This weekend I enjoyed teaching the Edinburgh on-campus Marketing class alongside my colleague Professor Steve Carter. I found the session on market segmentation, targeting and positioning particularly interesting. It’s well known that good market segmentation underpins effective marketing strategies, and that several variables can be used to divide a market into groups of customers who share important characteristics. Traditional variables such as demographics can be easiest to measure, but only give a broad-brush picture of the consumer and can be poor predictors of actual behaviour. More insightful are harder to measure, psychologically-based dimensions, such as lifestyle and benefits sought. Our discussion on this brought to my mind a buzzword for 2015 – “post-demographic consumerism”. But is it really time to throw out traditional demographic approaches to segmentation?
Trendwatching.com featured post-demographic consumerism in its 10-trends-for-2015 suggesting that “people – of all ages and in many markets – are constructing their own identities more freely than ever. As a result, consumption patterns are no longer defined by ‘traditional’ demographic segments such as age, gender, location, income, family status and more”. Indeed, Trendwatching.com followers see this phenomenon as the biggest opportunity for 2015. The full briefing on post demographic consumerism has some really interesting insights, and suggests several emerging factors are blurring boundaries, such as better access to brands, ability to trial and personalise product offerings and new perceptions of status symbols.
Ok, so my question is, has demographic segmentation become irrelevant? In Marketing Week, IAB’s senior research manager Hannah Bewley draws attention to a great example of two people who appear very similar, demographically, on paper, but are quite different in reality. “One famously cited example of this would be Prince Charles and Ozzy Osbourne, who were both born in 1948, grew up in England, married twice, have two children, are both wealthy and both like dogs”. So, in this case, clearly psychographic and behavioural variables are needed to paint a more realistic and detailed picture of the customer. But, I would argue demographics are still important, and probably will be for a long time.
This has become particularly apparent to me during my year on maternity leave. I have an 8 month old son, and having recently entered the world of maternity mums, could argue that a lot hasn’t changed, either. OK, so there are some brands that have ridden on the waves of change. Bugaboo has been extremely successful in its innovative design and marketing of prams to capture the male target market (prams traditionally being seen as the woman’s domain). And you only need to go to Marks and Spencer’s café any weekday afternoon to see dozens of grannies tasked with looking after their grandchildren. But you’ll also see groups of mums hanging out, who have met and formed friendships - and behave and consume in similar ways - based on shared demographic dimensions – gender, age, family life-cycle stage, location.
While there have been significant demographic shifts and blurring of boundaries, and there is no doubt that psychographic and behavioural insight is crucial for an understanding of today’s consumer – I think marketers should be cautious about ignoring demographic variables. We can still learn a lot about our target customer by asking the questions, “who are they?” and “where are do they live?