A cohort analysis of household vehicle expenditure in the U.S. and Japan: A possibility of generational marketing
- 233 Downloads
This paper shows the usefulness of cohort analysis for generational marketing. Aggregate data classified by age and period are decomposed into age, period, and generational cohort effects. We compare two cohort-analysis models, the constrained multiple regression model and the Bayesian cohort model. The empirical results that are common to the household vehicle expenditure ratio in the U.S. and Japan are as follows: (1) among a total of three effects, the period effect is the smallest; (2) with the exception of the latest birth cohort, the cohort effect shows a clear upward trend; (3) the age effect decreases in the 20s and 30s, and next increases with a peak detected in the late 50s, and finally decreases. We provide marketing implications for cohort segmentation and forecasting.
KeywordsAge–period–cohort decomposition Bayesian cohort model Constrained multiple regression model Generational marketing Household vehicle expenditure ratio
The author is grateful to the co-editor, Joe Urbany, and three anonymous reviewers for their very useful comments and suggestions. Needless to say, any remaining errors are the author’s.
- Akaike, H. (1980). Likelihood and the Bayes procedure. In J. M. Bernardo, M. H. DeGroot, D. V. Lindley & A. F. M. Smith (Eds.), Bayesian statistics, pp. 143–166. Valencia: University Press.Google Scholar
- Deaton, A., & Paxson, P. (1994). Saving, growth, and aging in Taiwan. In D. A. Wise (Ed.), Studies in the economics of aging, pp. 331–357. Chicago: Chicago University Press for NBER.Google Scholar
- Higgins, K. T. (1998). Generational marketing. Marketing Management, 7, 6–9.Google Scholar
- Japanese government. (2001). Monthly Economic Report, November Issue.Google Scholar
- Kotler, K. (2000). Marketing management. New Jersey: Prentice-Hall.Google Scholar
- Kritz, G. H., & Arsenault, P. M. (2006). Teaching cohort analysis: an important marketing management tool. Marketing Education Review, 16, 37–43.Google Scholar
- Meredith, G., & Schewe, C. D. (1994). The power of cohorts. American Demographics, 12, 22–31.Google Scholar
- Nakamura, T. (1982). A Bayesian cohort model for standard cohort table analysis. Proceedings of the Institute of Statistical Mathematics, 29, 77–97. In Japanese.Google Scholar
- Smith, J. W. (2003). Marketing in an anxious age. Marketing Management, 12, 56–56.Google Scholar
- Smith, J. W., & Clurman, A. (1997). Rocking the ages. New York: Harper Business.Google Scholar
- Wyner, G. A. (2008). Measuring change through cohort analysis. Marketing Research, 20, 6–7.Google Scholar