Analyzing Consumers

Analyzing Consumers

• STP stands for segment, target, position.
• Marketers take into account people and relationships in social and psychological context.
• Specialization entails deciding which consumers to serve.
• Effective marketing is targeted.
• The segmentation of the market starts the marketing process.
• Consumers can be separated by a number of criteria, including their response to internet promotions and whether they buy premium products.
• Individuals within a group usually respond similarly.
• Individuals in different groups respond differently.
• Customer segments should be meaningfully differentiated.
• Identify key characteristics or variables that define a unique segment.
• Clear and specific customer profiles aid managers' decisions.
• Consumer markets include segments of individuals, groups, and families.
• Industrial markets include industrial buying segments.

Factors that Describe Consumers

• Geographic factors include urban, suburban, and rural.
• Demographic factors include age range, income range, and gender.
• Psychographic factors include lifestyle and motivational values.
• Behavioral factors include usage rate (heavy or light users) and brand loyalty.
• Regional segmentation can be divided by north vs. south.
• Zip codes are a factor.
• Marketing is done for similar types of neighborhoods.
• Segments differ in how they behave.
• Demographic factors are objective and observable.

Household Demographics

• Less than 25% of Americans live in nuclear families with a mother, father, and children.
• Other household setups include single-parent households, households with no children, and two-parent households with no children.
• Motivations impact people’s characteristics and careers.
• Identity is defined by jobs.
• Achievers, experimenters, thinkers, believers, and communicators are segments to be aware of.
• A priori segmentation is "top down."
• Post hoc segmentation is "bottom up."
• Segments can be individuals, smaller groups, niches, targets or mass market
• Behavioral-based variables include usage rates, brand loyalty and usage occasions.
• Benefits of the purchase are a factor.
• Heavy vs. light users are considered.
• The 80/20 rule.
• Create a consumer profile and avoid stereotypes when segmenting the market.
• Cognitive misers either defer thinking or don't spend enough time evaluating choices.
• Involvement levels are how much effort customers exert.
• High-involvement purchases include a prom dress, a house, or a luxury automobile.
• The elaboration likelihood model of persuasion (ELM) explains how attitudes form and how consumers are influenced.
• Central route processes require thought and scrutiny of persuasive conversations.
• Peripheral route processes are more simplistic, faster, or arbitrary.

Consumer Buying Process

• The buying process includes problem recognition, information search, considering alternatives, purchase, and post-purchase evaluation.
• Problem recognition occurs when potential buyers perceive a difference between their actual and desired state.
• When searching for information, consumers may engage in a search for relevant and useful information.
• The evaluation of alternatives involves establishing choice criteria and processing brand information.
• The evoked set analysis is the set of products or brands that come to mind when a consumer considers a purchase.
• The consideration set involves the brands that a consumer considers buying.
• Purchase involves considering specific features desired in the product, allowing the consumer to reduce the decision consideration set to a smaller number.
• Post-purchase behavior influences future sales, especially through word of mouth.
• Buyer's remorse occurs when there's inconsistency in a person's cognitions.
• This can be due to changes in product knowledge, shifting attitudes, beliefs and diminished expectations after purchase.
• Cognitive dissonance is a broader psychological term.

Types of Consumer Purchases

• Routine purchases refer to staple products like eggs or bread, where the bread name barely matters..
• Limited problem solving involves purchases needing some thought, but with limited effort.
• Extensive problem solving involves purchases needing much thought and deliberation.
• Social class refers to a relatively permanent and ordered division in a society whose members share similar values, interests, and behaviors.
• Upper-uppers (less than 1%) are the conservative social elites who have inherited wealth and live in large homes.
• New rich (about 2%) are those who earn their wealth and have important work values.
• Middle class (32%) include the middle income white-collar workers and some of the higher income blue-collar workers.
• Working class (38%) consists of those who lead a working class lifestyle, being closely tied to their families and local neighborhoods.
• Upper-lowers (9%) are working poor but their living standard is just above the poverty line
• Lower-lowers (7%) are welfare poor who may receive public assistance and are visibly poverty stricken.
• A reference group serves as a basis of personal comparison to define and influence their identity.
• An aspirational group is one to which an individual hopes to belong.
• Opinion leaders exert influence due to their special skills, knowledge, personality, or other characteristics.
• Family refers to a group related by blood, marriage, or adoption that live together in a household, or in close proximity.
• Households relate to a dwelling.

Maslow's Hierarchy of Needs

• (top-bottom):
• Self-actualization is the desire for self-fulfillment and realization of an individual's full potential.
• Self-esteem is the desire for respect and recognition from others.
• Social needs are the desire for affiliation, communication, friendship, and belonging.
• Safety needs are the desire for security and stability, to feel safe from harm.
• Physical needs are the most basic human needs: food, water, sleep, and comfort.
• Perception is the process of selecting, organizing, and interpreting information to form a meaningful picture of the world.
• Selective attention means people perceive only a selective subset of information.
• Selective distortion means consumer tend to interpret information to support their existing beliefs.
• Selective retention means consumers retain or remember only a part of the information to which they've been exposed.
• Actual self-concept is the way a person perceives or constructs their self.