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 147

cameras, new cars, foreign travel, cell phone services, and various kinds of recre-

ation—tennis, skiing, boating, concerts, and fine restaurants.^19

Income has a direct bearing on spending patterns, but many other demographic

dimensions are also useful in understanding consumer buying. Marital status, age,

and the age of any children in the family have an especially important effect on

how people spend their income. Put together, these dimensions tell us about the

life-cycle stage of a family. Exhibit 5-9 shows a summary of stages in the family life

cycle. In our discussion, we will focus on the traditional flow from one stage to the

next—as shown in the middle of the diagram. However, as shown at the top and

bottom of the exhibit, divorce does interrupt the flow for many people; after a

divorce, they may recycle through earlier stages.^20

Singles and young couples seem to be more willing to try new products and

brands—and they are careful, price-conscious shoppers. Younger people often earn

less than older consumers, but they spend a greater proportion of their income on

discretionary items because they don’t have the major expenses of home ownership,

education, and family rearing. Although many young people are waiting longer to

marry, most do tie the knot eventually. These younger families—especially those

with no children—are still accumulating durable goods, such as automobiles and

home furnishings. They spend less on food. Only as children arrive and grow does

family spending shift to soft goods and services, such as education, medical, and per-

sonal care. This usually happens when the family head reaches the 35–44 age group.

To meet expenses, people in this age group often make more purchases on credit,

and they save less of their income.

Divorce—increasingly a fact of American life—disrupts the family life-cycle pat-

tern. Divorced parents don’t spend like other singles. The mother usually has

custody of the children, and the father may pay child support. The mother and chil-

dren typically have much less income than two-parent families. Such families spend

a larger percent of their income on housing, child care, and other necessities—with

Spending varies over

the family life cycle

Young people and

families accept

new ideas

Purchases of luxuries, like overseas tourist travel, come from discretionary income.