2. Consumer Behavior, Trends & Segmentation Week 3 BA343

3. Consumer Behavior & Shopping Patterns: n Mental State (Alpha vs. Beta mode), Promo- Tricks (Sales-Limit # items), Use of –lists…

4. ID factors that influence Consumer Behavior Outline Buyer Decision-Making Process Delineate logic & techniques of Segmentation

5. Situation Analysis Strategic Planning C ompanyC ompany C onsumersC onsumers C ompetitorsC ompetitors C onditionsC onditions PEST PEST The Marketing Mix: Marketing Strategy WM TGT E E D D C C N N G G F F Service Growth & Competitive Strategies P’s Positioning Strategy Behavior & Segmentation

6. How Do You Decide ?

7. Total Set Decision Making Mind-Sets Awareness Consideration Choice Set Decision “Evoked Set”

9. Ad only 1 element of Consumer Behavior The Situation & Marketing Mix The Situation & Marketing Mix Buyer’s Black Box Buyer’s Response Product Price Place Promotion Competitive Economic Technological Political Cultural Factors Characteristics Affecting Consumer Behavior Buyer’s Decision Process Product Choice Brand Choice Purchase Timing Purchase Amount

10. Problem Recognition Information Search Evaluation of Alternatives Purchase Post-Purchase Evaluation Internal Search Memory External Search Exposure Attention Comprehension Acceptance Retention Stimuli: Marketer Dominated & Other DissatisfactionSatisfaction Environmental Influences Culture Social Class Reference Group Family Individual Differences Motivation & Involvement Knowledge/ Learning Attitudes Personality, Values & Lifestyle INPUTINFORMATION PROCESSINGDECISION PROCESSINFLUENCES Variables & Processes Inside Black Box

12. Assume Consumer Buying Process is rational /logical Problemrecognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior

13. Step 1. The Buyer Decision Process Step 1. Need Recognition External Stimuli Stimuli in the Environment advertising conversation some visual cue External Stimuli Stimuli in the Environment advertising conversation some visual cue Internal Stimuli Hunger Thirst Or higher level needs…along Maslow’s hierarchy Internal Stimuli Hunger Thirst Or higher level needs…along Maslow’s hierarchy Difference between an actual state and a desired state

14. Maslow’s Hierarchy of Needs Psychological needs (food, water, shelter) Psychological needs (food, water, shelter) 1 Safety needs (security, protection) Safety needs (security, protection) 2 Social needs (sense of belonging, love) Social needs (sense of belonging, love) 3 Esteem needs (self-esteem, recognition) Esteem needs (self-esteem, recognition) 4 Self- actualization (self-development and realization) Self- actualization (self-development and realization) 5

15. Step 2. The Buyer Decision Process Step 2. Information Search Family, friends, neighbors Advertising, salespeople Experts, Celebrities Friends, family Web-searches, site- recommendations Handling -Examining - Using -- product Personal Sources Commercial Sources Reference Sources Experiential Sources

16. Step 3 The Buyer Decision Process Step 3. Evaluation of Alternatives Product Attributes Evaluation of Quality, Price, & Features Product Attributes Evaluation of Quality, Price, & Features Degree of Importance Which attributes matter most to me? Degree of Importance Which attributes matter most to me? Brand Beliefs What do I believe about each available brand? Brand Beliefs What do I believe about each available brand? Total Product Satisfaction Based on what I’m looking for, how satisfied would I be with each product? Total Product Satisfaction Based on what I’m looking for, how satisfied would I be with each product? Evaluation Procedures Choosing a product (and brand) based on one or more attributes. Evaluation Procedures Choosing a product (and brand) based on one or more attributes. A ijk =  (B ijk x I ik )

17. Step 4. The Buyer Decision Process Step 4. Purchase Decision Purchase Intention Desire to buy most preferred brand Purchase Intention Desire to buy most preferred brand Purchase Decision Situational factors

18. Purchasing Situation Consumer behavior influenced by: – Physical surroundings – Social surroundings – Temporal perspective – Task & Antecedent variables

19. 1. Physical surroundings include geographical location, decor, sounds, aromas, lighting, weather 2. Social surroundings influence of other persons present, their characteristics, their apparent roles, & interpersonal interactions occurring. 3. Temporal perspective may be specified in units ranging from time of day to seasons of the year. 4. Task definition includes an intent or requirement to select, shop for, or obtain information about a general or specific purchase. 5. Antecedent states are momentary moods or momentary conditions 1. Physical surroundings include geographical location, decor, sounds, aromas, lighting, weather 2. Social surroundings influence of other persons present, their characteristics, their apparent roles, & interpersonal interactions occurring. 3. Temporal perspective may be specified in units ranging from time of day to seasons of the year. 4. Task definition includes an intent or requirement to select, shop for, or obtain information about a general or specific purchase. 5. Antecedent states are momentary moods or momentary conditions Situational Influences on Consumer Selection

20. SituationalDescription of Type of Influence the SituationRestaurant Chosen 1.PhysicalIt is very hot and your air conditioning isn’t working 2.PhysicalYou’re downtown Christmas shopping and the stores and streets are very crowded. 3.SocialYour fiancée's parents are going to take you out for dinner and ask you to pick the restaurant. 4.SocialYour neighbor comes over to visit, you are having a pleasant chat, and you discover it is time for lunch. 5.TemporalYou plan to go to a show at 7:30 p.m. It is 6:30 p.m. now. SituationalDescription of Type of Influence the SituationRestaurant Chosen 1.PhysicalIt is very hot and your air conditioning isn’t working 2.PhysicalYou’re downtown Christmas shopping and the stores and streets are very crowded. 3.SocialYour fiancée's parents are going to take you out for dinner and ask you to pick the restaurant. 4.SocialYour neighbor comes over to visit, you are having a pleasant chat, and you discover it is time for lunch. 5.TemporalYou plan to go to a show at 7:30 p.m. It is 6:30 p.m. now. How Situations Might Influence Choice of a Restaurant

21. SituationalDescription of Type of Influence the SituationRestaurant Chosen 6.TemporalYou want to have an evening meal with the family when not rushed for time. 7.TaskIt’s your parents’ 25th wedding anniversary and you want to take them out to dinner. 8.TaskYour spouse won’t be home for dinner and you are wondering what to feed the children. 9.AntecedentYou are too tired to cook dinner because you have had a very fatiguing day at the office. 10.AntecedentYou have just finished a tough semester and you’re in the mood to really reward yourself. SituationalDescription of Type of Influence the SituationRestaurant Chosen 6.TemporalYou want to have an evening meal with the family when not rushed for time. 7.TaskIt’s your parents’ 25th wedding anniversary and you want to take them out to dinner. 8.TaskYour spouse won’t be home for dinner and you are wondering what to feed the children. 9.AntecedentYou are too tired to cook dinner because you have had a very fatiguing day at the office. 10.AntecedentYou have just finished a tough semester and you’re in the mood to really reward yourself.

22. The Buyer Decision Process Step 5. Step 5. Postpurchase Behavior The Buyer Decision Process Step 5. Step 5. Postpurchase Behavior Differential betw. Consumer’s Expectations & Product’s Performance Differential betw. Consumer’s Expectations & Product’s Performance Dissatisfaction Satisfaction Satisfaction

23. 10,000+ Studies on every variable influencing Consumer Behavior Problemrecognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior

24. www.business.com/directory /advertising_and_marketing/ market_research/consumer_ behavior/ www.business.com/directory /advertising_and_marketing/ market_research/consumer_ behavior/

25. What we know abt Today’s Consumers-

26. Becoming more complex--age, sex & income reversals Becoming more self- centered & Home centered Have less time & more choices Are less brand loyal More connected & more informed Have lower attention spans & higher expectations Are living & shopping more for today… Less long range planning Seeking new/ heightened sensation & experiences Today’s Consumers

27. People are seeking out more intense experiences. Extreme sports, long action-packed weekends, aromatherapy, authentic ethnic foods, even intense flavors of soft drinks

28. Connectivity Technology (instant message, mobile phones, email, MySpace, Facebook) are keeping us all connected. People -have an increased desire for belonging to a greater community. Clanning The growing need to join up with / belong to groups to confront a more chaotic world

29. 28 Customers spending Less Time & Effort Shopping 1975 vs Today Trips to Mall 3.1 <1.4 Stores Visited 7.0 <3.0 Hours Spent 10.0 <2.9 Source: MAS Marketing/McMillan Doolittle People - eating on the go, frequenting convenience stores- buying products that offer greater convenience.

30. Consumers are less loyal…

31. 20 th Century Homogenous Consumers 21 st Century MORE COMPLEX & FRAGMENTED Extreme shifts in:  Age  Wealth  Ethnicity/Culture  Lifestage patterns  Household composition  Value systems Source: IBM Institute for Business Value analysis 21 st Century Consumer

32. Consumers are more Complex AGEAGE : Children are acting & thinking older. -- adults acting more like kids GENDERGENDER : Metrosexuality is in — men behaving more like women-- women behaving more like men INCOMEINCOME : High income groups spending on “ anti-luxury ” --- shopping for discounts--------------- lower income groups splurging on luxury items

33. Key to understanding increasingly fickle & fragmented consumer- base…. Effective market segmentation model that captures complete profile of your actual & potential customer base…

34. market segmentation= Statistical Procedure clusters cases/consumers so as to maximize homogeneity-within & heterogeneity-between groups on key variables/segmentation dimensions such as : demographic, geographic, socio-graphic, psychographic, technographic characteristics, lifestyle, generational &/or behavioral patterns

35. Segmented on 2 attributes

36. Key Segmentation Decisions: 1. Size & # segments u select to target 2. What dimensions u use to segment consumers

37. 1) Size & # segments select to target Undifferentiated/ Mass Marketing Differentiated/ Segment Marketing Concentrated/ Niche marketing One-to-One/ Micro marketing

38. Undifferentiated Strategy – One marketing mix for all members of total market – One mix fits all

39. Differentiated Strategy – multiple marketing mixes for multiple segments of total market

40. Concentrated Strategy – One mix focused on one narrowly defined segment of total market

41. 1:1 Strategy – Marketing Mix customized to meet needs of individual customers – made possible w/ CRM/MRM Systems… http://www.1to1.com/

42. 2 nd Key decision: What dimensions you use: Who / Where Geographic Segmentation Demographic Segmentation – SocioGraphics Consumes How Much Volume Segmentation & Why Psychographic Segmentation – Motives, Traits, AIO’s, Attitudes & Beliefs, Benefits Behavioral GeoDemographic Lifestyle Generational

43. Demographics Age, sex, income, occupation, education, marital status, location, household characteristics, etc…. Socio-Graphic Indexes : SES- Socio-economic Status (income+ occupation+ education) FLC- Family Life Cycle (age+ martial status + age/# kids) TGA’s =target group acronyms (some mix of age/ location/ occupation/income/ or any other unique descriptor…)

44. Yuppies- young urban professionals Chuppies- chinese urban professionals Dinks- dual income no kids Poops- persons on one pension Clumps – computer literate urban metro-sexual professionals Twits- teens with info technologies Tweens- 11-12 year olds

45. GLAM - Greying, leisured, affluent, middle-aged GUPPY- Green YUPPY NILKY- No income, lots of kids OINK- One income, no kids PANSE- Politically active, not seeking employment RAPPY- Retired, affluent professionals SITCOM- Single income, two children, outrageous mortgage SUPPY- Senior urban professionals WOOPY- Well-off older people YAPPY- Young affluent parents ZUPPY- Zestful upscale person in their prime

46. Middle Class Working Class Working Poor The Under Class Capitalists Class Capitalists 1% Top 1% w/ income from assets earned or inherited Most Shopping done by personal assistants Upper Class SES

47. Middle Class Working Class Working Poor The Under Class Upper Class 14% Upper managers, professionals, Income nearly twice the national average. Invest in art Hi expenditures- travel, entertainment, 2 nd homes, clubs Capitalists Class Upper Class SES

48. Upper Class Working Class Working Poor The Under Class Middle-level white-collar & top level blue-collar workers. Income somewhat above national average. Mainstream & Mainstay of most marketing efforts Capitalists Class Middle Class Middle Class 33% SES

49. Upper Class Middle Class Working Poor The Under Class Middle-level blue-collar & lower-level white-collar workers. Income & educational level slightly below national level. Shop for best bargains prices & discount stores Capitalists Class Working Class Working Class 33% SES

50. Upper Class Middle Class Working Class The Under Class Low paid workers (minimum wage). Income just above the poverty line. Most have some high school education Most products purchased are for survival Capitalists Class Working Poor Working Poor 11-12% SES

51. Upper Class Middle Class Working Class Working Poor Depend primarily on welfare systems Standard of living below poverty line. Lack regular employment and education Capitalists Class The Under Class The Under Class 8-9% SES

52. Family Life Cycle

53. Personicx places each of 112MM + U.S. households in its InfoBase into one of 70 segments based on its specific life stage consumer behaviors & demographic characteristics. This enables marketers to see the dramatic difference between consumer behaviors of HHs in same geo-cluster--

54. Three Next-Door Neighbors – Three Different Life Stages Same ZIP + 4 ®, Block Group, Tract and ZIP ® Different households with different Personicx Life Stage Clusters Personicx ® A household-level segmentation system driven by InfoBase ® household data *The following trademarks are owned by the United States Postal Service ® : ZIP ® and ZIP + 4 ®. Taking Hold: Cluster 18 Beginnings: Cluster 39 Aging Upscale: Cluster 23

55. Track Changes over Time Every year in the U.S… – 1.5 million new addresses are created – 1 in 6 people move (40 million) – 1 in 5 movers (8 million) leave no new address – 1 in 100 people get married (4.7 million) – 1 in 200 people are divorced (1.9 million) – 1 in 115 people die

59. Video Clip Excerpt Overview of Acxiom CorporationOverview of Acxiom Corporation

60. Bases for/ Systems of Segmentation Who Geographic Segmentation Demographic Segmentation – SocioGraphics Consumes How Much Volume Segmentation & Why Psychographic Segmentation – Motives, Traits, AIO’s, Attitudes & Beliefs, Benefits Behavioral

61. Light Users 80% Light Users 80% Heavy Users 20% Heavy Users 20% Volume Segmentation Markets can be segmented by how much consumers buy/use your product - 80% of revenue might be generated by 20% of customers

62. Bases for/ Systems of Segmentation Who Geographic Segmentation Demographic Segmentation – SocioGraphics Consumes How Much Volume Segmentation & Why Psychographic Segmentation – Motives, Traits, AIO’s, Attitudes & Beliefs, Benefits

63. Psychographics Measures used to determine what’s going on in the consumer’s head: 1. Motivations 2. Personality Traits & Self- concept 3. Activities, Interests & Opinions 4. Attitudes & Beliefs 5. Benefits sought from product… Measures used to determine what’s going on in the consumer’s head: 1. Motivations 2. Personality Traits & Self- concept 3. Activities, Interests & Opinions 4. Attitudes & Beliefs 5. Benefits sought from product…

64. Psycho-Factor # 1: Motivatio n Motivational Marketing consumer behavior is result of unconscious motives which can be ascertained thru psychoanalytical research techniques

65. Motivation Research Motivational marketing emerged shortly after World War II and bloomed in the 1950s Ernest Dichter founded the Institute of Motivational Research in New York. Defined MR as "qualitative research designed to uncover the consumer's subconscious or hidden motivations that determine purchase behavior."

66. Clotaire Rapaille

67. Psycho-Factor # 2: Personality Traits Key assumptions of trait-factor theory 1. traits are common across all persons & vary only in absolute amount between individuals 2. traits relatively stable & exert fairly universal effects on behavior regardless of environment 3. are predictive of a wide variety of behavior Assumes personality composed of set # of pre-dispositional attributes or traits

68. Some Key Consumer Traits Brand-Loyalty Style-consciousness Price-consciousness Risk-Taking Innovativeness Liberal / conservative Introvert / extrovert Inner / outer directed

69. Self-Concept Ask consumers to describe themselves thru list of adjectives -- Dependable, strong, serious, sensitive aggressive, practical, sociable, confident etc. Also measure discrepancies between real vs. ideal self Image Congruence Research : correlation betw. self-image & brand image – esp. cars, clothes, personal accoutrements, booze….

70. Interaction of Self-Concept and Brand Image

71. Identity relationships w/ products& brands…. Self-concept attachment – The product helps to establish the user’s identity

72. Psycho-Factor # 3: AIO’s Activities – what they do, what they buy, and how they spend their time. Interests – consumers’ preferences and priorities. Opinions – views and feelings on such things as world, local, moral, economic, and social affairs.

73. Psycho-Factor # 4: Attitudes & Beliefs An attitude = a complex mental state involving beliefs & feelings & values & dispositions to act in certain ways A belief = a descriptive thought or conviction that a person holds about something, and involves holding an opinion.

74. The ABC’s of Attitudes 1. The Affective Component ( based on feelings or overall evaluation) – I feel good about myself when I drive a BMW 2. The Behavioral Component ( likely action toward object- - the consumer’s intention to buy a product) I probably will buy a BMW next time 3. The Cognitive Component (based on beliefs; what you think about product- ideally a result of marketing promotion) – I think BMWs are quality cars

75. Utilitarian Function of Attitudes  consumers seek out products that they believe provide them with benefit s that are important to their well- being…

76. Three factors influence attitude formation: 1. Salient attributes which consumer uses to evaluate a product… 2. Extent to which consumer believes product contains these salient attributes 3. Importance of the attribute to the consumer

77. Fishbein’s Multi-attribute Theory Fishbein’s model argues that consumers’ attitudes towards a brand derives from:  their beliefs about the attributes of the brand  and their evaluations of those attributes

78. Attitude= Belief * Importance A ijk =  (B ijk x I ik ) : i = attribute j = brand k = consumer I = Importance weighting B = Extent to which the brand is believed to possess the attribute A = Attitude toward brand/product/etc.;

79. Fishbein’s Multi-attribute Model  Step 1 : Get consumers’ list of attributes  Step 2 : Rank each attributes relative importance  Step 3 : Evaluate each brand with respect to its rating on each attribute.  Step 4 : Apply Fishbein’s Formula

80. Example -Application of Multi-attribute Model Evaluating 3 banks : Step One: List of Attributes :  quickness in service, office hours, convenience, parking facilities, Step Two: Rank relative importance  Quickness=1, Hours= 4, Localization= 3, Parking= 2 Step Three: Evaluate each bank w/respect to each attribute.  (6= Excellent, 5=Very Good, 4=Good, 3=Bad, 2=Very Bad, 1=Poor) Step Four: Apply Fishbein’s Formula

81. Importance Bank A Bank B Bank C Quickness 1 4 3 1 Hours 4 3 3 1 Convenience 3 4 3 2 Parking 2 1 2 5 Total 30 28 21 Which is the best Bank? Which is the worst Bank? What would you do if you were responsible of Bank C?

82. Psycho-factor #5: Benefits Segment consumers Based on the benefits that consumers desire from using a specific product

83. Sensory Segment Sociable Segment Worrier Segment Independent Segment Flavor & product appearance Principal benefit sought Brightest of teeth Price Decay prevention Children Demographic strengths Teens, young people Men Large Families Users of spearmint- flavored toothpaste Special behavioral characteristics Smokers Heavy users SOURCE: Adapted from Russell I. Haley, “Benefit Segmentation: A Decision-Oriented Research Tool, “Journal of Marketing, July 1968, pp. 30-35. (continued) Figure 5-3 Colgate Brands favored Macleans, Ultra Brite Cheapest brand Crest Hedonis t Lifestyle characteristic Active Value- oriented Conservative

84. Bases for/ Systems of Segmentation Who/ Where Geographic Segmentation Demographic Segmentation – SocioGraphics Does What -When Volume Segmentation Situation Segmentation & Why Psychographic Segmentation – Motives, Traits, AIO’s, Attitudes & Beliefs, Benefits GeoDemographic

85. Geo-Demographic Segmentation A composite segmentation strategy: uses geographic variables (zip codes, neighborhoods) & demographic variables (e.g., income, occupation, value of residence) to identify target markets.

86. The Logic: Birds of a Feather….Flock Together  People w/ similar cultural ways & $ gravitate to one another - form relatively homogeneous communities  Once settled in, people emulate their neighbors, adopt similar social values, tastes & expectations  And most important of all, share similar patterns of consumer behavior re: product/brand preference & media...

87. …15,000+ companies in the United States & Canada alone used clusters as part of their marketing information mix last year… Geodemographics: PRIZM, Claritas, and Clusters Geodemographic... www.andreas.com/faq-geodemo3.html www.andreas.com/faq-geodemo3.html Geo-Demographic Segmentation’s Popularity

88. Census Demographics Neighborhood Geography Neighborhood Geography Consumer Behavior Data Consumer Behavior Data u Social rank u HH composition u Housing u Ethnicity u Urbanization u Mobility u Census tracts u Block groups u Zip codes (9-digit) u Carrier routes u Automobiles owned u Magazine readership u Direct marketing data u Real estate u Credit u Expenditures CLUSTER - ANALYSIS Lifestyle Clusters

89. Elvis Lives!

90. http://www.claritas.com/target-marketing/market-research-services/marketing- data/marketing-segmentation/segmentation-systems.jsp

91. Bases for/ Systems of Segmentation Who Geographic Segmentation Demographic Segmentation – SocioGraphics Consumes How Much Volume Segmentation & Why Psychographic Segmentation – Motives, Traits, AIO’s, Attitudes & Beliefs, Benefits Lifestyle Generational

92. Lifestyle-SegmentationLifestyle-Segmentation Classifies the way one lives … & constellation of products & services used to support your existence

93. Model based upon Riesman's Social Values & Maslow’s hierarchy of needs Societally Conscious External vs. Internal Locus of Values/Rewards Esteem Self Actualization Safety Belonging Physiological

94. VALS Logic: VALS Logic: Personality traits + key demographics determine an individual's lifestyle 1. A person's tendency to consume goods & services extends beyond age, income, & education. 2. Energy, self-confidence, intellectualism, novelty seeking, innovativeness, impulsiveness, leadership, & vanity ….play critical role Ideals vs. Achievement vs. Self-Expression 3. Different levels of resources enhance or constrain a person's expression of their primary motivation… Ideals vs. Achievement vs. Self-Expression

95. http://www.sric-bi.com/VALS/ STRUGGLERS FULFILLEDS BELIEVERS ACHIEVERS EXPERIENCERS STRIVERSMAKERS Low Resources High Resources Action OrientedStatus Oriented Principle Oriented ACTUALIZERS

96. Actualizer Fulfilled Believer Achiever Striver Experiencer Maker Struggler Total VALS Segments -Demographic Profiles

97. Total Actualizer Fulfilled Believer Achiever Striver Experiencer Maker Struggler

98. iVals

99. Go Find Your Self http://www.sric-bi.com/VALS/presurvey.shtml Take the VALs Survey- and find what segment you belong to…

100. Val’s with Dr. Pepper example

101. Lifestyle Clusters- Reflective of Orientation to Technology Lifestyle defined by the Role & Scope that Technology Plays in Peoples Lives

102. Technographic Technographic Segmentation Scheme Define & Segment consumers according to: Ownership Use Patterns Motivations (purchase & use) Attitudes toward Technology Attitudes toward Media Define & Segment consumers according to: Ownership Use Patterns Motivations (purchase & use) Attitudes toward Technology Attitudes toward Media

103. The concept and technique was first introduced in 1985 by Dr. Edward Forrest [1] in a study of VCR users and later elaborated upon in the article, "Segmenting VCR Owners" published in the Journal of Advertising Research. In the article it was suggested that the profiling of technology consumers "should be based on an amalgam of variables which might best be referred to as "technographic"... which "focuses on the motivations, usage patterns, attitudes about technology... as well as measures of a person's fundamental values and lifestyle perspective." Edward Forrest [1]VCR

105. Technographics ® Segmentation Model Primary motivationAttitudeIncome Techno- strivers Techno- strivers Digital Hopefuls Digital Hopefuls Gadget Grabbers Gadget Grabbers Handshakers Traditionalists Media Junkies Media Junkies Sidelined Citizens Fast Forwards Fast Forwards New Age Nurturers New Age Nurturers Mouse Potatoes Mouse Potatoes

106. Segments in Europe Primary motivationAttitudeIncome Techno- strivers Digital Hopefuls Gadget Grabbers HandshakersTraditionalists Media Junkies Sidelined Citizens Fast Forwards New Age Nurturers Mouse Potatoes 11%6%8% 10%11%8% 5%4%6% 31% Red % = Europe 12%9%8% 7%9%7% 5%8% 28% Blue % = USA … and the US

107. Advertising Strategy

108. Bases for/ Systems of Segmentation Who Geographic Segmentation Demographic Segmentation – SocioGraphics Does What -When Volume Segmentation Situation Segmentation & Why Psychographic Segmentation – Benefit Lifestyle Generational

109. Origins of our identity individuality Our individuality = result of nature & nurture commonality Our commonality = results from our shared culture & experience War; civil unrest; social movements Political persons & events; economic swings Scientific/Technological discoveries & advances Tragedies: Natural & Man-made Entertainment: Movies, TV, Music; artists, celebrities Clothing styles; Lifestyle trends, Fads

110. Generational Life Experiences Called “Markers” Values are shaped by: Events Culture Politics Economy Technology Personalities Events Culture Politics Economy Technology Personalities

111. Come of age – Imprint on your WORLD Each generation molded by world events that occur during its formative years. … distinct historical experiences create characteristics that stay w/ people thruout rest of their lives Each generation molded by world events that occur during its formative years. … distinct historical experiences create characteristics that stay w/ people thruout rest of their lives

112. Generations Variously Named & Dated: 1.Matures – < 1946 2.Baby Boomer – 1946-1953 3.Generation Jones – 1954-1964 4.Generation Rerun – 1965-1975 5.Generation Xceptional – 1976-1986 6.Generation M – 1987-1995 7.Millennials – 1996 and beyond 1.Matures – < 1946 2.Baby Boomer – 1946-1953 3.Generation Jones – 1954-1964 4.Generation Rerun – 1965-1975 5.Generation Xceptional – 1976-1986 6.Generation M – 1987-1995 7.Millennials – 1996 and beyond Depression cohort (1912-1921) WWII cohort (1922- 1927) Post-war cohort (1928- 1945) Baby Boomer cohort #1 (1946- 54) Baby Boomer cohort #2 (1955- 65) Generation X cohort (1965- 1976) N Generation cohort (1977 to date) Depression cohort (1912-1921) WWII cohort (1922- 1927) Post-war cohort (1928- 1945) Baby Boomer cohort #1 (1946- 54) Baby Boomer cohort #2 (1955- 65) Generation X cohort (1965- 1976) N Generation cohort (1977 to date) THE GI GENERATION: 1901-1924 THE SILENT GENERATION: 1925- 1942 BABY BOOMERS: 1943-1960 GENERATION X: 1961-1981 GENERATION Y*: 1982-1995 THE GI GENERATION: 1901-1924 THE SILENT GENERATION: 1925- 1942 BABY BOOMERS: 1943-1960 GENERATION X: 1961-1981 GENERATION Y*: 1982-1995 * AKA: Echo Boomers; Millennial’s

113. Some Defining Events- Senior Generations Depression cohort (born from 1912 to 1921) Lived thru- The Great Depression, high levels unemployment, poverty, lack of creature comforts, financial uncertainty WWII cohort/ GI Gen. (born from 1922 to 1927) Lived thru- : men leaving to war - many not returning, -- women working in factories, focus on defeating a common enemy Post-war cohort/ Silent Gen. (born from 1928 to 1945) Lived thru- : sustained economic growth, social tranquility, The Cold War, McCarthyism Born: <1945

114. Born: 1945 ~1964 78 million “The Ed Sullivan Show”, Fallout Shelters, Poodle Skirts and Pop Beads, Slinkies, TV Dinners, Hula Hoops,The Peace Sign, “Laugh In”, Clinton, Midler, Leno, Streisand, Gates “The Ed Sullivan Show”, Fallout Shelters, Poodle Skirts and Pop Beads, Slinkies, TV Dinners, Hula Hoops,The Peace Sign, “Laugh In”, Clinton, Midler, Leno, Streisand, Gates Cultural Icons & Memorabilia Baby Boomer cohort #1 (born 1946 to 1954) Lived thru- : assassination of JFK, RFK, and MLK, political unrest, walk on moon, Vietnam War, anti-war protests, sexual freedom, civil rights – environmental- hippie & women’s movement, protests and riots, experimentation w/ drugs Baby Boomer cohort #2 (born 1955 to 1964) Lived thru- : Watergate, defeat in Vietnam, the oil embargo, raging inflation, gasoline shortages IDEALIST – Prophet: Inner- driven, moralistic generation - comes of age during a period of spiritual awakening

115. “The Brady Bunch”, Pet Rocks, Platform Shoes, “The Simpsons”, “Dynasty”, ET, Cabbage Patch Dolls, Brad Pitt, Cameron Diaz, Carrot Top, TV-Friends, Brady Bunch, Ninja turtles Born: 1965~1983 48 million Gen X cohort Initial Impact Events: Challenger explosion Iran-Contra social malaise Reaganomics AIDs fall of Berlin Wall Predom. of single parent families Cultural Memorabilia ADAPTIVE- Nomad: A hypocritical generation- coasts along on accomplishments of civics, lay the groundwork for new idealist era.

116. Cultural Icons? Xena Warrior Princess Buffy The Vampire Slayer cell phones laptops/ ipods Cultural Icons? Xena Warrior Princess Buffy The Vampire Slayer cell phones laptops/ ipods Born: 1984 ~2002 first wired gen… Initial Impact Events : : Rise of the Internet 9-11 Cultural diversity 2 wars in Iraq CIVIC– Hero: Outer-driven, morally complacent generation -institutionalizes ideals of previous generations..

117. The New generation- Ferals? Born: after ~1990 Age today: <17 Predicted to be- Alienated, cynical generation- challenge ideals of parents & develop into pragmatic, risk- taking adults..

118. Common Experiences Common Experiences Common AIO’s, values, tastes, style... Common responses to marketing mix variables Generational mindsets … are major factors in determining what & how consumers buy… The notion a group of people bound together by sharing experience of common historical events 1st introduced by Karl Mannheim - early 1920s

119. Generational Marketing Key Considerations not a key behavior driver for all product categories- but is particularly appropriate for: Food Music Apparel Automotive Financial & Insurance as well as entertainment products.

120. Tailor Marketing Message Accordingly: DescriptionYears BornMillions/peopleCharacteristics Generation “Next” or Millennials 1982-2002 (1980 – 2002) 70 millionTech-savvy Educated Multicultural Generation “Y” 1976-1981 (1979 – 1994) 81 million (X + Y) Edgy, focused on urban style, retro style Generation “X” 1961-1981 (1965-1978) See aboveCynical, media savvy, rebellious Baby Boomers 1946-1964 (1946-1964) 76 millionHigh disposable income, value- driven Silent Generation 1925 - 194535 millionConformists, now grandparents of “Millennials”

121. Marketing to Seniors The Classic

122. “The generation that dropped acid to escape reality… is generation that drops antacid to cope w/ it” Marketing to Boomers The Music The Values

123. every month = new technology every day = new product / service every minute = new blog & web-site Change you now experience in one year… Your Grandparents experienced in one lifetime. For X + generations… it’s all about the rate of change

125. Divorce one-parent families, step families working parents, latch-key lives violence on television, violence in the streets & breaking down of traditional values & sources of comfort "The Street-Savvy Generation" Marketing to Gen X -- "The Street-Savvy Generation"

126. How to Market to Gen-Yer’s