Market Demographics: How to Use & Analyze

market demographics concept

The demographic makeup of populations is everchanging. However, knowing how these changes can be measured or how they will change in the future can be difficult to gather. 

Knowing the market demographics on a base level allows you to see how it could impact your organization.

For example, market demographics could help an organization determine what percentage of its target market is Gen Z.

Are there more men or women?

How does the urbanicity break out? 

These are only just some of the questions that can be answered by market demographics!

Let’s discuss what market demographics are, the importance of collecting them, the different market demographic types, how to collect them, and some examples of how organizations could use them.    

What are Market Demographics?

Market demographics refer to set characteristics of a population or group of people that are relevant for market segmentation and targeting. 

This includes categories such as age, gender, household income, employment status, and more. Market demographics are foundational in understanding the DNA of a population and target audience.

Market demographics

Importance of Collecting Market Demographics

As stated previously, market demographics are always changing.

Knowing what the market demographics are and how they are changing needs to be prioritized when conducting market research. 

Here are some reasons why collecting market demographics is important:

Understanding the Target Audience 

Market demographics can discover the characteristics, preferences, and behaviors of a target audience. This can help businesses tailor their products or services to better meet the desired needs of their ideal customers.

Targeted Marketing 

With market demographic data, businesses can segment their audience and create targeted marketing campaigns that resonate with certain groups.

This approach can increase the effectiveness of marketing efforts and lead to higher conversion rates and ROI.

Product Development and Innovation

Innovation and developing products in itself can be very challenging.

There is a legitimate concern about investing a lot of time and resources in launching a new product and having it fail to take off or even establish itself.

By analyzing market demographics, organizations can identify emerging trends, consumer preferences, and unmet needs within demographic segments.

This can reduce risk, lead to better product development, and provide a competitive advantage.

Optimized Resource Allocation

Where are our resources best spent?

This is a common question asked in all organizations. Understanding market demographics can help organizations allocate resources more efficiently.

For example, by placing their efforts in the most profitable demographic segments, businesses can improve their marketing budgets, product development investments, and distribution strategies.

Market Expansion Opportunities

Market demographics can reveal untapped populations or segments to capitalize on. By identifying underserved markets, businesses can develop customized strategies to expand their reach and grow their customer base.

Risk Mitigation

By staying informed and anticipating changes in consumer behavior, economic trends, or general shifts in demographics, organizations can proactively adjust strategies to mitigate risks and seize new opportunities.

Data-Driven Decision-Making

Market demographics provide valuable data that informs strategic decision-making across all aspects of an organization, including pricing decisions, product launches, or marketing campaigns.

💡 The Key Takeaway: There are several benefits to collecting market demographic data. Having the ability to make data-driven decisions can have a sizable impact on any organization.  

Types of Market Demographics

There are a plethora of characteristics used to differentiate segments within a population.

Let’s discuss some of the more common market demographic types:


There are 5 current age generations: Silent Generation, Baby Boomers, Generation X, Millennials, and Gen Z. Knowing which generation(s) are more prevalent in a market can offer insight into how it will change in the future.


Knowing how people identify themselves can help determine and better understand specific audiences. The most common gender identities include female, male, non-binary, gender neutral, and transgender.

Income Level

Household income can shed light on the affluence of a market. This is typically determined by calculating the percentage of a population through pre-determined income ranges or brackets.

For example, how many make less than $15,000, $15,000 to $24,999, and so on up to how many make $200,000 or more. 

Occupation or Industry

Knowing which occupations or industries are prevalent can help better understand the economics of a market and population.

For example, the Rust Belt is associated with manufacturing whereas Silicon Valley is associated with the technology sector. 

Education Level

Education levels can vary both from and in markets. This includes people who may have only received a high school education or less than those who obtained a graduate degree.

Education level is often analyzed with income level and occupation/industry data. 

Marital Status

Beyond just determining the married percentage in a market, you can also find out how many are single, single but living with a significant other, or separated/divorced.

This provides a much more detailed analysis for understanding the non-married audience.

Family Size

Household or family size can range from living alone to living with multiple people. This includes living with a spouse or significant other, parents, grandparents, children over the age of 18, and of course children under the age of 18.


The United States is one of the most ethnically and racially diverse countries in the world.

The more common ethnicities include Asian, Black or African American, Hispanic or Latino, Native American or Alaska Native, Native Hawaiian or Other Pacific Islander, and White or Caucasian.

💡 The Key Takeaway: While these are the most used market demographic types, there are several others worth exploring including urbanicity, state, region, DMA, employment status, housing situation, political affiliation, language, etc. 

How to Collect Market Demographics

There are a few methods to collect market demographic data.

Basic geographic and demographic data can be accessed through the U.S. Census Bureau and other large databases. However, this information can only go so far when determining insights from a targeted audience. 

Here are some more advanced methods: 

Customer Surveys

Customer surveys are a fast and effective way to both obtain market demographic data and analyze it against the results from other survey questions.

For example, you can measure the difference in purchase likelihood between Millennials and Baby Boomers. 

Asking demographic survey questions is critical to any type of market research study and can help organizations understand the characteristics and behaviors of their target audience.

Market Analysis 

A market analysis produces demographic, behavioral, consumer expenditure, and index scores on specific geographies (i.e., ZIP Code, county, DMA, state, etc.). This can be also called an industry analysis, demographic analysis, or landscape analysis. 

It can allow you to:

  • Understand shifts in consumers in your market
  • Understand the make-up and demographics of your consumers
  • Segment your consumers into profiles and behavioral traits
  • Identify basic demographic needs

A market analysis leaves no stone unturned. There is an abundance of data and information for any organization to utilize.

market analysis reports

Website Analytics

Web analytics gathers data from users visiting and browsing a website, with the main objective of understanding behavior to improve the user experience and achieve business KPIs, such as conversion rates and sales. 

For example, website analytics can capture various items of information including new visitors, returning visitors, page views, and traffic sources.

Knowing this data can help you better design your website as well as invest the proper resources in channels that generate the most traffic.     

💡 The Key Takeaway: No matter how you collect market demographic data, there is a lot of value to be found! Any of the methods discussed above will make you understand your target audience better.

Using Market Demographics (Examples) 

Here are a few examples of how an organization could use market demographics:

  • Targeted Advertising: A company that sells luxury fragrance products wants to generate more sales from affluent women aged 35 to 54. By using data from a market analysis report, they have a better understanding of what publications or online platforms are popular among this segment, ensuring their marketing efforts are reaching the intended audience.

  • Product Development: A toy company analyzes market demographic data and discovers a growing trend of tech-savvy parents who prioritize educational toys for their kids. The company develops a new line of interactive STEM toys for preschoolers in an attempt to capitalize on this new and trendy audience.

  • Pricing Strategies: A restaurant chain operating in urban centers notices through a customer survey that a significant portion of its customer base consists of young professionals with low to moderate incomes. To increase revenue, they introduce a happy hour menu with discounted prices on appetizers and drinks during weekday evenings, making dining out more affordable for these customers.

  • Market Expansion: A clothing retailer identifies a niche market of plus-size consumers who struggle to find fashionable and affordable apparel. Leveraging market demographic insights from a market analysis report, the retailer adds a dedicated plus-size clothing line. Thus tapping into an underserved market segment and increasing its customer base.

  • Location-Based Marketing: A fitness franchise targets health-conscious consumers living in densely populated urban areas. Using market demographic data from a feasibility analysis, they open new gym locations strategically in neighborhoods with a high concentration of young professionals and affluent individuals, maximizing foot traffic and membership sales.

  • Personalized Marketing Campaigns: A home decor online retailer analyzes market demographics from a customer survey and discovers that its millennial customers are particularly interested in sustainable and eco-friendly products. Knowing this information, they launch a targeted email marketing campaign promoting their eco-friendly product line.

💡 The Key Takeaway: Market demographics can be used in countless ways. Whether it’s determining something about your target audience or wanting to know who is your target audience, market demographics can provide you with the answers you need and then some!

Contact Our Market Research Company

Drive Research is a national market research company located in Syracuse, NY. Our team has the knowledge and tools to design a robust market research study, should it be the right fit for your business.

Interested in learning more about our market research services? Reach out through any of the four ways below.

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Justin Eisenhauer

As a Research Analyst, Justin works directly with all team members on client projects. His intrigue in market research formed during his time at Marist College, where he studied business and entrepreneurship.

Learn more about Justin, here.

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