What is demographic data
Demographics are statistics that describe population characteristics such as age, gender and ethnicity. They are used to research products and services, how well they sell, who likes them and where they are most popular. Traditionally, data are collected through methods such as surveys and questionnaires. Using demographics, entrepreneurs can understand why customers make a certain choice. Does it depend on where they live, is it because of their age or gender? This allows them to plan their product portfolio and measure how customers respond.
A consumer questionnaire is used by marketers to collect data from a target group targeted by a particular product or service. However, this can be difficult and impractical as it is expensive and time consuming. Specialists find this method ineffective because when you work with a large number of people, you have no guarantee that you will receive all the questionnaires back. This would be a waste of time and money that could be spent on a different and more reliable method as a software solution. These specialized systems capture real-time data from real retail outlets and present information without distortions.
Uses of demographic data
1) To group clients based on variables such as age, gender and ethnicity. Consumer grouping through demographics allows marketers to understand what each target group wants. This will help the business sell each product differently based on the groups of customers it targets.
2) Businesses can use demographics to determine the next step in their development. By analyzing the demographics of a potential location, marketers could determine if it would be advantageous to open a new store there. The data could serve to avoid costly mistakes and help the business to thrive.
3) To customize products to a specific user group. Demographics can be used to tailor the product portfolio by assessing consumer behavior. You can modify your existing product mix and positioning to meet the interests of the targeting customer group. The whole idea of customizing them would be to save time and money on a portfolio that is not engaging and does not meet consumer expectations.