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What Are The Advantages And Disadvantages Of Demographic Segmentation?

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Beth Kennedy answered
Demographic segmentation, a form of market segmentation, is where the market is divided into sections including age, sex, occupations, ethnicity, religion, family life cycle, family size, income, education, nationality and social standards. Gender segmentation, for example, is widely used in the cosmetic and clothing industries, whereas age segmentation is commonly used when marketing toys. Demographic is taken from the work "Demography", which means the "study of the population". Products and services are usually aimed at one or more demographic segments. This answer will look at:

  • Definition of demographic segmentation
  • Advantages of demographic segmentation
  • Disadvantages of demographic segmentation
Demographic segmentation entails the identification of the market as a whole. The firm must then determine the way it will segment the market and must then profile each segment. The firm will next assess the advantages of marketing to each segment and will select the segment with the best potential. Lastly, the positioning, or marketing mix, will be determined for each chosen segment.

Firstly, using demographic segmentation means resources and advertising are not wasted on the wrong section of the market. A business can identify the wants of consumers with ease when using demographic factors. There are several segmentation strategies including behaviour segmentation, benefit segmentation, psychographic segmentation and geographic segmentation. However, information gathered from demographic segmentation variables is easier to measure and obtain. The market is driven by strong competition and demographic segmentation makes it easier to pinpoint what products and services to target to who and what type of advertising/promotion to use. The business will get to know its customers a lot better with demographic segmentation.

There are some disadvantages to using demographic segmentation. As with any kind of market segmentation, multiple segmentation can be costly and time consuming. Demographic segmentation may lead to the proliferation of products and, if the business narrowly markets a product, this could reduce the development of broad-brand equity.

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