CONSUMERS AND SUBCULTURES

1. CONSUMERS AND SUBCULTURES

2. What are some demographics • Age • education • occupation • social class • Ethnic group • gender composition • family size and composition • distribution of population

3. Objective • quantifiable • Characteristics • of a population • Important variables for market segmentation So What Are demographics?

4. What are some Recent Demographic Trends in Canada • Change in age distribution • Increased urbanization; though there have been some moves to non-urban areas • Change in the structure of the family • Increased participation by women in the workforce • Women more focused on careers • Couples having fewer children • Increased incomes and greater consumer confidence • Increased educational opportunities

5. EVEN though Calgary accountant "Michelle" (not her real name) and her husband, "Jim," an elementary school teacher, could afford to have more children, they are not going to. Jim is scheduled for a vasectomy next month. "We already have one child," Michelle explains. "We just don't want any more. One is enough. Kids are expensive, and they take up so much time. We want our life back." Michelle is not alone. Canadian women are now having fewer children than ever before, according to a new Statistics Canada study, released in July. The latest figures mean that for the first time in 100 years, Canada's population growth rate has fallen below the United States. At least three factors explain the decline, including increased abortions and birth control, more women in the workforce who are starting their families later in life, and high taxation.

6. Marketing Implications of Demographic Trends You are the marketing manager of a telecommunications company that manufactures cell phones. Until recently you have targeted businessmen for these phones. How would you use the information that more women are entering the workforce in Canada to refocus your marketing strategy?

7. What Problems might there be with Relying on Demographics • Information may be old • Data on various demographics may be unavailable • Summary data may be too broad and hide opportunities in niches • Psychological or social factors that affect people’s buying patterns are not considered • Demographics do not provide the reasons that people make certain purchases • Consumers with similar demographics may differ in purchase behavior

8. CONSUMER SPENDING AND ECONOMIC ACTIVITY What does the demand for goods and services depend on? • the ability to buy • the willingness to buy

9. What is Consumers’ willingness to buy? • a measure of consumers’ opinions on the financial position of their own household and the economy as a whole • and to what extent they think it is a good time to buy large expensive items such as a TV or a computer. Demand for necessities remains stable over time • A component of consumer confidence that gives an approximate indication of the development of consumption growth in the subsequent months, especially with respect to durable goods. • The underlying data are taken from the consumer confidence survey.

10. The Conference Board's Consumer Confidence Survey • based on a representative sample of 5,000 U.S. households across the country. • Consumer assessment of current economic conditions. Covers things such as • Employment • Spending intentions over the next six months • Feelings about business conditions over the next six months • The Conference Board's Consumer Confidence Index declined sharply in February 2003, the third consecutive monthly decline. The Index now stands at 64.0 (1985=100), down from 78.8 in January, an almost 15-point drop. The last time the Consumer Confidence Index was lower was in October of 1993 when it reached 60.5.

13. Confidence and willingness to buy varies by market segment and is usually higher among younger than older consumers

14. And among higher income consumers than lower, • college college graduates over high school graduates • whites or other ethnic groups • men or women

15. Willingness to buy by telephone

17. Social ClassWhat is Social Class? relatively permanent strata in a society that are distinct subcultures What are the typical factors that differentiate the social classes? • Occupation • Education attained • Behavioral standards – taste culture • Source of Income • Level of Income; wealth • Dwelling area • Power • Religious Affiliation; Associations • lifestyles, buying patterns, motivations and values • possessions

18. Social Classes in Canada A. The upper class. • 1. The upper-upper class. (1%; ‘old money) • 2. The lower-upper class. (2-4%) B. The middle class (40-50% considerable racial & ethnic diversity) • 1. The upper-middle class. ($100k +) • 2. The middle-middle class. ($50-$100,000, upper managerial or professional fields) • 3. lower-middle: under $50,000, less prestigious white collar, or highly skilled blue collar jobs. C. The working class. (1/3 of population) (lower incomes than middle class, no accumulated wealth less personal satisfaction in jobs D. The lower class. (20% of population) (either supported by welfare, or are ‘working poor’)

19. The Importance of Class What sort of things does social class affect • tastes • Lifestyles • access to such resources as education, health care, housing and consumer goods. • Self Image • Values • Political orientation • Consumption behaviour I.e. who spends how much and on what

20. Vuitton  Credit Card Holder $96.00 Celine Boogie Bag $990

21. Harry Rosen’s

22. How Do the Lower and Upper Classes Differ in Their Consumption Behaviour? Lower classes generally focus on more immediate and more utilitarian needs Upper classes are often likely to approach consumption from a more aesthetic perspective

23. Marketing Implications Your company XYZ corp. manufactures inexpensive furniture and has targeted the less well off. In an effort to upgrade your image the company has decided to target higher-class consumers. What will the marketing implications be on the following. • Market research • Product choices and development • Product design and packaging • Distribution • Price • Advertising and other marketing communications

24. Status SymbolsWhat are They? Conspicuously consumed goods which are used to provide evidence of wealth Why do some people feel the need for status symbols • The need to display status through purchase and use of products is at least partially derived from the anonymous nature of much of our social interaction • If most people are unknown in public, status cannot be conveyed by reputation • Anonymity exacerbates the need for uniqueness

25. Status SymbolsExamples

26. When consumers deliberately mock a trend by carefully selecting products and consumption patterns that are not the current fashion or style. Paper Denim Retro Torn Jeans $140.00 Parody Display

27. When too many others use or possess a status symbol such that it loses much of its former power Fraudulent Symbolism

29. Your company has just introduced a digital camera. It has been decided that a key element of the marketing strategy will be to position it as a status symbol. What will be some of the highlights of the marketing campaign?

30. SUBCULTURES

31. What is a Subculture? A distinct cultural group that exists as an identifiable segment within a larger, more complex society/culture How do you distinguish one group from another? • Members of a subculture possess beliefs, values, customs that distinguish them from other groups in the wider culture • Subcultures create their own worlds that are complete with their own norms, language, and product insignias • Every consumer belongs to many subcultures

32. What are some Types of Subcultures in Canada • Ethnic • Racial • Age • Regional • Religious

33. What is an Ethnic Subculture? • Possess common cultural and or genetic ties which are identified both by its members and by others as a distinguishable category. • Ethnic identity is a significant component of a consumer’s self concept

34. What makes Ethnic Subcultures Different?

35. Immigration in Canada • Impact of immigration – Canada has one of the world’s most liberal immigration policies and is considered a multicultural or pluralistic society (as opposed to melting pot) • New immigrants tend to cluster together geographically which makes them easy to reach. • Concentrated in major Canadian cities • Bring with them customs, traditions, values, etc. • New immigrants are likely to be Asian and are best marketed to in their native language.

36. Population reporting at least one Ethnic Origin other than British, French or Canadian, 1986, 1991 and 1996 Censuses

39. Percentage of Visible Minority Population by All Age Groups, for Canada, Provinces, Territories and selected Census Metropolitan Areas, 1996 Census

40. Visible Minority Population for Provinces and Territories 1996 Census

41. Visible Minority Population in selected Census Metropolitan, 1996 Census

42. Percentage of the Visible Minority Population Aged 0 to 24, for Canada, Provinces, Territories and selected Census Metropolitan Areas, 1996 Census

43. Asian Canadians • Asian Canadians are the Fastest Growing Minority Group in Canada Average Household Income is $2,000 Greater Than Whites, and tend to be more brand and price conscious • College Graduation Rate is Twice That of Whites.

44. Small, Diverse, Growing Characteristics of Asian Subcultures Native Language Print Media Above Average Income Education Oriented

45. Marketing Implications of Subculture • basis for market segmentation • Marketers need to be aware of different needs for products, different patterns of usage, preference for certain brands • Advertising-media habits may be different; different media to reach different subcultural groups • Distribution-geographic concentration of many ethnic subcultures means that marketers can reach them more easily; also in some cases certain groups prefer to shop in certain stores.

46. Marketing Implications of Subculture • Your company manufactures, markets and sells kitchen utensils • Aware that Canada’s population increase now results primarily from immigration rather than by natural means and that most of these immigrants are from Asia your company realizes that there is a vast untapped market for its products and decides to go after it. • How will this affect your company’s Marketing mix? • What difficulties might you encounter?

47. Reaching the Asian Canadian Consumer Overlooked Complex Differences Among Asian Subcultures • Translating Advertising • Messages Into Asian • Media Problems Encountered by Canadian Marketers • Been Insensitive to • Cultural Practices Lack of Media Available to Reach Asian Americans