Why Demographics Matter

Say good-by to the one-size-fits-all marketing plan.

Who is the average consumer of your product? Because populations change, age, and move around geographically, it is critical to research your buyer.

Your current business strategy may be reflective of the St. Cloud demographic. Twenty percent of St. Cloud residents are under 18 years old, according to the US Census Bureau's 2000 survey. Ten percent are over 65 years old. Over seven percent are speaking a language other than English at home. Over half own their own homes but 13 percent of the St. Cloud population is below poverty level. Women-owned businesses account for 30 percent of total businesses.

Demographics most commonly used by marketers are age, gender, income, race, and ethnicity. Minding the age demographic is important because “generations look alike, think alike, dress alike, vote alike, live alike, and share a similar attitude toward life and leisure…” generalizes Nielsen, a data collection and marketing and media information company. Nielsen has three suggestions for using demographics when marketing:

• Compare demographic characteristics of your customers
• Identify ideal geographic areas (population growth, decline or stability)
• Estimate sales potential for a given area (opportunities, competitors)

How does this apply to your business? Research the demographics of the area when creating a new growth plan or marketing plan. Once you narrow down your current consumer profile, make changes to your product delivery, buying and service options to break into another market, or broaden your consumer base.

For example, Wal-Mart began using demographic information in their marketing in 2006, studying their specific customer segments, including Hispanics, baby boomers, women, urban populations, and affluent customers. Based on this information Wal-Mart is remodeling stores, changing merchandise assortment, and store design/decoration. Supply Chain Digest detailed the change, addressing how 3400 stores are transformed into one of six formats based on local demographics. Each format features different layouts, merchandising selection, and staffing/training plans.

This change from the world's largest retailer signals the end of the one-size-fits-all marketing plan, and brings with it the possibility for all businesses to market to new customers using demographic information. – By Jill Copeland