Understanding Demographic and Environmental Factors in Worldwide Markets

1. bestbatch.bba9thbatch@gmail.com • jaibholeki

2. Demographic Environment Worldwide Population Growth Population Age Mix Ethnic Markets Educational Groups Household Patterns Geographical Shifts in Population Shift from Mass Market to Micro markets

3. Demographic Environment • World wide Population Growth Population Growth + = Increase in Demand Income Growth * Marketers can find opportunities by finding increasing market. • Population Age Mix • Preschool • School age children • Teens • Young adults • Middle aged adults • Older adults Most populous age group shape the marketing environment Contd….

4. Demographic Environment • Ethnic Markets • Countries vary in ethnic and racial makeup. • In Japan, everyone is Japanese; at the other end USA, where people are from all nations. • Each ethnic group has certain specific wants and buying habits. • Educational Groups • Illiterates • High school drop outs • High school degrees • College degrees • Professional degrees Contd….

5. Demographic Environment • Household Pattern • Traditional household (husband, wife, children) • Non-traditional household • Single live alone • Adult live together of one or both sexes • Single parent families • Childless married couples • Empty nester • Geographical shifts in population • Migration can be from one country to another • It could be from rural to urban area • Location makes a difference in goods & service patterns Contd….

6. Demographic Environment • Shift from a Mass market to Micro Market • Effect of all these changes is fragmentation of mass market into numerous micro markets. • Each group has strong preferences and is reached through increasingly targeted communication and distribution.

7. Economic Environment Income Distribution Different demand patterns in different economies Subsistence economies Raw-material-exporting economies Industrializing economies Industrial economies Savings, Debt, & Credit Availability Express purchasing power and price sensitivity.

8. Changing Role of Government Higher Pollution Levels Shortage of Raw Materials Increased Costs of Energy Natural Environment Natural Environment

9. Natural Environment • Shortage of Raw Material • Infinite, finite renewable, finite non-renewable. • Finite non-renewable resources-oil, coal, platinum etc. pose serious problem. • Firms using such material may face substantial cost increase. • Increased Energy Cost • Finite non-renewable sources of energy as oil, coal are become expensive. • Development of alternative sources of energy, as solar, nuclear, wind energy should be used. Contd….

10. Natural Environment • Increased Pollution Level • Some industrial activity inevitably damage the natural environment • Consumers are willing to pay higher prices for ‘green’ products. • This willingness creates a need for pollution control solutions. • Changing Role of Government • Governments vary in their concern and efforts to promote a clean environment. • E.g. German govt. is vigorous in its pursuit of environmental quality. • But many poor nations are doing little about pollution.

11. Accelerating Pace of Change Varying R & D Budgets Unlimited opportunities for innovation Increased Regulation Technological Environment

12. Technological Environment • Accelerating pace of technological change • More ideas are being worked on • The time lag between new idea and their successful implementation is decreasing rapidly. • Time between introduction and peak production is shortening considerably. • Unlimited opportunities for Innovation • Scientists are working on a startling range of new technologies that will revolutionize products and production processes. • Virtual reality is used, combination of computer generated environment through sound, light, and touch. Contd….

13. Technological Environment • Varying R&D Budgets • R&D budget vary from country to country. • Some spend a lot in research • Some put money into copying competitor’s product and making minor changes. • Much of the research is defensive rather offensive. • Increased Regulation of Technological change • Products become more complex, public needs to be assured of their safety. • Government agencies powers to investigate and ban potentially unsafe products have been expanded.

14. Political- Legal Environment Political Legal Environment Increased Legislation Special- Interest Groups

15. Political-Legal Environment • Legislation Regulating Business • Legislation has three purposes • Protect companies from unfair competition • Protect companies from unfair business practices • Protect interest of society • Growth of special interest groups • Consumerist movement- an organized movement of citizens and government to strengthen the rights and powers of buyers in relation to sellers • These things put more pressure and restraints on marketers.

16. Of Others Of Oneself Of Organizations Views that Express values Of Universe Of Society Of Nature Socio-Cultural Environment

18. Socio-Cultural Environment • High Persistence of Core Cultural Values • Particular society hold many core beliefs and values that tend to persist. • Secondary beliefs and values are more open to change • Marketers have some chance of changing secondary values but little chance of changing core values • Existence of Subcultures • Each society contains subcultures, groups with shared values emerging from their special life experiences. • They exhibit different wants and consumption behavior, marketer can choose particular subcultures as target market. • Shifts of Secondary cultural values through time • Marketers have a keen interest in spotting cultural shifts that might bring new marketing opportunities or threats.

19. Summary • Successful companies realize that the marketing environment presents a never ending series of opportunities and threats. • Many opportunities are found by identifying trends and mega trends (social, economic, political and technological changes that have long lasting influence). • In rapidly changing global picture, marketers must monitor six major environmental forces: demographic, economic, natural, technological, political-legal and socio-cultural factors. • Marketer must be aware of the characteristics of all these environmental forces. • And then make products and strategies according to the present environmental characteristics.

20. Thank You !