Consumer Behavior

Roger D. Blackwell
Paul W. Miniard
James F. Engel

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 CHAPTER 7

Demographics,
Psychographics, and
Personality
Analyzing and Predicting
Consumer Behavior
Demographics

Personality

Personal Values

Lifestyles
Analyzing and Predicting
Consumer Behavior
Demographics is the size,
structure, and distribution of a
population
Analyzing and Predicting
Consumer Behavior
Demographics is the size,
structure, and distribution of a
population
Marketers use demographic
analysis as market segment
descriptors and in trend analysis
Demographic Analysis to
Predict Consumer Behavior
Consumer analysts use demo-
graphic trends to predict changes
in demand for and consumption of
specific products and services
Demographic Analysis to
Predict Consumer Behavior
Consumer analysts use demo-
graphic trends to predict changes
in demand for and consumption of
specific products and services
Demographic analysis provides
information for social policy
Demographic Analysis and
Social Policy
Demographics used in analyzing
policy questions related to the
aggregate performance of
marketing in society
(macromarketing)
Demographic Analysis to
Predict Consumer Behavior
Consumer analysts use demo-
graphic trends to predict changes
in demand for and consumption of
specific products and services
Demographic analysis provides
information for social policy
Industrial demand is ultimately
derived from consumer demand
Demographic and
Industrial Demand
Analysis of demographic trends is
important for industrial and
business-to-business marketing
In an industrial firm, you must
understand not only the
customers’ minds, but also the
minds of the customers’
customers
Demographic Analysis to
Predict Consumer Behavior
Demographics
Changing Structure of Markets
Geographic Factors
Economic Resources
Global Markets
Changing Structure of
Consumer Markets
Market analysis requires
information about
people with needs
ability to buy
willingness to buy
authority to buy
Changing Structure of
Consumer Markets
How many people will there be?
birthrate
natural increase
fertility rate
total fertility rate
population momentum
Changing Structure of
Consumer Markets
Birthrate: number of live births per
1,000 population in a given year
Natural increase: surplus of births
over death in a given period
Fertility rate: number of live births
per 1,000 women of childbearing
age (15 to 44 years)
Changing Structure of
Consumer Markets
Total fertility rate: average number
of children that would be born
alive to a woman during her
lifetime if she were to pass through
all of her childbearing years
conforming to age-specific fertility
rates of a given year
Changing Structure of
Consumer Markets
Population momentum: future
growth of any population will be
influenced by its present age
distribution
Changing Structure of
Consumer Markets
Factors affecting birthrates:
Age distribution of population
Family structure
Social attitudes toward family/children
Technology
Changing Structure of
Consumer Markets
Factors affecting birthrates:
Age distribution of population
Family structure
Social attitudes toward family/children
Technology

Increasing life expectancy

Immigration represents about 30%
of annual growth in United States
U.S. Population Projections
Changing U.S. Age Distribution
Changes in age distribution affects
the types of products and services
that will be bought and consumed in
the future
Cohort analysis is fundamental to
understanding changing consumer
markets
A cohort is any group of individuals
linked as a group in some way
Changing U.S. Age Distribution
The key to cohort analysis is
examining the influences that are
shared by most people in a specific
group
Ultimately, these influences affect
consumer decision processes and
the types of products, brands, and
retailers consumers prefer when
responding to a firm’s marketing
strategy
Children As Consumers
Projected increase in number of
young children between 2000 and
2010
Children As Consumers
Projected increase in number of
young children between 2000 and
2010

The importance of children as

consumers increases even more,
with the higher proportion of first-
order babies generating higher
demand for quality products and
services
Children As Consumers
Most parents do most of the buying
Children often involved in family
purchasing decisions
Children often have their own
ability to buy
Generation Y
Born in the 1980s and early 1990s
with 72 million members
Greater need for peer acceptance,
which often guides product and
brand choice
More likely to switch brands quicker
than other segments
Teens like the social aspects of
shopping with friends
Appealing to Generation Y
Generation X (Young Adults)
Segment of 25-to-34 year olds is
declining but will have a slight
increase with the inclusion of older
Gen Y consumers
Need to buy products to set up
households and for young children
With many needs and greater
financial restraints, they often shop
at value-oriented retailers
Baby Boomers or Muppies
This group (45 to 64 years) is
projected to grow by 19 million by
2010
Good market for luxury travel, spas,
health clubs, cosmetics, salons, diet
plans foods, and health foods
Group represents the greatest share
of the workforce, the greatest share
of income, and the greatest share of
voting power, and political influence
Young Again Market
Also referred to as mature market,
seniors, and elderly
These segments are expected to
grow substantially
Despite advanced chronologic age,
many in this segment feel, think,
and buy young
Young Again Market
Cognitive age: the age one
perceives one’s self to be
Cognitive age is measured in
terms of how people feel and act,
express interests, and perceive
their looks
Can be used with chronologic age
to better target segments, create
more effective content, and select
the most efficient media channels
Young Again Market
Important segmentation variables
for this group include health,
activity level, discretionary time,
engagement in society, and gender
Communicating with this segment
often requires alteration of
traditional messages and materials
- larger type and bright colors
- newspapers and AM radio
- sensitive to revealing their age
Macromarketing to an Aging
Population
The aging populations of the United
States, Japan, Canada, and Europe
will have enormous effects on
macromarketing and social policy
Younger consumers may have
considerably less financial
resources at their disposal due to
future contributions to Social
Security and Medicare
Macromarketing to an Aging
Population
One solution to this problem
includes increasing the age at
which benefits begin, thus changing
the age at which people and
organizations expect to retire
Quasi-retirement is another option
where more experienced workers fill
in for younger workers during
vacations, sabbaticals, training, or
maternity leaves
Demographic Analysis to
Predict Consumer Behavior
Demographics
Age Structure of Markets
Geographic Factors
Economic Resources
Global Markets
Demographic Analysis to
Predict Consumer Behavior
Demographics
Age Structure of Markets
Geographic Factors
Economic Resources
Global Markets
Changing Geography of Demand
Geodemography, refers to where
people live, how they earn and
spend their money, and other
socioeconomic factors
Changing Geography of Demand
Geodemography, refers to where
people live, how they earn and
spend their money, and other
socioeconomic factors
The study of demand related to
geographic areas assumes that people
who live in proximity to one another also
share similar consumption patterns and
preferences
Cities are the most important unit of
analysis in most marketing plans
Changing Geography of Demand
Metropolitan statistical area (MSA): a
free-standing metropolitan area
surrounded by non-metropolitan
counties and not closely related to other
metropolitan areas
Primary MSA (PMSA): metropolitan area
closely related to another city
Consolidated MSA (CMSA): a grouping
of closely related PMSAs
Changing Geography of Demand
The greatest gains in population are
expected in California, Texas and Florida
These states are considered prime
candidates for new stores compared to
other states where populations may be
declining
Growth rate may be deceptive unless the
size of the population is also taken into
account
Geographic variables affect many
components of a firm’s marketing strategy
Demographic Analysis to
Predict Consumer Behavior
Demographics
Age Structure of Markets
Geographic Factors
Economic Resources
Global Markets
Economic Resources
The ability to buy, typically measured
by income and wealth
Economic Resources
Income: money from wages and
salaries as well as interest and
welfare payments
Economic Resources
What consumers think will happen in
the future (consumer confidence)
heavily influences consumption
Influences whether consumers will
increase their debt or defer spending
to pay off debt
Measures of consumer confidence
are important in making decisions
about inventory levels, staffing, or
promotional budgets
Economic Resources
Income: money from wages and
salaries as well as interest and
welfare payments
Wealth: a measure of a family’s net
worth or assets in things such as
bank accounts, stocks, and a home,
minus its liabilities such as home
mortgage and credit card balances
Economic Resources
Net worth influences willingness to
spend but not necessarily ability to
spend, because much wealth is not
liquid and cannot be spent easily
How much people accumulate over
the years is more a function of how
much they save rather than how
much they earn
Targeting the Up Market
The superaffluent represent the top
quintile of consumers in terms of
income
Households often consists of two
income earners who place a high
value on time
They value extra services provided
by some retailers
Saving money is as important as
spending it for many individuals in
this group
Targeting the Up Market
Shop discount stores, use coupons,
and wait for sales
More print oriented in communications
Simple ads that promote image
Credibility of source selling product
Product reviews influence this group
Targeting the Down Market
Throughout the world, the majority
of consumers are low income
Retailers such as Wal*Mart have
found success by providing good
products at reasonable prices
Closeout stores offer brand name
products at deep discounts to at all
income-level consumers
Dollar stores are one of the fastest
growing retail categories
Targeting the Down Market
Provide good products at reasonable
prices
Maintaining attractive stores
Offering stylish and up-to-date products
Have friendly employees that treat
customers with respect
Demographic Analysis to
Predict Consumer Behavior
Demographics
Age Structure of Markets
Geographic Factors
Economic Resources
Global Markets
Global Market Analysis
The most attractive markets are
countries that are growing both in
population and in economic
resources
Global Market Analysis
The most attractive markets are
countries that are growing both in
population and in economic
resources
Which countries will grow the most
in the future?
Global Market Analysis
The most attractive markets are
countries that are growing both in
population and in economic
resources
Which countries will grow the most
in the future?
Which countries
have the highest
per capita income?
Global Market Analysis
Low income countries offer an
advantage to firms looking to buy
products from the lowest-cost
source
There are pockets of
consumers who are
able to buy products,
even in the poorest
countries
Emerging Markets
Marketing programs should focus
on creating brand awareness
(because competitors will follow)
and stimulating product trial
Marketers may have to teach
consumers about products taken for
granted (deodorant)
Products may have to be adapted to
local values
Consumer Behavior in
the Pacific Rim
Consumer Behavior in
the Pacific Rim
South Asia
India
China
Australia
Japan
Consumer Behavior in
Latin America
Consumer Behavior in
Latin America
Some of the most attractive markets
include Brazil, Venezuela, Colombia,
Argentina, and Chile
Most countries have high
population growth rates, moderately
high incomes close proximity
Intermarket segmentation provides
a basis to identify segments that
can afford certain items
Consumer Behavior in
Eastern Europe
Consumer Behavior in
Eastern Europe
The attractiveness of Eastern
European markets lies in their
similar preferences to Western
consumers
Hungary and Poland have received
much attention from global
marketers
Marketers have launched a myriad
of successful brands
Consumer Behavior in The EU
Consumer Behavior in The EU
The EU is a market larger than the
United States
Extremely low population growth
makes customer retention
extremely important for marketers
Products and people move across
borders easily
Efficiencies include logistics,
financial arrangements, and
marketing economies of scale
Consumer Behavior in The EU
Efficiencies include logistics,
financial arrangements, and
marketing economies of scale
Marketers can approach Europe as
a single market, but national identity
still exists among consumers
Analyzing and Predicting
Consumer Behavior
Demographics

Personality

Personal Values

Lifestyles
Personality
Personality:
consistent responses to
environmental stimuli

an individual’s unique psychological

makeup, which consistently
influences how the person responds
to his or her environment
Personality
Personality:
How does personality influence
consumer behavior?

Psychoanalytic Theory

Sociopsychological Theory

Trait-Factor Theory
Personality
Psychoanalytic theory
Human personality system consists of
the id, ego, and superego
The dynamic interaction of these
results in unconscious motivations
that are manifested in observed
human behavior
Personality is derived from conflict
between the desire to satisfy physical
needs and the needs to be a
contributing member of society
Personality
Psychoanalytic theory
Personality is a result of more than
just subconscious drives
Some advertising is influenced by
psychoanalytic approach
Personality
Sociopsychological Theory
Recognizes interdependence of the
individual and society—individual
strives to meet needs of society and
society helps individual attain
personal goals
Social variables (rather than biological
instinct) are most important in
shaping personality
Behavioral motivation is directed to
meet those needs
Personality
Sociopsychological Theory
Person may buy a product that
symbolizes an unattainable or
unacceptable goal—the acquisition
fulfills some subconscious “forbidden
desire”
Personality
Trait-Factor Theory
Quantitative approach to personality
Personality made up of traits: any
distinguishable, relatively enduring
way in which one individual differs
from another
Understanding consumer traits can be
useful in marketing planning
Personality
Trait-Factor Theory
Assumes that traits are common to
many individuals and vary in absolute
amounts among individuals
Traits are relatively stable and exert
fairly universal effects on behavior
regardless of the environmental
situation
Traits can be inferred from the
measurement of behavioral indicators
Personality
Trait-Factor Theory
Trait theory is most useful to
marketing strategists in developing
brand personality—the personality
consumers interpret from a specific
brand
Brands may be characterized as old-
fashioned, modern, fun, provocative,
masculine, or glamorous
Predicting Buyer Behavior
Research typically attempts to find
relationships between personality
variables and consumer behaviors
Predicting Buyer Behavior
Research typically attempts to find
relationships between personality
variables and consumer behaviors
Research tried to predict brand
and store preference based on
personality but with poor results
Predicting Buyer Behavior
Research typically attempts to find
relationships between personality
variables and consumer behaviors
Research tried to predict brand
and store preference based on
personality but with poor results
Personality is just one variable in
the consumer decision making
process
Analyzing and Predicting
Consumer Behavior
Demographics

Personality

Personal Values

Lifestyles
Personal Values
Values:
Represent consumer beliefs about life
and acceptable behavior
Unlike attitudes, values transcend
situations or events and are more
enduring because they are more
central in the personality structure
Personal Values
Values:
Represent three universal
requirements:
biological needs, requisites of
coordinated social interaction, and
demands for group survival and
functioning
Values express the goals that
motivate people and the appropriate
ways to attain those goals
Personal Values
Social values define “normal”
behavior for a society or group
Personal values define “normal”
behavior for an individual
Personal values reflect the choices
an individual makes from the
variety of social values or social
systems to which they are exposed
Individuals pick and choose which
social values to emphasize
Rokeach Value Scale (RVS)
Values are concerned with goals and
ways of behaving to obtain them
Values are enduring beliefs that
specific modes of conduct or end
states of existence are personally or
socially preferable to opposing
modes of conduct or end states or
existence
Rokeach Value Scale (RVS)
RVS asks people to rank the
importance of a series of goals and
ways of behaving which can be
analyzed by whatever variable might
be of interest in consumer analysis
Consumer analysts are using values
as a criterion for segmenting the
population into homogeneous
groups
Rokeach Value Scale (RVS)
Schwartz Value Scale (SVS)
Designed to measure a compre-
hensive set of values thought to be
held by nearly everyone
Values are trans-situational goals
that serve the interest of individuals
or groups and express one of ten
universal motivations or value types
The ten values and four higher-
order value domains represent a
continuum of related motivations
Structural Relation of Motivational
Value Types
Value Type Exemplary Values
Value Type Exemplary Values
Power Authority, wealth
Achievement Successful, capable
Hedonism Pleasure, enjoying life
Stimulation Daring, exciting life
Self-direction Creativity, curious
Universalism Social justice, equality
Benevolence Helpful, honest
Tradition Humble, devout
Conformity Politeness, obedient
Security Social order, clean
Values and Consumer Decision
Process
Personal values help explain how we
answer the question, “Is this product
for me?”
While important in the need
recognition stage, values also affect
consumers in determining evaluative
criteria
Values influence the effectiveness of
communications programs and are
enduring motivations
Values and Consumer Decision
Process
Laddering: in-depth probing directed
toward uncovering higher-level
meanings at both the benefit
(attribute) level and the value level
It seeks linkages between product
attributes, personal outcomes, and
values that serve to structure
components of the cognitive network
in a consumer’s mind
Values and Consumer Decision
Process
Identifying which product attribute
appeals to which value-based
segment can guide alternative
advertising and marketing strategies
Analyzing and Predicting
Consumer Behavior
Demographics

Personality

Personal Values

Lifestyles
Lifestyle Concepts
Lifestyle: patterns in which people
live and spend time and money
Reflects a person’s activities,
interests, and opinions as well as
demographic variables
Lifestyle Concepts
Lifestyle: patterns in which people
live and spend time and money
Reflects a person’s activities,
interests, and opinions (AIO) as
well as demographic variables
Since lifestyles change readily,
marketers must keep research
methods and marketing strategies
current
Lifestyle Concepts
Psychographics: an operational
technique to measure lifestyles; it
provides quantitative measures
and can be used with the large
samples needed for definition of
market segments
Can also be used in qualitative
research techniques such as focus
groups or in-depth interviews
Lifestyle Concepts
Demographics profile who buys
products whereas psychographics
focus on why they buy
AIO measures: activities, interests,
and opinions of consumers
AIO Categories of Lifestyle Studies
Market Segmentation
Develop a deeper understanding of
a segment or define segments
Use Likert scale to answer various
AIO statements
Gain understanding of core
customers lifestyles better and
develop packaging and
communication strategies that
position products to their various
lifestyle attributes
Values and Lifestyle System
VALS™ suggests that consumer buy
products and services and seek
experiences that fulfill their
characteristic preference and give
shape, substance, and satisfaction to
their lives
An individual’s primary motivation
determines what in particular about the
self or the world governs his or her
activities
Primary motivations include ideals,
achievement and self-expression
Values And Lifestyle System
Consumers who are primarily motivated
by ideals are guided by knowledge and
principles
Consumers primarily motivated by
achievement look for products or
services to demonstrate their success
to their peers
Consumers primarily motivated by self-
expression desire social or physical
activity, variety, and risk
VALSTM Lifestyle Segments
VALSTM Types
Innovators: successful, sophisticated, take-
charge consumers with many resources and
high self-esteem. Image is important
Thinkers: satisfied, mature, comfortable,
practical people who look for durability,
value, and functionality in products
Achievers: motivated by the desire for
achievement, career-oriented, and prefer
prestige brands that signal success. Social
lives revolve around family, place of worship,
and work
VALSTM Types
Experiencers: young, enthusiastic, impulsive,
and like risk taking, variety, and excitement.
Like new and off-beat products and activities
Like Thinkers: conservative, conventional,
and motivated by ideals, with beliefs based
on codes of church, community, family, and
nation. Buy proven brands from home
country and are generally loyal consumers
Strivers: concerned about approval and
opinions of others and seek self-definition,
security, and image of success. Emulate
those they want to be like, but lack resources
VALSTM Types
Like Experiencers: express themselves and
experience the world by working on it.
Practical people who are self-sufficient, live
within a traditional context, and prefer value
to luxury
Survivors: live narrowly focused lives with
few resources and represent a modest
market for most products. They are cautious
consumers and seek safety and security
Global Lifestyles
Increased globalization requires
that marketing strategy be
increasingly planned on a global
basis
VALSTM and other approaches are
being used to identify lifestyle
segments across country borders
and segment international markets