Definition: A statistical view of a population, generally including age,
gender, income, schooling, occupation and so on
Understanding the demographics of your target customers is
critical for the success of your business. Not only do you need to
understand them in order to decide exactly what your product and
services mixes will include, but this information will also affect
pricing, packaging, promotion and place.
Let's talk about just one of these factors to see how
demographics affects your choices. In order to properly evaluate a
community or neighborhood for the best location for your business,
you must know the demographic profile of your potential customers.
To see if the community you're considering offers a population with
the demographic traits necessary to support your business, look at
the community's:
- Purchasing power. Find out the degree of disposable
income within the community.
- Residences. Are homes rented or owned?
- Means of transportation. Do prospective customers in the
area own vehicles, ride buses or bicycles, and so on?
- Age ranges. Does the community consist primarily of
young people still approaching their prime earning years, young
professionals, empty nesters or retirees?
- Family status. Are there lots of families in the area or
mostly singles?
- Leisure activities. What type of hobbies and
recreational activities do people in the community participate
in?
Detailed demographic information is available from the Census Bureau's
website. Click on "State and County Quick Facts" for your
state, and you can find county-by-county demographic information.
You can also get this kind of information from established
businesses within your industry or from a trade association. Gale's
Dictionary of Associations, available in most libraries, contains
listings for more than 30,000 trade associations' national
headquarters. Many associations also have local or regional
chapters that serve members in a variety of ways, with everything
from newsletters to lobbying actions.
In addition, the Bureau of Labor Statistics publishes the
Consumer Expenditure Survey (CES), which you can find at the
Bureau's website
by clicking on "consumer spending." The CES annually samples 5,000
households through its Quarterly Interview Survey and its Diary
Survey to learn how families and individuals spend their money.
Unlike other surveys that might ask only how much people are
spending on household or home appliances, the CES collects data
about nearly every category of expenses--from alcoholic beverages
and restaurant meals to pensions and life insurance. Bureau of
Labor Statistics analysts then sort the information and group
consumers by income, household size, race, gender and other
characteristics relevant to your business.