1. Roger D. Blackwell, Paul W. Miniard, and James F. Engel, Consumer Behavior, Ninth Edition Copyright© 2001 by Harcourt, Inc. Demographics, Psychographics, Values, and Personality CHAPTER 7

2. All rights reserved. Analyzing and Predicting Consumer Behavior Demographics Personality Values Lifestyles

3. All rights reserved. Analyzing and Predicting Consumer Behavior Demographics Personality Values Lifestyles

4. All rights reserved. Demographic Analysis to Predict Consumer Behavior Demographics Age Structure of Markets Geographic Factors Economic Resources Global Markets

5. All rights reserved. Demographic Analysis to Predict Consumer Behavior Demographics Age Structure of Markets Geographic Factors Economic Resources Global Markets

6. All rights reserved. Demographic Analysis to Predict Consumer Behavior 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

7. All rights reserved. Changing Structure of Consumer Markets How many people will there be? Birthrates Death rates Net Immigration

8. All rights reserved. Changing Structure of Consumer Markets How many people will there be? Birthrates Death rates Net Immigration Birthrate: number of live births per 1,000 population in a given year Fertility rate: number of live births per 1,000 women of childbearing age (15 to 44 years)

9. All rights reserved. Changing Structure of Consumer Markets Total fertility rate: average number of children that would be born alive to a woman during her lifetime if she passed through childbearing years conforming to age-specific fertility rates Population momentum: future growth of any population will be influenced by its present age distribution

10. All rights reserved. Changing Structure of Consumer Markets Factors affecting birthrates: Age distribution of population Family structure Social attitudes toward family/children Technology Ethnicity (varying birthrates)

11. All rights reserved. Changing Structure of Consumer Markets Factors affecting birthrates: Age distribution of population Family structure Social attitudes toward family/children Technology Ethnicity (varying birthrates) Increasing life expectancy Immigration represents about 25% of annual growth in United States

12. All rights reserved. Changing U.S. Age Distribution Changes in age distribution affects demand for specific products and services Marketers can adapt product features, packaging, and communication strategies and messages depending on changing age structure of markets

13. All rights reserved. As the number of older, health conscious consumers increased in the 1990s, so did the popularity of healthy, easy-to- prepare frozen meals, such as Healthy Choice.

14. Total Population262,754274,815298,109 Younger than 5 years 19, 553 18,908 19,730 5-19 years old 56,144 59,740 61,278 20-24 years old 17,885 18,161 21,061 25-34 years old 40,844 37,416 38,367 35-44 years old 42,500 44,662 38,853 45-54 years old 31,082 37,054 43,737 55-64 years old 21,153 23,988 35,378 65 years and older 33,594 34,886 39,705 U.S. Population Projections (Middle Series in Thousands) 1995 2000 2010

15. All rights reserved. Children As Consumers Projected decline in number of children under 13 years between 2000 and 2010

16. All rights reserved. Children As Consumers Children make purchases themselves Parents buy for children Buying more quality goods

17. All rights reserved. Rise of Teenagers Number of teenagers grew in 1990s and will continue this decade 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

18. All rights reserved. Young Adults This group (18-to-35) is expected to grow somewhat in next decade Segment of 25-to-34 year olds will decline first 5 years of this decade and increase in latter 5 years Need to buy products to set up households and for young children With many needs and greater financial restraints, they often shop at value-oriented retailers

19. All rights reserved. Baby Boomers and Muppies These groups (45 to 55 years and 56 to 65 years) are projected to grow by six to ten million by 2010 Good market for spas, travel, health clubs, cosmetics, health foods, and restaurants This group may be “aging” but doesn’t want to be reminded Breaking mold of what “50” looks and feels like

20. All rights reserved. Young Again Market Also referred to as mature market, seniors, and elderly These segments are expected to grow substantially Many in this segment are feeling, thinking, and buying younger than previous generations Many have adopted “young again” lifestyles and attitudes

21. All rights reserved. Young Again Market Cognitive age: the age a person perceives himself of herself to be Many advertisers appeal more to cognitive age than chronological age in ads to this segment Cognitive age can be used for targeting segments within this group, developing more creative content, and selecting more effective media

22. All rights reserved. Ball Park franks appeal to this segment with older, attractive models and products addressing concerns about health and fat.

23. All rights reserved. Young Again Market Important segmentation variables for this group include health, activity level, discretionary time, engagement in society, and gender Communicating with this segment often requires alteration of messages and materials -larger type and bright colors -newspapers and AM radio -models they can relate to

24. All rights reserved. Demographic Analysis to Predict Consumer Behavior Demographics Age Structure of Markets Geographic Factors Economic Resources Global Markets

25. All rights reserved. Changing Geography of Demand Geodemography, which combines socioeconomic factors with where people live, helps examine and characterize consumer demand

26. All rights reserved. Changing Geography of Demand Geodemography, which combines socioeconomic factors with where people live, helps examine and characterize consumer demand Metropolitan statistical area (MSA): a free-standing metropolitan area surrounded by non-metropolitan counties Primary MSA (PMSA): metropolitan area closely related to another city Consolidated MSA: a grouping of PMSAs

27. All rights reserved. Changing Geography of Demand Low Growth States (less than 4%) High Growth States (greater than10%)

28. All rights reserved. Changing Geography of Demand Low Growth States (less than 4%) High Growth States (greater than10%) Indiana Kentucky Michigan New York Ohio Pennsylva niaSouth Dakota Vermont Wisconsin Alaska Arizona California District of Columbia Florida Hawaii Texas Washingto nWyoming

29. All rights reserved. Demographic Analysis to Predict Consumer Behavior Demographics Age Structure of Markets Geographic Factors Economic Resources Global Markets

30. All rights reserved. Economic Resources Income: money from wages, salaries, interest, and welfare payments Wealth: a measure of a family’s net worth (assets minus liabilities) Net worth influences willingness to spend but not necessarily ability to spend, since many assets are not liquid and difficult to spend

31. All rights reserved. Targeting the Up Market Print oriented communication Simple ads that promote image Credibility of source selling product Product reviews influence this group

32. All rights reserved. Targeting the Down Market Good products at reasonable prices Promote value in ads and in store Limit services performed for customers to keep prices low Keep stores clean

33. All rights reserved. Demographic Analysis to Predict Consumer Behavior Demographics Age Structure of Markets Geographic Factors Economic Resources Global Markets

34. All rights reserved. Global Market Analysis Attractive markets have both population growth and consumers with ability to buy products

35. All rights reserved. Global Market Analysis Attractive markets have both population growth and consumers with ability to buy products Which countries will grow the most in the future?

36. 1. India 2. China 3. United States 4. Nigeria 5. Indonesia 6. Pakistan 7. Brazil 8. Bangladesh 9. Congo 10. Mexico 11. Ethiopia 12. Philippines 13. Russia 14. Vietnam 15. Egypt 16. Iran 17. Turkey 18. Japan 19. Saudi Arabia 20. Sudan 1. China 2. India 3. United States 4. Indonesia 5. Brazil 6. Russia 7. Pakistan 8. Bangladesh 9. Japan 10. Nigeria 11. Mexico 12. Germany 13. Philippines 14. Vietnam 15. Egypt 16. Turkey 17. Iran 18. Thailand 19. Ethiopia 20. United Kingdom Top 20 Countries Measured by Population 20002050

37. All rights reserved. Global Market Analysis Attractive markets have both population growth and consumers with ability to buy products Which countries will grow the most in the future? Which countries have the highest GNP per capita?

38. All rights reserved. Global Market Analysis Attractive markets have both population growth and consumers with ability to buy products Which countries will grow the most in the future? Which countries have the highest GNP per capita? How to market throughout the world

39. All rights reserved. Developing Countries Marketers may have to teach consumers about products they do not know (deodorant) Need to stimulate product trial Brand awareness is important because competitors will follow Ads with price information or with economic appeal often attract interest Visual language is often required

40. All rights reserved. Consumer Behavior in the Pacific Rim India South Korea Australia China Japan

41. All rights reserved. Consumer Behavior in Latin America Some of the most attractive markets include Brazil, Colombia, Venezuela, Chile, and Argentina Most countries have high population growth rates and large markets of young consumers, and some have promising income growth rates

42. All rights reserved. Consumer Behavior in Eastern Europe Influence of TV and movies on culture has caused consumers to have similar preferences and tastes of western consumers Hungary, Poland, and Yugoslavia have received much attention from marketers Marketers have launched a myriad of successful brands

43. All rights reserved. Consumer Behavior in Europe The EU is a market larger than the United States Extremely low population growth makes customer retention extremely important for marketers Products and people move across borders easily Marketers can approach Europe as a single market, but national identity still exists among consumers

44. All rights reserved. Analyzing and Predicting Consumer Behavior Demographics Personality Values Lifestyles

45. All rights reserved. Analyzing and Predicting Consumer Behavior Demographics Personality Values Lifestyles

46. All rights reserved. Personality consistent responses to environ- mental stimuli an individual’s unique psychological makeup, which consistently influences how the person responds to his or her environment Personality:

47. All rights reserved. Personality How does personality influence consumer behavior? consistent responses to environ- mental stimuli an individual’s unique psychological makeup, which consistently influences how the person responds to his or her environment Personality:

48. All rights reserved. Personality Human personality system consists of the id, ego, and superego The dynamic interaction of these results in unconscious motivations that are manifested in observed human behavior Personality is more than just subconscious drives Some advertising is influenced by psychoanalytic approach Psychoanalytic theory

49. All rights reserved. Personality Recognizes interdependence of the individual and society-- individual strives to meet needs of society and society helps individual attain goals Social variables (rather than biological instinct) are most important in shaping personality Person may buy a product that symbolizes unattainable or unacceptable goal--”forbidden desire” Socio-Psychological Theory

50. All rights reserved. Personality Quantitative approach to personality Personality made up of traits: any distinguishable, relatively enduring way in which individuals differ from one another Understanding consumer traits can be useful in marketing plans Practical application is brand personality: the personality consumers interpret from a brand Trait-Factor Theory

51. All rights reserved. Haagen Dazs projects an elegant, indulgent, and special personality in this ad.

52. All rights reserved. Personality to Predict Behavior Research typically focused on relationships between personality variables and consumer behaviors

53. All rights reserved. Personality to Predict Behavior Research typically focused on relationships between personality variables and consumer behaviors Research tried to predict brand and store choice based on personality but with poor results

54. All rights reserved. Personality to Predict Behavior Research typically focused on relationships between personality variables and consumer behaviors Research tried to predict brand and store choice based on personality but with poor results Application problems: people with common personalities can represent vast demographic segments, but media is often segmented on these variables

55. All rights reserved. Analyzing and Predicting Consumer Behavior Demographics Personality Values Lifestyles

56. All rights reserved. Analyzing and Predicting Consumer Behavior Demographics Personality Values Lifestyles

57. All rights reserved. Personal Values Represent person’s beliefs about life and acceptable behavior Unlike attitudes, they transcend situations or events and are more enduring because they are more central in personality structure Represent 3 universal requirements: biological needs, coordinated social interaction, and group survival and functioning Values:

58. All rights reserved. Personal Values Social values define “normal” behavior for a society or group Personal values define “normal” behavior for an individual Social values of groups to which an individual belongs, influence personal values Values are used to understand advertising cognitions, product or brand choice and segmentation

59. All rights reserved. Rokeach Value Scale Values are concerned with goals and ways of behaving to obtain them Values are enduring beliefs that specific modes of conduct or end states of existence are preferable to others RVS asks people to rank importance of a series of goals and ways of behaving--can be used to segment groups based on values systems

60. All rights reserved. Rokeach Value Scale Instrumental (Modes of Conduct) Terminal Values (End States)

61. All rights reserved. Rokeach Value Scale Instrumental (Modes of Conduct) Terminal Values (End States) Ambition Broad-minded Capable Cheerful Clean Courageous Forgiving Honest Imaginative Independent Intellectual Logical A comfortable life An exciting life A world at peace A world of beauty Equality Family security Freedom Happiness Inner harmony Mature love National securityPleasure

62. All rights reserved. Schwartz Value Scale Designed to measure a compre- hensive set of values thought to be held by nearly everyone Values are trans-situational goals that serve the interest of individuals or groups and express one of ten universal motivations or value types The ten values and four higher- order value domains represent a continuum of related motivations

63. Structural Relation of Motivational Value Types

64. All rights reserved. Exemplary Values Value Type

65. All rights reserved. Exemplary Values Value Type PowerAuthority, wealth AchievementSuccessful, capable HedonismPleasure, enjoying life StimulationDaring, exciting life Self-directionCreativity, curious UniversalismSocial justice, equality TraditionHumble, devout ConformityPoliteness, obedient SecuritySocial order, clean

66. All rights reserved. Values and The Decision Process Laddering: in-depth probing directed toward uncovering higher-level meanings at both the benefit level and the value level

67. All rights reserved. Values and The Decision Process Laddering: in-depth probing directed toward uncovering higher-level meanings at both the benefit level and the value level It seeks linkages between product attributes, personal outcomes, and values Identifying which product attribute appeals to which value-based segment can guide advertising and marketing appeals

68. All rights reserved. Analyzing and Predicting Consumer Behavior Demographics Personality Values Lifestyles

69. All rights reserved. Analyzing and Predicting Consumer Behavior Demographics Personality Values Lifestyles

70. All rights reserved. Lifestyle Concepts Lifestyle: patterns in which people live and spend time and money Reflects their activities, interests, and opinions

71. All rights reserved. Lifestyle Concepts Lifestyle: patterns in which people live and spend time and money Reflects their activities, interests, and opinions Since lifestyles change readily, marketers must keep research methods and marketing strategies current Lifestyles can affect which goods are sold and how positioned

72. All rights reserved. Vittel highlights how its water bottles fit into an active lifestyle by featuring the drinking cap and a model who is roller- blading.

73. All rights reserved. Lifestyle Concepts Psychographics: an operational technique to measure lifestyles Can be used in qualitative and quantitative research methods Demographics focus more on who buys products; psychographics focus on why they buy AIO measures: activities, interests, and opinions

74. AIO Categories of Lifestyle Studies InterestsOpinionsActivities

75. InterestsOpinionsActivities Family Home Job Community Recreation Fashion Food Media Achievements Social Issues Politics Themselves Business Economics Education Products Future Culture Work Hobbies Social Events Vacation Entertainment Community Shopping Sports Volunteering

76. All rights reserved. Lifestyle Segmentation Develop a deeper understanding of a segment or define segment Use Likert scale to respond to various AIO statements Gain understanding of which life- styles influence purchase and consumption behaviors Marketers can develop packaging and communication strategies accordingly

77. All rights reserved. The Martha Stewart brand, featured at Kmart, has come to represent a lifestyle segment.

78. All rights reserved. Values And Lifestyle System VALS2™ captures consumers’ attitudes and values by measuring how strongly they agree or disagree with various phrases Classifications of self-orientations: Principle oriented: make purchases based on their principles not others’ Status oriented: heavily influenced by others’ beliefs, opinions, and views Action oriented: buy to affect environ- ment and seek activity, variety, and risk

79. VALS Lifestyle Segments Actualizers Strugglers Low Resources High Resources Status Orientation Action Orientation Principle Orientation Fulfilleds Believers Achievers Strivers Experiencers Makers

80. All rights reserved. VALS Lifestyle Categories Actualizers: successful, active, sophis- ticated consumers with many resources and high self-esteem. Image is important. Fulfilleds: satisfied, mature, comfortable, practical people, who look for durability, value, and functionality in products. Believers: principle oriented, with beliefs based on codes of church, community, family, and nation. Buy proven brands from home country.

81. All rights reserved. VALS Lifestyle Categories Achievers: career-oriented, like to feel in control of their lives, and prefer prestige brands that signal success. Social lives revolve around family, church, and career. Strivers: concerned about approval of others and seek self-definition, security, and image of success. Emulate those they want to be like, but lack resources. Experiencers: young, enthusiastic, impul- sive, and like risk taking, variety, and excitement. Like new and off-beat products and activities.

82. All rights reserved. VALS Lifestyle Categories Makers: tend to focus on self-sufficiency, live within context of family and work, and pay little attention to issues outside of their realm. Often make and fix things themselves. Strugglers: poor and usually poorly educated, have no social bonds, and are concerned with issues of the moment, such as obtaining food and healthcare. They are cautious consumers and seek safety and security.

83. Roger D. Blackwell Paul W. Miniard James F. Engel Consumer Behavior Requests for permission to make copies of any part of the work should be mailed to the following address: Permissions Department, Harcourt, Inc. 6277 Sea Harbor Drive Orlando, Florida 32887-6777 Copyright© 2001 by Harcourt, Inc. All rights reserved.