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

American market. Already, more than 36 percent of American children are African

American, Hispanic, or Asian. Longer term, whites are expected to become a minor-

ity by 2050.

The buying power of ethnic submarkets is also increasing rapidly. Estimates sug-

gest that African American consumers now spend about $543 billion a year,

Hispanics more than $383 billion a year, and Asian Americans more than $250 bil-

lion a year. It’s also important to marketers that much of this buying power is

concentrated in certain cities and states. For example, half of all Hispanics in the

U.S. live in California and Texas, and another fourth live in New York, Florida,

Arizona, and New Jersey. Over 20 percent of San Francisco’s residents are Asians.

Companies may need separate strategies for these ethnically or racially defined

markets. Many of these strategies may require only changes in Place and Promo-

tion. But sometimes companies have more difficulty developing strategies and

segmenting ethnic submarkets. For example, Asian Americans emigrated from

China, Japan, the Philippines, India, Korea, Vietnam, Laos, and Cambodia. Many

come from very different backgrounds with no common language, religion, or cul-

ture. That adds to the marketing challenge; it means marketers must really

understand the basic needs that motivate specific target markets to think and act

as they do. This is important with any consumer market—regardless of people’s eth-

nic or racial background or where in the world they live. We’ll deal with that

important issue in more detail in the next chapter.^25

Strategy changes may

be needed

Demographic Dimensions of Global Consumer Markets 151

Conclusion

In this chapter, we studied population, income, and

other demographic dimensions of consumer markets.

Getting the facts straight on how about 6 billion people

are spread over the world is important to marketing

managers. We learned that the potential of a given mar-

ket cannot be determined by population figures alone.

Geographic location, income, stage in life cycle, ethnic

background, and other factors are important too. We

talked about some of the ways these dimensions—and

changes in them—affect marketing strategy planning.

We also noted the growth of urban areas in countries

around the world. The high concentration of population

and spending power in large metropolitan areas of the

U.S. has already made them attractive target markets.

However, competition in these markets is often tough.

One of the outstanding characteristics of U.S. con-

sumers is their mobility. Managers must pay attention to

changes in markets. High mobility makes even relatively

new data suspect. Data can only aid a manager’s judg-

ment—not replace it.

U.S. consumers are among the most affluent in the

world. They have more discretionary income and can af-

ford a wide variety of products that people in other parts

of the world view as luxuries. However, in the U.S., as in

most other societies, income is distributed unevenly

among different groups. Consumers at the top income

levels have a disproportionately large share of the total

buying power.

The kind of data discussed in this chapter can be very

useful for estimating the market potential within possi-

ble target markets. But, unfortunately, it is not very

helpful in explaining specific customer behavior—why

people buy specificproducts and specificbrands. Yet such

detailed forecasts are important to marketing managers.

Better forecasts can come from a better understanding of

consumer behavior—the subject of the next chapter.

Questions and Problems

1. Drawing on data in Exhibit 5-2, do you think that
   Romania would be an attractive market for a firm
   that produces home appliances? What about Fin-
   land? Discuss your reasons.
   2. Discuss the value of gross national product and gross
   national product per capita as measures of market
   potential in international consumer markets. Refer
   to specific data in your answer.