Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e

5. Demographic
   Dimensions of Global
   Consumer Markets

Text © The McGraw−Hill

Companies, 2002

Demographic Dimensions of Global Consumer Markets 129

spread population may make promotion more difficult, especially if there are lan-

guage differences or communication systems are poor. Of course, even in countries

with low population density, major cities may be packed with people.

The extent to which a country’s population is clustered around urban areas varies

a lot. In the United Kingdom, Argentina, Australia, Israel, and Singapore, for exam-

ple, more than 85 percent of people live in urban areas. See Exhibit 5-2. By contrast,

in Ethiopia, Nepal, and Uganda less than 17 percent of the people live in major

urban areas.

People everywhere are moving off the farm and into industrial and urban areas.

Shifts in population—combined with already dense populations—have led to

extreme crowding in some parts of the world. And the crowding is likely to get worse.

The worldwide trend toward urbanization has prompted increased interest in

international markets. For many firms, the concentration of people in major cities

simplifies Place and Promotion strategy decisions—especially for major cities in the

wealthiest nations. Affluent, big-city consumers often have similar lifestyles and

needs. Thus, many of the products successful in Toronto, New York, or Paris are

likely to be successful in Caracas and Tokyo. The spread of the Internet, satellite

TV, and other communication technologies will accelerate this trend.

However, keep in mind that many of the world’s consumers—whether crowded

in cities or widely spread in rural areas—live in deplorable conditions. These peo-

ple have little hope of escaping the crush of poverty. They certainly have needs—

but they don’t have the income to do anything about the needs.

Profitable markets require income—as well as people. The amount of money peo-

ple can spend affects the products they are likely to buy. When considering

international markets, income is often one of the most important demographic

dimensions.

There are a variety of different measures of national income. One widely used

measure is gross national product (GNP)—the total market value of goods and

services produced by a country’s economy in a year. Gross domestic product

(GDP) is a similar measure that often is used to describe the U.S. economy. The

difference between the two measures is that GNP for a nation does not include

income earned by foreigners who own resources in that nation. By contrast, the

There’s no market

when there’s no

income

In countries like the Philippines

and Venezuela, where consumers

have less purchasing power and

shops are small, Colgate is

gaining widespread acceptance

by providing products in

economical sizes.