Final answer:
The statement is true; demographic characteristics are pivotal in market segmentation because they help predict consumer product needs and purchasing behavior, which are vital for creating targeted marketing strategies and assessing market sustainability.
Step-by-step explanation:
The statement that demographic characteristics are commonly used to segment a market because they are closely related to consumers' product needs and purchasing behavior is true. Demography, which involves the statistical study of human populations, provides critical data that can affect market segmentation and has implications for population dynamics that can influence economic trends and development. Demographic factors such as age, gender, education, and socio-economic status are important because they can shape consumer needs and purchasing patterns, thus making them a key consideration in market segmentation.
Businesses and marketers often use demographic data to understand the characteristics of their target audience and to tailor their products and marketing efforts to meet the specific needs and preferences of different market segments. Targeted marketing is more effective because it is based on the real characteristics, behaviors, and tendencies of consumer groups determined by their demographics.
Moreover, demography can also give insight into the long-term sustainability of a market by analyzing trends such as population growth, life expectancy, and economic development. Population size, density, and age structure are critical in determining birth rates and ultimately affect local resources and health, which are vital inputs for a stable market environment.