This is an important macro-environmental factor to consider when deciding on a new demographic to focus your marketing on.
This has caused a boom in high-priced pet products and a decline in investment into products that relate to early childhood. In the macro environment we’re currently living in, couples are far more likely to raise a pet than a child, and globally, consumers are far more likely to be old than young. In the US, the annual rate of childbirth has declined 20% in the last five years, and Singapore has become desperate enough to offer couples a ‘baby bonus’ of up to $10,000 for having a baby. While the population is growing older, the number of babies being born is shrinking. We briefly mentioned age structure earlier, but the issue goes deeper than just its connection to population growth this issue affects the viability of entire categories of the market. We continue our exploration into the macro environment with age structure. However you choose to react to this data, what matters is that every year the number of consumers living in poorer countries is growing, and this will affect global distribution and the macro environment. At the same time, other companies are starting subsidiaries to sell cheaper products that are entirely removed from the main brands.
This trend is causing companies with high-valued products to consider producing increasingly low-priced alternatives that will be more popular in these regions.įor companies that are concerned about brand integrity, this can mean creating alternate product SKUs that are marketed without a connection to their original range of products. This means that over time, more and more consumers are increasingly located in poorer countries and cities. The highest population growth rates are happening outside of the world’s twenty richest countries. Thanks to advances in modern medicine, people are staying alive longer, and it’s shifting population density while also shifting age structure. The global population is expanding at unprecedented rates, even as birth rates decline in most high-population countries worldwide. Let’s have a look at some of the most important demographic forces in the macro environment: Global Population GrowthĪn issue that has concerned us all since the 1970s and a big concern for marketers is global population growth. Successful marketers respond to demographic forces and adjust their strategy to meet the consumer where they are in the present moment. There’s a reason that successful companies are constantly changing marketing strategies no idea comes from nowhere. Knowing consumers’ political leanings, diet trends, pop culture knowledge, and more are contributing factors to understanding and catering for the macro environment. Staying ahead of the market means knowing the consumers intimately this means understanding their location, population density, age, gender, occupation, and many other statistics. It’s critically important that marketers stay ahead of what consumers want and ensure that they’re always tailoring their message to exactly what consumers want to hear. The term ‘demographic forces’ defines people, specifically consumers and their changing demands. Let’s begin with the first consideration for all marketers, demographic forces. The Macro Environment – Six Forces in the Environment of a Business How the Six Macroenvironmental Forces Affect a Company Demographic Forces Whichever model helps you best understand, what’s important is that you’re aware of all contributing factors to the macro environment so that no single factor catches you or your marketing strategy by surprise. Other popular, related models that can help you understand the macro environment include Porter’s Five Forces and Porter’s Diamond models, which focus more on the competitive environment but should be applied hand in hand with macro environment analysis. Another, slightly different analysis of the Macro Environment is the PESTLE-analysis (replaces the Demographic factor by a Legal one). This is known as the DEPEST model (also referred to as DESTEP). There are six forces that make up the macro environment
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