1. For use only with Perreault/Cannon/ McCarthy texts, © 2009 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Chapter 5 Demographic Dimensions of Global Consumer Markets www.mhhe.com/fourps

2. Marketing Strategy Planning and Demographic Dimensions of Final Consumers (Exhibit 5-1)

3. Final Consumers Organizational Consumers CH 5: Demographic Dimensions of Final Consumer Markets Marketing Strategy Planning and Demographic Dimensions of Final Consumers (Exhibit 5-1) CH 7: Buying Behavior of Business & Organizational Customers CH 6: Buying Behavior of Final Consumers

4. Final Consumers CH 5: Demographic Dimensions of Final Consumer Markets Marketing Strategy Planning and Demographic Dimensions of Final Consumers (Exhibit 5-1) Global Consumer Markets Population trends Income growth & distribution Urbanization, literacy, & other differences U.S. Consumer Market Population trends Income growth & distribution Spending patterns Ethnic dimensions

5. What are its relevant segmenting dimensions? How big is it? Where is it? 3 Main Questions 3 Main Questions Understanding Potential Markets

6. Other Countries Current Population Population Trends Marketers Search for Growing Markets

7. Increasing Density Increasing Urbanization Other Population Trends

8. Gross National Income (GNI) Gross National Income (GNI) Gross Domestic Product (GDP) Gross Domestic Product (GDP) Income earned by foreigners in the nation GNI / Country’s Population Size = Per Capita Income No Money, No Market! + =

9. Literacy and marketing problems What do third world consumers really need? Much segmenting may be required Issues Related to Development

10. Where Does Your State Stand? (Exhibit 5-3)

11. Population Growing, but… Population Growing, but… Birthrate – Boom or Bust? Birthrate – Boom or Bust? Graying of America Graying of America Growth Trends Young and Old Key Trends

12. Appealing to the “Matures”

13. Married Couple without children “Traditional” Family Single Adult Households High Divorce Rate Unmarried Living Together Trends in US Households and Families

14. Population Mobility Urban to Suburban Rural to Urban US Population Mobility

15. Changing US Income Patterns (Exhibit 5-6)

16. Income Dimensions of the US Market (Exhibit 5-7)

17. Total Income Total Income Taxes Disposable Income Disposable Income Necessities Different Types of Spending Discretionary Income Discretionary Income

18. Tony – The Alabama Grad Tony’s income is $30,000 annually Taxes are $7,000 Rent & Car Payments are $16,800 What is Tony’s disposable income? What is Tony’s discretionary income?

19. Tony Disposable Income = $30,000 - $7,000 = $23,000 Discretionary Income = $30,000 - $7,000 - $16,800 = $6,200

20. Sue – an Auburn Graduate Income is $45,000 annually Taxes are $9,000 Rent & car payments = $20,000 What is Sue’s disposable income? Discretionary income? Would Sue say “yes” to a marriage proposal from Tony?

21. Sue Answer Disposable income = $45,000 - $9,000 = $36,000 Discretionary Income = $45,000 - $9,000 - $20,000 = $16,000 Marry Tony? – Clearly not. Tony is a low discretionary income “loser boy” bama fan.

22. A Luxury Item

23. The Family Life Cycle (Exhibit 5-8)

24. Family Life Cycle Implications Key Issues Reallocation for teenagers Empty Nesters Senior Citizens Acceptance of New Ideas

25. Buy Differently Increasing Median Income High Growth Rate Avoid Stereotypes Ethnic Dimensions of the US Market

26. You should now be able to: 1.Know about population and income trends in global markets — and how they affect marketers. 2.Understand how U.S. 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 they are increasingly the focus of multicultural marketing strategies.

27. Gross Domestic Product (GDP) Birthrate Metropolitan Statistical Area (MSA) Real Income Disposable Income Discretionary Income Empty Nesters Senior Citizens Key Terms