Strategic Marketing Strategy for Whites:

Strategic Marketing Strategy for Whites: Identifying the Most Profitable White Generation X and the Most Profitable Consumer Product for These Consumers

Demographic Profile of the Most Profitable White Generation X

White Americans make up the largest segment of Generation X by far, with an absolute population of over 37 million consumer units (92.5 million individuals, approximately), which comprised 86% of the U.S. population in our age group 25-44 in 2008 and 70.6% of overall employment in 2009. With an annual average income of $63,916, we see a purchasing power for this sample of some $2.365 trillion dollars for 2008. If this seems like a vast amount, considering this group comprises 85% of the population in question, that population is in the prime of its work years, and we have a $14.4 Trillion GDP, that figure sounds more realistic. This includes "White and all other races" not Black or Asian. Again, since many Hispanics identify themselves as White (and Black, or Asian) at the same time, we have to remember the categories "Race" and "Hispanic Origin" include many of the same people, and will not add up to the same amounts. We see this difference when we consider "White Alone" in our age belt as share of total polulation, because White Alone GenXers make up an average of 16% of the total population without including Hispanics. We use the broader figure in order to include the White Hispanic Generation X group into our marketing analysis, because we want their money.

61% of White GenX Americans had college education, 34% had maximum high school education, and only 5% did not attend high school (Census 685). 53% of the White population is female overall, with 50% of the 25-34-year-old group overall being female and 54% of the 35-44-year-old group female. White renter-homeowner split of the reference age was 30%/70%, with 67% of the overall GenX 25-34-year-olds owning homes and 75% homeownership for the aged 35-44 segment.

Trends in Purchasing Power for White Generation X 2005 to 2009

Personal income was higher for Whites than all other races, and largely mirrored the aggregate average in rate of increase year over year.

all races white alone blackAlone

Black AOIC

Asian Alone

Hispanic

2005

25,036

26,496

16,874

16,629

27,331

14,483

2006

26,352

27,821

17,902

17,564

30,474

15,421

2007

26,804

28,325

18,428

18,107

29,901

15,603

2008

26,964

28,502

18,406

18,054

30,292

15,674

2005-06

5.26%

5.00%

6.09%

5.62%

11.50%

6.48%

2006-07

1.72%

1.81%

2.94%

3.09%

-1.88%

1.18%

2007-08

0.60%

0.62%

-0.12%

-0.29%

1.31%

0.46%

Most Profitable Product to Offer to White Generation X

Propensity

Index

White

Avg $/Year

In-Group

Average annual expenditures (dollars)

52,265

..Housing

17,456

33.40%

33.40

....Shelter

10,345

19.79%

19.79

..Transportation

8,889

17.01%

17.01

Owned dwellings

7,095

13.58%

13.58

..Food

6,676

12.77%

12.77

Mortgage interest and charges

3,951

7.56%

7.56

....Food at home

3,865

7.40%

7.40

..Health care

3,211

6.14%

6.14

..Entertainment

3,007

5.75%

5.75

....Vehicle purchases (net outlay)

2,885

5.52%

5.52

....Food away from home

2,811

5.38%

5.38

....Gasoline and motor oil

2,790

5.34%

5.34

....Other vehicle expenses

2,698

5.16%

5.16

Rented dwellings

2,484

4.75%

4.75

White GenXers spend above all on their homes, with housing comprising 33% of the 25-44-year-old spending when sorted for aggregate expenditures for the White segment. The table above outlines their major purchases with some categories like home utilities and social security removed as not really constituting marketable consumption products for our purposes. Since White Generation X of Hispanic origin or not constitutes the majority of absolute dollar marketshare, we would do well to target this group first, focusing on "Owned dwellings," "Food at home," mortgage and health care products, because those products represent the largest baskets of consumer spending in the entire marketplace.

White

25-34

35-44

Prop 25-34

Prop 35-44

Average annual expenditures (dollars)

48,159

58,808

..Housing

17,318

20,649

35.96%

35.11%

....Shelter

10,935

12,689

22.71%

21.58%

..Transportation

8,699

9,797

18.06%

16.66%

Owned dwellings

5,873

9,056

12.20%

15.40%

..Food

6,229

7,849

12.93%

13.35%

Mortgage interest and charges

4,151

6,194

8.62%

10.53%

....Food at home

3,393

4,509

7.05%

7.67%

..Health care

1,737

2,499

3.61%

4.25%

..Entertainment

2,766

3,603

5.74%

6.13%

....Vehicle purchases (net outlay)

3,149

3,122

6.54%

5.31%

....Food away from home

2,836

3,340

5.89%

5.68%

....Gasoline and motor oil

2,754

3,347

5.72%

5.69%

Rented dwellings

4,734

3,013

9.83%

5.12%

Within the White GenX group, however, if we break the two age cohorts out from our aggregated totals above, we see from our propensity to spend, that the different ages buy different shares of these products.

Hispanic Generation X

Demographic Profile of the Most Profitable Hispanic Generation X

U.S. Hispanic Generation X are the second-largest segment of American Generation X in 2008, there were 35 million Hispanic consumers of whatever race and age in Generation X, who represented 17.5% of the U.S. population (U.S. Census) and 14% of the aggregate workforce.

There were 35 million Hispanic consumers in 2008 of whatever race and age, with the average consumer unit income for the target age at $48,955 per year, third-lowest after Asian and White incomes, respectively. Hispanics make up 17.5% of the Generation X population of 43 million consumer units, a result of 7.5 million, which, multiplied by average income for our age cohort, returns a purchasing power of some $360 billion. While the Hispanic market segment is growing, the young population will not grow into their consumer ages for a few decades yet, as the bulk of the increase rests with the extremely young Hispanic sector. 17% of Hispanic-Americans have under high school education, 44% graduated high school by 2008, and 38% had college education by that time.

Again, to say that Hispanics represent a bigger share of the whole population than say even the tiny Asian ethic sector, would be to commit a compounding fallacy because some Asians claim Hispanic origin, as do some Blacks and many Whites. So, we can discuss Hispanic or not Hispanic purchasing power, age, and education for example, but to oppose this number to say "Blacks" or "Whites" would simply be a mistake because the groups contain some of the same people. The U.S. Census does present number of single-race and more-than-one-race data, but not side by side with incomes, and not broken out by age. We thought it would be more accurate to target the Hispanic market including Whites, Blacks and 'all other,' because if they identify as Hispanic, and if we can trigger that identification through marketing, then they will consume our products, and if they identify as Hispanic we want their revenue regardless of race, and because breaking down the figures we do have into projections of Hispanic broken out by one and multiple races would introduce more error than using the Hispanic-Not Hispanic figures published next to the White / Black / Asian figures.

Trends in Purchasing Power for Hispanic Generation X

Purchasing power for Hispanics was increasing faster than the rate of increase for all other ethnicities / origins over 2005-06, but that growth rate slowed to less than average as we approach 2008.

all races white alone blackAlone

Black AOIC

Asian Alone

Hispanic

2005

25,036

26,496

16,874

16,629

27,331

14,483

2006

26,352

27,821

17,902

17,564

30,474

15,421

2007

26,804

28,325

18,428

18,107

29,901

15,603

2008

26,964

28,502

18,406

18,054

30,292

15,674

2005-06

5.26%

5.00%

6.09%

5.62%

11.50%

6.48%

2006-07

1.72%

1.81%

2.94%

3.09%

-1.88%

1.18%

2007-08

0.60%

0.62%

-0.12%

-0.29%

1.31%

0.46%

Most Profitable Product to Offer to Hispanic Generation X

While Hispanics spend their incomes on much the same goods as the White group for Generation X does, the proportion of income is different. Hispanics spend 36% of incomes on Housing, 12 and 9 percents respectively for owned and rented shelter; spend more of their incomes on food at home, and a higher share of income on vehicle purchases.

Hispanic All

Average

Prpp.

Index

In-Group

Average annual expenditures (dollars)

43,052

1

..Housing

15,582

0.362

36.19

....Shelter

9,688

0.225

22.50

..Transportation

7,986

0.185

18.55

..Food

6,596

0.153

15.32

Owned dwellings

5,334

0.124

12.39

Rented dwellings

4,065

0.094

9.44

....Food at home

4,039

0.094

9.38

Mortgage interest and charges

3,525

0.082

8.19

....Gasoline and motor oil

2,717

0.063

6.31

....Food away from home

2,556

0.059

5.94

....Vehicle purchases (net outlay)

2,554

0.059

5.93

....Other vehicle expenses

2,335

0.054

5.42

..Apparel and services

2,119

0.049

4.92

Black Generation X

U.S. Black Alone Generation X are the third largest segment of American Generation X in 2009, there were 15 million Black Generation X consumers, who represented 14% of both the U.S. population aggregate population, and of the GenX segment (U.S. Census), which indicates a total GenX Black population of 6.026 million consumer units (roughly 15 million people), who represent under 11% of the workforce. With an average annual income of $43,482 for Blacks of reference age, we find an aggregate consumption spending of some $262 million in 2008. Black Generation Xers had a lower college attendance rate than Whites and Asians at 50%, which was higher than Hispanic 38% attended college; 45% of Blacks' maximum education was in high school, the highest of all the racial / ethnic demographics.

Trends in Black Purchasing Power of Generation X

Purchasing power for Blacks both alone and in combination with other ethnicities (AOIC) increased faster than all races from 2005-2007, but started to lose that growth rate over 2007-08. The consumers who identified as polyethnic increased earnings faster at first but those slowed to even more sharply negative at the end of our period.

all races white alone blackAlone

Black AOIC

Asian Alone

Hispanic

2005

25,036

26,496

16,874

16,629

27,331

14,483

2006

26,352

27,821

17,902

17,564

30,474

15,421

2007

26,804

28,325

18,428

18,107

29,901

15,603

2008

26,964

28,502

18,406

18,054

30,292

15,674

2005-06

5.26%

5.00%

6.09%

5.62%

11.50%

6.48%

2006-07

1.72%

1.81%

2.94%

3.09%

-1.88%

1.18%

2007-08

0.60%

0.62%

-0.12%

-0.29%

1.31%

0.46%

Most Profitable Product to Offer to Black Generation X

With a smaller share of total population and smaller per-unit incomes, the Black consumer group ranks third in our aggregate spending comparison, but they consume largely the same major purchase fields as all other consumers, particularly Housing, transportation and food, although they spend different shares of their incomes on these purchases than the other sectors. These are the "Big spender" categories for all ethnicities and origins, but we see for example, that Blacks spend much less of their income on food away from home for example, so targeting restaurant purchases to that segment instead of any other, would be a mistake. Rental real estate, for another example, consumes a far larger share of Generation X Black incomes relative to owned shelter than it does for Hispanics, and double the share compared to owned homes for Whites. Targeting marketing for rental dwellings may have more return per capita for Blacks than for Whites, although the dominance of the aggregate size of the White expenditure for everything would make them the primary target if we measured return on a fixed advertising budget in overall dollar return on investment. Even though Blacks spend more of their income on rent than whites do, Whites still spend more in total at the bottom line.