Question

How do demographic risks affect business activities?

Answer 1

Explanation:

Income is one demographic variable that can affect businesses. A company's products usually appeal to certain income groups. For example, premium products such as high-end woman's clothing usually appeal to women with higher incomes. Conversely, people with comparatively lower incomes are more sensitive to price and, therefore, may prefer purchasing discount products.

People with lower incomes have less disposable income. Value is a major determinant in the products they purchase. Hence, a company may best reach lower-income people through discount retailers and wholesalers and attract higher-income buyers in specialty retail shops.

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