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 143

money to spend because wages tend to be higher. In addition, professionals—with

higher salaries—are concentrated there. But, remember that competition for con-

sumer dollars is usually stiff in an MSA.^15

Of course, none of these population shifts is necessarily permanent. People move,

stay awhile, and then move again. In fact, about 16 percent of Americans move

each year. Although about 6 out of 10 moves are within the same county, both the

local and long-distance mobiles are important market segments.

Often people who move in the same city trade up to a bigger or better house or

neighborhood. They tend to be younger and better educated people on the way up

in their careers. Their income is rising—and they have money to spend. Buying a

new house may spark many other purchases too. The old sofa may look shabby in

the new house. And the bigger yard may require a new lawn mower—or even a

yard service.

Many long-distance moves are prompted by the search for a better lifestyle. Many

affluent retirees, for example, move to find a more comfortable life. Young people

also hop from place to place—attracted by better job opportunities. This applies to

graduates moving to high-paying, new-economy jobs as well as recent immigrants

whose only choice may be a low-wage service job.

Regardless of why someone moves, many market-oriented decisions have to be

made fairly quickly after a move. People must find new sources of food, clothing,

medical and dental care, and household products. Once they make these basic buy-

ing decisions, they may not change for a long time. Alert marketers try to locate

these potential customers early—to inform them of offerings before they make their

purchase decisions. Retail chains, “national” brands, and franchised services avail-

able in different areas have a competitive advantage with mobiles. The customer

who moves to a new town may find the familiar CVS sign down the street and

never even try its local competitors.^16

So far, we have been concerned mainly with the numberof different types of

people—and wherethey live.

Earlier in this chapter you saw how GNP figures can be helpful in analyzing mar-

kets. But GNP figures are more meaningful to marketing managers when converted

to family or household income—and its distribution. Family incomes in the U.S.

generally increased with GNP. But even more important to marketers, the distribu-

tionof income changed drastically over time.

Fifty years ago, the U.S. income distribution looked something like a pyramid.

Most families were bunched together at the low end of the income scale—just over

a subsistence level—to form the base of the income pyramid. There were many

fewer families in the middle range, and a relative handful formed an elite market

at the top. This pattern still exists in many nations.

By the 1970s, real income (buying power) in the U.S. had risen so much that

most families—even those near the bottom of the income distribution—could

afford a comfortable standard of living. And the proportion of people with middle

incomes was much larger. Such middle-income people enjoyed real choices in the

marketplace.

This revolution broadened markets and drastically changed the U.S. marketing

system. Products viewed as luxuries in most parts of the world sell to “mass” markets

The mobile ones are an

attractive market

More people are in

middle and upper

income levels

Income Dimensions of the U.S. Market