Demography Segmentation


In demographic segmentation, the market is divided into groups on the basis of variables such as age, family size, family life cycle, gender, income, occupation, education, religion, race, generation, nationality, and social class.

There are several reasons for the popularity of demographic variables to distinguish customer groups. One reason is that of consumer needs, wants, and usage rates and product & brand preference are often associated with demographic variables.

Another is that demographic variables are easier to measure. Even when the target market is described in non-demographic terms (say, a personality type), the link back to demographic characteristics may be needed in order to estimate the size of the market and the media that should be used to reach in efficiently. Here is how certain demographic variables have been used to segment markets.

Age and Life-cycle Stage

Consumer wants and abilities change with age. Toothpaste brands such as Pepsodent, Crest and Colgate offer three main lines of products to target kids, adults, and older consumers. Age segmentation can be even more refined. Pampers divides its market into prenatal, newborn (0-1 month), infant (2-5 months), cruiser (6-12 months), toddler (13-18 months), explorer (19-23 months), and preschooler (24 months +).

Nevertheless, age and life cycle can be tricky variables. In some cases, the target market for products may be the psychologically young. For example, Honda tried to target 21-year olds with its boxy Element, which company officials described as a “dorm room on wheels�. So many baby boomers were attracted to the car’s ads depicting sexy college kids partying near the car at a beach, however, that the average age of buyers turned out to be 42!

Nostalgia can also play a role. Chrysler had a young target market in mind for the PT Cruiser, but found that lots of older consumers were reminded of hot rods from their youth. Toyota has been...