Posts Tagged: business strategy for buying behavior
Investors and entrepreneurs ignore demographics at their peril. Studying demographics is a key part of market research. If you don’t understand who your target customers are, you have no customers (Cue the flailing entrepreneur who shouts “But my product is aimed at everyone!”). You need to look at key markers like age, sex, ethnicity and more when examining buying behavior. If your customers are businesses you need to look at where they are in the value chain, how much of the product do they buy and when and who makes the decision within the company to buy these products.
Using Demographic Data Strategically to Capitalize on Buying Behavior
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For instance, development companies for the mobile app industry would be very interested in a new Pew Internet survey that shows 50 percent of all US adults have apps on their cellphones. When you break it down further, you see that 62 percent of adults aged 25-44 have smartphones. As Dan Rowinsky notes on ReadWriteMobile, if you were thinking of aiming a new app at teens on the go, you might want to adapt your product knowing that only 38 percent of teens have smartphones – and their parents aged 45-54 only have a marginally higher adoption rate.
The restaurant industry pays very close attention to demographic data – at least, the restaurants that stay in business do. Take for example, the case detailed in Inc. magazine of an Italian Lebanese pizzeria owner named Antonio Swad.
In 1986, he moved from Ohio to Dallas to open a traditional pizzeria. Realizing that he was located in an area with a large concentration of Hispanic consumers, he changed his eatery’s name to Pizza Patrón and focused his marketing efforts on the Latino community.
It wasn’t an easy decision to make. Swad–who is of Italian and Lebanese descent–says he was completely unversed in Latino culture when he made the strategic decision to pursue that market. To attract Latino customers to his stores, he hired bilingual employees for customer interaction positions, dedicated time and money to developing a large community service presence and, most controversially, allowed customers to pay in pesos. The shift in focus paid off. Today, Pizza Patrón operates 95 stores in six states, with 13 more in the works.
When collecting data, it is perfectly reasonable to take into account the demographics and buying behavior of past customers. However, past behavior is no guarantor of future results. A careful study of the demographics of your target market will not only help you develop products and sales processes to cater to your current customers, but also help you adapt to the marketplace of tomorrow.
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