Transcript CONSUMER BEHAVIOR & MARKET SEGMENTATION

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”
Perception
Attitude
Behavior
Consumer Behavior in a Nutshell
Influences
Reference Levels
Perception/Sensation
Cultural
Cognition
Social
Affect
Personal
Beliefs
Social
Psychological
Buyer
The Purchase Decision
Other Factors

Risk: Performance, Financial, Physical, Social &
Ego
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Behavioral Learning: Repeat Pleasure;
Environment & Experience Rule

Cognitive Learning: Sensory, Short-term & Longterm Memory

Attitudes: Learned predispositions
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Social Groups: Which ones really matter for which
products?
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Personality: What is it?
Market Segmentation in a Nutshell
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What is Segmentation?
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Why Segment?
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Types of Segmentation
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
Geographic

Demographic

Psychographic

Behavioral
Segments must be

Large enough
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Identifiable

Reachable
France – Consumer Behavior &
Market Segmentation

Population - Age & birth rate
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Ethnicity – Immigration & Religion
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Education

Households

Lifestyle and Health – Work & Habits
France - Risk, Learning, Attitude,
Personality & Social Group & Behavior
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Price has been an essential element in the buying process;
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Quality is becoming more and more important for the consumer;
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Buying equals pleasure;
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The French consumer is impulsive;
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Domestic Products are preferred (Food).
India – Consumer Behavior
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Environment of the consumer
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Geographic influences
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Influence of occupation
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Place of purchase
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Creative use of products http://India and Washing Machines
India – Consumer Market Structure
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The Rich
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The Consuming Class
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The Climbers
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The Aspirants
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The Destitutes
India - The Purchase Decision
KFC example
The need was hunger
and the immediate
satisfaction of hunger
through fast food
Search by
consumers through the
Internal factors and
external factors of
Information
Comparing the food
joints-Mc Donald,
Wimpy’s and KFC.,
Rational choice,
attribute 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 satisfied with the
quality and taste of
food NEGATIVE
FEEDBACK some found
the food as oily and
bland.
Personality
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Who are you?
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Big5
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VALS
Personality
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Is ‘personality profiling’ valuable to a marketing strategy?
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How do we gather ‘personality’ data about the masses?
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Or specific target markets?
Population ‘Personalities’
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Demographic data: Applied Geographic Solutions Inc.
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Experian: Mosaics
School and Church Plot: 10-mile radius
Legend
Trinity School 292
Trinity Church 588
Mosaic Types
J34 Aging in Place
C11 Aging of Aquarius
I31 Blue Collar Comfort
L42 Rooted Flower Power
E20 No Place Like Home
O51 Digital Dependents
M45 Diapers and Debit Cards
B09 Family Fun-tastic
A02 Platinum Prosperity
Total
10 mi% Cong % Sch %
6.1
6.1
6.0
6.0
5.8
5.1
4.5
3.6
3.5
46.7
9.1
6.8
10.9
5.7
12.3
4.3
3.4
6.0
3.6
62.1
3.3
3.3
12.7
5.5
9.8
6.5
6.9
9.1
2.2
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
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consumption is patterned by the stage of life
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consumption patterns change during different stages of their lives
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individuals plan their consumption and savings behavior
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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.
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Most believe that to support this future level of consumption postretirement, the working individuals will have to save on a higher
scale higher than the current retired generation achieved
Life-Cycle Hypothesis
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However,
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Consumer behavior researchers find that Elderly do not “dissave” or
spend as quickly as expected from the life-cycle model
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There are several reasons:
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precautionary saving because cautious about unpredictable expenses
and worried about living longer
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worried that ill-health will result in assistance and nursing expenses
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leaving bequests to their children
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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
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More important than age group is where the individual is in their life
cycle rather than their generational cohorts
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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
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Generalizations have a “kernel of truth,” however like astrology can
always find some characteristics that fit and some that do not.
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In general in the US, the population is becoming “larger, older, and
more diverse” as cited by Marketing: the Core, p. 61.
Age Group
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Generation Y: 1984-2002 AKA “millennials” and “baby boomet”
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Defined by communication technologies.
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80 million Generation Y in US.
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Peer-oriented
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Instant Gratification
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Events, leaders, trends of its time
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Facing higher costs for education
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Not used to negative feedback themselves
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Raised by Boomers. Interested in Environmental Sustainability.
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Want work/life balance
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Multi-taskers
Age Group
Age Group
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Generation X: 1965-1983 AKA “Baby Bust”

Also unimpressed with authority

40 Million in US
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Tolerant of all peoples
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Drug problems.
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Self-absorbed, Clothes and fashion labels are important
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Late to marry, quick to divorce, single parents, short on loyalty, relative
values, self-reliant,
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Struggling to buy
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Suspicious, cautious, skeptical
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Computer oriented. Define self by skill set, not firm membership
Age Group
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Baby Boomers: 1946-1964
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“Me” generation.
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80 million Boomers in US.
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Defined by “rock and roll” music, free love, “non-violent” protests
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First TV generation
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Poor marital skills and were first divorced generation
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Shaped by AIDs epidemic and began support for gay citizens
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Individual rights of members of minority and gender groups championed
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Optimistic
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Team-oriented
Age Group
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Silent Generation: 1927-1945
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Born in the great Depression of 1929 or children of parents who lived
through the Depression
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Married for life. One firm for life.
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Labor Unions
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World War II, Korean and Viet Nam Wars

Well behaved in school: complaints from teachers regarding chewing
gum and passing notes.
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Big Band/Swing music
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Believe in sacrificing for next generation, disciplined, cautious spenders.
Conclusion
Perception
Attitude
Behavior