Chapter V
DEMOGRAPHIC DIMENSIONS OF GLOBAL
CONSUMER MARKETS
TARGET MARKETERS FOCUS ON THE CUSTOMER
Need to ask three important questions:
1) What are the relevant segmenting dimensions?
2) How large is the segment?
3) Where is the segment?
Demographic dimensions: Involve size, location, and characteristics
of target markets.
PEOPLE WITH $$ MAKE MARKETS
US population is less than 5% of the world population
US population is becoming more concentrated as people move to industrial/urban areas
There is no market when there is no income
GNP is best measure -- see Exhibit 5-2
What do third world countries need? Healthy diets, etc. See page 132
POPULATION TRENDS IN THE US CONSUMER MARKET
See exhibit 5-3
Our population is growing at less than 10%/yr.
Birth rate is declining
Average age is rising. See exhibit 5-6
Household composition is changing: 50% of all marriages end in divorce.
Nonfamily households are increasing. 25% are single parent households
17% of Americans move each year
MSA==area of 50,000+
CMSA==area of 1,000,000+
INCOME DIMENSIONS OF THE US MARKET
Median family income is $42,300
Top 20% of families receive 47% of income
Top 5% of families receive 20% of income!
CONSUMER SPENDING PATTERNS ARE RELATED TO INCOME
Disposable income: What is left after taxes
Discretionary income: What is left of disposable income after paying
for necessities
Spending varies over family life cycle (Exhibit 5-9)
For example, singles and young couples try new products and are price conscious.
Teens spend $
Empty nesters: Finally, you have money to spend when the kids leave. The question is, are you healthy enough to enjoy the benefits?
Senior citizen make up 13% of the market and it is growing
ETHNIC DIMENSIONS OF THE US MARKET
More than 10% of US families speak language other than English
Median age is lower and birthrate is higher
By 2010, more than 40% of American children will be Black, Hispanic,
or Asian
BEHAVIORAL SCIENCES HELP UNDERSTAND BUYING PROCESS
Economists assume consumers are economic men: they know all facts, compare,. maximize value, etc.
Above view assumes following economic needs: economy of purchase convenience
efficiency dependability improvement of
earnings
PSYCHOLOGICAL INFLUENCES WITHIN AN INDIVIDUAL
See exhibit 6-1
Needs motivate consumers:
Needs are basic forces motivating a person to do something. When a need is not satisfied, drive is created.
PSSP: solve lower order needs, then move on to higher order needs. See exhibit 6-3
Perception determines what consumers see and feel:
Selective exposure: we seek only that which
interests us
Selective perception: we screen out conflicting
information
Selective retention: we remember only what
we want to.
Learning determines response:
Cues: stimuli in the environment
Response: effort to satisfy drive
Reinforcement: if response is followed by satisfaction
Many needs are culturally learned
Attitudes relate to buying
Belief: person’s opinion about something
Ethical issues: May have to address issues such as meaning of low fat, lite, etc.
Lifestyle dimensions: may help. See exhibit 6-5
SOCIAL INFLUENCES AFFECT CONSUMER BEHAVIOR
INDIVIDUALS ARE AFFECTED BY PURCHASE SITUATION
Purchase reason varies.
Time and surroundings can also make a difference
CONSUMERS USE PROBLEM-SOLVING PROCESSES