Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e
- Demographic
Dimensions of Global
Consumer Markets
Text © The McGraw−Hill
Companies, 2002Demographic Dimensions of Global Consumer Markets 153c. Because more firms are paying attention to fast-grow-
ing ethnic markets, Davis thinks competition may
increase in lines targeted at affluent African Ameri-
cans in the 45–59 age group. Because of price
competition, the line targeted at this group already
earns a lower average profit per unit. Further, as
more firms compete for this business, she thinks that
her “ratio of units sold to market size” may decrease.
Use the what-if analysis to prepare a table showing
how percent of profit from this group, as well as total
profit, might change as the ratio of units sold to mar-
ket size varies between a minimum of .001 and a
maximum of .010. Explain the implications to the
firm.
For additional questions related to this problem, see
Exercise 5-4 in the Learning Aid for Use with Basic Mar-
keting,14th edition.data, and the relationships discussed above, into a
spreadsheet.
a. Briefly compare the profit data for 2000 and esti-
mated profit for 2005 as it appears on the initial
spreadsheet. What is the basic reason for the expected
shift? What are the implications of these and other
data in the spreadsheet for Stylco’s marketing strategy
planning?
b. The rate of growth or decline for different age groups
tends to vary from one geographic region to another.
Davis thinks that in the market areas that Stylco
serves the size of the 35–44 age group may decrease
by as much as 10 to 12 percent by 2005. However,
the Census Bureau estimates that the decline of the
black 35–44 age group for the whole country will only
be about 1.7 percent. If the decline in the target
market size for Davis’ market areas turns out to be
1.7 percent rather than the 10.1 she has
assumed, what is the potential effect on profits from
the young adult line? On overall profits?