:

• Age segmentation
• Income demographic segmentation
• Education demographic segmentation
• Location
• Employment
• Marital Status
• Gender
• Ethnicity or race

Some specialized demographics can help too.

For instance, you may want to know how many car owners are new drivers.

Or for a political campaign, you can benefit from knowing information on donor status and party registration.

Examples

Age

People of different ages may have separate desires, wants, expectations and needs.

Hence, if you are targeting a specific age group, your ad or landing page of the website should indicate that.

University admissions are usually targeted toward young students, hence the pictures or the text matches them.

You may log into a university website and see pictures of young students with books.

And the slogan too can be aimed at youth.

Gender

Gender-specific marketing is powerful but it can easily get stereotypical.

Oddly enough, effective gender marketing is about having a clear and effective targeted marketing approach, you know like everything else.

While you can definitely advertise products for men and women, avoid putting genders into stereotypes. Only then they will work.

Relationship Status

Knowing the relationship status of your audience can help in identifying their living situation and family makeup.

It is not an important demographic for every industry but is certainly for the wedding industry.

Hence, matrimonial sites can target single people accordingly.

Income and Occupation

These demographic segments along with education levels can be useful for many marketing techniques.

Having income-related segmentation can be useful as people belonging to different income brackets will make drastically different purchasing decisions.

People in lower brackets may value good value while those with a disposable income will spend more on a better product.

Hence, this demographic is usually important to many businesses while targeting their audience.

Finally,

You do not necessarily need demographic segmentation to define your audience and target it.

However, if it suits your business model then it can prove to be beneficial for your improving the relevance of your products, personalizing the copies and improving the effectiveness of ads, thus resulting in more sales.