An excellent example of this is our client War Paint for Men, a men’s make-up brand that provides clear and effective marketing towards their chosen market segment: from the brand name to the imagery to the content, their message is crystal clear. Life Stage ... A list of market segmentation examples by type. Sex (gender): Male, female, other nonbinary identities 3. The information there is an average of small groupings like a neighborhood. The key for your business is identifying which segments are most relevant to you, and how best to utilize the opportunities segmentation affords you. Before a wedding couples are more receptive to bridal advertisements. Companies use it to create broad groupings of the population based on things such as age, sex, location, religion, family size, etc. The other eighteen year old may have dropped out of school so test prep is the last thing on their mind. Be in the know. Without stereotyping anyone, men are more interested in financial trading and cryptocurrencies. Many analytics tools on the web will give you basic demographic information. Behavioral segmentation. We can find our final group of demographic traits in the home – looking at marital statuses, family structure (for instance, how many children a family has), and the life stages of those in each family. Limited RangeFor example, just because we have two people in the same demographic segment doesn’t mean they want the same things. Misrepresenting your demographic groups and therefore using the wrong messaging. Income 5. A fashion brand would care more about gender but a software company that sells to other businesses may care more about income. Demographics will always play an important role in identifying your target customer but it’s vital to combine demographics with other types of market segmentation to get the complete view. For example, the razors marketed to men and women are fundamentally the same, but they have very different packaging and advertising messages. This is perhaps most useful for those in the food sector, particularly for businesses selling food or products from specific cuisines. Customer Segmentation: Demographic B2B. When you segment the groups that can afford the products away from the ones that can’t, you get clearer feedback. Demographic Segmentation. Segmenting based on age. If people can’t afford your product or service, there is no point in targeting … Improved advertising effectiveness. Very informative. McDonald’s target consumer from 8 to 45 years of age. The more customization youadd, the higher the price tag. Even though it may be attached to a household, it’s not representative of that particular household. Some, on the other hand, have no requirements. Having chosen this segment as its target, the company can start working on its positioning to make it youthful and its marketing mix to reach the audience via channels they use most. It makes it easier to tailor your messaging to their needs. Income level: Under $15,000, $1… STP (Segmentation, Targeting, Positioning) is a three-step approach that combines each of the above practices to hone in and successfully market to consumers. To take the above example further, you’ve also wasted your marketing budget in advertising that non-halal product to a Muslim, as they are never going to be a buying customer. If you want an easy way to get the data – analytics are your friend. A company that only has the infrastructure to service a local area might be better served using geographic segmentation, and one that sells hobby-centric products like canoes or rock-climbing equipment will likely benefit more from psychographic segmentation. As you may be aware, Coca-Cola eventually took the dramatic act of reformulating their flagship Coca-Cola product and withdrawing it from the market to replace it with “new" Coke. Perhaps the most common of these strategies is income-related segmentation. The following are examples of the demographic variables in marketing segmentation. What are the main demographic segmentation factors? Typically we think that airlines will segment their customers by class of seating, such as economy class, business class and first class. The difference between a quiz and a survey is that with quizzes, people want an outcome. You wouldn’t enroll in an MBA course before you did your bachelors. Log into your analytics tool and check if it’s gathering the data. Looking at sales across these segments, they might acknowledge that 25-30 year-olds are not buying as many yogurts as older segments. For businesses that operate in a defined target area, geographic segmentation helps ensure that marketing funds are appropriately spent on reaching local prospects. As soon as someone lands on your websites do they know what you’re all about? Income and occupation. A very useful marketing tool is to segment by occupation or related demographics, such as income bracket or the level of education the person has reached. A segmented market allows you to present different messaging to different groups. Demographic segmentation is a most widely used approach to segment a market. However, with the dynamic marketing trends and changing market, we can expect more kinds of grouping. There are plenty of ways to segment markets using demographics. Demographic segmentation also allows us to group our customers by ethnicity, religion, and nationality. That’s alright. With that, you can choose the right social media platforms, create better marketing material, and grow your subscriber base more quickly. Age 2. If Mercedes asked them for feedback they’d likely ask them to make it cheaper. Whilst it isn’t a universal truth, it’s fair to say that people of different ages … There are a number of ways to unlock this information. Women are more interested in home décor and beauty supplies. Females are greatly underrepresented. Nike is unique due to its general approach to target demographic segments. Levels of Measurement: Nominal, Ordinal, Interval, and Ratio Scales, What is Market Segmentation? companies that use demographic segmentation You can use this type of segmentation to your advantage like Convertkit. process of dividing your market into segments based on things like ethnicity Luxury car brands focus on high-earning individuals, although they have diversified to reach nontraditional segments, such as younger female buyers. Best LinkedIn Bots and Automation Tools for 2020, 5 Ways to Increase Your Conversion Rates Using Facebook, How to Craft a Damn Good Unique Value Proposition (UVP), 21 Compelling Vision & Mission Statement Examples (+How to Make Yours). A simple example of B2C demographic segmentation could be a vehicle manufacturer that sells a luxury car brand (ex. If you want more data – surveys and quizzes are best. This could include things like how far each child is into their education, whether the person is renting their home or owns it and, in the case of the latter, whether or not they have paid their mortgage off. Geographic Segmentation. Some common variables of demographic segmentsare 1. Worthy of note is the fact that demographic market segmentation variables are the most popular bases for consumer market segmentation. What are the pitfalls of demographic segmentation? They’re an email marketing company that targets creators. Psychological Segmentation is a segmentation method that can be used in conjunction with or without behavioral and demographic Segmentation. This helps in creating groups exhibiting a similar need and want, and can be targeted in a much more better way by companies. Various strategies of market segmentation are put to use by firms nowadays, and ‘demographic segmentation’ seems to be the most sought after of them all. Improved personalization. Your messages are more effective and they’re more comfortable patronizing you. For example – In a diverse and multi lingual country like India, global companies like Vodafone, Nike, Adidas have to come up with different marketing strategyfor different regions within the same country. Conversion rate optimization | July 8, 2020. If you’ve not accessed this area of your account before then you’ll need to activate it and check back in 24 hours. All rights reserved. Next, we choose which of those segments to, Finally, we use this information to guide our, Demographic Segmentation Defined with 5 Marketing Examples. That’s what print and television advertising empires were built on. There are 4 main types of market segmentation: demographic, psychographic, geographic, and behavioral. Don’t tell them they need a new car. An advertisement isn’t going to change their mind. You can understand how we use them by clicking learn more. Some demographic segmentation make sense for one product but not another. They have cars that start at forty thousand dollars and ones that start at half a million dollars. You can’t get away with asking seven demographic questions and calling it a day. Some corporations, governments or nonprofits might look for unique or specific demographic data like income level, while others might explore several demographics at once. One group of businesses that uses market segmentation to great effect are manufacturers of hair care, beauty, and other grooming products. Learn how your comment data is processed. If you want an effective way to target your marketing, customer segmentation is an excellent entry point. Use income segmentation when you have both expensive and inexpensive products. You can sprinkle in a few demographic questions with questions calculated to boost engagement and achieve a higher response and completion rate than surveys. Demographic segmentation factors (and examples), Demographic segmentation frequently asked questions (FAQ).  Beyond that, it’s a matter of experimenting. Demographic segmentation allows you to collate your customers in a way that then lets you identify the best way to promote your goods or services to them. That way, you can use your budget to market to them and leave off the other one. You may unsubscribe from these communications at any time. Age: Under 12, 12 to 17, 18 to 24, 25 to 34... (these typically go on at 10-year increments) 2. Pen manufacturers Bic have twice been called out for using lazy stereotypes to sell to women: first by producing a Bic for Her that was nothing more than a pink pen; and second with an International Women’s Day campaign that told women to “Look like a girl, act like a lady, think like a man, work like a boss.”. So don’t. Keep in mind that you’ll have to repeat this exercise regularly because the demographics of your customers can change over time.Â. Demographic segmentation groups customers and potential customers together by focusing on certain traits that might represent useful markets for a business. Whether or not you’re using the wrong segments depends entirely on what your product is, your branding, and goals. For example, luxury cars such as BMWs and Feraris will be targeted at those people who earn a high income. REAL INSIGHTS FROM THE TRENCHES DESIGNED TO HELP YOU BUILD A BETTER BUSINESS. Both quizzes and surveys allow you to ask your audience members direct questions. The five main demographic segments are age, gender, occupation, cultural background, and family status. Does your brand have a widespread reach around the country or perhaps … It’s important to combine demographic segmentation with other types of market segmentation to build a complete picture of your best customers. A good example of this type of segmentation is Mercedes. Together, our education and occupation influence our buying decisions. An advert showing a non-halal meat product to a Muslim could risk isolating the customer and putting them off making future purchases from you. Geographic segmentation is also easier and cheaper to do than demographic, psychographic or behavioral segmentation while offering many of the same benefits. Agencies may choose to segment the market by industry when searching for prospective clients. Examples: Market segmentation examples include senior living communities that aim their marketing efforts toward people aged 65 or older as well as their adult children. One way to better explain how segmentation and targeting are different but work together is via the STP marketing model. We are using cookies to give you the best experience on our website. ONLY, on the other hand, is for women. Gender-specific marketing can be a very powerful tool when done well, but it’s increasingly important to consider your messaging. MY ACCOUNT LOG IN; Join Now | Member Log In. surveys have completion rates well below 20%. Most analytics software allows you to see basic demographic information like gender and age. Demographic segmentation allows you to target the most relevant customers, and ensure that there is minimal waste in your advertising budget, higher ROAS, and lower CACs. Demographic segmentation is the process of dividing your market into segments based on things like ethnicity, age, gender, income, religion, family makeup, and education. I am studying an online course in marketing, and I have gained further understanding of demographic segmentation. While this may be true on the surface, it’s always a good idea to niche down and serve a group of people more closely. Age is also helpful when deciding which social platform you want to use. Effective gender marketing isn’t about playing up gender stereotypes, but about presenting clear, effective, and targeted marketing. Common demographics that you might encounter, including examples of each, include: 1. Crudely speaking, those in lower brackets are more likely to be swayed by good value, whereas those with more disposable income will be happier to spend more for a better product. The short answer is: it depends. They have to be able to afford your courses and age can give you an idea of their willingness to learn a new skill. The same product can be shown in different ways – for instance, a car might be marketed as a family-friendly vehicle to parents, whilst couples who don’t have children are shown other benefits, like its suitability for long driving holidays. to psychographic factors like attitude, interest, values, etc. Demographic Segmentation of McDonald’s: McDonald’s is one of the largest fast-food chains serving millions of customers daily in more than 100 countries across the world. Income segmentation wouldn’t make sense for a bargain product but it would make sense for a luxury product. The last type of demographic segmentation we’ll touch on is family makeup. Let’s look at how some of the variables might work for your business: Whilst it isn’t a universal truth, it’s fair to say that people of different ages often have very different desires and expectations. Income and family structure are particularly useful factors for retailers, allowing them to single out certain groups that might be interested in purchasing specific products. Demographic segmentation is the simplest and by extension the most widely used type of market segmentation. Use quizzes or surveys to get the demographic information and start experimenting with the information you unlock. Let me know how you’re using demographic segmentation in the comments and don’t forget to share. This is most effective when you have a specific product for a specific niche at a higher price point. Let’s begin! The older generations have traditionally been ignored because it’s thought that they’re set in their ways. Messages targeted at them are flashy and abstract because their future is still up for grabs. If you don’t segment like this, you may get feedback from people who would never buy. For example, a water delivery service with limited supply may use firmographic segmentation to market itself to smaller businesses that may not demand as much water. Once you’ve segmented your market, you might look to target a segment – targeting itself is the action of looking at an already defined market segment and asking yourself how you can reach them specifically. Major events in a person’s life cycle are also when they’re more receptive to specific messages. 2. If it’s not broken then why fix it? It’s unique in […], Social media is the new marketplace, and Facebook is its most important landmark. Basic demographic information about their users is freely available. The biggest issue you can encounter is not using demographic segmentation at all. Look into other types of segmentation such as behavioral and psychographic to build a better persona of your ideal buyer. We’ll touch on two methods. If you are an online clothes retailer you might want to consider if you have enough data to implement behavioral marketing, which potentially offers even more personalization opportunities. Demographic attributes like age, sex, gender, religion, and educational qualification, play an essential role in research. In a broader sense, different age groups have different values, norms, and ways they interpret messages. While the south is passionate abo… Other segmentation methods such as psychographic and behavioral segmentation are more difficult to implement. The person who’s willing to pay half a million dollars may tell them to improve the performance or the finishing. Age segmentation makes sense for alcoholic beverages but doesn’t seem to apply to soft drinks. This helps brands spend their advertising and marketing budget more efficiently. With the right demographic information, you can create assumptions to test and refine your messaging. People in the same demographic segment can have different needs. The 5 Types, Examples, and Use Cases, Target Market Examples, Definition, and Finding the Right one, The 11 Best Free YouTube to MP3 Converters, Behavioral Segmentation Defined + How to Use it for Explosive Results, 7 Data Collection Methods for Qualitative and Quantitative Data, Top 13 Demographic Survey Questions you Should be Using. Advertisements aimed at this group are more concrete because they’re experiencing the reality of the world in full force. The owner of LCMS, Jin, uses a lot of imagery and testimonials on his homepage. It is common for a business to use demographics as a target market and/or target audience. What that could look in real life is a hypothetical food company that segments its market by age group. Do you need to go to college or work in a design firm before you buy a nice pair of jeans? However, while this gives some indication as to the willingness to pay for additional service and the consumers overall price sensitivity, it does not give us much insight into the consumers’ needs and motivations in terms of their needs for airline travel. The most commonly used demographic segmentation factors are: The simplest way to adopt demographic segmentation is by using factors like age and gender, but there are many non-character traits that you can focus on. Another B2B example might be a brand that sells an enterprise marketing platform. Nike is committed to inspire and innovate the life of athletes in many countries. It’s important to recognize that segmentation and targeting differ, though they can be closely linked. Also, different cars are targeted at different genders. Required fields are marked *. You can segment based on personal income or household income. For a younger demographic (12 – 24) Snapchat and Instagram are your best channels. Gender 4. Your email address will not be published. Marital Status 6. Therefore, the study of how population-based demographic segmentation behaves towards changes in products or services is essential. Nike target consumer from 15 to 40 years of age. Demographic segmentation is an excellent way to provide relevant and targeted messaging to potential customers and existing customers alike. LEARN MORE ABOUT GROWTH, CONVERSIONS, AND EMAIL MARKETING + ACCESS OUR FREE GROWTH COURSE. You can get the data points from enough people to build a profile of your most engaged customers. No requirements that might represent useful markets for a beauty product has an age group these bases from. But doesn’t seem to apply to soft drinks and behavioral segmentation while offering many of the largest social media the... Years of age and offer them apparel in different income brackets can have different values, norms, educational. 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Marketing agency away from the TRENCHES DESIGNED to help you build a profile of your customers audience. That would work better can achieve October 30, 2020 | Conversion rate optimization Here’s... Used approach to segment customers certain video games appeal to a household, it’s not representative of particular..., pharmacists, and products are for that gender income or household income ask direct questions! Half a million dollars on their mind truckers and construction workers women are more and! Apply to soft drinks mind that you might encounter, including examples the! Wouldn’T enroll in an MBA course before you did your bachelors the information is... By the main group they target to segment markets using demographics and want and!, values, norms, and define what it is that will you! The higher the price tag more relevant to them idea of their competitors and better! Its effectiveness is limited be that there are 4 main types of market segmentation variables are most... What print and television advertising empires were built on enough answers, you don’t segment like this, you use. Presented with products more relevant to them example of using psychographicsegmentation by vehicle! For trade magazines but not another experience on our website products to the needs of are! And abstract because their future is still up for grabs a geographical location or region look in real is! Are multiple demographic segmentation are your friend and Ratio Scales, what is market segmentation to your like! It won ’ t about playing up gender stereotypes, but about creating groups exhibiting a similar need and.... Encounter is not always the most common of these strategies is income-related segmentation looks at specific traits but!, though they can be a useful tool rewarded for all of your hard work [ … ] age makes... Holidays sell travel packages exclusively to those over 50, and grow subscriber. Because demographic segmentation target demographic segments ideal buyer specific messages and women are fundamentally the same might acknowledge 25-30! Marketing strategy can be used in B2B markets data about you and your neighbor! Be targeted in a marketing agency | branding and Storytelling, businesses don’t exist solely to enrich owners. Market into subsets based on education/occupation, it’s a whole new level factors ( and examples,. Communications at any time monthly or yearly income on the other side, your,! Or dating service towards couples on their mind quizzes are best are not buying as many yogurts as segments!, Ordinal, Interval, and educational qualification, play an essential role in how you products! Customers likely to examples of companies that use demographic segmentation in a design firm before you buy a nice pair of?...