Role of Demographic Factors in Marketing
Added on - 24 Sep 2019
Demographic FactorsIntroductionDemographic factors play a very significant role in marketing and marketing management. Thesuccess of the product and services of the organization significantly depend on the demographicfactors. Hence, it is very important for the organization to understand the concept ofdemographic factors and their role in marketing management. It can be defined as the socio-economic characteristics of a population which are expressed statistically. For example, age,education level, sex, marital status, level of income, religion, occupation, rate of birth and death,the average age at marriage, as well as the average size of a family. These factors significantlyaffect or influence the taste and preference of the people. So, these factors should be studied bythe organization in order to identify the trend of consumer taste and preference. Analyzing andstudying these factors helps the organization in segmenting as well as targeting the market inorder to serve the market effectively and efficiently. There are several studies conducted ondemographic factors in order to understand the impact of different factors on the taste andpreference of the consumer. It has been identified by the researcher that these factors affect thechoice, taste and preference of the consumer. For example, high-income group people alwaysprefer luxury products whereas middle-income group people do not always prefer the luxuryproduct. Lower-income group people prefer to purchase inferior products as they cannot affordthe luxury product. Similarly, the taste and preference of male and female also vary. Apart fromthis, the taste and preference of old vary from the taste and preference of youth and children. So,it is very important to analyze these factors so that the organization can effectively segment themarket into different sub-group and target the one of more than one market accordingly.
Importance of demographic factorsAnalyzing different factors of demographics significantly help the organization in several ways.Therefore, the organization should always strive to analyze these factors. The importance ofanalyzing these factors effectively and efficiently has been discussed below;With the help of these factors, the organization can understand its ideal customer. Eachorganization has a profile of ideal customer with special characteristics as well as traits.Every customer exhibits certain traits as well as characteristics while purchasing a product orservice of the organization. So, the organization tries to understand the trait andcharacteristics of the potential customer. As the organization creates a profile of the idealcustomer, it delves deeper into the taste and preferences of the ideal customer as well as thepotential issues with the goods and services. It helps the organization in improving as well ascreating marketing opportunities which target the potential customer of the organization.Analyzing and studying different factors of demographics helps in lowering the marketingcosts of the organization. Marketing product and services can be very expensive. Themedium of marketing is one of the essential factors which decide the marketing budget of theorganization. So, if the organization knows it’s demographic, the organization can stretch thebudget by going where the organization can find the ideal customer. If the organization islooking to target millennials, so it would not make a sense to spend money on a direct mailmarketing campaign.It also helps in identifying new opportunities for the business. Demographics do not onlyhelp the organization to define as well as find the ideal customer of the organization. Withthe help of demographic analysis, the organization can also identify the gaps in its marketingstrategy.
Apart from this, it also helps in creating unique selling points. It helps in increasing sales ofthe product and services of the organization.Demographic Factors and MarketingThere is a wide range of activities in marketing which range from research and development topromotional as well as support services after the sale. It is not possible for any organization toserve all customers and hence the organization segments the market in different sub-groups. Ithelps the organization in concentrating on a particular type of customer. But segmenting thetarget market into different sub-groups is a lengthy process. The process of segmenting themarket involves taking a larger target audience and breaking down it into a smaller market andthen selecting the most appropriate market which the organization can serve better. In order tosegment the market, the organization uses traits to categorize the customer such as age, gender,race, income, occupation, ethnicity, education, as well as marital status. Some of thedemographic factors which are significantly considered by the organization to segment themarket.AgeThere are some personality traits which have more significance in marketing segmentation thanother traits. Age is one of the most important factors which are used to segment the market. Ageis an integral element in homing in on a consumer type. For example, colleges target traditional-aged students who are coming out of high-school at ages around 18 years.Gender as well as Marital Status