1. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.

2. Roger D. Blackwell Paul W. Miniard James F. Engel Consumer Behavior Requests for permission to make copies of any part of the work should be mailed to the following address: Permissions Department, Thomson Business and Economics 5109 Natorp Boulevard Mason, OH 45040 800–423–0563

3. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Demographics, Psychographics, and Personality CHAPTER 7

4. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Analyzing and Predicting Consumer Behavior Demographics Personality Personal Values Lifestyles

5. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Analyzing and Predicting Consumer Behavior Demographics is the size, structure, and distribution of a population

6. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Analyzing and Predicting Consumer Behavior Demographics is the size, structure, and distribution of a population Marketers use demographic analysis as market segment descriptors and in trend analysis

7. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Demographic Analysis to Predict Consumer Behavior Consumer analysts use demo- graphic trends to predict changes in demand for and consumption of specific products and services

8. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Demographic Analysis to Predict Consumer Behavior Consumer analysts use demo- graphic trends to predict changes in demand for and consumption of specific products and services Demographic analysis provides information for social policy

9. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Demographic Analysis and Social Policy Demographics used in analyzing policy questions related to the aggregate performance of marketing in society (macromarketing)

10. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Demographic Analysis to Predict Consumer Behavior Consumer analysts use demo- graphic trends to predict changes in demand for and consumption of specific products and services Demographic analysis provides information for social policy Industrial demand is ultimately derived from consumer demand

11. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Demographic and Industrial Demand Analysis of demographic trends is important for industrial and business-to-business marketing In an industrial firm, you must understand not only the customers’ minds, but also the minds of the customers’ customers

12. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Demographic Analysis to Predict Consumer Behavior Demographics Changing Structure of Markets Geographic Factors Economic Resources Global Markets

13. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Changing Structure of Consumer Markets Market analysis requires information about people with needs ability to buy willingness to buy authority to buy

14. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Changing Structure of Consumer Markets How many people will there be? birthrate natural increase fertility rate total fertility rate population momentum

15. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Changing Structure of Consumer Markets Birthrate: number of live births per 1,000 population in a given year Natural increase: surplus of births over death in a given period Fertility rate: number of live births per 1,000 women of childbearing age (15 to 44 years)

16. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Changing Structure of Consumer Markets Total fertility rate: average number of children that would be born alive to a woman during her lifetime if she were to pass through all of her childbearing years conforming to age-specific fertility rates of a given year

17. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Changing Structure of Consumer Markets Population momentum: future growth of any population will be influenced by its present age distribution

18. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Changing Structure of Consumer Markets Factors affecting birthrates: Age distribution of population Family structure Social attitudes toward family/children Technology

19. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Changing Structure of Consumer Markets Factors affecting birthrates: Age distribution of population Family structure Social attitudes toward family/children Technology Increasing life expectancy Immigration represents about 30% of annual growth in United States

20. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. U.S. Population Projections

21. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Changing U.S. Age Distribution Changes in age distribution affects the types of products and services that will be bought and consumed in the future Cohort analysis is fundamental to understanding changing consumer markets A cohort is any group of individuals linked as a group in some way

22. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Changing U.S. Age Distribution The key to cohort analysis is examining the influences that are shared by most people in a specific group Ultimately, these influences affect consumer decision processes and the types of products, brands, and retailers consumers prefer when responding to a firm’s marketing strategy

23. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Children As Consumers Projected increase in number of young children between 2000 and 2010

24. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Children As Consumers Projected increase in number of young children between 2000 and 2010 The importance of children as consumers increases even more, with the higher proportion of first- order babies generating higher demand for quality products and services

25. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Children As Consumers Most parents do most of the buying Children often involved in family purchasing decisions Children often have their own ability to buy

26. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Generation Y Born in the 1980s and early 1990s with 72 million members Greater need for peer acceptance, which often guides product and brand choice More likely to switch brands quicker than other segments Teens like the social aspects of shopping with friends

27. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Appealing to Generation Y

28. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Generation X (Young Adults) Segment of 25-to-34 year olds is declining but will have a slight increase with the inclusion of older Gen Y consumers Need to buy products to set up households and for young children With many needs and greater financial restraints, they often shop at value-oriented retailers

29. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Baby Boomers or Muppies This group (45 to 64 years) is projected to grow by 19 million by 2010 Good market for luxury travel, spas, health clubs, cosmetics, salons, diet plans foods, and health foods Group represents the greatest share of the workforce, the greatest share of income, and the greatest share of voting power, and political influence

30. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Young Again Market Also referred to as mature market, seniors, and elderly These segments are expected to grow substantially Despite advanced chronologic age, many in this segment feel, think, and buy young

31. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Young Again Market Cognitive age: the age one perceives one’s self to be Cognitive age is measured in terms of how people feel and act, express interests, and perceive their looks Can be used with chronologic age to better target segments, create more effective content, and select the most efficient media channels

32. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Young Again Market Important segmentation variables for this group include health, activity level, discretionary time, engagement in society, and gender Communicating with this segment often requires alteration of traditional messages and materials - larger type and bright colors - newspapers and AM radio - sensitive to revealing their age

33. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Macromarketing to an Aging Population The aging populations of the United States, Japan, Canada, and Europe will have enormous effects on macromarketing and social policy Younger consumers may have considerably less financial resources at their disposal due to future contributions to Social Security and Medicare

34. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Macromarketing to an Aging Population One solution to this problem includes increasing the age at which benefits begin, thus changing the age at which people and organizations expect to retire Quasi-retirement is another option where more experienced workers fill in for younger workers during vacations, sabbaticals, training, or maternity leaves

35. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Demographic Analysis to Predict Consumer Behavior Demographics Age Structure of Markets Geographic Factors Economic Resources Global Markets

36. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Demographic Analysis to Predict Consumer Behavior Demographics Age Structure of Markets Geographic Factors Economic Resources Global Markets

37. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Changing Geography of Demand Geodemography, refers to where people live, how they earn and spend their money, and other socioeconomic factors

38. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Changing Geography of Demand Geodemography, refers to where people live, how they earn and spend their money, and other socioeconomic factors The study of demand related to geographic areas assumes that people who live in proximity to one another also share similar consumption patterns and preferences Cities are the most important unit of analysis in most marketing plans

39. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Changing Geography of Demand Metropolitan statistical area (MSA): a free-standing metropolitan area surrounded by non-metropolitan counties and not closely related to other metropolitan areas Primary MSA (PMSA): metropolitan area closely related to another city Consolidated MSA (CMSA): a grouping of closely related PMSAs

40. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Changing Geography of Demand The greatest gains in population are expected in California, Texas and Florida These states are considered prime candidates for new stores compared to other states where populations may be declining Growth rate may be deceptive unless the size of the population is also taken into account Geographic variables affect many components of a firm’s marketing strategy

41. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Demographic Analysis to Predict Consumer Behavior Demographics Age Structure of Markets Geographic Factors Economic Resources Global Markets

42. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Economic Resources The ability to buy, typically measured by income and wealth

43. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Economic Resources Income: money from wages and salaries as well as interest and welfare payments

44. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Economic Resources What consumers think will happen in the future (consumer confidence) heavily influences consumption Influences whether consumers will increase their debt or defer spending to pay off debt Measures of consumer confidence are important in making decisions about inventory levels, staffing, or promotional budgets

45. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Economic Resources Income: money from wages and salaries as well as interest and welfare payments Wealth: a measure of a family’s net worth or assets in things such as bank accounts, stocks, and a home, minus its liabilities such as home mortgage and credit card balances

46. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Economic Resources Net worth influences willingness to spend but not necessarily ability to spend, because much wealth is not liquid and cannot be spent easily How much people accumulate over the years is more a function of how much they save rather than how much they earn

47. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Targeting the Up Market The superaffluent represent the top quintile of consumers in terms of income Households often consists of two income earners who place a high value on time They value extra services provided by some retailers Saving money is as important as spending it for many individuals in this group

48. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Targeting the Up Market Shop discount stores, use coupons, and wait for sales More print oriented in communications Simple ads that promote image Credibility of source selling product Product reviews influence this group

49. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Targeting the Down Market Throughout the world, the majority of consumers are low income Retailers such as Wal*Mart have found success by providing good products at reasonable prices Closeout stores offer brand name products at deep discounts to at all income-level consumers Dollar stores are one of the fastest growing retail categories

50. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Targeting the Down Market Provide good products at reasonable prices Maintaining attractive stores Offering stylish and up-to-date products Have friendly employees that treat customers with respect

51. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Demographic Analysis to Predict Consumer Behavior Demographics Age Structure of Markets Geographic Factors Economic Resources Global Markets

52. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Global Market Analysis The most attractive markets are countries that are growing both in population and in economic resources

53. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Global Market Analysis The most attractive markets are countries that are growing both in population and in economic resources Which countries will grow the most in the future?

54. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Global Market Analysis The most attractive markets are countries that are growing both in population and in economic resources Which countries will grow the most in the future? Which countries have the highest per capita income?

55. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Global Market Analysis Low income countries offer an advantage to firms looking to buy products from the lowest-cost source There are pockets of consumers who are able to buy products, even in the poorest countries

56. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Emerging Markets Marketing programs should focus on creating brand awareness (because competitors will follow) and stimulating product trial Marketers may have to teach consumers about products taken for granted (deodorant) Products may have to be adapted to local values

57. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Consumer Behavior in the Pacific Rim

58. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Consumer Behavior in the Pacific Rim South Asia India China Australia Japan

59. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Consumer Behavior in Latin America

60. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Consumer Behavior in Latin America Some of the most attractive markets include Brazil, Venezuela, Colombia, Argentina, and Chile Most countries have high population growth rates, moderately high incomes close proximity Intermarket segmentation provides a basis to identify segments that can afford certain items

61. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Consumer Behavior in Eastern Europe

62. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Consumer Behavior in Eastern Europe The attractiveness of Eastern European markets lies in their similar preferences to Western consumers Hungary and Poland have received much attention from global marketers Marketers have launched a myriad of successful brands

63. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Consumer Behavior in The EU

64. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Consumer Behavior in The EU The EU is a market larger than the United States Extremely low population growth makes customer retention extremely important for marketers Products and people move across borders easily Efficiencies include logistics, financial arrangements, and marketing economies of scale

65. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Consumer Behavior in The EU Efficiencies include logistics, financial arrangements, and marketing economies of scale Marketers can approach Europe as a single market, but national identity still exists among consumers

66. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Analyzing and Predicting Consumer Behavior Demographics Personality Personal Values Lifestyles

67. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Personality consistent responses to environmental stimuli an individual’s unique psychological makeup, which consistently influences how the person responds to his or her environment Personality:

68. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Personality How does personality influence consumer behavior? Personality: Psychoanalytic Theory Sociopsychological Theory Trait-Factor Theory

69. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Personality Human personality system consists of the id, ego, and superego The dynamic interaction of these results in unconscious motivations that are manifested in observed human behavior Personality is derived from conflict between the desire to satisfy physical needs and the needs to be a contributing member of society Psychoanalytic theory

70. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Personality Personality is a result of more than just subconscious drives Some advertising is influenced by psychoanalytic approach Psychoanalytic theory

71. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Personality Recognizes interdependence of the individual and society—individual strives to meet needs of society and society helps individual attain personal goals Social variables (rather than biological instinct) are most important in shaping personality Behavioral motivation is directed to meet those needs Sociopsychological Theory

72. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Personality Person may buy a product that symbolizes an unattainable or unacceptable goal—the acquisition fulfills some subconscious “forbidden desire” Sociopsychological Theory

73. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Personality Quantitative approach to personality Personality made up of traits: any distinguishable, relatively enduring way in which one individual differs from another Understanding consumer traits can be useful in marketing planning Trait-Factor Theory

74. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Personality Assumes that traits are common to many individuals and vary in absolute amounts among individuals Traits are relatively stable and exert fairly universal effects on behavior regardless of the environmental situation Traits can be inferred from the measurement of behavioral indicators Trait-Factor Theory

75. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Personality Trait theory is most useful to marketing strategists in developing brand personality—the personality consumers interpret from a specific brand Brands may be characterized as old- fashioned, modern, fun, provocative, masculine, or glamorous Trait-Factor Theory

76. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Predicting Buyer Behavior Research typically attempts to find relationships between personality variables and consumer behaviors

77. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Predicting Buyer Behavior Research typically attempts to find relationships between personality variables and consumer behaviors Research tried to predict brand and store preference based on personality but with poor results

78. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Predicting Buyer Behavior Research typically attempts to find relationships between personality variables and consumer behaviors Research tried to predict brand and store preference based on personality but with poor results Personality is just one variable in the consumer decision making process

79. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Analyzing and Predicting Consumer Behavior Demographics Personality Personal Values Lifestyles

80. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Personal Values Represent consumer beliefs about life and acceptable behavior Unlike attitudes, values transcend situations or events and are more enduring because they are more central in the personality structure Values:

81. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Personal Values Represent three universal requirements: biological needs, requisites of coordinated social interaction, and demands for group survival and functioning Values express the goals that motivate people and the appropriate ways to attain those goals Values:

82. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Personal Values Social values define “normal” behavior for a society or group Personal values define “normal” behavior for an individual Personal values reflect the choices an individual makes from the variety of social values or social systems to which they are exposed Individuals pick and choose which social values to emphasize

83. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Rokeach Value Scale (RVS) Values are concerned with goals and ways of behaving to obtain them Values are enduring beliefs that specific modes of conduct or end states of existence are personally or socially preferable to opposing modes of conduct or end states or existence

84. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Rokeach Value Scale (RVS) RVS asks people to rank the importance of a series of goals and ways of behaving which can be analyzed by whatever variable might be of interest in consumer analysis Consumer analysts are using values as a criterion for segmenting the population into homogeneous groups

85. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Rokeach Value Scale (RVS)

86. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Schwartz Value Scale (SVS) Designed to measure a compre- hensive set of values thought to be held by nearly everyone Values are trans-situational goals that serve the interest of individuals or groups and express one of ten universal motivations or value types The ten values and four higher- order value domains represent a continuum of related motivations

87. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Structural Relation of Motivational Value Types

88. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Exemplary Values Value Type

89. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Exemplary Values Value Type Power Authority, wealth Achievement Successful, capable Hedonism Pleasure, enjoying life Stimulation Daring, exciting life Self-direction Creativity, curious Universalism Social justice, equality Benevolence Helpful, honest Tradition Humble, devout Conformity Politeness, obedient Security Social order, clean

90. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Values and Consumer Decision Process Personal values help explain how we answer the question, “Is this product for me?” While important in the need recognition stage, values also affect consumers in determining evaluative criteria Values influence the effectiveness of communications programs and are enduring motivations

91. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Values and Consumer Decision Process Laddering: in-depth probing directed toward uncovering higher-level meanings at both the benefit (attribute) level and the value level It seeks linkages between product attributes, personal outcomes, and values that serve to structure components of the cognitive network in a consumer’s mind

92. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Identifying which product attribute appeals to which value-based segment can guide alternative advertising and marketing strategies Values and Consumer Decision Process

93. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Analyzing and Predicting Consumer Behavior Demographics Personality Personal Values Lifestyles

94. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Lifestyle Concepts Lifestyle: patterns in which people live and spend time and money Reflects a person’s activities, interests, and opinions as well as demographic variables

95. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Lifestyle Concepts Lifestyle: patterns in which people live and spend time and money Reflects a person’s activities, interests, and opinions (AIO) as well as demographic variables Since lifestyles change readily, marketers must keep research methods and marketing strategies current

96. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Lifestyle Concepts Psychographics: an operational technique to measure lifestyles; it provides quantitative measures and can be used with the large samples needed for definition of market segments Can also be used in qualitative research techniques such as focus groups or in-depth interviews

97. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Lifestyle Concepts Demographics profile who buys products whereas psychographics focus on why they buy AIO measures: activities, interests, and opinions of consumers

98. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. AIO Categories of Lifestyle Studies

99. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Market Segmentation Develop a deeper understanding of a segment or define segments Use Likert scale to answer various AIO statements Gain understanding of core customers lifestyles better and develop packaging and communication strategies that position products to their various lifestyle attributes

100. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Values and Lifestyle System VALS™ suggests that consumer buy products and services and seek experiences that fulfill their characteristic preference and give shape, substance, and satisfaction to their lives An individual’s primary motivation determines what in particular about the self or the world governs his or her activities Primary motivations include ideals, achievement and self-expression

101. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Values And Lifestyle System Consumers who are primarily motivated by ideals are guided by knowledge and principles Consumers primarily motivated by achievement look for products or services to demonstrate their success to their peers Consumers primarily motivated by self- expression desire social or physical activity, variety, and risk

102. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. VALS TM Lifestyle Segments

103. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. VALS TM Types Innovators: successful, sophisticated, take- charge consumers with many resources and high self-esteem. Image is important Thinkers: satisfied, mature, comfortable, practical people who look for durability, value, and functionality in products Achievers: motivated by the desire for achievement, career-oriented, and prefer prestige brands that signal success. Social lives revolve around family, place of worship, and work

104. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Experiencers: young, enthusiastic, impulsive, and like risk taking, variety, and excitement. Like new and off-beat products and activities Like Thinkers: conservative, conventional, and motivated by ideals, with beliefs based on codes of church, community, family, and nation. Buy proven brands from home country and are generally loyal consumers Strivers: concerned about approval and opinions of others and seek self-definition, security, and image of success. Emulate those they want to be like, but lack resources VALS TM Types

105. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Like Experiencers: express themselves and experience the world by working on it. Practical people who are self-sufficient, live within a traditional context, and prefer value to luxury Survivors: live narrowly focused lives with few resources and represent a modest market for most products. They are cautious consumers and seek safety and security VALS TM Types

106. COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Global Lifestyles Increased globalization requires that marketing strategy be increasingly planned on a global basis VALS TM and other approaches are being used to identify lifestyle segments across country borders and segment international markets