Demographics, Psycho Graphics & Personality Ch 7

Demographics, Psychographics and

Personality

CHAPTER 7

Analysing and predicting consumer behaviour

Demographics

Personality

Personal Values

Lifestyles


Demographics is the size, structure, and distribution of a population

Marketers use demographic analysis as market segment descriptors and in trend analysis

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 to predict consumer behaviour

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

Demographic and industrial demand

Analysis of demographic trends is important for industrial and business-to-business marketing

In an industrial firm, you must understand not only the customers’ minds, but also the minds of the customers’ customers

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

– birthrate– natural increase– fertility rate– total fertility rate– population momentum

How many people will there be?


Birthrate: number of live births per 1000 population in a given year

Natural increase: surplus of births over death in a given period

Fertility rate: number of live births per 1000 women of childbearing age (15 to 44 years)

Population momentum: future growth of any population will be influenced by its present age distribution


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

Children as consumersProjected increase in number of young children between 2000 and 2010

The importance of children as consumers increases even more, with the higher proportion of first-order babies generating higher demand for quality products and services

Most parents do most of the buying

Children often involved in family purchasing decisions

Children often have their own ability to buy

Australian population projections

Generation YBorn 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

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, they often shop at value-oriented retailers

Baby Boomers (or Muppies)This group (45 to 64 years) is projected to grow to 19 million by 2010

Good market for luxury travel, spas, health clubs, cosmetics, salons, diet plans foods and health foods

Group represents the greatest share of the work force, the greatest share of income, and the greatest share of voting power and political influence

Young-again market

Also referred to as mature market, seniors, and elderly

These segments are expected to grow substantially

Despite advanced chronologic age, many in this segment feel, think and buy young

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

Macromarketing to an ageing population

The ageing 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

One solution to this problem includes increasing the age at which benefits begin, thus changing the age at which people and organisations expect to retire

Quasi-retirement is another option where more experienced workers fill in for younger workers during vacations, sabbaticals, training or maternity leaves

Changing geography of demandGeodemography refers to where people live, how they earn and spend their money, 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

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

Economic resources

The ability to buy, typically measured by income and wealth– 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, stocks, and a home, minus its liabilities such as home mortgage and credit card balances

Economic resourcesWhat 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, staffing or promotional budgets

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

– 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-marketThroughout 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

– Provide good products at reasonable prices

– Maintaining attractive stores

– Offering stylish and up-to-date products– Have friendly employees that treat customers with respect

Global market analysisThe 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 highestper capita income?

Global market analysisLow income countries offer an advantage to firms looking to buy products from the lowest-cost source

There are pockets ofconsumers who areable to buy products, even in the poorest countries

Emerging marketsMarketing 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 behaviour in the Pacific Rim

South Asia

India

China

Australia

Japan

Consumer behaviour in Latin America

Some of the most attractive markets include Brazil, Venezuela, Colombia, Argentina 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

Consumer behaviour 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 behaviour 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, but national identity still exists among consumers


Demographics

Personality

Personal values

Lifestyles

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

How does personality influence consumer behaviour?– Psychoanalytic Theory– Sociopsychological Theory– Trait-Factor Theory

Predicting buyer behaviourResearch typically attempts to find relationships between personality variables and consumer behaviours

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


Demographics

Personality

Personal values

Lifestyles

Personal values

Values represent consumer beliefs about life and acceptable behaviour

Unlike attitudes, values transcend situations or events and are more enduring because they are more central in the personality structure

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 valuesSocial values define ‘normal’ behaviour for a society or group

Personal values define ‘normal’ behaviour 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 emphasise

Exemplary valuesValue type

Power Authority, wealth

Achievement Successful, capable

Hedonism Pleasure, enjoying life

Stimulation Daring, exciting life

Self-direction Creativity, curious

Universalism Social justice, equality

Benevolence Helpful, honest

Tradition Humble, devout

Conformity Politeness, obedient

Security Social order, clean

Values and consumer decision process

Personal values help explain how we answer the question, ‘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

Identifying which product attribute appeals to which value-based segment can guide alternative advertising and marketing strategies

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


RVS asks people to rank the importance of a series of goals and ways of behaving which can be analysed 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

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 higher-order value domains represent a continuum of related motivations


Demographics

Personality

Personal values

Lifestyles

Lifestyle conceptsLifestyle: patterns in which people live and spend time and money

Reflects a person’s activities, interests, and opinions (AIO) as well as demographic variables

Since lifestyles change readily, marketers must keep research methods and marketing strategies current

Psychographics: an operational technique to measure lifestyles; 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 conceptsDemographics profile who buys products whereas psychographics focus on why they buy

AIO measures: activities, interests and opinions of consumers

Market segmentationDevelop 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

Demographics, Psycho Graphics & Personality Ch 7

Documents

Transcript of Demographics, Psycho Graphics & Personality Ch 7