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Chapter 5 The Canadian Consumer Market: Demographic and Economic Dimensions

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Demographic & Economic Trends

Demographic and Economic trends and conditions help marketing by:

discovering new marketing opportunities; and

giving advance warning regarding necessary changes in the existing marketing strategies.

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Demographic & Economic Trends

“ … provides marketing managers with critical information about the size, location, income, and characteristics of possible target markets”.

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Demographic & Economic Trends

Key QuestionKey Question:

How do these trends and conditions affect or change consumption patternsconsumption patterns and buying behaviourbuying behaviour? ?

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Identifying Potential Markets

Key markets factors or indicators to analyze include:

1. Population (growth & concentration);

2. Income/Expenditure date (income, income distribution, and product spending);

3. Family & Cultural/Ethnic structures (family size, and language).

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Factor #1Factor #1 - Population Trends

RegionalDifferences

Shifts toSuburban

AreasWhere do

people live?

The MobileMarket

Population Growth

KeyDomestic

Trends

KeyDomestic

Trends

5-3

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Regional Differences

Not all areas or regions of the country are changing in the same way or at the same speed.

Examples include:Calgary as compared to Saskatoon; or Ethnic population growth.

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Where do people live?

Quebec and Ontario together contain more than three-fifths of the country’s population.

However, ignoring B.C. and Alberta would mean losing access to potentially 7.04M consumers.

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Where do people live?

The size of Quebec and Ontario also makes these markets quite competitive.

As well, these two provinces can often have two very distinct linguistic and cultural traditions.

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Population Growth

Although the population of Canada has more than doubled since WWII, the population did not double everywhere.

Marketing managers, therefore, need to monitor where the more recent growth has occurred, as well as where it is likely to be in the future.

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The Mobile Market

The 1996 Census classified nearly half of Canadians as movershalf of Canadians as movers, and about half that population moved to a new community.

As well, the approximately 200,000 200,000 immigrants that move to Canadaimmigrants that move to Canada also create a marketing opportunity.

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Shifts to Suburbia …

Both people and industries have left the cities, often with jobs also moving closer to the suburbs.

This shift to Suburban areas has also created different purchase patternsdifferent purchase patterns.

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… and back to the City.

Many consumers, either tired with suburban life or experiencing changing family structures, have moved back t the city.

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Factor #2Factor #2 - Family & Cultural/Ethnic

BuyingBehaviourBuying

Behaviour

MedianIncomeGrowth

MedianIncomeGrowth

AccurateTarget

AccurateTargetGrowth

RateGrowth

Rate

5-4

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Group Exercise! Group Exercise!

What are some special considerations to be able to effectively market to people in the culture you know best?

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Ethnic Market in Canada

Ethnic groups (whether Ukrainian or Taiwanese) will often consume products and services in behaviourally different ways.

Different languages, religions, and cultural/social norms will sometimes equate to different consumption patterns.

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Ethnic Market (Calgary Example)(Calgary Example)

The China TownChina Town market in Calgary clearly offers a different line of products than the Eu ClaireEu Claire market just three blocks away.

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Targeting for Ethnic Markets

Mainstream CampaignsMainstream Campaigns - target cultural diversity in mainstream advertising.

Mother-Tongue MarketingMother-Tongue Marketing - try reaching consumers either in their communities or through mother-tongue media.

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Family/Household Composition

Non-traditional Households

Lifestages FallingBirthrates

Aging Population

The Baby BoomGeneration

KeyDomestic

Trends

KeyDomestic

Trends

5-3

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Non-Traditional Households

As household composition changes, marketers must also be prepared to change their target market and marketing mix.

Double Income No KidsSingle ParentUnmarried Couples

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Birthrate Changes

The Canadian “baby boom” generation is having fewer children.

This trend would indicate slower population market growth but higher disposable income per person.

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Aging Population

Lower birth rates and longer life spans for most Canadian citizens means the average age of Canadians is higher.

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Lifestages

Lifestages for marketing focuses on the different stages that each person passes through from birth to death.

Each stage has different spending patterns that must be considered when developing a marketing mix for particular segments.

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Factor #3Factor #3 - Income/Spending Trends

Essentially, the amount of consumer purchasing power affects the products consumers are likely to buy.

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Income Distribution

Pe

rce

nt

of

To

tal I

nco

me

Middle 20%Income Group

Lowest 20%Income Group

Top 20%Income Group

10

20

30

40

50

6.1% 11.9%

17.4%

24.0%

40.6%

5-6

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Consumer Spending Patterns

Key Termsand Issues

Key Termsand Issues

DisposableIncome

DiscretionaryIncome

ExpenditureData

FamilyLife Cycle

5-7