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One reason demographic variables are the most popular bases for segmenting customer groups is because they __.
- create more easily accessible segments;
- are easier to measure than other variables;
- do not involve stereotypes;
- involve fewer attributes to consider and create smaller segments.
Answer
One reason demographic variables are the most popular bases for segmenting customer groups is because they are easier to measure than other variables.
Segmenting your market using demographic variables is often an easier task than utilizing other types of marketing data. The most common demographic factors used in customer segmentation are age, gender, and income. These factors can be easily accessed through census data, analytics software, and consumer forecasts.
Additionally, demographic variables are often used as proxies for other variables that may be more difficult to measure. For example, income is often used as a proxy for purchasing power. Age is sometimes used as a proxy for the stage in the family life cycle.
Additionally, geographic variables such as region or city can be used to segment customers based on climate, which can impact customer needs and buying habits.
What Is Market Segmentation?
Market segmentation divides a market into distinct groups of consumers with similar needs, wants, or behavior patterns. Market segmentation aims to identify target groups within a larger market with common characteristics that can be reached through tailored marketing messages.
There are several different approaches that can be used to segment a market. The most common approach is to use demographic variables such as age, gender, income, or geographic location. However, other types of data can also be used for segmentation, including behavioral data (e.g., purchase history) or psychographic data (e.g., lifestyle).
Why Is Market Segmentation Important?
Market segmentation is important because it allows businesses to tailor their marketing messages to specific groups of consumers. By targeting consumers with similar needs and wants, businesses can use their marketing resources and budget more effectively. Additionally, segmentation can help businesses better understand their customers and develop more targeted product offerings.
