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BB Chapter Twelve : Demographics

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BB Chapter Twelve : Demographics

  1. 1. Chapter Twelve: Australasian (or own) society: Demographics and lifestyles 12-1
  2. 2. Chapter 12 Australasian society: Demographics and lifestyles • Use of demographic factors • Anticipating demographic shifts • How population segments can influence behaviour • Changing gender roles in society • Lifestyle and how it is measured • Psychographics and its applications • Using lifestyle and psychographics for market segmentation 12-2
  3. 3. KEY NOTE • This chapter is written purely from an Australian perspective • You can avoid most the details since we are in Singapore • But what is important is that you understand how marketers track and analyze the marketing implications of demographic changes in society- and respond accordingly • I have omitted including much of the data and charts in Chapter 12 and decide to focus on the key issues only 12-3
  4. 4. Australasian society: Demographics and lifestyles (cont.) Some specific questions are: • Which demographic factors help marketers describe and understand the market segments? • What is the importance of anticipating demographic shifts in society to develop marketing strategies? • What are some impacts of changing roles (such as gender roles) on society and consumption? 12-4
  5. 5. Demographics and Social Stratification Demographics Population & Occupation Education Income Age Size 12-5
  6. 6. Ads appealing to baby-boomer market 12-6
  7. 7. Ads appealing to the baby- boomer market Note: luxury is highlighted 12-7
  8. 8. Australasian (or any other)society: Demographics and lifestyles (cont.) • What is the nature of lifestyle and how is it measured? • What is the meaning of psychographics, and how is it used to understand consumer lifestyle and consumption behaviour? • How are lifestyle and psychographics used in market segmentation to develop marketing strategies? 12-8
  9. 9. Changing societal factors affecting marketing strategy 12-9
  10. 10. Demographics (overview) • Population size • Age structure • Population distribution • Income • Occupation • Education 12-10
  11. 11. Projected Australian age structure for 2051 Source: ABS file 3222.0 Check the Department of Statistics Singapore and find out our OWN demographic profile) 12-11
  12. 12. http://www.singstat.gov.sg/stats/themes/people/demo.html 12-12
  13. 13. Demographics • Population distribution – Changes attributed to internal migration e.g. baby-boomers moving to Queensland and coastal regions to retire • Actual vs self-perceived age 12-13
  14. 14. Actual vs self-perceived age 12-14
  15. 15. Demographics (cont.) • Income / actual incomes • Disposable incomes / buying power • Occupations • Regional influences – e.g. industry shutdowns etc. – e.g. city vs country – e.g. internal migration 12-15
  16. 16. Demographics and Social Stratification Demographics Income A household’s income level combined with its accumulated wealth determines its purchasing power. Income enables purchases but does not generally cause or explain them. Occupation and education directly influence preferences for products, media, and activities; income provides the means to acquire them. 12-16
  17. 17. Demographics and Social Stratification Demographics Income (cont.) Therefore, income is generally more effective as a segmentation variable when used in conjunction with other demographic variables. How wealthy one feels may be as important as actual income for some purchases. Subjective discretionary income (SDI) is an estimate by the consumer of how much money he/she has available to spend on nonessentials. SDI adds considerable predictive power to actual total family income (TFI). 12-17
  18. 18. Demographics and Social Stratification Demographics Occupation Occupation is probably the most widely applied single cue we use to initially evaluate and define individuals we meet. One’s occupation provides status and income. The type of work one does and the types of individuals one works with over time also directly influence one's values, lifestyle, and all aspects of the consumption process. 12-18
  19. 19. Demographics and Social Stratification Occupational Influences on Consumption 12-19
  20. 20. Demographics (cont.) Education • Increase during the 90s: about 30% more now with university degrees • Huge increase in training: less ‘unskilled’ 12-20
  21. 21. Changing levels of education 12-21
  22. 22. Demographics and Social Stratification Demographics Education Approximately 85% of Americans have a high school degree, and 27% have completed college. Education is increasingly critical for a “family wage” job. Traditional high-paying manufacturing jobs that required relatively little education are rapidly disappearing. 12-22
  23. 23. Demographics and Social Stratification Demographics Education (cont.) High-paying jobs in the manufacturing and service sectors today require technical skills, abstract reasoning, and the ability to read and learn new skills rapidly. Since individuals tend to have spouses with similar education levels, these differences are magnified with spousal income is considered. 12-23
  24. 24. Demographics and Social Stratification Education Level Influences on Consumption 12-24
  25. 25. Ethnicity and country of origin of Australasians • Ethnic markets • Country of origin markets 12-25
  26. 26. Specific population segments Population segments share distinguishing patterns of behaviour. 12-26
  27. 27. Age subcultures • Mature market • Youth market – Generation X – Generation Y 12-27
  28. 28. Demographics and Social Stratification Demographics Age Proper age positioning is critical for many products. Our age shapes the media we e, where we shop, how we use products, and how we think and feel about marketing activities. Age carries with it culturally defined behavioral and attitudinal norms, which affect our self-concepts and lifestyles. 12-28
  29. 29. Demographics and Social Stratification Age Influences on Consumption 18-24 25-34 35-44 45-54 55-64 65+ 12-29
  30. 30. Understanding Generations 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. 12-30
  31. 31. Understanding Generations Pre- Pre-Depression Depression Mature Market Baby Boom Generation X Generation Y Millennials 12-31
  32. 32. Understanding Generations How to Target the Mature Market One approach to segmenting older consumers is gerontographics gerontographics, based on the theory that people change their outlook on life when they experience major life events such as becoming a grandparent, retiring, losing a spouse, or developing chronic health conditions. Those experiencing similar events are likely to have similar outlooks on life, and given similar economic resources, similar lifestyles. 12-32
  33. 33. Understanding Generations How to Target the Mature Market Gerontographics has identified the following four segments of the mature market: - Healthy Indulgers (7 million, rapidly growing) - Ailing Outgoers (18 million) - Health Hermits (20 million) - Frail Recluses (18 million) 12-33
  34. 34. Understanding Generations Baby Boom Generation: A Closer Look 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 Often alienated by overly “youth oriented” appeals in ads 12-34
  35. 35. Understanding Generations Generation Xers: A Closer Look Beyond the stereotype: 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 Reality 4– Reaching Xers requires special attention to media, particularly online 12-35
  36. 36. Understanding Generations Generation Y, or echo boom generation, account for 71 million Americans. They are the children of the original baby boomers and were born between 1977 and 1994. Gen Y is characterized by a strong sense of independence and autonomy. They are assertive, self-reliant, emotionally and intellectually expressive, innovative, and curious. It is a multiracial generation, with African American and Hispanic teenagers often being the style leaders. 12-36
  37. 37. Understanding Generations Generation Yers: A Closer Look Interesting Facts About Gen Y: Really Two Sub-Markets: Twenty-somethings and Teens Expected to have the highest education of previous generations with incomes to follow Very tech savvy with media options including Internet, cell phones, and video games A strong market for automobiles with brands like Toyota creating edgy and affordable models such as the Scion to target them 12-37
  38. 38. Gender roles • Ascribed roles —an attribute over which the individual has little or no control • Achievement roles —based on performance criteria over which the individual has some degree of control • Traditional versus modern orientation 12-38
  39. 39. Marketing strategy and gender roles 1. Market segmentation 2. Product strategy 3. Marketing communications 4. Retail strategy 12-39
  40. 40. The Nature of Lifestyle Lifestyle is basically how a person lives. It is how one enacts his or her self-concept. Influences all aspects of one’s consumption behavior. Is determined by the person’s past experiences, innate characteristics, and current situation. 12-40
  41. 41. The nature of lifestyle • Lifestyle is the expression of the individual’s situation, life experiences, values, attitudes and expectations • It is defined simply as how the individual lives • ‘Lifestyle’ has been used interchangeably with the term ‘psychographics’ 12-41
  42. 42. The Nature of Lifestyle Measurement of Lifestyle Attempts to develop quantitative measures of lifestyle were initially referred to as psychographics Measures include psychographics. include: Attitudes Evaluative statements about other people, places, ideas, products, etc. Values Widely held beliefs about what is acceptable or desirable Activities and Nonoccupational behaviors to which consumers devote time Interests and effort, such as hobbies, sports, public service, and church Demographics Age, education, income, occupation, family structure, ethnic background Media patterns The specific media the consumer utilize Usage rates Measurements of consumption within a specified product category; often consumers are categorized as heavy, medium, light, or nonusers 12-42
  43. 43. The Nature of Lifestyle General versus Specific Lifestyle Schemes Lifestyle measurements can be constructed with varying degrees of specificity. 1. Marketers can 2. Firms can conduct study the general very specific lifestyle lifestyle patterns of studies focused on a population. aspects of individual or household lifestyles most relevant to their product or service. 12-43
  44. 44. Determinants of lifestyle 12-44
  45. 45. Continuum for lifestyle measurements Lifestyle measurements can be constructed with varying degrees of specificity. 12-45
  46. 46. Several components of AIO questionnaires 12-46
  47. 47. The Nature of Lifestyle Three specific lifestyle examples: examples: 1. Luxury Sports Cars 2. Shopping 3. Technology 12-47
  48. 48. The Nature of Lifestyle Lifestyle Schemes: Luxury Sports Cars Porsche examined the lifestyles of its buyers. Key demographics (e.g., high education and income) were similar across buyers. However, their lifestyles and motivations were quite different. 12-48
  49. 49. The Nature of Lifestyle Porsche Consumer Segments Top Guns (27%) Ambitious and driven, this group values power and control and expects to be noticed. Elitists (24%) These old-family-money “blue-bloods” don’t see a car as an extension of their personality. Cars are cars no matter what the price tag. Proud Patrons 23%) This group purchases a car to satisfy themselves, not to impress others. A car is a reward for their hard work. Bon Vivants (17%) These thrill seekers and “jet-setters” see cars as enhancing their already existing lives. Fantasists (9%) This group uses their car as an escape, not as a means to impress others. In fact, they feel a bit of guilt for owning a Porsche. 12-49
  50. 50. The Nature of Lifestyle Lifestyle Schemes Shopping Hedonic shopping motives underlying consumer shopping patterns include* 1. Adventure - fun 2. Gratification reward/stress reduction 3. Role - shop for others 4. Value - good deal 5. Social - bonding 6. Idea - trends Five shopping lifestyle segments emerged based on these motives. *Discussed in Chapter 10 12-50
  51. 51. The Nature of Lifestyle Five Shopping Lifestyle Segments Minimalists Primarily motivated by value; least motivated by fun and adventure; low in appreciation for retail aesthetics, low in innovativeness, do (12%) not tend to be browsers-- middle-aged, with 57% being men Gatherers Primarily motivated by keeping up with trends and joy of shopping for others; least motivated by value; low in appreciation of retail (15%) aesthetics, low in innovativeness, moderate browsers-- mix of younger and older shoppers, with 70% being male Providers Primarily motivated by enjoyment of shopping for others and value; not motivated by fun and adventure; moderate in appreciation of (23%) retail aesthetics, low in innovativeness, moderate browsers-- oldest group, with 83% being female Enthusiasts Highly motivated by all hedonic aspects including fun and adventure; highest in appreciation of retail aesthetics, most (27%) innovative, spend the most time browsing-- youngest group, with 90% being female Traditionalists Mmoderately motivated by all hedonic aspects, gratification high on the list; moderate in appreciation of retail aesthetics, highly (23%) innovative, moderate browsers-- mix of younger and older shoppers, with 58% being female 12-51
  52. 52. The Nature of Lifestyle Lifestyle Schemes Technology How technology is utilized by consumers is of critical importance to marketers. Numerous technology and Internet lifestyle profiles exist, including • Pew Internet User Types • Ebates.com Dot-shoppers • TDS Shopper Clusters: Onliners Group Forrester Research created Technographics, a segmentation scheme that examines lifestyle segments relating to technology, online access, online shopping, instant messaging, etc. 12-52
  53. 53. The Nature of Lifestyle Technographics Fast Sidelined Forwards Techno- Techno- Citizens 10% Strivers 29% 5% Media Handshakers Junkies 7% 6% Technology Segments Gadget New Age Grabbers Nurturers 7% 8% Mouse Digital Potatoes Hopefuls 9% Traditionalists 6% 10% 12-53
  54. 54. The VALSTM System Underlying Differences Across VALSTM Motivational Types 12-54
  55. 55. VALS Lifestyle System 12-55
  56. 56. The 8 psychographic segments of VALS 1. Innovators 2. Thinkers and Believers: ideals motivated 3. Achievers and Strivers: achievement motivated 4. Experiencers and Makers: self-expression motivated 5. Survivors 12-56
  57. 57. Shortcomings of VALS • Measures of individuals - some decisions are by households • Few individuals have ‘pure’ primary motivations, a secondary motivation may be very influential • VALS may not be useful for products that are evenly spread over all VALS types as it is for ego- involved purchases, e.g. laundry detergent 12-57
  58. 58. The VALSTM System Ideals Motivation Consumers who are guided in their choices by their beliefs and principles rather than by feelings or desire for social approval. They purchase functionality and reliability 12-58
  59. 59. The VALSTM System Achievement Motivation Consumers who strive for a clear social position and are strongly influenced by the actions, approval, and opinions of others. They purchase status symbols. 12-59
  60. 60. The VALSTM System Self- Self-Expression Motivation Action-oriented consumers who strive to express their individuality through their choices. They purchase experiences. 12-60
  61. 61. The VALSTM System VALSTM Segments Innovators Innovators are successful, sophisticated, active, take-charge people with high self-esteems and abundant resources. They are motivated by a blend of ideals, achievement, and self- expression. Image is important as an expression of their taste, independence, and character. They often see brands and products as extensions of their personalities. They have a wide range of interests, are concerned with social issues, and are the most receptive to new products, ideas, and technologies. 12-61
  62. 62. The VALSTM System VALSTM Segments Thinkers: Ideals Motivated Thinkers are mature, satisfied, comfortable, reflective people who value order, knowledge, and responsibility. Most are well-educated and are in or near retirement from professional occupations. They plan their purchases and are cautious concerning big-ticket items, looking for functionality, value, and durability in products. 12-62
  63. 63. The VALSTM System VALSTM Segments Believers: Ideals Motivated Believers are conservative, conventional people with concrete beliefs based on traditional, established codes: family, church, community, and the nation. They are conservative, predictable and highly loyal consumers. They favor American products and established brands, and are averse to change. 12-63
  64. 64. The VALSTM System VALSTM Segments Achievers: Achievement Motivated Achievers are successful career- and work-oriented people who like to, and generally do, feel in control of their lives. They value consensus, predictability, and stability over risk. Image is important to them, favoring established, prestige products and services that demonstrate success to their peers. 12-64
  65. 65. The VALSTM System VALSTM Segments Strivers: Achievement Motivated Strivers are style conscious and trendy. They have limited education and tend to have narrow interest. Money defines success for them, favoring stylish products that emulate the purchases of people with greater material wealth. 12-65
  66. 66. The VALSTM System VALSTM Segments Experiencers: Self-Expression Motivated Self- Experiencers are young, vital, enthusiastic, impulsive, and rebellious. They seek variety and excitement and savoring the new, the offbeat, and the risky. They are avid consumers and spend much of their income on clothing, fast food, music, movies and videos and technology. 12-66
  67. 67. The VALSTM System VALSTM Segments Makers: Self-Expression Motivated Self- Makers are practical people who have constructive skills and value self-sufficiency. They live within a traditional context of family, practical work, and physical recreation. They buy tools, pickup trucks, washing machines, fishing equipment, etc. 12-67
  68. 68. The VALSTM System VALSTM Segments Survivors Survivors’ lives are constricted. They live simply on limited incomes but are relatively satisfied. Frequently elderly and concerned about their health, they are not active in the market place and show no evidence of a strong primary motivation. They represent a modest market, are cautious consumers who look for low prices, buying familiar, trusted products. 12-68
  69. 69. VALS Survey Try it for yourself! http://www.sric-bi.com/VALS/ presurvey.shtml 12-69
  70. 70. Roy Morgan Research’s Values Segment System: the Segments • Young optimism (8%) • Socially aware (14%) • Something better (7%) • Visible achievement (18%) • Look at me (11%) • Conventional family life (10%) • Traditional family life (20%) • Real conservatism (5%) • A fairer deal (4%) • Basic needs (3%)
  71. 71. Geo-demographic lifestyle analysis • Analysis focusing on the demographics of geographical areas • based on the belief that lifestyle and therefore consumption are largely driven by demographic factors • Based on research that shows that neighbours have shared patterns of consumer behaviour towards goods, services, media and promotions. • An example is Mosaic Australia
  72. 72. International Lifestyles Marketing is increasingly a global activity. Marketers can develop cross-cultural strategies around those discernible lifestyle segments that cut across cultures. Although language and other differences would exist, individuals pursuing similar lifestyles in different cultures should be responsive to similar product features and communication themes. Large international advertising agencies and marketing research firms, such as Roper Starch Worldwide, are leading the way. 12-72
  73. 73. International Lifestyles Global Lifestyle Segments Identified by Roper Starch Worldwide 12-73

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