1. Demographics & Trends I MKT 750 Dr. West

2. 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?

3. 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?

4. Behavioral Segmentation: “Heavy versus Light” Users – “80/20 rule” Heavy Users: Efficiency/profitCaution: Majority Fallacy (20%) (32%) (88%) (48%) (95%) Percent of Consumers

5. Forecasting Requires: Understanding the past Monitoring demographic shifts Anticipating trends

6. 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

7. Snapshot of Demographic Trends

9. Implications? Opportunities: Sun City / Retirement Communities Increasing property values Threats Health care and insurance problems in Florida Power Shortages in California

10. 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.

11. Snapshot of Demographic Trends

12. Implications? Opportunities Cooper MINI (BMW) Hybrid cars

13. Snapshot of Demographic Trends

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

15. Snapshot of Demographic Trends

16. Implications? Opportunities: New markets Threats Lacking infrastructure

17. Snapshot of Demographic Trends National Trends & Projections Growth rate from 1990-2000 was 7.1% and is expected to increase by 50% by 2050. Global Trends & Projections World population increase, gradually slowing. Expected to hit 9 billion by 2050. U.S. 289,991,634 World 6,267,017,685 12:24 EST Jan 07, 2003

18. 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.

19. Snapshot of Demographic Trends

21. National Trends & Projections The “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 from 1% to 5.9% of the pop. Projected Growth (Millions)

22. Implications? Opportunities Pharmaceutical products (i.e. Viagra & Botok) Travel Threats Health care & insurance

23. 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 doubled By 2000, the percentage of minority populations ranged from 16 percent for people over age 65 and 39 percent for those under age 25.

24. Snapshot of Demographic Trends National Trends & Projections

25. 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.

26. Snapshot of Demographic Trends

28. 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.

29. Snapshot of Demographic Trends

30. Marital Status and Living Arrangements

31. Additional Trends Two income families Higher education levels More “mobile” What are the implications?

32. Fads versus Trends

33. 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?

34. Forecasting the Future Requires: Understanding the past Monitoring demographic shifts Anticipating trends Faith Popcorn's Website Yankelovich Monitor

35. Assignment Read Chapter 11 Memo 1 due on Wednesday Team Research Proposal Due by Friday