1. Part 2: Principle: Strategy is Creative, Too
The Consumer Audience
Part 2: Principle: Strategy is Creative, Too
Chapter 5

2. Questions We’ll Answer
CHAPTER KEY POINTS
Questions We’ll Answer
Why is consumer behavior important to advertisers?
What cultural, social, psychological, and behavioral influences affect consumer responses to advertising.
How does the consumer decision process work?
What is the difference between segmenting and targeting?

3. HOW DOES CONSUMER BEHAVIOR WORK?
Definitions
Consumer behavior: how consumers select, purchase, use, or dispose of products, and the needs and wants that motivate behaviors.
Consumers: people who buy or use products or adopt ideas to satisfy needs and wants.
Customers: consumers who buy particular brands or patronize specific stores.
Prospects: potential customers who are likely to buy the product or brand.

4. INFLUENCES ON CONSUMER DECISIONS
Cultural Influences
Norms and Values
Norms: a culture’s boundaries for “proper” behavior
Values: the source of norms which represent underlying belief systems
Subcultures
Smaller groups of cultures defined by geography, age, values, language, traditions, or ethnic background.
Corporate Culture
How various companies operate (formal vs. informal).

5. INFLUENCES ON CONSUMER DECISIONS
Social Influences
Social Class
Your position in society determined by income, wealth, education, occupation, family prestige, value of home, and neighborhood.
Reference Groups
Models for behavior such as teachers, religious or political figures, religious groups, ethnic organizations, your peers.
Family
People related by blood, marriage, or adoption who live in the same household.
Household: all those who occupy a dwelling, related or not.
Demographics
Statistical, social, and economic factors such as age, gender, education, income, occupation, race, family size, and sexual orientation.

6. Psychological Influences
INFLUENCES ON CONSUMER DECISIONS
Psychological Influences
Perception and State of Mind
Past experiences, what others say, and mental states.
Needs and Wants
A need is what we think is essential, a want is what we desire.
Motivations
Internal forces that stimulates a certain behavior.
Attitudes
Based on deeply held values, and resistant to change.
Personality
Created to make brands distinct from competitors.
Psychographics
Activities, opinions, and interests.
Lifestyles
Yankelovich Monitor’s MindBase, VALS.

7. Behavioral Influences
INFLUENCES ON CONSUMER DECISIONS
Behavioral Influences
Usage Behavior
Usage Rate: quantity or purchase—light, medium, heavy.
Brand relationship: past, present, or future use of product— nonusers, ex-users, regulars, first-timers, switchers.
Innovation and Adoption: how willing people are to try something new.
Perceived risk: what you have to gain or lose by trying something new.
Experiences
The experience of buying vs. acquiring the product itself.
Our decisions are based on our experience with the brand.

8. Trends in Consumer Buying Behavior
THE POWER OF BRAND COMMUNICATION
Trends in Consumer Buying Behavior
Trends and fads
Related to lifestyle and psychographic factors as well as desire for choice in a consumer culture.
Young people are very involved in trends.
Trendspotters: researchers that identify trends affecting consumer behavior
Cool hunters: specialize in trends that appeal to youth
Brand proselytizer: consumer paid to positively influence people about a brand
“Take charge” mentality of today’s consumers.

9. The Information Approach to Brand Decisions
THE CONSUMER DECISION PROCESS
The Information Approach to Brand Decisions
Traditional View
Need recognition
Information search
Evaluation of alternatives
Purchase decision
Postpurchase evaluation
Low-involvement or High-involvement
In low involvement, there’s little or no information search

10. Paths to Brand Decisions
THE CONSUMER DECISION PROCESS
Paths to Brand Decisions
Depends on product and buying situation
Planners must know how the process works for different product categories (e.g. cars vs. candy bars)
Think–feel–do
Think–do–feel
Feel–think–do
Feel–do–think
Do–feel–think
Do–think–feel

11. Influences of B2B Decision Making
THE CONSUMER DECISION PROCESS
Influences of B2B Decision Making
Many individuals involved; decision by committee
Rational and quantitative criteria dominate
Often based on specs who bid on the contract; low bid wins
Long time between initial contact and decision; decisions last a long time and are supported by a contract
Quality is hugely important and repeat purchases are based on performance
Personal selling is important; advertising’s role is used to generate leads for the sales force

12. SEGMENTING AND TARGETING
Definitions
Segmenting
Dividing the market into groups of people who have similar characteristics in certain key product-related areas
Targeting
Identifying the group that might be the most profitable audience (most likely prospects) and the most likely to respond to marketing communications messages

13. To Segment or Not to Segment
SEGMENTING AND TARGETING
To Segment or Not to Segment
Market aggregation strategy
When planners use one marketing strategy that will appeal to as many audiences as possible—“Coke is it!”
Treats the market as homogeneous (single, undifferentiated, large unit).
Market segmentation
Marketers recognize consumer differences and adjust strategies and messages accordingly (Diet Coke vs. Caffeine free Coke).
Target market
From these segments, marketers identify, evaluate, and select a group of people with similar needs and characteristics who are most likely to be in the market for the advertiser’s product.

14. SEGMENTING AND TARGETING
Types of Segmentation
Demographic segmentation
Divided by age, gender, ethnicity, income
Life style segmentation
Based on consumers’ life cycle
Geographic segmentation
Uses location as a defining variable
Psychographic segmentation
Based on how people spend their money and time, their interests and opinions and their views of themselves
Behavioral segmentation
Based on product category and brand usage
Values and benefits-based segmentation
Based on underlying values or consumers’ needs and problems

15. Sociodemographic Segments
SEGMENTING AND TARGETING
Sociodemographic Segments
Dinkies: double income young couples with no kids
Guppies: gay upwardly mobile professionals
Skippies: school kids with purchasing power
Slackers: high school kids who don’t care or do much
Bling bling generation: coined by rappers and hip hoppers; flashy people with a high rolling lifestyle and costly diamonds and jewelry.
Ruppies: retired urban professionals; older consumers with sophisticated tastes and a generally affluent lifestyle

16. SEGMENTING AND TARGETING
Niche Segments
Subsegments of a more general market defined by some distinctive trait
Ecologically minded moms who don’t use disposable diapers
Skateboarders
Classical music enthusiasts
Educationally oriented senior travelers

17. Profiling the Target Audience
SEGMENTING AND TARGETING
Profiling the Target Audience
Markets are divided into segments; then profitable segments are selected as target audiences.
A profile is a description of the target audience that reads like a description of someone you know.
The target is described using the variables that separate this prospective consumer group from others who are not in the market.
Each time you add a variable to a target audience definition, you narrow the size of the target audience.
Behavioral targeting is getting more attention due to new practices in Internet marketing.

18. SEGMENTING AND TARGETING
Targeting Issues
Ethical Issues
Advertising potentially unhealthy products to specific segments like sugary foods to children.
Emphasis on advertising to young consumers while ignoring Boomers in their “power years.”
Microtargeting
Using vast computer databanks of personal information to identify voters most likely to support one candidate or another.
Used in swing states to identify potential supporters.

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Publishing as Prentice Hall