How to Use Population Data to Enhance your Business Strategy

Monitoring demographic trends is a vital part of business strategy for any consumer goods or services company as changes in population size will impact the consumer market potential. Shifts within a population profile, such as diversity or ageing, will also change demand and provide new opportunities.

Additionally, health trends can be used to understand the well-being of the labour force and to target medical goods and services or nutrition-driven products. Several major demographic megatrends are shaping the world we live in, notably: urbanisation, declining fertility rates, ageing and increased migration within and between countries. Our forecasts to 2030 enable clients to stay in tune with the projected patterns of change, which is the key to strategise, adapt and succeed in the longer term.

Top 5 Uses for Passport Population

  1. Build detailed consumer profiles by age, segmentation and diversity, to support targeted marketing opportunities
  2. Examine the size and composition of the consumer market and labour force
  3. Analyse the health and well-being of the population
  4. Project and strategise for future demographic shifts
  5. Identify similar demographic markets to existing territories, using Euromonitor’s unique Future Demographics model

Analysing the granularity of population data will empower marketers to adapt their goods and services in a more targeted way depending on age, segmentation and diversity. If your business has been prosperous in a particular country, identifying similar demographic profiles in other markets is a sure-fire strategy for success and can be done using Euromonitor’s Future Demographics Model.

Download the full strategy briefing report here ‘Why Population Insights Matter for Business Strategy

Five critical business questions that population data answers

  1. How can we size and segment a market?

A European shoe retailer is looking to enter the Chinese market. Top level data reveals a population size of 1.4 trillion in 2015. A further look into population by sex exposes an imbalance skewed towards males and delving deeper in the male market, the male population aged 40-49 are the most dominant as of 2015. Our forecasts indicate that this age cohort is set to shrink in the decade to 2025 and that males aged over 65 will be the fastest-growing profile, especially those aged 70-74. The shoe retailer should focus on the ageing male market for a long-term strategy in China. Our Future Demographics model highlights that Thailand is the most similar market to China within the Asia-Pacific region in terms of the growth of the male population aged 65+ if the retailer wishes to export this strategy.

China and Thailand
Source: Euromonitor International Future Demographics Model

  1. What is the potential for a new product?

For example, if we use health data, this can determine future demand for any food and beverage company or consumer foodservice business. Looking at the increase in diabetes or obesity trends, for instance, will reveal government health regulations that could emerge in response to a potential health crisis, as well as the opportunity to launch new health products in countries where this is likely to be a problem.

  1. Do we need to broaden our consumer base?

One of the demographic issues facing Eastern European countries is depopulation, due to declining fertility rates, ageing, a low life expectancy amongst men and emigration to better-performing economies. Eastern Europe will be the only world region which will experience a shrinking population to 2030. Yet, there are still opportunities even in the challenging climate of a shrinking population. Urban populations in some Eastern European countries are growing; this is where the opportunities lie for businesses to broaden their reach beyond rural areas or capital cities. In Croatia, for example, the rural and total population declined in 2010-2015 but the urban population expanded. We forecast that while the population in the capital, Zagreb, will grow to 2030, other cities such as Zadar and Sesvete will experience higher population expansion. Businesses operating in Croatia should focus on urban areas and think beyond the capital for the best prospects.

  1. Do we need diversity data to explore untapped market potential?

Populations, especially in developed countries, are more diverse than ever before. Migration leads to a corresponding diversification of consumer markets, opening up whole new customer groups to tap into. The U.S. is a notable example, with many analysts predicting a “majority minority” population by 2050. Diversity presents new consumer opportunities but marketers need to be careful not to generalise or stereotype.

L’Oreal is one brand that has successfully embraced a more diverse consumer base by not just adapting its product lines but also through acquisitions of local brands in new markets. The USA is L’Oreal’s largest market for beauty and personal care products in terms of retail value, driven by colour cosmetics and hair care. Our Competitor Analytics model shows that sales of hair care products in the USA fell in 2008-2015, partly owing to the global financial crisis of 2008-2009 but also higher competition with Unilever since 2011 following the Alberto-Culver Company acquisition, which has closed the gap with L’Oreal in hair care. Exploring new market opportunities within ethnic hair care ranges for the increasingly diverse US population will help long-term sales. L’Oreal has already acquired Carol’s Daughter, which includes natural hair products and has a mission to fulfil the needs of a diverse range of skin types.

L'Oreal Group

Source: Euromonitor International Competitor Analytics Model
Note: Green categories represent growth in retail sales value while red categories represent decline

  1. Will our target market continue to grow to 2030?

A maternity wear producer is looking to see if the market is set to expand. Female population by age data can be used to explore the market size of the child-bearing population, while forecasts can determine if the segment is projected to grow or decline. Alongside fertility and birth rates, the company can analyse a country’s overall trend in terms of the average number of births/children born per female in line with cultural shifts or ageing populations.

 

For more information about how Population insights can help your business strategy, download the full briefing here.

 

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