UK Accounting Glossary
Data that portrays specific characteristics of a group of people (e.g., sex, race, age, geographic location). Used as a noun, it means a set of people who are grouped because of their similarity in one or more aspects.
Statistical data relating to the population and particular groups within it.
Demographics is the classification of populations, especially consumers, by various characteristics, including age, gender, race, religion, and income. Demographics is vital to investing in several ways. A company’s success often depends critically on its ability to understand demographics and successfully target various segments of the population. Demographics is the reason that advertisers cater to young people, who decide early in life what brand of toothpaste they like and stick with it. As the demographics of a company’s customer base changes, the firm must develop new products to serve them or enter new businesses with different demographics. Demographics is also key to understanding international stock markets: companies based in high-income countries enjoy greater domestic demand, and those with high birth rates will likely enjoy strong demand in the future. Demographics can have an impact on the overall investing environment as well. For example, an investing public with older demographics may demand more fixed-income instruments, with their relatively firm prices and stable income, and fewer stocks, whose prices tend to fluctuate and whose stream of cash payments is less steady.
The demographics of the neighborhood have changed over the last thirty years, as the immigration policy has allowed more movement between EU countries.
When a company chooses to advertise on television is determined by the demographic they wish to reach, which explains the increased number of ads for cars and electric shavers during football games.
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This glossary post was last updated: 7th February 2020.