The Use of Demographic Data In Market Research - Demographics

What is Market Research?

• Market research is useful when you are trying to put a business or you want to see what product might or might not be successful when you introduced it to the market. In essence it is a kind of research geared towards the analysis of data pertaining to the potential customers and the success of a product in a market - population. it is used in every business strategy - to analyze your market.
  
• In particular, market research is done to understand and analyze the market variables pertaining to demographic data so that you will have a good picture of demographic composition of the area. A case in point is to analyze your market in terms of its composition and age structure. What kind of products will be successful when you introduced it to a certain place or area? If you want to introduced a spa center, what kind and type of person are you marketing it with. In this case you want to gather demographic data like age of the people in the area- average age, sex composition, average income, lifestyle etc. All of these can be derived from local census except for lifestyle variables.

Usually a business graduate, statistician, demographer, population analyst or a social researcher is tasked to do market research.

• When we say demographics, these are data that are used to describe a certain population. They are called variable in statistics like age, sex, sex ratio, number of population, race, ethnicity and all the data pertaining to the three demographic processes - fertility, mortality and migration.
  
• Demographic rates are also included like migration rate, birth rate, death rates and ratio - school to student population ratio or police officers to number of population per sq miles.
  

In particular the use of demographic data in market research are :

• To get a closer approximation of your targeted customer (number and count of local population)

• To ascertain what kind of product will click to the population. To get a clear idea on what type of products is more saleable to the area.

• To give an intelligent information about the market for business purpose
  

Demographic data - are data pertaining to the population in a certain area. Demographic data are usually gathered to ascertain the three factors in population change, fertility, mortality and migration. Demographic analysis is used to look at the factors that may affect those changes in the three mentioned.

• Age structure - when we say age structure, we are talking about age composition of the population. Usually census data are presented in 4 year age group (aggregated) data like population below age 1, 1-4, 5-9, 10-14, 15-19 and son on. Demographic data are either aggregated by sex, age group, You can also get a data by specific age. Like how many 5 years old are in the area for example.

• Sex or Gender data - the data which are relevant to market research are data which are aggregated or specific age data, like for example you want to know your market for a specific product, you want to know how many women or men in specific age group. You can get these data from census. If the data you are after is not the newest data but from an old census data, you can get population projection data. The population projection is estimated using software using growth rates taken from the census survey, so it is fairly credible.

• Average income in the household within the area. You can get this from your local office or the local library or the Internet - Bureau of Commerce site. This is to get an idea how much does an average household earns so that you know if they can afford your product.
• Data on race, ethnicity and income are also useful

• Census data - this is usually conducted by the government in a regular basis, mostly five years to ten years apart. You can derived local data from the census. Basic data includes, age, sex, race, ethnicity and household size plus all other data which can be derived form the data itself like migration, household composition, types of household and many more. The census data is aggregated by sex, age, place, by religion (if it is available), nuptiality and other variables etc.

• Field gathering technique - Demographic data can be demographic surveys - one way to get data is the conduct of demographic surveys like getting a sample and going house to house or phone interviews. This is costly and difficult because most of the people are working outside their homes and it is difficult to ascertain when they are available.
  
• For a more detailed analysis on the target population you can also use focus group discussion or round table discussion as a method of data gathering