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Demographic Segmentation Examples

Market research 04 12
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01

Introduction to Market Segmentation

Market segmentation is a marketing term that describes the segmentation of a target audience into groups of consumers with similar traits. 

Market segmentation can be divided into the following four categories:

  • Demographic Segmentation
  • Psychographic Segmentation
  • Geographic Segmentation
  • Behavioral Segmentation

Within this article, we will specifically focus on understanding the types of demographic segmentation through the use of examples.

Demographic Segmentation Examples1

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02

What is Demographic Segmentation?

Demographic segmentation refers to the categorization of consumers into segments based on their demographic characteristics. This includes variables such as age, gender, income, education, religion, nationality etc. 

Demographic segmentation gives you an understanding of which customers are most likely to make purchases. This helps you outline who your most valuable customers are, and therefore who you need to target your marketing efforts towards. By tailoring marketing strategies to those customers who are most likely to make purchases, you increase the effectiveness of your marketing strategies whilst lowering your spendings. This means that demographic segmentation can help you increase customer loyalty, decrease spendings, and increase your ROI (return on investment).

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03

Types of Demographic Segmentation with Examples

  • Segmentation by Age

Age is one of the most important variables by which consumers are segmented. This is because consumers’ preferences and needs vary significantly depending on the age group they fall under. Age segmentation is done by generation or by life cycle stage. When it is done by generation, the different stages include millennials, generation z, and baby boomers. When it is done by life cycle stage, the different categories include babies, teenagers, adults, and the elderly. 

For example, companies that sell soft drinks, like Coca-cola, often target young adults between the age of 15 to 25 by depicting young men or women in their marketing campaigns. 

  • Segmentation by Gender

Individuals identify on different points in the gender spectrum, such as feminine and masculine. Their gender will often have a significant effect on their preferences and purchasing decisions. By understanding which gender your products/services appeal to, you can make sure your marketing strategies are tailored to the right audience. 

For example, a lot of organizations that sell deodorants for men will often use marketing campaigns that depict a man using their deodorant and instantaneously becoming irresistible to the women around him. They do so because most men get a strong sense of gratification when women are attracted to them. These campaigns want to show men that this deodorant can bring them this gratification, instantly. 

  • Segmentation by Income

Segmentation by income is very important as a person’s income is a strong determinant of their purchasing decisions and their perceptions on pricing. Individuals in lower-income groups will prefer buying products that are inexpensive or reasonably priced, whereas those in high-income groups may be more interested in buying high-end and luxury products.

For example, luxury clothing brands often advertise their products in luxury lifestyle magazines that appeal to high-income earners. These brands rarely use mainstream marketing channels, such as TV advertisements, that are viewed by the masses. This not only reinforces the exclusivity of their brand, but also allows them to reduce their spendings as they are focusing only on their target market. 

  • Segmentation by Family

Societal family structures can play a significant role in shaping individuals’ preferences. People in larger families may prefer buying cheaper goods so that they can purchase in bulk. However, smaller families and single people may have more flexible spending patterns and may favour premium or luxury purchases. 

For example, a lot of jewelry brands target newly engaged couples and will depict serious relationships within their ad campaigns. This is because jewellry is often purchased by couples who are about to get married. These campaigns will try to depict loving couples that are ready to take the next step in their relationship and are looking for the right rings to commemorate their commitment.

Demographic Segmentation Examples3
  • Segmentation by Race and Religion

It is important for businesses to know the religious categorizations of their target market as religion can influence preferences. 

Additionally, nationality and ethnicity can also play a significant role in influencing preferences. Such segmentation is most common in the food sector, as a lot of companies under this sector sell food from specific cuisines.

For example, some restaurants that serve asian cuisines in western countries are trying to target asian expats that live in these countries. They often appeal to this audience by marketing the authenticity of their food.

  • Segmentation by Education

Consumers’ level of education plays a significant role in the shaping of marketing strategies. It also determines the channels that must be adopted to reach the target market. 

Additionally, education levels affect the appeal of product features. Extremely basic product features may not appeal to a highly-educated audience, while complex product features may not appeal to consumers with low to medium levels of education.

For example, tech companies that sell laptops have identified that a significant segment of their target market is college-going students. They try to attract this segment by offering promotional offers to college-going students by giving them a discount on their laptop if they can provide proof of being a student (such as university identification cards).

Demographic Segmentation Examples cvr

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