Question

What are the disadvantages and advantages of using demographic segmentation? Can demographic segmentation and psychographics be used together to determine target markets? Give a specific example a product that uses a combination of demographics and psychography at the same time to determine target consume

Answer 1

DEMOGRAPHIC SEGMENTATION---------

Demographic segmentation is the market segmentation based on demographic attributes like sex, religion, age, education and qualification.

ADVANTAGES OF DEMOGRAPHIC SEGMENTATION

* It leads to customer loyalty - When the customer needs and wants are properly evaluated, then organisation uses it properly in its marketing campaign. If customers are satisfied with their product, they will become loyal and tend to use product more often.

* Demographics are easily measureable as compared to other attributes.

* Demographic data shows the ongoing trend which reveals the clear signal indication of business for marketers. For example, if there are more old age people belonging to middle class group in the region, the marketting campaign of the firm should launch health related products for such age group

* It saves business expansion costs of the firm, because the characteristics of people can be predicted in advance

DISADVANTAGES OF DEMOGRAPHIC SEGMENTATION:

* Demographic data is only general and descriptive. It doesn't give proper understanding of customer's choices

* The data cannot be used in the development of product

* Demographic is only one dimensional i.e. it can give details on certain product, but can't give full information about a particular brand

* As demographic data is easily available, it can be easily copied by our competitors. They can use this information in launching their product in a better way, which could harm our own product

PSYCHOGRAPHIC SEGMENTATION:
It is related with research on the psychological needs of the customers and their lifestyle analysis. e.g. social status, opinions, interests, food habits

Psychographic segmentation provides much greater insight into the customer's lifestyle and their needs, which finally helps in promotional campaigns in the market

#COMBINED USE OF DEMOGRAPHIC AND PSYCHOGRAPHIC SEGMENTATION:

* Both demographic and psychographic segmentations can be used complementarily, as combination of both gives sufficient information for development of product in a particular market segment

* Demographic data should be used together with psychographic data as the combination of both makes it easy to launch a product as per customer's need

* When other variables like social status and food habits are considered, their demographic characteristics like age, sex, and income level have to be acertained in order to get a true characteristic of the market

COCA-COLA COMPANY IS A SOFT DRINK COMPANY WHICH USES THE COMBINATION OF BOTH DEMOGRAPHIC AND PSYCHOGRAPHIC SEGMENTATION AT THE SAME TIME, TO DETERMINE TARGET CONSUMERS

* Coca-cola has drinks that target different age groups, sexes, and ethnic groups

* Considering people's needs, it has launched in the market coca-cola zero, diet coke, sports drinks powerade

DEMOGRAPHIC FEATURES ADOPTED BY COCA-COLA:

* Different size of packaging of bottles

* Tin packaging

* Returnable bottles

* Small packaging for low income groups

PSYCHOGRAPHIC FEATURES ADOPTED BY COCA-COLA:

* People who are brand conscious and don't drink beverages of less known companies, show their status by drinking coca-cola. For such customers, the company has launched tin packing of coca-cola

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