For companies selling products or services, knowing the people who will buy them is essential. Aside from the time, effort and cost associated with manufacturing a product or providing a service, researching who will buy a product and tailoring marketing efforts to target that group of consumers also eats up a large part of a company's product budget. One of the best ways to find out who will buy or who is buying a product is to assess its demographics.


The product demographic, sometimes called the target audience, of a product or service is a collection of the characteristics of the people who buy that product or service. Knowing information such as the income status, age and tastes of the demographic can help companies sell more, branch out to other groups and create more products that appeal to target buyers.

Using Product Demographics to Create New Products

Before companies even assess who is using a product, they assess who might benefit from a potential product. It's a process that firms go through with every single thing they sell. Once the firm determines the key age group, gender group or wealth bracket that would buy a product, it tailors the product for maximum appeal to that group. Once the product debuts, marketing and advertising efforts are directed at the core product demographic in an effort to increase sales.

Finding the Product Demographic

Companies use a multitude of methods to determine who is buying a product or who would benefit from a potential product. Market surveys, either online or in person, are used to determine the effectiveness of the product itself, its packaging and its presentation with various age groups. Companies can also inject themselves into the demographic by following the demographic's trends in the news and online, in an effort to get in better touch with consumers.

Analyzing Competitors

One main way companies analyze their product demographic is in relation to the competition. Through competitive analysis, companies determine what the market in their product demographic is like and what opportunities are underutilized or unexploited. For instance, a company shopping a line of hats to 18-year-old males with an interest in computers may realize that no other company sells this product to this product demographic. Or, the company may see three other competitors selling the same thing to the same demographic and tailor its product to capture underdeveloped product demographics in the hat market.