bsad 112 demographics and segmentation 1 demographics demographic variables social stratification...
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 1
Demographics
Demographic variables Social stratification
– in the U.S.– in other cultures
Measurement of social class
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 2
Definition
Demographics: the description of a population in terms its size, distribution, and structure
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 3
Issues in Demographics
Population– size: number of
individuals– distribution
across a geographic region
rural, urban, or suburban
– Structure age economic stratification occupational distribution status/social class
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 4
Demographics helps
Understand current markets--demand for products explained in terms of personal characteristics
Predict future markets
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 5
Population
U.S.– growing, fueled by
immigration rather than birthrates (implications)
– shifting (away from Midwest toward South, Southwest)
– highly mobile
Germany– declining (large incentives
given to have children)– traditionally static
(immobile) but more mobile now due to
unification of East and West Germany
opportunities with EC
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 6
Age
“Graying” countries– Germany, Japan, U.S.
High birthrate areas– Africa, parts of Asia, Latin
America
Age group vs. demand for products (refer to section on subculture)
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 7
Other Demographic Variables
Occupation Education Income Ethnic group (refer to
section on subculture) Religious groups Geographic region
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 8
Social Class
In the U.S.– often denied– not clearly defined but– clear differences in
individual status income power/privilege
In India– traditionally defined by
rigid caste (now officially outlawed but still in practice)
– movement traditionally not permitted
In Britain– class differences not
legally spelled out, but accepted by tradition
– class “consciousness”– some upward
movement possible
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 9
Implications for Marketing Strategy
– “At level’’--accurately portray class standing
Positioning strategies– Upward Pull (opportunity
to enjoy pleasures of higher class)
– Appeal to newly wealthy (ability to enjoy better things in life now)
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 10
Measuring Social Status--not an easy task
Single item measures– education– occupation/licensure– income
Multi-item indices– e.g., U.S. Census: occupation,
income, education
Other issues--e.g., club memberships, family relationships
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 11
SEGMENTATION Bases for segmentation Determining which segments exist Choosing segments to serve Serving chosen segments
– positioning– promotion – product features
Segmentation in direct marketing Segmentation exercise
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 12
Requirements for Segment Viability
Group identity (similarity within, differences between, segments)
Systematic behaviors Marketing mix efficiency
potential
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 13
Three “Levels” of Segmentation
Personal characteristics– lifestyle– personality
Benefits sought– attributes– results
Behavior– approach to purchase– variety seeking/loyalty
Note: Some of theseapproaches overlap.It is not essential to bedogmatic in distinguishing.
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 14
Level 1: Personal Characteristics
Demographics– age, sex, ethnic group– geographic region– education, occupation, social class
Media exposure Lifestyle/Psychographics
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 15
Lifestyles and Psychographics: Examples
Activities, Interests, and Opinions (AIO)
VALS, VALS2 Residence based
(e.g., PRIZM)
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 16
The PRIZM System
60 consumer measures within zip code area
36,000 zip code areas Statistical methods used to
find areas containing relatively consumers ---> 60 segments
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 17
Level 2
Benefits Sought
Based on– differences in arbitrary tastes
(e.g., cola vs. non-cola drink)– ideal point– tradeoffs (e.g., taste vs.
calories)– usage situation (e.g., coffee
for camping (instant) vs. higher quality for home brewing)
A consumer insearch of benefits.
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 18
Level 3
Behavior Attitude Extent of usage Shopping approach
– price elasticity– deal-proneness– brand loyalty– sources of influence on brand choice:
advertising sales person store assortment
What do you meanyou won’t give mea discount? Then I’llgo to the competitors!
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 19
Means of Segmentation in Direct Marketing
Income Past purchases Ethnic surnames Credit history Hobbies/interests
(magazine subscription lists)
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 20
Sources of Info for Direct Marketing Segmentation
Phone books--often contain both names and addresses; yellow pages
State registrations (vehicle, driver’s licenses)
Past purchases (from company or outside)
Professional and school directories
Magazine subscription lists Credit rating bureaus
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 21
Advanced Segmentation Techniques in Direct Marketing
“Merge-Purge”– merge: add lists together; add
purchased lists to own customer list– purge: sort of duplicates
special software allows for standardization of addresses (“phonetic” matching possible)
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BSAD 112 DEMOGRAPHICS AND SEGMENTATION 22
Sources of List Value
Recency Frequency of
purchase Value of past
purchases Geography (zip code
as surrogate for lifestyle)
Gender identifiability