INTERGENERATIONAL DIFFERENCES IN RESPONSES TO MARKETING STIMULI
Oct 23, 2014
INTERGENERATIONAL DIFFERENCES IN RESPONSES TO
MARKETING STIMULI
STP MARKETING
MARKET SEGMENTATION
•Identify segmentation variables and segment the market
•Develop profiles of resulting segments
MARKET SEGMENTATION
•Identify segmentation variables and segment the market
•Develop profiles of resulting segments
MARKET TARGETING
•Evaluate the attractiveness of each segment
•Select the target segment(s)
MARKET POSITIONING
•Identify possible positioning concepts for each target segment
•Select, develop, and communicate the chosen positioning concept
Source: Philip Kotler, Marketing Management, 8th edition
SEGMENTATION VARIABLES
GEOGRAPHIC Region City or Metro size Density Climate
PSYCHOGRAPHIC Social Class Lifestyle Personality
DEMOGRAPHIC Age Gender Family size Family life cycle Income Occupation Education Religion Race Nationality
BEHAVIORAL Occasions Benefits User status Usage rate Loyalty status Readiness stage Attitude toward product
Source: Philip Kotler, Marketing Management, 8th edition
SEGMENTATION VARIABLES Traditional demographic breakdowns used in
the past are no longer relevant. Society and culture are changing. (Geller, Geller Media International)
Segmenting by age is ineffective because age and life stages do not go hand in hand anymore (Rice & Seals-McDonald, 1995)
Marketers need to grasp that there is a difference between the over-fifties of today and those of previous generations (Carrigan & Szmigin, 2000)
SEGMENTATION VARIABLES
Generational issues have come to the forefront in understanding consumer habits, tastes, and buying preferences (Fisherman, 2000)
Generationally determined lifestyles and social values exercise as much influence on buying and purchasing as do more commonly understood demographic factors like income, education, and gender (Walker & Clurman, 1997)
GENERATIONS Generations are whole groups of persons who
move through life with a common identity based on their dates of birth. (Crouch, 1999)
By knowing how the motivations of customers are tied to the underlying values of the generation to which they belong marketers will be able to tailor their products, services, and communications to their customers needs, interests, and desires. (Walker & Clurman, 1997)
GENERATIONSA generation is linked by the shared life experiences that occur in its formative years but individuals are also impacted by unique personal experiences via family experiences.
FAMILY SOCIETY
PERSONAL EXPERIENCES SHARED EXPERIENCES
GENERATIONS
Ref: Sullivan & Ross (1999)
Marketing Stimuli
Product
Price
Place
Promotion
BUYER BEHAVIOUR
Generational characteristics
Cultural
Social
Personal
Psychological
Generational responses
Product choice
Brand choice
Dealer choice
Purchase timing
Purchase amount
Source: Philip Kotler, Marketing Management, 8th edition (abridged and revised)
FACTORS INFLUENCING BEHAVIOUR/RESPONSES
CULTURAL
Culture Subculture Social Class
SOCIAL
Reference groups
Family Roles and
statuses
PERSONAL
Age & life-cycle stage
Occupation Economic
situation Lifestyle Personality &
self-concept
PSYCHOLOGICAL
Motivation Perception Learning Beliefs & Attitudes
Source: Philip Kotler, Marketing Management, 8th edition
GENERATIONS FAMILY GENERATIONS
Grandparents
Parents
Children
U.S. GENERATIONS
GI (pre 1930) Depression (1930-39) War Babies (1940-45) Baby Boomers (1946-64) Generation X (1965-76) Generation Y (1977-95) Echo Bust (1996-?)
(Ref: American Demographics, 1993)
Average generational span = 20 yrs.
Age bands are no longer consistent
Intergenerational Transfer
Children – wide diversity of ages
No standard system of definition or nomenclature
Not internationally representative
Many commonalities, but also differences within generations
CRITERIA FOR SEGMENTATION VARIABLES
EASY TO MEASURE
IDENTIFY A GROUP OF CONSUMERS WHO CAN BE REACHED EFFICIENTLY
(Gwinner & Stephens, 2001)
Familial GenerationsResearch Findings
There is clear evidence that consumer preferences, skills, and behaviors are transmitted generationally (Moore-Shay & Berchmans, 1996)
The character of communication and quality of relationship between parent and child significantly influences the degree of IG consensus
Character and tenor of the home environment that influence the degree to which children adopt parents’ values and attitudes rather than actual economic status
Chidren’s influence greatest where the product is less expensive & for own use (Foxman et al, 1989)
Familial GenerationsResearch Findings
The balance of power is shifting towards the older generation. Older consumers will switch to brands which recognize their existence and portray them as attractive people with plenty to offer. (Carrigan &Szmigin, 2000)
Private necessities attract the greatest amount of IG transfer. (Childers & Rao, 1992)
Distinction between luxuries & necessities greater for US than for Thai families
Owning the same brand as one’s parents less likely to be considered a social faux pas in Thailand as older generation is accorded high respect
Familial GenerationsResearch Findings
Grandmothers enjoy shopping for their grandchildren – generally prefer discount stores, value quality and price, guided by grandchildren on items to be purchased (Kinley & Sivils, 2000)
2/3 of adult generation reported at least a “fair” amount of influence on parents’ purchase decision (Sorce, Loomis & Tyler, 1989)
Mothers are primary socialization agents and influence the MAB of their children (Carlson et al., 1994)
Familial GenerationsResearch Findings
FCP may play a role in the acquisition of marketplace MAB (Carlson et al., 1994)
Greater communication and influence lead to greater similarity in family members’ brand purchase behaviour (Moore et al.,2000)
Intergenerational effects decrease with age. Most prominent in early adulthood.
Cultures where the emphasis is on interdependence and cohesion due to extended family structure lead to a greater cumulative impact on intergenerational influence
Familial GenerationsResearch Findings
Parental style has an influence on the consumer socialization of children (Carlson et al., 2001)
FAMILY INFLUENCESConsumer Socialization Research Intergenerational Transfer Research
Family Characteristics
Parenting Styles
Time Away from Home
Dyad Linkages
Product Category
Level of Children’s Education
Perception of Parents’ values & views
Communication Pattern
INT
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GE
NE
RA
TIO
NA
L IN
FL
UE
NC
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Brand Preference
Brand Loyalty
Store Loyalty/Preference
Shopping Strategies
Information search beh.
Response to promotion
Price-Quality Beliefs
Price Consciousness
Price Sensitivity
Older Younger
INDIVIDUAL
FAMILY
SOCIETYN
FAMILY
SOCIETY
SOCIETAL GENERATIONS Sociologists report that common experiences create a central
tendency that differentiates one generation from another Should not make sweeping generalizations (Zill & Robinson,
1995) e.g. Net Generation (4 groups identified) (Napoli & Ewing, 2001)
Each has distinctive differences due to a different historical perspective (Sullivan & Ross, 1999)
Knowing the nature of the shared experiences, based on when people were born, allows us to predict motivations, attitudes and behaviour (Smith & Clurman, 1997; Sullivan & Ross, 1999)
Each has specific buying behaviour, responsiveness to different media & require different marketing approaches (Harris, 1999; Smith & Clurman, 1997)
SOCIETAL GENERATIONS Every generation will ultimately pass through the
same life stages – youth to old age – but will respond based on shared values of their generation. Preferences are deeply implanted. (Smith & Clurman, 1997)
Pre Baby Boomers (Late 50s and over) have a more constrained set of expectations and hold to traditional values hence are slow to embrace new products (Smith & Clurman, 1997) Now more than willing to spend on themselves. (Fisherman, 2003)
Over 70s are avid readers (Fisherman, 2003) Older minds are more responsive to nuances,
subtleties, emotional content and context of information. Prefer narrative-style presentations (Sullivan & Ross, 1999)
SOCIETAL GENERATIONS Boomers most populous and influential
generation in US.(Smith & Clurman, 1997) They love self-improvement and are self-absorbed. (Fisherman, 2003)
Baby Boomers are externally motivated; appearances and possessions count. (Tycer, 1999)
Have a belief in, and search for the quick fix and are hesitant to change. (Tycer, 1999)
SOCIETAL GENERATIONS GENERATION Xers: More likely to seek a balance of work and leisure
activities than boomers were as young adults.(Ritchie, 1995)
Very diverse group (teams of psychologists and cultural anthropologists id 4 groups) (Rice & Seals McDonald, 1995)
Dislike overstatement, hype, self-importance in ads (Ritchie, 1995)
Very practical orientation (Ritchie, 1995). Prefer honest, straight-forward approach (Fisherman, 2003; Tycer, 1999)
SOCIETAL GENERATIONS GENERATION Xers (continued): Place importance on traditional values of family
and stability (Ritchie, 1995) Tend to be more self-confident and start about
70% of new businesses in the US (Tycer, 1999) Like alternative methods and new products, are
computer-dependent, need flexibility, value opportunities to learn and to improve themselves (Tycer, 1999)
SOCIETAL GENERATIONS
Young adults are more interested in art, TV, and movies than physical exercise. Unifying traits are insecurity, importance of education, length of time to enter the adult world (Zill & Robinson, 1995)
Generation Y needs constant change and speed (Fisherman, 2003)
Younger minds are more literal, generally respond to a more direct and detailed language style (Sullivan & Ross, 1999)
Kids are not the same all over the world but resemble each other more than any other generation in history (Sellers, 1989)
Brand preferences established between ages 15 – 25. Brand not as important as fit, style and look. Brand is a short cut for decision making (Taylor & Cosenza, 2002)
ALTERNATIVE VIEWS Generations (dates of birth) vs cohorts
(important external events that occur during formative years) (Rice & Seals McDonald, 1995)
Generational marketing vs Lifestages – Transition, Early, Expansion, and Mature stages. More applicable to some products (CRMTrends.com, 2000)
The role of cognitive age (Gwinner & Stephens, 2001)
Apart from Baby Boomers other American generations are an arbitrary timeframe. “Generation is a construct that owes its existence, its plausibility, and its vitality to consumer culture.” (Crouch, 1999)
RECOMMENDATIONS Advertising targeted toward older consumers
when portraying old age should use fit, active and healthy role models from their own generation (Carrigan & Szmigin, 2000)
Print media (newspapers) can be used to target older consumers (Somerville, 2001) Sales by mail catalogue sales preferred. (Fisherman, 2003)
Use messages with emotional content and narrative-style presentations. Word-pictures, analogies, and metaphors are effective tools of communication (Sullivan & Ross, 1999)
Seniors need a lot of hand holding, a high touch relationship (Harris, 1999)
RECOMMENDATIONS For older consumers product needs to be
promoted as economical and provides great value for money (Knight, 2003)
Will respond very well to coupons and discount offers. (Knight, 2003)
For older consumers products should be focused on family values (Knight, 2003)
Baby Boomers require quicker and more convenient service (Wilkening, 1999)
RECOMMENDATIONS Do not use direct mail for Boomers (Wilkening,
1999) Promote quality of life when getting older
(Wilkening, 1999) Perfect services and products for Boomers
require little change in the user’s habit and provide the quick fix. (Tycer, 1999)
Sales can be dealt with over the telephone, or in person but needs to be quick and easy, with no hassle (Harris, 1999)
RECOMMENDATIONS For Gen Xers use good eye-catching
graphics (Knight, 2003) New alternative services or products
offering a non-traditional experience, or an opportunity for growth and improvement (Tycer, 1999)
Provide flexibility and control either in acquisition or in use (Tycer, 1999)
RECOMMENDATIONS Teens – international coverage easier due to
‘youth culture’ that revolves around music, fashion, & humour (Sellers, 1989)
Family branding not recommended for teens who like brands specifically designed for them. Sub-brands to achieve a different image is appropriate. Always keep in mind the “coolness” factor. (Taylor & Cosenza, 2002)
Must attempt to create word of mouth ‘buzz’ (Taylor & Cosenza, 2002)
RECOMMENDATIONS Products targeted to young adults must be
perceived as useful – not just for status or to make a statement (Ritchie, 1995)
Advertising is an effective tool for Gen Xers (young adults). Message must be deemed as sincere (Paterson, 1994; Ritchie, 1995)
Shift advertising away from print media and towards cable TV, progressive media, and computer access media (Paterson, 1994) Channel information through the Internet or by way of peers. (Anonymous, 1999) Use interactive media. (Wilkening, 1999)
Promotional message should be informational (Paterson, 1994)
RECOMMENDATIONS Net Generation (Generation Y): prefer
magazine ads and shopping catalogues, hate unsolicited e-mail and radio ads. Need to develop integrated communication strategies that combine the use of interactive technologies with the more traditional media channels (Napoli & Ewing, 2001; Oakley, 2000)
For younger minds use a language style that is direct and detailed, avoid ambiguity and subtlety (Sullivan & Ross, 1999)
RECOMMENDATIONS Marketers who target children must
consider the complexities of family consumer socialization processes
(Carlson et al., 1994) Targeting children – Children in ads about
2 years older than target, create a “cool” image for the product (Cool = confident, respected, & always knowing the right thing to say). Dont’ forget Mom
(Sellers, 1989)