Chapter 5: Demographic Dimensions of Global Consumer Markets

1. Chapter 5: Demographic Dimensions of Global Consumer Markets

2. Chapter 5 Objectives When you finish this chapter, you should 1. Know about population and income trends in global markets—and how they affect marketers. 2. Understand how population growth is shifting in different areas and for different age groups. 3. Know about the distribution of income in the United States. 4. Know how consumer spending is related to family life cycle and other demographic dimensions. 5. Know why ethnic markets are important—and why increasingly they are the focus of multicultural marketing strategies. 6. Understand the important new terms. 5-2

3. Money Growth Focus: Relative Buying Power Concentration Focus: Rate of Growth Literacy Focus: Population Density Focus : Communication Concerns Identifying Potential Markets 5-3

4. Regional Differences ????? ????? ????? ????? ????? Birthrate Aging Population Changing Household Composition Shifts to Suburban Areas US Population Trends 5-4

5. 25.0 26 19.4 19 Birthrate 18.7 16.6 14.6 13 14.0 1935 1970 2005 Changes in U.S. Birthrate, 1935-2005 After a peak between 1950 and 1955, U.S. Birthrates declined steadily until 1975. Following a brief rise in rates finishing about 1990, rates have again begun to fall. Exhibit 5-5 5-5

6. $44K $34K Median income $26K 1960 1980 1996 Median Family Income, 1960-1996 Long term income trends are important to marketing managers because strategy planning must take into account realistic growth potential. A narrow focus on a high growth period that extends a temporary rate too far into the future can ruin chances for long term success Exhibit 5-7 5-6

7. 50 46.8% 40 30 Percent of Total Income 23.1% 20 15.8% 10 10.0% 4.2% $0 19,680 34,315 51,086 75,316 Lowest 20% Income Group Middle 20% Income Group Top 20% Income Group Percent of Total Income Going to Different Income Groups in 1996 Income Distribution Exhibit 5-8 5-7

8. Consumer Spending Patterns Disposable Income Discretionary Income Key Terms and Issues Expenditure Data Family Life Cycle 5-8

9. Family Life Cycle Middle-aged divorced w/out children Young divorced w/out children Middle-aged married w/out children Young single* Young married x-child.* Young married with children* Middle-aged married with children* Middle-aged married w/out dep. children* Older married* Older un- married* Young divorced with children Middle-aged divorced with children Middle-aged divorced w/out dep. children Usual flow Recycled flow *Traditional family flow Exhibit 5-9 5-9

10. Buying Behavior Median Income Growth Growth Rate Accurate Target Ethnic Dimensions of the US Market 5-6

11. Key Terms Gross National Product (GNP) Birthrate Metropolitan Statistical Area (MSA) Disposable Income Discretionary Income Empty Nesters Senior Citizens 5-11