1/16/15

Prepared by Sudhir Pasricha

Learning Objectives:

To explore the core concepts and theories of shopper behavior at individual, group and organizational
level so that learners may use these as inputs in marketing decision making.

1/16/15

Prepared by Sudhir Pasricha

Course Contents

Module I
Consumer demographics,
Consumer life styles.
Retailing implications of consumer demographics and lifestyle.
Consumer profiles.
Lifestyle marketing.
Environmental factors and individual factors affecting consumers.

1/16/15

Prepared by Sudhir Pasricha

Definitions
The behavior that consumers display in searching for, purchasing, using,
evaluating, and disposing of products and services that they expect will satisfy
their needs.
Consumer Buying Behavior
Buying behavior of individuals and households that buy products for
personal consumption.
Consumer Market
All individuals/households who buy products for personal
consumption.
1/16/15

Prepared by Sudhir Pasricha

Market Segmentation
Market segmentation is the process that companies use to divide large
heterogeneous markets
into small markets that can be reached more efficiently and effectively with
products and
services that match their unique needs

1/16/15

Prepared by Sudhir Pasricha

Segmenting Consumer Markets

Geographic - divides the market into different geographical units such as nations,
regions, states, counties, or cities

Demographic - refers to the vital & measureable stats of a population. It helps to

locate a target market. It divides the market into groups based on variables such as
age, gender, family size, family life cycle, income, occupation, education, religion,
race, generation, and nationality.
Is the most popular segmentation method because consumer needs, wants, and
usage often vary closely with demographic variables and are easier to measure than
other types of variables

Age and life-cycle stage segmentation is the process of offering different

products or using different marketing approaches for different age and lifecycle groups

Gender segmentation divides the market based on sex (male or female)

Income

1/16/15

consumers

segmentation divides the market into affluent or low-income

Prepared by Sudhir Pasricha

Market Segmentation
SEGMENTATION
SELECTED SEGMENTATION VARIABLES
BASE
Geographic Segmentation
Region
Southwest, Mountain States, Alaska, Hawaii
City Size
Major metropolitan areas, small cities, towns
Density of area
Urban, suburban, exurban, rural
Climate
Temperate, hot, humid, rainy
Demographic Segmentation
Age
Under 12, 12-17, 18-34, 35-49, 50-64, 65-74,
75-99,
100+
Sex
Male, female
Marital status
Single, married, divorced, living together,
widowed
Income
Under $25,000, $25,000-$34,999, $35,000$49,999, $50,000-$74,999, $75,000-$99,999,
$100,000
overhigh school graduate, some
Education
Some highand
school,
college, college graduate, postgraduate
Occupation
Professional, blue-collar, white-collar,
agricultural, military
Copyright 2007 by

Segmenting Consumer Markets..contd.

Psychographic - divides buyers into different groups based on social class, lifestyle,
or personality traits

Behavioral - divides buyers into groups based on their knowledge, attitudes, uses, or
responses to a product

Occasion

Benefits sought

User status

Usage rate

Loyalty status

Benefit

Segmentation - The segmentation of the consumers based on what

particular benefit of the product appeals to them. Different consumers look for
different benefits and the marketer needs to understand each segment and
accordingly develop his communication for each group. Benefit segmentation helps to
identify each group and accordingly promote the product within that group.
Example : one particular soap offers a variety of benefits, say fragrance (liked by older
1/16/15
Prepared by Sudhir Pasricha
8
women), fairness (liked by

Organisational Buying Behaviour

Organisational buying is a multiperson buying activity: A large number of buying
situations in organisations (manufacturing, government, hospitals, educational institutions)
would involve many persons. These persons may be from different functions (production,
purchase, design, maintenance), may have different backgrounds (engineers, MBA,
graduates etc.) may have different hierarchical levels within the organisation (Managing
Director, General Manager, Material Manager).
Persons in a buying situation, may appear to play different roles over the entire buying
decision exercise. A grand conceptualisation of various roles of the different members is the
concept of the Buying Centre. The various members of the buying centre may appear to play
any of the following roles:
Users like production department person
Influencers like Managing Director, Design Engineers or Consultants
Deciders like the committee appointed
Buyers like the people from the purchase or materials department
Gatekeepers like those who can control the flow of information within an organisation
Specifiers like consultants or design or production people who may develop the
1/16/15

Prepared by Sudhir Pasricha

specifications of the product or services needed

Customer Profiles
Solving almost any sales and marketing challenge starts with knowing who your
customer is. Mapping Analytics can help you find outwhoyour best customers
are and apply geographic analysis techniques to discoverwhereto find more of
them.
Adescriptionof a customer or set ofcustomersthat includesdemographic,
geographic,

andpsychographiccharacteristics,

as

well

patterns,creditworthiness, andpurchasehistory.

1/16/15

Prepared by Sudhir Pasricha

10

asbuying

Customer Profile

A customer profile uses marketing segmentation to identify key factors and using them to
break down the pool of customers to who would likely purchase the product or service.

This shows a company where to spend their advertising resources to get the most return
on investment.

Target Market Segmentation

Geographic segmentation

Demographic segmentation

Psychographic segmentation

Behavioral

Importance of target markets

Once target markets are identified correctly, specific marketing programs are
directed to identified group, or target market.

1/16/15

Prepared by Sudhir Pasricha

11

Example of Customer Profile

Head Fones
Customer Profile:

Geographic segmentation:
any area, any climate

Demographic segmentation:
age 12-26
Males
Professional musician

Psychographic segmentation:
Likes to listen to music
Athletic/exercises
Trendy
Extreme Sports

Behavioral
Listens to personal media device
Buys mobile music media
Brand conscience

1/16/15

Prepared by Sudhir Pasricha

12

Consumer Lifestyle and Values

It is an indicator as to how people live & spend their time & money. What people do
in their spare time is often s good indicator of their lifestyle

Lifestyles are shaped partly by whether consumers are money-constrained or timeconstrained.

Consumers in different countries & cultures may have characteristic lifestyles. Eg

Indian women are home

focused. Less likely to visit restaurants . More Price Sensitive

Lifestyle segmentation is particularly useful in case of product categories where the

1/16/15

Prepared by Sudhir Pasricha

13

user s self image is considered as an important factor , such as perfumes , beer,

Consumer Lifestyle and Values

A lifestyle is a persons pattern/style of living in the world as expressed in AIO Activities, Interests and Opinions.

Lifestyle Analysis provides broad view of consumers as it segments market s on the

basis of AIO Analysis:
Activities - How they spend their time
Interests - Importance of things in their surroundings
Opinions Their Beliefs on broad issues & themselves

1/16/15

Prepared by Sudhir Pasricha

14

AIO Inventories
Consumer Behavior and AIO studies envisage a wide variety of variables and measures the
major dimensions of Lifestyle Marketing shown below :
Activities

Interests

Work

Family

Hobbies

Home

Social events

Job

Vacation

Community

Themselves

Politics

Club member Fashion

Food

Demographics
Age

Social

Entertainment Recreation

Community

Opinions

Education
Income

Business

Occupation

Economics

Family size

Education

Geography

Products

Shopping

Media

Future

Sports

Achievements Culture

City size
Lifecycle
Dwelling

Source : Joseph T. Plummer--The Concept and Application of Lifestyle Dimensions, Journal of Marketing

1/16/15

Prepared by Sudhir Pasricha

15

VALS (Values & Lifestyle) Framework

Stanford Research Institute (SRI) developed a popular
Approach to

psychographics

segmentation called

VALS
(Values & Lifestyle) puts less emphasis on Activities

&

Interest and more on Psychological drivers to consumer

behavior.
VALS has two dimensions :
Primary Motivations Types of goals the individual will
pursue &
Pattern of

attitudes & activities that help individuals

reinforce ,
Sustain or modify their social image. This is a fundamental
human
Need
Resources Reflects the ability of individuals to pursue
1/16/15
Prepared by Sudhir Pasricha
their

16

Self Orientation of People :

Ideals (principle)- Individuals are guided in their
choices by their beliefs & principles & not by feelings,
desires & events.
Achievement Individuals are heavily influenced by
actions, Approvals & opinion of others
Self expression (action) Individuals desire physical
& social Activity, variety & risk taking.
Based on the concepts of basic motivations & resources,
the
Typology breaks consumers into eight groups. The
The VALS 2 typology draws heavily

eight sub-divisions that these major self orientations

on Maslow's need hierarchy and tries

have been divided into also differ in terms of their

to explain the lifestyle orientation of

resources.

the various segments based on the

values sought by each of them in

Resources

their life.

demographical factors that become enabling variables

1/16/15

Prepared by Sudhir Pasricha

physical,

psychological,
17

in consumer's choice making behavior.

and

Innovators are successful, sophisticated, active, "takecharge" people with high self-esteem and abundant
resources. Are interested in growth and seek to develop,
explore, and express themselves in a variety of ways to
have an effect to make a change.
Image is important to Innovators, not as evidence of
status or power, but as an expression of taste,
independence, and character. Innovators are among the
established and emerging leaders in business and
government, yet they continue to seek challenges.
Have a wide range of interests, are concerned with
social issues, and are open to change. Lives are
characterized by richness and diversity. Possessions and
recreation reflect a cultivated taste for the finer things in
life.
LivesResources)
are characterized
by richness
andcomfortable,
diversity.
Thinkers (Motivated By Ideals : High
are mature,
satisfied,
Possessions
and recreationMost
reflect
cultivated
taste
reflective people who value order, knowledge.
and responsibility.
are a
well
educated,
andfor
in
the
finer
things
in
life.
(or recently retired from) professional occupations.
Are well-informed about world and national events and are alert to opportunities to broaden
their knowledge. Content with their careers. families. and station in life, their leisure activities
tend to center on their Home.
Although
them many
choices,
thinkers & are18conservative, practical
1/16/15 their incomes allow Prepared
by Sudhir
Pasricha
consumers: are concerned about functionality, value, and durability in the products they buy.

Believers (motivated by ideals : low resources) are

conservative, conventional people with concrete beliefs
and strong attachments to traditional institutions: family,
church, community, and the nation.
Many Believers possess moral codes that are deeply
rooted and literally interpreted.
Follow established routines, organized in large part
around their families and the social or religious
organizations to which they belong. As consumers, they
are conservative and predictable, favoring American
products and established brands.
Education, income and energy are modest but sufficient
to meet their needs.
Achievers (Motivated by Achievement; High Resources) are successful career and workoriented people who like to-and generally keep control of their lives. Value structure.
predictability, and stability of over risk, intimacy, and self-discovery. They are deeply committed
to their work and their families. Work provides them with a sense of duty, material rewards, and
prestige.
Social lives reflect this focus and are structured around family, church, and business. Achievers
live conventional lives, are politically conservative, and respect authority and the status quo.
Image
is important to them. As consumers,
they
favor
established products
1/16/15
Prepared by
Sudhir
Pasricha
19 and services that
demonstrate their success to their peers.

Strivers (motivated by achievement ; low resources)

seek motivation, self-definition, and approval from the
world around them. Striving to find a secure place in life.
Unsure of themselves and low on economic, social, and
psychological resources.
Strivers are deeply concerned about the opinions and
approval of others. Money defines success for Strivers, who
don't hate enough of it and often feel that life has given
them a raw deal.
Strivers arc easily bored and impulsive Many of them seek
to be stylish. They emulate those who have more impresses
Experiencers (Motivated by self expression:
high
are young,
vital,
e possessions,
butresources)
what they wish
to obtain
is generally
enthusiastic, impulsive, and rebellious. Seek variety and excitement, savoring the new, the
beyond their reach
offbeat, and the risky. Still in the process of formulating life values and patterns of behavior, they
quickly become enthusiastic about new possibilities but are equally quick to cool.
Are politically uncommitted, uninformed, and highly ambivalent about what they believe.
Experiencers combine an abstract disdain for conformity and authority with an outsiders awe of
others' wealth, prestige, and power.
1/16/15
Preparedsports,
by Sudhir
Pasricha
Their
energy finds an outlet in exercise,
outdoor
recreation, and 20
social activities.
Experiencers are avid consumers and spend much of their income on clothing, fast food, music,

Makers (motivated by self expression: low

resources) are practical people who have constructive
skills and value self-sufficiency.
Live in a traditional context of family, practical work, and
physical recreation, and have little interest in what lies
outside that context.
Experience the work by working on it-building a house,
raising children, fixing a car, or canning vegetables-and
have sufficient skill, income, and energy to carry out
their projects successfully.
Are politically conservative, suspicious of new ideas,
respectful
of government authority and organized labor. but
resentful of government intrusion on individual rights.
Are unimpressed by material possessions other than
those with
practical orIon-skilled,
functional without
purpose strong
(e.g. tools,
Survivors lives are constricted. Chronically
poor,aill-educated.
pickup
trucks,
fishing
social bonds, aging, and concerned about
their
healthorthey
arc equipment).
often despairing and passive.
Because they are so limited, they show no evidence of a strong self orientation, but are
focused on meeting the urgent needs of the present moment.
Chief concerns are for security and safety. Strugglers are cautious consumers. They represent
a very modest market for most, products and services but are loyal to favorite brands
1/16/15

Prepared by Sudhir Pasricha

21

Decision Making Process

The first step is when the consumer
becomes aware of the fact that he
has a problem.
The problem maybe that he has run
out of toothpaste or that he needs
new sofa for the drawing room or
that he needs to engage the services
of an accountant to help him with his
tax planning.
Problem recognition thus occurs
when the consumer recognizes
that he has an unfulfilled need.
The desire to fulfill this need triggers
off
the other steps of information;
1/16/15

Prepared by Sudhir Pasricha

search and evaluation and finally

22

Retail Implications
What Makes Retail Shoppers Tick ?
Life-Styles

Demographics

Needs and
Desires

Retail
Shoppers

Retailer Actions

Environmental
Factors
1/16/15

Shopping Attitudes
and Behavior

Prepared by Sudhir Pasricha

23

Retail Implications of Consumer Demographics

Because of changing life-styles, more husband and wives shop together. More
men are doing non traditional work around the house
Component life-styles consumers are less predictable
Such as cleaning, shopping, babysitting
Consumer sophistication and confidence more knowledgeable shoppers who
are more cosmopolitan (more aware of trends)
Poverty of time people are time-pressed because of work, commuting, family
responsibilities and etc

1/16/15

Prepared by Sudhir Pasricha

24

Lifestyle Marketing
Lifestyle marketing is a process of establishing relationships between products
offered in the market and targeted lifestyle groups.
It involves segmenting the market on the basis of lifestyle dimensions,
positioning the product in a way that appeals to the activities, interests and
opinions of the targeted market and undertaking specific promotional
campaigns which exploit lifestyle appeals to enhance the market value of the
offered product.
A consumer's lifestyle is seen as the sum of his interactions with his
environment. Lifestyle studies are a component of the broader behavioral
1/16/15

Prepared by Sudhir Pasricha

concept called psychographics."

25

Lifestyle Marketing
Demographics, Psychographics and Lifestyle
Demographic variables help marketers "locate" their target market and psychographic
variables provide the marketer with more insight about the segment.
Psychographics is, in common parlance for lifestyle analysis.
In its most widely practiced form, a psychographic study consists of list of statements
designed to capture relevant aspects of a consumer, like personality, hinting motives,
interests, attitudes, beliefs and values.
The demographic and psychographic lifestyle approaches are highly complimentary
and work best together. People hailing from the same sub-culture, social class and
even occupation follow quite different lifestyles.
The lifestyle analysis adds a great amount of understanding to a typical demographic
description.
E.g., A person buying a new designer shirt may be 34 years old, married and living in a
3 bedroom house and having 2 children. The lifestyle analysis would help marketers to
paint a more human portrait to their target market.
1/16/15

Prepared by Sudhir Pasricha

26

Lifestyle Marketing - Examples

For instance the "young, upwardly mobile" lifestyle group cutting across sub-cultures,
social class, occupation etc. is now being increasingly used by Indian marketers as their
market group.
This finds its expression in advertising appeals "He loves the feel of the city... The
skyscrapers... The crowds... The pretty faces... And the heady feeling of being
successful... Above all the freedom of being himself." So says the advertisement
for Pantaloons cotton trousers from Manz Wear.
Another advertisements for men's innerwear from Bhilwara loudly announces "for the
man who plays many roles-here comes the very best in wear unders via the grand
fashion avenues of Paris...Champs Elise". The behavioral differences between prospects
that do not show up in demographic figures come alive in lifestyle patterns.
Lifestyle, analysis leads to more comprehensive and penetrating profiles of how
1/16/15
Prepared
by available
Sudhir Pasricha
27
consumers think and act than
may be
from other approaches.

CHARACTERISTICS OF LIFESTY

Feldman and Theilbar describe lifestyle by the following characteristics:

1 Lifestyle is a group phenomenon
A person's lifestyle bears the influence of his/her participation in social groups and of his/her
relationships with others. Two clerks in the same office may exhibit different lifestyles.
2 Lifestyle pervades various aspects of life
An individual's lifestyle may result in certain consistency of behaviour. Knowing a person's
conduct in one aspect of life may enable us to predict how he/she may behave in other areas.
3 Lifestyle implies a central life interest
For every individual there are many central life interests like family, work, leisure, sexual
exploits, religion, politics etc. that may fashion his interaction with the environment.
4 Lifestyles vary according to sociologically relevant variables
The rate of social change in a society has a great deal to do with variations in lifestyles. So do
age, sex, religion, ethnicity and social class. The increase in the number of double income
families and that of working women have resulted in completely different lifestyles in the
1980's
in India
1/16/15

Prepared by Sudhir Pasricha

28

ENVIORNMENTAL & INDIVIDUAL FACTORS AFFECTING CONSUMER INFLUENCES ON LIFESTYL

Hierarchy of Influences on Lifestyle

1/16/15

Prepared by Sudhir Pasricha

29

APPROACHES TO STUDY LIFESTYLE

The study of lifestyle is interdisciplinary. It draws on a variety of disciplines

such as anthropology, psychology, sociology and economics. Marketing uses
this free approach for segmenting, targeting and positioning which
forms the core of marketing strategy.

Because lifestyle refers to the way in which people live and spend money,
consumers psychographic profiles are derived by measuring different
aspects of consumer behaviour such as:
1 Products and services consumed
2 Activities, interests and opinions
3 Value systems
4 Personality
1/16/15

traits andPrepared
self-conception
by Sudhir Pasricha

30

END OF MODULE - 1
THANK YOU

1/16/15

Prepared by Sudhir Pasricha

31