Advantages and disadvantages of demographic segmentation?

Answer 1

1) disadvantages:

- comparability and availability (3 way- stick)

in the regions where census data is problematic, it's availability can be a problem, and, obviously, this introduces unreliability into your estimations based on statistical methods;

in the regions like US secondary data is so widely available that one has to posess superior ability to analyze it to be able to extract advantageous information about consumer behaviour not already extracted by competitors)

- explanatory power

if consumers are grouped by one Demographics, say, age, there's ambiguity as to whether consumers at the border ages are sufficiently different to place them in separate groups; also, you can not split them into groups to no limit - therefore you lose information about consumers if you group them based on limited demographics;

2) advantages:

- availability

in countries like US secondary demographical data IS the cheapest (free) data to get;

- in developed countries, with some effort and good statistical software, for generic products, especially, demographical data can explain up to 70% of change in consumer behaviour