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Demographics

Demographics. Demographic variables Social stratification in the U.S. in other cultures Measurement of social class. Definition . Demographics : the description of a population in terms its size, distribution, and structure. Population size: number of individuals distribution

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Demographics

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  1. Demographics • Demographic variables • Social stratification • in the U.S. • in other cultures • Measurement of social class

  2. Definition • Demographics: the description of a population in terms its size, distribution, and structure

  3. Population size: number of individuals distribution across a geographic region rural, urban, or suburban Structure age economic stratification occupational distribution status/social class Issues in Demographics

  4. Demographics helps • Understand current markets--demand for products explained in terms of personal characteristics • Predict future markets

  5. U.S. growing, fueled by immigration rather than birthrates (implications) shifting (away from Midwest toward South, Southwest) highly mobile Germany declining (large incentives given to have children) traditionally static (immobile) but more mobile now due to unification of East and West Germany opportunities with EC Population

  6. Age • “Graying” countries • Germany, Japan, U.S. • High birthrate areas • Africa, parts of Asia, Latin America • Age group vs. demand for products (refer to section on subculture)

  7. Other Demographic Variables • Occupation • Education • Income • Ethnic group (refer to section on subculture) • Religious groups • Geographic region

  8. In the U.S. often denied not clearly defined but clear differences in individual status income power/privilege In India traditionally defined by rigid caste (now officially outlawed but still in practice) movement traditionally not permitted In Britain class differences not legally spelled out, but accepted by tradition class “consciousness” some upward movement possible Social Class

  9. “At level’’--accurately portray class standing Positioning strategies Upward Pull (opportunity to enjoy pleasures of higher class) Appeal to newly wealthy (ability to enjoy better things in life now) Implications for Marketing Strategy

  10. Measuring Social Status--not an easy task • Single item measures • education • occupation/licensure • income • Multi-item indices • e.g., U.S. Census: occupation, income, education • Other issues--e.g., club memberships, family relationships

  11. SEGMENTATION • Bases for segmentation • Determining which segments exist • Choosing segments to serve • Serving chosen segments • positioning • promotion • product features • Segmentation in direct marketing • Segmentation exercise

  12. Requirements for Segment Viability • Group identity (similarity within, differences between, segments) • Systematic behaviors • Marketing mix efficiency potential

  13. Three “Levels” of Segmentation • Personal characteristics • lifestyle • personality • Benefits sought • attributes • results • Behavior • approach to purchase • variety seeking/loyalty Note: Some of these approaches overlap. It is not essential to be dogmatic in distinguishing.

  14. Level 1:Personal Characteristics • Demographics • age, sex, ethnic group • geographic region • education, occupation, social class • Media exposure • Lifestyle/Psychographics

  15. Lifestyles and Psychographics: Examples • Activities, Interests, and Opinions (AIO) • VALS, VALS2 • Residence based (e.g., PRIZM)

  16. The PRIZM System • 60 consumer measures within zip code area • 36,000 zip code areas • Statistical methods used to find areas containing relatively consumers ---> 60 segments

  17. Level 2Benefits Sought • Based on • differences in arbitrary tastes (e.g., cola vs. non-cola drink) • ideal point • tradeoffs (e.g., taste vs. calories) • usage situation (e.g., coffee for camping (instant) vs. higher quality for home brewing) A consumer in search of benefits.

  18. Level 3Behavior • Attitude • Extent of usage • Shopping approach • price elasticity • deal-proneness • brand loyalty • sources of influence on brand choice: • advertising • sales person • store assortment What do you mean you won’t give me a discount? Then I’ll go to the competitors!

  19. Means of Segmentation in Direct Marketing • Income • Past purchases • Ethnic surnames • Credit history • Hobbies/interests (magazine subscription lists)

  20. Sources of Info for Direct Marketing Segmentation • Phone books--often contain both names and addresses; yellow pages • State registrations (vehicle, driver’s licenses) • Past purchases (from company or outside) • Professional and school directories • Magazine subscription lists • Credit rating bureaus

  21. Advanced Segmentation Techniques in Direct Marketing • “Merge-Purge” • merge: add lists together; add purchased lists to own customer list • purge: sort of duplicates • special software allows for standardization of addresses (“phonetic” matching possible)

  22. Sources of List Value • Recency • Frequency of purchase • Value of past purchases • Geography (zip code as surrogate for lifestyle) • Gender identifiability

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