Physical Distribution What is marketing? Pricing Research Inventory Management Promotion Marketing Activities Branding Sales Physical Distribution Storage Packaging Product development

Consumer Profiling

Who is the market? Why know your target market? Distribution Methods – how to best deliver product Advertising – helps create meaningful messages Product Design – consumers in a target market tend to like similar designs Media – know which media to use for promotions Target Market Entire Market

Consumer Profiles - Demographics “Demographics is the study of obvious characteristics that categorize people.” Age Baby Boomers (born 1946-1963) make up the largest age group in Canada Gender Some products are no longer exclusively marketed to one gender Ex: cars, boxer shorts Family Life Cycle Single, married, kids, blended family Income Level Ethnicity & Culture

Consumer Profiles - Psychographics “Psychographics is a system for measuring consumers’ beliefs, opinions, and interests.” Much more difficult to measure than demographics Religious Beliefs Musical Tastes Lifestyle Attitudes towards health Personality Traits Other Psychological Factors

Consumer Profiles - Geographics Geographics – where consumers live. Urban Consumers Live within the boundaries of the city. They usually live in apartments, condos, or houses with small yards. Spend on cultural events, restaurants, public transportation Suburban Consumers Typically owns a car (is a commuter), owns house with larger yards Spends on household furnishings, BBQs, gardens Rural Customers Often farmers with trucks and extremely large properties.

How frequently does the consumer use the product? Heavy Users: Often most lucrative segment. Example: 30% of bottled water market are heavy users who account for 80% of all bottled water sold. Marketers try to build brand loyalty in this group. Medium & Light Users: Attempt to turn them into Heavy Users with pricing deals, special contests, informative ads. Non-users: Those entering category for the first time (ex: new mothers buying diapers). Those who do not plan on using the products.

Value Equation Total Benefits – Total Costs = Value Example: 1990’s parent deciding to buy a cell phone for a teenager Benefits: emergency aid, ability to contact family, convenience, ability to keep in touch with friends Costs: high monthly monetary costs, high start up costs, safety issues, time wasting Value: Costs outweigh Benefits Result: Not buying the phone!

What changed? Ads in the late 90’s showed teens in a broken down car at night being able to contact their parents only because they had a cell phone. Benefits all of a sudden out weighed the costs.

Consumer Profiles – LEGO Demographics: Young children (12 or younger) Both genders Psychographics: Kids who like: to build things lots of colours to touch things with their hands Geographics: All Geos

Consumer Profiles – Rolex Watches Demographics: Adults (30+) More male oriented Higher income ($75K+) Psychographics: Luxurious lifestyle Businessmen Likely to play golf, tennis or polo Geographics: Urban & Suburban

Consumer Profiles – Mountain Dew Demographics: Teenagers/Young Adults (14-25) Both genders Middle income Psychographics: Extreme lifestyle Creative Outgoing Enjoys punk/rock music Geographics: Urban & Suburban

McDonalds – Who is their target market? 1. Young children who enjoy clowns, small toys and playtowns. 2. Teens/Young adults who are cost conscious. 3. Adults who are cost conscious and are in need of a quick meal. 4. Other/Don’t Know

McDonalds – Young Children

McDonalds – Teens/Young Adults

McDonalds – Cost/Time Conscious Adults

Primary vs. Secondary Markets Primary market is made up of the most likely consumers to buy a specific product. Secondary markets consist of other or occasional consumers. Most of a marketing department’s budget is based on targeting the primary market, although some is spent on secondary markets.

Changes in Consumer Groups Sometimes the target market will change New target market Ex: Manicures for men New uses for products Ex: Orange juice now with more vitamin C