Chapter 12 Copyright © 2015 Pearson Education

Chapter 12 Learning Objectives 12.1 To understand the subcultures within the United States and their relationships to American culture. 12.2 To understand the influence of nationality and ethnicity subcultures on consumer behavior. 12.3 To understand the impact of religious affiliations on consumer behavior. A subculture is a group that shares certain beliefs, values, and customs and exists within a larger society. A subculture can stem from a person’s ethnicity, religion, geographic location, age, or gender.

Chapter 12 Learning Objectives 12.4 To understand the influence of regional characteristics on consumer behavior. 12.5 To understand age and generational influences on consumer behavior. 12.6 To understand the influence of gender on consumer behavior.

Opening Vignette Savvy companies have been adapting their products to the specific needs of older persons. For example, Kohler—a marketer of bathroom and kitchen products—introduced Elevance—a line of products designed to provide greater safety and independence (Figure 12.1).

Learning Objective 12.1 12.1 To understand the subcultures within the United States and their relationships to American culture. Subcultures are based on sociocultural and demographic variables, such as nationality, religion, geographic locality, ethnicity, age, and gender. When marketers single out a particular subculture that they wish to target, they must often modify the product to better meet the needs of the targeted consumers and also change the marketing message to suit the subculture’s values and tastes.

Subculture A distinct cultural group that exists as an identifiable segment within a larger, more complex society. A subculture has beliefs, values, and customers that set them apart from the other members of the same society.

Society’s Cultural Profile Two elements: Unique beliefs, values and customs of specific subcultures Central or core cultural values and customs shared by most of the population, regardless of subcultural memberships A society’s cultural profile includes two elements: (1) the unique beliefs, values, and customs of specific subcultures; and (2) the central or core cultural values and customs that are shared by most of the population, regardless of specific subcultural memberships. Figure 12.2 presents a model of the relationship between two subcultural groups (Hispanic Americans and Asian Americans) and the larger or “more general” culture. As the figure shows, each subculture has its own unique traits, yet both groups share the dominant traits of the overall American culture. Most Americans belong to more than one cultural group. Subcultural analysis enables marketers to identify the size of subculture segments, but subcultures are dynamic so analysis is ongoing.

Discussion Questions To which subcultures do you belong? How does it affect your consumer purchases? Perhaps you belong to lifestyle, age, religious or ethnic subcultures. Do these affect your grocery decisions, for instance?

Learning Objective 12.2 12.2 To understand the influence of nationality and ethnicity subcultures on consumer behavior. America’s immigrants brought with them cultural values and lifestyles that blended into the American culture (i.e., the “melting pot” concept). Each cultural ancestry has blended, to some extent, into America’s diversity, which many believe to be the country’s key strength.

Latino (Hispanic) Consumers Growing population (30% of the U.S. population by 2050; 133 million) Purchasing power of $1.2 trillion in 2011 Young with large families 77% of Latino Americans live in 7 states 12 distinct Hispanic subgroups Loyal to well-established brands and smaller stores Hispanic Americans are younger: In 2006, when almost 34% of Hispanics were under 18 years of age, only 25% of the U.S. population was under 18. The median age for Hispanics is 27 years of age, whereas the median age for all of America is 36 years. Hispanic Americans have larger families, and many live in extended family households consisting of several generations of family members. Hispanic households have more children than black or non-Hispanic American white families that contain children, and spend more time caring for their children. 77% live in the 7 states that have a Hispanic population of 1 million or more (California, Texas, New York, Florida, Illinois, Arizona, and New Jersey). Still further, while Hispanics represented 42% of New Mexico’s total population, the highest percentage of any state, some counties in North Carolina, Georgia, Iowa, Arkansas, Minnesota, and Nebraska are between 6 and 25% Hispanic. There are 12 distinct Hispanic subgroups - The three largest Hispanic subcultural groups are Mexican Americans (about 67% of America’s Latinos), Puerto Ricans (8%), and Cubans (4%). Hispanic consumers have a strong preference for well-established brands, and traditionally prefer to shop at smaller stores. However, as Hispanics acculturate, they become less brand loyal and shop differently than they used to.

Targeting Hispanic Consumers The ad appeals to the unique identity and ancestry of Hispanics and creates a bond between the legacy of Jeep and the Hispanic subculture.

African American Consumers Purchasing power of $1 trillion Young – > 50% less than 35 years old Prefer leading brands over private-label brands/ brand loyal Spend more then other segments on hair, clothing and telephone services Some interesting consumption patterns include a preference for brand names and more spending on hair care, telephone services and clothing than other segments. Because of the importance of “black media” to African American consumers, many marketers supplement their general advertising expenditures with ads placed in magazines, newspapers, and other media directed specifically to African Americans.

Asian American Consumers Fastest growing racial segment Diverse group including 6 major ethnicities: Chinese, Filipino, Indian, Vietnamese, Korean, and Japanese 95% live in metropolitan areas Business ownership and educational attainment are high The Asian market is a challenge for marketers because it is so diverse and there are so many languages spoken. It is hard to determine whether to run an ad to this target in their native language or in English.

TV Viewing Habits by Ethnicity Marketers must take into account ethnicities’ media usage patterns. One study showed discovered pronounced differences in TV viewing.

Product Usage by Segment Table 12.1 indicates that there are significant differences among Anglo-white, African American, and Hispanic American consumers in the purchase, ownership, and use of several product categories. These findings support the value of using nationality and ethnicity as segmentation bases.

Learning Objective 12.3 12.3 To understand the impact of religious affiliations on consumer behavior. The United States reportedly has more than 200 different organized religious affiliations (or subcultures). Of this number, Protestant denominations, Roman Catholicism, Islam, and Judaism are the principal organized religious faiths. The members of all these religious groups at times are make purchase decisions that are influenced by their religious identity. Commonly, consumer behavior is directly affected by religion in terms of products that are symbolically and ritualistically associated with the celebration of various religious holidays.

Religion and Consumer Behavior Born-again Christians – fastest-growing loyal to brands that support their causes/views Jewish consumers – dietary laws Born-again Christians are the fastest-growing religious affiliation in America (they make up about 72 million of the 235 million Christians in the United States). From a marketer’s perspective, born-again Christians are fiercely loyal to a brand that supports their causes and viewpoint. A study of Jewish consumers found no significant differences with respect to brand loyalty and word-of-mouth between American Jews and non-Jews. Religious requirements or practices do, however, sometimes take on an expanded meaning. The U and K marks on food packaging are symbols that the food meets Jewish dietary laws.

Learning Objective 12.4 12.4 To understand the influence of regional characteristics on consumer behavior. The United States is a large country, one that includes a wide range of climatic and geographic conditions. Given the country’s size and physical diversity, it is only natural that many Americans have a sense of “regional identification” when comparing and describing themselves to others.

Targeting Urban Consumers New York – Highest purchase/usage of frozen yogurt and catalog/Internet orders Boston – Highest purchase/usage of frozen pizza Chicago – Highest purchase/usage of energy drinks and board games Atlanta – Highest purchase/usage of mouthwash San Francisco – Highest purchase/usage of massage and highest recycling Los Angeles – Highest purchase/usage of frozen yogurt 1. New York: • Lowest purchase/usage of energy drinks • Highest purchase/usage of frozen yogurt • New York metropolitan area ranked first in ordering anything from catalog, mail order, phone, and use of Internet for shopping 2. Boston: • Lowest purchase/usage of massage past six months • Highest purchase/usage of frozen pizza • Boston metropolitan area ranked seventh terms of ordering anything from catalog, mail order, phone, and Internet 3. Chicago: • Not the lowest in any of the categories examined • Highest purchase/usage of energy drinks, board games, making a speech • Chicago metropolitan area ranked fourth in terms of ordering anything from catalog, mail order, phone, and Internet 4. Atlanta: • Lowest purchase/usage of adult education courses • Highest purchase/usage of mouthwash • Atlanta metropolitan area ranked sixth in terms of ordering anything from catalog, mail order, phone, and Internet 5. San Francisco: • Lowest purchase/usage of board games and video games • Highest purchase/usage of massage in past six months; recycle products • San Francisco metropolitan area ranked seventh in terms of ordering anything from catalog, mail order, phone, and Internet 6. Los Angeles: • Los Angeles metropolitan area ranked ninth in terms of ordering anything from catalog, mail order, phone, and Internet A national brand is a brand that is available in all fifty states, although the market shares of most brands vary among geographic regions.

Learning Objective 12.5 12.5 To understand age and generational influences on consumer behavior. Each generation is a distinct subculture and market segment, because its members have unique priorities and purchase patterns.

Generational Subcultures The chapter discusses the following age (or generational) subcultures: Generation Z, Generation Y, Generation X, baby boomers, and older Americans.

Generation Z Also known as Digital Natives or the Homeland Generation Highly connected Most are children of Generation X Most diverse American generation ever Expected to earn less than their parents Cohort of people born from 1997 to the present day. Members of Gen Z have had lifelong exposure to and use of communication and media technology like the Internet, instant messaging, text messaging, MP3 players, and mobile phones. Generally, Gen Z are the children of Generation X, although some of the oldest may be the children of baby boomers; the youngest members can also be children of Generation Y. Gen Z is the most diverse American generation ever, consisting of 54% Caucasian, 24% Hispanic, 14% African American, 4% Asian, and 4% mixed race/other. Experts expect Gen Z members to be the first generation to earn less than their parents, because they are growing up in a period of economic decline.

Teens and Tweens Fickle customers and changing lifestyles Teens Tweens Aged 13-17 More independent in their behavior Alienated by marketers who talk down to them Surf the Internet, create content Aged 8-12 Share many traits with younger siblings Families important to tweens in terms of social lives Generation Z consists of two markets: teens are those aged 13 to 17 and tweens are aged 8 to 12. Marketing to teens and tweens means targeting lucrative, elusive, and fickle customers. Teens are more independent in their behavior and less reliant on their parents than tweens are for day-to-day decisions. Teens are beginning to develop the characteristics and behaviors of adulthood, while tweens still share many traits with their younger siblings. Families are more important to tweens in terms of their social lives as well. Some marketers have alienated them, most often by talking down to them. Teens and tweens like companies whose messages are tailored directly to them. Marketers who effectively tailor products and brands to the needs and desires of this target market will succeed in making them customers. Tweens tend to be more brand loyal and teens more brand skeptical. Technology is the center of both groups’ lives and they fully accept technological innovation and obsolescence. Among teens and young adults, surfing the Internet is the primary leisure activity.

Generation Y Embrace technology Confident Want fast product turnover, personally relevant promotions and interactive marketing platforms Generation Y (Echo Boomers, Millennials) are people born between 1980 and 1996. However, some include people born in the late 1970s and late 1990s in this cohort. Gen Y members grew up with technology and embraced it. They are more confident than other generations were at their age, because of growing up in child-centric households, a youth-oriented society, and the American emphasis on self-esteem. Many want to design their own products, get involved with messaging through their own networks, and rate products. Figure 12.11 shows the primary online activities of Gen Y.

Six Segments of Millenials Hip-ennials Millenial Moms Anti-Millenials Gadget Gurus Clean and Green Millenials Old-School Millenials 1. Hip-ennials: They believe that they can have an impact on the world and make it better. They are aware of what’s going on globally, give to charity, and search for information regularly. Although they read social media content, they do not produce it. 2. Millennial Moms: They enjoy traveling, getting in shape, and treating their “children” as they were treated (pampered). They are confident, very family oriented, and proficient in technology. They participate in social networks online and are very attached to their peer groups. 3. Anti-Millennials: They care mostly about their businesses and their families, in contravention of the Millennial “norms.” They do not buy green products like most Millennials do. They seek comfort instead of change, whereas most Millennials embrace different activities to make life more interesting. 4. Gadget Gurus: They are always looking for the next big gadgets, usually from Apple, and will stand in line to get them first. They are highly egotistical, wired, free spirited, and laid back. They often create content online and tweet continuously. Gadget Gurus are male dominated and single because they live in their own world. 5. Clean and Green Millennials: They take care of themselves and support others. They are driven by social causes, ecological issues, philanthropy, and positive outlooks on life. 6. Old-School Millennials: They did not adopt many of the typical Millennial rituals, like updating their Facebook pages during meals. They would rather meet people in person than online or through text, and read books instead of blogs. They are independent and self-directed, whereas most Millennials wants mentors and constant feedback from their managers.

Generation X Spending power > $1 trillion Cynical; do not like to be singled out/ marketed to Do not like labels Purchase prestigious and pricey brands Oppose insincerity Generation X (Xers) consists of about 50 million individuals born between 1965 and 1979. As consumers, they represent a market with a spending power in excess of $1 trillion. They do not like labels, are cynical, and generally do not want to be singled out and marketed to. Unlike their parents, the baby boomers, they are in no rush to marry, start a family, or work excessive hours to earn high salaries. For Generation X consumers, job satisfaction is typically more important than salary, they do not neglect their families while striving to secure higher salaries and career advancement, and they are not loyal to employers. Members of Generation X are sophisticated consumers. Although many claim that they are not materialistic, they purchase prestigious and pricey brands, but not necessarily designer labels. They want to be recognized by marketers as a group in their own right and not as mini–baby boomers. Therefore, advertisements targeted to this audience must focus on their style in music, fashions, and language. One key for marketers appears to be sincerity. Xers are not against advertising, but strongly oppose insincerity. Baby boomer media do not work for Generation X members. They grew-up with the various advantages of computer technology and most specifically with a number of ways to search for information of importance to the user. Spending time online comes naturally to their psyches. They see computers and cell phones and technology as “friendly tools” for making contact and gaining knowledge.

Baby Boomers > 40% of the U.S. adult population Consumption oriented and influential 65-75% of disposable income in the U.S. Want to look and feel young Yuppies = status brand consumers The term Baby Boomers refers 78 million people that were born between 1946 and 1964. They make up 50% of all those in professional and managerial occupations, they frequently make similar purchase decisions that influence entire categories of consumer goods, the segment includes trendsetting, upwardly mobile professionals who have influenced the consumer tastes of all age segments, they account for nearly half of consumer packaged goods spending and control between 65% and 75% of the disposable income in the United States. They want to look and feel young. They enjoy buying for themselves, for their residences, and for others. Yuppies – the younger segment among the baby boomers that includes urban, upwardly mobile persons -- are the most sought-after subgroup of baby boomers. They are well off financially, well educated, and in professional or managerial careers. Many buy status brand names, such as BMWs or Lexus hybrid cars, Prada shoes and clothing, Rolex watches, expensive adventurous vacations, and scores of pricey gadgets.

Postretirement Segments As many yuppies are maturing, they are shifting their attention away from expensive status-type possessions to travel, physical fitness, planning for second careers, or some other form of new life directions. People’s outlooks about retiring are related to their levels of fulfillment during their professional careers, their accumulated financial resources, and their health status. Some researchers examine the relationship between baby boomers’ job satisfaction and attitudes toward retirement, as in the segmentation results in Table 12.2.

Older Consumers Cognitive age Chronological age categories Feel age Look age Do age Interest age Chronological age categories New-age elderly Projecting ahead to the year 2050, it is anticipated that more than 88 million Americans (20% of the total population) will be 65 years of age or older. Driving the growth of the elderly population are three factors: the declining birthrate, the aging of the huge baby boomer segment, and improved medical diagnoses and treatment. In the United States, “old age” is officially assumed to begin with a person’s sixty-fifth birthday (or when the individual qualifies for full Social Security and Medicare). However, people over age 60 view themselves as being 15 years younger than their chronological age. Cognitive age is a person’s perception of how old he or she is. Marketers realize that people’s perceptions of their ages are more important in determining behavior than their chronological ages. One study identified several dimensions of cognitive age: 1. Feel Age —how old one feels. 2. Look Age —how old one looks. 3. Do Age —how involved a person is in activities favored by his or her age group cohort. 4. Interest Age —how similar a person’s interests are to those of others in his or her age group. The results indicated that the majority of older consumers perceived themselves as younger (cognitive age) than their chronological age. For marketers, these findings underscore the importance of looking beyond chronological age to perceived or cognitive age when appealing to mature consumers and to the possibility that cognitive age might be used to segment the mature market. Older consumers are not a homogeneous subcultural group. 1. The young-old – age 65 to 74. 2. The old – age 75 to 84. 3. The old-old – age 85 and older. A study of elderly consumers’ “quality-of-life orientation” identified a distinct group of older persons, which the researchers named the “new-age elderly.” The new-age elderly are individuals who feel, think, and do according to a cognitive age that is younger than their chronological age. They retire later than other elderly and feel more in control of their lives. They are self-confident in making consumer decisions and view themselves as more knowledgeable and alert consumers. Many are “selectively innovative” and only adopt innovations that truly enhance their lives.

Marketing to Older Consumers Promotional appeals Promote the right products Use the right appeals Focus on the future Use emotional appeals Older people and technology Seniors often want to be identified not for what they did in the past but by what they would personally like to accomplish in the future. They have a strong commitment to remaining functionally young. Research has found that when considering how to advertise to seniors, older adults have a higher liking for and better recall of emotional appeals (younger consumers have a higher liking for and recall of rational appeals). Older Internet users (aged 65 and older) are the fastest-growing demographic group with respect to the U.S. Internet market. Having a computer and modem “empowers” older consumers, allowing them to regain some of the control that was lost due to the physical and/or social deterioration in their lives.

Discussion Question How might the three senior segments differ in their consumption of food products? How might a marketer of a food product market differently to the three subgroups? How might cognitive age affect the consumption of food products? Explain. To answer this question, visualize a grocery store and the variety of food categories. Where might you find the three groups of seniors? What about dining out? What are their interests? For cognitive age, consider the different dimensions of cognitive age and how feeling younger might affect consumption patterns.

Learning Objective 12.6 12.6 To understand the influence of gender on consumer behavior. Women and men respond differently to messages and products. Sex roles affect consumption behavior.

Men vs. Women Men Women Superior affect and purchase intentions as a result of ads that are comparative, simple and attribute-oriented. Less loyal to local merchants than female counterparts. Superior affect and purchase intentions as a result of ads that are verbal, harmonious, complex and category oriented. Shopping motives Uniqueness Assortment seeking Social interaction Browsing Women show superior affect and purchase intention toward ads that are verbal, harmonious, complex, and category oriented. In contrast, men exhibit superior affect and purchase intention toward ads that are comparative, simple, and attribute oriented. Female shoppers tend to be more prone to such shopping motives as uniqueness and assortment seeking, social interaction, and browsing. Women are more loyal to local merchants than their male counterparts. Women control a substantial portion of the a household’s expenditures and the family’s spending. Because of this, women are frequently a household’s “chief purchasing officer” or “chief financial officer.”

Role of Gender Consumer products and sex roles Depictions of women in media and advertising Working women Stay-at-home housewives Plan-to-work housewives Just-a-job working women Career-oriented working women Within every society, it is quite common to find products that are either exclusively or strongly associated with the members of one sex. Many women feel that the media and advertising create an expectation of beauty that most women can never achieve. The segments of working women are somewhat self-explanatory, but there is an important distinction between “just-a-job” and “career-oriented” working women. “Just-a-job” women” work because the family requires the additional income, whereas “career-oriented” women are driven more by a need to achieve and succeed in their chosen careers. Working women have also been segmented as: THE INDIE (INDEPENDENT) WOMAN (Single, 28 to 34 years old, with a median income of $33,200 and college degree; busy building her career and loves it; outs off marriage and having kinds because she does not want to have obligations to others; likes to work late, go out late, and come and go as she pleases; aspires to buy luxury brands across categories like travel, clothes, jewelry, and automobiles (e.g., Chanel, Prada, Ritz-Carlton and BMW) but loves to shop for bargains; considers virtual image as important as her real-world one; heavy social media user, mostly via mobile devices) THE MOM ACHIEVER (Working mother, 35 to 45 years old, with a median income of $75,000; highly driven, has advanced degrees, and earned executive jobs; applies her professional knowledge and ethics to being a mom; has a hard time leaving her job behind; would choose a 50% pay raise over 50% more time with her kids; spends a lot of money on herself, mostly on prestige beauty products and services; spends little time on research before buying high-end products, but is also thrifty and looks for discount websites) THE ALPHA GODDESS (Working mother, 55-to-64-year-old, with a median income of $69,000; knows what she wants and has the resources to get it; loves to lavish gifts on her family, but her top purchases are for herself (e.g., luxury cars, travel, prescription drugs); buys expensive fragrances and is influenced by celebrity endorsements; confident in her relationships; receptive to new technologies; watches more TV than other age groups, but is not a captive audience; unlikely to compromise on either love or sexual attractiveness in order to have a committed relationship.

Copyright © 2015 Pearson Education All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2015 Pearson Education