Much of the US trade deficit can be traced to the questions American companies ask - or don't ask - when they attempt to market products overseas. By taking demographics into account, US companies can determine which products will sell in which countries, specialists emphasized at a two-day meeting this week sponsored by American Demographics magazine.
Africa, where populations are moving from countryside to city, will need housing, transportation, machinery, and services.
The more developed countries become, the more they begin to pull women into the work force. That creates a need for services (child care, dry-cleaning, etc.), and time-saving products (dishwashers, eventually microwave ovens). As they gain education and affluence, they buy leisure goods like video recorders and financial services.
Young countries - Mexico, Brazil, and much of Latin America - buy durable goods like cars and consumer goods like clothes. Older populations spend more money on housing, fuel (they stay home more), and health care.
One big mistake, demographers say, is to target a waning market. Japan has been importing the same amount (in percentage terms) of cars over the last decade. Statistics say Japan is aging faster than any country has ever aged, says Barbara Torrey, head of the Census Bureau's international research.
Young people are the big car buyers; older people spend on housing, fuel, and health care. So carmakers should look instead at places like Brazil and Turkey, where populations are young and gaining affluence.
Another mistake is to ignore a market because of politics. Hungary, for example, buys 47 percent of its imports from non-communist nations, but only 3 percent from the US. It buys products the US can compete in - machinery, chemicals, consumer goods, and food.
A third mistake is to group countries geographically. Turkey's economy is robust; Greece's hasn't budged in seven years. A company that puts two in the same category would be missing out on Turkey's big market, says John Keane, director of the US Census Bureau.
A final mistake is to cling to history. In the past, many American companies trying to deal with China got entangled by government regulations and concluded that the market was not developed enough to make it worth their while. But today 80 percent of Chinese households owns television sets, and the government recently began allowing people to advertise over TV.
The Chinese will be a good market for some time to come: They have a very high savings rate; their rural communities are growing. And development makes them hungry for machinery and transport equipment, chemicals (especially fertilizer), food, and raw materials.
In 1981, the US was selling China up to 45 percent of those goods. By 1983, however, the US had lost most of its market share in everything but machinery and transportation. Who took up the slack? The Japanese, despite the historical suspicion China has of Japan.
The Japanese are masters at studying the statistics and targeting the markets. Often those statistics are compiled by the US. The Japanese buy 10 times more data on foreign countries from the US Census Bureau than all other countries put together, says Ms. Torrey. ``They are statistical machines, and it's paid off.''