presentation chapter 7...consumer behavior demographics age structure of markets geographic factors...

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Chapter 7

Demographics, Psychographics, Values, and

Personality

Analyzing and Predicting Consumer Behavior

Demographics

Personality

Values

Lifestyles

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Demographic Analysis to Predict Consumer Behavior

Demographics

Age Structure of Markets

Geographic Factors

Economic Resources

Global Markets

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Consumer analysts use demo-graphic trends to predict changes indemand for and consumption ofspecific products and services

Demographic analysis providesinformation for social policy

Industrial demand is ultimatelyderived from consumer demand

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Changing Structure of Consumer Markets

How many people will there be?

BirthratesDeath ratesNet Immigration

Birthrate: number of live births per1,000 population in a given year

Fertility rate: number of live births per1,000 women of childbearing age (15to 44 years)

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Total fertility rate: average number ofchildren that would be born alive to awoman during her lifetime if shepassed through childbearing yearsconforming to age-specific fertilityrates

Population momentum: future growthof any population will be influencedby its present age distribution

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Factors affecting birthrates:• Age distribution of population• Family structure• Social attitudes toward family/children• Technology • Ethnicity (varying birthrates)

Increasing life expectancy

Immigration represents about 25% ofannual growth in United States

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Changing U.S. Age DistributionChanges in age distribution affectsdemand for specific products andservices

Marketers can adapt product features,packaging, and communicationstrategies and messages dependingon changing age structure of markets

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As the number ofolder, healthconsciousconsumersincreased in the1990s, so did thepopularity ofhealthy, easy-to-prepare frozenmeals, such asHealthy Choice.

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Children As Consumers

• Children makepurchasesthemselves

• Parents buy forchildren

• Buying morequality goods

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Rise of Teenagers

• Greater need for peer acceptance,which often guides product andbrand choice

• More likely to switch brands quickerthan other segments

• Teens like the social aspects ofshopping with friends

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Young Adults

This group (24-to-35):

• Need to buy products to set uphouseholds and for young children

• With many needs and greaterfinancial restraints, they often shopat value-oriented retailers

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Baby Boomers and MuppiesThese groups (45 to 55 years and 56to 65 years) are projected to grow bysix to ten million by 2010

Good market for spas, travel, healthclubs, cosmetics, health foods, andrestaurants

This group may be “aging” but doesn’twant to be reminded

Breaking mold of what “50” looks andfeels like

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Young Again Market

Also referred to as mature market,seniors, and elderly

These segments are expected togrow substantially

Many in this segment are feeling,thinking, and buying younger thanprevious generations

Many have adopted “young again”lifestyles and attitudes

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Young Again Market

Cognitive age: the age a personperceives himself of herself to be

Many advertisers appeal more tocognitive age than chronological agein ads to this segment

Cognitive age can be used fortargeting segments within this group,developing more creative content,and selecting more effective media

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Young Again Market

Important segmentation variables forthis group include health, activitylevel, discretionary time, engagementin society, and gender

Communicating with this segmentoften requires alteration of messagesand materials

-larger type and bright colors-newspapers and AM radio-models they can relate to

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Demographics


Geographic Factors

Economic Resources

Global Markets

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Changing Geography of DemandGeodemography, which combinessocioeconomic factors with wherepeople live, helps examine andcharacterize consumer demand

• Metropolitan statistical area (MSA): a free-standing metropolitan area surrounded by non-metropolitan counties

• Primary MSA (PMSA): metropolitan area closelyrelated to another city

• Consolidated MSA: a grouping of PMSAs

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Changing Geography of DemandLow Growth States (less than

4%)High Growth States (greater

than10%)

Indiana

Kentucky

Michigan

New York

Ohio

Pennsylvania

South Dakota

Vermont

Wisconsin

Arizona

Alaska

California

District of Columbia

Florida

Hawaii

Texas

Washington

Wyoming

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Demographics


Geographic Factors

Economic Resources

Global Markets

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Economic ResourcesIncome: money from wages, salaries,interest, and welfare payments

Wealth: a measure of a family’s networth (assets minus liabilities)

Net worth influences willingness tospend but not necessarily ability tospend, since many assets are notliquid and difficult to spend

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Targeting the Up Market

• Print oriented communication

• Simple ads that promote image

• Credibility of source selling product

• Product reviews influence this group

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Targeting the Down Market

• Good products atreasonable prices

• Promote value in adsand in store

• Limit services performedfor customers to keepprices low

• Keep stores clean

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Demographics


Geographic Factors

Economic Resources

Global Markets

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Global Market AnalysisAttractive markets have bothpopulation growth and consumers withability to buy products

Which countries will grow the most inthe future?

Which countrieshave the highestGNP per capita?

How to marketthroughout the world

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1. India2. China3. United States4. Nigeria5. Indonesia6. Pakistan7. Brazil8. Bangladesh9. Congo

10. Mexico11. Ethiopia12. Philippines13. Russia14. Vietnam15. Egypt16. Iran17. Turkey18. Japan19. Saudi Arabia20. Sudan

1. China2. India3. United States4. Indonesia5. Brazil6. Russia7. Pakistan8. Bangladesh9. Japan

10. Nigeria11. Mexico12. Germany13. Philippines14. Vietnam15. Egypt16. Turkey17. Iran18. Thailand19. Ethiopia20. United Kingdom

Top 20 Countries Measured by Population

2000 2050

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Developing Countries• Marketers may have to teach

consumers about products they do notknow (deodorant)

• Need to stimulate product trial

• Brand awareness is importantbecause competitors will follow

• Ads with price information or witheconomic appeal often attract interest

• Visual language is often required

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Consumer Behavior in Latin America

Some of the most attractive marketsinclude Brazil, Colombia, Venezuela,Chile, and Argentina

Most countries have high populationgrowth rates and large markets ofyoung consumers, and some havepromising income growth rates

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Consumer Behavior in Eastern Europe

Influence of TV and movies on culturehas caused consumers to have similarpreferences and tastes of westernconsumers

Hungary, Poland, and Yugoslavia havereceived much attention frommarketers

Marketers have launched a myriad ofsuccessful brands

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Consumer Behavior in Europe

The EU is a market larger than theUnited States

Extremely low population growthmakes customer retention extremelyimportant for marketers

Products and people move acrossborders easily

Marketers can approach Europe as asingle market, but national identity stillexists among consumers

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Demographics

Personality

Values

Lifestyles

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Personality

How does personality influence consumer behavior?

• consistent responses to environ-mentalstimuli

• an individual’s unique psychologicalmakeup, which consistently influences howthe person responds to his or herenvironment

Personality:

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Personality

• Human personality system consists of the id,ego, and superego

• The dynamic interaction of these results inunconscious motivations that are manifestedin observed human behavior

• Personality is more than just subconsciousdrives

• Some advertising is influenced bypsychoanalytic approach

Psychoanalytic theory

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Personality

• Recognizes interdependence of the individualand society-- individual strives to meet needsof society and society helps individual attaingoals

• Social variables (rather than biologicalinstinct) are most important in shapingpersonality

• Person may buy a product that symbolizesunattainable or unacceptable goal--”forbiddendesire”

Socio-Psychological Theory

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Personality

• Quantitative approach to personality

• Personality made up of traits: anydistinguishable, relatively enduring way inwhich individuals differ from one another

• Understanding consumer traits can be usefulin marketing plans

• Practical application is brand personality: thepersonality consumers interpret from a brand

Trait-Factor Theory

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Haagen Dazsprojects an elegant,indulgent, andspecial personality

in this ad.

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Personality to Predict BehaviorResearch typically focused onrelationships between personalityvariables and consumer behaviors

Research tried to predict brand andstore choice based on personality butwith poor results

Application problems: people withcommon personalities can representvast demographic segments, butmedia is often segmented on thesevariables

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Demographics

Personality

Values

Lifestyles

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Personal Values

• Represent person’s beliefs about life andacceptable behavior

• Unlike attitudes, they transcend situations orevents and are more enduring because theyare more central in personality structure

• Represent 3 universal requirements:• biological needs, coordinated social

interaction, and group survival and functioning

Values:

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Personal ValuesSocial values define “normal”behavior for a society or group

Personal values define “normal”behavior for an individual

Social values of groups to which anindividual belongs, influence personalvalues

Values are used to understandadvertising cognitions, product orbrand choice and segmentation

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Rokeach Value ScaleValues are concerned with goals andways of behaving to obtain them

Values are enduring beliefs thatspecific modes of conduct or endstates of existence are preferable toothers

RVS asks people to rank importanceof a series of goals and ways ofbehaving--can be used to segmentgroups based on values systems

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Rokeach Value ScaleInstrumental (Modes of Conduct)Terminal Values (End States)

Ambition Broad-minded Capable Cheerful Clean Courageous Forgiving Honest Imaginative Independent Intellectual Logical

A comfortable lifeAn exciting lifeA world at peaceA world of beautyEqualityFamily securityFreedomHappinessInner harmonyMature loveNational securityPleasure

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Schwartz Value ScaleDesigned to measure a compre-hensive set of values thought to beheld by nearly everyone

Values are trans-situational goalsthat serve the interest of individualsor groups and express one of tenuniversal motivations or value types

The ten values and four higher-order value domains represent acontinuum of related motivations

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Structural Relation of Motivational Value Types

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Exemplary ValuesValue Type

Power Authority, wealth

Achievement Successful, capable

Hedonism Pleasure, enjoying life

Stimulation Daring, exciting life

Self-direction Creativity, curious

Universalism Social justice, equality

Tradition Humble, devout

Conformity Politeness, obedient

Security Social order, clean

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Values and The Decision ProcessLaddering: in-depth probing directedtoward uncovering higher-levelmeanings at both the benefit level andthe value level

It seeks linkages between productattributes, personal outcomes, andvalues

Identifying which product attributeappeals to which value-basedsegment can guide advertising andmarketing appeals

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Demographics

Personality

Values

Lifestyles

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Lifestyle Concepts

Lifestyle: patterns in which people liveand spend time and money

Reflects their activities, interests, andopinions

Since lifestyles change readily,marketers must keep researchmethods and marketing strategiescurrent

Lifestyles can affect which goods aresold and how positioned

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Vittel highlightshow its waterbottles fit into anactive lifestyle byfeaturing thedrinking cap and amodel who is roller-blading.

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Lifestyle Concepts

Psychographics: an operationaltechnique to measure lifestyles

Can be used in qualitative andquantitative research methods

Demographics focus more on whobuys products; psychographics focuson why they buy

AIO measures: activities, interests,and opinions

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AIO Categories of Lifestyle Studies

Interests OpinionsActivities

FamilyHomeJobCommunityRecreationFashionFoodMediaAchievements

Social IssuesPoliticsThemselvesBusinessEconomicsEducationProductsFutureCulture

WorkHobbiesSocial EventsVacationEntertainmentCommunityShoppingSportsVolunteering

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Lifestyle Segmentation

Develop a deeper understanding of asegment or define segment

Use Likert scale to respond to variousAIO statements

Gain understanding of which life-styles influence purchase andconsumption behaviors

Marketers can develop packaging andcommunication strategies accordingly

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The Martha Stewartbrand, featured atKmart, has come torepresent a lifestylesegment.

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Values And Lifestyle SystemVALS2™ captures consumers’ attitudes andvalues by measuring how strongly they agree ordisagree with various phrases

Classifications of self-orientations:

• Principle oriented: make purchases based ontheir principles not others’

• Status oriented: heavily influenced by others’beliefs, opinions, and views

• Action oriented: buy to affect environ-mentand seek activity, variety, and risk

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VALS Lifestyle Segments

Actualizers

StrugglersLow Resources

High Resources

Status Orientation

Action OrientationPrinciple Orientation

Fulfilleds

Believers

Achievers

Strivers

Experiencers

Makers

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VALS Lifestyle Categories • Actualizers: successful, active, sophis-ticated

consumers with many resources and high self-esteem. Image is important.

• Fulfilleds: satisfied, mature, comfortable,practical people, who look for durability, value,and functionality in products.

• Believers: principle oriented, with beliefs basedon codes of church, community, family, andnation. Buy proven brands from home country.

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VALS Lifestyle Categories • Achievers: career-oriented, like to feel in

control of their lives, and prefer prestigebrands that signal success. Social livesrevolve around family, church, and career.

• Strivers: concerned about approval ofothers and seek self-definition, security,and image of success. Emulate those theywant to be like, but lack resources.

• Experiencers: young, enthusiastic, impul-sive, and like risk taking, variety, andexcitement. Like new and off-beatproducts and activities.

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VALS Lifestyle Categories • Makers: tend to focus on self-sufficiency, live within

context of family and work, and pay little attention toissues outside of their realm. Often make and fixthings themselves.

• Strugglers: poor and usually poorly educated, have nosocial bonds, and are concerned with issues of themoment, such as obtaining food and healthcare. Theyare cautious consumers and seek safety and security.

Review Question

Define personality and briefly explain how personalitycan be used to predict behavior.

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presentation chapter 7...consumer behavior demographics age structure of markets geographic factors...

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