You are on page 1of 14

Consumer

Person who uses the product

Customer

Person who buys the product

Gatekeeper

Person who oversees care of another


Think of 3 Examples:
1. Parent/Guardian
2. Nanny
3. Nurse at a retirement home

Consumer demand Is

constantly changing based on the economic shifts in a country, city or


region and on the availability of new products in the marketplace.

During poor economic Fall


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 More retailers enter the market (tattoo parlors)


becomes popular

Gauging fluctuations Essential to marketing.


in consumer demands
is

2.2
Product Life
Cycles

Describe the changes in consumer


demand over time.

Profitability

Stages of PLC

Target Market

Pricing Strategy

1. Introduction

Innovators

Skim-High

Stars

2. Growth stage

Early adopters

Penetrate-med high

Cash Cows

3. Maturity Stage

Early Majority

Penetrate-med

Cash Cows

4. Decline Stage

Late Majority

Lower

Dogs

5. Decision Point Stage

Laggards

liquidate

Identify at least 1 product for each of the 5 stages of the PLC: Examples:

Think of one
example for
each stage

1.
2.
3.
4.
5.

Iggy Azalea
bruno marz
smartphones
digital cameras
traditional film cameras

1.
2.
3.
4.
5.

Meghan Trainor
Ariana Grande
Wireless electronics
flip phones (still being used by many adults)
MP3 players

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. small market
2. cost of research and development/know how
3. design costs

4. lack of distribution channels


5. cost of raw material

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

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

Profits during High


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 Point End of the road


Stage

Strategies for New uses, new market


this stage

Niche Market A small section of a market, which has little competition

Target Market

Innovators

Early Adopters

Majority

Late Majority

Laggards

Decline

Decision Point

Cash Cow

Dog

Lower

Liquidate

Product Life Cycle


Introduction

Growth

Maturity
Profitability

Question Mark/
Dog

Question Mark

Star

Pricing Strategy
Skim

Penetrate

Penetrate

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 be


called a

Target Market

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


built using

demographics

Pre Customers

0-9: children influence gatekeepers who make the decision-Marketers


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 were started by the baby boomers.


in the last 50 years

Gender: More products


are exclusively marketed
to:

Women

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


products or services to
various family life-cycle
groups but

It will tailor its marketing efforts to match the needs of each one.

Income level

Consumers can be grouped by how much money they have or earn.

Businesses research the


following indicators to
determine the income of
specific groups of
consumers

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 are


less obvious

Than demographics and much more difficult to measure, but they are
equally important to businesses

Geographics:
Consumers

Living in different geographic locations have different wants and


needs.

3 main geographic
categories

Urban
Suburban
Rural

Urban consumer

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


need

Trucks, riding mowers, tractors

Product Use Statistics

Categorize consumers by how frequently they use a specific type of


product

4 Types of product use


consumers

Pareto Principle

1.
2.
3.
4.

Heavy User
medium user
light user
non-user

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 oftenheard 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 a Value equation


non-users

Almost all consumers are In the introductory stage

non users

2.4- Consumer Motivation


Motivation is

Biological, emotional, rational or social force that activates and


directs behavior.

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

Cannot worry about higher level


needs until:

Peer Pressure
Celebrity Endorsement

Consumers are motivated to buy products that produce positive


events and to avoid products that produce negative events

1.
2.
3.
4.
5.

Physiological
Safety
Affiliation: Friends, relationships
Esteem: success
Self Actualization

Lower level needs are met.

Destination Locations

Large ticket item buying process

Shopping Good

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

1.
2.
3.
4.
5.
6.

Want is created
Criteria is set-Features needed
Search begins
Decision is made
Purchase is made
Purchase is evaluated

Categories of products instead of brands

If the consumer has not decided on The store display, selection, price, and packaging will influence
the brand
the decision

Impulse items

Goods that are purchased with no forethought. candy bar at


checkout

Push strategy

Impulse

Pull Strategy

Shopping

Combo Strategy

Big Ticket/Specialty