Consumer behavior and marketing strategy 12e hawkins motherbaugh chapter 04

Understand the critical role that demographics play in influencing consumer behaviorDefine the concept of generations and discuss the generations that exist in America Explain the concep

PART II: EXTERNAL INFLUENCES

Understand the critical role that demographics play in influencing consumer behavior

Define the concept of generations and discuss the generations that exist in America

Explain the concept of social stratification and the role that socioeconomic factors play

Identify and discuss the major social classes in America

Understand how social class is measured

Discuss the role of social class in developing marketing strategies

Where Is The Growth For Luxury Brands?

brands in the future?

income of $100k-199k in income (65% of all people who earn $100k or more per year)

$100k-199k in income (12% of all people who earn $100k or more per year)

Consumer Behavior In The News…

Where Is The Growth For Luxury Brands?

brands in the future?

right!

into the truly affluent ($200k plus) – a big predictor of luxury purchases

economy, which relates subjective discretionary wealth (SDI)

Consumer Behavior In The News…

 Population and Size

Demographics and Social Stratification

Demographics and Social Stratification

Age

 U.S Age Distribution 1

 Key Growth Categories

1“Resident Population Projections by Sex and Age: 2010 to 2050,” Statistical Abstract of the United States 2008 (Washington, DC: U.S Bureau of the Census, 2008), Table 10.

Demographics and Social Stratification

18-24 25-34 35-44 45-54 55-64 65+

Demographics and Social Stratification

A Generation or age cohort is a

group of persons who have experienced a common social, political, historical, and economic environment

Cohort analysis is the process

of describing and explaining the attitudes, values and behaviors

of an age group as well as predicting its future attitudes, values, and behaviors

Understanding American Generations

How to Target the Mature Market

Gerontographics has identified the following four

segments of the mature market:

 Compared to prior generations, Boomers are:

 Higher income, higher education

 More tech savvy

 Defining retirement differently

 Boomers also are:

 Strong market for “anti-aging” products, travel, and financial

services

Baby Boom Generation: A Closer Look

Understanding American Generations

 Marketers must look beyond the stereotypes:

• Boomers are all retiring early and wealthy

Segmenting the Boomer Market

Understanding American Generations

 Beyond the stereotype:

Early stereotype – Xers as disenfranchised youth

• Reality 1– Xers are more highly educated than previous

generations

• Reality 2– Xer women are more highly educated than

Xer men

• Reality 3– Xers are getting married, having families and

facing the time pressures associated with these events

Generation Xers: A Closer Look

Understanding American Generations

 Really Two Sub-Markets: Young Gen Y and Older Gen Y

 Expected to have at least as high of education level as

previous generation

 Very tech savvy including Internet, text messaging, and

social media

 A strong market for apparel with brands like Metropark

 Tapping into consumer-generated buzz works with the high

level of social media of this segment

Generation Yers: A Closer Look

Understanding American Generations

The following Video Clip demonstrates

how FreeAgent.com tries to appeal to

the Gen Y segment!

Video Application

Targeting Generation Z

 Known as Digital Natives, Generation @, Net Generation

 $200 billion purchase power!

 Buying patterns formed as young teen will follow through life

 Gen Z easily bored; use of music, language and images key

to remain relevant and fresh

Understanding American Generations

EVO 3D Superphone

ad targets the active

and diverse Gen Z

“youth market.”

Notice the use of

texting and emphasis

on device power.

Courtesy HTC Corporation.

Applications in Consumer Behavior

 Social Rank and Social Class System

 Status Crystallization

 Social Structure in the United States

 The Coleman-Rainwater Hierarchy

 The Measurement of Social Class

 Social Stratification and Marketing Strategy

Social Stratification

We are all familiar with the concept of social class, but

most of us would have difficulty explaining our class

system to a foreigner

Social rank is one’s position relative to others on one or

more dimensions valued by society, also referred to as

social class and social standing.

A social class system is a hierarchical division of a

society into relatively distinct and homogeneous groups

with respect to attitudes, values, and lifestyles "Pure”

social classes do not exist in the U.S or most other

industrialized societies

Social Stratification

Status dimensions, such as parental status, education,

occupation and income, set limits on one’s lifestyle,

including one’s residence

Status crystallization, which is moderate in the U.S.,

reflects the consistency of these status dimensions

Web Exercise

What Social Class are You?

Social Stratification

Social Standing is Derived and Influences Behavior

Social Structure in the United States

Social Structure in the United States

Social Structure in the United States

Source: Information for this table adapted from Richard P Coleman, “The Continuing Significance of Social Class in Marketing,” Journal

of Consumer Research, December 1983, p 267; and Richard P Coleman and Lee P Rainwater, with Kent A McClelland, Social Standing

in America; New Dimensions of Class (New York, NY: Basic Books, 1978)

*Income is 2010 inflation adjusted dollars using U.S Consumer Price Index (CPI) data.

Upward Pull Strategy

Middle Americans

Social Structure in the United States

There are two basic approaches to measuring

social status:

- Single-item index

- Multi-item index

Since an individual’s overall status is influenced

by several dimensions, single-item indexes are

generally less accurate than are well-developed

multi-item indexes.

Measurement of Social Class

• Single-Item Index

• Marketers generally think of these as direct

influencers of consumption behavior rather than

determinants of status that then influence

Measurement of Social Class

• Multi-Item Index

Index of Social Position (ISP)

Measurement of Social Class

Social status is largely derived from demographics; that is,

one’s income, education, and occupation go a long way

toward determining one's social class or status

Should marketers use an overall measure of social status

(a multi-item index) or a demographic variable such as

income?

Unless the marketer is interested in social standing per se,

he/she will most likely focus on demographic

Demographics or Social Status?

Measurement of Social Class

Social Stratification and Marketing