Question

Why demographics is important in business?

Answer 1

Demographics is very important for the determination of the success and failure of the businesses. It shall be noted that businesses runs on the principle of profit maximization and long-run sustainability.

Segmenting a population by using demographics allows companies to determine the size of a potential market. The use of demographics helps to determine whether its products and services are being targeted to that company's most important consumers. For example, market segments may identify a particular age group, such as baby boomers (born 1946-1964) or millennials (born 1981-1996), that have certain buying patterns and characteristics.

For corporate marketing goals, demographic data is collected to build a profile for the organization's customer base. The common variables that are gathered in demographic research include age, sex, income level, race, employment, location, homeownership, and level of education. Demographical information makes certain generalizations about groups to identify customers. Additional demographic factors include gathering data on preferences, hobbies, lifestyles, and more.

The demographic study determines how to market their product or service and the best market to the target audience. It is valuable to know the current customer and where the potential customer may come from in the future.