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CONSUMER BEHAVIOR & MARKET SEGMENTATION
PATRICIA CARSON, PRASHANT MISRA, LARA MURGALE, ROBERT MULLENBERG, CAROLE WHITE
DR. CLAYSON: MARKETING MANAGEMENT
DECEMBER 2, 2013
“Attitude is the link between perception and behavior”
AttitudePerception Behavior
Consumer Behavior in a Nutshell
Actions
Social Processes
Mental Proces
ses
Influences
Perception/Sensation
Cognition
Affect
Beliefs
Social
Reference Levels
Cultural
Social
Personal
Psychological
Buyer
The Purchase Decision
Other Factors
Risk: Performance, Financial, Physical, Social & Ego
Behavioral Learning: Repeat Pleasure; Environment & Experience Rule
Cognitive Learning: Sensory, Short-term & Long-term Memory
Attitudes: Learned predispositions
Social Groups: Which ones really matter for which products?
Personality: What is it?
Market Segmentation in a Nutshell
What is Segmentation?
Why Segment?
Types of Segmentation Geographic
Demographic
Psychographic
Behavioral
Segments must be Large enough
Identifiable
Reachable
France – Consumer Behavior & Market Segmentation
Population - Age & birth rate
Ethnicity – Immigration & Religion
Education
Households
Lifestyle and Health – Work & Habits
France - Risk, Learning, Attitude, Personality & Social Group & Behavior
Price has been an essential element in the buying process;
Quality is becoming more and more important for the consumer;
Buying equals pleasure;
The French consumer is impulsive;
Domestic Products are preferred (Food).
India – Consumer Behavior
Environment of the consumer
Geographic influences
Influence of occupation
Place of purchase
Creative use of products http://India and Washing Machines
India – Consumer Market Structure
The Rich
The Consuming Class
The Climbers
The Aspirants
The Destitutes
India - The Purchase DecisionKFC example
The need was hung
er and the immediat
e satisfaction of hung
er throu
gh fast food
Search by consumer
s throu
gh the
Internal
factors
and external
factors of Information
Comparing the food
joints-Mc
Donald,
Wimpy’s and
KFC., Ration
al choice
, attribu
te choice, KFC
attribute
choice theory
The decision
of buying
a product at KFC
was backed
by many
factors(as
known by
consumer
survey like
social surroundings,
physical surroundings and
antecedent
states.
like some consumers were satisfi
ed with the
quality and
taste of
food NEGAT
IVE FEEDBACK so
me found the food
as oily and
bland.
Personality
Who are you?
Big5
VALS
Personality
Is ‘personality profiling’ valuable to a marketing strategy?
How do we gather ‘personality’ data about the masses?
Or specific target markets?
Population ‘Personalities’
Demographic data: Applied Geographic Solutions Inc.
Experian: Mosaics
School and Church Plot: 10-mile radius
Legend
Trinity School 292 Trinity Church 588
Mosaic Types 10 mi%
Cong % Sch %
J34 Aging in Place 6.1 9.1 3.3
C11 Aging of Aquarius 6.1 6.8 3.3
I31 Blue Collar Comfort 6.0 10.9 12.7
L42 Rooted Flower Power 6.0 5.7 5.5
E20 No Place Like Home 5.8 12.3 9.8
O51 Digital Dependents 5.1 4.3 6.5
M45 Diapers and Debit Cards
4.5 3.4 6.9
B09 Family Fun-tastic 3.6 6.0 9.1
A02 Platinum Prosperity 3.5 3.6 2.2
Total 46.7 62.1 59.3
J34 Aging in Place
J34 Aging in Place
E20 No Place Like Home
E20 No Place Like Home
E20 No Place Like Home
Franco Modigliani
Franco Modigliani
Italian economist naturalized American, a professor at the MIT Sloan School of Management and MIT Department of Economics who won the Nobel Memorial Prize in Economics in 1985
the life-cycle theory
individuals build up a store of wealth during their younger working lives to consume during their own old age.
proved useful in study of demographics based on age
Predicting pension plans
Predicting consumption
Life-Cycle Hypothesis
consumption is patterned by the stage of life
consumption patterns change during different stages of their lives
individuals plan their consumption and savings behavior
Individual want to maintain stable lifestyles so work to build assets during working lives
use assets during retirement years
Life-Cycle Hypothesis
Most believe that this working generation will aim for a level of consumption in their post-retirement years larger than the consumption enjoyed by the currently retired individuals belonging to a less affluent generation.
Most believe that to support this future level of consumption post-retirement, the working individuals will have to save on a higher scale higher than the current retired generation achieved
Life-Cycle Hypothesis
However,
Consumer behavior researchers find that Elderly do not “dissave” or spend as quickly as expected from the life-cycle model
There are several reasons: precautionary saving because cautious about unpredictable
expenses and worried about living longer
worried that ill-health will result in assistance and nursing expenses
leaving bequests to their children
Leaving bequests to charity
Finding Common Ground
Dates Vary by Author
1927-1942: Silent Generation
1946-1964: Baby Boomers
1965-1983: Gen X or the Busters
1984-2002: Gen Y or the Millennials
2003-Current: Gen Z or the Digital Generation
Source: Connecting Across Generations
Controversy Among Researchers
More important than age group is where the individual is in their life cycle rather than their generational cohorts
For example, if a family is having children or helping to raise grandchildren, their spending patterns and housing choices are driven by need and activity rather than age group category
Generalizations have a “kernel of truth,” however like astrology can always find some characteristics that fit and some that do not.
In general in the US, the population is becoming “larger, older, and more diverse” as cited by Marketing: the Core, p. 61.
Age Group
Generation Y: 1984-2002 AKA “millennials” and “baby boomet” Defined by communication technologies.
80 million Generation Y in US.
Peer-oriented
Instant Gratification
Events, leaders, trends of its time
Facing higher costs for education
Not used to negative feedback themselves
Raised by Boomers. Interested in Environmental Sustainability.
Want work/life balance
Multi-taskers
Age Group
Age Group
Generation X: 1965-1983 AKA “Baby Bust” Also unimpressed with authority
40 Million in US
Tolerant of all peoples
Drug problems.
Self-absorbed, Clothes and fashion labels are important
Late to marry, quick to divorce, single parents, short on loyalty, relative values, self-reliant,
Struggling to buy
Suspicious, cautious, skeptical
Computer oriented. Define self by skill set, not firm membership
Age Group
Baby Boomers: 1946-1964 “Me” generation.
80 million Boomers in US.
Defined by “rock and roll” music, free love, “non-violent” protests
First TV generation
Poor marital skills and were first divorced generation
Shaped by AIDs epidemic and began support for gay citizens
Individual rights of members of minority and gender groups championed
Optimistic
Team-oriented
Age Group
Silent Generation: 1927-1945 Born in the great Depression of 1929 or children of parents
who lived through the Depression
Married for life. One firm for life.
Labor Unions
World War II, Korean and Viet Nam Wars
Well behaved in school: complaints from teachers regarding chewing gum and passing notes.
Big Band/Swing music
Believe in sacrificing for next generation, disciplined, cautious spenders.
Conclusion
Perception Attitude Behavior