Leg 2 from Lisbon to Cape Town. Theme 1: Segmentation Consumer Markets. Part 2.

eleonoraescalantestrategy 10 Nov 2017 Leave a Comment

Hello to all! We will continue with the theme Understanding Customer Behavior. We mentioned the personal factors in the last post. Today will dig a bit more into the third group of consumer behavior factors, Personal Factors.

3. Personal Factors: The Personal characteristics that influence a buyer’s decision include age and stage in the life cycle, occupation and economic circumstances, personality and self-concept, and lifestyle and values. There are several segmentation systems which we can use to classify our customers in accordance with personal factors such as:

Age and Stage in the Life Cycle: Our taste in food, clothes, furniture, and recreation is often related to our age and if we are the decision maker in the “buying process”. If we wish to sell baby products, little matters the baby in the buying process, but the mother of the baby who perceives the product for her child and decides which one to buy.
Different family lifestyle ages

Consumption is also shaped by the family life cycle and the number, age, and gender of people in the household at any point in time. In addition, psychological life-cycle stages may matter. Adults experience certain “passages” or “transformations” as they go through life.Their behavior as they go through these passages, such as being a baby, a toddler, teenager, adult or senior or becoming a parent are stages which change with time. We should also consider critical life events or transitions—marriage, childbirth, illness, relocation, divorce, first job, career change, retirement, the death of a spouse—as giving rise to new needs. Service providers and manufacturers should have to think about this a lot. The life cycle is a process to take into consideration by banks, insurance, lawyers, and marriage, employment, and bereavement counselors. The same applies to healthcare services. For example, it is not the same to sell strategic consulting for a company owned by people who are close to retirement ages, than to millennial owners who are about to get married. The same applies to insurance companies, the better insurance services companies segment their markets, the ample is their potential to find different products adapted to the age-life cycle of their customers.
Occupation and Economic Circumstances:
Different Occupations. Different segments.

Occupation also influences consumption patterns. In order to do the right segmentation of clients, first, we must try to identify the occupational groups that could be interested to buy our services or products. There is evidence about how the individual’s nature of the job has a direct influence on the products and brands he picks for himself/herself. Also, certain occupation groups expect tailor-made services to them, for example, computer software companies do have to design different products for brand managers, than to engineers, lawyers, or physicians. Luxury-goods makers of brands like Gucci, Prada, and Burberry are vulnerable to recessions or to an economic downturn. Economic Circumstances: As strategists, we have to work closely with our marketers, in order to be ready to adapt our strategic decisions for redesign and reposition our products and services to different economic scenarios. Product and brand choice are greatly affected by economic circumstances such as:
- Spendable income (level, stability, and time pattern),
- Savings and assets (including the percentage that is liquid),
- Debts,
- Borrowing power, and
- Attitudes toward spending and saving.

Personality and Self Concept: Each person has personality characteristics that influence his or her buying behavior. By personality, Kotler means a set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environmental stimuli (including buying behavior). We often describe personality in terms of such traits as self-confidence, dominance, autonomy, deference, sociability, defensiveness, and adaptability. Personality can be a useful variable in analyzing consumer brand choices.
Source: http://www.superskill.com/aaker-brand-personality-dimension/

Brands also have personalities and consumers are likely to choose brands whose personalities match their own. Consumers often choose and use product brands with a brand personality consistent with their actual self-concept (how we view ourselves), although the match may instead be based on the consumer’s ideal self-concept (how we would like to view ourselves) or even on others’ self-concept (how we think others see us).
- For example, if you consider yourself as a charming and calm person, it is probable that you will buy a brand that reflects the “charming and calmness” about yourself. Let´s see a body wash product, if you think you are sweet, you will identify with brands which reflect sweet & softness such as Dove Purely Pampering Sweet Cream Body Wash. In contrast, if you are an energetic and active person, it is expected you will buy a Nivea Powerfruit Shower Gel or similar brands with energy and active branded products.
  Ghurka bag and Tod´s shoes.
  
  Another example: If you are a business person and consider yourself as an “earthy traveler”, it is more probable that you will pack a pair of comfortable walking shoes such as North Face Hike shoes and your Patagonia Hiking Vest in your luggage, with the hope to do a hike if you have some time during your travels. In contrast, if you are a businessman “luxury traveler”, you will pack Tod´s Gommino shoes and an eye mask inside your Cavelier Duffel Ghurka bag and will accommodate in a hotel with a luxury spa.

Finally, often consumers have multiple aspects of self (serious professional, caring family member, active fun-lover) that may be evoked differently in different situations or around different types of people.

Lifestyle and Values: People from the same subculture, social class, and occupation may lead quite different lifestyles. A lifestyle is a person’s pattern of living in the world as expressed in activities, interests, and opinions. It portrays the “whole person” interacting with his or her environment. Lifestyles are shaped partly by whether consumers are money constrained or time constrained. Companies aiming to serve money-constrained consumers will create lower-cost products and services. By appealing to thrifty consumers, Walmart has become the largest company in the world.
Walmart Every-Day Low Prices attracts clients with economic limitations.

Blue Apron Meal delivery kit.

Consumers who experience time famine are prone to multitasking, doing two or more things at the same time. They will also pay others to perform tasks because time is more important to them than money. The food delivery market industry is a US$70 billion size, while merely US$9 billion happens online. Different meal delivery companies are taking different approaches: Grocery delivery, Meal kit ready to cook, Meal kit ready to heat, Restaurant delivery, Meals from a central kitchen, Diet approach, gourmet approach, healthy, vegan, allergen centric. Clients who purchase meal delivery kits are the ones who experience time constraints to buy fresh ingredients to cook. Companies such as blueapron.com, hellofresh.com, purplecarrot.com, plated.com, greenchef.com, homechef.com and many other companies with similar value proposition all over the United States, India, China and Europe will continue to grow.
Core Values: Consumer decisions are also influenced by core values, the belief systems that underlie attitudes and behaviors. Core values go much deeper than behavior or attitude and determine, at a basic level, people’s choices and desires over the long term.

Do you remember the picture I shared with you previously?

Guess what business is this picture? We will see it tomorrow!!!

Did you guess?

This picture belongs to a MIWE oven located in the new Princi´s Bakery opened three days ago inside the Starbucks Reserve Roastery and Tasting Room in Seattle. wenz1919_schraeg “Princi’s Bakery three MIWE Wenz 1919 deck ovens from Germany will radiate non-stop, ideally ensuring the Roastery’s custom-roasted coffees are accompanied by warm, hearty loaves and tender, flaky cornetti Italian croissants, fresh sourdough bread, focaccia pizza, baked on-site all day every day whenever customers arrive”. According to the WSJ, Starbucks Corp. is making its next move into the artisan “premium” high-end food and beverage market, seeking to find new sources of revenue amid a broader slowdown in the industry. We will analyze further this event which I am sure will change the coffee shops industry, when we develop our next topic Psychological processes affecting consumer behavior.