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Applied Marketing Strategies

2 Target Markets / Page 2.6 Segmenting by Demographics: Income and Gender On this page: 2 of 2 attempted (100%) | 2 of 2 correct (100%)

Segmenting by Demographics: Income and Gender

Income

Millennials might appear to be a very attractive market when you consider they will be buying products for years to come and there are more millennials than any other demographic group. But would you change your mind if you knew that baby boomers account for 50 percent of all consumer spending in the United States? Americans over 65 now control nearly three-quarters of the net worth of U.S. households; this group spends $200 billion a year on major “discretionary” (optional) purchases such as luxury cars, alcohol, vacations, and financial products.13

Income is used as a segmentation variable because it indicates a group’s buying power and may partially reflect their education levels, occupation, and social classes. Higher education levels usually result in higher paying jobs and greater social status. The makers of upscale products such as Rolexes and Lamborghinis aim their products at high income groups. Louis Vuitton, Christian Dior, and Prada are brands that have luxury suites with rooftop views, fine art, and tanning areas in some of their stores. High-income customers are given access to the suites to keep them shopping longer and buying more products.14

MULTIPLE-CHOICE QUESTION

NOTIFICATIONS

Americans over 65 control about how much of the net worth of U.S. households?

Correct. Since Americans over 65 control around three-quarters of the net worth of U.S.

households, they are a very powerful consumer spending group.

Saved moments ago.

one-half

three-quarters

one-third

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Automobile companies may segment markets based on income, age, social class, and gender.

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However, other companies aim their products specifically at lower-income consumers. The fastest-growing product in the financial services sector is prepaid debit cards, most of which are being bought and used by people who don’t have bank accounts. Businesses are finding that this group is a large, untapped pool of customers who tend to be more brand loyal than most. If you capture enough of them, you can earn a profit.15 Based on the targeted market, businesses can determine the location and type of stores where they want to sell their products.

Income isn’t always indicative of who will buy your product. Companies are aware that many consumers want to be in higher income groups and behave like they are already part of them. Mercedes Benz’s cheaper line of “C” class vehicles is designed to appeal to these consumers.

Gender

Gender is a common basis for market segmentation. Gender marketing involves using marketing mix strategies that are believed to appeal to the targeted gender. In addition to segmenting by gender, market researchers might couple gender with marital status and other demographic characteristics. For example, did you know that more women in the United States than ever before (51 percent) now live without spouses? Can you think of any marketing opportunities this might present?

While gender marketing has been around forever, some people object to it, believing that it reinforces gender stereotypes. A new trend, gender neutral marketing, is inclusive to everyone. Many new brands in beauty and skin care are marketing genderless brands and creating campaigns that celebrate gender fluidity.

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MULTIPLE-CHOICE QUESTION

13 Tim Reisenwitz, Rajesh Iyer, David B. Kuhlmeier, and Jacqueline K. Eastman (2007), “The Elderly’s Internet Usage: An Updated Look,” Journal of Consumer Marketing, 24 (7): 406–18.

14 Christina Binkley (May 7, 2015), “Shop and Lounge Like a VIP,” Wall Street Journal, D1.

15 Constantine von Hoffman (September 11, 2006), “For Some Marketers, Low Income Is Hot,” Brandweek, http://cfsinnovation.com/content/some- marketers-low-income-hot.

close

How is gender marketing evolving?

Correct. Marketers are focusing more on gender-neutral marketing because it is inclusive and

avoids gender stereotypes.

Saved moments ago.

There is more reinforcement of gender stereotypes in marketing.

There is less attention to gender in marketing.

There is more focus on gender-neutral marketing.

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