Consumer

Personwhousestheproduct

Customer

Personwhobuystheproduct

Gatekkeeper

Personwhooverseescareofanother

Thinkof3Examples:

1. HeadNursing(Supervisor)

1. PersonalSupportWorker

1. CaseManager(Grouphomes)

ConsumerdemandIs constantlychangingbasedontheeconomicshiftsinacountry,city
orregionandontheavailabilityofnewproductsinthemarketplace.

Duringpoor
economictimesthe
demandforwants
will:

Fall

Why?Peoplearespendingwisely,mostlyonneeds.

Glut

Anoversupplyofgoodssometimesduetoanoverestimationof
demand

Asaproductcategory Moreretailersenterthemarket(tattooparlors)
becomespopular

Gaugingfluctuations
inconsumer
demandsis

Essentialtomarketing.

2.2

ProductLife
Cycles

Describethechangesin
consumerdemandovertime.

Profitability

StagesofPLC

TargetMarket

PricingStrategy

1. Introduction

Innovators

SkimHigh

Stars

1. Growthstage

Earlyadopters

Penetratemed
high

CashCows

1. MaturityStage

EarlyMajority

Penetratemed

CashCows

1. DeclineStage

LateMajority

Lower

Dogs

1. DecisionPointStage

Laggards

liquidate

Identifyatleast1productforeachofthe5stagesofthePLC:Examples:

1.
2.
3.
4.
5.

IggyAzalea
brunomarz
smartphones
digitalcameras
traditionalfilmcameras

Thinkofone
examplefor
eachstage

1.
2.
3.
4.
5.

SamSmith
TaylorSwift
DVDs
CDs
VCRs

Consignment

Allowsretailertoreturnunsoldproducttothemanufacturerafterdisplaying
themforaperiodoftime.

Shelf
Allowance

Moneypaidtotheretailertoprovidespaceforaproduct

Bust

Whenaproductispulledbeforeithasrecapturedthecostsofproduction

Most
Important
Stage

Growthstage

Benefitof
beingfirst

Nocompetitioninitially

MarketShare

Acompaniessalesasapercentageoftotalsalesforthatmarket

Barriersto
entry

Factorsthatpreventcompaniesfromrealizingaprofitinagivenmarket

Examples

1. smallmarket

1. costofresearchanddevelopment/knowhow

1. designcosts

1. lackofdistributionchannels

1. costofrawmaterial

Companies
thatusea
pushstrategy

Areoftenverysuccessfulduringthemiddleportionofthegrowthstageusing
lowprices

Maturity
Stage

Periodduringwhichsalesofaproductincreasemoreslowly,ifatall.

Profitsduring
thisstageare
usually

High

Profits
obtained
duringthis
stageare
oftenusedto

Developnewproducts

DeclineStage Whenacompanyisunabletofindnewcustomersforanewproduct

Strategiesto
boostsalesin
thedecline
stage

Redesign,reformulate,repackage

DecisionPoint Endoftheroad
Stage

Strategiesfor
thisstage

Newuses,newmarket

NicheMarket

Asmallsectionofamarket,whichhaslittlecompetition

TargetMarket

Innovators

EarlyAdopters

Majority

LateMajority

Laggards

Decline

DecisionPoint

CashCow

Dog

Lower

Liquidate

ProductLifeCycle
Introduction

Growth

Maturity
Profitability

QuestionMark/
Dog

QuestionMark

Star

PricingStrategy
Skim

Penetrate

Penetrate

2.3
Cohorts

Groupsthatsharecommoncharacteristicsand
buyinghabits.

ConsumerSegment

Identifiedgroupofconsumerswithcommon
characteristicsandbuyinghabits

ConsumerSegmentcan
alsobecalleda

TargetMarket

PrimaryMarket

Mostlikelyconsumers

SecondaryMarket

OtherOccasionalconsumers

Demographics

Obviouscharacteristicsthatcategorizepeople

Includes:

Age
Gender
Familylifecycle
Incomelevel
Ethnicity
Culture

Consumerprofilesare
builtusing

demographics

PreCustomers

09:childreninfluencegatekeeperswhomakethe
decisionMarketerstrytoappealtoboth

AllowanceCustomers

1015Gatekeepersstillresponsibleformostdecisions,notall

YouthMarket

1619Relyongatekeepersforfinancialsupportneeds.Usetheir
incometopurchasewants

PostSecondaryMarket

2025Startupproducts:cheapcars,furniture,kitchenstuff

FamilyFormation

Nesters2540career,marriage,home,children.Major
purchases

Establishment

4055Earningmaximumsalaries,disposableincome
increasing.Quality,luxury,trips,investments

MatureMarket

55+:Fastestgrowingmarkettoday.Highdisposableincome.
Manyretiringearly.

BabyBoomers

Hugegroup,bornbetween19461963

Manyofthemajortrends werestartedbythebabyboomers.
inthelast50years

Gender:Moreproducts
areexclusivelymarketed
to:

Women

Productsthatwere
formerlytargetedto
womenormen

Arenowbeingmarketedtobothgenders

FamilyLifeCycle

Determinesmanyoftheconsumerswants,needsand
purchasingpatterns.

Abusinesscansellits
productsorservicesto
variousfamilylifecycle
groupsbut

Itwilltailoritsmarketingeffortstomatchtheneedsofeachone.

Incomelevel

Consumerscanbegroupedbyhowmuchmoneytheyhaveor
earn.

Businessesresearchthe
followingindicatorsto
determinetheincomeof
specificgroupsof
consumers

Postalcodes
Employment
Numberofchildren
Education
PropertyOwnership

Ethnicityandculture

Businessesthatdonotunderstandthecultureoftheir
consumersriskoffendingthem.

Whenmarketingin
anothercountry

Itisessentialtoresearchthecultureofthetargetmarket.

Psychographics

Isasystemformeasuringconsumersbeliefs,opinionsand
interests

Examples

Psychographictraitsare
lessobvious

Religiousbeliefs
Tastesinmusic
Lifestyle
Attitudestowardhealth
Personalitytraits
AttitudetowardstheEnvironment

Thandemographicsandmuchmoredifficulttomeasure,but
theyareequallyimportanttobusinesses

Geographics:
Consumers

Livingindifferentgeographiclocationshavedifferentwantsand
needs.

3maingeographic
categories

Urban
Suburban
Rural

Urbanconsumer

1. liveswithin:an:apartment,condoorhousewithsmall
yard
2. Spendson:cultural,restaurants,parking,transportation

SuburbanConsumer

Spendsmoneyon:cars,gardens,barbecues,householdstuff

Ruralconsumersare
often

Farmersorpeoplewhohavelargepiecesofland

Ruralconsumersoften
need

Trucks,ridingmowers,tractors

ProductUseStatistics

Categorizeconsumersbyhowfrequentlytheyuseaspecifictype
ofproduct

4Typesofproductuse
consumers

1.
2.
3.
4.

HeavyUser
mediumuser
lightuser
nonuser

ParetoPrinciple

Fewrulesaremorewidelyquotedinmarketingtodaythanthe
80/20Rule(thePareto'sPrinciple),whichstatesthat80%of
yoursalescomefromjust20%ofyourcustomerbase.

Inthisageofrelationshipmarketing,thisrulehasbecomean
oftenheardbattlecrytofocusoureffortsonmaintainingthe
loyaltyofcustomersbelongingtothegolden20%thatdrivemost
ofourbusiness,whilespendinglesseffortonthetrivialother
80%.

PointofEntryTarget

Thosewhowillenteracategory

Truenonuser

Individualswhodonotplantouseproductsinacategory

Marketersmustchange
anonusers

Valueequation

Almostallconsumersare Intheintroductorystage
nonusers

2.4ConsumerMotivation

Motivationis

Biological,emotional,rationalorsocialforcethatactivates
anddirectsbehaviour.

Biologicalneedsare

Dominantbecausetheyhavetheirrootsinthebasicneed
forsurvival.

Emotionalneeds:

Thevalueequationplaces:pleasureontheplussideand
thepaininvolvedinearningthemoneytoafforditonthe

negative.

Marketersusethefollowingto
makepeoplewantproducts:

PeerPressure
CelebrityEndorsement

ThorndikesLawofEffect:

Consumersaremotivatedtobuyproductsthatproduce
positiveeventsandtoavoidproductsthatproducenegative
events

MaslowsHierarchyofNeeds

1.
2.
3.
4.
5.

Physiological
Safety
Affiliation:Friends,relationships
Esteem:success
SelfActualization

Cannotworryabouthigher
levelneedsuntil:

Lowerlevelneedsaremet.

DestinationLocations

Storesthatconsumerswillvisitandwilltraveltogetto.
Usuallyforlargeticketitemsorspecialtyitems.

Largeticketitembuying
process

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

Wantiscreated
CriteriaissetFeaturesneeded
Searchbegins
Decisionismade
Purchaseismade
Purchaseisevaluated

ShoppingGood

Categoriesofproductsinsteadofbrands

Iftheconsumerhasnot
decidedonthebrand

Thestoredisplay,selection,price,andpackagingwill
influencethedecision

Impulseitems

Goodsthatarepurchasedwithnoforethought.candybarat
checkout

Pushstrategy

Impulse

PullStrategy

Shopping

ComboStrategy

BigTicket/Specialty