CONSUMERS AND SUBCULTURES

1. CONSUMERS AND SUBCULTURES

2. What are some demographics • Age • education • occupation • social class • Ethnic group • gender • family size and composition • distribution of population

3. So What Are demographics? • Objective • Quantifiable • Characteristics of a population • Important variables for market segmentation Different segments have different consumption patterns

4. What does money mean to you? • Security • Comfort • being able to help one's children, • freedom • pleasure • success or failure • social acceptability • love • happiness Money means different things to different segments Our ideas about money affect our consumption behaviour

5. What does the demand for goods and services depend on? • the ability to buy • the willingness to buy

6. To Spend or Not to Spend Consumers’ willingness to buy? • a measure of consumers’ opinions on the financial position of their own household and the economy as a whole • and to what extent they think it is a good time to buy large expensive items such as a TV or a computer. • Demand for necessities remains stable over time • The underlying data are taken from the consumer confidence survey.

7. The Conference Board's Consumer Confidence Survey • a monthly report based on a representative sample of 5,000 U.S. households across the country. • measures the level of confidence individual households have in the performance of the economy. • Households are asked five questions (1) a rating of business conditions in the household’s area, (2) a rating of business conditions in six months, (3) job availability in the area, (4) job availability in six months, and (5) family income in six months. • An index is constructed for each response and then a composite index is fashioned based on the responses. • Industries that rely on the Survey for forecasting include manufacturers, retailers, banks, and government agencies

8. Base year 1985=100

9. The Consumer Confidence Index fell to 92.8 in October 2004, down 3.9 points from 96.7 in Sept.. This is the third consecutive decrease for the index, which is at its lowest level in 7 months. What are the implications for Marketers of automobiles?

11. Consumption growth displays a positive relation to the willingness to buy. • The index of willingness to buy is a clear predictor for the future development of consumer spending.

12. Confidence and willingness to buy varies by market segment and is usually higher among younger than older consumers

13. And among higher income consumers than lower, • college graduates over high school graduates • whites or other ethnic groups • men or women

14. Willingness to buy is also affected by product and method of purchase Willingness to buy by telephone

15. Social Class

16. What is Social Class? What are the typical factors that differentiate the social classes? • relatively permanent strata in a society that are distinct subcultures • Occupation • Education attained • Behavioral standards – taste culture • Source of Income • Level of Income; wealth • Dwelling area • Power • Religious Affiliation; Associations • lifestyles, buying patterns, motivations and values • possessions

17. Classes in Canada Upper Class • Upper-upper class • About 1%, “old money” • Lower-upper • 2-4%, nouveau riche, .com millionaires. • Sir Kenneth Thompson Canada’s richest man (16.4 billion 2001)

18. Classes in Canada: Middle Class • 40 – 50% of population • Considerable racial and ethnic diversity • Upper-middle: upper managerial or professional fields ($100k +) • middle-middle class. ($50-$100,000) • Lower-middle: middle management, white-collar and highly skilled blue-collar. (< $50,000)

19. Classes in Canada: Working Class • 1/3 of the population. • Lower incomes than middle-class. • No accumulated wealth. • Less personal satisfaction in jobs.

20. Classes in Canada: Lower Class • 20% of population • Social assistance and working poor • Revolving door of poverty • Seasonal, part-time workers, minimum wage earners.

21. The Importance of Class What sort of things does social class affect • Lifestyles and Interests • Tastes • Language • Self Image • Values • Political orientation • Access to such resources as education, health care, housing and consumer goods. • How long you will live & how healthy you will be I.e. Consumption behaviour who spends how much and on what

22. Dress: white collar vs. blue collar • Form of recreation: upper-class people are expected to play golf rather than shoot pool down at the pool hall - but they can do it at home. • Residential location: upper-class people do not ordinarily live in slums • Material Possessions: Kind of car: Rolex watch, how many bathrooms a house has

23. How Much Money Will Be Spent How Money Will Be Spent Vuitton  Credit Card Holder $96.00 Celine Boogie Bag $990

24. Where it will be spent

25. Singapore Airlines (SIA) is planning to offer a first and business-class only flight to the United States in 2005. A first for Asia, SIA will be the second major airline in the world to go all-business class: about a year ago, Swiss PrivatAir started 'no coach' flights between Dusseldorf and Newark, on behalf of Lufthansa.

26. How Do the Lower and Upper Classes Differ in Their Consumption Tastes? Lower classes generally focus on more immediate and more utilitarian needs Upper classes are often likely to approach consumption from a more aesthetic perspective

27. Ads targeted to particular social classes

28. Marketing Implications Your company, XYZ corp., manufactures inexpensive furniture and has targeted the less well off. In an effort to upgrade your image the company has decided to target higher-class consumers. What will the marketing implications be on the following. • Product design, choices and development • Distribution • Price • Advertising and other marketing communications

29. What are Status Symbols? Conspicuously consumed goods which are used to provide evidence of wealth Why do some people feel the need for status symbols? • motivation for the purchase and display of products is not to enjoy them but rather to let others know that we can afford them • Anonymity exacerbates the need for uniqueness. If most people are unknown in public, status cannot be conveyed by reputation

30. The Sony VGN-A190 Vaio laptop computer “Take a look at this status symbol” “Wow you're going to attract attention opening this in public…” • 17" Widescreen LCD display, 512MB SDRAM expandable to 2GB, 400MHz FSB, 80GB Hard Drive, 4x DVD Writer - up to DVD-R $2400 US

31. Status SymbolsExamples

33. When consumers deliberately mock a trend by carefully selecting products and consumption patterns that are not the current fashion or style. Paper Denim Retro Torn Jeans $140.00 Parody Display

34. When too many others use or possess a status symbol such that it loses much of its former power Fraudulent Symbolism

35. SUBCULTURES

36. What is a Subculture? A distinct cultural group that exists as an identifiable segment within a larger, more complex society/culture How do you distinguish one group from another? • beliefs • Values • Customs • Lifestyles and interests • norms • Language • Insignias • Consumption patterns Every consumer belongs to many subcultures

37. Which region has the highest bubble gum sales? What are some Types of Subcultures in Canada • Ethnic • Age • Religious • Regional

38. What is an Ethnic Subculture? • Possess common cultural and or genetic ties which are identified both by its members and by others as a distinguishable category. • Ethnic identity is a significant component of a consumer’s self concept

39. Whyhas Ethnic marketing become increasingly important to marketers who wish to maintain or increase market share? • Ethnic groups in Canada are growing more than 7 times faster than the general population • Advertising Canada estimated that in 2001 African and Asian populations in Canada represented in excess of $300 billion in purchasing power. • Ethnicity plays an important role in how brands are perceived and purchase decisions made

40. What makes Ethnic Subcultures Different?

41. Immigration in Canada • Canada has one of the world’s most liberal immigration policies and is considered a multicultural or pluralistic society (as opposed to melting pot) • New immigrants tend to cluster together geographically which makes them easy to reach. • Concentrated in major Canadian cities • Bring with them customs, traditions, values, etc. • New immigrants are likely to be Asian

42. Population reporting at least one Ethnic Origin other than British, French or Canadian, 1986, 1991 and 1996 Censuses

43. Who are they and where are they?

45. Percentage of Visible Minority Population by All Age Groups, for Canada, Provinces, Territories and selected Census Metropolitan Areas, 1996 Census

46. Visible Minority Population for Provinces and Territories 1996 Census

47. Visible Minority Population in selected Census Metropolitan, 1996 Census

48. Percentage of the Visible Minority Population Aged 0 to 24, for Canada, Provinces, Territories and selected Census Metropolitan Areas, 1996 Census

49. Asian Canadians • Asian Canadians are the Fastest Growing Minority Group in Canada • Small, Diverse, Growing • Above Average Income • ($2000/yr more) • Native Language Print Media • Education Oriented • College Graduation Rate is Twice That of Whites • tend to be more brand and price conscious • Tend to be early adapters of new technology • .

50. Reaching the Asian Canadian Consumer Problems Encountered by Canadian Marketers • Translating Advertising Messages Into Asian Media • Overlooked Complex Differences Among Asian Subcultures • Lack of Media Available to Reach Asian Canadians • Been Insensitive to Cultural Practices A British ad for Tennent’s beer marketed to the East Asian community