Target Demographic

A target demographic is a group of people that a company or business has identified as the appropriate potential customers, who may most benefit from and/or be interested in the business’s products and services. The group share identifiable population characteristics, typically socioeconomic factors. A target demographic is affected by many factors and changes accordingly as company products and services evolve.

Determining a business’s target demographic is important when defining the marketing strategy or approach for a company’s products and services. Without knowing the appropriate target demographic, companies’ marketing and/or product research efforts can be misdirected and yield subpar results.

• Factors That Impact a Target Demographic: When determining a company’s target demographic, numerous factors need to be assessed. These factors include, but are not limited to: age, education level, gender, ethnicity, and income. These factors allow businesses to sort their customers into categories (young/old, rich/poor, educated/non-educated) and identify who their products and services interest the most.
• Different Market Categories: Target demographics are just one aspect that companies determine when trying to market products and services effectively. Companies must also consider the geographical features of their market (e.g., costs of living) and the behavior of their customers (e.g., when customers tend to spend the most money).
• Establishing a Target Demographic: To establish one’s target demographic, companies and businesses must define their business, research market wants and needs, compare costs and advantages of products and services to those of competition, and analyze the habits of current customers. Following these steps will allow companies to better manage and market their products and services to maintain current customers and attract new ones.
• Importance of Identifying the Target Demographic: Many companies worldwide establish their target demographic as the foundation of their company. Restaurants to clothing brands identify their target demographic to group their customers into categories with similar characteristics. Doing so will allow for the creation of more effective advertisements and designs to appeal to their determined customer category.

Identifying a company’s target demographic is essential to successfully marketing and selling products and services. It is one of the primary and initial steps in the marketing process and, if overlooked, can hinder a company’s ability to attract customers.

Factors Affecting an Ideal Target Demographic

• Age: Age is an extremely important characteristic when assessing a target demographic. For example, selling modern technology and intricate software with fast-paced and flashing video games targets the younger generation, kids or teenagers. Companies selling these items would not depict senior citizens playing with the technology or even target senior citizens when selling the product.
• Education Level: Education is also vital when determining a target demographic. Separating education into primary school, secondary school, undergraduate, and graduate levels would allow a company to identify which level of schooling is needed to understand the use of its products and services thoroughly.
• Gender: To maximize revenue and sales, companies should determine whether gender plays a significant role in their sales. Are men or women more likely to purchase their products or services?
• Ethnicity: Ethnicity plays a huge role in identifying a target demographic. Different races are more likely to purchase and buy from certain companies, and recognizing this will help maximize a company’s sales. For example, Miya, a Japanese tableware and utensil company, is targeted toward Southeast Asians, Chinese, Vietnamese, Japanese, etc.
• Income: Knowing the income of target customers is essential as it gives insight into the pricing of a company’s products and services. If a company is marketing products and services to those with a lower income and if prices are overpriced and inflated, sales will be lower overall. However, if a company sells to wealthier customers, the prices of products and services can be higher to gain more profits.

Different Target Markets

Demographics are just one market that a company has to identify when selling products and services.

• Demographics: As written above, the demographics consist of the characteristics that define customers interested in a company’s products and services.
• Geographics: Geography refers to the region in which a company wants to sell its products and services. When identifying their target geography, companies must consider regional preferences, costs of living, and taxes.
• Behavioral: Companies must research customers' spending habits, interests, and reactions to create and tweak products and services that help maximize revenue and sales.

How to Determine a Target Demographic

• Establishing Your Business: The first step in determining a target demographic is accurately and directly defining the business value proposition, product offerings, and services.
• Coordinate Market Research: Researching the characteristics of existing customers and customers of competitors will also help determine the appropriate target demographic.
• Compare With Competitors: Comparing your products and services to a competitor’s will help reveal advantages and disadvantages to features of products and services. Doing so will help market your products and services more effectively to gain an edge over the competition and attract more customers
• Explore Current Customers: Analyzing your current customer’s characteristics will be the most effective way to determine your target demographic, as the customers are currently interested in your products and services. Learning from your current customers will allow you to better your products and services in ways that benefit current customers and help attract newer customers.

Examples of A Target Demographic

• Car Companies: Cars also vary in target demographics. Car companies such as Ford, Toyota, and Nissan target the working and middle classes who potentially have families. These demographics would value utility and safety. They therefore focus on affordable prices and safe designs.
• Clothing Brands: High-end fashion luxury brands with their high-price point and customer focused experience are only viable consumer products for those with excess disposable income. Therefore, designer brands such as Gucci, Dior, and Louis Vuitton target higher net-worth individuals who are typically female.