-Demographics
-Population Demographics
-Age cohorts

[SLIDE 1]

Demography is the study of people's vital statistics, such as age, race, ethnicity, and location. Demographics matter because marketing comes down to sending messages to people, and different groups of people have different interests and ways of communicating.

[SLIDE 2]

Understanding the population matters as where which people live impacts marketing plans and costs.

For instance, India and China are the two largest markets, having over 1.3 billion people each, but many people have lower disposable income than in the advanced world. The USA is third, with over 300 million people, with a higher standard of living. For different reasons, there are large but somewhat different market opportunities in those nations and around the world.

Within a country, there are regional differences. The markets in the Northeast and the Southwest of the USA can have very different interests. In a similar way, the large retirement communities in Central Florida have a different market demand than in the high-tech centers of San Francisco or Seattle.

Even within a state, there are different attitudes and interests that drive many urban and rural communities. The rural population of the US is aging, and, outside the oilfield growth, rural populations are seeing a net populating decrease.

In previous generations, married and multi-generational households were a higher percentage of the population. In 1970, 86% of American women were married by the time they were 25-29. Projections now say 80% will not be married until 35-39 by 2030.

Population demographics are necessary as a starting point in understanding markets, but more fine tuning is needed.

[SLIDE 3]

One of the first ways demographers break down the population data is by age cohorts, clumping people by generation in order to find similar traits and interests. In current marketing terms, in the USA, there are five main cohorts:

-Tweens
-Teens
-Millennials
-Generation X
-Baby Boomers

[SLIDE 4]

Tweens are in the transition from child to teenager, between 8 and 12 years of age. There are over 20 million tweens in the USA and they directly or indirectly control over $180 billion in revenue.

Unlike all other cohorts other than teens, tweens have grown up in the mobile, digital world. As of this writing, 78% of tweens own a mobile phone. With access to information and social media platforms, tweens have opinions and sophistication beyond that seen in previous generations at that age. Microtransactions and advertising in mobile games are valuable ways of reaching tweens.

Researchers identify seven developmental needs of this cohort, meaning there are many ways marketers can target the cohort. Those needs are:

-Physical activity
-A sense of accomplishment and achievement
-Self-definition
-Creative expression
-Positive social interaction
-Structure and clear limits
-Meaningful participation

[SLIDE 5]

The next cohort is teens, those between 13 to 19 years of age. There are 25 million teens in the US. They are a truly digital cohort, spending 72 hours a week on electronics. That is not, mind you, solely on electronics but also via multi-tasking. Seventy-five percent of teens listen to music while doing homework. 95% of teens use the internet and of them, approximately 90% use social media.

There are differences in usage. For instance, 62% of teen boys say they play video games “a lot”, while only 20% of teen girls say the same. On the other hand, 44% of girls say they use social media “a lot” while only 20% of boys reply the same.

An interesting twist supporting teen buying power is that teens are passing technology knowledge to their parents, pushing the parents to buy smart phones and driving home technology purchases.

As much as teens are at the forefront of mobile technology, most would still prefer physical items to intangibles such as music and games. A Packaged Facts Study showed the 75% of teens would rather have a new pair of shoes over 50 downloads.

[SLIDE 6]

Millennials, born 1979-1994, have the first of their generation entering their 40s in 2019. While initially a smaller group than the Baby Boomers, immigration and the aging of the Boomers means that millennials have surpassed them now with 75 million members. They generate $200 billion in annual purchases and estimates are that they will spend more than $10 trillion over the lifetime of the cohort.

They are not just the largest cohort, given their ages from the early 20’s to 40, they are the largest segment of the workforce. Jobs have changed since the Baby Boomers entered the workforce, with individual jobs now averaging 16 months in length. This has cost employers money in training and retention, and many companies are starting to revisit their view of employees as replaceable clones. Ernst & Young, IBM, Coca-Cola, Visa and others have changes policies to build retention. These include roundtables, mentors and processes for building internal networks between millennials at the companies.

Given their ages, millennials are also the primary cohort having babies. Eight-five percent of babies born in 2015 were born to Millennials.
Millennials were also the first generation raised from childhood with computing technology. 92% use smartphones and 62% say that they are more likely to become loyal customers if a brand engages them on social media.

[SLIDE 7]

Generation X members are in their prime earning years. That is one reason why the 65 million people in Generation X account for 31% of USA income dollars.

This generation spent more time than other generations on their own in their youth, leading to a focus on independence and adaptability.

As their children are older than those of Millennials, the costs of college and other expenses make savings a key priority for this cohort. They also still fight to be financial independent. Sixty-six percent say they will continue working through what many Baby Boomers think of as the early retirement years, still trying to achieve their financial goals.

Another reason they need to continue to grow their savings is that 40% of Generation X people have a parent or other family member living with them, meaning support for family adds to costs. This provides companies with different marketing opportunities.

For all those reasons, the Generation X cohort heavily researches purchases, and digital media are key options. Online shopping, banking and research are a normal part of the Generation X lifestyle.

[SLIDE 8]

The last major demographic is the Baby Boomers, named for the boom in births after World War II.  While there are approximately 75 million now, as the oldest cohort, it is shrinking through aging and death of its members. The number is predicted to be 60 million by 2030.

Retirement means Baby Boomer income averages lower than younger cohorts, but houses, retirement funds and other wealth mean that they outspend all the other generations by $400 billion on consumer goods.

As with other generational cohorts, price and quality matter to Boomers, but they are still more focused on traditional advertising, marketing and sales tactics than the younger cohorts.

While they have adopted technology, they are far more likely to use desktop computers, laptops and tablets than they are smartphones. While they are not as much into online purchasing as other generations, one exception is travel, for which Baby Boomers make most of their purchases online.

Life expectancy has continued to grow, so while people in previous generations were viewed as old in their 60’s and 70’s, do not use that term when marketing to Boomers. Many have very active lifestyles. Simple marketing changes such as using larger fonts can make products more attractive to Baby Boomers while still attracting them with active messages.