SkillBuilder discussion Investigating 1. Investigate what the word demographic means. 2. What does FIGURE3 represent in the context of the term demographic ? 3. What are some examples
FIGURE3 Looking at demographics can allow a business to identify target markets for their products.
of products that might be more appealing to an older demographic compared to a younger demographic?
The age of a country’s population can influence business opportunities. The products that a business sells will usually appeal to a certain age group. The Australian population is ageing, which means that there is more demand for health services, further education and training, and travel. Some businesses may choose to focus on these opportunities or to target their products at younger consumers. People aged under 35 are more likely to be the first to purchase the latest versions of technologies such as mobile phones, games consoles and televisions. Income Income can affect business opportunities. The products that a business sells will usually appeal to a certain income group. A premium product, such as designer clothing, will normally appeal to higher- income groups. Lower-income groups tend to purchase less expensive products. A business owner may decide to focus on higher-income groups by starting a boutique fashion store or on lower-income groups by opening a discount fashion store. Competition Competition can make life difficult for a business. Depending on the market the business is operating in, it may have several or very few competitors. Competition can drive prices down and can restrict the opportunity to make profit. However, competition can also create opportunities for businesses. It can force a business to improve the way it does things or to innovate, either through using technology, altering the product or by improving customer service. Competition can force a business to examine its target market closely to make sure that it is selling to the right consumers and perhaps to change the group of customers it is attempting to sell to.
TOPIC22 Financial goals and decision-making 649
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