Conquer the CAS Challenge 2025 – Your Ultimate Actuarial Adventure Awaits!

Demographic segmentation focuses on categorizing individuals based on quantifiable characteristics, primarily characteristics such as age, gender, income, education level, family size, and other similar variables. The correct choice encompasses these fundamental aspects, as both age and income are key demographic factors that can influence consumer behavior and, consequently, market strategies.

By using demographic segmentation, companies can effectively target their marketing efforts to specific segments of the population that are more likely to respond positively based on their shared characteristics. It helps businesses understand the composition of their audience and tailor products or services to suit their needs and preferences more accurately. For instance, a company may market luxury goods to higher income groups while offering budget-friendly options to lower income segments.

The other options revolve around different forms of segmentation. Consumer preferences relate more to psychographic segmentation, which looks at individual preferences and behaviors. Geographical location is another form of segmentation, often referred to as geographic segmentation, which focuses on where consumers live and how it affects their purchasing. Lifestyle choices, while also related to psychographic segmentation, pertain to the interests and activities of consumers rather than quantifiable, demographic characteristics.