The differences are obvious in this comparison. Marketers to these groups may need to make changes to their product lines and sales projections. 4.What behavioral characteristics are shared by your target market? To be successful, every business owner has to know the demographics that describe the customers and what trends or changes are happening in those specific characteristics. Retailers who sell products to the middle class have a smaller number of possible consumers with less income. As an example, they represent a good market for lawn and garden supplies, such as flower seeds from Burpee or outdoor furniture from Wayfair. Their jobs give insights into the type of person they are. As a result, middle-class workers have less money to spend. According to a study from Pew Research Center, while older people are using technology more, they are still less digitally inclined than millennials and buy fewer digital products. As discussed during this our discussion of consumer behavior, demographics refer to statistical information about the characteristics of a population. They don't have unlimited funds, so the money for one purchase may be at the expense of not buying something else. Older people spend less on these things; they are less active, they stay indoors more and they have more needs for medical treatments. Renters and home owners have different motivations. A haberdashery in New York would not be wise to carry a large stock of cowboy hats. It is common for a business to use demographics as a target market and/or target audience.The following are common types of demographics. The theory of this marketing strategy is that the more focused your demographic is, the better you can speak to their emotions and get them to buy. Let's start our talk with the age ranges that advertising execs … These demographic characteristics are also an important part of creating a persona. Demographic information allows you to better understand certain background characteristics of an audience, whether it’s their age, race, ethnicity, income, work situation, marital status, etc. 1.What are the demographic characteristics of your target market and why are they important? This is not a generational thing, but is more likely an age range target for couples between the ages of 20 and 50. A demographic profile (often shortened to \"a demographic\") provides enough information about the typical member of this group to create a mental picture of this hypothetical aggregate. Age ranges may seem like they are another way to say generational groups, but it goes a bit farther than that. The Importance of Demographics to Marketing. Home owners are willing to invest and make improvements in their property. Demographics or demographic data refers to selected population characteristics as used in government, marketing or opinion research, or the demographic profiles used in such research. How do these impact your marketing strategy? The Demographic Variables That Affect a Business, How to Identify the Segmentation Criteria That Will Affect Your Target Market Selection. A restaurant selling fried catfish will do better in Macon, Georgia, than in San Francisco. Income has a significant effect on consumer behavior and product decisions. James Woodruff has been a management consultant to more than 1,000 small businesses. A local ethnic foods supermarket is likely to target a particular ethnic group based on cultural … Religion, Race, Nationality As our communities become more and more integrated and less homogeneous, … Take the family to dinner at Applebee's or put some money aside for the kids' college fund? In this way, age becomes one of the fundamental demographic factors affecting consumer behavior and buying decisions. How do you anticipate these characteristics changing over the next 15–20 years? Commonly-used … While single parents still buy life insurance, the key demographic that we looked at in the age section was that of married couples. Knowing whether a person is married, single or divorced, is also an important demographic to understand. They also have learned from the ex… We see that Van's customer demographic is … For example, married couples who own homes might buy home theater systems, but the husband might direct the sale, with his football season parties in mind. Types of Demographics. … Demographics are a key factor in getting that edge. A youngster might want a mobile phone but an earning professional will want a communicator with lots of extra features such as email and file editing support. A retailer of hoodies, for instance, needs to take stock of the race and ethnicity of the people living in a neighborhood before opening a new store. On the other hand, consumers with higher incomes don't have to fret about taking the entire family out to dinner at an expensive restaurant, such as Le Bernardin in Manhattan. This is because consumer needs and wants change with their age. Many businesses are using contemporary technology via social media and online analytics programs to closely target the demographic down to a focused niche. Farmers are interested in any kind of tool or machine that will make their work easier or more productive. The declining birth rate means that married couples will not be forming families as early as before. 1. The mindsets of singles versus married couples are different. Sometimes products are targeted toward both genders, as with retired couples. Use it when you need demographic and marketing data for a specific geographic area in the … A fundamental principle of running any business is to know your customer. Demographics finds those people. Find those who need what you have, and you will be more successful in selling. The level of education influences consumers' perceptions of the things around them and affects the degree of research before making a purchase. Smart … People from different cultures have different tastes and have different buying habits from one another. Education affects choices in fashion, movies and TV programs. As a senior management consultant and owner, he used his technical expertise to conduct an analysis of a company's operational, financial and business management issues. It is also important to understand and respect the different holidays and cultural traditions of specific ethnic demographics. This situation has led to an increase in the number of dollar stores, off-price stores and warehouse clubs. Age: Demographic Target … The geographic location of the consumer makes a difference. Demographics are statistical data related to groups within a population, often … What Is the Target Market for Fitness Gyms? Thus even though the basic functionality of the product is same, the wants are different. 3.What psychographic characteristics define your target market? The Stages of Family Life Cycle Marketing, Explain the Difference Between Decrease in Demand & Decrease in Quantity Demanded. Not only do different generations have different buying habits from each other, but they also have different ways of speaking and alternative ways of buying. SimplyMap is an online GIS product that maps demographic and market data in the United States. When not writing, Kimberlee enjoys chasing waterfalls with her son in Hawaii. Baby Boomers have very different buying habits compared to those of the X-Generation or Millenials. He graduated from Georgia Tech with a Bachelor of Mechanical Engineering and received an MBA from Columbia University. Business owners are always looking for an edge in marketing products and services to generate more revenue and profit margins. Highly educated consumers are more skeptical of advertisements and question the information being presented. Whether marketing to domestic or international markets, demographic information can provide important insights about a target market and how to address consumer needs. Learn the value of different segments of demographic groups. Related to gender or sex: These questions are as sensitive as questions on race and ethnicity. This is a good target for pet service and supply providers. Since most downtown professionals may not be experts in GIS, you will probably want to enlist consultants, planners and/or marketing data providers to offer technical mapping assistance. Penn State Extension: Understanding Your Customers: How Demographics and Psychographics Can Help, Forbes: The Importance of Really Knowing Your Target Audiences, Up Front Analytics: Understanding the Importance of Demographics in Marketing, Baker University: Conducting Market Research, University of Pennsylvania: Consumer Behavior and Demographics, How to Profile Your Customer With Five Key Questions, Sociocultural Factors That Affect Marketing, Examples of Market Needs in a Marketing Plan. Is the company selling fertilizers to farmers, clothing to teenage girls or vacations to older retired people? Income and occupation. These and other characteristics categorize us without describing our personality. Not only do demographics encompass the study of human populations, they represent the impact that these populations have on the market. Demographic, psychographic, and behavioral marketing all work together to set up intent — and help marketers make sense of it. Seiko has a line of diver watches for men. A 2017 study by the Council on Contemporary Familiesfound that high school seniors increasingly believe that the man should be the bread-winner in a relationship and a woman should care for the home. Businesses market products or services through targeted approaches to different segments of the population. The consumer's occupation plays a major role in the products they buy. Both young males and females may like the same fast foods and movies. Middle-income consumers make their buying decisions with due consideration to the utility of money. If the husband is the decision maker and you are speaking to the wife, you have the wrong person in front of you. Age also defines market segments. The characteristics of the customers are defined by the demographics. Even worse, their share of total national income has dropped from 62 percent in 1970 to 43 percent in 2014. What that really means to a business owner is that it enables her to find the group of people who fit the mold of the ideal customer. Travel and Leisure magazine has a list of recommended vacations for retirees; they suggest trips to Ireland, Sicily, Thailand and Costa Rica. The more focused your demographic is, the better you can speak to their emotions and get them to buy. This age range spans several generations and is contingent on the common thread of having a baby. Males and females have entirely different needs and preferences that affect their buying selections of lifestyle products and fashion. Psychographics is the qualitative methodology of studying consumers based on psychological characteristics and traits such as values, desires, goals, interests, and lifestyle choices. Demographic characteristics can refer to age, sex, place of residence, religion, educational level and marital status. They never stay the same, and marketers must be aware of these changes and adapt to them. The characteristics of the customers are defined by the demographics. These characteristics … ... interests, values, and other lifestyle factors. This is the primary reason for using age as a variable in demogr… How Does the Generation Gap Affect Marketing. Pretty much anything you can think of regarding buyer preferences is available data. Marketing needs to target the couple and to lean toward the most common decision-maker for that purchase. James has been writing business and finance related topics for work.chron, bizfluent.com, smallbusiness.chron.com and e-commerce websites since 2007. Age leads to changes in lifestyle, personal values and health needs. Asians, for example, have their own style of clothing and like for certain foods; Italians certainly have their own favorite recipes. A demographic profile is generally defined by the following categories: Age has a major effect on consumer behavior. There are five major types of marketing demographics that are used when … Younger consumers are healthy, and will spend more on fun, fashion, entertaining and movies. DEMOGRAPHICS. For example, digital products, such as iPhones, are marketed more toward millennials than toward the elderly. What are the demographic characteristics of Vans' target market? The factors that make up the demographics of a consumer market are constantly changing. Many demographic characteristics … Demographics describe who we are as individuals, for example: ethnicity, age/generation, gender, income, marital status, education, and homeownership. What Is the Boom-Boom Effect in Marketing? Demographic analysis is useful in understanding purchasing characteristics for different market segments. Demographics is the practice of identifying groups of people in a population by their characteristics. Ranges can actually transcend generations. Kids grow up with their parents and absorb a certain culture and environment with traits that will follow them into adulthood. If you aren't marketing to Millenials online, you aren't capturing the greatest potential share of this demographic. One in five Americans, about 60 million people, now reside in multigenerational households. That’s why demographics are such an important part of marketing research. For example, if a kitchen remodeling contractor expands his business to a community in which it is culturally acceptable to negotiate every purchase, the contractor will need to prepare himself for the sales process and potentially altering his pricing to ensure that he gets clients and still makes a profit. According to the article in Forbes magazine, more people are living in households with more than one generation. It is frequently used as a business marketing tool to determine the best way to … People who live in New York City don't buy the same products as someone who lives in Austin, Texas. Marketers typically combine several variables to define a demographic profile. Demographic characteristics include gender, generation, race … The demographic factor is a set of characteristics of the audience, such as age, gender, ethnicity, education, religion, economic, status, and group membership. Home Depot and Lowes sell construction supplies to building contractors, and Michael's has just about everything a teacher could want for the classroom. Race and ethnicity are demographic factors that may or may not come into play in a marketing strategy. The factors affecting the growth rate are fewer births, a lower death rate and the decline in the number of immigrants. Higher educated people will take more time to become better informed before spending their money. … Ferrari will target its red model 458 Italia at up-and-coming single guys, while John Deere wants to sell riding lawn mowers to young married couples who just bought their first home. When you know the income range of clients, you can also find data to support how those groups spend money on both the higher and lower end of the spectrum. One trend that is affecting consumer demographics is the change in population. One in 10 children lives with a grandparent as head of the household. What are the Primary Demographic Characteristics? Millennials tend to be a generation of contradictions. Consumers' preference for certain products and brands change with age. Sociological characteristics are more objective traits, such as membership in … For example, Tractor Supply Company sells to farmers and has locations in the South and Midwest selling fencing, pumps, sprayers, chemicals and tractor parts, of course. Renters, on the other hand, don't want to damage their apartments so they can get their deposit back. The more liberal ideals of gender roles that Baby Boomers and Gen Xers fought so hard to buck, are seeing a steady reversal in Millennials. With more than 15 years of small business ownership including owning a State Farm agency in Southern California, Kimberlee understands the needs of business owners first hand. There … Niches can look at political affiliations, hobbies and favorite sports teams. For example, a life insurance agent can target married couples having their first baby. The term demographics refers to a statistical analysis of people or a group. If people can’t afford your product or service, there is no point in targeting … All of these factors will change the composition of demographic groups. The sizes of garages may even be affected. Knowledge Networks has previously compiled a great deal of information on the demographic characteristics of its panel members. The demand will increase for homes with more square feet, bedrooms and baths. Demographic data is used by businesses to … Knowing whether or not you are targeting a group that can afford your products and services is important. Buyers with higher incomes spend more money on luxury items, vacations, jewelry and cars. All of the above sections of demographic data are a foundation. Industry Analysis of Retirement Communities, Penn State University: Understanding Your Customers: How Demographics and Psychographics Can Help, Pew Research: 7 Demographic Trends Shaping the US, Forbes: 9 Demographic Trends Shaping Retail's Future, Population Reference Bureau: Eight Demographic Trends Transforming America’s Older Population, Pew Research Center: The American Middle Class Is Losing Ground, Pew Research Center: Technology Use Among Seniors, The Demographic Variables That Affect a Business, Shifting the Demand Curve Vs. Moving Along the Demand Curve. Understanding your target customers' demographics helps you determine exactly what your products or services will be, and what kind of customer service tactics work best. It may surprise you to know HOW much age demographics for advertising effects your marketing efforts in this always on world. An example would be single women who own dogs; this demographic might be more likely to spend money on the dog as if it were a child, rather than a pet. it is important to understand which generation your target market belongs to. Demographics are the statistical … A lower death rate means elderly people will live longer and need more health care. According to Forbes magazine, the rate of US population growth is the lowest it has been since the 1930s. Age does not just affect buying behavior, it is also an important factor affecting market segmentation and marketing strategy. Demographics is the collection and analysis of general characteristics about groups of people and populations, such as age, gender, and income. Family structure affects buying habits and also affects the sales process. Demographics is the collection and study of data regarding the general characteristics of specific populations. And Costco Travel has a website designed to put a vacation package together. Marketers segment their target market … One of the first variable of demographic segmentation is age. For instance, young people like to drink La Croix sparkling water and post selfie pictures on Instagram of themselves having a Starbucks Pumpkin Spice latte with its orange sweater insulation. Products are made to appeal to specific genders. Macys, Nordstrom and The Gap all have departments that carry clothing aimed at teenage girls. One effect of this trend is the impact on types of housing. Studies from the Pew Research Center show that the number of middle-class households has been in a steady decline for the past 40 years. You don't want to market a luxury car to someone who can barely afford a used clunker. People's needs change as they grow older. 2.Where your target market is located geographically and why is that important? 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