Consumer Behaviour

1
Consumer Behaviour

• Class 11 Income, Social Class and Age
• Dr. John Nadeau
• November 19, 2009

2
Class Outcomes

• Know that our consumer decisions are influenced
  by both personal and social conditions.
• Understand that consumer behaviour often is
  affected by a persons desire to make a statement
  about her social class, or the class to which she
  would like to belong.
• Appreciate that people have many things in common
  with others merely because they are about the
  same age.
• Know that mature consumers will increase in
  importance as a market segment.

3
Consumer Spending and Economic Behaviour

• General economic conditions affect the way we
  allocate our money
• Income patterns
• Standard of living
• Women in workforce
• Education attainment

4
Discretionary Spending

• Discretionary income
• Attitude toward money
• Money success/failure, social acceptability,
  security, love, or freedom

5
Consumer Confidence

• Behavioural economics/economic psychology
• Consumer confidence the extent to which people
  are optimistic or pessimistic about the future
  health of the economy
• Overall savings rate is affected by 3 main
  factors

6
Social Class

• Haves vs. have-nots
• Social class is determined by income, family
  background, and occupation
• Where we occupy in the social structure
  determines how much we spend and how we spend it

7
Social Class Affects..

• Access to Resources
• Taste and Lifestyles

8
Development of Social Class

• Dominance-submission hierarchy
• Pecking order relative standing in society
• Social Stratification
• Social arrangements in which some members get
  more resources than others by virtue of relative
  standing, power, or control in the group

9
Class in Canada
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Discussion

• What consumption differences might you expect to
  observe between a family characterized as
  underprivileged versus one whose income is
  average for its social class?

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The Rise of Mass Class

• Income distribution
• Affordable luxuries within reach of many
  consumers
• Rising incomes decreasing prices
• Marketers cater to mass class with high-quality
  products

12
Social Mobility

• The passage of individuals from one social class
  to another
• Horizontal mobility
• Downward mobility
• Upward mobility

13
Components of Social Class

• Occupational prestige
• Is stable over time and similar across cultures
• Single best indicator of social class
• Income
• Wealth is not distributed evenly across classes
  (top 10 controls 45 of all assets)
• Income per se is not often a good indicator of
  social class its the way money is spent and not
  how much is spent

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How Social Class Affects Purchase Decisions

• World of working class - intimate constricted
• Taste cultures - aesthetic and intellectual
  preferences
• Codes - express and interpret meanings
• Cultural capital - distinctive and socially rare
  tastes and practices

15
Discussion

• Sears, and (to a lesser degree) The Bay have made
  concerted efforts in recent years to upgrade
  their images and appeal to higher-class
  consumers.
• How successful have these efforts been?
• Do you believe this strategy is wise?

16
Targeting the Poor

• Poor people have the same basic needs as everyone
  else
• Staples/food, health care, rent
• On average, residents of poor neighbourhoods must
  travel more to have same access to supermarkets,
  banks, etc.

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Targeting the Rich

• Many marketers try to target affluent, upscale
  markets
• Affluent consumers interests/spending priorities
  are affected by where they got their money, how
  they got it, and how long they have had it
• Old Money vs. Nouveaux Riches

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Status Symbols

• Equate themselves with others
• Conspicuous consumption
• The Trophy Wife

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CBC Video Case Luxury Products

• How do luxury goods differ from other goods?
  Provide some examples.
• Describe the consumer who buys luxury goods?
• Why are luxury goods recession-proof?
• What is the relationship between social class and
  income?

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Age and Consumer Identity

• A consumers age exerts a significant influence
  on his/her identity
• Age cohort (my generation)
• Marketers target specific age cohorts
• Our possessions let us identify with others of a
  certain age/life stage

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The Youth Market

• Echo Boomers and millennials make up 23 of
  Canadian population
• Spend 170 billion a year
• First to grow up with computers in their homes,
  in a 500-channel TV universe
• Multitaskers with cell phones, music downloads,
  IM on Internet
• Most diverse generation ever
• Most raised by single parent and/or working
  mother

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The Youth Market (cont)

• Gen Yers value fitting in/teamwork
• Hold traditional values
• Believe in fitting in
• More upbeat about their lives

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Teen Values, Conflicts, and Desires

• Values - uncertainty, need to belong, finding
  unique identity
• Conflicts
• Autonomy vs. belonging
• Rebellion vs. conformity
• Idealism vs. pragmatism
• Narcissism vs. intimacy
• Desires

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Tweens

• Children aged 9 to 14
• Spend 1.7 billion a year on clothes, CDs, movies
  (feel good products)
• Exhibit characteristics of both children and
  adolescents

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Teens

• Influence decisions on vacations, discretionary
  items and food products
• Teens are more TV savvy
• Marketing rules of engagement

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Big (Wo)Man on Campus

• University/college market is attractive
• University/college students are hard to reach via
  conventional media
• Online advertising is very effective
• Sampler boxes
• Wall media
• Spring break beach promotions

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Discussion

• What are some of the positives and negatives of
  targeting university students?
• Write your answers down on a piece of paper to be
  submitted.

28
Baby Busters Generation X

• Consumers born between 1966 and 1976
• Marketers initially thought that Gen Xers felt
  alienated, cynical, and depressed
• But, desire stable families, save portion of
  income, and view home as expression of
  individuality

29
Baby Boomers

• Consumer born between 1946 and 1966
• Woodstock Generation created revolution in
  style, politics, and consumer attitudes
• Value active and physically fit lifestyle
• Currently in peak earning years
• Feathering their nests
• Food, apparel, and retirement programs
• Baby Boom Echo

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The Mature Market

• Traditionally neglected by marketers
• People are now living longer/healthier lives
• active, interested in life, enthusiastic
  consumers with buying power
• Fastest growing group of Internet users

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Economic Clout of Mature Market

• Impact of mature market on marketplace
• 6.8 million people aged 55 and older
• Second fastest growing market segment in Canada
• Most brand loyal of any age group
• Economic health of mature market is good and
  getting better
• Exercise facilities, cruises/tourism, cosmetic
  surgery/skin treatments, how-to books/classes
• Most advertising campaigns dont recognize mature
  market

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Discussion

• Is it practical to assume that people age 55
  years and older constitute one large consumer
  market?
• What are some important variables to keep in mind
  when tailoring market strategies to mature
  consumers?

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Segmenting the Mature Market - Gerontographics
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Marketing to Mature Consumers

• Most mature consumers lead more active,
  multidimensional lives than we assume
• Mature consumers are finished with many financial
  obligations
• Marketers must provide more welcoming advertising
  for mature market

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Mature Marketing Messages

• Basic guidelines for effective advertising
• Abundance of information
• Simple language
• Clear, bright pictures
• Use action to attract attention
• Speak clearly, and keep word count low
• Single sales message, emphasize brand extensions
  (familiarity)
• Avoid extraneous stimuli (excessive pictures)

36
CBC Video Case Demographics

• How do Baby Boomers and Generation X differ in
  buying power and purchasing behaviour? What
  underlies these differences?
• Under Ettenbergs scenario, which retail sectors
  will be the winners and losers? Why?

37
Research Report Presentation

• 10 minutes plus questions
• Present highlights of your research results and
  design
• Presentation skills

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Next Class

• In class presentations
• Reports due at the beginning of class