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

Three Questions That Must Be Answered

About Any Potential Market

What are its relevant segmenting

dimensions?
How big is it?
Where is it?

For use only with Perreault and McCarthy texts.

The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill

Identifying Potential Markets

Money

Focus:
Relative Buying Power

Growth

Focus:
Rate of Growth

Concentration

Literacy

5-3

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
Regional
Regional Differences
Differences

?????
?????
?????
?????
?????
5-4

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

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.

Birthrate

19.4

19

18.7
16.6

13
1935

14.6
1970

14.0
2005

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, 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 5-7
5-6

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 5-8
5-7

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
(next slide)

5-8

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

Young
single*

Young
married
x-child.*

Middle-aged
married w/out
children

Young
married with
children*

Middle-aged
married with
children*

Middle-aged
married w/out
dep. children*

Young
divorced with
children

Middle-aged
divorced with
children

Middle-aged
divorced w/out
dep. children

Usual flow

Recycled flow

Older
married*

Older
unmarried*

*Traditional family flow

Exhibit 5-9
5-9

For use only with Perreault and McCarthy texts.

The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill

Ethnic Dimensions of the US Market

Buying
Buying
Behavior
Behavior

Growth
Growth
Rate
Rate

5-6

Median
Median
Income
Income
Growth
Growth

Avoid
Avoid
Stereotyping
Stereotyping

For use only with Perreault and McCarthy texts.

The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill