Overview of Demographic Information | Tuesday December 30th, 2003 | |
What can I learn from demographic information?
Demographic information is collected in a variety of ways and includes statistics relating to population, age, composition of household, education, ethnicity/race and income. This type of information is available from government agencies like the U.S. Census Bureau, Department of Commerce at www.census.gov and the County and City Data Book as well as from industry periodicals, business publications, newspapers and magazines.
Having identified market opportunities through demographic profiles, the new business owner can focus marketing resources where they will be most effective, both long and short-term.
Population
Population trends are important indicators in developing strategies for sales of products and services. The aging of America, for example, has caused every consumer product manufacturer to reevaluate its product lines and ensure inclusion of products targeted at baby boomers and beyond, the largest population segments.
Geographic population shifts are also important considerations in making strategic marketing decisions. Trends include continued movement into the Sunbelt states, movement away from rural and into urban areas, and movement out of cities into suburbs, with some movement back into cities that are aggressively pursuing urban renewal.
Age
Baby boomers, the largest population segment, have been the market drivers in consumer goods and services for several decades. As this group moves through its 50’s into its 60’s, savvy marketers are ready to provide the appropriate products and services that baby boomers demand. By the year 2020, there will be twice as many elderly consumers as there are teenagers and the retirees will be looking for senior living situations, quieter forms of recreation, single-portion food packaging, life and health-care and travel opportunities.
The children’s youth and young adult segments began declining at the turn of the 21st century. Product and service providers targeting these groups will be working hard for bigger shares of smaller markets.
Households
The size of the American family has been decreasing steadily due to people marrying later and having fewer or no children and an increase in women working outside the home. As a result, traditional roles have shifted, offering both men and women as target markets for purchases of food, appliances, automobiles, etc.
The number of non-family households continues to increase. Young adults living alone, adults choosing cohabitating situations and the incidence of single, separated, widowed and divorced individuals has created the need for a variety of living arrangements that continue to change consumer spending patterns.
Education
Educational levels of the American population have continued to increase, with over ¼ of the population having completed college. As education levels increase, more of the population has moved into white collar employment, creating the demand for quality products, books, magazines, luxury automobiles and travel.
Ethnicity/Race
Ethnic population groups have specific buying needs and wants. Identification of concentrations of these specific groups assists in developing new products and services as well as developing targeted marketing strategies.
The U.S. African American population is growing in affluence and is strongly motivated by quality and selection. With a total annual purchasing power in excess of $250 billion entering the 21st century, this market is attractive because they are price conscious, brand loyal and hop in neighborhood stores.
Hispanic consumers number more than 40 million in the U.S., with annual purchasing power exceeding $150 billion. This group is also brand and quality conscious. Reaching the Hispanic consumer has become easier through an increased number of Spanish-language broadcast and print media.
The Minority Business Development Agency recently released three important
research studies: Minority Purchasing Power: 2000-2045; Minority Population Growth:
1995-2050; and Dynamic Diversity-Projected Changes in U.S. Race an Ethnic Composition: 1995-2050. You may download these reports by going to www.mbda.gov/.
Income
Real income began increasing in the late 1980’s and is projected to continue through the first decade of the 21st century, as baby boomers enter their most productive wage earning years and there is an increase in smaller families and dual-career households. Time-saving devices, travel, entertainment, physical fitness products, cultural activities and continuing education will be in demand from these large segments of the buying public.
New business owners can use demographic trends to identify potential customer segments, set priorities of specific product and service offerings and make strategic decisions on where to place their marketing emphasis.
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