Demographics - American businessDemographics are population measures such as age, race, gender, occupation, and INCOME. Demographics are often used by businesspeople to define market segments on which to focus their efforts. No business has the resources to be “all things to all people”; marketers therefore use segmentation to identify which groups of consumers are or are likely to be most interested in their PRODUCTs and SERVICES. Segmentation of markets based on demographics allows marketers to make more efficient use of RESOURCES. Consider the alternative, broadcast marketing—that is, promoting and distributing a company’s products wherever and whenever possible. Also known as “spaghetti marketing” (throw it up on the wall and see if it sticks), broadcast marketing wastes resources and reduces the likelihood of success. Often obtainable from U.S. CENSUS BUREAU data, demographics— in exacting detail for anywhere in the country— are a basic tool for marketing. Segmentation by gender is commonplace and logical. Some products, such as computerized action games, appeal more to males; while other products, such as cosmetics, appeal more to women. In the 1980s, racetracks, traditionally thought of as a male-dominated spectator sport, studied their demographics and found almost 50 percent of their patrons were female. This led to a huge increase in sponsorships by firms targeting women. Age is also a basic demographic characteristic affecting CONSUMER BEHAVIOR. In the 1980s, Chrysler recognized that “baby boomers,” Americans born after World War II (1945–64), were finally starting to have children. Chrysler’s vans appealed to this demographic group who needed room for a baby seat but did not want to drive station wagons like their parents. Demographers have come up with a variety of age-based labels, including “Generation X,” people born between 1965 and 1976 perceived to be more egalitarian and environmentally oriented; and “Generation Y,” young people in the 1990s, considered more conservative and materialistic than their predecessors. Similar to age and gender segmentation, race, income, and occupational demographics are useful ways to look at consumer groups. Almost any television show or commercial radio station will have ADVERTISING that targets different demographic groups. Most advertising media maintain a listener, reader, and viewer demographic profile, allowing marketers to match their customer demographics with similar advertising media demographics. Business markets are also divided based on demographic characteristics: size, geographic location, enduse applications, and customer type. Business marketers often use the North American Industry Classification System to identify business customer groups. Business marketing organizational structures are typically based on business demographics. Sales organizations are usually divided based on customer types, geographic location, and business size, with representatives assigned to each group.
See also MARKET SEGMENTATION; TARGET MARKETS.