What is Demographic Segmentation + How To Use It (with examples)

As you know, marketing comes to two fundamental concepts: Communication and Targeting (please note that there's a lot of theory to marketing and the different types and strategies in marketing, but humour me). You can find out more here. 

To put it another way, marketing is who to talk to and listen to.

One way that marketers can decide who they want to communicate with is through demographic segmentation.

What is demographic segmentation in marketing?

In marketing, demographic segmentation means dividing your potential customers into groups based on traits and characteristics. But, what does this mean?

The easiest way to explain this is if you've ever filled out a general census form. You'll notice that the questions relate to you (and your family) in terms of quantitative data:

• Age
• Gender
• Ethnicity
• Children
• Marital Status
• Income Level
• Level of Education
• Etc.

This is probably the most popular (or most well-known) type of segmentation due to its use in the media. 

You can use demographic segmentation in both B2B and B2C marketing. Although with B2B marketing, you're more likely to see occupational segmenting used.

Occupational segmenting is a demographic segmentation that helps identify if certain traits, such as gender, are over or underrepresented within an industry or company. 

What are the advantages of using demographic segmentation in your marketing?

There are a few advantages to demographic segmentation that will help you achieve your marketing goals. Here are just a couple:

Improved Personalisation

Personalisation is designing your marketing messages to speak to an individual to show them how your products or service will solve a particular problem they're having.

Understanding that the problems an 18-year-old female who is not religious faces are different from a 45-year-old male with a wife and three kids under the age of 12 are just the start. 

They are living very different lifestyles and are at different life stages. Because of these factors, the two people in this example will be attracted to very different products and services. And that's without taking into consideration income levels, ethnicity, or any other demographic factors.

As you can see, you can get really in-depth with your personalisation. And ultimately, your messaging and your product or service will be received better by some people than others. 

Improved Product Relevance

Understanding who will buy your product will help you sell more of your products. It makes sense, right?

Basically, do your ideal customers want or even need your product or service?

Think about it like this; if a man who practices Islam were to buy beef, he requires that beef be halal. If you sold halal beef, then your product is relevant to him.

Likewise, if you sold software that helped improve Spelling, Punctuation, and Grammar, then you're likely to target the student population based on demographic segmentation.

Improved Advertising Efficiency and Effectiveness

You have a budget set for marketing and advertising your products and services. To make the most of your budget and get more bang for your buck, it helps you to only advertise in spaces that will maximise your sales.

By focusing on your chosen target market, you're actually saving money, time, and other resources by not simply throwing things at the wall and seeing what sticks.

It's a more strategic approach that will increase the volume of products and services that you sell, thus boosting that bottom line.

Is demographic segmentation right for you and your business?

There are many factors that you need to consider to determine if demographic segmentation is the right choice for your business. 

It depends on the size of your business, the types of products and services you sell, and whether or not there is a better way.

Demographic segmentation is a fantastic starting point, and just like geographic segmentation, it is fairly straightforward to execute. But, again, this is because it doesn't have as many factors or variables as psychographic or behavioural segmentation. 

If you have a restaurant that only caters to a local community, then geographic segmentation might be a better choice for you. 

As with anything you do in marketing, it takes persistence, consistency, and to test, test, test! 

Disadvantages to demographic segmentation

As with any strategy, there will always be advantages and disadvantages. Read on to find some disadvantages to segmenting the market by demographics.

Being Limited

Even within your chosen demographics, not everyone will want or need your products and services. This limitation can be fed by making assumptions. One of the biggest criticisms of demographic segmentation is that the data can be misread or is too vague to do anything with.

Wrong Combination of Variables

Although demographic segmentation is one of the easiest in terms of data collection, there is still a wide range of variables that you must consider.

These variables are easy to get wrong, and the incorrect combination will mean that your marketing message will miss the intended audience.

If you are a restaurant (I must be hungry because I keep coming back to this idea), then segmenting your market based on gender would not work. You would be alienating some of your potential customers. 

Using demographic segmentation with other types of market segmentation

Combining demographic segmentation with psychographic or behavioural segmentation will give you a greater boost with your marketing efforts. More of this idea and how to implement it will be found in future articles.

Demographics tends to be the first place a lot of businesses start. Through filling out forms or surveys, chances are you've come across questions asking for your demographics. This provides insight into your potential behaviours, attitudes, and opinions to feed into the other types of segmentation.

This can become the basis for any marketing campaign.

Examples of demographic segmentation

Saga Over 50's Holidays

Saga is a tourist board that cater to the over 50's crowd. They provide bespoke travel packages that attract and entice the chosen customer based on age. 

Someone in this age bracket will likely have their family all grown up. They have also likely spent years in the hustle and bustle and so are now in a different life phase where they no longer want the wild adventure.

So Saga uses a lot of peaceful imagery that evokes tranquillity and peace. 

"Bic For Her" Range

You've heard of the company Bic, right? Well, they are a great example of how not to use demographic segmentation for your target market. 

Firstly, their campaign of "Bic for Her" was greatly stereotyped. They decided that people who identified as female must love the colour pink. 

Secondly, their International Women's Day campaign implied that only men should be in charge with the slogan “Look like a girl, act like a lady, think like a man, work like a boss.”

Naturally, both of these situations caused a backlash on social media - not just once, but in 2012, 2015, and even now in 2021! 

This is why it's important that you don't make assumptions and you actually understand your target market. 

Final Thoughts

So, do you think you'll use demographic segmentation within your business and marketing strategy?

It's a fantastic way to target your message and improves your product relevancy. However, it may take a while for you to choose the correct variables to run with. 

Demographic segmentation is not a guessing game; it's learning how to accurately interpret the data so that you get the messaging right. 

You can also use demographic segmentation as a feeder into the other segmentation types, such as: geographic, psychographic, and behavioural.

Resources

Balearic islands tourism: a case study in demographic segmentation

The advantages of preference-based segmentation: An investigation of online grocery retailing

The Advantages and Disadvantages of the Profile Approach to Analyzing LifeStyle Data

Market segmentation

Possibilities Of Market Segmentation Based On Geographic And Demographic Variables (PDF)

image: Freepik.com