1. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Chapter 5: Demographic Dimensions of Global Consumer Markets

2. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill When you finish this chapter, you should 5-2 Chapter 5 Objectives 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.

3. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Money Growth Concentration Literacy Relative Buying Power Rate of Growth Population Density Communication Concerns Focus: Identifying Potential Markets 5-3

4. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill US Population Trends Shifts to Suburban Areas Shifts to Suburban Areas Changing Household Composition Changing Household Composition Aging Population Birthrate Regional Differences 5-4

5. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill 1935 19702005 13 19 26 Birthrate 25.0 18.7 19.4 14.6 14.0 16.6 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 Changes in U.S. Birthrate, 1935-2005

6. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill 1960 19801996 $26K $34K $44K Median income 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 Median Family Income, 1960-1996

7. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Income Distribution 5-7 Percent of Total Income Middle 20% Income Group Lowest 20% Income Group Top 20% Income Group 46.8% 10 20 30 40 50 4.2% 10.0% 15.8% 23.1% Percent of Total Income Going to Different Income Groups in 1996 $019,68034,31551,08675,316 Exhibit 5-8

8. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Key Terms and Issues Disposable Income Expenditure Data Family Life Cycle Discretionary Income Consumer Spending Patterns 5-8

9. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Family Life Cycle Middle-aged divorced w/out dep. children Middle-aged divorced with children Young divorced with children Middle-aged married w/out dep. children* Middle-aged married with children* Young married with children* Middle-aged married w/out children Middle-aged divorced w/out children Young married x-child.* Young divorced w/out children Young single* Older married* Older un- married* Exhibit 5-9 5-9 Usual flowRecycled flow*Traditional family flow

10. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Buying Behavior Buying Behavior Median Income Growth Median Income Growth Accurate Target Accurate Target Growth Rate Growth Rate 5-6 Ethnic Dimensions of the US Market

11. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Disposable Income Discretionary Income Empty Nesters Senior Citizens Gross National Product (GNP) Birthrate Metropolitan Statistical Area (MSA) Key Terms 5-11