1. A.Kwanta Sirivajjanangkul Albert Laurence School of Communication Arts Department of Advertising 2014

2. * Customer Segmentation * Consumer Purchase Decision Process * Adoption of Innovation and Trends

3. Customer Segmentation AD3118 for 2/2014 by A. Kwanta S.

4. * Consumer * People who buy or use products to satisfy their needs and wants * Customers * People who buy a particular brand or patronize a specific store * Purchaser * User

6. Demographic Age, Gender, Family structure, Social class and income, Generation, Race, and Ethnicity Geographic Region, Size of metropolitan area, Population density, climate Psychographic - Lifestyles Activities, Interestes, Opinions, Attitudes, Values.

7. Wells, Moriarty, Burnett & Lwin - Xth Edition ADVERTISING Principles and Effective IMC Practice1-7 Influences on Consumer’s Buying Decision Process Social Cultural Influences Culture Social Class Reference Groups Family Demographic THE CONSUMER AUDIENCE Psychological Influence Perception Motivation Attitudes and values Personality Psychographics Behavioral Influences Usage Innovation& Adoption

8. 1-8 Culture * a way of life * Learned and passed on from one gen. to another * Norm * Core value: a sense of belonging, excitement, fun & enjoyment, warm relationships, self- fulfillment, respect from others, a sense of accomplishment, security, self-respect Tangible items: art, literature, building, furniture,food, clothes, etc. Intangible concept: history, knowledge, moral, tradition, language etc.

9. 1-9 Social Class * The position a person and his/her family hold within society * Determined by such factors as income, wealth, education, occupation, etc. * Family * Two or more people who are related by blood, marriage, or adoption and live in the same household * Household * Lifestyle : the way you spend your time and money on the activity you value.

10. 1-10 Reference Groups * A group of people who are used as a guide for behavior in specific situations * 1) provide info. * 2) a means of comparison * 3)they offer guidance

12. Reference Groups: influence in 3 ways InformationalUtilitarian Value- Expression brand will enhance images others have Brand possess characteristics that others have Advertisement gives a good feeling of using a brand Purchasing a brand are admired by others brand would help show others what he or she would like to be brand will enhance images others have Brand possess characteristics that others have Advertisement gives a good feeling of using a brand Purchasing a brand are admired by others brand would help show others what he or she would like to be Brand is influenced by preference of family members Purchasing a particular brand is influenced by their preferences Purchasing a particular brand is influenced by a person whom they have social interaction Brand is influenced by preference of family members Purchasing a particular brand is influenced by their preferences Purchasing a particular brand is influenced by a person whom they have social interaction Information seeking brand- related knowledge and experience Reliable information about brands Information from experts Information seeking brand- related knowledge and experience Reliable information about brands Information from experts

13. Social power “The capacity to alter the actions of others”

14. 1-14 Demographics * The statistical, personal, social, and economic characteristics that describe a population Characteristics * Age (different age,different need) * Sexual orientation (product preferred) * Education (media used) * Occupation (type of product) * Income (purchasing power) * Race and ethnicity (type of product) * Geography (type of product)

15. 1-15 Perception/State of Mind * Affects how people perceive information as well as determines the particular pattern of consumer behavior * ( experience, friend,brand message,mental stage) * Needs & Wants - Basic driving forces that motivate us to do something - Need: e.g. choose a motel when traveling - Want: e.g. choose the most expensive motel - Innate needs (needs necessary to keep life) VS Acquired needs (learn in response to culture & environment) e.g. esteem, prestige, affection power and learning

16. A need is a basic biological motive; a want represents one way that society has taught to satisfy the need.

17. Attitudes and Values * Attitudes impact motivations * Influence how consumers evaluate products, institutions, retail stores, and advertising Personality * Distinctive characteristics that make people or brands individual * Brand personalities make them distinctive from their competitors e.g. old-fashioned, lively, efficient, helpful, warm, dependable, risk taking * Motivations * Internal forces that stimulate people to behave in a particular manner * Produced by the tension caused by an unfulfilled need * People are usually motivated by emotion & habit

18. Psychographics : complex consumer profiles  how people make the decisions Lifestyle The way people allocate, Time, money & energy Psychographic Influences Hobbies, vacation, entertainment, club membership, fashion, family, job, food, trend, etc. Psychological Perception Motivation and Needs Attitude Personality

19. Wells, Moriarty, Burnett & Lwin - Xth EditionADVERTISING Principles and Effective IMC Practice1-19 * Usage behavior * How much of a product category or brand customers buy * Usage Rate: Light users, Medium users, Heavy users (how much they buy) * Brand relationship: Nonusers, Ex-users, Regulars, First timers, Loyal users, Switchers * Innovation and adoption * How willing people are to be innovative and try something new * Innovators, Early adopters, Early majority, Late majority, Laggards * perceived risk: evaluate what u gain & what u have to lose if the p/d does not work

20. Consumer Purchase Decision Process AD3118 for 2/2014 by A. Kwanta S.

21. * Consumer purchase is a response to a problem Problem Recognition Information Search Evaluation of Alternatives Product Choice Outcomes

22. Internal The micro environment The macro environment Distributors End-consumers stakeholders Business relationships supplier customers competitors Taxation Legislation Exchange rates Technology Cultural influences Social trends Interest rates

23. * Getting a bargain * Standing out from the crowd * Fitting in and belonging * Trying to avoid clothes shopping * Looking like a celebrity

24. Adoption of Innovation and Trends AD3118 for 2/2014 by A. Kwanta S.

26. A.Introduction Stage Sales grow slowlyProfit is minimal or negative Create awarenessStimulate trial High production costsLimited product models Frequent product modificationPenetration pricing Skimming pricingLittle competition High failure rate,High marketing costs Promotion strategy focuses on primary demand for the product category developing product awarenessInforming about product benefits. Intensive personal selling to retailers and wholesalers is required.

27. B. Growth Stage Sales grow at an increasing rate. Many competitors enter the market. Large companies may acquire small pioneering firms. Profits are healthy Promotion emphasis, heavy brand advertising Differences between brands. Gaining wider distribution is a key goal Toward the end of this stage, prices normally fall profits reach their peak. Development costs have been recoveredSales volume has created economies of scale.

28. C. Maturity Stage Sales continue to increase but at a decreasing rate The marketplace is approaching saturation Annual models of many products An emphasis on product style rather than function Product lines are widened or extended marginal competitors begin dropping out of the market. Heavy promotions to both the dealers and consumers are required.Prices and profits begin to fall.

29. D. Decline Stage Signaled by a long-run drop in sales. Falling demand forces many competitors out of the market The rate of decline is governed by how rapidly consumer tastes change or how rapidly substitute products are adopted. A few small specialty firms may still manufacture the product. Dropping a product from the company’s product line, is the most drastic strategy. Harvesting Company retains the product but reduces marketing support To prevent slipping into decline, Promote more frequent use of the product by current customers Find new target markets for the product Find new uses for the product, Price the product below the market Develop new distribution channels, Add new ingredients Delete old ingredients, Make a dramatic new guarantee

30. Some Dimensions of the Product Life Cycle 1. Length of the Product Life Cycle There is no exact time that a product takes to move through its life cycle consumer products usually have shorter life cycles than business products Mass communication shortens life cycles Rate of technological change shortens product life cycles. 2. Shape of the Product Life Cycle There are several distinctive life-cycle curves Each type suggests different marketing strategies

31. Significant education of the customer is required. Extended introductory period.

32. Sales begin immediately Little learning is required by the consumer Benefits of purchase are readily understood. Most often appear in women’s and men’s clothing styles. Length of the cycles may be years or decades.

33. Rapid sales on introduction Equally rapid decline. Often novelties and have a short life cycle.

35. Innovators2.5% Eager to try new ideas and products Have higher incomes Better educated than non-innovators Early Adopters13.5% Much more reliant on group norms Oriented to the local community Tend to be opinion leaders. Early Majority34% Collect more information Evaluate more brands than early adopters. Rely on friends, neighbors, and opinion leaders for information and norms. Late Majority34% Adopt because most of their friends have already done so. For them, adoption is the result of pressure to conform. Are older than the others Tend to be below average in income and education. Laggards16% Do not rely on the norms of the group. Independent because they are tradition-bound Have the lowest socioeconomic status Are suspicious of new products Alienated from an advancing society

36. Life cycle of a fashion trend

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