CopyandpastethenotesbeforebeginningChapter.

Besuretofill
intheYELLOWblanks.Youwillneedthesetostudyfortest.
Consumer
Personwhousestheproduct

Customer
Personwhobuystheproduct

Gatekeeper
Personwhooverseescareofanother

Thinkof3Examples:

Babysitter

Nurse

Managers

ConsumerdemandIs Constantlychangingbasedontheeconomicshiftsin
acountry,cityorregionandontheavailabilityof
newproductsinthemarketplace.

Duringpoor
Fall
economictimesthe
demandforwants
Why?Peoplearespendingwisely,mostlyonneeds.
will:

Glut
Anoversupplyofgoodssometimesduetoanover
estimationofdemand

Asaproduct
Moreretailersenterthemarket(tattooparlors)
categorybecomes
popular

Gaugingfluctuations Essentialtomarketing.
inconsumerdemands
is


2.2

ProductLife
Cycles

Profitability

Describethechangesinconsumer
demandovertime.

StagesofPLC
TargetMarket

Pricing
Strategy
?
Introduction
Innovators
Skim
High
Stars
Growthstage
Earlyadopters
Penetrate
med
high
CashCows
MaturityStage
EarlyMajority
Penetrate
med
CashCows
DeclineStage
LateMajority
Lower
Dogs
DecisionPointStage
Laggards
liquidate

Identifyatleast1productforeachofthe5stagesofthePLC:Examples:

IggyAzalea
brunomarz
smartphones
digitalcameras
traditionalfilmcameras
Thinkofone AppleWatch
examplefor BluerayDVDPlayer
eachstage
iPhone
Newspaper
Cassette

Consignment Allowsretailertoreturnunsoldproducttothemanufacturerafter


Shelf
Allowance

Bust

Most
Important
Stage

Benefitof
beingfirst

MarketShare

Barriersto
entry

Examples

Companies
thatusea
pushstrategy

Maturity
Stage

displayingthemforaperiodoftime.

Moneypaidtotheretailertoprovidespaceforaproduct

Whenaproductispulledbeforeithasrecapturedthecostsof
production

Growthstage

Nocompetitioninitially

Acompaniessalesasapercentageoftotalsalesforthatmarket

Factorsthatpreventcompaniesfromrealizingaprofitinagiven
market

smallmarket
costofresearchanddevelopment/knowhow
designcosts
lackofdistributionchannels
costofrawmaterial

Areoftenverysuccessfulduringthemiddleportionofthegrowth
stageusinglowprices

Periodduringwhichsalesofaproductincreasemoreslowly,ifat
all.


Profitsduring
thisstageare
usually

Profits
obtained
duringthis
stageare
oftenusedto

Decline
Stage

Strategiesto
boostsalesin
thedecline
stage

Decision
PointStage

Strategiesfor
thisstage

NicheMarket

High

Developnewproducts

Whenacompanyisunabletofindnewcustomersforanew
product

Redesign,reformulate,repackage

Endoftheroad

Newuses,newmarket

Asmallsectionofamarket,whichhaslittlecompetition

TargetMarket

Innovators

Introductio
n

Majority

Early
Late
Adopters
Majority
ProductLifeCycle
Growth
Maturity
Decline

Profitability
Question
Question
Star
CashCow
Mark/Dog
Mark
PricingStrategy
Skim
Penetrate
Penetrate
Lower

Laggards

Decision
Point
Dog

Liquidate

2.3
Cohorts

ConsumerSegment

ConsumerSegmentcanalsobe
calleda

PrimaryMarket

SecondaryMarket

Demographics

Includes:

Consumerprofilesare

Groupsthatsharecommon
characteristicsandbuyinghabits.

Identifiedgroupofconsumerswith
commoncharacteristicsandbuying
habits

TargetMarket

Mostlikelyconsumers

OtherOccasionalconsumers

Obviouscharacteristicsthatcategorizepeople

Age
Gender
Familylifecycle
Incomelevel
Ethnicity
Culture

demographics

builtusing

PreCustomers

09:childreninfluencegatekeeperswhomake
thedecisionMarketerstrytoappealtoboth

AllowanceCustomers
1015Gatekeepersstillresponsibleformost
decisions,notall

YouthMarket
1619Relyongatekeepersforfinancial
supportneeds.Usetheirincometopurchase
wants

PostSecondaryMarket
2025Startupproducts:cheapcars,furniture,
kitchenstuff

FamilyFormation
Nesters2540career,marriage,home,children.
Majorpurchases

Establishment
4055Earningmaximumsalaries,disposable
incomeincreasing.Quality,luxury,trips,
investments

MatureMarket
55+:Fastestgrowingmarkettoday.High
disposableincome.Manyretiringearly.

BabyBoomers
Hugegroup,bornbetween19461963

Manyofthemajortrends werestartedbythebabyboomers.
inthelast50years

Gender:Moreproducts Women
areexclusivelymarketed

to:

Productsthatwere
formerlytargetedto
womenormen

FamilyLifeCycle

Arenowbeingmarketedtobothgenders

Determinesmanyoftheconsumerswants,
needsandpurchasingpatterns.

Itwilltailoritsmarketingeffortstomatchthe
needsofeachone.

Abusinesscansellits
productsorservicesto
variousfamilylifecycle
groupsbut

Incomelevel
Consumerscanbegroupedbyhowmuch
moneytheyhaveorearn.

Businessesresearchthe Postalcodes
followingindicatorsto
Employment
determinetheincomeof Numberofchildren
specificgroupsof
Education
consumers
PropertyOwnership

Ethnicityandculture
Businessesthatdonotunderstandthecultureof
theirconsumersriskoffendingthem.

Whenmarketingin
Itisessentialtoresearchthecultureofthe
anothercountry
targetmarket.

Psychographics
Isasystemformeasuringconsumersbeliefs,
opinionsandinterests

Examples

Psychographictraitsare
lessobvious

Geographics:
Consumers

3maingeographic
categories

Urbanconsumer

SuburbanConsumer

Ruralconsumersare
often

Ruralconsumersoften

Religiousbeliefs
Tastesinmusic
Lifestyle
Attitudestowardhealth
Personalitytraits
AttitudetowardstheEnvironment
Thandemographicsandmuchmoredifficultto
measure,buttheyareequallyimportantto
businesses

Livingindifferentgeographiclocationshave
differentwantsandneeds.

Urban
Suburban
Rural

liveswithin:an:apartment,condoorhouse
withsmallyard
Spendson:cultural,restaurants,parking,
transportation

Spendsmoneyon:cars,gardens,barbecues,
householdstuff

Farmersorpeoplewhohavelargepiecesof
land

Trucks,ridingmowers,

need

ProductUseStatistics

tractors

Categorizeconsumersbyhowfrequentlythey
useaspecifictypeofproduct

4Typesofproductuse HeavyUser
consumers
mediumuser
lightuser
nonuser

ParetoPrinciple
Fewrulesaremorewidelyquotedinmarketing
todaythanthe80/20Rule(thePareto's
Principle),whichstatesthat80%ofyoursales
comefromjust20%ofyourcustomerbase.In
thisageofrelationshipmarketing,thisrulehas
becomeanoftenheardbattlecrytofocusour
effortsonmaintainingtheloyaltyofcustomers
belongingtothegolden20%thatdrivemostof
ourbusiness,whilespendinglesseffortonthe
trivialother80%.

PointofEntryTarget
Thosewhowillenteracategory

Truenonuser
Individualswhodonotplantouseproductsina
category

Marketersmustchangea Valueequation
nonusers

Almostallconsumersare Intheintroductorystage
nonusers

2.4ConsumerMotivation

Motivationis

Biologicalneedsare

Emotionalneeds:

Marketersusethefollowingto
makepeoplewantproducts:

ThorndikesLawofEffect:

MaslowsHierarchyofNeeds

Cannotworryabouthigherlevel

Biological,emotional,rationalor
socialforcethatactivatesand
directsbehaviour.

Dominantbecausetheyhavetheir
rootsinthebasicneedfor
survival.

Thevalueequationplaces:
pleasureontheplussideandthe
paininvolvedinearningthe
moneytoafforditonthe
negative.

PeerPressure
CelebrityEndorsement

Consumersaremotivatedtobuy
productsthatproducepositive
eventsandtoavoidproductsthat
producenegativeevents

Physiological
Safety
Affiliation:Friends,relationships
Esteem:success
SelfActualization

Lowerlevelneedsaremet.

needsuntil:

DestinationLocations

Largeticketitembuyingprocess

ShoppingGood

Iftheconsumerhasnotdecided
onthebrand

Impulseitems

Storesthatconsumerswillvisit
andwilltraveltogetto.Usually
forlargeticketitemsorspecialty
items.

Wantiscreated
CriteriaissetFeaturesneeded
Searchbegins
Decisionismade
Purchaseismade
Purchaseisevaluated

Categoriesofproductsinsteadof
brands

Thestoredisplay,selection,
price,andpackagingwill
influencethedecision

Goodsthatarepurchasedwithno
forethought.candybarat
checkout

Push Impulse
strate
gy
Pull Shopping
Strate
gy
Comb BigTicket/Specialty

o
Strate
gy