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9609 · 6.1.3

Social and demographic — practice questions

Practice and worked examples for 9609 Social and demographic. Short previews only — attempt the full question in MarkScheme against the official scheme.

Worked example 1

Country has rising vegan population (+40% in 5 years) and strong animal welfare activism. Impact on a traditional dairy company?

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Threat: Falling demand for milk; negative publicity from activists; retailers delist non-sustainable suppliers.

Opportunity: Launch plant-based line; certify welfare standards; rebrand as diversified "nutrition" firm.

Marketing: Target flexitarian segment (3.1.6); promotion emphasises sustainability (3.3.5); may need premium pricing for R&D costs.

Worked example 2

A company, 'Silver Journeys Ltd', plans to launch luxury holiday packages for seniors in a country with a population of 50 million. Demographic data shows that 20% of the population is aged 65 or over, and this segment is growing at 3% per year. Market research suggests an average annual spend of $1,500 per person in this demographic on luxury travel. Calculate the potential market value for Silver Journeys in the current year and in 5 years' time.

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This calculation helps quantify the opportunity presented by the ageing population demographic trend.

Step 1: Calculate the current size of the target market (population aged 65+).

  • Total Population: 50,000,000
  • Percentage of population aged 65+: 20%
  • Current Target Market Size = 50,000,000 × 0.20 = 10,000,000 people

Step 2: Calculate the current potential market value.

  • Current Target Market Size: 10,000,000 people
  • Average Annual Spend: 1,5001,500
  • Current Market Value = 10,000,000 × 1,500=1,500 = 15,000,000,000 ($15 billion)

Step 3: Project the size of the target market in 5 years.

  • Current Size: 10,000,000 people
  • Annual Growth Rate: 3% (0.03)
  • Projected Size in 5 years = Current Size × (1 + Growth Rate)^Number of Years
  • Projected Size = 10,000,000 × (1.03)^5
  • Projected Size ≈ 10,000,000 × 1.15927 = 11,592,700 people (approx.)

Step 4: Project the potential market value in 5 years.

  • Projected Target Market Size: 11,592,700 people
  • Average Annual Spend: $1,500 (assuming it stays constant for simplicity)
  • Projected Market Value = 11,592,700 × 1,500=1,500 = 17,389,050,000 (approx. $17.39 billion)

Conclusion: The potential market for luxury senior travel is currently $15 billion and is projected to grow to approximately $17.39 billion in five years. This represents a substantial and growing market, justifying further investment in product development and marketing for Silver Journeys Ltd.

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