Segmenting Consumer Demographics

As I posted in my last post on Market Segmentation, one of the ways you can segment your market is by demographic information. There are many ways to segment demographically including by the way consumers spend their money.

For example the average American family spent $40,817 on goods and services in 2003. Where'd the money go? More than half of the typical family budget went for the house (33¢ of every dollar) and car (19¢). After paying for food (13¢), medical bills (6¢), families had a six cents left to spend on entertainment.

Since the 1950's household spending has increased tenfold, according to the Bureau of Labor Statistics. After you factor in inflation the increase is less spectacular. Spending, adjusted for inflation, rose from about $29,000 in 1950 to $37,000 in 1972. Since then, spending has seen smaller real increases.

Viewed over the long term, statistics prove that American's real income has increased, which leads to more consumption and the natural outcome - changing priorities.

You see from a marketers point of view if you can isolate what priorities are changing then you can position your products in accordance with how consumers spend money. Doing this will help you convert better as you reach into your market segment.

Until next time.