Introduction
Demographics are one of the most important features a marketer should consider prior to planning its campaign strategy or an ad. Demographics are an essential component of the overall marketing strategy for a company. They can provide insight that otherwise a marketer misses (Hawkins, Mothersbaugh, & Best, 2007).
Demographic data include information regarding age, gender, income, race / ethnicity, ownership, marital status, etc. They are data relating to determined variables in a sample group. Generally, demographic variables are physical or tangible traits of individuals and / or communities. Usually this data serve to classify the targeted audience in bands. This done, the marketing message can be streamlined to reach each of the targeted subgroups maximizing the message acceptance and lowering barriers of receipt the max possible. For example, a certain product or service fits best to a particular group age than to another. Another example is the usage of race and ethnicity as an important demographic factor when planning an ad campaign. In the case of Kudler Fine Foods, it is best to target age and race groups by offering them foods they are more attracted too. It is best to prepare a marketing campaign that offers Asian type foods to Asian Americans than promoting among them foods particular to other ethnicities.
Nevertheless, this kind of information is too general and does not provide a detailed customer focus. Today companies have to deal with strict marketing budgets and competition is getting fiercer. This situation puts forward the necessity for more detailed classification of targeted customer groups.
Here is where psychographic information comes to rescue marketers. These kinds of data are essential to better analyze and classify targeted groups. These subjective variables directly relate to the internal aspects of individuals, the irrational aspect in each one of us. Psychographic information relates to behavior, interests, lifestyle, values, opinions, attitudes, etc. a company uses these data to make ad and marketing campaigns more personal and narrow the target audience. Narrowing the target group of the marketing campaign makes it possible to receive greater feedback from the potential customers (Hawkins et al., 2007).
When and how to use demographic, psychographic, geographic and behavioral segmentation in marketing strategies
From the above explanation of the demographic and psychographic data, the marketer uses them separately or together when designing a marketing campaign. Their utilization is according to the product or service a company wants to promote. Kudler Fine Foods will target customers of 18+ years of age when promoting alcoholic products like the refine wines it offers. Since wine is a product generally accepted for everyone, Kudler has only to define its target customer group by using simple demographic data relating to age. If it wants to promote certain types of wines that carry a high cost, it will add other demographic factors. For example, it will classify potential customers by age and income.
Marketer use psychographic data to develop narrower target groups of potential customers. Here the company will have to take into consideration other non-physical factors that influence decision making of a customer (Oslon & Peter, 2008).
For example, if the Kudler wants to promote special foods for religious groups it has to consider their values and beliefs. In order to promote ‘Kosha’ foods to Jewish people Kudler has to consider all rules and values embodied by Judaism prior to starting a marketing campaign promoting such foods. This is how psychographic data come to help.
Behavioral segmentation is based on the reaction actual customers have on a certain product. This type of segmentation is important when developing a new product. Usually, customers tend to react similarly for similar products. For example, if Kundler wants to promote new foods it is best to check the reaction customers have on similar foods the company already has on the market.
Finally, geographical segmentation deals with regions and / or areas where the company promotes its products. It is an important factor especially related to distribution and transportation costs. For example, Kundler cannot afford to promote certain foods in a state when its warehouse is located thousands of miles away. Transportation costs will affect the product price and may turn out not to be competitive in that state.
Positioning strategy against competition
Psychographic data play an important role in today’s market competition (Oslon & Peter, 2008). They are the key to a successful marketing campaign. Of course, other factors like demographics and behavior are also relevant to a marketer. Since the trend of customer behavior is tending toward the organic and bio foods, Kudler should take advantage of this situation. All of our products are bio and organic and we should try to form a brand recognition based on these factors.
Our marketing strategy should identify those customer groups that have positive reaction, behavior, toward 100% bio and organic foods. A second step is the selection of those potential customers embodying values and beliefs congruent to this view. This will ensure that our marketing message reaches as many potential customers as possible. It makes sure that these potential customers hear and accept this message. This is the general framework that our company should abide when planning and executing its marketing strategy. Insisting on 100% bio and organic products will give us a head start toward the competition.
However, we should divide the strategy into categories and not promote our products all at once. Each of the five departments of the company should have a separate marketing sub-campaign to promote its products. Nevertheless, each of these sub-strategies, sub-campaigns, should embody the principles of bio and natural organic food of the general framework. Bakery, meat and seafood, produce, cheese and diary, and wine, will develop their own strategies, which may differ from each other. For example, the wines category may use a mixture of variables from the psychographic and demographic information different from the mixture utilized by the bakery department. The bakery department will appeal to all age and gender groups of the area, with different levels of income since its products are quite affordable. They will take into consideration psychographic variables like attitudes and values of people that are usually attracted to grain foods.
On the other hand, wines department will have to utilize different mixture of demographic and psychographic data. It will have to address people 18+ years of age and with middle to high income because its products are quite more expensive than bakery. It will also have to consider the attitudes and values of customers that prefer to use wine to other alcoholic drinks. If it uses the same variable mixture as bakery, it will not have the same customer feedback since wineries are specific products.
References
Hawkins, D. I., Mothersbaugh, D. L., & Best, R. J. (2007). Consumer Behavior: Building Marketing Strategy (10 ed.). New York: McGraw Hill.
Oslon, J. C., & Peter, J. P. (2008). Consumer Behavior and Marketing Strategy (8 ed.). New York: McGraw Hill.