Demographic factors of Business

1. Changes in Business
Environment due to
Demographic changes…
Varun
Pratap
Singh Tomar
By-

2. Components of Business
Environment
Internal Environment
• Value System
• Resources
• Company Image
• Mission& Objective
External Environment
• Micro Environment
• Customers
• Suppliers
• Distributors
• Society
• Macro Environment
• Demographic Environment
• Technological Environment
• Economic Environment
• Political Environment

3. • Micro environment is
defined as the near by
environment, under
which the firm
operates.
Micro
environment
• Macro
environment refers to
thegeneral environment
, that can affect the
working of all business
Macro
environment

4. Demographic environment
Demographic Environment is the study of population
segregation by Business entities to target their
respective customers in order to reduce marketing
cost and to focus mainly on their audience.

5. Demographic environment

6. Demographic environment Elements
1
Population
Size
2
Growth
Rate of
population
3
Family Size
4
Educational
Level
5
Language

7. Demographic environment Elements
6
Religion
7
Race
8
Age
9
Income
10
Educational
Attainment
11
Assets
Ownership
12
Home
Ownership
13
Employment
Status
14
Lifestyle
15
Birth &
Death Rate

8. Demographic environment Elements
Population
Size
• Since every organization across the globe like to
target large amount of profit, so for this,
organization do require a healthy amount of
customer. For this factor a good population size is
an important aspect.
• Eg:- Pizza chain like Dominos has India as its
largest market after US with covering 70% of
Pizza Market.

9. Demographic environment Elements
Growth Rate
of Population
• In country like India, which has a high
growth rate of population has attracted so
many health food drinks for kids.
• Ex: Horlicks in India covers almost 50%
Market share competing with Complan and
Bournvita .

10. Demographic environment Elements
Family Size
• Country like India earlier was known for Joint Families structure
but with the changing era, its has started adopting the tradition
of Nuclear families.
• Ex: In urban areas, there are 88% Nuclear families having 3-4
members in a family. So with this companies dealing in cars
started targeting customers with this.
• Honda launched a car campaign of its car Mobilio in 2014
with tagline of ‘Apne liye, apno ke liye’

11. Demographic environment Elements
Educational
Level
• Huge population of India is young and most of them are graduates,
so those who have a family and are married living in urban cities
have a different approach towards various aspects like Food habits,
suggesting schools, colleges etc.
• Ex: Indian Parents are now focusing towards Smart Class concept
and with respect to this, more than 12000 schools have adopted
the concept of smart classes. Companies like Educomp, NIIT,
Samsung Smart Class Solutions are major key players in the market.

12. Demographic environment Elements
Language
• Language is the one of the centers of attraction for
companies so that they change their complete
strategies to cover markets.
• Ex: Coca-Cola in China did so much research just to
pronounce its brand name and it was over 40,000
characters to find actual tagline in Chinese language
i.e. “Happiness in the Mouth”

13. Demographic environment Elements
Religion
• Religion is basically one of the parameters that every
organization likes to take care of during the business,
because anything against religion may destroy or may
lead to huge loss for the company.
• Ex: Mc-Donald’s does not sell beef or pork based
dishes in India because it may harm sentiments of
Hindus or Muslims.

14. Demographic environment Elements
Racism
• Racism is one of the problems which always creates trouble to
companies, in some countries it’s not allowed for them to hire
other than natives, then it become a big problem to hire good
employees for the company.
• Ex: Trump’s controversial decision over H1B visa actually made
companies to suffer in completion of their projects. Indian IT Giant
Infosys got the problem because their clients in US showed
incapability in arranging H1B visa for the Infosys Employees.

15. Demographic environment Elements
Age
• There are multiple organizations which basically
likes to deal in different age segments and they
have their customers accordingly.
• Ex: Firstcry.com is one of the emerging companies
which deals in baby products. It will be having
around 400 Stores in India by the end of 2017.

16. Demographic environment Elements
Assets
Ownership
• Assets ownership helps organization to
make new ideas to make profit by business.
• Ex: Cab Services like OLA, UBER which
basically use individual owner’s car to earn
profit on sharing basis.

17. Demographic environment Elements
Home
Ownership
• Home Ownership is one of the foci which likely
to leads creation business like Home Loan,
Rental etc.
• Ex: Many Banks like PNB, SBI offers home loans
to public while company like OLX allows Home
Owners to give their flats, Homes on rent.

18. Demographic environment Elements
Employment
Status
• Sometimes due to unemployment, org like to come to our country just
because they know that they can hire people at lower cost then other
countries.
• Employment Status in a country is one of the parameters to judge a
country’s growth so for any organization its important to know whether
their business will be able to survive in the particular country or not
• Ex: In India, too many US staffing companies are working just because
here they have to pay less to employees.

19. Demographic environment Elements
Lifestyle
• With the going era lifestyle is one of the concern of
the customer. So many companies target their
customers and thus help in finding a unique base of
customers.
• Ex: Royal Enfield is one of the bikes which is
purchased by the people who are more likely
attracted by powerful engine and heavy sound.

20. Demographic environment Elements
Birth Rate &
Death Rate
• Birth Rate and Death Rate in a country talks about
creating a business environment which will lead to
Medicine market. So, many companies across globe
like to cover other countries to cover the expand
their market.
• Ex: Australian brand Human Mixtard is one of the
largest Insulin seller for Diabetes in India.

21. ADVANTAGES AND DISADVANTAGES
A demographic environment is a set of demographic factors such as gender or ethnicity.
Companies use demographic environments to identify target markets for specific products or
services. This practice has both advantages and disadvantages. Marketers have to take both sides
of the demographic environment coin into account when deciding what strategy to apply.

22. ADVANTAGES
Focus
When a company looks at a demographic environment, it focuses its attention on the people who are
most likely to buy a product. This is good from the marketing standpoint because it means the
company does not waste money trying to get people to buy who have no interest in the product
Branding and
Strategy
Demography provides very specific information about different populations. Once a company has this
data, the company can develop well-defined strategies about how to reach each population -- that is,
it tells companies exactly how to market and develop their brands so people in the demographic
environment will respond. For instance, if people in the demographic environment tend to be busy,
young workers, then a company might promote the quick use and convenience available with the
product.
Trending and
Comparison
When companies examine demographic environments, they usually do so under the same lenses,
such as age or gender. By collecting demographic data over extended periods of time and comparing
information from different points, companies can identify trends within the population. This lets them
forecast what might happen with sales in the future and make some decisions about upcoming
production or offered services

23. DISADVANTAGES
Change
Populations are never constant. People migrate from
place to place, and people pass away and are born.
Subsequently, marketers cannot simply collect
demographic data one time. They have to collect the
information constantly in order to have a realistic picture
of what is happening at any given point. This requires a
great deal of effort and means a constant expense to a
business.

24. DISADVANTAGES
Customer
Loss
Focusing marketing based on demographic
information means that a company may lose
potential customers who do not fit the general
demographic mold because the company does
not concentrate on attracting those customers.
This includes the loss of sales from people who
might buy the product or service for someone
else, as those people might not be aware the
company offers the product or service.

25. CONCLUSION
Thus, as a marketer, one must
understand how important
demographic changes effect the Indian
business and market and be flexible to
these changes leading a competitive
edge to the business organization.