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Consumer demographics
Marketers use demographic analysis as market segment descriptors and in trend analysis. Consumer analysts use demo-graphic 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.
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Geographic Factors
Economic Resources Global Markets
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. These influences are shared by most people in a specific group. It affects consumer decision processes and the types of products, brands, and retailers consumers prefer when responding to a firms marketing strategy.
American Generations
Amity Business School
Generation or Age cohort is a group of persons who have experienced a common social, political, historical and economic environment. Cohort analysis is the process of describing and explaining the attitudes, values and behavior of an age group as well as predicting its future attitudes, values and behaviors.
1.
Pre-depression Generation:
Born before 1930s. > 25 mn Americans. Conservative, concerned with financial and personal security. Depression Generation: 1930-45. 35 mn Americans. Rock n Roll culture, major consumer of recreational vehicles, second homes, new cars, travel services and recreational adult education.
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Baby Boom Generation 1946-1964 80 mn Americans. Prosperity between 1950s-60s. Vietnam war, Recreational drugs, Sexual revolution, rapid growth of divorce, cold war, Rock n Roll, Beatles. 35-50 age group will account for over 70 % of household population growth between 1985-2000. Buying power will almost double or more by 2000. Av. Income is 50% higher than that of comparable families in 1950. Self-centered, Individualistic, economically optimistic, skeptical, suspicious of authority, focused on present status, High education level, high income group, dual career house holds, Time poverty. Age range in 2005 is 41-59. Enjoying lavishing their retirement phase.
Generation Y: Mid 1977 1994. Next baby boom generation [Echo-boom] 71 mn Americans. Tweens and teens (11 to 18) & Young adults. Dual income group, good employment opportunity, Divorce, AIDS, visible homelessness, drug abuse, gang violence and economic uncertainity. Clinton Levinsky scandal, collapse of Soviet and autonomy union, Global terrorism. Strong sense of independence, assertivr, self-reliant, emotionally and intellectually expressive, innovative and curious, they understand market hype. Internet savy, major market for automobiles. Multi-ethnic generation. Successful brands Ford, Cover girl Enchanted You prom collection. Millennial generation : Born after 1994. 38 mn in 2005. (Generation Next) Saving as well as consumption is on higher side.
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
Geodemography, 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
NCAER Classification
Amity Business School
Income Level
<Rs.90,000 Rs. 90,000 - 2,00,000 Rs. 2,00,000 - 10,00,000 > 10,00,000 >100,00,000
Kotak wealth and CRISIL Research found that there are 62,000 ultra high net worth home are in 2010-11. Their minimum net worth is Rs.25 crore. In 2015-16, it will be trippled i.e. 2,19,000 homes. Currently, total net worth of these individuals is 45 trillion and it will be Rs 235 trillion in 2015-16. Quintessentially Life style is a UK based club for luxury members only in 2010.
Psychographic Segmentation
Psychographic analysis
Amity Business School
Lifestyle are consumers modes of living as reflected in their attitudes, interest and opinions.
Personality is defined as patterns of individual behavior that are consistent and enduring.
Life-Style and Psychographic Analysis Life-style refers to how people live, how they spend their money, and how they allocate their time
Psychographics is the quantitative investigation of consumers life-styles, personality, and demographic characteristics.
SRI (Stanford Research Institute) developed two psychographic inventories in 1978 and revised in 1989.
VALS is based upon motivational and developmental psychological theories particularly Maslows hierarchy of needs theory. VALS 2 was developed specifically to measure consumer buying patterns.
VALS
FULFILLEDS
ACHIEVERS EXPERIENCERS
BELIEVERS
STRIVERS
MAKERS
STRUGGLERS
Innovators (Actualizers): successful, sophisticated, take-charge consumers with many resources and high self-esteem. Image is important Thinkers (Fulfields): satisfied, mature, comfortable, practical people who look for durability, value, and functionality in products Achievers: motivated by the desire for achievement, career-oriented, and prefer prestige brands that signal success. Social lives revolve around family, place of worship, and work
Experiencers: young, enthusiastic, impulsive, and like risk taking, variety, and excitement. Like new and off-beat products and activities Believers: conservative, conventional, and motivated by ideals, with beliefs based on codes of church, community, family, and nation. Buy proven brands from home country and are generally loyal consumers Strivers: concerned about approval and opinions of others and seek self-definition, security, and image of success. Emulate those they want to be like, but lack resources.
Makers: express themselves and experience the world by working on it. Practical people who are selfsufficient, live within a traditional context, and prefer value to luxury Survivers: live narrowly focused lives with few resources and represent a modest market for most products. They are cautious consumers and seek safety and security
SEGMENT
PERCENT OF POPULATION 11.7% 10.5 17.0 14.7 11.8 12.9 12.0 9.5
Increase in disposable income. Increase in health and fitness consciousness. More Self-indulgent Lifestyle. More Home oriented lifestyle. Time is money approach. Growing Consumer self awareness.
More frugal and value oriented . Increasing involvement of internet in affecting lifestyles.
Based on values, lifestyles, and motivation. Researcher conducted 2500 2.5 hr interviews with American households for 10 years (1971-1981). Position on core set of values with lifecycle stage 32 target segments, 8 segments Materialism Technology Orientation Family Values Conservatism Cynicism versus Optimism Social interaction Activity level
Geo-Demographic Analysis
Amity Business School
PRIZM : Given by Claritas. Driven by demographics, consumption and media usage data. GM , Hertz, etc. 62 lifestyle clusters, 12 broad social groups Fur & Station Wagons (New Money) Pools & Patios (Children of Fur & Station Wagons) Young Suburbia (Young families of largest clusters from coast to coast. Relative affluence and high white-collared employment.) Blue Chip Blues (Socially less ranked from Young suburbia)
Blue Collar Nursery (Married with kids, high employment, well paid and very stable) Middle America ( Centre of socio-economic scale and is close to the US average as age, ethnicity, household consumption) Emergent Minorities (80% Black, below average education & white collared employment) Shotguns & Pickups (outlying areas and rural communities, large families, high school education, many are outdoor outdoorsmen.)
International Lifestyles
Amity Business School
Global Scan : Based on the Survey of 15000 consumers in 14 countries. Developed by BSBW (Backer Spielvogel Bates Worldwide). They combined life style and purchasing data. Strivers (26%) Achievers (22%) Pressured (13%) Adapters (18%) Traditionals ( 16%)
Limitation
Psychographic inventories often result in clever descriptions of a target market that can result in stereotypes. It can result in managers disparaging the target group. It can cause managers to view the target market as more homogeneous than it really is.
Managerial Implications
Position and differentiate product based upon the dominant personality or psychographic characteristic of the target market. Scan the environment to identify the dominant cultural values of the target market. Use market research to identify the personality, self-concept and psychographic characteristics that distinguish the target market.
Develop promotions to be consistent with the dominant personality characteristics of target market. Create products that fulfill the motivational needs of targete.g., low risk products for the low need for arousal group. Use personality and psycholographics to identify segments of consumers to target, such as one-price auto dealers for low bargain prone.