chapter 5

For use only with Perreault/Cannon/ McCarthy texts, © 2009 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin

Chapter 5

Demographic Dimensions of Global Consumer Markets

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

FinalConsumers

OrganizationalConsumers

CH 5: DemographicDimensions of FinalConsumer 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

FinalConsumers

CH 5: DemographicDimensions of FinalConsumer 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

What are its relevant

segmenting dimensions?

What are its relevant

segmenting dimensions?

How big is it?How big is it? Where is it?Where is it?

3 MainQuestions

3 MainQuestions

Understanding Potential Markets

Other CountriesOther Countries

Current PopulationCurrent Population

Population TrendsPopulation Trends

Marketers Search for Growing Markets

Increasing Density

Increasing Urbanization

Other Population Trends

Gross National Income(GNI)

Gross National Income(GNI)

GrossDomestic Product(GDP)

GrossDomestic Product(GDP)Income earned by

foreigners in the nation

Income earned by foreigners in the nation

GNI / Country’s Population Size = Per Capita Income

No Money, No Market!

+ =

Literacy and marketing problems

What do third world consumers

really need?

Much segmenting Much segmenting may be requiredmay be required

Issues Related to Development

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

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 TrendsKey Trends

Appealing to the “Matures”

Married Couple without children

Married Couple without children

“Traditional” Family

“Traditional” Family

Single Adult Households

Single Adult Households

High Divorce Rate

High Divorce Rate

Unmarried Living

Together

Unmarried Living

Together

Trends in US Households and Families

PopulationMobility

PopulationMobility

Urban toSuburban

Rural toUrban

US Population Mobility

Changing US Income Patterns (Exhibit 5-6)

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

TotalIncome

TotalIncome

TaxesTaxes

DisposableIncome

DisposableIncome

NecessitiesNecessities

Different Types of Spending

DiscretionaryIncome

DiscretionaryIncome

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?

Tony

• Disposable Income = $30,000 - $7,000 = $23,000

• Discretionary Income = $30,000 - $7,000 - $16,800 = $6,200

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?

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.

A Luxury Item

The Family Life Cycle (Exhibit 5-8)

Family Life Cycle Implications

Key IssuesKey Issues

Reallocation for teenagersReallocation for teenagers

Empty NestersEmpty NestersSenior CitizensSenior Citizens

Acceptance of New Ideas

Acceptance of New Ideas

Buy Differently

Buy Differently

Increasing Median Income

Increasing Median Income

High Growth Rate

High Growth Rate

Avoid Stereotypes

Avoid Stereotypes

Ethnic Dimensions of the US Market

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.

• Gross Domestic Product (GDP)

• Birthrate

• Metropolitan Statistical Area (MSA)

• Real Income

• Disposable Income

• Discretionary Income

• Empty Nesters

• Senior Citizens

Key Terms