Demographics & Trends II

MKT 750Dr. West

Agenda

Introduce the concept of cohortsHear about your customer depth interviewsExamine age and cultural cohortsYour team research proposal is due on Friday and remember to sign up for team meetings

Generational Influences:

Life Cohort Current Stage Experiences

Conditions

Values

Preferences

MarketplaceBehaviors

78

45

71

69

Post-War

Boomers

Generation X

Generation Y

US Population Break Down

Values in Millions

Post War: Demographics

Age: 57+ (born before 1946)Education:

36% high school, 12% college, 9% post-grad

Marital status: Married & had children earlier than any other generation

Income: Large difference between retired and not retired

Post War: Attitudes

Core values: Traditional, patriotic, family, risk-averse

Motivators/goals: Security & stability Want a better life for their kids

Spending/saving habits: “Save some, spend some” Started retirement saving at age 43

Post War: Lifestyle

Growing up: TV introduced during 40’s & 50’s Nat King Cole, Frank Sinatra, “I Love Lucy” Preoccupied with family

Current: Healthy & active Travel, gardening, charitable activities Grandchildren, pets, sweepstakes

Post War: Interesting Facts

Never been a president from this groupProduced 60’s activists:

Ralph NaderGloria SteinemMalcolm XMartin Luther King

Don’t like to have their age pointed out

Post War: Brand Relationships

Brand loyalSensitive to age-specific advertisingDo not like surprises, want gradual changeVery patriotic!

Post War: Segments

Today’s Mature Consumer:Autonomy: Want to lead active lives and be self-sufficient Connectedness: Value bonds with friends and family (Computer savvy)Altruism: Want to give something backPersonal growth: Very interested in trying new experiences and developing their potential

Effective Marketing Examples

Celebrex

Boomers: Demographics

Size: 78 millionBoomers I: (1946-1955) Age 47 – 56Boomers II: (1956–1965) Ages 37 - 46

                                   

            

                                   

            

                                   

            

Boomers: Customer Profile

Experiences Dr. Spock Leave it to Beaver Economic good times

Boomers: Lifestyle Segments

Upbeat EnjoyersFeel good=look goodVolunteers

InsecuresFinance worriesSpend only on themselves

Boomers: Lifestyle Segments

Threatened ActivesDon’t believe in retirement/reject retirement homesOpposed to re-taking drivers tests

Financial PositivesConsider themselves successfulNot satisfied with their looks

Boomers: Values

Individualism “Me Generation” Financial Positives, Insecures

Indulgence Cosmetic Changes, Love to Make Love

Stimulation Fitness Getaways/Active Vacations

Question Nature Mainstreaming of health foods

Boomers: Market Needs

Want more informationQuestion authority of all kinds

Doctors Government Corporations Education System

Boomers: Market Needs

Prize holding on to their youthVanishing Generation Gap

Increase in agreement between Boomers and their children vs. the Boomers and their Parents

Attitudes toward sex (61-86%) Young people less responsible (51-70%) Less respect for parents (69-77%) Harry Potter phenomenon

Boomers: Market Needs

Prize Holding on to Youth Fitness Revolution

Low Impact, want to enjoy their exercise 7% increase in home exercise equipment purchases since 1999 Vitamins, herbal remedies, fitness h2o

Bio Chemistry Dye gray (men and women) Anti-age creams Tummy tuck, eye lift, brow botoxed

Boomers: Viagra

Relevance to marketMarket has grown with themAlways into sex and drugs

Disregard for social norms in reference to sex

http://www.lifedrivemagazine.com/

Born: (1966–1976) 26-36 years oldApproximately 40 million Americans

Outnumbered by both the Boomers and Generation Y

Generation X: Demographics

Diverse group, difficult to categorize Children of divorce/latchkey

Skeptical of relationships Work to live, not live to work Marrying later, but having sex earlier Rely on their friends for love and acceptance

Generation X: Profile

Adrenaline junkiesExtreme sports

Embrace technology Well-educated

29% have bachelors or graduate degrees

Do not trust government and institutionsLowest voting rate in historyPrefer to make a difference locally, if at all

Generation X: Lifestyle

Remember that they prefer honestyTreat them as importantUse technologyBe comfortable with diversity

Example: Saturn

Generation X: Marketing

Gen Y: Demographics

Echo Boomers…Consists of US Children, Adolescents, and Young Adults Ages 9-26

Born Between 1977-1994

56 Million in the CohortFastest Growing Demographic group under age of 65

64% of Gen Y Group is in Primary Education

Gen Y: Purchasing Power

Purchasing Power Differs by Age Sub-Group

Children (9-11)Teenagers (12-17)Adults (18-24)

$0

$50

$100

$150

$200

$250

$300

Billions

18-24 12-17 7-11

Ages

Generation Y - Purchasing Power

Gen Y: Attitudes

Attitudes shaped by world events and socioeconomic trends

High percentage of single parent homes

Children involved in earning/spending decisions

World events brought reality of tragedy closer to home

Columbine, September 11th, Oklahoma City

Tumbling Icons OJ Simpson, President Clinton

Gen Y: Resulting Values

Resulting values from world events and trends

Conservative (more than parents)

Desire to have a family and a good job

Fiscally responsible

Open to using financing to achieve goals

Gen Y: Interests & Activities

InternetTwo thirds of children under age 11 used a computer before age five

80% of teenagers have internet access

Computer GamesApproximately 40% of 145 million US video game players are under the age of 18

Mobile CommunicationsAlmost 20 percent of U.S. teenagers own a wireless phone

Gen Y: Marketing Trends

Brand image is a necessity to competeInternet marketing is essentialIntegrated sponsorship and promotionSubtle use of celebritiesIncreased use of humor

Gen Y Marketing Example

7 UP Example

Attention to Diversity

Hispanics

African Americans

Hispanic Americans

Hispanic: Definition

People who live in the U.S. and who were born in, or their families came from, one of the Spanish speaking Latin American countries or from Spain Are an ethnic group, NOT a race because Hispanics belong to all human races

Hispanic: Demographics

Fastest growing population - 35.3M or 13%Age: 35.7% under 18 years old Households: 30.6% consist of 5 or more people vs. 11.8% Whites

Hispanic: Demographics

Bilingual households more common than English only households Education: 66% graduate from high school Income: 38% earn $40,000 per year

Difference in education and income are not uncommon for immigrant groups

Where Hispanics Live

KS7%

CA

32%

AZ

25%TX

32%

NM

42%

NY15%

FL

17%

“Traditional” Hispanic States

“New” Hispanic States: 2000 Census

CO

17% MA 7%

CT 9%

NJ 13%

WA8%

OK5%

WI 4%

IL 12%

“Future” Hispanic States: 5-10 years

Hispanic: Values

Collectivism Emphasizes needs, objectives, and points of view of an in-group

Familismo Strong identification with and attachment to family

Hispanic: Values

Machismo Men are viewed as providers, protectors, and representatives of the family

Simpatía Behave with dignity and respect toward others

Hispanics: Marketing

Hispanic market cannot be treated like the general market

Different language preferencesUnique acculturation levelsDistinct cultural values

Target based on country of originExample: baseball vs. soccer

Avoid stereotypesExample: Mexican wearing sombrero

Leverage languageMarket to Hispanic youth in both English and Spanish

Hispanics: Marketing

Marketing Example

Marketing Examples

Play Video

THE AFRICAN

AMERICANMARKET

America’s second largest minorityOver 36 million12.7% of the U.S. population

Huge purchasing power$601 billion in earned income$572 billion in purchases

African American: Demographics

African American: Trends

From 1990 to 2001, rate of increase in spending power was 81% faster than for whitesThe number of African-American-owned businesses grew by 46% from 1987 to 1997Half the African American population is middle class and above

PsychographicsLack of trust of the governmentStrong family unitReligious baseWork harder to get to level fieldWant R-E-S-P-E-C-T

Buying Habits

Spend 2 out of 3 dollars of all minoritiesRepresent:

25% of movie going audience30% of active footwear market31% of volume for some soft drink brands

Homes, cars, food

Marketing Efforts

Hallmark Cards Introduced a line of 16 greeting cards called Mahogany in 1987. Today it features more than 800 cards.Keys to success:

Employing African-American artists and writersFeaturing culturally relevant art and poetryEstablishing close relationships with respected artists and authorsTalking to consumers to develop designs and messages that depict the African-American lifestyle

Cultural Influence 

Cultural Value System Symbols/ Language

Heroes/

Lifestyles/

Influencers Customs

Human UniversalsNorms of reciprocity and hospitalityThe protection and training of children, caring for the sick Incest taboos and modesty, family units Social hierarchy, idiomatic language

… However, there is significant variation in how these are expressed across cultures

Sensitivity to CultureConsumers choose products to meet needs

What gives rise to needs & wants? View of the self & relationship to others Worldview (e.g. Russian consumers and credit) Preferences (e.g. eggs for breakfast) Lifestyles (e.g. dishwashers in Japan) Rituals & Customs (e.g. laundry detergent in Peru)

Sensitivity to Culture

Nestlé condensed milk is used and marketed differently around the world.

England – it is a cake or fruit topping Germany – used as a coffee creamerAustralia – for homemade ice creamMexico – as baby food

Sensitivity to Culture

Should everyone use deodorant?89% of Americans say - YES!59% of French consumers think so.Only 53% of Australians feel the need.

Sensitivity to Culture

Cultures differ in potentially significant waysHofstede identified four distinct dimensions for characterizing cultural differences:

Individualism versus Collectivism: the extent to which the welfare of the individual or the group is valued

Individualism Collectivism (e.g. US, Australia, Canada) (e.g. Hong Kong,

Taiwan, Japan)

Self-construal

Role of Others

Values

Motivational drives

Behavior

Self-construal

Role of Others

Values

Motivational drives

Behavior

Defined by internal attributes and traits

Self-evaluation (standards of social comparison)

Emphasis on separateness

Focus on differentiation, need for uniqueness

Reflective of personal preferences

Defined by internal attributes and traits

Self-evaluation (standards of social comparison)

Emphasis on separateness

Focus on differentiation, need for uniqueness

Reflective of personal preferences

Defined by important others, family, and friends

Self-definition (relationships with others define self)

Emphasis on connectedness

Focus on similarity, relatively greater need to fit in

Influenced by preferences and needs of close others

Defined by important others, family, and friends

Self-definition (relationships with others define self)

Emphasis on connectedness

Focus on similarity, relatively greater need to fit in

Influenced by preferences and needs of close others

Sensitivity to Culture

Phillip Morris successfully marketed its Marlboro brand in Hong Kong not by pitching the “Marlboro Man” but by citing the brand’s dominant share in the US.

Sensitivity to Culture

Power distance: societal acceptance of inequality in power, which can affect how relationships are are formed.

High Power Distance societies (e.g. Russia, China, India) believe in a well-defined order/place in society Low Power Distance societies (e.g. Germany & US) emphasize equal rights and the opportunity for advancement

Sensitivity to Culture

Uncertainty Avoidance: the degree to which people feel threatened by ambiguous situations and have well-defined rules and rituals to to deal with perceived threats

Religion plays an important role

Masculinity - femininity: Sex role delineation

How much should you adapt?

Going globalSome products are marketed the same virtually everywhere (e.g. Coca~Cola) Others are adapted to local conditions (e.g. McDonald’s)

What’s a manager to do?

How much should you adapt?

Consider the following: Is my product “culturally bound”?

Food (dairy in South America) Personal care (cosmetics) Ritual or convention based (laundry & credit)

High tech & luxury products are similar across cultures

How much should you adapt?

Consider the following: How does the product distribution fit within cultural norms

Amay and Avon in Japan, Some segments are similar in wants & needs Teens, luxury & status goods

How will “American” sell? Use local sources of information on trends and tastes

Think globally, act

locally!

Marketing Blunders

Coors translated its slogan, “Turn it loose,” into Spanish, where it read “Suffer from diarrhea” Pepsi’s “Come alive with the Pepsi Generation” translated into “Pepsi brings your ancestors back from the grave,” in Chinese In Italy, a campaign for Schweppes Tonic Water translated the name into “Schweppes Toilet Water”

Appreciating Differences

Getting to know your customer requires:

Understanding their past and what they value Being aware of social and cultural norms Not making assumptions that others think the same way that you do.

Beware of stereotyping

Assignment

Read Chapters 3,4 & 6Be sure to sign up for a team meeting!Memo 2

Begin working on shopping diary entries over the weekend Compare your purchase decisions with the book description of the decision making process