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Chapter 12 - Marketing and Consumer Behavior

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Chapter 12 - Marketing and Consumer Behavior Powered By Docstoc
					Marketing

     Leslie Lum
      The Market

This is where it all begins--
Target Market
• Who is it?
• How big is it?
Demographics of the
American Market
•   Characteristics of people
•   Gender
•   Age
•   Ethnic group
•   Education
•   Income
Population – www.census.gov
• The American population is described
  using demographics such as gender,
  marital status, age, education, income and
  ethnicity
• On a sheet of paper, estimate:
  –   Percent female, percent male
  –   Percent married, divorced, never married
  –   Percent under 25 years, etc. Median age
  –   Percent with college
  –   Percent white, black, Asian, etc.
Gender

             Population by Gender
                     2000


         Female
          51%




                                Male
                                49%
Married?
                    Marital Status

              Divorced
                                     Never Married
    Widowed     10%
                                         23%
      7%




                   Married
                    60%
            Income
        Source: U.S. Census
        (2001 Dollars)


                      Household income has been been rising
                   100%



                   80%
Percent of Total




                   60%



                   40%

                                  Over $100K

                   20%            $50 to 100K
                                  $25 to 50K
                                  Under $25K

                    0%
                          1967


                                 1969


                                        1971


                                               1973


                                                      1975


                                                             1977


                                                                    1979


                                                                           1981


                                                                                  1983


                                                                                         1985


                                                                                                1987


                                                                                                       1989


                                                                                                              1991


                                                                                                                     1993


                                                                                                                            1995


                                                                                                                                   1997


                                                                                                                                          1999


                                                                                                                                                 2001
                                         25,000
                                                  30,000
                                                           35,000
                                                                    40,000
                                                                             45,000
                                  1967
                                  1968
                                  1969
                                  1970
                                  1971
                                  1972
                                                                                                                              Income

                                  1973




Source: US Census, 2001 Dollars
                                  1974
                                  1975
                                  1976
                                  1977
                                  1978
                                                                                      Median US household income is rising.




                                  1979
                                  1980
                                  1981
                                  1982
                                  1983
                                  1984
                                  1985
                                  1986
                                  1987
                                  1988
                                  1989
                                  1990
                                  1991
                                  1992
                                  1993
                                  1994
                                  1995
                                  1996
                                  1997
                                  1998
                                  1999
                                  2000
                                  2001
                                                                        Millions




       2.25
                                         2.75
                                                                      3.25
                                                                                    3.75
                                                                                               4.25




                        2.5
                                                3
                                                                              3.5
                                                                                           4
                                                                                                      4.5
1909
                                                                                                                           Age
1912
1915

1918
                                                                                                            Births in US




                          Grandparents
1921
1924

1927
1930
1933
1936

1939
1942




              Parents
1945
1948

1951
1954
1957

1960
                                                       Baby Boomers




1963
1966
                         or




1969
                         Bust
                         Baby


                         Gen X




1972
1975
1978
1981

1984
1987
                                                or Gen Y




1990
                                                Baby Boomlet




1993
1996
1999
Age
     Total Population


 85 years and over

    80 to 84 years
                                                                   Female
    75 to 79 years
                                                                   Male
    70 to 74 years

    65 to 69 years

    60 to 64 years

    55 to 59 years

    50 to 54 years

    45 to 49 years

    40 to 44 years

    35 to 39 years

    30 to 34 years

    25 to 29 years

    20 to 24 years

    15 to 19 years

    10 to 14 years

       5 to 9 years

    Under 5 years

                        2 000 000   4 000 000   6 000 000   8 000 000       10 000 000   12 000 000
                    5 000 000
                                10 000 000
                                             15 000 000
                                                          20 000 000
                                                                       25 000 000
                                                                                                                        Age
   Under 5 years

     5 to 9 years

   10 to 14 years

   15 to 19 years

   20 to 24 years
                                                                                    Age distribution of US population




   25 to 29 years

   30 to 34 years

   35 to 39 years

   40 to 44 years

   45 to 49 years

   50 to 54 years

   55 to 59 years

   60 to 64 years

   65 to 69 years

   70 to 74 years

   75 to 79 years

   80 to 84 years

85 years and over
Age
                    The US population will be aging
                    35


                    30
                                                                         2000   2050

                    25
 Percent of Total




                    20


                    15


                    10


                    5


                    0
                         Under 10   10 to 19   20 to 34   35 to 54   54 to 64   65 and
                                                                                 over
Income
 Income goes up with education
 (Annual income 2001)


120,000



100,000
                              Male
                              Female

 80,000



 60,000



 40,000



 20,000



     0
          Less than   Grade 9 to 12 High School Some College Associates   Bachelors   Masters   Professional   Doctorate
           Grade 9
Income   Income fluctuates with age
            (Annual income 2001)
70,000


                       Male
60,000
                       Female


50,000



40,000



30,000



20,000



10,000



    0
          18 to 24   25 to 29   30 to 34   35 to 39   40 to 44   45 to 49   50 to 54   55 to 59   60 to 64   Over 65
  Education
         The population is becoming more educated

                   100%

                   90%

                   80%

                   70%
                                        College and more
Percent of Total




                   60%                  Some College
                                        High School
                   50%                  Some High School
                                        Elementary
                   40%

                   30%

                   20%

                   10%

                    0%
                          1970

                                 1972

                                           1974

                                                  1976

                                                         1978

                                                                1980

                                                                       1982

                                                                              1984

                                                                                     1986

                                                                                            1988

                                                                                                   1990

                                                                                                          1992

                                                                                                                 1994

                                                                                                                        1996

                                                                                                                               1998

                                                                                                                                      2000
Ethnicity
                          Minority populations will continue to grow
                     30
                                 Black

                                 Native                                                        24
                     25

                                 Asian
                                 Pacific
                     20          Hispanic or
  Percent of Total




                                 Latino


                                                                                  15
                     15
                                                                13
                                               12
                            12                                               12


                     10                                     9                              9


                                           6

                      5                                                  4
                                                        3
                                     2
                                                    1                1                 1
                                 1
                      0
                                 1980               1990             2000              2050
Context of Multicultural Markets
        Where US immigrants came from
   12,000,000
                                                                                                                                                             Africa

                                                                                                                                                             South America
   10,000,000
                                                                                                                                                             Central America

                                                                                                                                                             Carribean

    8,000,000




    6,000,000


                                                                                                                                                America
    4,000,000


                                                                        Europe
    2,000,000                                                                                                                                   Asia



          -
                1820s


                        1830s


                                1840s


                                        1850s


                                                1860s


                                                        1870s


                                                                1880s


                                                                        1890s


                                                                                1900s


                                                                                        1910s


                                                                                                1920s


                                                                                                        1930s


                                                                                                                1940s


                                                                                                                        1950s


                                                                                                                                1960s


                                                                                                                                        1970s


                                                                                                                                                  1980s


                                                                                                                                                          1990s
                                                                                                                                                  18
                            50%
                                  100%
                                         150%
                                                200%
                                                       250%




                       0%
                                                                                                                        Growth

              Total




              White




              Black



     American Indian
       and Alaska
         Native



       Asian Pacific



        Some other
           race



           Hispanic
19
                                                              Multicultural groups grew the fastest from 1980 to 2000




         White
       NonHispanic



            Minority
Going forward
                                                  Cumulative Change in Population
                                                                    1995-2050
                       140

                                    Hispanic
                       120
                                    Asian Pacific Islander
                                    Native
                       100          Black
  Millions of People




                                    White NonHispanic
                       80


                       60


                       40


                       20


                         0
                         2000       2005       2010   2015   2020      2025     2030   2035   2040   2045   2050

                         Source: U.S. Census                                                  20
Going forward
                      Multicultural populations will continue to grow as a
                                    portion of the population
                      30

                                Black

                      25
                                Native                                                        24

                                Asian Pacific

                      20
                                Hispanic or
                                Latino
   Percent of Total




                                                                                 15
                      15
                                              12               13
                           12                                               12

                      10                                   9                              9

                                        6

                       5                                                4
                                                       3
                                    2
                                                   1                1                 1
                                1
                       0
                                1980               1990             2000              2050
                                                                                                   21
Going forward




                22
The future is now
                          Ethnic Composition of the 100 Largest US Cities




                 Asian
                                                                   2000

                                                                   1990

    Hispanic (any race)




                                                                        Whites less than
                 Black
                                                                        50% of large
                                                                        cities.


                 White



                          0%       10%       20%       30%        40%       50%        60%


                                                                               23
Dynamics
   The proportion of college-educated minorities is growing
    Percent of population with four years of college or more



                                                               30.0

                                                                                                                                                                            All races
                                                                                                                                                                           57% growth
                                                               25.0



                                                               20.0

                                                                                                                                                                 African Americans
                                                                                                                                                                    115% growth
                                                               15.0



                                                               10.0
                                                                                                                                                                                 Hispanic
                                                                                                                                                                                40% growth
                                                                5.0



                                                                0.0
                                                                      1980
                                                                             1981
                                                                                    1982
                                                                                           1983
                                                                                                  1984
                                                                                                         1985
                                                                                                                1986
                                                                                                                       1987
                                                                                                                              1988
                                                                                                                                     1989
                                                                                                                                            1990
                                                                                                                                                   1991
                                                                                                                                                          1992
                                                                                                                                                                  1993
                                                                                                                                                                         1994
                                                                                                                                                                                1995
                                                                                                                                                                                       1996
                                                                                                                                                                                              1997
                                                                                                                                                                                                     1998
                                                                                                                                                                                                            1999
                                                                                                                                                                                                                   2000
                                                                                                                                                                                                                          2001
                                                                                                                                                                                                                                 2002
                                                                                                                                                                                                                   24
Dynamics
                                                      Median income of minorities grew between 1991 and
                                                                            2001
                                             60,000

                                                                           Asian Pacific Islander +16%
                                             50,000
   Household median income in 2001 dollars




                                             40,000                                                     Non-Hispanic White +11%

                                                                                   Hispanic +17%
                                             30,000


                                                                                                               Black +24%
                                             20,000



                                             10,000



                                                 0
                                                      1991   1992   1993    1994   1995   1996   1997   1998    1999   2000   2001



                                                                                                                              25
 Purchasing Power Growth
                   2002             2007                Change

African American   $645.9 billion   $852.8 billion       32%


Asian American     $296.4 billion   $454.9 billion       53%

Hispanic*          $580.5 billion   $925.1 billion       59%


Gay, Lesbian,
                   $451 billion     $608 billion         35%
Transgender


White              $6,252 billion   $7,910 billion       27%

                                                   26
African Americans

• 34.7 million African Americans with
  1.8 million as African American along
  with another race
• This group grew 21.5% versus 13.2%
  for the total population between 1990
  and 2000
• Definition of the segment is complex
  task
  – 700,000 are Hispanic blacks
  – Black with white number 785,00027
Immigration is still a factor
            Immigrants from Africa grew in the 1990s

       400,000


       350,000


       300,000


       250,000


       200,000


       150,000


       100,000


        50,000


            0
                 1900s   1910s   1920s   1930s   1940s   1950s   1960s   1970s   1980s   1990s




                                                                                         28
Age and Gender
 African Americans - Age Versus Gender


85 years and over
   80 to 84 years
   75 to 79 years
   70 to 74 years
                                                                                  Females
   65 to 69 years
                                                                                  Males
   60 to 64 years
   55 to 59 years
   50 to 54 years
   45 to 49 years
   40 to 44 years
   35 to 39 years
   30 to 34 years
   25 to 29 years
   20 to 24 years
   15 to 19 years
   10 to 14 years
     5 to 9 years
   Under 5 years

                    200 000   400 000   600 000   800 000   1 000 000 1 200 000 1 400 000 1 600 000 1 800 000 2 000 000



                                                                                             29
Versus Whites
  85 years and over
     80 to 84 years
     75 to 79 years
     70 to 74 years
     65 to 69 years                                                Black
     60 to 64 years
                                                                   White
     55 to 59 years
                                                                   Alone
     50 to 54 years
     45 to 49 years
     40 to 44 years
     35 to 39 years
     30 to 34 years
     25 to 29 years
     20 to 24 years
     15 to 19 years
     10 to 14 years
       5 to 9 years
     Under 5 years

                      0%   1%   2%   3%   4%   5%   6%   7%   8%     9%    10%

            Source: US Census 2000                             Percent of Group
            (agesexrace)                                           30
                                                                                                                                               Doctorate
                                                                                                                                               Professional
                                                                                                                                                  degree
                                                                                                                                                           31
                                                                                            Percent of All races
                                                                        Percent of Blacks




                                                                                                                                               Master's degree
                                                                                                                                               Bachelor's
                                                                                                                                                degree
Educational attainment




                                                                                                                                               Associate
                                                                                                                                                degree
                                                                                                                                               academic
                                                                                                                                                Associate
                         Highest Education Received




                                                                                                                                                 degree
                                                                                                                                               Occupational
                                                                                                                                               Some college
                                                                                                                                               High school
                                                                                                                                                graduate




                                                      40%


                                                            35%


                                                                  30%


                                                                            25%


                                                                                                                   20%

                                                                                                                         15%


                                                                                                                               10%


                                                                                                                                     5%


                                                                                                                                          0%
Educational attainment
    The proportion of college-educated African Americans has doubled since 1980
     Percent of population with four years of college or more
                                                                30.0

                                                                                                                                                                             All races
                                                                                                                                                                            57% growth
                                                                25.0



                                                                20.0

                                                                                                                                                                  African Americans
                                                                                                                                                                     115% growth
                                                                15.0



                                                                10.0
                                                                                                                                                                                  Hispanic
                                                                                                                                                                                 40% growth
                                                                 5.0



                                                                 0.0
                                                                       1980
                                                                              1981
                                                                                     1982
                                                                                            1983
                                                                                                   1984
                                                                                                          1985
                                                                                                                 1986
                                                                                                                        1987
                                                                                                                               1988
                                                                                                                                      1989
                                                                                                                                             1990
                                                                                                                                                    1991
                                                                                                                                                           1992
                                                                                                                                                                   1993
                                                                                                                                                                          1994
                                                                                                                                                                                 1995
                                                                                                                                                                                        1996
                                                                                                                                                                                               1997
                                                                                                                                                                                                      1998
                                                                                                                                                                                                             1999
                                                                                                                                                                                                                    2000
                                                                                                                                                                                                                           2001
                                                                                                                                                                                                                                  2002
                                                                                                                                                                                                      32
Income
   Proportion of African American families with incomes above $50,000 has grown
   tremendously from 1980 to 1990
         20
                                                                                                  Percent Blacks
                                                                                                  1980
         18
                                                                                                  Percent Blacks
                                                                                                  1990
         16                                                                                       Percent Blacks
                                                                                                  2000
         14

         12

         10

          8
                                                                                                       +369%
          6
                                                                                   +42%
          4

          2                                                                                  +91%

          0
               Under      5000 to    10000 to    15000 to   25000 to   35000 to   50000 to   75000 to 100000
               $5000       9999       14999       24999      34999      49999      74999      99999   and over
Source: Money and Income in the US 2000, US Census
                                                                                              33
Poverty rates
   Black poverty rates have fallen but are still much higher than white nonHispanic
   poverty rates

     40


     35


     30


     25                                                                                                     Black poverty rate as
                                                                                                            percent of all people
     20                                                                                                     in group


     15


     10

                                                           White poverty rate as
      5                                                    percent of all people
                                                           in group
      0
          1973
                 1974
                        1975
                               1976
                                      1977
                                             1978
                                                    1979
                                                           1980
                                                                  1981
                                                                         1982
                                                                                1983
                                                                                       1984
                                                                                              1985
                                                                                                     1986
                                                                                                            1987
                                                                                                                   1988
                                                                                                                          1989
                                                                                                                                 1990
                                                                                                                                        1991
                                                                                                                                               1992
                                                                                                                                                      1993
                                                                                                                                                             1994
                                                                                                                                                                    1995
                                                                                                                                                                           1996
                                                                                                                                                                                  1997
                                                                                                                                                                                         1998
                                                                                                                                                                                                1999
                                                                                                                                                                                                       2000
                                                                                                                                                                                                              2001
 Source: US Census                                                                                                                                                          34
Where African Americans live




                               35
Racism
      How important an issue is racial discrimination to you?

   100%

    90%

    80%

    70%

    60%                                                              Blacks

    50%                                                              Whites

    40%

    30%

    20%

    10%

    0%
               Very important           Somewhat important   Not important at all   Don't know/No Answer


          Source: Pew Hispanic Center



                                                                                        36
Causey Learning Center




                         37
Hispanic Americans
           Latino population by country of origin
                         All other
                           17%

              Spaniard
                0%
      South American
            4%
    Central American
           5%
          Dominican
            2%                                Mexican
                                               58%
               Cuban
                4%

                Puerto Rican
                   10%


    Source: US Census
    (raceagesex)




                                                        38
Hispanic Americans
     Mexican immigrants

2,500,000




2,000,000




1,500,000




1,000,000




 500,000




      -
            1901-10   1911-20   1921-30   1931-40   1941-50   1951-60   1961-70   1971-80   1981-90   1991-2000




                                                                                            39
Hispanic Americans
             Hispanic or Latino immigrants from all regions grew in the last 40 years

   400,000


                                                                          Other Central America and
   350,000
                                                                            Other South America
                                                                                (dashed line)
   300,000


   250,000

                                                                                          El Salvador
   200,000
                                                                                                Cuba
   150,000
                                                                                                Columbia

   100,000
                                                                                             Ecuador

    50,000
                                                                                                Argentina
       -
               1900s   1910s   1920s   1930s    1940s   1950s   1960s   1970s   1980s   1990s




                                                                                        40
Hispanic Americans
       Hispanic or Latino


   85 years and over

      80 to 84 years

      75 to 79 years

      70 to 74 years
                                                                                                  Female
      65 to 69 years
                                                                                                  Male
      60 to 64 years

      55 to 59 years

      50 to 54 years

      45 to 49 years

      40 to 44 years

      35 to 39 years

      30 to 34 years

      25 to 29 years

      20 to 24 years

      15 to 19 years

      10 to 14 years

        5 to 9 years

      Under 5 years

                            200 000   400 000   600 000   800 000   1 000 000 1 200 000 1 400 000 1 600 000 1 800 000 2 000 000




                                                                                                           41
Hispanic Americans
    The Hispanic population is younger than the white nonHispanic population


    80 to 84 years


    70 to 74 years
                                                                  Hispanic
                                                                  White Alone
    60 to 64 years


    50 to 54 years


    40 to 44 years


    30 to 34 years


    20 to 24 years


    10 to 14 years


    Under 5 years

                     0%        2%       4%           6%               8%        10%    12%
                                               Percent of Group
      Source: 2000 US Census



                                                                                  42
Hispanic Americans
    Hispanic youth as a percent of all US youths will grow

          25%




          20%




          15%




          10%




           5%




           0%
                     Under 1 year        1 to 4 years        5 to 13 years   14 to 17 years


      Source: 2000 US Census



                                                                                43
                                         Percent of Hispanics




                         0%
                              5%
                                   10%
                                              15%
                                                     20%
                                                                25%
                                                                                     30%
                                                                                           35%
          High school
           graduate




         Some college




     Associate degree
      Occupational
                                                                                                                                                    Hispanic Americans




     Associate degree
        academic
                                                                                                 Hispanic Americans lag in educational attainment




     Bachelor's degree




       Master's degree
                                                                 Hispanic




          Professional
                                                                 NonHispanic White




             degree
44
            Doctorate
Hispanic Americans
       The proportion of college-educated is rising

        30.0




        25.0




        20.0                                                                                                                   Percent of
                                                                                                                               Population
                                                                                                                               Percent of
        15.0                                                                                                                   Hispanics



        10.0




         5.0




         0.0
               1980

                      1981

                             1982

                                    1983

                                           1984

                                                  1985

                                                         1986

                                                                1987

                                                                       1988

                                                                              1989

                                                                                     1990

                                                                                            1991

                                                                                                   1992

                                                                                                          1993

                                                                                                                 1994

                                                                                                                        1995

                                                                                                                                1996

                                                                                                                                       1997

                                                                                                                                              1998

                                                                                                                                                     1999

                                                                                                                                                            2000

                                                                                                                                                                   2001

                                                                                                                                                                          2002
                                                                                                                                                            45
Hispanic Americans

                           Hispanic income levels have not grown as quickly due to more new immigrants

                           25



                                                                                                               1980
                           20
                                                                                                               1990

                                                                                                               2000
    Percent of Hispanics




                           15




                           10




                            5




                            0
                                 Under    5000 to   10000 to   15000 to   25000 to   35000 to   50000 to   75000 to   100000 and
                                 $5000     9999      14999      24999      34999      49999      74999      99999        over

                            Source: US Census



                                                                                                                46
Hispanic Americans




                     47
Hispanic Americans
                 During the past five years, have you, a family member, or a close friend experienced
                             discrimination because of your racial or ethnic background




   African Americans                                                                                          46%




             Whites                           13%




             Latinos                                                             31%




                       0%    5%       10%      15%      20%       25%      30%         35%   40%        45%         50%


           Source: 2002 National Latino Survey, Pew Hispanic Center and Kaiser Family Foundation




                                                                                                48
Hispanic Americans
    Percent of group who think discrimination against Latinos is a problem




                 School



                                                                                     African American
                                                                                     White
                                                                                     Latino
          The workplace




    Succeeding in the US




                           0%   10%      20%     30%      40%     50%      60%      70%     80%     90%

    Source: 2002 National Latino Survey, Pew Hispanic Center and Kaiser Family Foundation




                                                                                            49
Hispanic Americans

                              Latino discrimination against each other


                           Not a problem




                                                                                Major problem




                  Minor problem




    Source: 2002 National Survey of Latinos, Pew Hispanic Center and Kaiser Family Foundation




                                                                                            50
Asian Americans
     Asian Pacific populations grew the fastest from 1980 to 2000


                             Minority


                  White NonHispanic


                            Hispanic


                     Some other race


                        Asian Pacific


    American Indian and Alaska Native


                               Black


                               White


                                Total


                                        0%   50%         100%        150%          200%   250%
                                                   Growth rate from 1980 to 2000




                                                                                   51
Asian Americans
                                Asian Population by Country of Origin

   Chinese, except Taiwanese
                     Filipino
                Asian Indian
                 Vietnamese
                     Korean
                   Japanese
                 Cambodian
                     Hmong
                     Laotian
                   Pakistani
    Other Asian Not specified
                  Taiwanese
                        Thai
                Bangladeshi
                  Indonesian
                 Other Asian
                  Sri Lankan
                   Malaysian

                                0       500,000   1,000,000   1,500,000   2,000,000   2,500,000




                                                                                52
Asian Americans
        Asian immigration increased in the past thirty years
    600,000




    500,000
                                                                                                    Philippines

                                                                                                     China
    400,000

                                                                                                      India

    300,000
                                                                                                          Vietnam



    200,000

                                                                                                      Korea


    100,000                                                                                          Hong Kong

                                                                                                      Japan

         0
              1850s 1860s 1870s 1880s 1890s 1900s 1910s 1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s




                                                                                            53
                         0%
                              5%
                                   10%
                                         15%
                                               20%
                                                                  25%
                                                                                            30%
                                                                                                  35%


          High school
           graduate




         Some college
                                                                                                                                                       Asian Americans




     Associate degree
      Occupational



     Associate degree
        academic
                                                                                                        Asians are more educated that the population




     Bachelor's degree




       Master's degree




          Professional
             degree
                                                     Population
                                                     Percent of Total
                                                                        Percent of Asians




            Doctorate
54
Asian Americans
    Larger proportion of Asian American households have higher incomes

     25




     20

                     Percent White NonHispanic

                     Percent Asian American
     15




     10




      5




      0
          Under   5000 to   10000 to   15000 to   25000 to   35000 to   50000 to   75000 to    100000
          $5000    9999      14999      24999      34999      49999      74999      99999     and over




                                                                                         55
Asian Americans




                  56
Case Study: Uwajimaya




                        57
 American Indian
           Cherokee


              Navajo


Latin American Indian


            Choctaw


               Sioux


           Chippewa


             Apache

                                                         In Combination with Other
           Blackfeet
                                                         Tribe Alone


             Iroquois


              Pueblo

                        0   100000   200000   300000   400000     500000      600000
                                                                                       58
                                                                                       700000   800000
American Indian




                  59
American Indian
   American Indian and Alaskan Native Age Distribution

   85 years and over

      80 to 84 years

      75 to 79 years

      70 to 74 years                                               Female
                                                                   Male
      65 to 69 years

      60 to 64 years

      55 to 59 years

      50 to 54 years

      45 to 49 years

      40 to 44 years

      35 to 39 years

      30 to 34 years

      25 to 29 years

      20 to 24 years

      15 to 19 years

      10 to 14 years

        5 to 9 years

      Under 5 years

                              50 000          100 000    150 000      200 000    250 000




                                                                            60
American Indian
                        30.0%




                        25.0%
                                                   Total Population
                                                   American Indian and Alaskan Native

                        20.0%
     Percent of Group




                        15.0%




                        10.0%




                        5.0%




                        0.0%
                                Under 5 to 17   18 to   21 to   25 to   35 to   45 to   55 to   60 to   65 to   75 to   Over
                                5 years          20      24      34      44      54      59      64      74      84      85
                                                                                                                        years



                                                                                                                61
American Indian
        American Indian educational attainment lags general population

                       90%

                       80%

                       70%

                                                                  Total Population
                       60%
    Percent of group




                                                                  American Indian
                       50%

                       40%

                       30%

                       20%

                       10%

                        0%
                                         High School and Higher                Bachelors and Higher

                       Source: Census 2000




                                                                                                62
American Indian
                      American Indian household income is lower than the US
                                           population

                      35%
                                                   31%
                                                29%
                      30%

                                        25%
                      25%
   Percent of Group




                                                                         US Population
                                     19%                   19%
                      20%                                                American Indian
                              16%                             16%
                      15%
                                                                                  12%
                            10%                                       10%
                      10%
                                                                            7%
                                                                                        5%
                      5%


                      0%
                            Under    10000 to   25000 to   50000 to   75000 to   100000 and
                            $10000    24999      49999      74999      99999        over



                                                                                   63
American Indian




                  64
American Indian
                          American Indian Incidence Divided by US Incidence


                       Cirrhosis Deaths 1998

              Diabetes Mellitus Mortality 1998

                        Accident Deaths 1998

                      SIDS Death Rate 1994-6

   Arrest for Driving Under the Influence 1998

                                 Arrests 1998

                     Teen Cigarette Use 1999

                         Teen Drug Use 1999

             Single Parent Female Head 1995

          Children Abused or Neglected 1995

                                             0.00   0.50   1.00   1.50   2.00   2.50   3.00   3.50



                                                                                  65
Native Hawaiians




                   66
Mixed Race
   Percent of group of mixed race


     80 to 84 years


     70 to 74 years

                                                      White
     60 to 64 years
                                                      African Heritage
     50 to 54 years
                                                      Asian Heritage


     40 to 44 years


     30 to 34 years


     20 to 24 years


     10 to 14 years


     Under 5 years

                      0%   5%       10%   15%   20%           25%        30%




                                                                    67
Mixed Race
   American Indians have a high percent of mixed race
                              White/Black
                              Combination   Other
                                  3%         2%
                  Black Combination
                         5%




          White Combination
                 27%


                                                    American Indian
                                                        Alone
                                                         63%




                                                                68
Mixed Race

      Hawaiians have a high proportion of mixed race

                            Other
                            15%



            Asian/White
            Combination
                10%                           Hawaiian Alone
                                                  46%




        White Combination
               13%



                       Asian Combination
                              16%




                                                         69
You need to target your
market and know who your
customer is
Market Segmentation
• Demographic - Age, gender,
  education, income, ethnicity
• Geographic - Northeast, South,
  Midwest, Southwest, West
• Behavior - Sports, shopping habits
• Psychographic - Yuppies
• Propensity to buy
Propensity to Buy
               Early        Early      Late
 Innovators                                      Laggards
              Adopters     Majority   Majority




               "The
              Chasm"




                       Technology Adoption Process
Who is the target market?
•   Target
•   Wal-Mart
•   Gap
•   REI
•   Abercrombie and Fitch
•   Nordstrom
     The Customer


Now that you know the market,
     how do you target?
Target a market
•   Choose for desirable characteristics
•   Buying or purchasing power
•   Growth opportunities
•   No or limited competition
•   If you can’t make a profit---abort
Customer Value Proposition
•   Selection
•   Price
•   Convenience
•   Quality
•   Those are the easy ones--It’s the hot
    buttons that work: Safety, health,
    esteem, etc.
Give the customer a
compelling reason to buy
• Design product or service to satisfy
  needs - not the other way around
• Get partners to provide a complete
  package
• Make your customer aware of your
  offering
• Get your customer to buy
• Don’t let go of the customer
Customer Life Cycle
                    Customer Life Cycle
   How did the          What                               How to get     How long does a
                                     What can             customer to      customer stay
   customer get   triggered the
                                     be cross-            recommend           with the
    to know the      initial buy
                                       sold?               business?         business?
     business?      decision?

                   Intent to       Repurchase             Advocacy
     Customer
                   Purchase
     Awareness

                                                                           Customer
    Create
                                                                            Sales
    brand
  awareness.
                                                   Time
                     Create         Satisfaction            Develop       Continued
                     profile          surveys.            relationship.    contact.
                    for lead         Events to                Viral
                  generation.      trigger cross           marketing.
                                       sells.
Why manage the customer?
•   New customers are expensive to get
•   Existing customers are easy to reach
•   You know a lot about them
•   They can be your best marketers
The Supermarket Customer
• Female
• Shop 2.2 times per
  week
• 31% arrive with list
• traveled 1.8 miles
• needs: dieting,
  economizing,
  indulging and
  impressing guests
The Supermarket - A Science

• 30,000 SKU’s - selection
• Store labels to left of national brands - we tend
  to look right
• Sampling - 80% of those who sample buy
• Best sellers 51 to 53 inches off floor
• Slow background music - the more time you
  spend the more you buy
• Endcaps and in-aisle gondolas
• Don’t arrange by alphabet or type
Your Exercise
• Bellevue Community College
• What is the customer value
  proposition?
• What products should BCC market?
• Map the customer life cycle and what
  should be marketed at each point.
       Products

Now that you’ve decided on
your customer, what do you
           do?
Products
• Anything sold to your market
• Doesn’t have to be physical
• Most ideas don’t make it to the
  marketplace
• Needs to meet the needs of customer
Product Development
                             3 Profitable
       Commercialization
                                 10 get FDA
       Product Testing           Approval

     Prototype Development

 Business Analysis

Screening Ideas
                         5,000
                         Drugs
How does a new product get
marketed?
• All markets have “power users”
• Get power users excited about it
• Then comes the critical phase when
  you get the rest of the market to
  adopt
High school types and product
adoption

http://quizfarm.com/test.php?q_id=3970
  4
Chav, Rocker, Skater, Emo, Goth,
  Trendy, Prepy Ect
Marketing a New Product
      Think of some
      products that
    jumped the chasm
      and some that
          didn’t




                       Source: Geoffrey Moore
                       Crossing the Chasm
Product Life Cycle
Where are these products in
the product life cycle?
•   Television (98%)
•   Telephone (96%)
•   Broad Band Internet Access (30%)
•   Cell phones (80%)
        Branding

Keeping your company in the
     customer’s mind
Brands
• Creating a brand identity is important for both
  large and small businesses
• A brand is the image the customer has of your
  product or company
• If you can tie your brand image to something of
  value to the customer it can go a long way in
  making your enterprise successful
• The best brands have very loyal customers
Top Brands
Levels of Brand Loyalty
• Awareness - Can tell you what the
  brand is about
• Preference - Will buy it if it is
  available
• Brand loyalty - Will buy nothing else
The Brand - Mapping
Consumer Values
• Favorite brands
• What’s important in buying a soft
  drink?
• How do the brands map for your
  values?
      Channels

Getting the product to the
        customer
Channel
• Systems for getting your product to
  the customer
• Could be within your own enterprise
  or with partners
• There are lots of ways of doing it
A simple example - Target
• Stores
• Catalog
• Website
Other Channels - Give an
example of a product you
bought using each
•   Sales people
•   Distributors
•   Brokers
•   Agents
•   Internet
•   Wholesalers
•   Shopping Channel
Channel Selection
• How can you best serve the
  customer?
• What is the most cost effective way
  to getting product to the customer?
• How can you avoid conflict?
• How can you keep control?
• How can you enhance your brand?
Channel Selection
• Name all the channels for the Starbucks
  brand (note not the coffee, the brand)
Promotion

The message
Promotion
• Persuasive techniques used to
  communicate with target market
• Goals
  – Inform - where to find it, cost, use
  – Persuading - motivate to use or switch
  – Remind - maintain contact
Four Elements of Promotion
• Advertising
• Promotion
• Public Relations
Share of Measured Advertising
Spending

MEDIA TYPE     2007     2006     2005     2004
NATIONAL TV   32.0%    31.5%    31.6%    31.0%
MAGAZINES     20.4%    19.3%    19.8%    19.0%
NEWSPAPERS    17.7%    18.8%    20.2%    20.4%

LOCAL TV      11.3%    12.5%    11.5%    13.1%
INTERNET      7.6%     6.6%     5.8%     5.3%
RADIO         7.2%     7.5%     7.7%     7.8%
ALL OTHER     3.9%     3.8%     3.5%     3.3%
TOTAL         100.0%   100.0%   100.0%   100.0%
Advertising Media
• Media - Newspaper, radio, television,
  internet
• Media plan - allocation of ad budget
  to various media
• Media mix - combination of media
  and choice of specific newspaper,
  magazine or television slot
Media Buying
• Cost per thousand - cost to reach
  1,000 people
• Reach - total number of audience
  members exposed to message at
  least once (% total)
• Frequency - average number of times
  exposed to message
• Continuity - timing of ad messages
Major Advertising Media
               Advantage         Disadvantage

 Newspaper     Broad reach and   Clutter and
               cheap             graphic quality
 Television    Broad reach and   High cost
               creative          Effective?
 Direct mail   Target market     Cost and
                                 targetting
 Radio         Low cost          No visual and
                                 short life
 Magazines     Target            Cost and demo
                                 abilities
Public Relations
•   Reputation of company
•   Getting press coverage
•   Press release
•   Press conference
Sales Promotion
 – coupons
 – contests
 – in store point of sale display
 – Special events sponsorship
 – Premiums - free gifts
 – Specialty advertising - baseball caps, pens,
   mugs, tee-shirts
How would you devise an ad campaign
for a new kid’s Nintendo game?



  – Type of promotion?
  – Which magazines?
  – Which radio stations?
  – Which television shows?

				
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