In Glaeser, E. Demographic statistics are especially useful if they are presented in comparison with other places. To see how your trade area differs from other places, it is useful to provide two comparison sets of data: comparable communities and the state or United States as a whole. Comparing your trade area with other communities and the state allows demographic baselines to be established.
These baselines will help determine whether your trade area has low, median, or high values in each demographic category. For instance, after examining demographics for your trade area, it may appear that there is a high proportion of white-collar workers. However, this observation cannot be verified until you know what constitutes an average number of white-collar workers. Comparable communities can include five or six cities of similar size in the same region or state. The cities chosen should reflect similar distances from metropolitan statistical areas MSAs of the region.
Depending on the geographic size of your primary trade area, you will need to select similar-sized trade areas. In addition to comparable communities, adding state or U. State and U. Detailed local census data is readily available free via the Internet through the U. The U. Use American FactFinder to view, print, and download statistics about population, housing, industry, and business. Using FactFinder, you can also find U. Census Bureau products; create reference and thematic maps; and search for specific data.
In addition to the Census Bureau, there are numerous, nationally recognized data firms that can provide demographic estimates for a particular trade area. Census and other public sources, they add value by providing annual updates. They also package the data in user-friendly comparative formats that make it easy to compare one geographic area with another. Furthermore, you are able to tap into the knowledge of skilled demographers who have designed data products centered on particular industry needs.
These firms provide a way to order reports by simply calling a toll free number or downloading the data directly using their software. Prices charged by these firms have become more and more affordable as competition has increased.
Following is an example of a demographic comparison report assembled for a sample community from a private data source. Adding consumer lifestyle data takes the market analysis a step further. This data recognizes that the way people live lifestyle influences what they purchase as much as where they live geography or their age, income, or occupation demography. He concludes that retail is stimulated by large concentrations of populations of similar characteristics and tastes. As a result, a community can develop product mixes targeted to specific high-potential customer segments.
Concentrations of lifestyle segments create demand for specific products or services. Neighbors also tend to participate in similar leisure, social, and cultural activities. The quality of a segmentation system is directly related to the data that goes into them.
High quality and useful systems allow you to predict consumer behavior. In a retail business targeting tourists, for example, the systems allow the business to identify products and services that appeal to this market segment. The usefulness of a segmentation system depends on how well the data incorporates lifestyle choices, media use, and purchase behavior into the basic demographic mix.
This supplemental data comes from various sources, such as automobile registrations, magazine subscription lists, and consumer product-usage surveys. Several private data firms offer lifestyle cluster systems. The firms use data from the U.
Census and other sources to separate neighborhoods throughout the United States into distinct clusters. They utilize sophisticated statistical models to combine several primary and secondary data sources to create their own unique cluster profiles. Most models start with data from U. Census block groups that contain households. In rural areas, the data is more typically clustered by zip code. The system divides every U.
The Tapestry Segmentation also includes quantitative data, such as the purchase potential index that measures potential demand for specific products or services. The index compares the demand for each market segment with demand for all U. Values above indicate residents are more likely to purchase that product or participate in the respective activity.
Conversely, values below indicate residents are less likely to purchase the given product. For example, an index of means that the spending potential in the tapestry segment is 20 percent higher than the nation as a whole.
From this data, a clear picture of the important demographic, socioeconomic, and consumer behavior of residents in college towns emerges. Lifestyle segmentation generalizes the types of customers in your trade area, which is helpful in making sense of a complex market. This simplification, however, may not fully capture the particular traits of your customer base or may overlook the richness of groups in your area. Furthermore, since data are not continually updated, lifestyle segments are based on a snapshot in time.
This works well if social and economic conditions remain constant; however, significant changes may make the segment less representative of reality. Therefore, although lifestyle segments can greatly help you understand customers in your trade area, you should take care not to place too much weight on segmentation systems. Instead, regard the information as a part of the mix of demographic data. Estimates of household spending give a sense of the size of a market in dollars.
For example, secondary data are available that allow you to estimate the size of the local food or restaurant market, based on the number of households in your trade area. Private data are also available to provide refined estimates based on local demographics. It is important to remember that these estimates measure the amount of spending by households residing in your trade area, not necessarily spending within your trade area that also includes non-residents.
Conversely, residents of your trade area may choose to spend outside your trade area. The two-part Consumer Expenditure CEX Survey is the primary data source for spending-potential estimates that covers a whole range of household spending from dining to travel expenditures. Researchers use demographic analysis to analyze whole societies or just groups of people.
Some examples of demographics are age, sex, education, nationality, ethnicity, or religion, to name a few. Select your respondents. Demographic segmentation examples explain how researchers divide a market into smaller groups according to age, gender, family income, race and ethnicity, qualification, marital status, nature of employment, etc. It is an extremely tedious task to accommodate customers belonging to different demographics and develop an exhaustive marketing plan.
Demographic examples ease creating a strategy for a marketer. Thus, they are one of the most commonly implemented marketing segmentation methods compared to other techniques such as geographic segmentation, behavioral segmentation , or psychographic segmentation. As the details required for demographic examples are easily accessible, marketers have gained popularity to gather and analyze immense data in brief periods. According to demographic diversity, dividing the target audience will help a marketer design an accurate marketing plan that will yield productive results.
The products or services that interest a White, year-old boy, might not interest a year-old Asian woman. Here are a few more demographic examples that researchers commonly use:. There are several advantages of dividing the target audience according to demographics.
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What are Demographic Examples. What is a demographic? Select your respondents What are the various examples of demographic segmentation? Here are a few demographic examples: Age segmentation — Age is one of the most common demographic segmentation elements. Every age group has its peculiar characteristics and needs. Babies require a constant supply of diapers, select clothing, formula, and other such products, while toddlers require educational toys, coloring books, products that stimulate their mental and physical growth.
Middle-aged adults may invest a lot more in an expensive technological gadget than a teenager. An old-aged person would rather spend their money on buying health-related products. Some corporations, governments or nonprofits might look for unique or specific demographic data like income level, while others might explore several demographics at once. While these are some of the most common, you will find other demographics that might cover birth and death rates, marriage rates and more.
If a population can be grouped, it likely will be. The importance of demographics lies in the fact that these factors can turn a population into something that you can measure. You can measure and compare the age of your customers. You can measure the proportion of families in need in your neighborhood. When a population becomes measurable, you can make changes to improve your company, government or community.
Demographics allow a company, government and even scientific institute to group people based on specific characteristics like race, gender and location.
All rights reserved. What Are Demographics Used For? Demographics have vast uses in society. Politics and Government Demographic factors and data are oftentimes used in the context of politics and government. Customer Segmentation One of the largest uses of demographics is for customer segmentation in business.
If a business fails to understand their customer base, this is a surefire recipe for disaster.
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