Group Influence: Demographics and Generations (handout)

2 Learning Outcomes Define demographics and understand its components Understand the role of the Census in influencing marketing strategy Understand the different generations that exist in the U.S., and identify some of their defining characteristics Understand how being a member of a particular generation influences some consumer behavior LO 1 LO 3 LO 2 LO 4

3 Demographics  Defined: description of a population in terms of its size, structure, and distribution  A census, taken every ten years, describes the U.S. population in terms of its size, structure, and distribution.  Website is  Defined: description of a population in terms of its size, structure, and distribution  A census, taken every ten years, describes the U.S. population in terms of its size, structure, and distribution.  Website is LO 1&2

4 Demographics - Size  How many people are there?  Living in the U.S.?  Living in the South? In the Midwest? In the Northeast?  Living in Mississippi?  Living in Oktibehha County?  Living in Starkville?  How is population size relevant to marketing strategy?  How many people are there?  Living in the U.S.?  Living in the South? In the Midwest? In the Northeast?  Living in Mississippi?  Living in Oktibehha County?  Living in Starkville?  How is population size relevant to marketing strategy? LO 1 LO 1&2

5 Demographics – Size &Distribution  So how many people are there?  The population of the U.S. is approximately 298 million today and is expected to surpass 320 million by  Distribution answers the question, “Where do the people live?”  Uneven regional growth: some regions are growing, some are shrinking West has experienced most growth in population, South is second fastest-growing Northeast and Midwest not growing as rapidly  So how many people are there?  The population of the U.S. is approximately 298 million today and is expected to surpass 320 million by  Distribution answers the question, “Where do the people live?”  Uneven regional growth: some regions are growing, some are shrinking West has experienced most growth in population, South is second fastest-growing Northeast and Midwest not growing as rapidly LO 1 LO 1&2

6 Demographics – Structure LO 1 Structure refers to the characteristics of the people and answers questions like: How old are the people? How well educated are the people? What do the people do for a living? So structure refers to the description of the population in terms of age, education, and occupation. LO 1&2

7 Demographics – Structure LO 1 Occupation: What do the people do for a living? Single best indicator of social class “What do you do?” concisely provides an instant picture for people The type of work one does and the types of individuals one works with over time also directly influence one's values, lifestyle, and all aspects of the consumption process. White-collar jobs are growing Increasing employment of women LO 1&2

8 Demographics – Structure LO 1 Occupation’s Influence on Consumption: LO 1&2

9 Demographics – Structure LO 1 Education: How well educated are the people? Americans are getting more formal education than ever before; Approximately 85% of Americans have a high school degree, and 27% have completed college. An educated consumer is different than an uneducated one! The quality and quantity of what they read is different They gather more information before making decisions They’re less likely to be blindly brand loyal LO 1&2

10 Demographics – Structure LO 1 Education’s Influence on Consumption: LO 1&2

11 Demographics – Structure Age Groups: Generations  People at the same age are all at the same stage in life and therefore share many common symbols and memories, which in turn may lead to similar consumption patterns.  Generations definition: a group of people who have experienced a common social, political, historical, and economic environment. Also called an “age cohort.”  Cohort analysis  Cohort analysis is the process of describing and explaining the attitudes, values and behaviors of an age group as well as predicting its future attitudes, values, and behaviors.  People at the same age are all at the same stage in life and therefore share many common symbols and memories, which in turn may lead to similar consumption patterns.  Generations definition: a group of people who have experienced a common social, political, historical, and economic environment. Also called an “age cohort.”  Cohort analysis  Cohort analysis is the process of describing and explaining the attitudes, values and behaviors of an age group as well as predicting its future attitudes, values, and behaviors. LO 3

12 Understanding American Generations LO 3 Pre-depression (Before 1930) Depression (1930 to 1945) Baby Boom (1946 to 1964) Generation X (1965 to 1976) Generation Y (1977 to 1994) Millennials (After 1994)

13 Pre-Depression Generation (born before 1930) LO 3 12 million Americans Composed of those individuals born before 1930, living through the Depression, WWII, and witnessing radical social, economic, and technologic change throughout their lives. Conservative and concerned with financial and personal security. Also concerned with the disposition of valued belongings; can be very emotional This generation can be sub-segmented based on physical and mental health

Depression Generation (born ) LO 3 28 million Americans were small children during the Depression or WWII and matured during the prosperous years of the1950s and early 1960s. Conservative and concerned with financial and personal security. They “invented” rock and roll and grew up with music and television as important parts of their lives. Many are in great health and are very active, breaking with stereotypical portrayals of older consumers. Many have accumulated wealth, thru home equity and savings Many are doting grandparents

15 Baby Boomer Generation (born ) LO 3 Almost 80 million, which is substantially more than the two preceding generations combined. Heavily influenced by the Kennedy assassination, the Vietnam War, recreational drugs, the sexual revolution, the energy crisis, the rapid growth of divorce, and the cold War, as well as rock and roll and the Beatles. Higher education levels than previous generations, high incomes, and dual career households Tend to be more self-centered, individualistic, suspicious of authority, and focused on the present than previous generations

16 Baby Boomer Generation (born ) LO 3 Are now or are fast becoming empty nesters Will continue the idea of “active retirement” begun by the Depression generation 2 nd homes, vacations, RVs Many take care of their parents Some were considered YUPPIES Considerable materialism Selfishness and greed Some YUPPIES are now MUPPIES

17 Generation X (born ) LO 3 Small in size – about 45 million, which is a little more than half the size of the Boomers; also called “Baby Busters” 1 st generation to be raised mainly in dual-career households, about 40% in a single-parent household due to divorce 1 st generation of reduced expectations Highly educated (more college grads than previous generations), heavy consumers (meaning they buy a lot of stuff, particularly electronics), not especially brand loyal Delayed getting married, delayed having children Cynical, critical, lazy 1 st generation to move back in with parents after college graduation

18 Generation Y (born ) LO 3 Almost as large in size as the Boomers – about 71 million; also called the “Echo Boom” Strong sense of independence and autonomy (self- sufficiency), as dual career HHs or single parent households are the standard Some Gen Y characteristics: assertive, self-reliant, emotionally and intellectually expressive, innovative, and curious. Even more educated than Gen X, and very tech-savvy; higher online presence than any previous generation

19 Generation Y (born ) LO 3 Can be subdivided into “Twentysomethings” and “Teens” Teens are an attractive market for retailers, because: 1. They have purchasing power 2. They are developing their preferences and tastes, which will influence their purchases for the rest of their lives Teens like brands that are their own, and not their parents’ Teens get bored easily

20 Millenials (born after 1994) LO 3 Our newest generation, est. to be 62 million people by 2010 The tween market! SKIPPIES Disney, Nickelodeon K.G.O.Y. – kids are growing older younger, mainly due to media influence

© 2009 South-Western, a division of Cengage Learning.21 How “Generations” Affect Consumption LO 4 Proper age positioning is critical for many products. Our age shapes the media we use, where we shop, how we use products, and how we think and feel about marketing activities.

22 How “Generations” Affect Consumption LO 4

23 Population Shifts LO 4 Age Category Pop’n 2010 (millions) Pop’n 2020 (millions) Percent change Under 1042,13245, % ,10343, % ,05143, % ,40844, % ,63840, % ,68042, % ,85138, % 70 and older28,07137, %