Demographic environment

Importance of demographic environment

• Market is people in the sense that the demand depends on the people and their characteristics.

Demographic bases of market segmentation

• Age structure• Gender• Income distribution• Family size• Family life cycle• Occupation• Education• Social class• Religion• nationality

Falling birth rate and changing age structure

• The declining birth rate poses a problem for many businesses. The same has been a boon to certain industries. Although birth rate ahs fallen in developing countries, the population growth rate is still very high. High population growth rate implies increase in labour supply.

• The falling birth rate and rising longevity will alter the age distribution in the population.

• The changes in the age distribution have a lot of implications for the business. The pharmaceutical companies may pay attention to the requirements of the aged population.

• Increasing proportion of the aged would have implications for the government. It may increase the welfare burden of the governments.

Migration and ethnicity

• United States has been a great nation of immigrants and on the other side Japan which has never allowed any immigration whatsoever.

• Immigration has brought about very remarkable ethnic changes in various countries. A number of localities are concentrated by immigrant communities.