Social, Demographic, Cultural Trends and Patterns

EXTERNAL ANALYSIS

Social, Demographic, Cultural Trends and Patterns

Industries are affected by changes in social, demographic, cultural trends and patterns. In other industries, politics even interfere. These changes have effects on market tastes, purchasing power, purchase decision patterns, needs, wants and consumption behavior. These translates to new products demanded, volume of consumption, quality standards and the like. Being sensitive to these changes, enterprises could anticipate and appropriately respond to the market.

In the Philippines the more specific changes include lowering of purchasing power by the majority of the population (due to inflation and currency devaluation), the decrease in population rate thus increasing the proportion of the older population, rapid urbanization, family independence, increasing tolerance towards foreign culture, popularity of high technology consumer goods, internationalization of fashion and food tastes,increasing time for leisure, women's liberation and reduction in family size among others. These changes would naturally result in the alteration of usual demand and consumption patterns.

As a reaction industries will start discarding "old products and services " and begin to produce new ones.The degree of competitiveness of business enterprises therefore, would highly depend on their abilities to anticipate and respond to the changes. Some of the examples of the effects on these changes are the following:

"As a result of decrease in income and purchasing power, cost consideration has become a major determinant for buying non-essential goods ".

"The reduction in the size of family household shifts the demand from large houses to compact and smaller houses".

"The general feeling of future financial insecurity and stability pushes the demand for pre-need services such as educational plans and memorial plans".

"The internationalization of tastes in fashion and food increases the acceptaility of foreign brands like Versace, Louis Vitton, Feragammo and food such as pizza, shwarma, lasagna, sashimi, sushi etc."

"The increasing time for leisure increases demand for travel vacation, sports and hobbies".

"The high rate of urbanization decreases land area thus housing developers are forced to construct high rise dwelling units". A condominium living culture begins to develop".

Guide Questions

What social changes affect your markets buyers behavior ?

Are your products and services appeal to a specific demographic sector ?

How do changes in cultural trends and patterns affect the enterprise.