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Lecture Basic Marketing: A global-managerial approach: Chapter 5 - William D. Perreault, E. Jerome McCarthy

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In this chapter, you will: Know about population and income trends in global markets and how they affect marketers, understand how population growth is shifting in different areas and for different age groups, know about the distribution of income in the United States,...

Chapter 5:    Demographic Dimensions of Global Consumer Markets For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Chapter Objectives When you finish this chapter, you should 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 5­2 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 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Identifying Potential Markets Money Growth Concentration Literacy 5­3 Focus: Relative Buying Power Focus: Rate of Growth Focus: Population Density Focus : Communication Concerns For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill US Population Trends ????? ????? ????? ????? ????? 5­4 Regional Regional Differences Differences Birthrate Birthrate Aging Aging Population Population Changing Changing Household Household Composition Composition Shifts Shifts to to Suburban Suburban Areas Areas For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Changes in U.S Birthrate, 1935-2005 25.0 Birthrate 26 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 19.4 19 18.7 16.6 13 1935 14.6 1970 14.0 2005 Exhibit 5­5 5­5 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Median Family Income, 1960-1996 Median income $44K 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 $34K $26K 1960 1980 1996 Exhibit 5­7 5­6 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Income Distribution Percent of Total Income 50 40 46.8% 30 20 23.1% 15.8% 10 10.0% 4.2% $0 19,680 Lowest 20% Income Group 34,315 51,086 Middle 20% Income Group 75,316 Top 20% Income Group Percent of Total Income Going to Different Income Groups in 1996 Exhibit 5­8 5­7 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Consumer Spending Patterns Disposable Income Key Terms and Issues Discretionary Income Expenditure Data Family Life Cycle 5­8 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 children Young divorced w/out children Middle-aged married w/out children Young Young Middle-aged Middle-aged Older Young Older married married with married with married w/out unsingle* married* x-child.* children* children* dep children* married* Young Middle-aged Middle-aged divorced with divorced withdivorced w/out children children dep children Usual flow Recycled flow *Traditional family flow Exhibit 5­9 5­9 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Ethnic Dimensions of the US Market 5­6 Buying Buying Behavior Behavior Median Median Income Income Growth Growth Growth Growth Rate Rate Accurate Accurate Target Target For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Key Terms Gross National  Product (GNP) Birthrate Metropolitan Statistical  Area (MSA) 5­11 Disposable Income Discretionary Income Empty Nesters Senior Citizens For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill ... Suburban Areas Areas For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Changes in U.S Birthrate, 19 3 5- 20 05 25. 0 Birthrate 26 After a peak between 1 950  ... 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 ... 14.6 1970 14.0 20 05 Exhibit 5 5 5 5 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Median Family Income, 196 0-1 996 Median income $44K Long term income trends are 

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