For use only with Perreault and McCarthy texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER FIVE Demographic Dimensions of Global Consumer Markets

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. © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin When we finish this lecture you should

What are its relevant segmenting dimensions? How big is it? What are its relevant segmenting dimensions? How big is it? © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Target Marketers Focus on the Consumer Where is it? 3 Main Questions 3 Main Questions

Other Countries Current Population Other Countries Current Population © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin People with Money Make Markets Search for Growing Markets Population Trends

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Worldwide Population Growth Exhibit 5-1 +

Other Population Trends © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Increasing Density Increasing Urbanization

Gross National Income (GNI) Gross National Income (GNI) Gross National Income (GNI) Gross National Income (GNI) Gross Domestic Product (GDP) Gross Domestic Product (GDP) Income earned by foreigners in the nation No Money, No Market! © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin GNI / Country’s Population Size = Per Capita Income

Issues Related to Development © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Literacy and marketing problems What do third world consumers really need? Much segmenting may be needed

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Where Does Your State Stand? Exhibit 5-3 +

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Where Are the People Today and Tomorrow? Exhibit 5-4 +

Population Growing, but… Population Growing, but… Population Growing, but… Population Growing, but… Birthrate – Boom or Bust? Birthrate – Boom or Bust? Birthrate – Boom or Bust? Birthrate – Boom or Bust? Graying of America Graying of America Growth Trends Young and Old © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Key Trends

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Appealing to the “Matures” +

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Not Just for the Younger Generation

Buying Power Buying Power Unique Culture Unique Culture High Growth High Growth Buying Power Buying Power High Growth High Growth Unique Culture Unique Culture Teenagers – They’re Back © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Different Needs

Married Couple without children “Traditional” Family Single Adult Households High Divorce Rate Married Couple without children “Traditional” Family Trends in US Households and Families © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Unmarried Living Together

US Population Mobility © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Population Mobility Urban to Suburban Rural to Urban

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Changing US Income Patterns Exhibit 5-7 +

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Appealing to Higher Income Consumers +

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Income Dimensions of the US Market Exhibit 5-8

Total Income Total Income Disposable Income Disposable Income Different Types of Spending © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Total Income Total Income Taxes Disposable Income Disposable Income Disposable Income Disposable Income Necessities Discretionary Income Discretionary Income

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A Luxury Item +

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Family Life Cycle Exhibit 5-9 +

Empty nesters Reallocation for teenagers Reallocation for teenagers Reallocation for teenagers Reallocation for teenagers Acceptance of new ideas Acceptance of new ideas Key Issues Key Issues Acceptance of new ideas Acceptance of new ideas Family Life Cycle Implications © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Senior citizens

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Credit Card Use

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Interactive Exercise: Family Life Cycle

Buy Differently Increasing Median Income High Growth Rate Buy Differently Increasing Median Income High Growth Rate Ethnic Dimensions of the US Market © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Avoid Stereotypes

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Appealing to Minority Consumers +

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Gross Domestic Product (GDP) Birthrate Metropolitan Statistical Area (MSA) Disposable Income Discretionary Income Empty Nesters Senior Citizens © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Key Terms