1. 4.01 Understand the importance of demographics, and the effect of population and social class on international marketing

2. Going Global… Shoprite in Africa  https://www.youtube.com/watch?v=Nbl_EHHy11w https://www.youtube.com/watch?v=Nbl_EHHy11w Shoprite group – Africa’s largest retailer  http://www.shoprite.co.za/ http://www.shoprite.co.za/ In Store  https://www.youtube.com/watch?v=_HPHmI95DPY https://www.youtube.com/watch?v=_HPHmI95DPY Why would they choose to expand to lesser developed countries?

3. Why are demographics important? Demographics provide a picture of what a country looks like  Age, gender, income, education, marital status, race, etc… When expanding to an international market a company must consider 3 things: 1. Is there a need for the product? 2. Can the potential market pay for the product?* 3. Is the market large enough?* *These steps require a lot of market analysis that focuses on a countries demographics

4. Developmental Categories Some countries have mixtures of both categories with rural and urban areas.

5. Income Distribution Need to know who can pay for your product  The USA & Western Europe have the highest incomes  Low income countries shouldn’t be ignored A lot of times average income is a misleading statistic Income is not evenly distributed The Lorenz Curve provides a clearer picture of a countries ability to pay for a product

6. Lorenz Curve Lorenz Curve is a graphic representation of how income is proportionally distributed Looks at the distribution of income in a population in fifths The Line of Absolute Equality means that income is spread evenly throughout a nation The Line of Absolute Inequality means that a small percentage of the population has all of the national income The farther the curve is to the right, the less equally a nations income is distributed Sweden has the most equality of income South Africa has the least equality of income https://www.youtube.com/watch?v=0CfBXjsEvHc

7. Lorenz Curves The average Income in South Africa is $2,780 The top 20% have almost 65% of the national income & have a lifestyle similar to the United States Top 20% Top 65%

8. Role of Education One of strongest links to higher income  Most countries require 12 years (USA)  Some require 13 years (Canada)  Less developed countries require 7 to 9 years (Mexico)  Best Education System in the World: http://youtu.be/0__9s3A2pcA http://youtu.be/0__9s3A2pcA

9. Benefits of Education Educated workforce makes it easier for international company to expand into a market Educated managers can design, build & sell products Higher education levels in China & India resulted in economic booms. India graduates 2 million English speakers from universities annually.  Work in call centers, software firms, engineering companies & other businesses. Individuals with higher educational levels more likely to purchase same types of products.  Ex) Medical doctors need same types of supplies, tools, medicine & training.  Ex) Managers purchase computers technology equipment & transportation for office/home.

10. Population Current World population is 7.286 Billion  http://www.worldometers.info/world-population/ http://www.worldometers.info/world-population/  Growth is about 1% annually By 2050, projected population is over 9 billion  Most growth occurs in developing countries  Growth in developed countries typically declines Family size shrinks Lower infant mortality rate Dual-income families Desire for higher standard of living Both Europe & Japan are projected to see a dramatic decline in GDP in the next 40 years Younger citizens have less disposable income because of tax burdens for elderly

11. Population Trends Growth in Developing Countries leads to larger population of younger citizens  With shrinking family sizes, younger people have higher disposable incomes  Great potential for international marketers  Example: Eno or SkiAustralia

12. Population Pyramid Shows number of males & females in different age groups of population Age groups make up layers of the pyramid Age increases as you move up the pyramid Wide base with narrow top indicates high birth and high death rate. Wider top with narrow base indicates lower birth and lower death rate. Some developed countries, like Germany & Japan expect an upside- down pyramid by 2050.

13. Market Segmentation By Social Class A Social Class is a group distinguished from others in society based on criteria such as Income, net worth, education, family history, political power, or lifestyles.  In America, how do we distinguish between our social classes?  The value of social classes varies amongst countries International marketers find that top social classes of any culture have shared interests & purchasing behavior. Lower social classes may be more traditional in their purchasing behavior with less experience & contact with other cultures & media.

14. Social Classes of Great Britain Great Britain has traditionally had three classes  Upper class- those with inherited wealth & families that are titled aristocrats  Middle class- majority of industrialists, professionals, business people and shop owners.  Working class - laborers, such as agricultural, mine & factory workers.  Social class differences reinforced by education individuals receive; spoken accents, interests and even type of food eaten.

15. Social class (con’t) India’s class structure is based on a 3,000 year-old view that 4 groups sprang from body parts of prehistoric man created by God Brahma. Brahmans - highest class that provided for intellectual & spiritual needs. Kshatriya - rule & protect others Vaishyas - businessmen & merchants. Shudras - farmers & manual laborers. Untouchables - worked only menial jobs related to bodily decay & dirt. *Only way to move to another class is through reincarnation

16. Class Mobility Class Mobility is the ability of an individual to change social classes  Marketers look at opportunities for class mobility  In developed countries movement is achieved through education & increased income.  In culturally bound countries, less social mobility, consumers less likely to purchase products related to higher classes.  Mobility important because marketer sell products that allow individuals to appear to belong to higher social classes. What do we assume about people who drive a Mercedes-Benz?

17. 4.01 Activities Population Pyramid for your country in 2015  3 facts that the population tells you  Impact the pyramid design has on your company Social Classes  What social classes are used in your IBP country  Create 2 ads that advertise to two separate groups CIA Factbook Comparison of developing countries  Compare the 3 categories of countries based on factors in chart