International demographic environment

Demographic Environment

demographic environment
Demographics is about the characteristics of the population in a specific area and includes multiple factors like age, race, income, etc. Further, most businesses find the data with respect to these factors within the targeted demographic variable of interest as it can affect the growth and success of a business.
For example, India has around sixteen percent of the world’s population and is second to China. Also, India has a relatively younger population compared to China. Therefore, many international companies are targeting India as a potential market for various products/services.
Every business can be concerned with different aspects or demographic characteristics of a population. While for some businesses, age can be an important factor, for some others it can be the geographical spread. Let’s look at four major characteristics of the demographic environment that business strategists use to determine the competitiveness of the company.

Population Size

Some businesses require a minimum volume of potential customers for the business model to make sense. Therefore, any changes in the population size can have a critical impact on the business. Some such changes in the population size are:
  • Increase/decrease in the population’s birth rate
  • Changes in the average family size
  • An overall increase/decrease in the population size
  • Impact of a fast-growing population on the natural resources/food
These changes can have important implications for businesses dependent on the population size as an important demographic characteristic.

Geographical Distribution

Over years, an organization’s target population might shift from one region of a country to another for various reasons. Hence, it is important to consider the following issues:
  • The company’s location remains attractive to the population
  • If the population shift affects the quality of the available workforce, then the company must consider relocation
  • At all times, the organization must endeavor to adapt its functions to the geographical shifts of the population

Ethnic Mix

There are times when the ethnic mix of the population undergoes a change. This can affect the definition of the organization’s potential customers and also impact the workforce. These are some issues that need consideration:
  • Understanding the implications of changes in the ethnic mix of the target population on the design and delivery of products/services
  • Is modification of existing products/services sufficient? Or, should the organization design new ones?
  • Are the current employees ready to accept a more culturally diverse workforce?
  • A strategic plan to help the organization take advantage of the increased heterogeneity in the workforce

Income Distribution

For any business, understanding the purchasing power of its target population is essential for designing products/services. Any changes in income distribution in the population usually leads to changes in saving and spending patterns. Hence, organizations must track these changes to identify opportunities and use them to their benefit.

Solve

Q: What are the four major demographic characteristics of a population that interest most businesses?
Answer: The four demographic characteristics that most businesses are interested in are:
  1. The size of the population
  2. Geographical distribution of the population
  3. The ethnic mix and
  4. Income Distribution

Comments

Post a Comment

Popular posts from this blog

Work certified and uncertified

Meaning of Work Certified  When contractor takes the contract to complete any construction work, it may complete in 4 or 5 years. but contractor has to pay different expenses for material, labor and others. So, it is very necessary to pay him some money of contract. This money is given on the basis of work done. So, any part of construction which is completed by contractor will be work certified if it is certified by an authority. Authority may be independent engineer or architect who can estimated the work. He will issue the certificate of work done after certifying the work of construction. On this work certified, contractor has right to get money of contract. Meaning of Work Uncertified Work uncertified means work done but not certified by authority. So, contractee will cut some money on the basis of work uncertified and will keep in his pocket. This will be retention money. Accounting Treatment of Work Certified and Work Uncertified  (I) Work  certified...
Read more

factors influencing choice of advertising agency

The Advertiser looks for an advertising agency whose services and expertise meets his requirements. Following factors should be considered while selecting an advertising agency:- Services offered by Ad-agency  - There are different agencies provides different services, some provides all the services, some provide selected services, some provides only media services. It depends on the requirement of advertiser whether he need a fulls service agency, creative boutique, media buying service agency, or a  sweet shop . Experience of Agency  - An experienced agency performs better then a new agency  because it is familiar with different components of marketing environment like- competitors' policies, taste of consumer, income of consumer, consumer responses, fashions and trends, reputation of different media etc. Location  - A major factor to be considered while selecting ad-agency is location of office of agency. A considerable amou...
Read more

Environment of International Marketing

Image
Apple is so successful because of their effective marketing efforts. They are good in identifying relevant environmental factors and trends which helps in taking advantage of opportunities and minimising threats.  New technological developments, global economic conditions, worldwide population changes, increased competition, legislative requirements, and political events are some of the factors affecting current and future marketing activities of the organisations around the world. Combination of such factors makes the International Marketing Environment. The long term performance of any organisation depends on its ability to identify and respond effectively to the key changes in its marketing environment.  Meaning of International Marketing Environment  International Marketing Environment is the combination of various factors external to an organisation that can affect the international marketing decisions of the organisation in international market. These fac...
Read more