PROFILING MARKETS AND TARGET AUDIENCES
Profiles are built for typical customers or prospects in order to make the brand
communication more personal and relevant. Profiles are descriptions of the target
audience that read like a description of someone you know.
Targeting and Profiling UsingDemographics
The statistical, social, and economic characteristics of a population, including
such factors as age, gender, education, income, occupation, race, family size, and
sexual orientation, are called demographics. These characteristics serve as the
basis for identifying audiences. Knowing these factors helps advertisers in
message design and media selection for their target market. The first place to
start when analyzing and compiling demographics is the U.S. Census Bureau.
Age
The most important demographic characteristic used by marcom planners is
age.People of different ages have different needs and age often determines product
choice. The following list describes some of the more common age-related categories
that are used by marketers:
Referred to as The Greatest Generation by Tom Brokaw in his book by that name,
this generation, born in the 1910s through the late 1920s, fought World War II. A
small group, these seniors are in their last years. They opened up college
education to the middle class after the war and lived frugal yet financially
satisfying lives.
Known as the Silent Generation or traditionalists, this group of people,who were
born in the late 1920s to the war years,are now active seniors. They were
described in a national poll as the ones having the most “positive impact” on the
American economy for fueling the post-war economic boom.
Baby Boomers, people born between 1946 and1964, represent the largest
age-related category in the U.S. The 78 million consumers are now in the final
years of their careers, having made a huge population bulge as they have moved
through the life cycle. While they were growing up, Boomers’ numbers affected
first schools, then the job market, and now retirement programs and health care.
This generation has been influenced by significant social movements and
scientific breakthroughs.
A boomer subgroup called Generation Jones is made up of the younger Baby
Boomers who were born from the mid- to late-1950s through the mid-1960s. The
Jones referencecomes from their continuing need to chase the dream of affluence
by trying to “keep up with the Joneses.”
1
Gen X, also known as baby busters is the group whose 49 million members were
born between 1962 and 1981. Now adults, they have been described as
independent-minded and somewhat cynical. They are concerned with their
physical health (they grew up during the AIDS outbreak) and financial future (the
job market became more difficult just about the time they entered).
Born between 1980 and 1996, Generation Yis also known as Echo Boomers
because they are the children of Baby Boomers. They are important to marketers
because they are next in size to the boomer generation with more than 74 million
members. They are also described as the Digital Generation or Net Generation
because they grew up with computers and are seen as more technologically savvy
than their predecessors. They were the first generation to grow up with cell
phones and e-mail, and are also environmentally conscious.
Millennials, who overlap with GenY, include the children and young people born
from the late 1980s into the beginning decade of the new century. Also called the
iGeneration, these young people are digital natives and spend considerably more
time texting and using social media than even the older Net Generation. This is
the generation that most marketers are desperately trying to understand.
Age also is a key factor in media plans because age usually determines what media
you watch, listen to, or read. The older the age group, the more likely it is to use
traditional media daily or several times a week, and the more likely they are to read
newspapers.
Age is driving a fundamental shift in U.S. marketing strategy. Since the 1960s,
marketers focused on reaching young people, but now with the Boomer bulge moving
into retirement, marketers realize that wealth and numbers belong to this active senior
market.
Gender and Sexual Orientation
Anobvious basis for differences in marketing and advertising is gender. Because
women account for 85 percent of all consumer purchases in the United States, they
are an important target for many marketers.
Gender stereotypes have been a problem in advertising for decades and some believe
that may be because the majority of the work has been created by men writing for
women.
During the past decade, LGBT households have become far more visible in the
economy. The A Matter of Practice feature in this chapter explains how this group has
impacted the wedding market.
Education, Occupation, and Income
According to the 2009 census, U.S. males are falling behind females in attaining
higher levels of education. Generally, white U.S. consumers attain higher levels of
2
education than blacks and Hispanics. Education tends to correlate with the type of
medium consumers prefer. Consumers with lower levels of education are higher users
of television, especially cable. Consumers with higher levels of education prefer print
media, the Internet, and selected radio and cable stations. Likewise, education dictates
the way copy is written and its level of difficulty.
Most people identify themselves by what they do. In the United States, there has been
a gradual trend away from blue-collar occupations and towards white-collar
occupations. There have also been shifts within white-collar work from sales to other
areas, such as professional, technical and administrative positions. The number of
service-related jobs continues to increase.
Another key demographic indicator for many advertisers is income, which relates to
both education and occupation. The updated census income data reported in 2011
showed a shift toward fewer people in the top third (6%) and more people in the
bottom third of income distribution (72%). The remaining 21% is made up of the
shrinking middle class.
Principle: Income is a key demographic factor because consumers are meaningful to
a marketer only if they have the resources needed to buy the product advertised.
Although the demand for luxury goods continued to be healthy because of the
increasing wealth of the top group, the retail winners for the rest of the population
were dollar stores and low price retailers such as Wal-Mart.
European consumers are even more frugal, as many of their countries are in economic
trouble and suffering from government austerity programs that have drastically
increased unemployment and reduced income levels. In contrast, the middle class in
China has been growing dramatically during the 2000s, although it is slowing down
as the worldwide recession hits Asian markets.
Advertisers track trends in discretionary income, which is the amount of money
available to spend after paying taxes and buying basic necessities such as food and
shelter. Discretionary income has been found to be a more reliable predictor of
spending than income, although it is most vulnerable during times of economic
downturn.
Race,Ethnicity, and Immigration Status
In the United States, ethnicity is a major factor for segmenting markets. According to
the 2011 update, Hispanics now comprise 16.3 percent of the population and have
overtaken African Americans at 13% as the largest ethnic group. African Americans,
however, have seen a dramatic increase of more than 55 percent in their buying power
since 2000. Asians comprise 5 percent of the U.S. population. The United States is
more multicultural than ever.
3
Because of the large size of the Hispanic and African American markets, special
brand communication programs are often designed for them. Marketers are wise to
note that Latinos are a category based on language rather than race and are not a
homogenous group. Latinos and blacks make up more than half of the births in the
U.S. population. According to the Census Bureau, whites now account for only
49.6% of all births and minorities accounted for 92% of the nation’s population
growth in the decade that ended in 2010.
Media use differences may also be based on ethnicity. For example, Hispanic viewers
are more likely to watch commercials in their entirety, in comparison to non-Hispanic
viewers. Many marketers are employing multicultural strategies to better serve their
customers. Self-identity is also affected by race and ethnicity, which is another reason
that diversity is so important in advertising. This point is underscored in the
Principled Practice feature in this chapter.
Geography
Geographic segmentation is an important strategy for marketers because marketers
are often tied to locations where their products are sold. Also, marketers study the
sales patterns of the country because people residing in different regions need certain
products.Differences also exist between urban areas and suburban or rural areas. The
use of designated marketing areas (DMAs) in describing media markets also
highlights the importance of geography. A DMA is identified by the name of the
dominant city in that area and it generally aligns with the reach of local television
signals.
Religion
Religion connects culture to demographics. Christianity is the largest religion both in
the United States and the world, while Islam is one of the fastest growing. There is
also a large percentage of the population, U.S. and worldwide, that is secular or
unaffiliated with any organized religion.
Depending on the product category, religion can be a key factor in identifying those
who are or are not in the market for a good, service or idea. Some religions forbid
certain products, and religion sometimes affects people’s choice of clothing and
adornment.
Targeting and Profiling Using Psychographics
Just as demographics relates to social characteristics, psychographics summarizes
personal factors. This term refers to lifestyle and psychological characteristics,
such as activities, interests, and opinions. Sometimes complex psychographic
factors are more relevant in explaining consumer behavior than are demographics.
Principle: Often differences in consumer behavior lie in psychographics –
consumers’ interests and lifestyles – rather than in demographics.
Attitudes
4
An attitude is a predisposition that reflects an opinion, emotion, or mental state
directed at some object, person, or idea. Advertisers are interested in attitudes
because of their impact on motivations. Because attitudes are learned, we can
establish them, change them, reinforce them, or replace them with new ones.
However, most attitudes are deeply set, reflect basic values, and tend to be
resistant to change. You can hold an attitude for years or even decades. Attitudes
are important to advertisers because they influence how consumers evaluate
products, institutions, retail stores, and advertising.
Principle: Strategies that are designed to affect attitudes focus on establishing,
changing, reinforcing, or replacing them.
Ethical consumerism, which refers to consumers who buy according to their
conscience, is an example of a trend that depicts changing attitudes. A Time
magazine poll found that 40% of those queried said they purchased a product
because “they liked the social or political values of the company that produced
it.’’
Lifestyles
Psychographic analysis looks at lifestyles in terms of patterns of consumption,
personal relationships, and leisure activities. Some of the most common lifestyle
patterns are described by such familiar phrases as Yuppies (young urban
professionals)and Yuppie Puppies (their children). These terms are group
identifiers but they also refer to a set of products and the settings within which the
products are used. These terms are group identifiers but they also refer to a set of
products and the setting in which they are used.
DDB advertising agency has been conducting lifestyle research annually in the
United States since 1975. As part of their services to clients, some research firms
create lifestyle profiles that collectively reflect the whole culture. The
Yankelovich MONITOR has been tracking consumer values and lifestyles since
1971. Although the database can be used to custom design segments for
individual clients, its MindBase tool has identified eight general consumer groups.
They are: I Am Expressive, I Am Down to Earth, I Am Driven, I Am
Sophisticated, I Am at Capacity, I Measure Twice, I Am Rock Steady, and I Am
Devoted.
The VALS system, developed by research firm SRIC-BI, categorizes U.S. and
Canadian adults age 18 or older into distinctive consumer groups on the basis of
an individual’s responses to attitude questions to correspond to consumer behavior
and a proprietary algorithm. Figure 5.7 in the textbook shows the eight VALS
groups.
VALS explains why different consumer groups exhibit different behaviors and
why various groups exhibit the same behavior but for different reasons. In
5
addition to the U.S. framework, VALS frameworks are available for Japan, the
United Kingdom, Venezuela, the Dominican Republic, Nigeria, and China.
Socio-demographic Segments
Age groups also connect with lifestyles. Generation X and Y, as well as the Baby
Boomers, are important demographic segments, but their socio-demographic
characteristics may represent more consistent lifestyle differences. Seniors are
referred to as the Gray Market and divided into two categories—young seniors
(60-74) and older seniors (75 plus). Other terms that have been used to describe
demographic and lifestyle segments include the following:
Dinkies: double income young couples with no kids
Guppies: gay upwardly mobile professionals
Skippies: school kids with purchasing power
Ruppies: retired urban professionals; older consumers with sophisticated tastes
and a generally affluent lifestyle
Mini-Me: Infants and toddlers of affluent parents and grandparents who spend
large amounts on luxury brands with parents wanting their kids to reflect their
taste and style.
Trends and Fads
The phenomenon of trends and fads is related to lifestyle and psychographic factors,
as well as the fascination with choice in a consumer culture. Young people are
particularly involved in trends.Trend spotters are professional researchers hired by
advertisers to identify trends that may affect consumer behavior.Cool hunters are
trend spotters who specialize in identifying trendy fads that appeal to young people.
Targeting and Profiling Using Behavioral Patterns
Behavioral targeting is a practice used by online marketers who track customers’
activities – sites visited and products bought – to predict consumer interest in a
product and design personalized brand communication message. Examples of
behavioral targeting come from both Google and Orbitz. Behavior is related to
feelings (impulse) or thoughtful search.
Brand Usage and Experiences
There are two ways to classify usage: usage rates and brand relationship. There are
two ways to classify usage: usage rates and brand relationship. Usage rates refer to
quantity of purchase: light, medium, or heavy. Heavy users typically buy the most of
a product category or a brand’s share of the market. Switchers are people with low
levels of brand loyalty who are willing to leave a brand to try another one.
Principle: In many product categories, 20 percent of the users buy 80 percent of
the products.
Innovation and Adoption
6
Another type of behavior has to do with how willing people are to be innovative and
try something new. Researcher Everett Rogers developed the classic system, called
the Diffusion of Innovation Curve, to identify adoption behavior for new ideas. This
adoption process is identified in terms of the speed with which consumers are willing
to try something new, such as innovators, early adopters, early majority, late
majority, and laggards.This system reflects the speed of diffusion of new ideas. See
Figure 5.8 for an illustration of this model.
Risk taking is a characteristic of one’s personality but it combines with behavior in
the area of trying a new product. Perceived risk is your view of the relationship
between what you gain by trying something new and what you have to lose if it does
not work out.
SRI researchers found that contrary to popular belief, there is no one single innovator
or early adopter group. Instead, adoption patterns vary with the product category.
Early adopters are in different strata and roles in society and cannot be identified by
demographics alone.
Seeking Seekers
Segmenting and targeting works differently in the 21st century. The traditional
approach, which involved identifying groups of people and directing messages to
them using mass media, is today only one piece of brand communication. This new
and more complex communication system recognizes the increased importance of
word of mouth, where consumers talk among themselves about brands. Furthermore,
companies are much more involved in listening and responding to consumers, rather
than just targeting them. What this means is that we not only need to rethink
targeting, but also the way consumers interact with brands.
In terms of targeting strategy for this new category of Seeker, there are three
types of searching (see Figure 5.9):
Information. A search for specific content – Where can I get the lightest
notebook computer? How do I return a product and get a refund?
Interaction. Friends, fellowship, belonging, respect and admiration, or
something to talk about and share
Entertainment, experiences, and stimulation. Surprises, challenges, love and
liking, happiness, rewards, something to believe, the newest thing, or ways to
become smarter or more attractive.
In terms of expanding segmentation strategies that include Seekers, we can
distinguish between two communication behaviors that reflect these new types of
brand relationships: targeting and responding. Within those two basic
categories are variations that lead to seven new consumer approaches.
Targeting Strategies:
7
1. New customers who you want to see or hear a specific message, such as sales
prices, new location, or that a product will last longer
2. Current customers who you want to see or hear a specific message, such as
incentives to repurchase or advocacy rewards.
3. Seekers of product information who are searching for general category
information or maybe as followers and looking for something to talk about
and share.
4. Seekers of interaction, who are embedded in networks in networks of friends,
may as opinion leaders, or maybe as followers and looking for something to
talk about and share.
5. Seekers of experiences and stimulation who are looking for surprises,
challenges, friends, love and liking, happiness, belonging, respect and
admiration, rewards, something to believe, the newest thing, or way to be
smarter or more attractive.
Response Strategies
6. Connect with those who response to a brand message.
7. Connect and respond to those who initiate contact with a brand.
The Seeker breed of consumer is personally independent but socially dependent:
they are frequently in contact and frequently in touch both with other people and
with web sites. It’s a curious blend of individual search and communal sharing.
For Seekers, marketing communication is like a video game and successful
marketers will offer exciting, engaging and even mesmerizing brand experiences.
END-OF-CHAPTER SUPPORT
8