Transcript 1. Length of the Product Life Cycle

* Chapter 4:
Understanding the Customer
in Fashion Industry
AD 3118 Fashion Marketing & Brand Management
A.Kwanta Sirivajjanangkul
Albert Laurence School of Communication Arts
Department of Advertising
2014
*Chapter Outline
* Customer Segmentation
* Consumer Purchase Decision Process
* Adoption of Innovation and Trends
Customer Segmentation
AD3118 for 2/2014 by A. Kwanta S.
*
* Consumer
* People who buy or use
products to satisfy their
needs and wants
* Customers
* People who buy a particular
brand or patronize a specific
store
* Purchaser
* User
* Consumers are
different!!
*
Demographic
Geographic
• Age, Gender,
Family structure,
Social class and
income,
Generation,
Race, and
Ethnicity
• Region, Size of
metropolitan
area, Population
density, climate
*
Psychographic
- Lifestyles
• Activities,
Interestes,
Opinions,
Attitudes, Values.
Influences on Consumer’s Buying Decision Process
Social Cultural
Influences
•Culture
•Social Class
•Reference Groups
•Family
•Demographic
Behavioral Influences
Usage
Innovation& Adoption
ADVERTISING Principles and Effective IMC Practice
THE CONSUMER AUDIENCE
1-7
Psychological
Influence
Perception
Motivation
Attitudes and values
Personality
Psychographics
Wells, Moriarty, Burnett & Lwin - Xth
Edition
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Culture
*a way of life
*Learned and passed on
from one gen. to another
*Norm
*Core value: a sense of
Tangible items: art,
literature, building,
furniture,food, clothes,
etc.
Intangible concept:
history, knowledge,
moral, tradition,
language etc.
belonging, excitement, fun &
enjoyment, warm relationships, selffulfillment, respect from others, a
sense of accomplishment, security,
self-respect
1-8
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Social Class
Family
* The position a person
* Two or more people who
and his/her family
hold within society
* Determined by such
factors as income,
wealth, education,
occupation, etc.
*
are related by blood,
marriage, or adoption and
live in the same household
* Household
* Lifestyle : the way you
spend your time and money
on the
activity you value.
1-9
*
Reference Groups
* A group of people who are used as a guide for
behavior in specific situations
* 1) provide info.
* 2) a means of comparison
* 3)they offer guidance
1-10
* Reference Group: is an actual or
imaginary individual or group
considered of having significant
relevance upon an individual’s
evaluations, aspirations, or behavior.
Reference Groups: influence in 3 ways
Informational
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•
•
•
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Information seeking
brand- related knowledge
and experience
Reliable information
about brands
Information from experts
ValueExpression
Utilitarian
•
•
Brand is influenced by
preference of family
members
Purchasing a particular
brand is influenced by
their preferences
Purchasing a particular
brand is influenced by a
person whom they have
social interaction
•
•
•
•
•
brand will enhance
images others have
Brand possess
characteristics that
others have
Advertisement gives a
good feeling of using a
brand
Purchasing a brand are
admired by others
brand would help show
others what he or she
would like to be
Social power
“The capacity to alter the actions of others”
*
Demographics
*The statistical, personal,
social, and economic
characteristics that
describe a population
Characteristics
* Age (different age,different need)
* Sexual orientation (product
preferred)
* Education (media used)
* Occupation (type of product)
* Income (purchasing power)
* Race and ethnicity (type of product)
* Geography (type of product)
1-14
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Perception/State of Mind
* Affects how people perceive
information as well as
determines the particular
pattern of consumer behavior
* (experience, friend,brand
message,mental stage)
* Needs & Wants
- Basic driving forces that
motivate us to do something
- Need: e.g. choose a motel
when traveling
- Want: e.g. choose the most
expensive motel
- Innate needs (needs
necessary to keep life) VS
Acquired needs (learn in
response to culture &
environment) e.g. esteem,
prestige, affection power and
learning
1-15
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A need is a basic biological motive; a want represents one way
that society has taught to satisfy the need.
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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
e.g. old-fashioned, lively, efficient,
helpful, warm, dependable, risk
taking
* Motivations
* Internal forces that stimulate people
to behave in a particular manner
* Produced by the tension caused by an
unfulfilled need
* People are usually motivated by
emotion & habit
Psychographic Influences
Psychographics : complex consumer profiles  how
people make the decisions
Lifestyle
The way people allocate,
Time, money & energy
Hobbies, vacation, entertainment,
club membership, fashion, family, job,
food, trend, etc.
Psychological
Perception
Motivation and Needs
Attitude
Personality
*
* Usage behavior
* How much of a product
category or brand customers
buy
* Usage Rate: Light users,
Medium users, Heavy users
(how much they buy)
* Brand relationship:
Nonusers, Ex-users,
Regulars, First timers,
Loyal users, Switchers
Wells, Moriarty, Burnett & Lwin - Xth Edition
*Innovation and adoption
* How willing people are to be
innovative and try something
new
* Innovators, Early adopters,
Early majority, Late majority,
Laggards
* perceived risk: evaluate what
u gain & what u have to lose if
the p/d does not work
ADVERTISING Principles and Effective IMC Practice
1-19
Consumer Purchase Decision Process
AD3118 for 2/2014 by A. Kwanta S.
Problem Recognition
Information Search
Evaluation of
Alternatives
Product Choice
Outcomes
*Consumer purchase is a response to a problem
* Marketing environment
Interest
rates
Taxation
Legislation
Internal
Distributors
The micro
environment
Business
relationships
The macro
environment
End-consumers
supplier
stakeholders
Social
trends
customers
Exchange
rates
competitors
Technology
Cultural influences
*
*Getting a bargain
*Standing out from the crowd
*Fitting in and belonging
*Trying to avoid clothes shopping
*Looking like a celebrity
Adoption of Innovation
and Trends
AD3118 for 2/2014 by A. Kwanta S.
A. Introduction Stage
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Sales grow slowly Profit is minimal or negative
Create awareness Stimulate trial
High production costs Limited product models
Frequent product modification Penetration
pricing
Skimming pricing Little competition
High failure rate, High marketing costs
Promotion strategy focuses on primary demand
for the product category
developing product awareness Informing about
product benefits.
Intensive personal selling to retailers and
wholesalers is required.
B. Growth Stage
• Sales grow at an increasing rate.
• Many competitors enter the market.
• Large companies may acquire small pioneering
firms.
• Profits are healthy
• Promotion emphasis, heavy brand advertising
Differences between brands.
• Gaining wider distribution is a key goal
• Toward the end of this stage, prices normally fall
profits reach their peak.
• Development costs have been recovered Sales
volume has created economies of scale.
C. Maturity Stage
• Sales continue to increase but at a decreasing rate
• The marketplace is approaching saturation Annual
models of many products
• An emphasis on product style rather than function
• Product lines are widened or extended marginal
competitors begin dropping out of the market.
• Heavy promotions to both the dealers and
consumers are required. Prices and profits begin to
fall.
D. Decline Stage
•Signaled by a long-run drop in sales.
•Falling demand forces many competitors out of the market
•The rate of decline is governed by how rapidly consumer tastes change
or how rapidly substitute products are adopted.
•A few small specialty firms may still manufacture the product.
•Dropping a product from the company’s product line, is the most drastic
strategy.
•Harvesting Company retains the product but reduces marketing support
•To prevent slipping into decline, Promote more frequent use of the
product by current customers
•Find new target markets for the product
•Find new uses for the product, Price the product below the market
•Develop new distribution channels, Add new ingredients
•Delete old ingredients, Make a dramatic new guarantee
Some Dimensions of the Product Life Cycle
1. Length of the Product Life Cycle
• There is no exact time that a product takes to move
through its life cycle consumer products usually
have shorter life cycles than business products
• Mass communication shortens life cycles
• Rate of technological change shortens product life
cycles.
2. Shape of the Product Life Cycle
• There are several distinctive life-cycle curves
• Each type suggests different marketing strategies
•
Significant education of the customer is
required.
Extended introductory period.
Sales begin immediately
Little learning is required by
the consumer
Benefits of purchase are
readily understood.
Most often appear in
women’s and men’s
clothing styles.
Length of the cycles may be
years or decades.
Rapid sales on introduction
Equally rapid decline.
Often novelties and have a short life cycle.
Innovators 2.5%
Late Majority
34%
• Eager to try new ideas and products • Adopt because most of their friends
• Have higher incomes
have already done so.
• Better educated than non-innovators • For them, adoption is the result of
pressure to conform.
Early Adopters
13.5%
• Are older than the others
• Much more reliant on group norms
• Tend to be below average in income
• Oriented to the local community
and education.
• Tend to be opinion leaders.
Laggards
16%
Early Majority
34%
• Do not rely on the norms of the
• Collect more information
group.
• Evaluate more brands than early
• Independent because they are
adopters.
tradition-bound
• Rely on friends, neighbors, and
• Have the lowest socioeconomic status
opinion leaders for information and • Are suspicious of new products
norms.
• Alienated from an advancing society
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Life cycle of a fashion trend
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