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.