Consumers who wish to participate in online surveys must provide basic demographic information to market research companies in order to receive studies to complete. This can be seen as an invasion of privacy by consumers when in fact, it is about building a profile that ultimately helps companies understand and satisfy a customer’s needs better than the competition.
Different customers have different needs, and rarely is it possible to satisfy all customers by treating them alike. This is why such market segmentation is important; it is a way for marketers to gain insight into if why and how different groups should be marketed towards differently.
First off, a demographic can be defined as a characteristic that people share including age, gender, income, etc.
Demographic segmentation then, is the process of dividing consumers into groups who share these characteristics.1 Market researchers often consider this the starting point with a new consumer who wishes to join their survey panel. It lays the foundation for other types of market segmentation is also considered to be of utmost importance. Demographic segmentation variables may include:
Age – Different age groups desire different types of products and services. Contrast a child’s interests with that of a senior’s, and it’s easy to see why this bit of information is so essential.
Gender – Men and women consume different things, especially in the areas of cosmetics, beauty-related services, clothing, etc. One sex over another may be more or less likely to purchase a product from a particular store, manufacturer, brand, etc.
Income – Affluent customers may be more likely to consume luxury goods and brands whereas lower income individuals may possess different consumer behaviors.
Education Level – High school completion, post-secondary schooling, doctorate completion, etc. can all influence factors concerning consumption patterns.
Occupation – People who work certain kinds of jobs may be more inclined to have particular attitudes, whether this be directly related to the occupation itself, or due to a common behavioral characteristic which the group as a whole may possess. Occupation sub-options may also include level of employment (full time/part time), student, self-employed, retired, stay-at-home caregiver, etc.
Nationality – Canadian, Danish, Nigerian, Brazilian – the nationality of a person can influence a consumer’s attitudes. Note that a person’s nationality is different from where a person is living.
Race/Ethnicity* – Some consumers get offended when they are asked to provide information about their race and ethnicity. Although some survey companies offer the option of “prefer not to say” as a selection choice during initial registration, most prefer that this information is provided. People of different races and ethnicities tend to have similar predispositions to medical conditions, may share appearance traits (ex. hair color, eye color, etc.), possess similar cultural beliefs, speak the same language, etc. which can all influence consumer behavior.
Religion – Christians may be more likely to consume a product over Hindus, due to a certain set of attitudes and beliefs they have. Because of its sensitive nature, many market researchers choose to avoid this question, or, similar to ethnicity, may provide a “prefer not to say” option.
Some survey panels may only be looking for people of a certain ethnicity to join their panel at any given time, while those of different races may be blocked from joining. This is mostly due to the research company trying to craft a more accurate representation of a given market for their panel.Although blocking certain individuals from joining may also occur with other demographic variables, race does seem to be the most sensitive in nature. Not being able to participate in a particular study or being able to join a certain survey panel for these reasons has nothing to do with racism and everything to do with creating an accurate representative sample of consumers.
Other types of segmentation
Market researchers may not only choose to classify their panelists by demographic characteristics, but also by geographic, psychographic and behavioristic information.2
Geographic segmentation includes things such as region (country, province/state, city, neighborhood, postal code/zip code), suburban/rural, proximity to a major city, neighboring countries, etc.
Psychographic segmentation depicts lifestyle choices including activities, interests, attitudes and opinions.
Behavioristic segmentation is based on a consumer’s attitudes and beliefs towards a product or service. These may include things such as brand loyalty, usage rates, readiness to buy, etc.
When segmentation information is collected
As a consumer, when you initially register to join an online survey panel, you be asked to provide demographic information as well as geographic information. Many online survey panels also have “profilers” available within member accounts, which may also be optionally completed. These profilers are essentially long questionnaires which ask for additional demographic, behavioristic, and psychographic information.
Although usually optional to complete, completing them will typically result in better targeted online surveys (fewer screenouts) and sometimes even additional available studies.
Market research exists to identify different consumer needs and wants and relies on the honesty of survey takers (respondents). Even though data provided through online surveys is aggregated and anonymized, if as a consumer, it makes you feel uncomfortable sharing personal details with a market research company, participation in the entire process might not be for you.
Providing accurate and honest information is a pillar in the market research process, both during initial registration when joining a new panel as well as during completion of an individual study. If the data collect by market researchers is flawed or inaccurate, clients might choose to avoid the use market research in the future. This would put the entire market research industry at risk.
Hopefully the information above highlights why market researchers ask for the information they do, and how truly important it is for it to be accurate.
1. Tutor2u – http://www.tutor2u.net/business/marketing/segmentation_bases_demographic.asp
2. NetMBA – http://www.netmba.com/marketing/market/segmentation/