The marketing mix consists of four P's that are very central to the popularity of a brand in the market. The price, place, promotion, and product must be finely controlled to achieve the desired economic impact of a brand in the market (Armstrong 13). The place where a product is sold determines its popularity. One of the factors that make the place such an important component of the marketing mix is the people who make up the customer base. Customers with a higher purchasing power make the product to make good returns for the business. Therefore, the population profile of a place is fundamental in the marketing of a product. Additionally, population changes may be detrimental or beneficial to a business depending on the nature of the change. In a nutshell, a growing population provides a bigger and more diverse market for a product, while a declining population reduces the customer base for a product.
Japan is an example of a market that is taking a downturn. There is a high population of elderly people and the birth rate is historically low. There is no longer a vibrant young population that provides the market for numerous products in the Japanese market (Lockwood 9). Additionally, the low fertility rate means that the family consumer products are no longer needed, and the market for these goods is taking a negative trend. On the opposite hand, a growing population is very promising for the future of the business. India is an example of a population that is fast and steadily growing. As a result, many businesses are recording high sales due to the presence of a diverse customer base. There are consumers of diverse demographics for the plethora of products marketed in the Indian market. From these two examples, it is evident that population control is a determinant for marketing and the success of a brand in any market. Population control is a sensitive area of policy-making that arouses concern among various political and social circles. The government may promote population control to experience some economic outcome that it feels are in the interest of the people. Regardless of the methods employed to control population, there results a negative relationship between fertility rate and income (de Silva, Tiloka, and Tenreyro 210). It is, therefore, appropriate to say that a country with high fertility rate like India has a lower per capita income, and therefore the average purchasing power of an individual in India is lower than that of an individual of similar socio-demographic characteristics in Japan.
Rural to urban migration has similar effects to the market as population growth. However, for this phenomenon, there are additional effects that come to play. As more people migrate to the urban areas from the villages and the country side, jobs in the town become more competitive (Junfu and Zhao 2). Over time, a high unemployment rate emerges, and the market deteriorates. More unemployed people translate to low purchasing power (Junfu and Zhao 1). As a result, businesses are forced to review their marketing strategy to suit the new population profile. For instance, businesses can decide to offer more promotion to attract the customers who do not have a lot of money to make purchases. Additionally, companies dealing with luxury products may liquidate as these commodities lose popularity with the new population. The price of some goods that are not considered essential like furniture goes low as competition from many companies increases.
Population decline may have both positive and negative ramifications for the market of an existing product. A drop in population of an area leaves many job openings for the remaining population. A high employment rate results in people with a high purchasing power for both basic and luxury goods. However, this change depends on the nature of population decline. If the population decline is uniform, meaning that the remaining populace has people of diverse demographics, then the market of the entire range of product is not affected. On the contrary, a population decline that is attributable to age group attrition is detrimental to the market (Bloom et al. 650). In a market like Japan, where there are many elderly people compared to the young population, there is a decline in the market of some goods. For example, the market for smart phones and electronics is expected to decrease in an aging population. On the converse side, the market for adult diapers and medications for geriatric diseases will expand in such a market.
Worker shortage has similar marketing implications as rural to urban migration explained above. When workers are few in the economy, companies increase their ages to attract employees and to retain the ones they have. At the same time, companies record low productivity rate, and this change is likely to affect the cost of products in the market. The prices of these goods may rise as the company struggles to maintain its profit margin and solidify its returns (Armstrong 73). The company in this situation may also decide to reduce its exports and concentrate on the domestic market. Immigration also has the same marketing effects as rural to urban migration. A poor socio-economic status of the immigrants is likely to lower the overall purchasing power of the customers in the market while the reverse is also true.
Armstrong, Gary, et al. Marketing: An Introduction. Pearson Education, 2015.Bloom, David E., et al. "Macroeconomic Implications of Population Ageing And Selected Policy Responses." The Lancet 385.9968 (2015): 649-657.
de Silva, Tiloka, and Silvana Tenreyro. "Population Control Policies And Fertility Convergence." Journal of Economic Perspectives 31.4 (2017): 205-28.
Lockwood, William Wirt. Economic Development of Japan. Princeton University Press, 2015.
Zhang, Junfu, and Zhong Zhao. "Social-Family Network And Self-Employment: Evidence from Temporary Rural-Urban Migrants In China." IZA Journal of Labor & Development 4.1 (2015): 4.
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