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Demographics



Kirjoittanut: Lucas Pääkkönen Alvim - tiimistä SYNTRE.

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Demographics

 

Introduction

Understanding demographics and their significance are crucial parts of doing a successful market research and planning. Some key factors such as gender, age, and income can provide valuable insights into the characteristics, behavior, and preferences of consumers. By utilizing demographic data gained from market research, companies can effectively develop new products, services, and marketing campaigns to meet the unique needs of different consumer groups at the right time. So demographics guide companies to a deeper understanding of their consumers. (N.N, 2023)

Demographics contain measurable characteristics of a population, some common demographic identification can include ethnicity, gender, age, household income, civil status, and educational level. Depending on the level of detail required by the company doing the market research, these demographics can be broken down into potentially limitless subcategories. By understanding the demographics, businesses can separate the consumers into groups, tailoring their efforts to the unique behaviors of each demography, making their business efforts more effective. (Bridges, 2023)

 

Demographics

Demographics contain measurable characteristics of a population, some common demographic identification can include ethnicity, gender, age, household income, civil status, and educational level. Depending on the level of detail required by the company doing the market research, these demographics can be broken down into potentially limitless subcategories. By understanding the demographics, businesses can separate the consumers into groups, tailoring their efforts to the unique behaviors of each demography, making their business efforts more effective. (Bridges, 2023)

 

Age

Age is a big demographic factor. Age influences heavily consumer behavior, different age groups behave differently, so businesses have to understand the impact that the age of their customers has on their decision-making so that the business can make decisions accordingly. A big impact of age on the behavior of consumers is the age gap, as each generation has their unique shared experiences, values, and attitudes that will affect their preferences and behavior. For example, millennials(around twenty to forty years old) often value sustainability and social responsibility, while baby boomers(around sixty to seventy-five years old) may value more quality and reliability, so companies may choose to market their products and services differently for those two different demographic groups. Technology adaptation also differs, while younger generations are usually early adopters of new technologies, older generations may be less inclined to embrace new technologies or may need more user-friendly interfaces. Businesses should take this into account while preparing their business strategies. For example when a company wants to advertise to a younger pool of people they may use social media marketing, while if they wish to target older people, they may use printed flyers or more traditional media channels as for example television advertising or advertise in newsletters. Also for example when designing their webstore, younger consumers may prefer a seamless mobile shopping experience, but older generations may prefer to have a clean and simple website, easier to navigate. Also the consumers behave differently according the life stage at what they are in. At different life stages, you have different needs and preferences, for example, a young person in their twenties or thirties can be more focused on building a career and gaining financial stability so they will probably be focus on getting affordable and convenient products and services, while someone a bit older in their fifties or sixties is approaching retirement and may have different needs as for example more health and comfort related products or services, so businesses need to factor the stage in life where their ideal customers are when developing their product or service. So when doing a market research you have to ensure to collect age specific data, including age as one of the demographic variables, letting you understand the impact of age in your consumer´s behavior. Also important to keep in notice that consumer behavior is not static and behaviors related to the age of consumers can change over time, so it is important to stay informed on the latest trends and changes. (N.N, 2023)

An example of a company tailoring their marketing for different age groups is Coca-Cola. In a wish to target younger customers, they launched a campaign by the name “Share a Coke” In which they put on the bottles popular names and that meet the desire of personalization and social sharing of younger generations as millennials and Gen Z. And to target older generations they featured older celebrities in their campaigns as Harrison Ford in the “Coca-Cola Zero Sugar”. So Coca-Cola is able to reach and engage different age groups.

 

Socioeconomic status and purchasing power

SES(Socioeconomic status) classifies a person’s standing in the society according to their income, education level, occupation, and wealth. SES heavily impacts the purchasing habits of consumers, so companies have to be aware of the effects that the consumer’s SES has on their decision-making so that they can tailor their strategies accordingly.

The income level of a person affects their purchasing habits, as an individual with a higher income may have more available income that frees him to use it on a broader range of products and services. For example, the luxury car brand Mercedes-Benz, focuses on attracting high-income individuals, by prioritizing features and branding that aligns with their target customers’ values. People with higher education levels usually are more informed customers and because of that, they can be more inclined to purchase eco-friendly products or spend more money on premium brands. Often consumers look around them for inspiration on what to buy, this phenomenon is noticeable in the fashion industry, where luxury clothing brands leverage the consumers’ aspirational desires, to convince them to buy their products. For example, Gucci throw market research identifies specific influencers in different SES groups to make their marketing campaigns more effective. (N.N, 2023)

 

Cultural background

Cultural background heavily influences consumer behavior and failing to take that into account when preparing a marketing strategy for example can lead to an ineffective unsuccessful campaign. When conducting a market research, it is important to conduct the surveys, interviews and focus groups in the local language as a small translation mistake can lead to a misinterpretation of the questions, of the product features or benefits, affecting the answer of the consumer and consequently the quality of the result of the market research.

In some cultures people are more individualistic, while in others there is more collectiveness leading in to group-oriented decision making, a beverage company conducted in a market research that in collectivistic cultures, people value family and togetherness in their advertisement, leading to more sales. Cultural traditions can impact customers’ choices, for example, around the festive season luxury brands change their packaging to fit in within the cultural tradition, increasing their sales. Different cultures have different taboos and sensitive topics, while conducting a market research it should be noted that in some cultures it is inappropriate to ask direct question about for example about income or personal finance. To obtain valuable data from the research, it is important to respect their cultural boundaries. (N.N, 2023)

 

Conclusion

In conclusion, understanding demographics is vital for any business. When companies know their customers, they can plan their efforts, making them more precise and successful. Coca-Cola’s marketing, targeting different age groups exemplifies how knowing your consumers and understanding their motivations brings benefits to the business. So recognizing these demographics and strategizing according to them will make your company resonate with your consumers, building a connection, cultivating a lasting relationship.

 

REFERENCES

Bridges, A. (2023) Demographics: The key to effective market research: Kelton, Kelton Global. Available at: https://www.keltonglobal.com/perspectives/demographics-the-key-to-effective-market-research/ (Accessed: 26 October 2023).

N.N (2023) How demographics affect market research results, FasterCapital. Available at: https://fastercapital.com/content/How-Demographics-Affect-Market-Research-Results.html#Introduction-to-Demographics-and-Market-Research (Accessed: 24 October 2023).

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