CHANGING DEMOGRAPHICS

Marketers have always been concerned with changing demographics in order to profile customers and subgroups of customers. They are discovering how rapidly they need to rethink and reassess such groupings. We have to be concerned with:

structural changes (in population, age distributions, fecundity/birth rates of different cultures),
migrations - net of immigration and emigration (aculturalization, ethnicity , diversity, and the development of multicultural societies ), and
changes in beliefs and values held by different people (shifts, divergences, and convergence of cultural norms and values).

The total potential market is growing as the world population expands at an increasing rate although it should be noted that this growth is not uniform, and in some areas - including Europe - the population is actually declining (see Table 1.1).

Table 1.1: Population data
Country or area	Population (000s)
	2003	2025	2050
World	6,301,463	7,851,455	8,918,724
Africa	850,558	1,292,085	1,803,298
Asia	3,823,390	4,742,232	5,222,058
Europe	726,338	696,036	631,938
Latin America and the Caribbean	543,246	686,857	767,685
Northern America	325,698	394,312	447,931
Oceania	32,234	39,933	45,815
Source: United Nations Population Statistics and Forecasts, July 2003.

The main growth continues to occur in the Far East, especially China and Korea, and in South America. Of course population growth does not imply a direct growth in market opportunity, especially because those countries with larger growth rates also tend to be those with lower GNP per capita. More importantly, population growth in these regions results in a larger low-cost labor force, which is why many US and European organizations operate in these countries.

However, even more dramatic are the changes in the structure of the population due to birth rates and life expectancy. These result because of differences in fecundity (fertility, health of mothers, and survival rates) and other changes in society (women in more developed societies restricting pregnancies and/or choosing to delay the onset of childbearing) combined with longer life expectancy. In some countries, such as Bangladesh, Pakistan, and India, life expectancy will double over the course of less than a century (see Figure 1.1).

Figure 1.1: Changes in life expectancy. Source- United Nations Population Statistics and Forecasts, July 2003.

These changes have important consequences for marketers. In the west, age-generation profiling has become even more a part of the marketers' toolkit - witnessed by the growth in targeted services and goods to WOOPs ("well off older people"), DINKYs ("double income, no kids yet") and SWLAs ("single women living alone") replacing the older A1, A2, B, and C social class groupings.

Whilst migration has very little effect on overall population levels, it does contribute to changes in population structure. Immigrants usually come from different cultural backgrounds and offer and create different opportunities for marketers. Entirely new markets have been identified and satisfied (like one for black adhesive plasters) for these immigrants as new customers. In addition immigrants often become a new source of suppliers as they offer new, culturally-led products and services to the host community - such as ethnic food shops and restaurants .

Smoking

As smoking declines in the west, tobacco companies have found an even larger and expanding group of new smokers in China. More cigarettes are smoked in China than anywhere else, with 1,643 billion consumed in 1998. Given that global consumption in 2000 was 5,500 billion, then one in every three cigarettes smoked is smoked in China.

"Tobacco companies are cranking out cigarettes at the rate of five and a half trillion a year," announced the World Health Organization, "nearly 1,000 cigarettes for every man, woman , and child on the planet."

Top five cigarette consumers:

China: 1,643 billion
US: 451 billion
Japan: 328 billion
Russia: 258 billion
Indonesia: 215 billion ^[1]

^[1] Source: US Federal Trade Commission Cigarette Report, 2003.