The demographic environment


The main demographic force that marketers monitor is population, because people make up markets. Marketers are keenly interested in the size and growth rate of population in cities, regions; and nations; age distribution and ethnic mix; educational levels; household patterns; and regional characteristics and movements.

Demographic trends are highly reliable for the short ad intermediate run. There is little excuse for a company’s being suddenly surprised by demographic development. The singer Company should have known for years that its sewing machines business would be hurt by smaller families and more working wives, yet it was slow in responding..

World wide Population Growth

The world population is showing explosive growth. It totaled 6.1 billion in 2000 and will exceed 7.9 billion by the year 2025. Here is an interesting picture:
If the world were a village of 1,000 people, it would consist of 520 women and 480 men, 330 children, and 60 people over age 65, 10 college graduates and 335 illiterate adults. The village would contain 52 North Americans, 55 Russians, 84 Latin Americans, 95 East and West Europeans, 124 Africans, and 584 Asians. Communication would be difficult because 165 people would speak Mandarin, 86 English, 83 Hindi/Urdu, 64 Spanish, 58 Russian and 37 Arabic, and the rest would speak one of over 200 other languages. There would be 329 Christians, 178 Moslems, 132 Hindus, 62 Buddhists, 3 Jews, 167nonreligious, 45 atheists, and 86 others.

The population explosion has been a source of major concern. Unchecked population growth and consumption could eventually result in insufficient food supply, depletion of key mineral, overcrowding, pollution, and an overall deterioration in the quality of life. Moreover, population growth is highest in countries and communities that can least afford it.

The less developed regions of the world currently account for 76% of the world population and are growing at 2% per year, whereas the population in the more developed countries is growing at only 0.6 % per year. In developing countries, the death rate has been falling as a result of modern medicine, but the birth rate has remained fairly stable. Feeding, clothing, and educating children, while also providing a rising of living, is nearly impossible in these countries.

Explosive population growth has major implications for business. A growing population does not mean growing markets unless these markets have sufficient purchasing power. Nonetheless, companies that carefully analyze their markets can find major opportunities.

In order to curb its skyrocketing population, the Chinese government has passed regulations limiting families to one child. One consequence of these regulations: These children are spoiled and fussed over as never before. Known in China as “little emperors,� Chinese children are being showered with everything from candy to computers as a result of the “six pocket syndrome.� As many as six adults—parents, grandparents, great-grandparents, and aunts and uncles—may be indulging the whims of each child. This trend has encouraged toy companies, such as Japan’s Bandai Company, Denmark’s Lego Group, and the US’s Hasbro and Mattel to aggressively enter the Chinese market.

Population Age Mix:

National Population varies in their age mix. At one extreme is Mexico, a country with a very young population and rapid population growth. At the other extreme is Japan, a country with one of the world’s oldest populations. Milk, diapers, school suppliers, and toys would be important products in Mexico. Japan’s population would consume many more adult products.

There is a global trend toward an aging population. According to a survey in The Economist, more people will grow old in this century than ever before. In 2004 or 2005, the population of people aged 60 or over will surpass the proportion of under fives. There are unlikely to be more toddlers than seniors. It is the start of what the Japanese are calling The Silver Century. The graying of the population is affected by another trend, the widespread fall in fertility rates. In most countries, women are not having enough babies to replace the people who die. The result will be fewer working people to replace those who retire. In a decade’s time, many countries—Japan, the United States, and the European countries, for instance—will face problem of having to support a vastly large population of elderly people.

A population can be subdivided into six age groups:

1. Preschool
2. School-age Children.
3. Teens.
4. Young adults age 25 to 40.
5. Middle-age 40 to 65.
6. The older-adults age 65 and up.

For marketers, the most populous age groups shape the marketing environment. In the United States, the “baby boomers,� the 78 million people born between 1946 and 1964, are one of the most powerful forces shaping the marketplace. Baby boomers are fixated on their youths, not their age.

With many baby boomers well into their fifties and even the last wave turning 40, demand for products to turn back the hands of time has exploded. According to one survey, half of all boomers were depressed that they no longer young and nearly one in five were actively resisting the aging process.

The 40-plus age group will be 60% bigger than the 18to 39 group by 2010, and it now controls three-quarters of the country’s wealth. As they search for the fountain of youth, sales of hair replacement and coloring aids, health club memberships, home gym equipment, skin tightening creams, nutritional supplements, and organic foods have all soared.

Boomers grew up with TV advertising, so they are an easier market to reach than the 45 million born between 1965 and 1976, dubbed Generation X. Generation Xers are typically cynical about hard sell marketing pitches that promise more than they can deliver, but some marketers have been able to break through.

Both baby boomers and Generation-Xers will be passing the torch to the latest demographic group Generation Y or the echo boomers, born between 1977 and 1984. Now numbering 72 million, this group is almost equal in size to baby boomers. One distinguishing characteristics of this age group is their utter fluency and comfort with computer and Internet technology. To them digital technology is no more intimidating than a VCR or a toaster.