Income – A Basis for Demographic Segmentation

Another useful a priori demographic variable is income. Not surprisingly, higher income households tend to be less price-sensitive, placing a higher value on buying higher-quality merchandise. Because of the growth in dual-income households, there has been a dramatic growth in the proportion of total spending in the economy coming from such households, implying that the market for high-end products and services should increase substantially.

It is seen that low-income people prefer beedis for smoking. Middle-income buyers smoke Wills Filter, and high-income buyers like 555 cigarettes.

Even sometimes the choice of celebrity endorser is considered while targeting at a certain income category. Amitabh Bachchan for Parker Pen and not Govinda.

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