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

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,...

For use only with Perreault and McCarthy texts.

Chapter 5:

Demographic

Dimensions of

Global Consumer

Markets

Chapter 5 Objectives

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.

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.

Money

Growth Concentration

Literacy

Relative Buying Power

Rate of Growth

Population Density

Communication Concerns

Focus:

Focus:

Focus:

Focus :

Identifying Potential Markets

US Population Trends

Shifts to Suburban

Areas

Shifts to Suburban

Areas

Changing Household

Composition

Changing Household

Composition

Aging Population

Birthrate

Regional Differences

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For use only with Perreault and McCarthy texts.

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19

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25.0

18.7

19.4

14.6

14.0 16.6

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.

Exhibit 5­5

Changes in U.S Birthrate, 1935-2005

1960 1980 1996

$26K

$34K

$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

Exhibit 5­7

Median Family Income, 1960-1996

For use only with Perreault and McCarthy texts.

Income Distribution

Middle 20%

Income Group

Lowest 20%

46.8%

10 20 30 40 50

15.8%

23.1%

Percent of Total Income Going to Different Income Groups in 1996

Exhibit 5­8

Key Terms and

Issues

Disposable Income

Expenditure

Data

Family Life Cycle

Discretionary

Income

Consumer Spending Patterns

For use only with Perreault and McCarthy texts.

Family Life Cycle

Middle-aged divorced w/out dep children

Middle-aged divorced with children

Young divorced with children

Middle-aged married w/out dep children*

Middle-aged married with children*

Young married with children*

Middle-aged married w/out children

Middle-aged divorced w/out children

Young married x-child.*

Young divorced w/out children

Young

Older un-married*

Exhibit 5­9

Usual flow Recycled flow *Traditional family flow

Buying Behavior

Buying Behavior

Median Income Growth

Median Income Growth

Accurate Target

Accurate Target

Growth Rate

Growth Rate

Ethnic Dimensions of the US Market

For use only with Perreault and McCarthy texts.

Disposable Income Discretionary Income Empty Nesters

Senior Citizens

Gross National 

Product (GNP)

Birthrate

Metropolitan Statistical 

Area (MSA)

Key Terms