CONSUMERS AND SUBCULTURES

1. CONSUMERS AND SUBCULTURES

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

3. So What Are demographics? • Objective • Quantifiable • Characteristics of a population • Important variables for market segmentation And why are they important? Different segments have different consumption patterns

4. What does money mean to you? • Security • Comfort • being able to help one's children, • freedom • pleasure • success or failure • social acceptability • love • happiness Money means different things to different segments Our ideas about money affect our consumption behaviour

5. What does the demand for goods and services depend on? • the ability to buy • the willingness to buy

6. To Spend or Not to Spend 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 • The underlying data are taken from the consumer confidence survey.

7. The Conference Board's Consumer Confidence Survey • a monthly report based on a representative sample of 2,000 Canadian (5,0000 US) households across the country. • measures the level of confidence individual households have in the performance of the economy. • Households are asked five questions (1) a rating of business conditions in the household’s area, (2) a rating of business conditions in six months, (3) job availability in the area, (4) job availability in six months, and (5) family income in six months. • An index is constructed for each response and then a composite index is fashioned based on the responses. • Industries that rely on the Survey for forecasting include manufacturers, retailers, banks, and government agencies

8. Base year 1985=100

9. Present situation Index – current economic and job situation • Expectations index – 6 month economy, job prospects, income • Buy Index – is now a good time to buy big ticket items

11. The Conference Board Consumer Confidence Index, declined in the third quarter of 2005. Why? Implications? What should retailers do to lure consumers in the face of declining confidence?

12. Consumption growth displays a positive relation to the willingness to buy. • The index of willingness to buy is a clear predictor for the future development of consumer spending.

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 graduates over high school graduates • whites or other ethnic groups • men or women

15. Willingness to buy is also affected by product and method of purchase Willingness to buy by telephone

16. Social Class

17. What is Social Class? What are the typical factors that differentiate the social classes? • relatively permanent strata in a society that are distinct subcultures • 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. Classes in Canada Upper Class • Upper-upper class • About 1%, “old money” • Lower-upper • 2-4%, nouveau riche, .com millionaires. • Sir Kenneth Thompson Canada’s richest man ($19.6+ billion 2006) (9th in the world) • David Thomson and family 22 billion 2007 1923-2006

19. Classes in Canada: Middle Class • 40 – 50% of population • Considerable racial and ethnic diversity • Upper-middle: upper managerial or professional fields ($100k +) • middle-middle class. ($50-$100,000) • Lower-middle: middle management, white-collar and highly skilled blue-collar. (< $50,000)

20. Classes in Canada: Working Class • 1/3 of the population. • Lower incomes than middle-class. • No accumulated wealth. • Less personal satisfaction in jobs.

21. Classes in Canada: Lower Class • 20% of population • Social assistance and working poor • Revolving door of poverty • Seasonal, part-time workers, minimum wage earners.

22. The Importance of Class What sort of things does social class affect • Lifestyles and Interests • Tastes • Language • Self Image • Values • Political orientation • Access to such resources as education, health care, housing and consumer goods. • How long you will live & how healthy you will be I.e. Consumption behaviour who spends how much and on what

23. Dress: white collar vs. blue collar • Form of recreation: upper-class people are expected to play golf rather than shoot pool down at the pool hall - but they can do it at home. • Residential location: upper-class people do not ordinarily live in slums • Material Possessions: Kind of car: Rolex watch, how many bathrooms a house has

24. How Much Money Will Be Spent How Money Will Be Spent Vuitton  Credit Card Holder $96.00 Celine Boogie Bag $990

25. Where it will be spent

26. October 2006 BIGresearch and Home Electronics Journal found that 93% of US affluent consumers research upcoming consumer electronics purchases

27. Singapore Airlines (SIA) offers a first and business-class only flight to the United States in 2005. A first for Asia, SIA became the second major airline in the world to go all-business class: about a year ago, Swiss PrivatAir started 'no coach' flights between Dusseldorf and Newark, on behalf of Lufthansa.

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

29. Ads targeted to particular social classes

30. 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. • Product design, choices and development • Distribution • Price • Advertising and other marketing communications

31. What are Status Symbols? Conspicuously consumed goods which are used to provide evidence of wealth Why do some people feel the need for status symbols? • motivation for the purchase and display of products is not to enjoy them but rather to let others know that we can afford them • Anonymity exacerbates the need for uniqueness. If most people are unknown in public, status cannot be conveyed by reputation

32. Status SymbolsExamples

34. 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

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

36. Sumptuary Laws • King Henry VIII, (1509 to 1547), introduced an elaborate set of regulations governing how everyone was to dress down to the smallest detail. • The color, style and fabric content of a person's clothing signaled that person's rank in society. • The main purpose of the legislation was to mark class distinctions clearly and to prevent any person from assuming the appearance of a superior class. • People who lived in England during the 16th century knew at a glance where everyone stood in the social pecking order. None shall wear . . .any lace of gold or silver, lace mixed with gold or silver, silk, spurs, swords, rapiers, daggers, buckles, or studs with gold, silver or gilt. . . except . . .Baron's Sons, all above that rank, Gentlemen attending the Queen, Knights and Captains.

37. Even after sumptuary laws stopped being enforced, it was easy to tell the social status of a person by the quality and amount of fabric or the amount of labour-intensive lace and embroidery. • Nowadays there are a lot more dimensions of the individual that people seek to express through consumer goods besides social status e.g. • religious affiliation • Political leanings • educational level • ecological awareness • Sports interests • Gender • They all seek expression through consumer good, not the least of all clothing.

38. SUBCULTURES

39. 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? • beliefs • Values • Customs • Lifestyles and interests • norms • Language • Insignias • Consumption patterns Every consumer belongs to many subcultures

40. Which region has the highest bubble gum sales? What are some Types of Subcultures in Canada • Ethnic • Age • Religious • Regional Canadian consumers cannot be viewed as a single block of customers with consistent purchasing patterns

41. What is an Ethnic Subculture? • Possess common cultural and/or genetic ties identified by both its members and others as a distinguishable category -- a sense of collective identity. • Possess common customs, values, and attitudes within a group of people who are bound by a common cultural identification. • Because values reflect a standard or criterion that people use in the guidance of behaviour, they act as a norm for ethnic consumer behaviour and an influence on many consumption motives. • Ethnic identity is a significant component of a consumer’s self concept

42. What makes Ethnic Subcultures Different?

43. Food preferences are close to a people’s centre of their self definition or identity

44. Ethnic marketing is becoming more important to marketers who wish to maintain or increase market share? Why? • Ethnic groups in Canada are growing more than 7 times faster than the general population • Advertising Canada estimated that in 2001 African and Asian populations in Canada represented in excess of $300 billion in purchasing power. • Ethnicity plays an important role in how brands are perceived and purchase decisions made, i.e. Each ethnic group has its own buying habits • i.e. different ethnic groups have different consumption patterns

45. Why is it important? • Of the $237 billion spent on advertising in the U.S. in 2002, less than 2% went to programs targeting a consumer population which constitutes almost 30% of the USA and commands an annual purchasing power in excess of $1.5 trillion. • This population is composed of Hispanics, African Americans, and Asian Americans. • The opportunity for Marketers is huge

46. Some ethnic groups spend significantly more than the market average for certain types of goods and services. • e.g., the Chinese are likely to spend more on leather goods, furniture, appliances and electronic equipment. • Italians are likely to favor clothing, food items, cleaning products and personal services, • the Portuguese tend to purchase more appliances, baby food, cigarettes and sport services, • South Asian consumers spend more on furniture, utensils, home decoration and children's clothing. • companies should target homogeneous components of a heterogeneous market rather than the market as whole

47. Immigration in Canada • Canada has one of the world’s most liberal immigration policies and is considered a multicultural or pluralistic society (as opposed to melting pot) • Canada is becoming increasingly culturally diverse as a result of the changing patterns of immigration since the 1960s. • A shift from European to non-European countries as the sources of immigrants to Canada is leading to a more ethnically varied population

48. 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

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

50. Who are they and where are they? 2001