Comparing the predictive utility of demographics to alternative segmentation schemes

Mohammad Bakher Naseri, Greg Elliott

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Abstract

This paper compares the predictive power of demographic variables with those of other, more complex segmentation bases. To achieve this objective, the mean R-square of20 demographic models obtained from a representative survey was judged against mean R-square of 99 non-demographic models, in comparable product categories, drawn from existing published studies. The result indicates that demographics have significantly higher explanatory power than some well-established segmentation bases, such as psychographics and benefits. Further, a non-symmetrical U-shape relationship was found between demographics' utility and adoption rate. That is, demographics appear to better predict consumer behavior at the early or late stages of the adoption process. This key observation helps to explain the inconsistency found in the literature in relation to the predictive power of demographic variables. Overall, our findings strongly refute the proposition advanced by a number of prominent market segmentation researchers that the relationships between demographic segments and marketing variables are too weak to be of any practical value. Based on the result of this analysis, therefore, it is concluded that demographics are, at least as useful as other segmentation bases.
Original languageEnglish
Title of host publicationMarketing theory into practice
Subtitle of host publicationproceedings of the Academy of Marketing Conference 2007
Place of PublicationKingston, UK
PublisherKingston Business School
Number of pages14
ISBN (Print)9781872058146
Publication statusPublished - 2007
EventAcademy of Marketing Conference (2007) - Egham, UK
Duration: 3 Jul 20076 Jul 2007

Publication series

NameResearch paper series
PublisherKingston Business School
Number61

Conference

ConferenceAcademy of Marketing Conference (2007)
CityEgham, UK
Period3/07/076/07/07

Keywords

  • demographics
  • segmentation
  • predictive power
  • non-demographics

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