Limitations of Demographics in predicting consumer behavior

There has been much discussion in recent years about the role of demographic factors as determinants or even correlates of consumption behavior of people. A number of researchers have expressed skepticism that such factors can be effectively used. For example, there are some undeniable demographic patterns to purchasing such as that razor blades are purchased mainly for men. However, except for specific products aimed directly at specific demographic groups, evidence indicates that demographic measures, outside of education, are not an accurate predictor of consumer behavior.

One potential limitation of demographics in explaining consumer behavior is based on the claim that while demographic factors may have been very relevant in the past (even up until World war II), they are now obsolete because of the narrowing differences in income, education, and occupational status. Nevertheless, there is much evidence showing that group differences among categories of income, education, and occupation are large and statistically significant in spite of a large number of within group differences. It would also be noted that demographic factors include numerous other variables (such as age, sex, race, and religion) that are much less subject to influence from environmental change. For example, older people tend not to listen to rock music, per-capita consumption of liquor is three times higher among blacks than whites, and Catholics still tend to use contraceptives much less than the rest of the population.

A second and more basic argument against using demographics is that they have generally failed to explain and predict consumption behavior. However, although demographics have failed to explain brand choice behavior they seem to succeed in explaining buying behavior at the broad product class level of such items as durables appliances, automobiles, and housing. Thus, it has been suggested that before demographics are abandoned because of their lackluster performance, several past problems with demographic research should be subjected to further study. These problems are mainly associated with techniques for measuring demographic variables, assumptions underlying their relationship to consumer behavior , inclusion of a small group of people in such studies who do not have a consistent pattern of behavior, and techniques of statistical analysis that are performed on the data.

Important reasons exist for the continued use of demographics in segmenting markets. First, they are easier to collect, easier to communicate to others, and often more reliable in measurement than many of the competing approaches to segmentation. Moreover, only through demographic factors is the researcher able to project results to the country’s population, because the Bureau of the Census collects and updates only demographics profiles.

Failure to obtain data from not-at-homes may bias survey results because population groups vary in the probability of being at home. Young males particularly are not likely to be home; but other groups that are also more likely than the average to be not-at-home include families with no children employed women, high income families, young people of both sexes, and those who live in large cities.

With quota samples on door-to-door surveys, the survey directors seldom have any knowledge of the not-at-home problem. In quota samples for shopping center interviews, of course, there are no not-at-home problems. When probability samples are used, the director is aware of the not-at-homes and must decide how much effort is desirable to get more of them into the sample. Because of the differences between the at-homes and not-at-homes, it is usually wise to make at least three call backs to interview the original not-at-homes.

For these reasons, discarding demographics would seem to be premature. Instead, they should continue to be used as one element along with numerous other variables in approaching the puzzle of explaining consumer behavior. Improvements in demographic measurement, variables used, and techniques used by marketers are likely to improve the quality of demographic contributions to marketing. In any event, demographics will continue to be used for projection, identification, and segmentation of markets as long as our census data limited to a socio economic demographic profile of citizens.