Its crucial for marketers to study the constant change in demographics of a population as people are the driving force for the changing development of markets. Demographic environment includes size, density, age, gender, occupation, etc. where important demographic trends that affects markets is the changing age and family structure and geographic shifts in population (Claessens, 2015). Malaysia’s population demography shows that there is increase in employment rate of 2.6% every year which may positively impact on the spending patterns (Department of Statistics Malaysia, 2018). For example, those from high-income households are able to afford custom cakes and expensive pastries. As for age, the median age is 28.2 and the life expectancy has also been increasing at 0.5 years with women outliving men at 4.7 years (Indexmundi, 2018); (Azman, 2017). This impact on the type of customers who would be potential customers and what kind of products should Harold’s Bread produce. For example, younger consumers would purchase pastries while families go for breads and rolls.
2.1.2 Economic Environment
Economic changes impact a lot on both the organization’s production and the consumer’s decision making process. These changes include inflation, taxation, currency exchange rate, etc. Figure 1 below is the statistics by Trading Economics where Malaysia has experienced a strong economic growth from 2010 to 2014, however, it dropped after that and had a slight growth averaging at 1.4%. Figure 2 shows the forecasts for the next few years, where GDP will decline. This may bring many impact such as increase in unemployment while it decreases in job opportunities for the locals, household income, consumer spending, etc. Due to this, consumer would save instead of spend which result in a decrease in the buying power and in turn, reduce company’s profit.