1. Demographic environment: Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics. The demographic environment is of major interest to marketers because it involves people, and people make up markets.
How influence on marketing: Changes in the world demographic environment have major implications for business. Changes in demographics—in the nature of human populations—mean changes in markets. So they are very important to marketers. When demographic environment changes, then company has to change its marketing strategy.
For example, Consider China, Only one child for each parent. So they spend 40% of their disposable income for their child. So it creates huge opportunities for the marketer of children goods (baby care products) in china. Generally That generation will purchase luxury products always.
• Changing Age Structure of the Population: Marketers must analyze the demographic dimensions carefully. Age is the pivotal dimension of demographic environment. Markets should be analyzed on the basis of age level. A product may not satisfy the needs of all customers. For different age groups different products may be required.
Example: Suppose in a country a large number of people are getting older, and birth rate is slow down. What will happen? The demand of geriatric (health care products for old) products will be increased. That means it will create opportunities for the pharmaceutical industry & health care products industry.
Example: In the 1970s and 1980s, Cadillac (American Luxury) had some of the most loyal customers in the industry. Cadillac’s share of the luxury car market reached a whopping 51 percent in 1976. Based on market share and sales, the brand’s future looked rosy. Cadillac customers were getting older (average age 60). Many Cadillac buyers were on their last car. Compare this with BMW. It’s more youthful and vigorous image didn’t win BMW the early market share war. The result: In the years that followed, BMW’s market share and profits soared while Cadillac’s fortunes eroded badly. Recognizing this, in recent years, Cadillac has attempted to make the Caddy cool again by targeting a younger generation of consumers with new high-performance models and more vibrant advertising. The average consumer aspiring to own a Cadillac is now about 36 years old. (So age of target market is an important factor)
• Generational Marketing (needs, wants, demands vary from generation to generation) so it may require separate marketing program for each generation.
• The Changing Family trends:
Traditional joint family to small nuclear family (Each group has distinctive needs and buying habits)
More people are divorcing or separating, choosing not to marry, marrying later, or marrying without intending to have children.
The number of working women has also increased greatly (This trends increase the opportunities of marketing of readymade foods, dressed chicken meat, fast foods, washing machine, woven, micro woven etc.)
• Geographic Shifts in Population
• A Better-Educated, More White-Collar, More Professional Population
This trends lead to Raise the awareness of consumer, consumption of quality goods etc.)
• Increasing Diversity