how multivariate demographic segmentation approach can resolve sales decline?
Answers
Explanation:
Demographic segmentation is made up of two words. The word demography is derived from the Greek word “demos,” meaning people and the English word “graphy,” which means “the study of.” When these two words are combined, they mean “the study of people.”
In market research, however, there is a slight deviation in the usage of the word. Marketing defines people who form a specific market for a product or a service based on demographics. It is essential to know demographics to study the market space.
Demographic segmentation is defined as a market segmentation method based on variables such as age, gender, income, etc. This segmentation helps organizations understand consumer behavior accurately that in turn, helps them perform better.
One of the types of segmentation that is closely related to demographic segmentation is geographic segmentation.
Within demographic segmentation, there are several variables:
1. Demographic segmentation based on age: One of the most important variables for demographic segmentation is age. A generation is a set of people who were born during the same era, grew up with the same type of experiences with some geographic segmentation.
For example, baby boomers are those born between 1946 and 1964. People born in this generation have certain similar characteristics and thought processes. People in generation X were born between 1965 and 1981.
Therefore, if your market research is targeting baby boomers and generation X with the same strategic planning and asking the same questions, it is likely to get inconclusive results as there is a big gap between how these two generations think and act.
2. Demographic segmentation based on gender: Men and women have differences in how they perceive the ways in which the market works. Even market researchers are very clear about the difference in the reasoning of the two groups and for this reason, make gender-specific products.
For perfumes, clothing, shoes, and even cars there are gender specifications that product manufacturers understand and work based on those specific needs.
3. Income-based demographic segmentation: Income is also an important variable, as it helps determine product pricing. Most manufacturers take the demographic segment into account when pricing the product.
However, there are other manufacturers that only focus on the higher-income segment of society. Cars, technology, clothing, etc. are created more specifically for these segments as they prefer luxury over anything else.
4. Demographic segmentation based on religion, race, and nationality: Alcoholic beverages have a very limited reach in Middle Eastern countries, leaving room for soft or carbonated beverages due to the hot climate. Brands around the world have large-scale advertising campaigns.
With the increase in international business, these brands have created campaigns that better suit religious beliefs, and even nationality, and make sure not to hurt anyone’s feelings. With the increase in the geographic area of business, there is also an increase in demographic segmentation based on religion, race, and nationality.