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Slide 1 - Lars Perner - Consumer Behavior and Marketing Wisdom

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					     FAMILY /GROUP INFLUENCES
        AND SEGMENTATION
• Family influences
• Group influences
• Segmentation
      – Methods
      – Tradeoffs
      – Segmentation in direct
        marketing




MKTG 371                                        1
Family/Group Influences/Segmentation   Perner
                FAMILY INFLUENCES
• Types of Households
      – Family
            • Traditional
                   – Nuclear
                   – Extended
            • Blended
      – Traditional non-family
            • Usually temporary (e.g., college and pre-marriage
              roommates)
      – Non-traditional
            • Non-married heterosexual
            • Gay/lesbian

MKTG 371                                                          2
Family/Group Influences/Segmentation   Perner
                  The Family Life Cycle
• Individuals and
  couples typically
  move through stages
• Today’s world is
  complicated




MKTG 371                                        3
Family/Group Influences/Segmentation   Perner
          Potential Family Life Cycle
                    Stages

    YOUNG                                       YOUNG    EMPTY NEST
    SINGLE                                      COUPLE       I/II


                                         FULL NEST
                                            I/II/III
   SINGLE                                                  OLDER
   PARENT                                                  SINGLE
                                           BLENDED
MKTG 371                                                        4
Family/Group Influences/Segmentation   Perner
      Economic/Marketing Implications of
             Household Cycles
• Income tends to increase                      • Product demand due
  with time                                       to
• But children/ obligations                       – singles with low
  add cost                                          expenses
• Divorce                                         – new couples
      – increases costs
                                                  – divorced families
      – may change income
        distribution marriage                     – children
                                                  – empty nesters -->
                                                    more income


MKTG 371                                                                5
Family/Group Influences/Segmentation   Perner
       Household Decision Making
                                                • Strategies of
• Roles/influence                                 Influence
                                                  – Constructive
     – Information                                   • Bargaining
       gatherers/holders                             • Reasoning (sincere)
     – Influencers                                – Manipulative
                                                     • Impression management
     – Decision makers
                                                     • Authority
     – Purchasers                                    • Emotion

     – Users                                      – Borderline
                                                     • Information gathering
• Values--desired end
  states
MKTG 371                                                                       6
Family/Group Influences/Segmentation   Perner
                                       Definition

           • Group: two or more
             individuals who share a
             set of norms, values, or
             beliefs and have certain
             implicitly or explicitly
             defined relationships to
             one another such that
             their behaviors are
             interdependent.
MKTG 371                                            7
Family/Group Influences/Segmentation   Perner
                                       Definition
                                                • Reference group: a
                                                  group whose
                                                  presumed
                                                  perspectives or
                                                  values are being used
                                                  by an individual as
                                                  the basis for his or
            You must own at least                 her current behavior.
            three encyclopedias to
            belong to our group!

MKTG 371                                                            8
Family/Group Influences/Segmentation   Perner
                        Reference Groups
• Types of                                      • Degree of
  reference groups:                               importance:
      – aspirational                              – primary
        (“Mean Joe                                – secondary
        Greene”)
      – associative
        (colleagues)
      – dissociative
        (“Cadillac--It’s not
        your father’s car!”)

MKTG 371                                                        9
Family/Group Influences/Segmentation   Perner
          Types of Reference Group
                  Influence
• Informational                                  How can you
                                                be a cool person
• Normative                                      if you are not
                                                 on the ‘Net?
• Identification




MKTG 371                                                           10
Family/Group Influences/Segmentation   Perner
 Communication About Products
                                        • Word-of-Mouth
                                                – product info
                                                – rumors
                                        • Communicators
                                                – Opinion Leaders (considered
                                                  experts)
                                                – Market Mavens--status from
                                                  knowledge
                                                – “Purchase-Pals”


MKTG 371                                                                        11
Family/Group Influences/Segmentation   Perner
                 SEGMENTATION
•   Bases for segmentation
•   Determining which segments exist
•   Choosing segments to serve
•   Serving chosen segments
     – positioning
     – promotion
     – product features
• Segmentation in direct marketing

MKTG 371                                        12
Family/Group Influences/Segmentation   Perner
         Requirements for Segment
                 Viability
• Group identity (similarity
    within, differences between,
    segments)
• Systematic behaviors
• Marketing mix
  efficiency potential



MKTG 371                                        13
Family/Group Influences/Segmentation   Perner
 Three “Levels” of Segmentation
• Personal characteristics
      – lifestyle
      – personality
• Benefits sought
      – attributes
      – results
• Behavior                                      Note: Some of these
      – approach to purchase                    approaches overlap.
      – variety seeking/loyalty                 It is not essential to be
                                                dogmatic in distinguishing.
MKTG 371                                                              14
Family/Group Influences/Segmentation   Perner
                                                Level 1:
             Personal Characteristics
                                        • Demographics
                                                – age, sex, ethnic group
                                                – geographic region
                                                – education, occupation, social
                                                  class
                                        • Media exposure
                                        • Lifestyle/Psychographics



MKTG 371                                                                          15
Family/Group Influences/Segmentation   Perner
          Lifestyles and
    Psychographics: Examples

 • VALS, VALS2
 • Residence based
      (e.g., PRIZM)




MKTG 371                                        16
Family/Group Influences/Segmentation   Perner
                         VALS2 Segments
• The Needy                                     • Inner-Directed Goal
      – Survivors                                 Consumption
      – Sustainers                                – Experiential
• Outer-Directed Goal                             – Socially Conscious
  Orientation                                     – Integrated
      –   Belongers
      –   Emulators
      –   Achievers
      –   I Am Me

MKTG 371                                                                 17
Family/Group Influences/Segmentation   Perner
                                  VALS Japan
•   Exploration
•   Self-expression
•   Achievement
•   Tradition
•   Realists




MKTG 371                                        18
Family/Group Influences/Segmentation   Perner
                      The PRIZM System
                                                • 60 consumer measures
                                                  within zip code area
                                                • 36,000 zip code areas
                                                • Statistical methods used
                                                  to find areas containing
                                                  relatively consumers --->
                                                  60 segments



MKTG 371                                                                  19
Family/Group Influences/Segmentation   Perner
                                                Level 2
                            Benefits Sought
• Based on
      – differences in arbitrary
        tastes (e.g., cola vs. non-
        cola drink)
      – ideal point
      – tradeoffs (e.g., taste vs.
        calories)
      – usage situation (e.g.,
        coffee for camping                                A consumer in
        (instant) vs. higher quality                      search of benefits.
        for home brewing)
MKTG 371                                                                 20
Family/Group Influences/Segmentation   Perner
                                                Level 3
                                        Behavior
• Attitude
• Extent of usage
• Shopping approach
      –   price elasticity
      –   deal-proneness
      –   brand loyalty                                   What do you mean
      –   sources of influence on brand choice:           you won’t give me
                                                          a discount? Then I’ll
            • advertising
                                                          go to the competitors!
            • sales person
            • store assortment
MKTG 371                                                                21
Family/Group Influences/Segmentation   Perner
          Means of Segmentation in
             Direct Marketing
•   Income
•   Past purchases
•   Ethnic surnames
•   Credit history
•   Hobbies/interests
    (magazine
    subscription lists)



MKTG 371                                        22
Family/Group Influences/Segmentation   Perner
             Sources of Info for Direct
             Marketing Segmentation
• Phone books--often contain
  both names and addresses;
  yellow pages
• State registrations (vehicle,
  driver’s licenses)
• Past purchases (from
  company or outside)
• Professional and school
  directories
• Magazine subscription lists
• Credit rating bureaus


MKTG 371                                        23
Family/Group Influences/Segmentation   Perner
   Advanced Segmentation Techniques
          in Direct Marketing
• “Merge-Purge”
   – merge: add lists together; add
     purchased lists to own customer list
   – purge: sort of duplicates
      • special software allows for
        standardization of addresses
        (“phonetic” matching possible)



MKTG 371                                        24
Family/Group Influences/Segmentation   Perner
                   Sources of List Value
• Recency
• Frequency of
  purchase
• Value of past
  purchases
• Geography (zip
  code as surrogate
  for lifestyle)
• Gender
  identifiability
MKTG 371                                        25
Family/Group Influences/Segmentation   Perner