Chapter 5 Demographic Dimensions of Global Consumer Markets

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

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

Marketing Strategy Planning and Demographic Dimensions of Final Consumers (Exhibit 5 -1) Final Consumers CH 5: Demographic Dimensions of Final Consumer Markets 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

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

Marketers Search for Growing Markets Other Countries Current Population Trends

Other Population Trends Increasing Density Increasing Urbanization

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

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

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

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

Appealing to the “Matures”

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

US Population Mobility Rural to Urban to Suburban

Changing US Income Patterns (Exhibit 5 -6)

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

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

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 Acceptance of New Ideas Reallocation for teenagers Key Issues Senior Citizens Empty Nesters

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

You should now be able to: 1. 2. Know about population and income trends in global markets — and how they affect marketers. 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.

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