Question

List 4 (four) important demographic segmentation variables (with breakdown) for your chosen new product. Use a table to present your answer.

Answer 1

What is demographic segmentation?
Demographic segmentation divides the market into smaller categories based on demographic factors, such as age, gender and income. Instead of reaching an entire market, a brand uses this method to focus resources into a defined group within that market.

1. Demographic segmentation based on age: One of the most critical variables for demographic segmentation is age. A generation is a set of people who are born around the same time in history, grew up with a similar kind of experience with specific geographic segmentation.

For example, baby boomers are those born between 1946 and 1964 in the United States. The people born in this generation have specific similar characteristics and thought processes. Generation X, followed by baby boomers, are born between 1965 and 1981.

If market researchers reach out to baby boomers and generation X with the same strategic planning, asking the same questions, there is a likelihood that they may end up having inconclusive results.

2. Demographic segmentation based on gender: Men and women have distinctive differences in their outlook and how they perceive how the market functions. Even the market researchers are very clear about the difference in the thought process of both genders, and so, they manufacture gender-specific products.

Perfumes, clothes, footwear to even cars, there is gender specificity that product manufacturers understand and thus cater to the specific needs.

3. Demographic segmentation based on income: Income is also one of the crucial variables, as it decides the pricing of the product. Most of the product manufacturers keep in mind the income demographic segment while putting a price tag on the product.

However, other manufacturers cater to only the higher-income segment of society. Cars, technology, clothes, etc. are made more specific to these segments as they prefer luxury over anything else.

4. Demographic segmentation based on religion, race, and nationality: Alcoholic beverages have limited to no reach in the middle eastern countries, leaving scope for non-alcoholic drinks or fizzy drinks because of the hot climate. Brands across the globe have wide-scale advertising campaigns.

But they haven’t just stopped there. With the increase in international business, these brands have come up with campaigns that are best suited to religious beliefs, and even nationality, and made sure that no sentiments are hurt. With the increase in the geographic area of the business, there is also an increase in demographic segmentation based on religion, race, and nationality.

If we are assuming a new product.

Let's take "Brand X" shoes

Segmentation by age

We are mainly targeting youngsters for this brand. This will be people having a age group of 13-28. Also type of people who are fitness conscious.  

Income

We positioned our brand for upper middle class people in the society. Price of different varieties will be affordable to them than lower class people. So our audience is upper middle class and upper class people.

Gender

This is a unisex product. Equally fits to both Male and female.

Region

We are targeting mainly urban peoples. Because they are more fitness conscious when compared to rural area.

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