Demographic Research: A Short Guide

demographic research
A product, when created by a company, needs to be sold for the company to continue existing. Whether the product is a good or a service is irrelevant: what’s important is that there is an interest in buying it. A company's obvious goal is finding a group of people who are predisposed to buying their product; naturally, a company will want to direct much of their marketing efforts towards these people. The population is generally divided into demographics for this purpose, in order to more easily measure certain recognized behaviors or beliefs.

We’ve spoken pretty extensively before on the value of identifying your target audience, but we haven’t necessarily explained what this study is called or how to research it. Over the course of this article, we will explain the definition and importance of demographics, the process of identifying your target demographic, and the tools you can use to research and measure demographics for the benefit of your business.

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The “What” and “Why” of Demographics


For those of you unfamiliar with demographics, here’s the given definition from GetBrandWise:

    “Demographics or demographic data refers to selected population characteristics as used in government, marketing or opinion research, or the demographic profiles used in such research.” [4]
Demographics data divides the market into given categories, such as gender, age, sex, race, religion, and income group. In all of these cases, there are understood trends in marketing and purchasing habits that lead to targeted marketing towards these people.

One of the most basic examples of this trend is “action toy marketing” geared towards boys aged 6-12, usually from a lower-middle to upper-middle class background. This is assumed given the disposable income their parents would need to buy them such toys and the presumed gender norms related to masculinity that associate boyhood with “action toys.” This is not unfounded, of course, given the success of “action toys” like Transformers™ or G.I. Joe™, and for that reason demographic research is given much attention when marketing plans are formulated.

It can be a good thing to break traditional demographic marketing: the popular Pokemon™ franchise was once marketed primarily at boys, but when research came out that the market for their games and products had cross-gender appeal, their marketing shifted to being more generalized [6]. However, remain cautious and aware when marketing a product: you’re obviously going to get unintended reactions if you’re marketing dolls to men over sixty or hangover cures for young teenagers.

How to Identify Your Target Demographic: Recognize What You’re Selling


Whenever you start looking into demographic research, you’re bound to come across two distinct phrases: the target demographic and the demographic profile.

Target demographic means exactly what it sounds like: it is the demographic that your good or service is explicitly intended to appeal to. If you’re making the aforementioned “action toy” type of product, you are likely selling to boys 6-12 of a middle income background. If you’re starting a small fruit smoothie shop in a college town, you are of course going to target college students from 18-29 with disposable income from a middle income or higher background. Several variables external to what you’re selling can affect what your demographic is, such as time (i.e. selling swimming trunks in the summer), location (i.e. selling broad rim hats near a desert), and market trends (i.e. selling banana smoothie after a new study comes out saying bananas help prevent disease). The profile conglomerated from all of the data about your product is known as the demographic profile: an example of this would be one for a business like Starbucks, which has been defined as “single, female, middle-class, age 18 to 24, college educated demographic” [4].

When defining your target demographic and constructing a demographic profile, you should consider the following steps [5]:

  • Look at Who’s Buying - The first and most basic step is this. If you’ve already been in business for a while, consider who your customers have been up to this point: identify trends in sales and people who frequent your business. Consider why this is the case and make a point of appealing to those customers you can rely on.
  • Consider Why They Are Buying - What does your product have to offer? If it’s good for cleaning a lot of mud off of clothes, don’t you think the people who would buy it are going to be people who often have mud on their clothes? If your service helps companies renovate their properties in order to attract more business, don’t you think you’re going to have to target businesses that have the money to pay you for your work in the first place while still having trouble expanding? You have to look for where the need is for your service: always try to see from the consumer perspective to understand what kind of person would want your product and for what purpose.
  • Continue Analyzing - You can’t sell a lot of anti-aging cream to high school students. That fact seems self-explanatory, but my reason for bringing it up is to point out that you should extend that thought to all product marketing campaigns. Even if you think that your product has a use for everyone, if it costs an exorbitant amount, then you need to target it to people who can afford it. Be realistic about what you’re selling and don’t assume it will be instantly ubiquitous: business consultation firms should not be relying on business from local ice cream stands, denture cleaning tools aren’t going to be a hit among twenty year olds, and Latin Jazz records are unlikely to sell well in rural Kansas. Think about and do research on who wants your product: focus your marketing there.

How to Measure Demographics: Tools for New Data, Resources for Old Data


Collecting demographic information can be as simple as sending out a survey along with your products to your customers, or it could be as elaborate as research crew taking an interview survey sample of a given population to determine how your product is doing in the market. Both are fine methods of conducting this research, but as cost-cutting is as vital as ever for corporations, membership and/or product registration with the collection of demographic information through sign-up sheets is the most reliable method of demographic collection without an excessive amount of cash investment. Incentivizing people to fill out your demographic information through the use of coupons or giveaways of goods/services in some way related to your business is a great way to encourage participation in your data-gathering efforts.

That being said, there’s no need to reinvent the wheel: multitudes of data has been acquired about demographics for certain products and services across several nations in the past few years, and much of it is publicly available online. There are a plethora of advanced databases you can use to sort through already collected data, such as:

  • SimplyMap - SimplyMap is an online GIS product that maps demographic and market data in the United States. Use it when you need demographic and marketing data for a specific geographic area in the U.S. such as a city, county, census tract, or ZIP code.
  • Proquest Statistical Abstract of the US - Find data on the cost of living index, population by specific demographic groups, crime, income, and more. Data comes from various government groups, industry groups and associations, and private market research firms. The appendix contains a list of foreign statistical abstracts and contact information.
  • Passport - Excellent resource for international industry, company, market and product research. Find data on consumer market sizes, consumer expenditures, population characteristics, national characteristics, and more. Often includes forecasted as well as historical data.
  • EIU Market Indicators & Forecasts - Economic, demographic, consumption and industry data on 60 major countries worldwide and 11 regional aggregates. Included are detailed economic and industry forecasts for the next five years and longer-term economic projections.
  • Consumer Expenditure Survey - The Bureau of Labor Statistics' Consumer Expenditure Survey records how Americans spend their money by tracking expenditures on food, housing, transportation, education, pensions, healthcare, etc. [2]
MarketResearch.com has a variety of sources for market-driven demographic research [3], but you can also look through similar articles on places like Google Scholar to other scholarly approaches to the same material.

Conclusion


Demographics are simply a way of understanding the world and the market within it: the lines they have are often arbitrary, but they do allow you to quickly distinguish between given cultures or groups of people in order to better focus on who to sell to. This is a valuable skill in marketing as well as in business-- in bettering your understanding who you’re selling, you gain a better understanding of how your company can grow and expand into the market.

Demographic research sounds intimidating and difficult, but it doesn’t have to be: all of the tools and databases we provided have guides on usage, and there are a multitude of other resources out there that you can access to help you.

If you get the data and you’re not sure what to do with it, give us a call. After all, if you’re reading articles on how to improve your marketing campaign, that means that you could use some help marketing; if you could use some help marketing, then you’re OUR target demographic.

Questions?

Contact us by email at alliaudrey@idesigncollaborative.com.


  [1] http://www.idesigncollaborative.com/marketing-mix-fundamentals-what-is-in-your-recipe-for-corporate-growth/

[2] http://guides.library.cornell.edu/cmr/Demographics
[3] http://www.marketresearch.com/Marketing-Market-Research-c70/Demographics-c81/
[4] http://www.inc.com/guides/2010/06/defining-your-target-market.html
[5] http://www.getbrandwise.com/branding-blog/bid/18617/What-are-marketing-demographics
[6] http://genderandgeekculturenu.blogspot.com/2014/10/in-her-article-gender-dynamics-of.html