the demographic impact of changing lifecycles

The Demographic Impact of Changing Lifecycles

Observa(ons & Predic(ons

JOEL BEVIN

8 December 2010

 Income and consump?on trends of the future

8 December 2010 2

 Marke?ng to future genera?ons

 Genera?ons and life phases of the future  Global popula?on trends

 The social and economic success of each na?on will be individually influenced by global demographic trends.

Key messages

8 December 2010 3

 Lifecycles have changed markedly over the last half century and we must plan for similar changes over the next half century.

 As the habits, behaviours and spending paLerns of each genera?on change, so to will the marke?ng model used to reach each target market.

 Combining demographic trends with the changing lifecycle helps us understand the who, how, what, when and why ques?ons that form the basis of demographic marke?ng.

 Global popula?on trends  Genera?ons and life phases of the future  Marke?ng to future genera?ons


8 December 2010 4

0

1

2

3

4

5

6

7

8

9

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

World popula?on 1900-‐2100

Source: United Na9ons Popula9on Division, 2010

Billion

s

War

Figh?ng rather than reproducing...1 billion extra

people over the 50 years to 1950

Baby boom

Making up for lost ?me…4 billion added over the 50 years to 2000

Capacity

Humanity peaks…expected to top 8.9 billion in 2068

8 December 2010 5


0 – 14 2010 to 2050

Rank 2010 (Rank 2050)

Country 2010 (million)

2010-‐2050 (million)

1 (1) India 375 -‐73

2 (2) China 265 -‐50

3 (3) Nigeria 68 11

4 (8) Indonesia 64 -‐12

5 (4) United States 63 6

6 (6) Pakistan 59 5

7 (7) Bangladesh 55 -‐2

8 (10) Brazil 53 -‐8

9 (9) Ethiopia 38 13

10 (5) Congo 33 31

11 (12) Philippines 32 -‐4

12 (17) Mexico 31 -‐9

13 (14) Egypt 25 -‐1

14 (18) Viet Nam 24 -‐3

15 (24) Russia 21 -‐5

16 (22) Turkey 20 -‐3

17 (16) Tanzania 19 4

18 (21) Iran 19 -‐1

19 (15) Kenya 17 7

20 (31) Japan 17 -‐6

Top 20 1,299 -‐100

Remainder 560 65

World 1,859 -‐35

Growth

Decline

Posi9ve growth due to a higher birth rate of Mexican migrants

Economic and demographic stagna9on throughout much of Europe

High third-‐world birth rate remains in Africa

Chinese one-‐child policy and Asian development sees birth rate decline

Economic development in South America drives the birth rate down

No change

8 December 2010 6

15 – 64 2010 to 2050

Rank 2010 (Rank 2050)


2010-‐2050 (million)

1 (2) China 973 -‐114

2 (1) India 780 336


4 (6) Indonesia 161 29

5 (10) Brazil 132 28

6 (4) Pakistan 107 89

7 (7) Bangladesh 105 66

8 (15) Russia 102 -‐36

9 (5) Nigeria 86 107

10 (21) Japan 82 -‐30

11 (12) Mexico 72 10

12 (14) Viet Nam 62 14

13 (11) Philippines 57 38

14 (25) Germany 54 -‐13

15 (17) Turkey 53 11

16 (16) Iran 52 12

17 (13) Egypt 50 30

18 (9) Ethiopia 49 73

19 (27) Thailand 46 -‐5

20 (28) France 41 -‐1

Top 20 3,276 682

Remainder 1,241 674

World 4,518 1,356

Growth

Decline A shrinking workforce…may force Europe to open borders to working-‐age migrants

Declining workforce in China, Japan and Russia…a risk to future economic growth?

Expanding workforce in the Americas…supported by high birth rate and liberal immigra9on policy

Workforce expands in Africa…the new global labour pool?

Increasing workforce makes south-‐east Asia the outsourcing hub of the world Source: United Na9ons Popula9on Division, 2010

8 December 2010 7

65+ 2010 to 2050

Rank 2010 (Rank 2050)


2010-‐2050 (million)

1 (1) China 132 304

2 (2) India 75 216


4 (6) Japan 37 18

5 (11) Russia 22 10

6 (10) Germany 21 11

7 (4) Indonesia 16 51

8 (5) Brazil 16 47

9 (13) Italy 16 9

10 (14) France 14 11

11 (15) United Kingdom 13 10

12 (18) Spain 10 11

13 (8) Mexico 9 27

14 (30) Ukraine 9 2

15 (7) Pakistan 8 29

16 (9) Bangladesh 7 27

17 (20) Thailand 7 14

18 (21) Rep. of Korea 6 14

19 (29) Poland 6 6

20 (12) Viet Nam 6 23

Top 20 482 904

Remainder 153 354

World 635 1,258

Growth

Re9rees draw on social security and health care…worsening dependency ra9os (re9red person per worker) may threaten social order and economic growth around the world

The post-‐WWII spike in births created the genera9on of Baby Boomers…the first one re9ring next year in 2011


8 December 2010 8

United States – age profile 1950, 2010 and 2050

Younger Older

13%

20%

8%

N = 307 m

N = 152 m

N = 439 m

65% 27%

65+ 15-‐64 0-‐14

20%

19%

67%

61% 2050

2010

1950


8 December 2010 9

Younger Older

China – age profile 1950, 2010 and 2050

8%

24%

4%

N = 1.35 b

N = 555 m

N = 1.41 b

20%

15%

34%

72%

61%

62%

2050

2010

1950


8 December 2010 10

65+ 15-‐64 0-‐14

Younger Older

India – age profile 1950, 2010 and 2050

5%

14%

3%

N = 1.22 b

N = 372 m

N = 1.66 b

31%

18%

37%

64%

67%

59%

2050

2010

1950


8 December 2010 11

65+ 15-‐64 0-‐14

Younger Older

Japan – age profile 1950, 2010 and 2050

23%

36%

5%

2050

2010

1950

N = 128 m

N = 83 m

N = 101 m

13%

11%

35%

64%

53%

60%


8 December 2010 12

65+ 15-‐64 0-‐14



8 December 2010 13

The Lifecycle 1950

0 20 21 59 60

CHILDHOOD RESPONSIBILITY LIFESTYLE

• Large tradi?onal family structure • Limited independence

• Adulthood – begins drinking and vo?ng • Chooses a career and wife (both for life) • Income used to maintain household

• Re?rement is planned • Shorter lifespan and reduced consump?on

8 December 2010 14

The Lifecycle 2010

0 14 30 59 60

CHILDHOOD RESPONSIBILITY LIFESTYLE

• Smaller family • Focus on educa?on & extra-‐curricular ac?vi?es

• Begin family with dual incomes • Meaningful career sought • Begins to plan for re?rement

• Officially re?red but remains working • Focus on health to maintain independence

EXPERIENTIAL

• Independent but lives at home • Con?nues educa?on • Experiments with careers & lifestyles • Global network

15 29

8 December 2010 15

The Lifecycle 2050

0 9 30 59 60

CHILDHOOD RESPONSIBILITY CONSOLIDATE

• Childhood shortened • Demands independence

• No expecta?on to begin family • Diverse lifestyles which remain in a state of flux

EXPERIENTIAL

• Delayed responsibility allows freedom • Personal & professional purpose merged • Independent but lives at home

10 29 79 80

LIFESTYLE

• Independent • Financial & poli?cal power

• Con?nues to work (personal & financial reasons • Transient lifestyle & loca?on

8 December 2010 16

The Consump?on Lifecycle 2050

0 9 30 59 60


• Independent consump?on choices

• Will not sacrifice lifestyle for family

EXPERIENTIAL

• Experien?al consump?on • No obliga?on to save & spends freely but with purpose

10 29 79 80

LIFESTYLE

• Longer life span requires managed spending

• Invests in self educa?on and health

8 December 2010 17

The Communica?on Lifecycle 2050

9 30 59 60


• Social network separate to family • Communica?on instantaneous and unrestricted

• Renewed focus on fostering personal rela?onships

EXPERIENTIAL

• Merged social & professional network • Wide and varied circle of friends

10 29 79 80

LIFESTYLE

• Technology maintains connec?on to social networks

• Connected to globally-‐spread friends & family

0

8 December 2010 18

The Work Lifecycle 2050

0 9 30 59 60


• Dual-‐income parents reinforces the importance of career

• Career & country of residence are transient • Iden?ty to be defined by our work

EXPERIENTIAL

• Early working age • Combines travel & work • Limited responsibility allows mul?ple careers

10 29 79 80

LIFESTYLE

• Con?nues to work in casual or volunteer role

• Remains in workforce on own terms • Demands flexibility

8 December 2010 19

The Health Lifecycle 2050

0 9 30 59 60


• Benefits from smaller family

• Health rou?ne part of lifestyle using tradi?onal and modern therapies

EXPERIENTIAL

• Greater health awareness • Self-‐diagnose using social network • Invest in health through natural & ar?ficial means

10 29 79 80

LIFESTYLE

• Physically independent • Chooses preventa?ve measures

• Invests for healthy old age • Pursues ‘youth’ with despera?on

8 December 2010 20

The Educa?on Lifecycle 2050

0 9 30 59 60


• Na?onal and interna?onal tes?ng begins

• Mul?ple careers and constantly reskills • Online educa?on crucial in busy lives

EXPERIENTIAL

• Interna?onal curriculum allows global mobility • Online educa?on demanded and accepted by students and industry

10 29 79 80

LIFESTYLE

• Pursues further unofficial educa?on

• Transi?on to re?rement with educa?on

8 December 2010 21



8 December 2010 22

Era 1 – Produc?on

PRODUCTION

• Simplified supply chain • Scarcity during industrial revolu9on meant manufacturers could sell all that they could produce. • Focus was on produc9on and distribu9on at the lowest cost

Factory

Vendor

Consumer

8 December 2010 23

Era 2 – Sales

SALES

• Increased compe99on at start of 20th century. • Greater dialogue between factory and vendor • Focus on selling using communica9ons, adver9sing and branding.

Factory Vendor

Consumer

8 December 2010 24

Era 3 – Segmenta?on

SEGMENTATION

• Market becomes saturated from 1960 onwards. • Intense compe99on for consumers leads to introduc9on of ‘marke9ng’ Focus on communica9on and branding with segmented consumers.

Factory Vendor

Consumer Consumer

Consumer Consumer

Marke9ng

8 December 2010 25

The next era – Consumer-‐defined

CONSUMER-‐DEFINED

• Consumers define the product. • Vendor, marke9ng department and factory work together to sa9sfy consumer. • Focus on differen9a9on and collabora9on.

Vendor Factory

Consumer Consumer

Consumer Consumer

Marke9ng

8 December 2010 26



8 December 2010 27

Average annu

al income by age of h

ouseho

ld

reference pe

rson

($US)

Income aner tax 2008

-‐

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

<25 25-‐34 35-‐44 45-‐54 55-‐64 65+

Source: US Consumer Expenditure Survey, 2007-‐08

8 December 2010 28

Food spend 2008

-‐

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

<25 25-‐34 35-‐44 45-‐54 55-‐64 65+

8 December 2010 29 Source: US Consumer Expenditure Survey, 2007-‐08

Average annu

al spe

nd by age of hou

seho

ld

reference pe

rson

($US)

Housing spend 2008

-‐

5,000

10,000

15,000

20,000

25,000

<25 25-‐34 35-‐44 45-‐54 55-‐64 65+


Average annu

al spe

nd by age of hou

seho

ld

reference pe

rson

($US)

Apparel spend 2008

-‐

500

1,000

1,500

2,000

2,500

<25 25-‐34 35-‐44 45-‐54 55-‐64 65+


Average annu

al spe

nd by age of hou

seho

ld

reference pe

rson

($US)

Health spend 2008

-‐

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

<25 25-‐34 35-‐44 45-‐54 55-‐64 65+


Average annu

al spe

nd by age of hou

seho

ld

reference pe

rson

($US)

Educa?on spend 2008

-‐

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

<25 25-‐34 35-‐44 45-‐54 55-‐64 65+


Average annu

al spe

nd by age of hou

seho

ld

reference pe

rson

($US)

Social security spend 2008

-‐

5,000

10,000

15,000

20,000

25,000

<25 25-‐34 35-‐44 45-‐54 55-‐64 65+


Average annu

al spe

nd by age of hou

seho

ld

reference pe

rson

($US)

 Future demographic marke?ng techniques must balance quan?ta?ve demographic forecasts with qualita?ve forecasts

Concluding messages

8 December 2010 35

 New global demographics will challenge na?onal & interna?onal management of an ageing popula?on and a shrinking workforce

 Changing lifecycles require micro-‐segmenta?on in order to reach and service the demands of new genera?ons

 New era of collabora?on between companies and consumer who are increasingly able to sa?sfy themselves

 As lifecycles change so does the ?meline of purchasing decisions – earlier in some cases and delayed in others

Arigato gozaimasu! Ques?ons?

JOEL BEVIN

[email protected]

UNIVERSITY OF POMPEU FABRA (BARCELONA)

8 December 2010

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