Demographics & Trends I

MKT 750Dr. West

Agenda

Looking back…How can Target leverage its brand?Fixing behavioral segmentation

Snapshot of Demographic Trends Fads versus Trends

Examples of each How to tell them apart? How can we identify trends?

Food for thought

Who are ‘s current and potential customers? (age, income, lifestyle)Why do they prefer to its competitors?How well is positioned relative to its competitors?How can leverage its brand?

Behavioral Segmentation:

“Heavy versus Light” Users – “80/20 rule” Heavy Half Light Half

(top 50%) (bottom 50%)

5%95%

86%

90%

87%

71%

14%

10%

13%

29%Toilet Tissue

Hair Tonic

Colas

Canned Ham

Bourbon

Heavy Users: Efficiency/profit Caution: Majority Fallacy

(20%)

(32%)

(88%)

(48%)

(95%)

Percent of Consumers

Forecasting Requires:

Understanding the past

Monitoring demographic shifts

Anticipating trends

Snapshot of Demographic Trends

The US population more than tripled from 76 million in 1900 to 281 million in 2000.Growth of 32.7 million in the 1990s represents the largest numerical increase in any decade in history

Snapshot of Demographic Trends

Snapshot of Demographic Trends

Implications?

Opportunities:Sun City / Retirement Communities Increasing property values

ThreatsHealth care and insurance problems in FloridaPower Shortages in California

Snapshot of Demographic Trends

The US population grew increasingly metropolitan, from 28 percent in 1910 to 80 percent in 2000. The suburbs, rather than central cities accounted for most of the growth

By 2000 half of the population lived in suburban areas.

Snapshot of Demographic Trends

Implications?

OpportunitiesCooper MINI (BMW)Hybrid cars

Snapshot of Demographic Trends

Snapshot of Demographic Trends

Less developed countries represent 80.5 percent of the global population, this is up from 68 percent in 1950.

Snapshot of Demographic Trends

Implications?

Opportunities:New markets

ThreatsLacking infrastructure

Snapshot of Demographic Trends

National Trends & ProjectionsGrowth rate from 1990-2000 was 7.1% and is expected to increase by 50% by 2050.

Global Trends & ProjectionsWorld population increase, gradually slowing. Expected to hit 9 billion by 2050.

0

50

100

150

200

250

300

350

400

2000* 2010 2020 2030 2040 2050

U.S. 289,991,634

World 6,267,017,685

12:24 EST Jan 07, 2003

Snapshot of Demographic Trends

In 1900 half of the US population was less than 22.9 years old. By 2000, half of the population was more than 35.3 years old.

The population age 65 and over increased tenfold, from 3.1 million in 1900 to 35 million in 2000.

Snapshot of Demographic Trends

Snapshot of Demographic Trends

Snapshot of Demographic Trends

National Trends & ProjectionsThe “mature” segment of the population will increase dramatically.

65+ segment will increase from 12.7% to 23.5% of the pop.

85+ segment will increase from1% to 5.9% of the pop.

0

10

20

30

40

50

60

70

80

1980 1990 2000 2010 2030 2050 2080

65+

85+

Projected Growth (Millions)

Implications?

OpportunitiesPharmaceutical products (i.e. Viagra & Botok) Travel

ThreatsHealth care & insurance

Snapshot of Demographic Trends

In 1900, 1 out of 8 Americans was not classified as white/not-Hispanic.At the of the century, the ratio was 1 out of 4.

From 1980 to 2000, the Hispanic population more than doubledBy 2000, the percentage of minority populations ranged from 16 percent for people over age 65 and 39 percent for those under age 25.

Snapshot of Demographic Trends

National Trends & Projections

Snapshot of Demographic Trends

In 1900, the most common household contained seven or more people.Average household size declined from 4.60 in 1900 to 2.59 in 2000, or by 44 percent.

Snapshot of Demographic Trends

Snapshot of Demographic Trends

Snapshot of Demographic Trends

Households and Families The share of “family” households fell from 81percent in 1970 to 71percent in 1990 and has remained at that level. The number of single parents increased from 3.8 million in 1970 to 11.7 million in 1996.

Snapshot of Demographic Trends

Snapshot of Demographic Trends

Marital Status and Living Arrangements

Additional Trends

Two income families Higher education levels More “mobile”

What are the implications?

Fads versus Trends

Critical Questions for Identifying Lifestyle Trends:

Does it fit with lifestyle changes? What benefits does it provide? Can it be personalized? Who has adopted it?

Forecasting the Future

Requires: Understanding the past Monitoring demographic shifts Anticipating trends

Faith Popcorn's Website Yankelovich Monitor

Assignment

Read Chapter 11Memo 1 due on WednesdayTeam Research Proposal Due by Friday