Page 158 - Foundations of Marketing

Target Markets: Segmentation and Evaluation | Chapter 5 125

Figure 5.5 Family Life Cycle Stages as a Percentage of All Households

Single-earner couples
with children
Dual-earner married couples
with children
7% 8%
Multiple-member/
shared households
13%
19% Childless singles
aged 45 or older
9% Childless singles
under age 45
10%
9% Single parents
Childless married couples
9%
16% aged 65 or older
Childless married couples
aged 45–64
Childless married couples
under age 45

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The composition of the U.S. household in relation to the family life cycle has changed con-
siderably over the last several decades. Single-parent families are on the rise, meaning that the
“typical” family no longer necessarily consists of a married couple with children. In fact, hus-
band-and-wife households only account for 48.4 percent of all households in the United States,
whereas they used to account for a majority of living arrangements. An estimated 26.7 percent
of Americans live alone. Recently, previously small groups have risen in prominence, prompt-
ing an interest from marketers. For example, unmarried households represent 6.6 percent
of the total, an increase of 41 percent since 2000. Same-sex partners represent 0.6 percent of
households, which is a small proportion of the total, but an increase of more than 81 percent
10
since 2000. People live in many different situations, all of which have different require-
ments for goods and services. Tracking demographic shifts such as these helps marketers be
informed and prepared to satisfy the needs of target markets through new marketing mixes that
address their changing lifestyles.

Geographic Variables

Geographic variables—climate, terrain, city size, population density, and urban/rural
areas—also influence consumer product needs. Markets may be divided using geographic
variables, because differences in location, climate, and terrain will influence consumers’
needs. Consumers in the South, for instance, rarely have a need for snow tires. A com-
pany that sells products to a national market might divide the United States into Pacific,
Southwest, Central, Midwest, Southeast, Middle Atlantic, and New England regions. A firm
that is operating in one or several states might regionalize its market by counties, cities, zip
code areas, or other units.
City size can be an important segmentation variable. Many firms choose to limit market-
ing efforts to cities above a certain size because small populations have been calculated to
generate inadequate profits. Other firms actively seek opportunities in smaller towns. A clas-
sic example is Walmart, which initially was located only in small towns and even today can

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