The mix of ages in the US population can be an important factor to consider as the marketer decides on appropriate target groups. Evidence of a changing age mix is the fact that the median age in the United States has increased from 27.9 in 1970 to 30 in 1980 and to 32.8 in 1990.
Each decade is characterized by a “core market thrust” – the part of the market with the largest proportional growth. During the 950 to 1960 period, the core market thrust was babies and young children; in the 1960s, it was teenagers and young adults; during the 1970s, it was young married during the 1960s, it was teenagers and young adults; during the 1970s, it was young married during the 1960s, it was early middle-agers and during the 1990s, the core market is middle-agers.
Demographics use the term “cohort” to mean the aggregate of persons born in any given year or other specified period. Cohort factors, therefore, are the values and attitudes that a population group carries with it throughout life. It will become clear later that values and attitudes differ among age groups within the population. For example, when General Mills asked adults and teens in the same families what expenditures they thought of as luxuries, they found that youngsters were far less likely than their parents to cite a new car each year or hired household help and were far more likely to classify having meat at most meals as a luxury.
Although cohort factors are difficult to predict, the following are observable trends compared with earlier decades. First, there are more working wives. The growth is extremely meaningful because it has occurred largely among women who have small children. Hence, there have been demands for more company sponsored day care and more paid maternity leave. Overall the proportion of women in the labor force has risen to over 60 percent. Seventy five percent of all two parent families have both parents employed.
Second, there will continue to be few children per family. However, since a very large number of women are entering prime childbearing years, total births may jump in spite of a low overall birthrate. Also, a large share of these births will be of first children – an estimated 40 percent of births in 1985 were of first children versus only 25 percent in 1960. This is significant since it has been estimated that an additional $ 700 is spent by parents “tooling up” for the first child. In the fact, a leading consulting firm estimates that during the first three years, a first born child accounts for over $2000 in retail sales. Thus, this expected baby boom let could account for an incremental $1 billion in retail sales each year. Parents changing spending patterns are also causing a significant growth in the children’s market. For instance today’s parents have more money to spend on kids because they have waited about two years later in life than their parents did to have children. The further along they are in their careers, the more money there is to spend. When parents decide their child must have something cost may not matter.
A third cohort factor is the growth in households (which are composed of those related and unrelated individuals who occupy a housing unit). Although the total population is an important factor, for many companies it is not nearly so critical as the total number of households. One of the reasons for the rapid growth in households is the high rate of divorce. The divorce rate fro all marriages is currently 50 percent an census experts estimate that approximately half of all children born in 1980 will spend a meaningful part of their childhood with only one parent. At current rates, 60 percent of American women now in their thirties will go through at least one divorce. Among the 70 percent who remarry, 52 percent will go through a second divorce.
A more important reason for the large growth in households, however, is the increasing tendency for young singles to establish their own accommodations apart from their parents. There is also a growing segment of older adults who live apart from their children. Thus, the dramatic rise in number of households is occurring largely among single adults.