Demographics is a science, which study the processes taking place in society - the reproduction of the population, its age and gender composition, the formation of labor reserves, the settlement of the state territory, the movement of people within the country and abroad.
What are Demographics and demographic analysis
Demographic analysis is the study of the population in a given sector. It is a form of scientific research in many ways. It includes sampling, statistics and probability, as well as traditional research. Companies often conduct demographic analysis to judge the relative sensitivity of their target market. This allows them to tailor their advertising and improve their overall understanding of the needs of a particular community. Understanding the demographics of these populations is also important for government planning and funding initiatives.
Demographic characteristics of the population
To build a client base, demographic information is collected and grouped to identify customers. The group of demographic characteristics includes:
- level of education;
- income level;
- composition and life cycle of the family.
Important role of Demographics
Demographic information can be used in a variety of ways to learn more about the general characteristics of a particular population. Nowadays, it is becoming an important component of any business, allowing companies to focus on meeting specific customer needs. Companies need to be able to identify the target group for which they will produce their goods and services, to determine trends in consumer demand and use this information for marketing and business strategy. Businesses can use demographics to avoid making mistakes and to push the business forward through the understanding what their clients are looking for.
Demographic data can be used to customize products. This can allow business owners to predict products in the future and how clients will react. By grouping consumers through the use of demographics, the company understands each segment, and this helps to sell different products differently based on the target consumer groups. In addition, it becomes clear how much money the company needs to allocate for production and marketing.
The government uses demographic data to characterize the population for purposes such as policymaking and economic market research. It uses socioeconomic information to understand the demographic criteria in order to make better public policy decisions.
Collection of demographic data
Due to the increasing importance of demographic indicators in the market research, the profession of demographer is becoming more and more popular. Some organizations engage specialized companies that collect and analyze demographic data in order to learn as much as possible about their current or potential customers.
Research is also carried out for academic purposes, as well as at the state level for the preparation of political campaigns.
Population demographic data is collected by the US Census Bureau every year with the American Community Survey (ACS), and every 10 years through a detailed count of every American household.
How are demographic changes affect the economy
The relationship between demographic growth and economic development has been the subject of debate for two centuries. In recent years, economists have returned to the view of the primary role of demographic processes for economic development.
Population growth leads to an increase in the labor force and, as a result, can provide the growth of production capacity. In addition, consumption in various sectors of the economy is increasing, and this is the undoubted engine of economic growth in any society.
Economic growth is the process of increasing real gross domestic product (GDP). This indicator measures the total income of the country, which is made up of the total value of goods and services that were produced in the country over a certain period of time. The greater the total income of a country, the more its inhabitants can afford. But not only the level of GDP is important, but also the size of GDP per capita, which shows the income of the average resident of the country.
Nevertheless, there are many demographic problems in society nowadays, such as population decline and exceeding the death rate over the birth rate, which should be well-regulated in order to raise the standard of living throughout the planet.