Let’s say you’re a shop owner and a random customer comes into your store and purchases an item with cash and then leaves. Ask yourself these questions:

Where do they live?
How much do they earn annually?
Can you identify their age and gender?
Did they graduate from college?
What is the size of their household?

If you don’t know the answers to these questions, you’ve probably eliminated any chance to make that person a repeat customer. To solve this problem, you need to understand your demographics and how to incorporate them into your marketing strategy.

The demographics that are of interest to your business are the average/typical characteristics of the customers who buy your products and/or services. These characteristics include, but are not restricted to, the following indentifying factors:

• Age/Gender/Race
• Gross Annual Income
• Education Level
• Occupation Category (e.g., industry type)
• Size of Household
• Residence (Rent/Own)
• Marital Status

Taking demographics one step further, psychographics includes IAO variables (interest, activities, and opinions). These variables and human behavior attributes include personality, interests, lifestyles, values, attitudes, etc.

The most effective way to fine-tune your marketing efforts is to combine the marketing research datum derived from both the demographics and psychographics applicable to your region. In fact, to define a demographic, most marketers combine several variables to create a profile.

A demographic profile provides enough information about the typical member of this group to develop a mental picture of this hypothetical aggregate. For example, a motorcycle manufacturer might tailor advertising based of the following demographic profile:

Marketing researchers typically have two objectives. First: Determine what segments or subgroups exist in the overall population. Second: Create a clear and concise picture of the characteristics of an average/typical member of each of these segments or subgroups.

Once these profiles are constructed and contrasted, they can be used to develop a marketing strategy. Marketing research can be conducted using in-house resources or by hiring an outside agency.

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