While demographic segmentation works for some brands it is n

While demographic segmentation works for some brands, it is not the best way to segment markets for all brands. What are the limitations of using demographic segmentation, vs. segmenting on the basis of psychographics or behaviors?

Solution

Demographic segmentation means that brands are segmented according to religion, gender, income and other demographics.

The disadvantage of using demographic segmentation is that companie\'s approach gets limited and the risk of failure also increases. For example a company is spending its resources to promote its brand to a specific demographic. Later it discovered that its resources were wasted as it was the wrong section of the market. This has increased the risk of brand failure for the company and has also caused wastage in resources in terms of time and money. Segementation based on behaviors limits the risk of failure as it incudes different demographics and the focus is on personality, attitude and lifestyle of the target segment.

Another disadvantage of demographic segmentation is that such a technique makes the organization and thus the brand vulnerable to competitors. If a competitor also uses the same method of segmentation and implements it rather successfully, it will be left with no potential customer in that particular demographic. On the other hand, if it uses segmentation based on personality, attitude and lifestyle of the target segment, this risk will be reduced.