Knowledge outcomes

1

• Knowledge outcomes
• Consider the relationship between segmentation
  and sociocultural trends and assess their impact
  on governments, organisations and individuals
• Review sociocultural trends within the UK.
• Monitor sub trends (Hispanics) within the US
• Assess the impact of sociocultural trends on
  organisational strategies.

2

• Segmentation and Strategy

Organisational strategy
Marketing Function Marketing strategy
Human Resources Function Human Resources strategy
Marketing strategy Marketing mix b.
Marketing strategy Marketing mix a.
Customer market b. (segmentation)
Customer market a. (segmentation)
Source Zikmund, William DAmico (1989),
Marketing, pp. 84, Wiley 1989
3

• Bases for Market Segmentation

Geographic   Political Boundaries Climatic Regio
ns Population boundaries
Demographic Sex Age Maritial Status   Family Si
ze Family life cycle
Socio-economic   Occupation   Education    Income
   Social class
Psycographic     Lifestyle  Activities   Interest
  Opinions   Values
Behaviour Patterns   Type of store shopped Time
of purchase Number of units purchased   Shopping
frequency   Media habits
Consumption patterns   Frequency of use - heavy
versus light usage, unit size   Occasion   Loyalty
to brand Ownership of other products
Source Zikmund, William DAmico (1989),
Marketing, pp. 87, Wiley 1989
4

• Marketing Mix and Segmentation

Total market Men Women
Primary target Market (Female)
Product A (Marlboro Light) Marketing Mix
Organisation Philip Morris
Primary target market (Male)
Product B (Marlboro) Marketing Mix
Source adapted from Zikmund, William DAmico
(1989), Marketing, pp. 83, Wiley 1989
5

• Social Trends - Overview
• The UK has an ageing population, and growth
• in the minority ethnic population has resulted in
  
• a more diverse society. Household income has
• risen over the past 35 years, although income
• inequality has widened. Technology has
• transformed many of our lives and our
• dependence on the car is greater than ever.

6

• Households families Highlights

7

• The proportion of children living in
  lone-parent families in Great Britain more than
  tripled between 1972 and spring 2004, to 24 per
  cent.
• In 2003/04, one in six adults aged 16 and over
  lived alone in Great Britain.
• In spring 2004, 58 per cent of young men (aged
  20 to 24), and 39 per cent of young women of the
  same age lived at home with their parents in
  England.
• There were 306,000 marriages in the United
  Kingdom in 2003. This was the second successive
  annual rise but was still 36 per cent below the
  1972 peak.
• The number of divorces in the United Kingdom
  rose for the third successive year in 2003, to
  167,000, but was still 7 per cent below the 1993
  peak.
• In 2003 there were 4,800 adoptions in England
  and Wales, less than one quarter of the number in
  1971.

8

• Expenditure - Consumer credit, UK

9

• Household spending on communications in
  the United Kingdom almost trebled in volume terms
  between 1991 and 2003. Between 1996 and 2003
  the volume of UK total domestic expenditure on
  goods grew at twice the rate of expenditure on
  services, at 4.6 and 2.1 per cent per year
  respectively.
• In 2002/03, 7 to 15 year old girls in the
  United Kingdom spent about 12 per cent more than
  boys of the same age.
• In 2003, 91 per cent of men and 90 per cent of
  women in Great Britain held at least one plastic
  card this compares with 80 and 73 per cent
  respectively in 1993.
• UK consumer credit has continued to rise and
  in 2004 was over two and half times greater than
  in 1993, after taking account of inflation.
• Of all the EU-15 countries, in June 2004 a UK
  resident would have found only Denmark, Ireland,
  Finland and Sweden more expensive than the United
  Kingdom.

10

• Health - Proportion of adults who are obese or
  overweight by sex, England

11

• The proportion of children in the United
  Kingdom immunised against MMR by their second
  birthday fell from 90 per cent in the early and
  mid-1990s to 81 per cent in 2003/04.
• The proportion of adults in England who were
  obese increased between 1993 and 2003 from 13 to
  23 per cent of men and from 16 to 23 per cent of
  women.
• In 2003/04, 40 per cent of men and 23 per cent
  of women exceeded the recommended daily
  benchmarks for sensible drinking on at least one
  day in the previous week.
• In 2003/04, smoking was most common among
  adults in routine and manual households (35 per
  cent of men and 31 per cent of women) and least
  prevalent among those in managerial and
  professional households (20 per cent and 17 per
  cent respectively).
• The incidence of lung cancer in males has
  fallen by more than 40 per cent over the past 20
  years, mainly as a result of the earlier decline
  in smoking.
• The suicide rate for men aged 25 to 44 in the
  United Kingdom doubled between 1971 and 1998 to
  27 per 100,000 in 2003 it was 23 per 100,000.

12

• Social Protection - Use of childcare by families
  with babies, while main carer is employed or a
  full-time student, 2001-02, UK

13

• In 2003/04, two thirds of full-time employees
  in Great Britain were members of an active
  pension scheme.
• The average length of stay of acute patients in
  UK NHS hospitals fell by nearly three and a half
  days between 1981 and 2002/03, to 5.1 days.
• The proportion of NHS GP consultations in Great
  Britain that took place in the home in the 14
  days before interview fell from 22 per cent in
  1971 to just 4 per cent in 2003/04.
• In 2002/03 two thirds of 60 to 74 year old men
  in England, and three fifths of women of the same
  age, who reported that they had difficulties with
  daily activities or mobility, said that they
  received no help from any source, paid or unpaid.
  
• In 2001-02, 64 per cent of parents in the
  United Kingdom with babies aged 9 to 10 months
  had used grandparents to look after their babies
  while the main carer was at work or college.

14

• Crime justice - Prisoners reconvicted within
  two years of discharge in 1999 by original
  offence, EW

15

• Humberside had the highest rate of recorded
  crime of all the police
• force areas in England and Wales in 2003/04, at
  163 per 1,000
• population, while Dyfed Powys, at 63 per 1,000,
  had the lowest.
• Crimes involving firearms in England and Wales
  more than doubled
• between 1997/98 and 2002/03, to over 10,000.
• In 2003/04, women were nearly three times as
  likely as men in
• England and Wales to be very worried about
  physical attack
• (17 per cent compared with 6 per cent), yet men
  were more likely than
• women to be a victim of violent crime (5 per cent
  compared with 3 per
• cent).
• Over seven in ten of both men and women
  previously convicted for
• theft and handling stolen goods in England and
  Wales were
• reconvicted within two years of their discharge
  from prison in 1999.
• Between 1993 and 2003 the average prison
  population in England
• and Wales rose by two thirds, to 73,000.

16

• Housing - Stock of dwellings by tenure, GB

17

• Between 1971 and 2003 the number of dwellings
  in Great Britain
• increased by one third, to 25 million.
• The number of owner-occupied dwellings in Great
  Britain increased
• by 44 per cent between 1981 and 2003, while the
  number of rented
• dwellings fell by 17 per cent.
• In 2003/04, 50 per cent of lone parents with
  dependent children in the
• United Kingdom rented their home from the social
  sector, compared
• with only 15 per cent of couples with dependent
  children.
• The number of homeless households in England
  living in temporary
• accommodation more than doubled between March
  1997 and March
• 2004, from 41,000 to 97,000.
• In 2003 the average price of a dwelling in the
  United Kingdom was
• almost 155,500, 16 per cent higher than in 2002.
  
• The average private sector rent (after housing
  benefit) in England
• doubled between 1993/94 and 2003/04, while the
  average local
• authority rent increased by 47 per cent.

18

• Transport - Goods moved by domestic freight
  transport by mode, GB

19

• The total distance travelled by people within
  Great Britain increased
• by 90 per cent between 1971 and 2003, to 794
  billion passenger
• kilometres.
• The volume of goods transported by road in
  Great Britain grew by
• 86 per cent between 1971 and the peak year of
  1998, then stabilised
• 159 billion tonne kilometres were transported in
  2003.
• Between 1981 and 2002/03, UK household
  expenditure on motoring
• increased by 71 per cent in real terms, while
  spending on fares and
• other travel costs rose by 22 per cent.
• The number of licensed cars on Britains roads
  continued to
• increase to nearly 28 million in 2003, over four
  times the number in
• 1961.
• Over 4.5 billion journeys in Great Britain were
  made by local bus in
• 2003/04, more than twice the number made by rail.
  
• UK residents made 61 million visits abroad in
  2003, over three times as many as in 1981.

20

• Lifestyles social participation - Households
  with selected durable goods, UK

21

• There were 171 million cinema admissions in
  2004, the second
• highest number for over 30 years.
• In 2002/03, 59 per cent of adults in Great
  Britain had participated in a
• sport, game or physical activity in the four
  weeks before interview, 6
• percentage points lower than in 1990/91.
• The Internet could be accessed at home by 45
  per cent of UK
• households (10.9 million) in 2002/03, more than
  four times the
• proportion in 1998/99.
• In 2003/04, 37 per cent of adults in Great
  Britain had never used the
• Internet, and this proportion rose to 69 per cent
  of those aged 55 and
• over.
• UK residents took 41.2 million holidays abroad
  in 2003, six times the
• number in 1971 Spain was the most popular
  destination in both years.
• Thirty nine per cent of the UK electorate voted
  in the 2004 European
• Parliament elections, an increase of 15
  percentage points on the
• previous election in 1999.

22

• Hispanics From Demographic Power to
• Purchasing and Political Power
• A decreasing majority of registered Hispanic
  voters
• in 2003 called themselves Democrats (39.8
  percent,
• with 24.9 percent registering as Republican and
  35
• percent registering as Independent).
• Females age 25 to 44 years represent the largest
• Hispanic voting segment at 23.21 percent.
• Education is the issue that will determine the
  vote of
• 58 percent of Hispanic voters in the coming
  election.
• Education directly correlates to political
  participation,
• especially among high school graduate Hispanics
  who are
• 10 percent more likely to vote in an election
  than non-
• graduates counterparts.

23

• Hispanics From Demographic Power to
• Purchasing and Political Power

Source https//secure.hbinc.com/product/view.asp?
id57
24

• Hispanics From Demographic Power to Purchasing
• and Political Power
• Census data indicates significant potential for
  Hispanic
• voting power to increase although Hispanics
  make up
• 13.4 percent of the total U.S. population, they
  comprise
• only 6.9 percent of total U.S. purchasing power
  and 5.3
• percent of all votes cast in the 2000
  presidential
• election.

25

• Hispanic Purchasing Power Surges to 700
• Billion May 2004
• U.S. Hispanic purchasing power has surged to
  nearly
• 700 billion and is projected to reach as much as
  1
• trillion by 2010, according to new estimates by
• HispanTelligence.
• The rate of growth is nearly three times the
  overall
• national rate over the past decade and will
  propel the
• aggregate disposable income of the nation's
  largest
• minority group to 699.78 billion in 2004,
  according to
• a HispanTelligence analysis of data recently
• released by the U.S. Bureau of Economic Analysis.

26
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27
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28

• U.S. Hispanic Purchasing Power (B) by State,2004

Source HispanTelligence
29

• McDonald's, an Effort to Restore Lost Luster
• The company has experienced serious slump
• in sales growth and profitability(2003).
• The company is changing its décor to expand
• its appeal beyond families and children. The new
• target audience was young adults 18 to 29.
• McDonald's is equipping many of its restaurants
  with
• wireless Internet connections.
• The company is also introducing a McCafe concept.
• The company is also changing its menu
• - McDonald's premium salads topped with hot
  chicken
• - Newman's Own salad dressing
• - low-fat milk and juice rather than soft drinks.
• The company is retraining its employees and
  managers

30

• You Want Any Fruit With That Big Mac?
• The company now buys more fresh apples than any
  other
• restaurant or food service operation, by far. In
  2005, it
• expects to buy 54 million pounds of fresh apples
  - about
• 135 million individual pieces of fruit. That is
  up from zero
• apples just two years ago. (This does not include
  fruit used
• to make juice and pies, which use a different
  quality of
• apple.)
• McDonald's is also among the top five
  food-service buyers of
• Grape tomatoes and spring mix lettuce other
  fast-food chains have
• similar salads and fruit choices on their menus,
  but they have not had
• a comparable influence on the market because of
  their smaller size.
• Burger King, for example, has 7,600 restaurants
  in the United States,
• while Wendy's has 5,900 and Arby's has 3,300.
  McDonald's has 13,700.

31

• While the double cheeseburger is still the most
  beloved single item - 1.5
• billion of them are ordered every year in the
  United States - Mr.
• Donahue(McDonald's vice president for
  communication and customer
• satisfaction ) said the company has sold more
  than 300 million of the premium
• salads since their introduction in March 2003.
• At 4 a salad, that translates to roughly 600
  million a year, or 10 percent of
• domestic revenue for McDonald's last year. "The
  salads have definitely
• been a driver for McDonald's sales in the U.S.,"
  said John Glass, an analyst
• at CIBC.
• Healthier fare does not come cheap, for
  McDonald's or its customers. Fruits
• and vegetables are much more expensive and
  complicated to ship and store
• than meat and potatoes. Shipments of Apple
  Dippers and salad components
• leave McDonald's warehouses several times a week,
  which is part of the
• reason salads cost 4 and everything else can be
  had for less than 3.
• Despite the fragility of the salads and fruit,
  McDonald's says it does not use
• any artificial preservatives or additives to keep
  them fresh longer.

32

• Value Chain Management
• McDonald's is using its purchasing decisions to
• build a reliable supply of fresh fruits and
  vegetables
• that meet its exacting specifications.
• At the U.S. Apple Association's annual marketing
• conference in Chicago last summer, Mitch Smith,
• the McDonald's director of quality systems in the
  
• United States, told a crowd of growers, many from
  
• the big apple-producing states of Washington and
• New York, that if they wanted to work with
• McDonald's, they should grow more Cameo and
• Pink Lady apples. Historically, growers have
• produced relatively few apples of these
  varieties,
• but McDonald's likes them for their crispness
• and flavour.
• Already, Cameo production in Washington State is
  up 58 percent in the

33
McDonalds
Comparable Sales - McDonald's Restaurants
34
Global Comparable Sales
McDonalds
Source http//www.mcdonalds.com/corp/invest/pub/2
004InteractiveFinancialHighlights/2004_interactive
_charts.html
35
Total revenues
McDonalds
Source http//www.mcdonalds.com/corp/invest/pub/2
004InteractiveFinancialHighlights/2004_interactive
_charts.html
36
McDonalds
Sourcehttp//www.mcdonalds.com/corp/invest/pub/20
04InteractiveFinancialHighlights/2004_interactive_
charts.html
37

• References
• http//news.bbc.co.uk/media/video/39977000/rm/_399
  77116_pensions_flanders
• 19aug_vi.ram
• http//www.risc-int.com/ci_reports.html
• Zikmund, William DAmico (1989), Marketing, pp.
  84, Wiley 1989
• http//www.statistics.gov.uk/cci/article.asp?id11
  07
• https//secure.hbinc.com/product/view.asp?id57
• www.hispanicbusiness.com/news/newsbyid.asp?id1604
  1
• www.hispanicbusiness.com/news/newsbyid.asp?id1906
  3
• www.hispanicbusiness.com/news/newsbyid.asp?id1669
  2
• Salsa Outselling Ketchup? Marketing to Hispanics
  Is Hot http//knowledge.wharton.upenn.edu/article/
  1077.cfm
• http//knowledge.wharton.upenn.edu/index.cfm?favi
  ewArticleid1028
• Day,Sherri Elliott,Stuart (2003) At McDonald's,
  an Effort to Restore Lost Luster
  ,www.nytimes.com, 08 April
• Day, Sherri (2003) McDonald's Strives to Regain
  Ground, www.nytimes.com,March 2003
• Elliott,Stuart (2003) McDonaldss Moves to
  Reassess Itself, nytimes.com, 04 February
• Warner, Melanie (2005) You Want Any Fruit With
  That Big Mac?, www.nytimes.com, 20 February
• Love Those Boomers (2005),www.businessweek.com,Oct
  ober
• Quiz http//images.businessweek.com/ss/05/10/boome
  r_quiz/index_01.htm
• http//www.mcdonalds.com/corp/invest.html