DEMOGRAPHIC ENVIRONMENT
Demography is the study of population and demographic environment refers to trends in country’s population composition and its growth, levels of income, household patterns and regional characteristics and other demographic factors of the market in which an organization operates. Study of demographic environment is highly useful especially in the short run, as populations changes over time in terms of size and structure according to which organization have to also respond. The key demographic factors that need a closer examination includes size and growth rate of population in cities, regions, age distribution and ethnic mix, educational levels and household patterns. Based on these factors marketers can develop products and service accordingly
COMPONENTS OF DEMOGRAPHIC ENVIRONMENT
- Population growth
Population growth indicates increase in the number of people who inhabit in a territory. The population explosion in India and across the globe has been a source of major concern.
Impact on Marketing Function
Population growth if not checked may result in insufficient supply creating a disparity in demand and supply side of goods and services. Further many marketing firms are motivated to invest in developing countries due to cheap labor and resources.
- Population Age Mix
Population age mix refers to the spread of people living in a given area and also initiates arrangement of population according to variables such as age, race, income or gender. Ex: balance between males and females as well as how the population is divided into groups of age.
Impact on Marketing Function
Recent trends show population in India includes more of youth who are interested to wear western attires, but old age population are interested in traditional attires. This can have important implications on marketing plans.
- Educational Level
The population in any society falls into five educational groups: illiterates, high school dropouts, pre – university or diplomas, college degrees, and professional degrees. Depending on educational levels customer purchase decisions are influenced.
Impact on Marketing Function
The level of education of the customer may also affect marketing techniques, in this information age customers feel they need not to be educated as they are confident enough to make a buying decision and therefore a marketer can use e – business instead of going for physical retail outlet.
- Household patterns
Household pattern signifies the way in which a family is organized. It includes the composition and membership of the family and the relationships among individual family members.
Impact on Marketing Function
Household pattern or family plays an important role in buying decisions of many products purchased by a family unit. A child learns how to enjoy candy by observing an older brother. To construct a house, study of the number of family members is necessary.
- Geographical shifts in population
Due to regional imbalances in terms of economic development, there is a great migratory movement between and within the states and countries. Intelligent marketers respond to these migrations and take advantage of the situation.
Impact on Marketing Function
Locations make an impact in terms of choice of goods and services. Bangalore for instance is home for many migrants from north India and their food habits are different from the localities. As a result of which there are many north Indian restaurants in Bangalore
