The Advantages Of Demographic Segmentation

According to geographical variables, the segmentation can be conducted nationally, regionally or locally (Tynan & Drayton, 1987). As a result of the limited financial resources and distribution channels to cover larger areas, many smaller companies usually end up with local segments, in contrast larger ones (mostly multinational companies) take advantages of the segmentation variable. Narrowly speaking, geographic segmentation can be just tailored to regional or country levels, which allows us to assess the profitability in the countries based on their economic performances such as gross national product per capita or average income. Another good point of the variable is that it takes the cultural difference into consideration. Despite the benefits, the segmentation variable is quite limited since it assumes that customers in the

Another crucial contribution in developing this group of variables was made by a book named Consumer behavior by (Reynolds & Wells, 1977). In the book, the authors postulated a family life-cycle models which we will discuss deeper in theoretical part. In spite of some difficulties of establishing correct amount after deduction or complications of having more than one earner in the family, income is certainly one of key variables in demographic segmentations. However, there has been debate arisen among researchers about the superiority of income and social class. Since the 1950’s the debate about of superiority of one criterion over another become the main subject of many studies (Mihic & Gulina, 2006). Earlier researchers such as (Pierre, 1958) concluded that “social class membership provides a richer dimension of meaning even tough income has generally been the most widely used behavioral indicator in marketing. In the study, he proved that an individual’s consumption patterns actually symbolize his class position, a more significant determinants of