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Consumer

Person who uses the product

Customer

Person who buys the product

Gatekkeeper

Person who oversees care of another


Think of 3 Examples:
1. Secretary
2. Foreman
3. Human Resource Manager

Consumer demand constantly changing based on the economic shifts in a country,


Is
city or region and on the availability of new products in the
marketplace.
During poor
Fall
economic times the
demand for wants
will:
Why? People are spending wisely, mostly on needs.
Glut

An oversupply of goods sometimes due to an over estimation of


demand

As a product
category becomes
popular

More retailers enter the market (tattoo parlors)

Gauging
Essential to marketing.
fluctuations in
consumer demands
is

2.2

Product Life Describe the changes in


Cycles
consumer demand over time.
Profitability Stages of PLC
?
1. Introduction
Stars
2. Growth stage

Target Market
Innovators
Early adopters

Cash Cows
Cash Cows
Dogs

Early Majority
Late Majority
Laggards

3. Maturity Stage
4. Decline Stage
5. Decision Point Stage

Pricing Strategy
Skim-High
Penetrate-med
high
Penetrate-med
Lower
liquidate

Identify at least 1 product for each of the 5 stages of the PLC: Examples:
1. Iggy Azalea
2. bruno marz
3. smartphones
4. digital cameras
Think of one
example for
each stage

5. traditional film cameras


1. Nike Hyperchase basketball shoes
2. Coconut Water
3. Iphone
4. VCR
5. Landline Phones (with cord)

Consignment Allows retailer to return unsold product to the manufacturer after


displaying them for a period of time.
Shelf
Allowance

Money paid to the retailer to provide space for a product

Bust

When a product is pulled before it has recaptured the costs of production

Most
Important
Stage

Growth stage

Benefit of
being first

No competition initially

Market Share A companies sales as a percentage of total sales for that market
Barriers to
entry
Examples

Factors that prevent companies from realizing a profit in a given market

1.
2.
3.
4.
5.

small market
cost of research and development/know how
design costs
lack of distribution channels
cost of raw material

Companies Are often very successful during the middle portion of the growth stage
that use a
using low prices
push strategy
Maturity
Stage

Period during which sales of a product increase more slowly, if at all.

Profits duringHigh
this stage are
usually
Profits
Develop new products
obtained
during this
stage are
often used to

Decline
Stage

When a company is unable to find new customers for a new product

Strategies to Redesign, reformulate, repackage


boost sales in
the decline
stage
Decision
End of the road
Point Stage
Strategies for New uses, new market
this stage
Niche MarketA small section of a market, which has little competition

Target Market
Innovators

Early Adopters

Majority
Late Majority
Product Life Cycle
Introduction
Growth
Maturity
Decline
Profitability
Question Mark/ Question Mark
Star
Cash Cow
Dog
Pricing Strategy
Skim
Penetrate
Penetrate
Lower

Laggards
Decision Point
Dog

Liquidate

2.3
Cohorts

Groups that share common characteristics and buying


habits.

Consumer Segment

Identified group of consumers with common


characteristics and buying habits

Consumer Segment can also Target Market


be called a
Primary Market

Most likely consumers

Secondary Market

Other Occasional consumers

Demographics
Includes:

Obvious characteristics that categorize people

Age

Gender

Family life cycle

Income level

Ethnicity

Culture

Consumer profiles are demographics


built using
Pre Customers

0-9: children influence gatekeepers who make the decisionMarketers try to appeal to both

Allowance Customers 10-15-Gatekeepers still responsible for most decisions, not all
Youth Market

16-19-Rely on gatekeepers for financial support-needs. Use


their income to purchase wants

Post Secondary Market 20-25-Start up products: cheap cars, furniture, kitchen stuff
Family Formation

Nesters 25-40-career, marriage, home, children. Major


purchases

Establishment

40-55- Earning maximum salaries, disposable income


increasing. Quality, luxury, trips, investments

Mature Market

55+:Fastest growing market today. High disposable income.


Many retiring early.

Baby Boomers

Huge group, born between 1946-1963

Many of the major


trends in the last 50
years

were started by the baby boomers.

Gender: More products Women


are exclusively
marketed to:
Products that were
formerly targeted to
women or men

Are now being marketed to both genders

Family Life Cycle

Determines many of the consumers wants, needs and


purchasing patterns.

A business can sell its It will tailor its marketing efforts to match the needs of each
products or services to one.
various family lifecycle groups but
Income level

Businesses research the


following indicators to
determine the income
of specific groups of
consumers

Consumers can be grouped by how much money they have or


earn.

Postal codes

Employment

Number of children

Education

Property Ownership

Ethnicity and culture

Businesses that do not understand the culture of their


consumers risk offending them.

When marketing in
another country

It is essential to research the culture of the target market.

Psychographics

Is a system for measuring consumers beliefs, opinions and


interests

Examples

Religious beliefs

Tastes in music

Lifestyle

Attitudes toward health

Personality traits

Attitude towards the Environment


Psychographic traits areThan demographics and much more difficult to measure, but
less obvious
they are equally important to businesses

Geographics:
Consumers
3 main geographic
categories

Urban consumer

Living in different geographic locations have different wants


and needs.

Urban

Suburban

Rural

1. lives within: an: apartment, condo or house with small


yard
2. Spends on: cultural, restaurants, parking, transportation

Suburban Consumer

Spends money on: cars, gardens, barbecues, household stuff

Rural consumers are


often

Farmers or people who have large pieces of land

Rural consumers often Trucks, riding mowers, tractors


need
Product Use Statistics Categorize consumers by how frequently they use a specific
type of product
4 Types of product use
consumers

1. Heavy User
2. medium user

3. light user
4. non-user
Pareto Principle

Few rules are more widely quoted in marketing today than the
80/20 Rule (the Pareto's Principle), which states that 80% of
your sales come from just 20% of your customer base.
In this age of relationship marketing, this rule has become an
often-heard battle cry to focus our efforts on maintaining the
loyalty of customers belonging to the golden 20% that drive
most of our business, while spending less effort on the trivial
other 80%.

Point of Entry Target

Those who will enter a category

True non user

Individuals who do not plan to use products in a category

Marketers must change Value equation


a non-users
Almost all consumers In the introductory stage
are non users

2.4- Consumer Motivation

Motivation is

Biological, emotional, rational or social force that


activates and directs behaviour.

Biological needs are

Dominant because they have their roots in the basic


need for survival.

Emotional needs:

The value equation places: pleasure on the plus side


and the pain involved in earning the money to afford it

on the negative.
Marketers use the following to
make people want products:

Thorndikes Law of Effect:

Maslows Hierarchy of Needs

Peer Pressure

Celebrity Endorsement

Consumers are motivated to buy products that produce


positive events and to avoid products that produce
negative events
1. Physiological
2. Safety
3. Affiliation: Friends, relationships
4. Esteem: success
5. Self Actualization

Cannot worry about higher


level needs until:

Lower level needs are met.

Destination Locations

Stores that consumers will visit and will travel to get to.
Usually for large ticket items or specialty items.

Large ticket item buying


process

1. Want is created
2. Criteria is set-Features needed
3. Search begins
4. Decision is made
5. Purchase is made
6. Purchase is evaluated

Shopping Good

Categories of products instead of brands

If the consumer has not


decided on the brand

The store display, selection, price, and packaging will


influence the decision

Impulse items

Goods that are purchased with no forethought. candy


bar at checkout
Push strategy
Pull Strategy
Combo Strategy

Impulse
Shopping
Big Ticket/Specialty