The demographic environment is the statistical study of the human population and the way it is distributed.
Fundamentally, this study includes variables such as age, family structure, geographic distribution, population growth rates, educational levels, and population diversity.
In addition, it is important for companies to know this data because it is people who form the market. Therefore, attention must be paid to demographic trends that may generate changes in terms of density, location, occupation, family structure, and educational characteristics of the population.Demography
Since changes in these variables can generate variations in demand and in the needs that consumers may have.
Changes in the demographic environment
Important elements in the demographic environment
Certainly, changes in the demographic environment can have significant consequences for businesses. These changes can be positive or negative and could affect in the short and long term.
Of course, changes in the demographic environment can occur at the national and international level and can affect both the social and economic structure of the population. Specifically, this especially impacts demand, which can increase or decrease. That is, all this helps the company to know how the population changes and evolves in a certain area.
The main elements of the demographic environment are:
1. Socioeconomic level
Above all, the socioeconomic level determines the social class to which a group of people belongs and what their purchasing power is. Thus, the products offered by a company must respond to the quality and price conditions that each group of consumers expects to obtain.
For example, in the automobile market, the Lexus brand is aimed at a group of high-class and high-net-worth customers, while the Toyota brand is aimed at middle-class and middle-income people.
In the same way, age is another important factor that a company must know, because all products are aimed at groups of consumers of a certain age.
Some products could be targeted to a target audience of any age, but most are geared toward a group of consumers located within a specific age range.
This case can be exemplified if we think of a breast milk formula that is aimed at babies and whole milk that can be consumed by children from the first year of life onwards.
Also, sex is another variable widely used by marketing to focus its products, since some are exclusively for the female sex, others for the male sex and other products can be used by individuals of both sexes.
If we use an example, a product intended for use by women is socks, a product intended for use by men would be socks, and a product intended for both genders is a toothbrush.
4. Family structure and marital status
On the other hand, the family structure helps to know important data information such as whether the families in that population group are large or small. In addition, if families are integrated or disintegrated, this information helps to design products that are adapted to the particular needs of those markets. As the size of the different packages could be for each group, a large family buys a larger bag of cereal, compared to a family with few members.
Marital status could also influence purchasing habits and purchase volume, as well as the price they can pay for products.
5. Increase or decrease in population
Certainly, this aspect is related to factors such as aging, the number of births and migrations that occur in a population.Affecting companies in terms of variations that can occur especially in the decrease or increase in demand.
6. Educational level and occupation
Both the educational level and the type of occupation can be important elements for the company to determine which products best meet the needs of the market it serves.Elements of the demographic environment
Finally, we can affirm that companies can use one or more of these variables to create their demographic environment. The demographic environment allows us to better define the target market and, in the same way, develop the best strategies that are useful to reach a greater number of the population.Macroenvironment