What Lies Beneath

Today's consumers no longer fit into yesterday's molds. Here's how to get a grip on the new demographics--and get inside your customers' heads.

Editor's note: For a short history of demographics, click here .

Age, income, sex and educational level. For decades, companies large and small have depended on these demographic categories to shape their marketing campaigns and make sense of their potential customers.

It might be time to rethink this strategy. Demographics--the quantifiable social and economic characteristics of a population--aren't as powerful as they used to be. "The value of demographics has begun to wear out a little bit. They're increasingly becoming less important," says J. Walker Smith, author of Coming to Concurrence: Addressable Attitudes and the New Model for Marketing Productivity and president of Yankelovich Partners, a market research and consulting firm in Chapel Hill, North Carolina.

Why are demographics not as significant as they used to be? As U.S. society evolves, subgroups are emerging within traditional demographic groups. Take, for example, the rise of mixed-race, or multiethnic, individuals. Today, 1 in 16 Americans under 18 is of mixed racial heritage, and celebrity examples abound, from Tiger Woods to Halle Berry to New York Yankees' shortstop Derek Jeter.

Also consider the shifts taking place between married vs. single households, a major component of traditional demographics. In the 1950s, 80 percent of U.S.

Households were married households. Today, the figure is only slightly more than 50 percent. When Yankelovich studied 170 variables ranging from spirituality to brands, it found much greater diversity of attitudes among single people compared to married couples. In other words, just knowing that someone's single these days doesn't tell you much about what he or she really thinks and believes.

Adding to the difficulty of categorizing consumers is their refusal to be stereotyped on the basis of race, age, education and income level. Americans living in a more accepting, multicultural society no longer fit neatly into one demographic profile that lets companies determine their lifestyles and the best way to market to them. "Some of the demographic categories we've traditionally understood are now breaking down," Smith says. "The boundaries between categories are blurring."

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Chris Penttila is a Washington, DC-based freelance journalist who covers workplace issues on her blog, Workplacediva.blogspot.com.

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This article was originally published in the May 2005 print edition of Entrepreneur with the headline: What Lies Beneath.

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