I have been a marketing professional in the natural products industry for more than two decades. Marketing is an inexact science to say the least. And, over my career, marketing has changed dramatically, most notably with the incorporation of social media.
That said, there are marketing strategies that can be utilized that will provide a greater chance for a return on investment (ROI). Businesses market products or services through targeted approaches to different segments of the population called demographics.
Demographics are the statistical component of marketing used to identify population segments or target markets by specific characteristics. Whether small or large, businesses need a targeted approach to their target market(s). In fact, demographics will impact the direction a business owner will take in developing a marketing plan.
The importance of demographics cannot be understated. In fact, business startups will initially gather demographic information to include in their business plans in an effort to raise seed capital, which is vitally important to launching a business. Demographic information can include: age, location, gender, income level, education level, marital or family status, occupation, ethnic background.
You may also need local demographics about how many people own cars or homes, who attends college or what percentage of residents are internet or social media users. Furthermore, you can also consider the psychographics of the demographics you are targeting. These may include: personality, attitudes, values, interests/hobbies, lifestyles, behavior.
Whether the demographics describe national or local markets or small groups, such as those within an age range, the information helps to avoid the hit-and-miss marketing so often utilized by many businesses. As you can imagine, the ROI is generally uninspiring.
The process of strategically determining demographics to identify ideal customers can often be painful. Nonetheless, this is crucial as certain marketing strategies must be put into play that include targeted product packaging, advertisements and pricing, among other factors.
That said, let's take a look at some common demographics and how marketers may find these initially useful to identify target markets.
Age – This is a common customer demographic that managers use to segment markets. A company selling dietary supplements may specialize in one or more health categories. The marketing plan could state the age groups that are likely to purchase each type of product featured in that category. For example, for an antioxidant formula, marketers could target men and women between the ages of 40 and 60 years. Based on market research, the product might be priced below average, have the latest cutting-edge ingredients, and boast the latest biotechnology.
Gender – Segmenting markets according to gender is another common marketing strategy. Due to social conditioning and physical differences, males and females have different needs. Gender segmentation is commonly seen in the marketing of natural health and beauty products. Gender roles have changed dramatically over the years. Marketers have to avoid falling into traditional stereotypes when marketing health and beauty products in today’s world. For example, sports nutrition has changed dramatically in recent years. Woman, now more than ever, are utilizing some of the very same edgy sports nutrition products men use. For example, protein formulas and meal replacements are equally popular among men and women. The same can be said for nitric oxide boosters for both male and female endurance athletes.
Income – This is a very effective demographic marketers use in devising their marketing plans. Often, groups with different income levels develop different preferences. The development of different preferences is largely due to affordability and access. Some experts argue income is not the most reliable demographic. A lower income group might be the first to purchase a new comprehensive nutritional formula if it eliminates the need for several standalone commodity items. Interestingly, preferences can also shift when lower income groups desire upward mobility and buy products that appeal to those ambitions.
Education – You may see some overlap with the income demographic. The belief is that higher education leads to higher average incomes. However, education is also a demographic many marketers link with social class. Social class can be actual or perceived. For example, people with graduate degrees may perceive themselves to be in the upper middle class. For example, teachers often have graduate degrees but will not have a corresponding upper middle class income. These people still may prefer more affluent products and lifestyle.
It is important to understand that a number of factors are considered in selecting the ideal target market for a marketing campaign. In general, the goal is to go after the market that offers the best current or long-term profit potential. Market size, growth potential, number of competitors and company strengths are among the key factors. The larger the market, the more potential to earn profit. Markets that are fast growing and less competitive also offer advantages.
At the end of the day, demographics are just one of the primary ways to segment markets. Your industry, company and customers determine which strategy is the most appropriate to segment. Demographics have been one of the most traditional marketing approaches as they involve clearly defining potential customers. However, as I mentioned earlier, marketing is an inexact science. Believe me when I say the marketing process is a constant game of adjusting and tweaking. At times, it can be frustrating. It can definitely be costly. But, once you zero in on a campaign that is showing a definitive ROI, it can be golden for you and your business. Good luck!
Mark Becker is an account manager for Vivion, a raw materials distributor, based in Vernon, California. He has worked as a natural products sales and marketing executive for 20 years. Mark has written more than 300 articles and has hosted or been a guest on more than 500 radio shows. He obtained a bachelor's in journalism from Long Beach State University and did his Master’s work in communications at Cal State Fullerton. For more than 30 years he has participated in numerous endurance events, including more than 150 triathlons of Olympic distance or longer, 103 marathons and numerous other events including ultramarathons and rough water swims from Alcatraz to the mainland. He has relied on a comprehensive dietary supplement and homeopathic regimen to support his athletic, professional and personal endeavors. Follow Mark Becker on Facebook and Twitter. For more information, access www.vivioninc.com or www.EnergyatLast.com.