Demographics and Psychographics EXAM Review

Sports and Entertainment Marketing Marketing and Strategy Council Rock School District Mr. Sherpinsky Demographics and Psychographics EXAM Review

Demographics • Demographics: The study of characteristics of groups of human beings in terms of statistics. • Objective characteristics of consumers such as age, income, education, sex or occupation. • A demographic is what most marketing activities focus on, as it is easiest to describe.

Psychographics • Psychographic Analysis • A technique that investigates how people live, what interests them, what they like--also called lifestyle analysis because it relies on a number of statements about a person's activities, interests and opinions. (How they “behave”) • Psychographic Segmentation • Dividing markets into segments on the basis of consumer life styles.

Psychographics Psychographic Analysis • A technique that investigates how people live, what interests them, what they like--also called lifestyle analysis because it relies on a number of statements about a person's activities, interests and opinions. (How they “behave”)

Geographics • Geographic segmentation tries to divide markets into different geographical units: these units include: • Regions: Counties or major metropolitan areas • States: perhaps categorized by size, development or membership of geographic region (East v. West, North v. South) • City / Town size: e.g. population within ranges or above a certain level • Population density: e.g. urban, suburban, rural, semi-rural • Climate: e.g. Northern, Southern

Markets • The simplest way to define a market is to think of a market as consisting of all the people or organizations that may have an interest in purchasing a company’s products or services. • In other words, a market comprises all customers who have needs that may be fulfilled by an organization’s offerings.

Marketing Segmentation • Market segmentation is a marketing strategy that involves dividing a broad target market into subsets of consumers who have common needs for the relevant goods and services. • Subsets may be divided by criteria such as age and gender, or other distinctions, such as location or income. • Marketing campaigns can then be designed and implemented to target these specific customer segments.

Lifestyle Analysis • Analyzing consumer lifestyles (psychography) means examining the way people live rather than where they live (geography) or their age, income, or occupation (demography). • Lifestyle analysis is based upon a person's activities, interests and opinions.

Examples of Demo vs. Psycho • Demographic data • SWM, MWF (male / age) • Earn a certain income • Occupation is computers, education, sales or… • Have one child, no child • Graduated college, no college, advanced degree • Psychographic data • Conservative with spending • Value driven rather than price driven • Aversion to debt • Value efficiency and privacy • Early majority but not always a technology optimist

Niche Marketing • A niche marketis the subset of the market on which a specific product is focusing. • So the market niche defines the specific product features aimed at satisfying specific market needs • It is also a smaller market segment. • For example, sports channels like STAR Sports, ESPN, STAR Cricket, and Fox target a niche of sports lovers.

Why Are These Things Useful? Demographics & Psychographics have an important place in marketing research • Increase the effectiveness of a promotional campaign by: • Targeting the appropriate audience • Reaching only those who could or will buy your products • Focusing the message on their needs • Using images, text, and specific messaging to heighten connectivity to consumers • Selecting the appropriate media • Selecting the right method or combination of methods to find our target audience using the least amount of resources

Baby Boomers • What is a Baby Boomer anyway? • The common definition is that people born between 1946 and 1964 are considered "Baby Boomers.“ • Also called, Me Generation, Boomers, Baboo, and Love Generation

Gen-X • Generation X can technically be defined as the generation following the Baby Boomers. • Gen-Xers were born between 1965 & 1977 now ranging in age from 35-47, as of 2012 and judged by characteristics assigned to them by the media. • Also known as the Baby Bust, Slackers, Why me Generation, and Latch-key Generation • The media has singled out America's youth as representative of Gen-X: "underemployed, overeducated, intensely private and unpredictable”

Gen-Y- Millennials/Echo Boomers • Also known as the Millennials or the Echo Boomers, “Why Generation”, Net Generation, Gen Wired, Next Generation, and Nexters • Chiefly the children of baby boomers and new immigrants, a demographic behemoth born roughly between 1977 and 1994, age 18-35, as of 2012 • The Millennials have already shown themselves to be big spenders. • Debt to Income Ratios: 20:1

Gen-Z Gen Z also known as Tweens, Baby Bloomers, and Generation 9/11 • Born after 1994 and are less than 18 years old, as of 2012. • Newest Generation • Not yet fully defined • Oldest of this group is Tweens (11-17)

Psychographics • People’s interests and values • How you spend your time • Lifestyle research • Valuable in establishing market segments • Often influences • Purchases • Housing, Vehicles • Location (Where you choose to live) • Recreation time (What do you do with free time) • Responsible for coffee shops, book stores, sports venues, home décor, and healthcare • Used to develop segments from the mass market

Psychographics When we look at the Psychographics of a consumer, we study the consumers shopping trends based on social and psychological characteristics. Specifically: • Attitudes • Values • Lifestyles

Psychographics • Attitude: How do people feel about certain things… Optimistic vs. Pesimistic White Collar vs. Blue Collar DIY vs. Hiring out help Basic vs. Luxury Debby Downer vs. Sammy Sunshine

Psychographics • Values: How consumers think about certain things… Religion:Religion practiced: Orthodox? Family: Traditional or Untraditional WorkEthic: Live to work or work to live? Food: Organic or Not? Education: What is expected? High School, College, Apprenticeship? Money: Spend, Save, or Invest…

Psychographics • Lifestyle: How consumers live Family: Single, DINKs, Married w/Kids, Empty Nesters Vehicle: Bike, Automobile, Mass Transit Body-types: Athletic, Plastic, Voluptuous, Overweight, Losing that LAST 5 pounds… Vacation: Camping/Mountains, Beach/Shore, Travelers, Amusement Parks, Vegas, Global, Family.

Mass Marketing • Mass marketing is a market coverage strategy in which a firm decides to ignore market segment differences and appeal the whole market with one offer or one strategy. • It attempts to sell a product to a wide audience. • The idea is to broadcast a message that will reach the largest number of people possible. • Traditionally mass marketing has focused on radio, television and newspapers • Opposite of Niche Marketing • Examples: Chewing Gum and Light Bulbs

The Buying Decision Step 6 Purchase is evaluated Step 5 Purchase made Step 4 Decision is made: the best deal is selected Step 3 Product search: various “Places” are investigated Step 2 Set Criteria: new or used? What kind do I want? How much can I spend? Step 1 The dishwasher breaks, creating a Want

Motivational Theories Thorndike’s Law of Effect • States that: Consumers are motivated to buy products that produce positive events and to avoid products that produce negative events • Motivation is affected by how good or how bad a product or service is (Product) but also by (Place) factors such as crowded stores, parking problems, noise, salespeople, etc Pain: economic and emotional Pleasure: economic and emotional Consumer Motivation to purchase

VALS System Primary Motivation • Consumers are inspired by one of three primary motivations: ideals, achievement, and self-expression. • Consumers who are primarily motivated by ideals are guided by knowledge and principles. • Consumers who are primarily motivated by achievement look for products and services that demonstrate success to their peers. • Consumers who are primarily motivated by self-expression desire social or physical activity, variety, and risk.

Behavioral Marketing What Is Behavioral Marketing? • Behavioral marketing targets consumers based on their behavior on Web sites, rather than purely by the content of pages they visit. • Behavioral marketers target consumers by serving ads to predefined segments or categories. These are built with data compiled from clickstream data and IP information. • Example: A user visits several travel category pages on a particular site, for example. She's then served airline ads. In most cases, the ads are served through a run-of-site (ROS) placement. • The user's behavior is the key, not the placement.

Contextual Marketing • Contextual advertising is a form of targeted advertising for advertisements appearing on websites or other media such as browsers. • Advertisements are selected and served by automated systems based on the content displayed to the user. • A contextual advertising system scans the text of a website for keywords and returns advertisements to the webpage based on those keywords

The AIDA Formula • The term and approach are commonly attributed to three (3) basic principles to which an advertisement should conform: • Attract a reader, so that he will look at the advertisement and start to read it; • Interest him, so that he will continue to read it; • Convince him, so that when he has read it he will believe it. • If an advertisement contains these three qualities of success, it is a successful advertisement.

The AIDA Formula • A = Attention: the headline or main image catches the readers' attention and excites them. The headline should either reveal or conceal a common interest. Consider a concern that a large percentage of the target market has and use that as the theme of the headline. • Examples • 1) FARM FRESH EGGS SOLD HERE! • 2) HOW TO BURN OFF BODY FAT, HOUR-BY-HOUR • 3) THE MOST EXPENSIVE MISTAKE OF YOUR LIFE • I = Interest:Interest is created by giving the potential customer multiple benefits that will enhance their life.

The AIDA Formula • D = Desire: Build desire by making the product irresistible. Include things like attractive images, free bonuses, guarantees, endorsements. Build urgency into every offer. • Example: "Order now in the next 72 hours and you will get this free bonus.“ • A = Action: The sales piece must have a call to action. The customer should be invited to buy. The customer should be aware that it is easy for them to buy (as many payment methods as possible).

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Demographics and Psychographics EXAM Review