1. The Consumer Audience CHAPTER 5

2. 2 Chapter Outline I.How Does Consumer Behavior Work? II.Cultural and Social Influences on Consumer Decisions III.Psychological Influences that Motivate Consumers IV.Behavioral Influences on Consumer Decisions V.The Consumer Decision Process VI.Segmenting and Targeting

3. 3 How Does Consumer Behavior Work? Consumer behavior –Describes how individuals or groups select, purchase, use, or dispose of products – as well as describing the needs that motivate these behaviors Influences on Consumer Decision Making (figure 5.1, p. 127)

4. 4 Cultural and Social Influences Culture Tangible items and intangible concepts that together define a group of people or a way of life Social Class The position a person and his/her family hold within society Reference Groups A group of people who are used as a guide for behavior in specific situations Family Two or more people who are related by blood, marriage, or adoption and live in the same household

5. 5 Cultural and Social Influences Demographics The statistical, personal, social, and economic characteristics that describe a population Characteristics Age Sexual orientation Race and ethnicity Occupation Income Geography

6. 6 Psychological Influences Perception/State of Mind Affects how people perceive information as well as determines the particular pattern of consumer behavior Motivations Internal forces that stimulate people to behave in a particular manner Produced by the tension caused by an unfulfilled need

7. 7 Levels of Needs in the Maslow Hierarchy Figure 5.4 (p. 138)

8. 8 Psychological Influences Attitudes and Values Attitudes impact motivations Influence how consumers evaluate products, institutions, retail stores, and advertising Personality Distinctive characteristics that make people or brands individual Brand personalities make them distinctive from their competitors

9. 9 Psychological Influences Psychographic Influences Lifestyle and psychological characteristics that have a bearing on how people make decisions Psychographics Lifestyles –Looks at the ways people allocate time, energy, and money The VALS system –Lifestyle profiles that collectively reflect a whole culture

10. 10 An example is SRI International’s Values and Lifestyle System (VALS). VALS 2 arranges groups by resources and self-orientation (principle, status, or action oriented) Combining All the Personal Factors: Psychographics

11. 11 Behavioral Influences Usage behavior –How much of a product category or brand customers buy. Innovation and adoption –How willing people are to be innovative and try something new Consumer Categories based on Product Usage (Table 5.4, p. 144)

12. 12 The Decision Processes

13. 13 Segmenting and Targeting Segmenting –Dividing the market into groups of people who have similar characteristics in certain key product-related areas –Figure 5.9 (p. 149) –Sociodemographic segments: age + lifestyle differences –Niche markets Narrowly defined group by some distinctive trait

14. 14 Segmenting and Targeting Market segmentation Strategy –Assumes that the best way to sell is to recognize differences within the broad market and adjust strategies and messages accordingly Market aggregation strategy –When planners purposefully use one marketing strategy that will appeal to as many audiences as possible Targeting –Identifying the group that might be the most profitable audience