CHAPTER 7

Demographics, Psychographics, and Personality

Analyzing and Predicting Consumer Behavior
Demographics Personality Personal Values Lifestyles

Analyzing and Predicting Consumer Behavior
Demographics is the size, structure, and distribution of a population

and distribution of a population Marketers use demographic analysis as market segment descriptors and in trend analysis . structure.Analyzing and Predicting Consumer Behavior Demographics is the size.

Demographic Analysis to Predict Consumer Behavior Consumer analysts use demographic trends to predict changes in demand for and consumption of specific products and services .

Demographic Analysis to Predict Consumer Behavior Consumer analysts use demographic trends to predict changes in demand for and consumption of specific products and services Demographic analysis provides information for social policy .

Demographic Analysis and Social Policy Demographics used in analyzing policy questions related to the aggregate performance of marketing in society (macromarketing) .

Demographic Analysis to Predict Consumer Behavior Consumer analysts use demographic trends to predict changes in demand for and consumption of specific products and services Demographic analysis provides information for social policy Industrial demand is ultimately derived from consumer demand .

you must understand not only the customers’ minds.Demographic and Industrial Demand Analysis of demographic trends is important for industrial and business-to-business marketing In an industrial firm. but also the minds of the customers’ customers .

Demographic Analysis to Predict Consumer Behavior Demographics Changing Structure of Markets Geographic Factors Economic Resources Global Markets .

Changing Structure of Consumer Markets Market analysis requires information about people with needs ability to buy willingness to buy authority to buy .

Changing Structure of Consumer Markets How many people will there be? birthrate natural increase fertility rate total fertility rate population momentum .

000 population in a given year Natural increase: surplus of births over death in a given period Fertility rate: number of live births per 1.000 women of childbearing age (15 to 44 years) .Changing Structure of Consumer Markets Birthrate: number of live births per 1.

Changing Structure of Consumer Markets Total fertility rate: average number of children that would be born alive to a woman during her lifetime if she were to pass through all of her childbearing years conforming to age-specific fertility rates of a given year .

Changing Structure of Consumer Markets Population momentum: future growth of any population will be influenced by its present age distribution .

Changing Structure of Consumer Markets Factors affecting birthrates: Age distribution of population Family structure Social attitudes toward family/children Technology .

Changing Structure of Consumer Markets Factors affecting birthrates: Age distribution of population Family structure Social attitudes toward family/children Technology Increasing life expectancy Immigration represents about 30% of annual growth in United States .

S. Population Projections .U.

Changing U.S. Age Distribution Changes in age distribution affects the types of products and services that will be bought and consumed in the future Cohort analysis is fundamental to understanding changing consumer markets A cohort is any group of individuals linked as a group in some way .

Changing U. Age Distribution The key to cohort analysis is examining the influences that are shared by most people in a specific group Ultimately. these influences affect consumer decision processes and the types of products. and retailers consumers prefer when responding to a firm’s marketing strategy .S. brands.

Children As Consumers Projected increase in number of young children between 2000 and 2010 .

Children As Consumers Projected increase in number of young children between 2000 and 2010 The importance of children as consumers increases even more. with the higher proportion of firstorder babies generating higher demand for quality products and services .

Children As Consumers Most parents do most of the buying Children often involved in family purchasing decisions Children often have their own ability to buy .

Generation Y Born in the 1980s and early 1990s with 72 million members Greater need for peer acceptance. which often guides product and brand choice More likely to switch brands quicker than other segments Teens like the social aspects of shopping with friends .

Appealing to Generation Y .

they often shop at value-oriented retailers .Generation X (Young Adults) Segment of 25-to-34 year olds is declining but will have a slight increase with the inclusion of older Gen Y consumers Need to buy products to set up households and for young children With many needs and greater financial restraints.

cosmetics.Baby Boomers or Muppies This group (45 to 64 years) is projected to grow by 19 million by 2010 Good market for luxury travel. health clubs. spas. the greatest share of income. salons. and health foods Group represents the greatest share of the workforce. and the greatest share of voting power. and political influence . diet plans foods.

Young Again Market Also referred to as mature market. think. and elderly These segments are expected to grow substantially Despite advanced chronologic age. and buy young . seniors. many in this segment feel.

create more effective content.Young Again Market Cognitive age: the age one perceives one’s self to be Cognitive age is measured in terms of how people feel and act. and perceive their looks Can be used with chronologic age to better target segments. express interests. and select the most efficient media channels .

Young Again Market Important segmentation variables for this group include health. and gender Communicating with this segment often requires alteration of traditional messages and materials .newspapers and AM radio . engagement in society. activity level.larger type and bright colors . discretionary time.sensitive to revealing their age .

Macromarketing to an Aging Population The aging populations of the United States. Japan. Canada. and Europe will have enormous effects on macromarketing and social policy Younger consumers may have considerably less financial resources at their disposal due to future contributions to Social Security and Medicare .

Macromarketing to an Aging Population One solution to this problem includes increasing the age at which benefits begin. thus changing the age at which people and organizations expect to retire Quasi-retirement is another option where more experienced workers fill in for younger workers during vacations. or maternity leaves . training. sabbaticals.

Demographic Analysis to Predict Consumer Behavior Demographics Age Structure of Markets Geographic Factors Economic Resources Global Markets .

Demographic Analysis to Predict Consumer Behavior Demographics Age Structure of Markets Geographic Factors Economic Resources Global Markets .

and other socioeconomic factors . refers to where people live. how they earn and spend their money.Changing Geography of Demand Geodemography.

refers to where people live.Changing Geography of Demand Geodemography. and other socioeconomic factors The study of demand related to geographic areas assumes that people who live in proximity to one another also share similar consumption patterns and preferences Cities are the most important unit of analysis in most marketing plans . how they earn and spend their money.

Changing Geography of Demand Metropolitan statistical area (MSA): a free-standing metropolitan area surrounded by non-metropolitan counties and not closely related to other metropolitan areas Primary MSA (PMSA): metropolitan area closely related to another city Consolidated MSA (CMSA): a grouping of closely related PMSAs .

Changing Geography of Demand The greatest gains in population are expected in California. Texas and Florida These states are considered prime candidates for new stores compared to other states where populations may be declining Growth rate may be deceptive unless the size of the population is also taken into account Geographic variables affect many components of a firm’s marketing strategy .

Demographic Analysis to Predict Consumer Behavior Demographics Age Structure of Markets Geographic Factors Economic Resources Global Markets .

Economic Resources The ability to buy. typically measured by income and wealth .

Economic Resources Income: money from wages and salaries as well as interest and welfare payments .

staffing. or promotional budgets .Economic Resources What consumers think will happen in the future (consumer confidence) heavily influences consumption Influences whether consumers will increase their debt or defer spending to pay off debt Measures of consumer confidence are important in making decisions about inventory levels.

Economic Resources Income: money from wages and salaries as well as interest and welfare payments Wealth: a measure of a family’s net worth or assets in things such as bank accounts. and a home. stocks. minus its liabilities such as home mortgage and credit card balances .

Economic Resources Net worth influences willingness to spend but not necessarily ability to spend. because much wealth is not liquid and cannot be spent easily How much people accumulate over the years is more a function of how much they save rather than how much they earn .

Targeting the Up Market The superaffluent represent the top quintile of consumers in terms of income Households often consists of two income earners who place a high value on time They value extra services provided by some retailers Saving money is as important as spending it for many individuals in this group .

Targeting the Up Market Shop discount stores. use coupons. and wait for sales More print oriented in communications Simple ads that promote image Credibility of source selling product Product reviews influence this group .

Targeting the Down Market Throughout the world. the majority of consumers are low income Retailers such as Wal*Mart have found success by providing good products at reasonable prices Closeout stores offer brand name products at deep discounts to at all income-level consumers Dollar stores are one of the fastest growing retail categories .

Targeting the Down Market Provide good products at reasonable prices Maintaining attractive stores Offering stylish and up-to-date products Have friendly employees that treat customers with respect .

Demographic Analysis to Predict Consumer Behavior Demographics Age Structure of Markets Geographic Factors Economic Resources Global Markets .

Global Market Analysis The most attractive markets are countries that are growing both in population and in economic resources .

Global Market Analysis The most attractive markets are countries that are growing both in population and in economic resources Which countries will grow the most in the future? .

Global Market Analysis The most attractive markets are countries that are growing both in population and in economic resources Which countries will grow the most in the future? Which countries have the highest per capita income? .

Global Market Analysis Low income countries offer an advantage to firms looking to buy products from the lowest-cost source There are pockets of consumers who are able to buy products. even in the poorest countries .

Emerging Markets Marketing programs should focus on creating brand awareness (because competitors will follow) and stimulating product trial Marketers may have to teach consumers about products taken for granted (deodorant) Products may have to be adapted to local values .

Consumer Behavior in the Pacific Rim .

Consumer Behavior in the Pacific Rim South Asia India China Australia Japan .

Consumer Behavior in Latin America .

and Chile Most countries have high population growth rates. moderately high incomes close proximity Intermarket segmentation provides a basis to identify segments that can afford certain items . Argentina. Venezuela.Consumer Behavior in Latin America Some of the most attractive markets include Brazil. Colombia.

Consumer Behavior in Eastern Europe .

Consumer Behavior in Eastern Europe The attractiveness of Eastern European markets lies in their similar preferences to Western consumers Hungary and Poland have received much attention from global marketers Marketers have launched a myriad of successful brands .

Consumer Behavior in The EU .

and marketing economies of scale .Consumer Behavior in The EU The EU is a market larger than the United States Extremely low population growth makes customer retention extremely important for marketers Products and people move across borders easily Efficiencies include logistics. financial arrangements.

and marketing economies of scale Marketers can approach Europe as a single market.Consumer Behavior in The EU Efficiencies include logistics. financial arrangements. but national identity still exists among consumers .

Analyzing and Predicting Consumer Behavior Demographics Personality Personal Values Lifestyles .

which consistently influences how the person responds to his or her environment .Personality Personality: consistent responses to environmental stimuli an individual’s unique psychological makeup.

Personality Personality: How does personality influence consumer behavior? Psychoanalytic Theory Sociopsychological Theory Trait-Factor Theory .

ego. and superego The dynamic interaction of these results in unconscious motivations that are manifested in observed human behavior Personality is derived from conflict between the desire to satisfy physical needs and the needs to be a contributing member of society .Personality Psychoanalytic theory Human personality system consists of the id.

Personality Psychoanalytic theory Personality is a result of more than just subconscious drives Some advertising is influenced by psychoanalytic approach .

Personality
Sociopsychological Theory
Recognizes interdependence of the individual and society—individual strives to meet needs of society and society helps individual attain personal goals Social variables (rather than biological instinct) are most important in shaping personality Behavioral motivation is directed to meet those needs

Personality
Sociopsychological Theory
Person may buy a product that symbolizes an unattainable or unacceptable goal—the acquisition fulfills some subconscious “forbidden desire”

Personality
Trait-Factor Theory
Quantitative approach to personality Personality made up of traits: any distinguishable, relatively enduring way in which one individual differs from another Understanding consumer traits can be useful in marketing planning

Personality Trait-Factor Theory Assumes that traits are common to many individuals and vary in absolute amounts among individuals Traits are relatively stable and exert fairly universal effects on behavior regardless of the environmental situation Traits can be inferred from the measurement of behavioral indicators .

Personality
Trait-Factor Theory
Trait theory is most useful to marketing strategists in developing brand personality—the personality consumers interpret from a specific brand Brands may be characterized as oldfashioned, modern, fun, provocative, masculine, or glamorous

Predicting Buyer Behavior
Research typically attempts to find relationships between personality variables and consumer behaviors

Predicting Buyer Behavior
Research typically attempts to find relationships between personality variables and consumer behaviors Research tried to predict brand and store preference based on personality but with poor results

Predicting Buyer Behavior Research typically attempts to find relationships between personality variables and consumer behaviors Research tried to predict brand and store preference based on personality but with poor results Personality is just one variable in the consumer decision making process .

Analyzing and Predicting Consumer Behavior Demographics Personality Personal Values Lifestyles .

values transcend situations or events and are more enduring because they are more central in the personality structure .Personal Values Values: Represent consumer beliefs about life and acceptable behavior Unlike attitudes.

Personal Values Values: Represent three universal requirements: biological needs. requisites of coordinated social interaction. and demands for group survival and functioning Values express the goals that motivate people and the appropriate ways to attain those goals .

Personal Values Social values define “normal” behavior for a society or group Personal values define “normal” behavior for an individual Personal values reflect the choices an individual makes from the variety of social values or social systems to which they are exposed Individuals pick and choose which social values to emphasize .

Rokeach Value Scale (RVS) Values are concerned with goals and ways of behaving to obtain them Values are enduring beliefs that specific modes of conduct or end states of existence are personally or socially preferable to opposing modes of conduct or end states or existence .

Rokeach Value Scale (RVS) RVS asks people to rank the importance of a series of goals and ways of behaving which can be analyzed by whatever variable might be of interest in consumer analysis Consumer analysts are using values as a criterion for segmenting the population into homogeneous groups .

Rokeach Value Scale (RVS) .

Schwartz Value Scale (SVS) Designed to measure a comprehensive set of values thought to be held by nearly everyone Values are trans-situational goals that serve the interest of individuals or groups and express one of ten universal motivations or value types The ten values and four higherorder value domains represent a continuum of related motivations .

Structural Relation of Motivational Value Types .

Value Type Exemplary Values .

Value Type Exemplary Values Authority. curious Social justice. enjoying life Daring. equality Helpful. honest Humble. devout Politeness. exciting life Creativity. obedient Social order. clean Power Achievement Hedonism Stimulation Self-direction Universalism Benevolence Tradition Conformity Security . capable Pleasure. wealth Successful.

“Is this product for me?” While important in the need recognition stage. values also affect consumers in determining evaluative criteria Values influence the effectiveness of communications programs and are enduring motivations .Values and Consumer Decision Process Personal values help explain how we answer the question.

personal outcomes.Values and Consumer Decision Process Laddering: in-depth probing directed toward uncovering higher-level meanings at both the benefit (attribute) level and the value level It seeks linkages between product attributes. and values that serve to structure components of the cognitive network in a consumer’s mind .

Values and Consumer Decision Process Identifying which product attribute appeals to which value-based segment can guide alternative advertising and marketing strategies .

Analyzing and Predicting Consumer Behavior Demographics Personality Personal Values Lifestyles .

and opinions as well as demographic variables . interests.Lifestyle Concepts Lifestyle: patterns in which people live and spend time and money Reflects a person’s activities.

Lifestyle Concepts Lifestyle: patterns in which people live and spend time and money Reflects a person’s activities. interests. marketers must keep research methods and marketing strategies current . and opinions (AIO) as well as demographic variables Since lifestyles change readily.

it provides quantitative measures and can be used with the large samples needed for definition of market segments Can also be used in qualitative research techniques such as focus groups or in-depth interviews .Lifestyle Concepts Psychographics: an operational technique to measure lifestyles.

and opinions of consumers .Lifestyle Concepts Demographics profile who buys products whereas psychographics focus on why they buy AIO measures: activities. interests.

AIO Categories of Lifestyle Studies .

Market Segmentation Develop a deeper understanding of a segment or define segments Use Likert scale to answer various AIO statements Gain understanding of core customers lifestyles better and develop packaging and communication strategies that position products to their various lifestyle attributes .

achievement and self-expression . and satisfaction to their lives An individual’s primary motivation determines what in particular about the self or the world governs his or her activities Primary motivations include ideals. substance.Values and Lifestyle System VALS™ suggests that consumer buy products and services and seek experiences that fulfill their characteristic preference and give shape.

variety.Values And Lifestyle System Consumers who are primarily motivated by ideals are guided by knowledge and principles Consumers primarily motivated by achievement look for products or services to demonstrate their success to their peers Consumers primarily motivated by selfexpression desire social or physical activity. and risk .

VALSTM Lifestyle Segments .

and functionality in products Achievers: motivated by the desire for achievement. mature. career-oriented. Image is important Thinkers: satisfied. and work . takecharge consumers with many resources and high self-esteem. place of worship. Social lives revolve around family. comfortable. sophisticated.VALSTM Types Innovators: successful. practical people who look for durability. value. and prefer prestige brands that signal success.

security. and excitement. and like risk taking. enthusiastic. family. and nation.VALSTM Types Experiencers: young. impulsive. conventional. Like new and off-beat products and activities Like Thinkers: conservative. and motivated by ideals. with beliefs based on codes of church. and image of success. community. Buy proven brands from home country and are generally loyal consumers Strivers: concerned about approval and opinions of others and seek self-definition. but lack resources . variety. Emulate those they want to be like.

Practical people who are self-sufficient. and prefer value to luxury Survivors: live narrowly focused lives with few resources and represent a modest market for most products. live within a traditional context.VALSTM Types Like Experiencers: express themselves and experience the world by working on it. They are cautious consumers and seek safety and security .

Global Lifestyles Increased globalization requires that marketing strategy be increasingly planned on a global basis VALSTM and other approaches are being used to identify lifestyle segments across country borders and segment international markets .

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