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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. A secretary who controls which callers will get to speak with the
head of the company.
2. A caregiver for a disabled or elderly person.
3. The parent or guardian of a child.

Consumer demand constantly changing based on the economic shifts in a country, city or region
Is
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
Cycles

Describe the changes in consumer


demand over time.

Profitability
?
Stars
Cash Cows
Cash Cows
Dogs

Stages of PLC
1. Introduction
2. Growth stage
3. Maturity Stage
4. Decline Stage
5. Decision Point Stage

Target Market
Innovators
Early adopters
Early Majority
Late Majority
Laggards

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. Apple TV
2.

Smart TVs

3.

Laptops

4.

Desktop computers

5.

PDAs

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 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

Introduction

Growth

Question Mark/
Dog

Question Mark

Majority
Product Life Cycle
Maturity
Profitability
Star

Penetrate

Pricing Strategy
Penetrate

Skim

Late Majority

Laggards

Decline

Decision Point

Cash Cow

Dog

Lower

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 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 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 one.
products or services to
various family life-cycle
groups but
Income level
Businesses research the
following indicators to
determine the income of
specific groups of
consumers

Ethnicity and culture

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

Postal codes

Employment

Number of children

Education

Property Ownership

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

Psychographic traits are


less obvious

Attitude towards the Environment


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 consumer

Suburban Consumer

Urban

Suburban

Rural

1.

lives within: an: apartment, condo or house with small yard

2.

Spends on: cultural, restaurants, parking, transportation

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

4 Types of product use


consumers

Categorize consumers by how frequently they use a specific type of


product
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 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 behaviour.

Biological needs are

Dominant because they have their roots in the basic need for
survival.

Emotional needs:

Marketers use the following to


make people want products:

Thorndikes Law of Effect:

Maslows Hierarchy of Needs

The value equation places: pleasure on the plus side and the
pain involved in earning the money to afford it on the
negative.

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 onThe store display, selection, price, and packaging will

the brand

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