When it comes to anticipating new trends and changes in the environment marketing firms must be able to narrow down the best opportunities for their firm and develop strategies that will give the firm a competitive advantage, in conjunction with providing customers in each target market with the superior quality and value they expect (Perreault, Cannon, & McCarthy, 2014). Although a firm has little to no control over trends and environmental changes, anticipation of these changes prevents the need for crisis management and saves valuable time and energy by decreasing or eliminating the need to play catch-up. The ability to anticipate new trends and environmental changes also allows marketing managers to evaluate potential growth opportunities for the firm, while maintaining a competitive advantage.
The demographic factors that a manager should be aware of in order to make the most effective marketing decisions are:
Gross National Income (GNI) ~ GNI provides an idea of the actual income levels of the people in a specific country (does not include foreigners).
Gross Domestic Product (GDP) ~ GDP provides information about the complete market value of all goods and services provided in any given country’s economy during one year by both residents and nonresidents.
Literacy rate ~ the ability of a country’s people to read and write has a direct influence on the economic development of the country and affects the way information is delivered and interpreted.
Population trends ~ population density is an indicator of the potential level of competition in a particular area, while population figures indicate growth rate and projected growth.
Age (birthrate) demographics ~ because people have different primary needs at different stages in life, knowing the age demographics give marketing managers a clear picture of what products and services would be best received in particular areas.
Household composition ~ all households are not composed of a husband, wife, and children.
