Understanding customer demographics is important to developing a marketing plan because advertisements are more effective when they are properly targeted at specific parts of the public. Advertisements that are tailored to a more narrow segment of the audience can address that niche’s specific desires and preferences.

Using customer demographics in targeted marketing can be powerful, because it allows marketers to develop separate ad campaigns that address different people’s preferences in a way that is more likely to generate sales. However, to develop these kinds of targeted plans, marketers first have to understand the demographics of their audience.

Types of Demographics

There are five major types of marketing demographics that are used when developing a marketing plan. Advertisers try to address each demographic segment differently, tailoring their advertisements to the specific needs of people who fall into these demographic categories. Although some of these demographics may overlap, in the strictest sense, demographic marketing is an attempt to narrowly address each demographic segment individually in an advertisement.

Age Demographic Segment

One of the most straightforward demographic segments used in marketing is the age segment. As people get older, their desires and preferences change with them. Marketers can take the same products and advertise them in different ways that appeal to different age segments.

A mobile phone may be important for older individuals who need it for business, but the same mobile phone can be marketed to young people with an emphasis on social media and internet connectivity.

Life Cycle Demographic Segment

The life cycle demographic segment is similar to the age demographic segment in that it places a heavy focus on what people need as they age. Rather than pitching the same product to different age groups in different ways, marketers target people with specific products based on what they actually need at different stages of their life.

An infant might need baby food while an older individual might need a retirement plan, so advertisements need to be crafted that feature each individual product.

A shorthand way of understanding the difference between age and life cycle segments is remembering that age segmentation more heavily leans toward wants while life cycle segments lean toward what a person actually needs.

Gender Demographic Segment

Much like people may need different things at different stages of their life, they also need different things based on gender. Marketers understand this and advertise based on the needs of men and women.

However, they also base their advertisements around different wants. Certain assumptions underlie gender demographic segmentation, such as the belief that women will be more interested in fashion advertisements and marketing.

However, gender-based marketing has been complicated in recent years as marketers have realized men and women may want products that don’t adhere to gender stereotypes.

Income Demographic Segment

One of the most defining demographic characteristics that marketers rely upon is income, since purchase decisions are often limited by how much money a person makes. High-income customers can afford specific types of luxury brands, for instance, and advertisers target products accordingly.

Income segmentation is fairly reliable as a means of targeting advertising and marketers divide their segments between those who have low, middle and high purchasing power.

Religion, Race and Nationality Segments

The issues of religion, race, and nationality apply differently within the United States compared to elsewhere around the world. Within the U.S., advertisers are increasingly putting out advertisements that feature a diverse cast of individuals, reflecting the diverse nature of the United States.

Although domestic advertisements don’t place a heavy emphasis on religion or nationality, they do attempt to cast individuals who reflect people of different ethnicities who come from all over the world.

Global advertisements are a little different from domestic advertisements, and they often need to be tailored to the different religions, customs and culture found around the world.

For this reason, global advertisements of the same product can be very different from one country to another. By keeping in mind cultural sensitivities as they market a product around the world, advertisers can make appealing, non-offensive advertisements that different cultures identify with.

While advertisements may not be explicitly religious, they still have to be developed in ways that do not offend religious sensitivities or cultural ones.

Identifying Customer Demographics

Marketers can use several different approaches to identify different types of demographics and the trends and preferences within those demographics. Surveys are a prime source of information for marketers, since they can reveal who falls into a specific demographic category and what their buying preferences are. After multiple types of this survey have been collected, marketers can then spot trends in the surveys demonstrating what people prefer to buy.

For instance, surveys might reveal that a majority of people between the ages of 25 and 34 prefer to shop in traditional stores and then market such stores using advertisements that feature people in that age group.

The rise of the internet has also given marketers a new, more powerful tool when it comes to collecting demographic data. Thanks to social media sites like Facebook, Twitter and other major networking platforms, demographic information is easier to collect than ever.

Social media tracks what people click on, what they like and what ads they prefer to view. These habits and trends in their behavior can be paired with their demographic data to create a profile of what people within certain demographic groups enjoy.

Other Types of Market Segmentation

Aside from marketing to people according to their demographic characteristics, marketers also advertise according to different market segments. Whereas demographic marketing looks at behaviors within different demographic segments, marketers can also look at trends based on geography, firmography, behavior and psychography.

Geographic Market Segmentation

Geographic market segmentation occurs when marketers divide their advertising efforts along geographic lines. There are typically different trends in purchasing behavior that can be identified by geographic boundaries.

Customers in different geographic regions have different needs and preferences, and advertisers can tailor their marketing to address these unique needs.

Firmographic Market Segmentation

Firmographic segmentation is a twist on demographic segmentation except with a focus on organizations rather than individuals. Demographic segmentation looks at the likely purchase behaviors of individuals based on their demographic characteristics, while firmographic segmentation looks at the likely purchasing behaviors of a firm or corporation.

In firmographic segmentation, marketers consider things like company size and the number of employees. Marketing would be different when advertising to a small business vs. a large corporation.

Behavioral Market Segmentation

Behavioral market segments are based specifically on the purchasing decisions of the public. While demographic research might be helpful in finding behaviors within a specific demographic, marketers do not target advertisements according to demographics when using behavioral market segments.

Instead, they find behaviors that can be targeted, such as groups of people who enjoy using a specific type of soap. These behaviors may not be limited to a single demographic and instead apply to several demographic groups, all of which exhibit similar purchasing behaviors.

Psychographic Market Segmentation

Psychographic market segmentation includes attempts to market to individuals based on psychological qualities present in a consumer’s behavior. In psychographic marketing, advertisers separate their marketing according to values, opinions, lifestyles and personality traits.

This type of marketing approach tries to address what people value, such as healthy living and fitness.