Global Population and Retailing Case Study Analysis

Demographic information is critical to making sound strategic decisions in retail. Before entering a market, retailers must understand the needs of their consumers in order to develop a competitive advantage. This case study examines the demographic data of leading markets, including Canada, China, and Great Britain. As this analysis will demonstrate, demographic data greatly impacts the strategy that management should pursue and the accommodations that must be made to serve different demographic groups. In target market planning, the demographic factors such as gender, age, and population growth are the top variables that planners must consider when they analyze their consumers.

An Analysis of the Gender of Consumers

In target marketing, gender is among the most important factors to consider. Lifestyle marketing, which considers the lifestyle factors that contribute to consumer spending decisions, takes into consideration the role that gender plays in consumption. Gender is most important in impacting the types of products that retailers will keep in stock. However, retailers must also consider how societal factors influence the behavior of consumers of different genders. In making this assessment it important to examine recent data that determines the male-to-female ratio in the targeted market.

As the data collected by Berman and Evans (2013) reveals, the male-to-female ratio in each examined country is nearly even. For example, in Canada, the population is composed of 49.5 percent males and 50.5 percent females, in China the ratio is 51.3 percent to 48.7 percent, in Great Britain, the ratio is 49.5 percent to 50.5 percent, and in India, the ratio is 51.9 percent to 48.1 percent (2013). Berman and Evans also assess the male-to-female ratios in Italy, Japan, Mexico, Poland, and South Africa, and the United States where the results are similarly symmetrical (2013). The implication of an equal distribution of male and female consumers from the standpoint of global marketing is that retailers possess the opportunity to effectively serve both market segments. For example, a retailer that focuses on consumer goods that would primarily appeal to a female demographic does not have to be concerned that there will be a shortage of female consumers in any of the discussed markets. Similarly, a retailer providing male-oriented products will find an adequate market in any product. Thus, considerations of gender will be specific to the business rather than a reflection of the market as a whole. Because there is an adequate market for products that appeal to either sex, management can successfully expand its operations in any country and expect to locate their ideal demographic.

However, in considering gender, it is important for management to consider how lifestyle changes impact the decisions of female consumers. A traditional approach to considering the influence of gender on consumer patterns might assess that female consumer fulfills a domestic role. Yet, as Bhatia (2008) notes, women have experienced a significant change in lifestyle over the past few decades, which holds important implications for retailers (p. 146). First, as more women around the world work in part-time and full-time positions, there is an increased demand for convenience products that accommodate their busier schedules (2008, p. 146). The addition of expanded product and service offerings, such as pharmacies, photograph processing, and post office services, are among the additions that aim to accommodate the busy lifestyles of female consumers (2008, p. 146). Additionally, an increasing number of retailers accommodate working women by offering child-friendly facilities and professional wardrobe items in the clothing section (2008, p. 146). Based on these trends, retailers should especially prioritize services tailored towards working women in markets where the female population surpasses the male population, such as Canada, Great Britain, Japan, Mexico, and the United States.

An Analysis of the Age of Consumers

The next demographic factor that can aid in target marketing is age. Because of factors such as health, birthrates, immigration trends, countries differ in the age groups represented in their populations. For example, a country with a less developed medical system might experience high infant mortality rates or low life expectancies that impact the overall age of the population. Thus, it is important to also consider the demographic factor of life expectancy to determine the causes of unequal age distribution patterns within a country. Global markets differ in the age distribution of their populations, which impacts the products and services that retailers should provide.

As the data provided by Berman and Evans (2013) reveals, age distribution can vary significantly between countries. For example, Canada is coupled with a high life expectancy of 81.4 years, and a relatively high number of individuals over 65 years of age, at 16 percent (2013). In contrast, South Africa has a life expectancy rate of 49.3 percent and a low number of individuals over 65 years of age, at 6 percent (2013). Countries with the highest percentage of citizens over 65 years of age include Japan, Italy, Great Britain, Canada, and Poland (2013). However, the data is also useful in assessing the number of young people in the target market. The countries with the highest percentage of individuals between the ages of 0-14 years of age include India, Mexico, South Africa, the United States and China (2013). In strategic planning, it is important to consider the age range of the market in order to assess the needs of the target demographic.

The age distribution patterns in a country are significant because they impact consumer behavior and choices. First, in cases where the population is very young, retailers will need to consider the needs of both parents and teenagers themselves. Conversely, retail operations that are youth-oriented might struggle to attract consumers in markets with growing elderly populations. For example, a retailer focusing on youth fashion would have difficulty in obtaining customers in countries with a lower percentage of teenage consumers and a higher percentage of elderly consumers (Bhatia, 2008, p. 146). For example, countries that are less ideal for youth-oriented businesses include Japan, Italy, and Poland. However, countries that are ideal for targeting young consumers include India, Mexico, and South Africa.

Further, there are considerations that must be taken when entering a market that is representative of older consumers. First, retailers must often make adaptations to meet the needs of an elderly clientele who require more assistance when they shop (2008, p. 146). For example, retailers can serve the needs of older consumers by training their staff to communicate clearly and effectively with older customers (2008, p. 146). Further, stores can accommodate the needs of older consumers by purchasing brochures, signs, and store displays that include large-print letters (2008, p. 146). Additionally, chain stores and other retail operations can benefit from providing services that pertain to the needs of the elderly, such as providing optometry or pharmaceutical services. According to the data, countries that should especially warrant priority for the needs of older consumers include Japan, Italy, Great Britain, and Canada. Additionally, determining the life expectancy rate in each country can aid marketers in determining whether the elderly population will expand, stabilize, or expand as other market segments of the population age.

An Analysis of the Population Growth in Target Markets

Finally, it is important to analyze the population growth in each target market during the planning process. Population growth is important because it can help in determining the profitability of retail operations and help assess future demographic shifts. As Davies (1992) notes, market growth is important because it enables retailers to assess the market share they can expect to capture, determine their potential for growth, and estimate their cash flows (p. 94). While demographic information should also be accompanied by detailed household data, determining population growth trends provides an overall snapshot of the market size.

As the data collected by Berman and Evans (2013) signifies, population growth is uneven in the world. With respective population growth rates of 1.34 percent, 1.10 percent, .96 percent, .79 percent, India, Mexico, the United States, and Canada have the highest rates of population growth. However, South Africa, Japan, and Poland have negative rates of population growth at -.38, -.28. and -.06 respectively. As Devine (1994) notes, it is important to determine the average population per retail store type in an area to determine whether populations are served or underserved by retail outlets (p. 48). For example, in a highly-populated market experiencing high growth, such as India, the construction of larger stores would be appropriate in meeting the needs of the market. However, in a market experiencing negative population growth, the establishment of several large-scale outlets would be inefficient in the long run. Population growth statistics enable retailers to consider how the capacity of their facilities, rather than merely the products they offer, meets the needs of their target market.

Conclusion

As this case study reveals, the overall objective of target marketing planning is to understand and anticipate the needs of consumers. Demographic factors such as gender, age, and population growth aid marketers in assessing segmentations that exist within a market and determining the accommodations that will attract these segments. By considering the needs of the emerging female workforce, demographic data on gender can help retailers offer products that appeal to busy female professionals. Additionally, considering the age of consumers can help retailers provide services that are sensitive to elderly customers. Finally, population growth estimates enable marketers to determine the growth of their market and the long-term viability of their business. An analysis of these three factors is critical in making decisions that serve the strategic interests of retailers in both the short and long run.

References

Berman, B.R., & Evans, J.R. (2013). Retail management: A strategy approach. New York: Prentice Hall.

Bhatia, S.C. (2008). Retail management. New Dheli: Atlantic Publishers and Distributors.

Davies, M. S. (1992). How to base retail decisions on competitor and household data. American Bankers Association.ABA Banking Journal, 84(5), 94. Retrieved from http://search.proquest.com/docview/218499722?accountid=14068

Devine, J. A. (1994). Retail targeting and attraction strategies. Economic Development Review, 12(2), 47. Retrieved from http://search.proquest.com/docview/230085274?accountid=14068