Hi, welcome to this blog post about the how demographics and different generational cohorts effect buying decisions. This is written as part of an assessment for my Consumer Behaviour module on my Digital Marketing Integrated Degree with QA and Solent University. If you’re here reading this, I would very much appreciate your feedback or additional observations/knowledge in the form of a comment!
Schiffman et al (2012) describe market segmentation as:
“the process of dividing a market into distinct subsets of consumers with common needs or characteristics and selecting one or more segments to target with a distinct marketing mix”.
The segmentation of customers can enhance various areas of your marketing strategy by increasing the understanding of the individual needs of your customer base as well as how varied these needs may be. However, successful segmentation requires a market large enough, with both enough diversity and spending power to allow you to segment on a demographic or psychographic basis (Schiffman et al 2012).
Demographics
Demographic segmentation includes variables such as:
Age
Gender
Marital status
Income
Education
Occupation
Social Class
Generation
And more.
Schiffman et al (2012) state that
“demography refers to the vital and measurable statistics of a population.”
These are areas of categorical data, allowing you to define each segmentation clearly and easily. Each category is stable, measurable and congruent, and should be accessible and substantial enough to require a personalised marketing mix.
Age Groups
One of the easiest and possibly most influential demographics to consider is age. Needs and
interests often change with age, as can product usage. For example, teenagers may use their mobile phones for a range of activities including social media, photography, gaming, educational purposes etc, where as someone in their sixties may only use their mobile device for phone calls and SMS. Consumer age groups are generally categorised as follows:
Teenagers – heavily influenced by group membership.
Twenties – more likely to perform impulse purchases, less likely to save.
Thirties – more responsible purchasing behaviour with increased stability and income.
Forties - potentially the most happy and established age group with a stable family, career and financial situation, but may want to start revisiting their youth.
Fifties – start experiencing “empty nest syndrome” so become more community focused and may begin to become grandparents.
Sixties – extended life expectancy sees a second middle-age. Retirement age is currently 65, they may begin to travel more.
Each consumer age group, as a whole, also tend to be at different life stages - which is another demographic that we can segment by.
Life Stage
These life stages often run parallel to age, but not all the time. With the “nuclear family” concept becoming less popular (Laplant 2016), less people having children (Social Market Foundation 2021) and housing and financial instability on the rise (Hourston 2022), it may be better to categorize by life stage rather than age. These include:
Teen – Living with and dependent on parents in some financial aspect.
Single/Independent – beginning to live independently, beginning a career, dating.
New Couple – living together, now experiencing a double income situation.
Mid-adulthood – this may include becoming parents, continuing without having children, or even more single households.
Empty nesters – children have moved out, retirement age.
Dissolution – as one partner dies, the other now lives alone
Generational Cohorts
Generational cohorts is another way of categorising set age groups to define different behaviours. Karl Mannheim first proposed the idea in 1952, suggesting that people are influenced by the socio-historical environment of their youth. These shared experiences (such as the fall of the Berlin wall, the rise of the internet, the introduction of rock music) shape generations.
However, it is important to note that each generation cannot be clearly defined by exact dates, often there is an overlap. The generation timespan is also shortening with the rapid change in technology giving way to new generations of digital natives at differing degrees.
Having said that, this is what scientists generally define as the current living generational cohorts:
Baby boomers
o Born between the mid-1940s to mid-1960s, this generation did not experience the wars and hardships that their parents did, instead growing up in an era of social and economic prosperity (Sandbrook 2006), in nuclear families (Nickerson 2022). This is the generation that invented youth culture as we know it today including the swinging 60s.
Gen X
o Born between the mid-1960s to the mid-1980s, this generation grew up in harder circumstances like the fall of the berlin wall, Thatcherism (BBC 2013) and the strikes of the 1980s (Sandbrook 2022). This generation gave rise to the popularity of metal music with general characteristics of scepticism, detachment and anarchism.
Millennials
o Born between the mid-1980s to the mid-1990s, the millennial generation is more
akin to their baby boomer parents. They are more likely to be idealistic and confident, despite experiencing 9/11 in early adolescence. They were the first adopters of social media and are the first generation to be comfortable online (WARC Best Practice 2022).
Gen Z
o Born in the mid-199s to the early-2010s, Gen Z value freedom above all else (yet are highly influenced by others – they’re still teens!) They have a short attention span of 8-seconds (Morgan 2020), are cautious about their spending and anxious about their future as well as that of the planet (Rose, Revel and O’Duffy 2019).
Gen Alpha
o Generation Alpha is still being populated, with its oldest
members now entering their early teen years and beginning to hold some purchasing power. They are the highly educated and digitally native children of the millennial generation – the first generation to have been immersed in technology their entire lives (McCrindle cited in Stechyson 2019).
References
BBC, 2013. What is Thatcherism? [viewed 6 February 2023]. Available from: https://www.bbc.co.uk/news/uk-politics-22079683
HOURSTON, P., 2022. Cost of living crisis [viewed 6 February 2023]. Available from:
https://www.instituteforgovernment.org.uk/explainer/cost-living-crisis
LAPLANT, K. M., 2016. Family Decline Theory. Encyclopaedia of Family Studies, 1-5
MANNHEIM, K., 1952. Essays on the sociology of knowledge. London: Routledge & Kegan Paul
MORGAN, B., 2020. 50 Stats All Marketers Must Know About Gen-Z. In: Forbes. 28 February 2020 [viewed 6 February 2023]. Available from:
https://www.forbes.com/sites/blakemorgan/2020/02/28/50-stats-all-marketers-must-know-about-gen-z/?sh=2fd2ba276d06
NICKERSON, C., 2022. The Nuclear Family in Sociology [viewed 6 February 2023]. Available from: https://simplysociology.com/nuclear-family.html
ROSE, H., F. REVEL and I. O’DUFFY, 2019. Gen Z: Diverse from previous generations and diverse within. [viewed 21 November 2022]. Available from: http://wwww.the7stars.co.uk/talkin-about-a-new-generation-whitepaper/
SANDBROOK, D., 2006. 1956: The year that changed the world. In: The Guardian. 22 October 2006 [viewed 6 February 2023]. Available from: https://www.theguardian.com/world/2006/oct/22/egypt.featuresreview
SANDBROOK, D., 2022. Your guide to the miners’ strike of 1984-1985. [viewed 6 February 2023]. Available from: https://www.historyextra.com/period/20th-century/miners-strike-history-facts/
SCHIFFMAN, L. G., L. L. KANUK and H. Hansen, 2012. Consumer Behaviour: A European Outlook. 2nd ed. Harlow, England: Pearson
SOCIAL MARKET FOUNDATION., 2021. “Baby shortage” could spell economic stagnation for UK [viewed 6 February 2023]. Available from: https://www.smf.co.uk/baby-shortage-could-spell-economic-stagnation-for-uk/
STECHYSON, N., 2019. What Is Generation Alpha? Everything To Know About The Kids Of Millennials. In: HuffPost. 27 November 2019 [viewed 6 February 2023]. Available from:
https://www.huffpost.com/archive/ca/entry/what-is-generation-alpha_ca_5dde809ae4b0913e6f7719c8
WARC BEST PRACTICE., 2022. What we know about US millennials. WARC.com: WARC [viewed 6 February 2023]. Available from: https://www.warc.com/content/article/bestprac/what-we-know-about-us-millennials/120917