Introduction to Business Demography: Meaning, Scope, Uses and Data Sources Questions

Question 1

What is demography?

Accepted Answer

Demography is the statistical study of human population—its size, distribution, composition and change over time.

Question 2

Define business demography.

Accepted Answer

Business demography is the application of demographic data and analysis to business planning and decision-making.

Question 3

What is a census?

Accepted Answer

A census is the official complete counting of population along with details like age, sex, literacy, occupation and housing.

Question 4

State one use of business demography.

Accepted Answer

One use of business demography is estimating market size and demand in a location (any one use).

Question 5

What is market segmentation?

Accepted Answer

Market segmentation is dividing the market into groups of customers with similar characteristics, such as age, income or education.

Question 6

Mention any one limitation of demographic data for business decisions.

Accepted Answer

One limitation is time lag—official data like census may be old by the time it is used (any one limitation).

Question 7

Explain any three features of demography.

Accepted Answer

Features of demography include:

1) It studies population size—how many people live in a given area.
2) It studies population distribution—where people live (urban/rural, region-wise).
3) It studies population composition—age, sex, literacy, occupation and other characteristics.

(Any three features can be written, including population change.)

Question 8

Write any three uses of business demography in business planning.

Accepted Answer

Uses of business demography include:

1) Market selection and expansion decisions based on population size and growth.
2) Demand forecasting for products/services using age structure, income and household trends.
3) Customer segmentation and targeting for marketing strategies.

(Any three uses can be written.)

Question 9

Explain any three sources of demographic data.

Accepted Answer

Sources of demographic data include:

1) Census: official complete population count with characteristics.
2) Civil registration system: records births and deaths.
3) Sample surveys: collect demographic and socio-economic information from representative households.

(Any three sources can be written.)

Question 10

Differentiate between primary and secondary demographic data (any three points).

Accepted Answer

Primary and secondary demographic data differ as follows:

1) Primary data is collected first-hand for a purpose (census, surveys), whereas secondary data is already collected and compiled by others (reports, databases).
2) Primary data is usually more direct and purpose-specific, whereas secondary data is quicker and cheaper to use.
3) Primary data collection takes more time and cost, whereas secondary data can have limitations like outdated information or different definitions.

(Any three points can be written.)

Question 11

Write any three key demographic variables used in business decisions.

Accepted Answer

Key demographic variables used in business decisions include:

1) Age (life-stage needs and product demand).
2) Income (purchasing power and pricing decisions).
3) Education (awareness and adoption of products/services).

(Any three variables like occupation, family size, urban/rural can be written.)

Question 12

Explain any three limitations of demographic data for business use.

Accepted Answer

Limitations of demographic data for business use include:

1) Time lag: official data like census may be outdated when used.
2) Underreporting: registration of births/deaths or migration may be incomplete in some areas.
3) Definition and classification issues: urban/rural definitions and categories may vary, affecting comparison.

(Any three limitations can be written.)

Question 13

Explain the meaning and scope of business demography.

Accepted Answer

Business demography means applying demographic data and demographic analysis to business planning and decision-making. Demographic information tells us who the people are (age, sex, education, occupation), where they live (distribution), how many they are (size), and how their numbers change over time (births, deaths and migration). Since consumers and workers are people, such information becomes very useful for business.

The scope of business demography is wide. It helps businesses estimate market size and potential demand in different areas, and it supports expansion decisions such as where to open new stores, branches or service centers. It is also used for customer profiling and market segmentation, because different age groups and income groups have different preferences and purchasing power.

Further, business demography supports product and service planning. For example, a growing youth population increases demand for education, smartphones and fashion, whereas an aging population increases demand for healthcare and insurance. It also helps in marketing planning by selecting suitable media and messages based on literacy, language and digital access.

Finally, business demography is important for workforce planning, because labor supply depends on age structure, education levels and migration patterns. Thus, business demography links population trends with business strategy in a practical way.

Question 14

Explain the importance of business demography for marketing and location decisions.

Accepted Answer

Business demography is very important for marketing and location decisions because it helps a firm understand the characteristics and distribution of customers. For marketing, demographic variables like age, income, education, occupation, family size and urban–rural residence provide a clear picture of who the potential buyers are.

Firstly, demographic data helps in market segmentation and target selection. A company can identify which age group or income group is more likely to buy its product and then focus its marketing accordingly. Secondly, it supports product and pricing decisions. For example, higher-income areas may respond to premium products, while low-income areas may need budget packs and lower pricing.

Thirdly, demography influences promotion and media planning. Literacy levels and digital access help a company decide whether to use newspapers, television, radio, outdoor advertising or social media. The message content can also be adjusted according to age and cultural background.

For location decisions, demographic information is equally important. Population size and density indicate market size, while population growth shows future potential. Distribution patterns help determine catchment areas for retail stores, banks or hospitals. Migration and urbanization trends show where new demand is emerging, such as in growing suburbs or industrial towns.

Therefore, by using demographic analysis, businesses reduce risk and make more accurate and practical marketing and location decisions.

Question 15

Explain major sources of demographic data and mention their limitations for business use.

Accepted Answer

Businesses use both official and non-official sources of demographic data. The major official source is the census, which provides population size, distribution and composition such as age, sex, literacy, occupation and housing characteristics. Another official source is the civil registration system, which records births and deaths and helps in understanding fertility and mortality trends. In addition, sample surveys conducted by government agencies provide information on employment, consumption, education and health.

Along with these, businesses also use secondary sources such as government statistical reports, publications of international agencies, and market research reports. Many firms use internal company data like sales records, customer databases and loyalty programs. Digital sources like web analytics and mobile usage patterns may also be used, but they require ethical and legal care.

However, these sources have limitations for business use. Census data may have a time lag because it is conducted periodically, so patterns may change by the time the data is used. Registration systems may suffer from underreporting in some areas. Sample surveys can have sampling errors and may not provide small-area details. Secondary reports may use different definitions and classifications, making comparisons difficult. Finally, company and digital data can create privacy concerns if personal information is used without proper consent.

Thus, demographic sources are very useful, but businesses must check reliability, update frequency and ethical issues before making decisions.

Introduction to Business Demography: Meaning, Scope, Uses and Data Sources

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