Demographic analysis is the study of populations in a given sector. Companies often conduct demographic analysis in order to judge the relative sensitivities of a target market. This allows them to tailor their advertising and general presence to the needs of a given community. Understanding the demographics of given populations is also important for government planning and funding initiatives.
In many respects, demographic analysis is a form of scientific study. It involves sampling, statistics and probability, as well as traditional research. Analysis can be performed in a number of different settings and can usually be as general or as specific as the analyst wants.
The most straightforward demographic analysis concerns the populations of entire towns, communities or countries. These populations can be broken down by age, sex, marital status and ethnic background. From there, factors such as profession, level of education and average income can also be compiled.
There are a number of reasons why demographic analysis is important. Most governments have a vested interest in understanding the makeup of their communities. Having accurate information about the needs of certain populations can help governments ensure that the people have adequate representation from local officials and sufficient access to emergency services, for instance. Data on current student demographics can make informed decisions possible about where to build schools, libraries, and other government-funded school resources, just as demographics on elderly populations can help governments identify communities where more senior services may be needed.
Demographic analysis at a more localised level is typically of great importance to business owners. Marketing demographics often focus on the population details of a specific community where a product is to be sold or where a business is to be opened. Having demographic data helps businesses to target marketing to certain demographic areas. Sometimes, this involves the creation of a specific advertising campaign for a given community. Other times it involves choosing a community because it has a high percentage of target demographics — high numbers of school students, for instance, or stay-at-home moms.
Companies looking to break into a market might also use demographic analysis to assess a community’s need for its particular services. Analysis in this context is usually sector-specific. A banking company might perform a business demographic analysis of all bank customers in a certain area, for example, in order to understand what sort of clientele they are likely to encounter. Demographic trends concerning age and socioeconomic status might also be helpful to a business when looking ahead and projecting what a community is likely to consist of, a number of years into the future.
Population demographics do not always concern people. In biology, scientists frequently use demographic analysis to study populations of animals in the wild. This kind of analysis provides information on birth rate, migratory patterns and cause of death. Information gleaned from these demographic analyses is helpful in understanding humans’ impact on animals in the wild, as well as natural phenomena such as disease and genetic mutation.