The Demographic Environment

 The Demographic Environment:

 Refersto the size, distribution,
and growth rate of groups of
people with different
characteristics.
Demographic Environment

Demography is the study of human populations in

terms of size, density, location, age, gender, race,
occupation, and other statistics
 Demographic environment is important because it
involves people, and people make up markets
 Demographic trends include age, family structure,
geographic population shifts, educational
characteristics, and population diversity
The Demographic Environment

Global Population Size and Growth:

 The world population is now more than six billion.

 Approximately 95 percent of that growth took place

in developing countries in Asia, Africa, and Latin
America.

 China currently has the largest population, followed

by India, with the United States a distant third.
The Demographic Environment

Global
Global Demographic
Demographic
Characteristics
Characteristics&&Trends:
Trends: U.S.
U.S.Population
Population Shifts
Shifts
 The

Thelarges
largescities
citiesand
and
the
thehighest
highestcity
citygrowth
growth
Urban:
Urban: Rural:
Rural:
rates
ratesare
arein
indeveloping
developing
countries 1900:
1900: 39.6%
39.6% 60.4%
60.4%
countriessuch
suchasas
Mexico,
Mexico,Brazil,
Brazil,and
and 1990:
India. 1990: 75.2%
75.2% 24.8%
24.8%
India.

 Urban

Urbanpopulation
populationis
is
growing
growingin
inmany
many
developed
developedcountries.
countries.
The World’s Largest Cities
City
City 1995
1995 2015
2015(est.)
(est.)
(in
(inthousands)
thousands) (in
(inthousands)
thousands)
1.
1. Tokyo,
Tokyo,Japan
Japan 26,959
26,959 28,887
28,887
2.
2. Mexico
MexicoCity,
City,Mexico
Mexico 16,562
16,562 19,190
19,190
3.
3. Sao
SaoPaulo,
Paulo,Brazil
Brazil 16,533
16,533 20,320
20,320
4.
4. New
NewYork,
York,USA
USA 16,332
16,332 17,602
17,602
5.
5. Mumbai,
Mumbai,India
India 15,138
15,138 26,218
26,218
6.
6. Shanghai,
Shanghai,China
China 13,584
13,584 17,969
17,969
7.
7. Los
LosAngeles,
Angeles,USA
USA 12,410
12,410 14,217
14,217
8.
8. Calcutta,
Calcutta,India
India 11,923
11,923 17,305
17,305
9.
9. Buenos
BuenosAires,
Aires,Argentina
Argentina 11,802
11,802 13,856
13,856
10.
10. Seoul,
Seoul,South
SouthKorea
Korea 11,609
11,609 12,980
12,980
 4-
The Macroenvironment 6

 Key Demographic Trends

 World population
growth
 Now 6.2 billion
 Projected to
reach 7.9 billion
by 2025
Changing Population
 Birth rates
 A trend towards smaller families as people become better off and health
 The increased availability of contraception.
 The trend towards later marriages and later childbearing.
 Declining fertility rates
 Changing attitudes towards women and work.
 Death rates
 Rising living standards, including better housing, sanitation and nutrition.
 Developments in medical technology and practice.
 Better education..
 Age structure

 Growth rates for different age and gender groups

in different countries

 Aging (increasing life expectancy) trends

suggest opportunities to meet needs of older
population

 Effects on labor forces

Geographic distribution
 Regional shifts

 Migration to nonmetropolitan areas

 Changing tax bases

 Effect on location of business operations

 Ethnic mix

 Varies significantly across regions

 Significant opportunities emerging
 U.S. Hispanic and Asian markets are more
diverse
 Effects on workforce composition
 Effects on pension plans
 Implications of cultural diversity
 Income distribution
 Discretionary income varies across groups and
nations
 Effects on purchasing power
 Decline of real income
 Dual income trends
 Effect of rapid economic growth in China
Key
Key Demographic
Demographic Trends
Trends

Changing
ChangingAge
AgeStructure
Structure
Population
Populationis
isgetting
gettingolder
older

Changing
ChangingFamily
FamilyStructure
Structure
Marrying
Marryinglater,
later,fewer
fewerchildren,
children,
working
workingwomen,
women,and
andnonfamily
nonfamilyhouseholds
households

Geographic
GeographicShifts
Shifts
Moving
Movingto
tothe
theSunbelt
Sunbeltand
andsuburbs
suburbs

Increased
IncreasedEducation
Education
Increased
Increasedcollege
collegeattendance
attendance
and
andwhite-collar
white-collarworkers
workers

Growing
GrowingEthnic
Ethnicand
andRacial
RacialDiversity
Diversity(USA)
(USA)
72%
72%Caucasian,
Caucasian,13%
13%African-American,
African-American,
11%
11%Hispanic
Hispanic&&3%
3%Asian
Asian
 Demographic Environment

More people are:

 Divorcing or separating
 Choosing not to marry
 Choosing to marrying later
 Marrying without intending to have children
 Increased number of working women
 Stay-at-home dads
Demographic Environment

Changesin the workforce

More educated
More white collar
 Demographic Environment
Increased Diversity

Markets are becoming more diverse

 International
 National
 Includes:
 Ethnicity
 Gay and lesbian
 Disabled