Demographic Segmentation
Segmentation made based on various demographic factors such as age, income, gender, occupation, etc. is known as demographic segmentation. It deals with the classification of customers whose similar characteristics in the context of age, income, gender, and occupation.
Demographic segmentation allows researchers to classify or group the market for customers based on various demographic factors. Segments are made based on the demographic factors used to determine the potential customers for which the company can implement the marketing strategies.
Demographic segmentation
Example 1
Demographic segmentation was made using the fact age of the product mobile phone
Considering the use of the mobile phone at various ages the following segments are made. It helps to determine the potential customers who are with the marketing strategy that will be applied.
20 to 30
30 to 40
40
50 and above
Above are the four segments made based on the demographic factor of age. The segments or groups are made based on similar characteristics that is age. These will be used for targeting or selecting the best group of customers or for which the company can implement a successful marketing strategy.
Example 2
Segmentation made based on the demographic factors income for the product mobile phone
1 lac to 5 lac
5 lac to 10 lac
5 lac and above
The above segmentation helps the organization to determine the customers who can afford the product. But it depends upon the price of the product and the customer’s expectations in terms of the reaches quality and price.
Example 3
Segmentation Made using the demographic factor occupation
Farming
Retailer
Government Job
Private Job
The above example shows the sources of income the people have. The business organization can analyze and predict the purchasing power of customers based on this segment. According to the type of product or service the company offers, the above segments can be targeted. After targeting the above segment the positioning strategies will be implemented to acquire these segments as potential customers.
Example 4
Segmentation for Beauty or cosmetic products made based on demographic factors Education. Following are the segments based on demographic factors in education.
School level education
Graduation
Post Graduation
Un-educated
Above are the four possible segments made using demographic factor education. In the context of cosmetic or beauty products, there is quite an impact of education on consumer behavior regarding cosmetic products. Educated people specifically female customers prefer a variety of beauty products whereas un-educated or less educated customers prefer less variety or are not interested in purchasing. Organizations always focus on the people who are easily attracted to buying the products.
Positioning strategy of marketing implemented according to the segments made in the context of specific products. for the above segments, the beauty product companies promote the products to attract different segments in different ways and offer them the products according to the way the can be interested and attracted.
Example 5
Income is also the key factor of demographic segmentation. It is used when the product’s price may no affordable for some customer segments. To determine the potential segments who are having sufficient purchase power. Following are the income ranges that can known as the segments made based on the demographic factor income.
Product: Mobile Phone whose price ranges from INR Rs. 10,000 to 25000
Segments
1 lac to 5 lac annually
5 lac to 10 lac annually
10 lac to 20 lac
20 lac and above
The above four segments made on income ranges useful in determining the potential segment. These targeted potential segments can easily converted and retained as loyal customers.
Product: Laptop
Segments
5 lac to 10 lac per year
10 lac to 200 lac per year
20 lac to 30 per year
30 lac and above
The above four segments made on income ranges are useful in determining the potential segment specifically to buy the laptop. These targeted potential segments can easily converted and retained as loyal customers. It very essential to target the segment based on income in regards to the product laptop. The normal price range of a laptop starts with 40,000 INR Rs. Indian Rupees. The people whose income is less than 5 lac annually may or may not afford the laptop which price more than 1 lac.
Example 6
Segmentation can also be possible to make using the demographic factor of land holding. This factor is specifically useful in rural marketing. The people whose occupation is farming or farming-related allied activities can be classified under the demographic segmentation land size as following segments.
Landless people
Marginal land size
Small farmers(small-size farming land)
Large farmers (large-size farming land)
The above segments are useful in the marketing of the products required for rural customers. Rural marketing activities or functions are involved in the execution of the above segmentation. Large-size sarge farmers can have higher purchase power whereas small-size farmers have low purchase power. The marginal land size people can afford the product but may or may not interested in buying the products required for farming purposes.
What product the company is going to promote and offer for which segment of the farmers determines the marketing strategy. Which marketing strategy will be useful will be decided by using the above segments and type of product.
Example 7
Religion also can be a significant factor in segmenting the market. specifically in countries like India religion plays a vital role in the determinants of demand for specific products. Following are the segments made based on the demographic factor of religion
Hindu
Muslim
Sikh
Jain
Christian
People or customers from the above segments have different consumer behavior. They are different in their consumption pattern, lifestyle, purchase power, and perception towards buying specific products or services. Any business organization needs to execute the marketing activities differently for each of the above segments.
Hindu religion is the only segment where a number of products can be sold in different festivals. these festivals make people mandatorily purchase a few of the products. for example, firecrackers used in the Diwali festival in India. This festival is celebrated across the globe by all the Indians who are living in different countries.
Firecrackers, Sweet food products, new clothes, and different products are to be bought on Shubh Muhurta which is on Diwali. Electronic and automobile products are the only products that can be sold in huge quantities in India during festivals. The actual reason behind this is the belief of people in buying any costly products on Shubha muhurta.