Demographic data means the statistics about the population in a particular geographical area. The word demographics derived from two Greek words, “demo” and “graphy” means “people” and “picture” respectively. Demographics profoundly influence the research decision. The importance of demographic data in market research and business research is undeniable. Demographics explain the socio-economic profile of a population, like a gender, residential location, age, marital status, income, educational qualification, career status, race, and so on. Through demographic data, we can understand the background characteristic of the population under study.
In business and marketing research, demographic data is used to categories the population into different groups according to the absence and presence of the quality. This will help the business to identify the nature and behavior of the population (Sale Variables) from a different angle. It leads to effective market planning and product design. It will also help the customization of the products and services of the business according to the needs of the different demographics. Business can plan their future business according to the future perspective of the demographics of the population.
In all dimensions of business, whether it is an automobile industry or an FMCG company, all are benefited from the demographics of the population at a deeper level. It always improves the target marketing strategy. By segmenting the population-based on a different demographic variable, we can identify the profile characteristic of the population, and on that basis, we can tailor the products and services that meet the preferences and requirements of the population.
In market research, this demographic data helps in standardizing the user segment strategy. Modern market researchers use demographic data in association with behavioral data to analyze consumer dynamism and make valuable conclusions on new market initiatives. When an organization plans to launch a new product to the market, the demographic data analysis is an inevitable part of the market study. We cannot think a market analysis without touching the demographic variables.
The effectiveness of the business strategy is an essential element in any business planning. To uncover the opportunity of growth, it needs to mould the business strategy efficiently. This type of data plays a vital role in the development of an effective business strategy.
Census data is a massive reservoir of demographic data. (https://censusindia.gov.in/). The census shows us how the people of a country are classified based on language, age, caste, income and occupation.
The analysis and interpretation of this type of data are fundamental in any business.
Watch this video for understand the method of analyzing the demographic (categorical) data using Microsoft Excel.
