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Consumer

Person who uses the product

Customer

Person who buys the product

Gatekeeper

Person who oversees care of another


Think of 3 Examples:
1.

Manager

2.

Business owner

3.

Supplier

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
More retailers enter the market (tattoo parlors)
category becomes
popular

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

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:

1. Iggy Azalea
2. bruno marz
3. smartphones
4. digital cameras
5. traditional film cameras
Think of one
example for
each stage

1.

IPhone 6

2.

Shawn Mendes

3.

Juice boxs

4.

Desktop computers

5.

Block buster

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
that use a
push
strategy

Are often very successful during the middle portion of the growth stage
using low prices

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 Stage

End of the road

Strategies
New uses, new market
for this stage

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

Target Market

Innovators

Early Adopters

Majority

Late Majority

Laggards

Growth

Maturity

Decline

Decision Point

Question Mark

Star

Cash Cow

Dog

Penetrate

Penetrate

Lower

Liquidate

Product Life Cycle


Introduction
Profitability
Question Mark/
Dog
Pricing Strategy
Skim

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 stuf

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 eforts 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

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 ofending 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 diferent geographic locations have diferent wants


and needs.

3 main geographic
categories

Urban consumer

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 stuf

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 eforts on maintaining the
loyalty of customers belonging to the golden 20% that drive
most of our business, while spending less efort 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 non-users

Value equation

Almost all consumers


are non users

In the introductory stage

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 aford
it on the negative.

Marketers use the following to


make people want products:

Thorndikes Law of Efect:

Peer Pressure

Celebrity Endorsement

Consumers are motivated to buy products that


produce positive events and to avoid products that

produce negative events

Maslows Hierarchy of Needs

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

Impulse

Pull Strategy

Shopping

Combo Strategy

Big Ticket/Specialty