Market segmentation is a crucial marketing concept because by properly dividing the market, a company or organization can better serve its customers’ needs and add value to its offerings. Market segmentation enables companies to assess the attractiveness of each segment and select one of the few most suitable for their business operations. Also, segmentation helps a company better navigate and understand existing and potential customers’ desires and individual preferences (Camilleri, 2018). Moreover, the market segmentation strategy divides consumers into segments for marketing policy based on needs and behaviors (Liu et al., 2018). Dolnicar et al. (2018) argue that market segmentation determines where companies are compared to competitors, understands what their customers need, and decides which segments they want to focus on in the future. Thus, the main goal of market segmentation is to consider consumer preferences and customer evaluation of products or services that provide the basis for further strategic decisions of a company or organization.
Camilleri (2018) argues that demographic segmentation is the most popular way to segment markets due to the ease of measuring and analyzing demographic variables. Hence, demographic variables include age, gender, financial income, marital status, family size, race, religion, and nationality. This kind of segmentation allows you to segment the market into segments using the factual information available. Additionally, demographic segmentation is most effective for health professionals because it provides critical client data for classification based on socio-demographic characteristics (Chon & Park, 2017). This method helps health professionals identify risk groups using a variety of variables. In addition, Sarti et al. (2018) suggest that socio-demographic data is crucial for analyzing customers and their health-related purchases.
Consumer demographics are relatively easy to classify and quantify. First of all, gender reflects the gender of potential and existing consumers. Secondly, age illustrates life expectancy and divides the market into different age groups with various preferences and interests. Consequently, marital status analyzes customers and divides them into single, married, and families with children. Income criteria help organizations determine which group to offer products to within a specific price range. Therefore, dividing the market into buyers with common social and demographic features enables the company to choose a targeted marketing strategy and quick profit. It is essential to mention that profit is not a company’s primary goal but rather a consequence of satisfying customer segments based on their characteristics.
Characteristics such as religion, race, and nationality apply to the definition of cultural preferences. As a result, this knowledge makes it better to develop advertising and marketing materials for each segment. The demographic segmentation method provides companies with expertise. As a result, they can effectively reduce or increase prices, select competitive services or products for each segment, and better target sales to customers of different age groups, social statuses, income levels, etc.
Population censuses provide ample opportunities for defining demographic segments, although they are not always sufficient. In such cases, the companies themselves conduct surveys to obtain the demographic data of their customers to target different groups efficiently. To summarize, demographic segmentation is efficient due to access to data, ease of the segments’ analysis and classification, and quick determination of segment preferences based on specific characteristics. Companies and organizations, including the health sector, are using demographic segmentation to drive strategy, improve decision-making, and add value to the company in the eyes of consumers.
Camilleri, M. A. (2018). Market segmentation, targeting and positioning. In: Travel marketing, tourism economics and the airline product (Chapter 4, pp. 69-83). Springer, Cham.
Chon, M.-G., & Park, H. (2017). One does not fit all: Health audience segmentation and prediction of health behaviors in cancer prevention. Health Marketing Quarterly, 34(3), 202–216. doi:10.1080/07359683.2017.1346434
Sarti, S., Darnall, N., & Testa, F. (2018). Market segmentation of consumers based on their actual sustainability and health-related purchases. Journal of Cleaner Production, 192, 270–280. doi:10.1016/j.jclepro.2018.04.188
Liu, J., Huang, W., & Liao, X. (2018). Market segmentation: A multiple criteria approach combining preference analysis and segmentation decision. Omega. doi:10.1016/j.omega.2018.01.008
Dolnicar S., Grün B., Leisch F. (2018) Market segmentation. In: Market segmentation analysis. Management for professionals. Springer, Singapore.