When is a Demographic Too Big- Or Too Small- to Make a Marketing Strategy Work

Demographics can be divided in countless ways, and any of them can be backed by a logical decision. Segmenting a market by demographic seems easy in theory, but it is often masterfully difficult to implement. On paper, it is easy to define how many people between 12 and 18 live in a city. It is just as easy to determine average incomes and target people who make over $45,000 a year. They would be the most willing to buy, say, high-end refrigerators or 72-inch televisions.

Is the demographic viable? Is the company correct in targeting them? The selection of a demographic could seem easy, but it may be too small or too large given the product and the area.

Companies often fail in their marketing strategy because they are thinking too big. The Internet allows companies to theoretically target everyone. That type of strategy will make the product boring for everyone because it is reaching the broadest audience possible. There is no longevity in something that is purposefully broadly appealing. Brands select their demographics and limit potential customers out of the pool.

That can be accomplished to a distasteful end. For example, the high-fashion industry will sometimes not make dresses and outfits over a certain size (size 12 is a common threshold). They are refining their audience. They actually do not want to encompass everyone because that will apparently dilute their brand and lose focus on their core demographic.

Interestingly, some brands have filled the void. A slew of new high-fashion clothing brands for size-12 and over women have amassed a substantial audience. They have stuck to the same strategy of selecting their market research and focusing on them.

Is the market too small? One company may want to sell fashionable winter coats in Florida because they think the competition is low. That may be true, but is it too low for a reason. Is the market simply not there in a large enough scale to justify targeting it? These are the essential questions business owners will ask as they navigate the who, where, why, and how of market segmentation.