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Chapter 6

No Jobs when ready Baby Boomers not retiring. Very educated stayed ... How much money do you have available to spend on different products? ...

Angelica
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Chapter 6

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    Slide 1:Chapter 6

    How many people live in the United States? Of what significance is that figure to Marketers? How often is the U.S. Census taken? What kinds of information is gathered? Why is that information important to Marketers?

    Slide 2:The Domestic Marketplace

    2 markets for products The Consumer Market Age group Ethnic background Income Geographics Psychographics The Industrial Market Type of business

    All people who make purchases for personal use Current Population: Estimated Population Year 2025: 335 MILLION Where is the Growth? West – 19.7% (Nevada – 66.3%!) South – 17.3% Midwest – 7.9% (Illinois – 8.6%) Northeast – 5.5% U.S. 295,417,407 World 6,417,357,287 18:49 GMT (EST+5) Feb 07, 2005 Up 22% in 25 years Largest American increase: 1990 – 2000 with a 13.2% increase! Net Gain of 1 person every 12 seconds Demographic shift will make the consumer market very different from what it is today.

    Slide 5:Study Demographic Variables

    Age Ethnic background Income Gender

    Slide 6:Geographic and Psychographic Trends

    Considered All factors put together provide a comprehensive picture of the U.S. consumer market.

    AGE Generation: when you were born. Shares certain characteristics Cohort: when you came of age** **much more important because it defines the group: music, politics, war, culture AGE War Babies Those over 65 will number 35 million by year 2000--an increase of 4 million since 1990 “Well-heeled older persons” 55-60 years old AGE War Babies Ages 60-65 still working peak earning power High income and newfound freedom from responsibilities! AGE Luxuries have been EARNED! It is my turn! Housing Market – not downsizing Reflects desired lifestyle Car – minivan is gone! Healthy, Active, Social AGE Depression Babies Ages 66-75 “Young Elderly” Financially secure Active & Healthy Targets for leisure market AGE 1990 – 4% 2000 – 12.4% Companies prepared them for retirement! Travel Market: cruises,, trips Education: computers, hobbies, students! Housing: Retirement communities NOT nursing homes AGE GI Generation Ages 75+ Primarily Women Poor Health Less Mobility (Disability?) Targets for nursing homes and services for the elderly (health) AGE Men are dying off Less active, rely on others 30% live alone Whoopie Market is a group of Haves and Have Nots Retirement, Medical Expenses, FIXED INCOME What do we sell them? Easy open Small servings Cosmetics Medical Equipment Comfortable clothing, shoes AGE Baby Boomers (effects of WWII) Born 1946-1964 1990 -- 77 million 1997 -- 78 million Marketers have focused on them for many years because they are the largest percentage Prime targets for luxuries & recreation items AGE Now at Peak Income Getting older, but NOT getting old! Use their music, attitudes, stars, culture when promoting AGE Generation X Born 1965-1980 “Baby Bust Generation” 44 Million Strong Latchkey Generation – self sufficient High levels of education (47% higher ed) Felt effects of 1990 Recession Financially cautious and conservative Fashionable, Complainers AGE YOU OWE ME! Disappointed by difficult economic times Entered job market during 1990 recession No Jobs when ready – Baby Boomers not retiring Very educated – stayed in college Latch Key Generation – home alone with TV “Held together by TV trivia and credit card debt” AGE Consume Cosmetics Fashionable clothing Movies Electronic items Marketing Tactics Sharp images Music Sense of humor AGE Gen Y Born 1980-2002 Baby Boomer’s Babies 76 Million Parents at peak earning potential Brand Loyalty, Influencers of family budget “Luxuries” are now “Needs” AGE Moms have own careers – financially better off Parents indulging kids Teens spent $89 billion in 1994 Needs: 2nd Cars, Cell Phones, Cable, Sports Camps (these items used to be luxuries) AGE Marketers build brand loyalty with this generation. Frito-Lay has seen a rise in chip snacking by adults, whom they attracted (“hooked”) as teenagers and have maintained. MasterCard wants to do the same thing by offering teens their own credit cards. Sony learned that 60% of 12-17 year old have their own CD players. Teens have a lot of buying power (shampoo, deodorant and toothpaste). AGE Gen Y Estimated Influence on Family Budget: $132 BILLION AGE Children ages 4-12 increased 10% from 1990 to 1994. What new products could we offer this group? Millennials – born after 2000 AGE Children’s Market continues to grow as an underserved market Strong Influencers Food, entertainment, cars, vacations Millennials ETHNICITY U.S. Population White African-Americans Hispanics Asian-Americans ETHNICITY African-American 33 Million spend $350 Billion Influenced by companies who show community support ETHNICITY African-American Maybelline Black History Month Promotions Coalition of 100 Black Women A national organization that dedicates its efforts to improving the lives of women. ETHNICITY African-American Revlon Supports the United Negro College Fund ETHNICITY Hispanics 26 Million in 1994 Grew at 7 times the rate of the general population between 1980 and 1990 31 Million in 2000 Growth is due to immigration and tendency towards larger families Education well below rest of population Larger households (3.53 v. 2.48) Larger families (3.4 v. 2.6) Younger than average (31% are younger than 15) ETHNICITY Marketing Information: Use language in promotion Use Spanish-language television Hispanics watch T.V. 3.6 hours a day Avoid treating all nationalities as the same (Mexican, Puerto Rican, Cuban, etc.) Gain a thorough knowledge of Hispanic culture. 70% of Hispanics are Roman Catholic Hispanic culture centers around families Hispanics ETHNICITY Marketing Information: Food Producers package in larger quantities due to the larger family size. Key Cities: New York City, Los Angeles, Miami, San Francisco, and Washington D.C. Hispanics ETHNICITY Asian-Americans 7.9 Million in 1992 10 Million in 2000 Median household income higher than average Concentrated in specific markets: LA, NYC, Honolulu 16 different nationalities fall into this category. More college degrees and professional jobs ETHNICITY Income higher due to higher education 57% of this market located in CA, NY, HI Easier for marketers to use local media to reach this group rather than more costly national media INCOME How much money do you have available to spend on different products? Disposable Discretionary INCOME Disposable Income Gross Pay – Taxes = Net Pay Rent, Utilities, Transportation Food, Clothing, School Supplies Medicine, Personal Care Marketers are interested is changes of disposable income INCOME Discretionary Income Money left over after paying for basic living expenses Marketers of Luxuries Entertainment, Jewelry, Fashion INCOME Socioeconomics 7.3% of households earn pretax income over $100,000 Account for 1/2 of all discretionary spending Household operations New Cars Trucks Education Household Furnishings Household equipment Women’s and girls apparel and services INCOME Socioeconomics 33% of households earn less than $25,000 Growing notice is being taken of this lower income group Dollar General Wal-Mart INCOME Real household income has increased Midwest has highest increase South lowest household income, Northeast highest Inequality is increasing Bottom 20% is getting less every year < Top 20% is getting more every year > 1/2 of people in poverty are elderly and children Demographics Where are people moving… Trends Moving South, West and Southwest Many retirees are relocating to those parts of the country Industries moving here in search of lower labor and land costs.

    Slide 42:Psychographics

    Psychographic trends tend to follow demographics Ages change attitudes and lifestyles

    Slide 43:Psychographics

    Changes are related to the differing sizes and habits of the different generations Movement through the family life cycle causes change. Family life cycle Single Newly married Full nest (children at home) Empty nest (children leave home) Sole survivor (widowed)

    Slide 44:Psychographic Trends

    Having Fun Increase spending on entertainment, theme parks, sports, toys, electronics Eating Naturally Nutritional concerns Fat, cholesterol, calories, Low Carb Exercising at any Age Relieving tension, social, new equipment Shopping for value Outlet stores, warehouse stores,value meals Green Marketing Recycle, reduce package, conserve natural resources

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