Lessons on Consumer Behaviour | Marketing Teacher

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Internal and External Customers
Internal Influences - Emotion and Perception
Internal Influences - Learning
Internal Influences - Lifestyle and Attitude
Internal Influences - Memory
Internal Influences - Motivation
Internal Influences - Personality
The Six Living Generations In America
Why People Buy

LESSON 1

Internal and External Customers

This lesson will consider the internal and external customer, how marketing is used to build and nurture customer relationships, and will begin to build your knowledge on the customer loyalty.
So let’s begin by looking at external customers and internal customers. For the purposes of an introduction to marketing, the more generic terms for the different types and characteristics of people with which an organisation develops relationships would include: customers, users, connected stakeholders, and other stakeholders. We will now look at how we differentiate between the internal and external customer.

Example – Starbucks Coffee

We going to look at Starbucks coffee as an example of a company that has both internal and external customers, and we should be able to apply some of the terminology that we introduced above. The internal customers will be the people that work within the business of Starbucks. The internal customers will be everyone from the Board of Directors of the company, to the supervisors and team members that serve coffee at the customer interface. So information and communication will flow from the board of directors to the people on the ground, and data and feedback from customers can flow from the people in the coffee shops back to the internal customers in the marketing department. External customers and consumers will be the everyday public that come in to the coffee shop and buy coffee for themselves and their friends. Of course the user will be the consumer of the product, whether that is the purchaser or not. The connected stakeholder would be the coffee suppliers from around the world, and the pension schemes that own shares in the business. Other stakeholders will include other businesses which are based around the Starbucks stores, as well as those impacted by the environment around coffee plantations (which is something that Starbucks is very keen to deal with since it has an ethical purchasing policy).

Internal Customers

Internal customers are those colleagues and departments within your own organisation. Again in previous lessons we looked at internal functions and how marketing can be used internally for the flow of internal services and communication. Sometimes you are the customer and sometimes you are the service provider. We considered how marketing connected internally with how marketing interacts with research and development, production/operations/logistics, human resources, IT and customer service. There are of course many other internal parts of the business.

External Customers

External customers are more likely to be customers, users, and stakeholders. Customers are those that exchange money for goods and services and consumers are those that actually use the product (and as we said they may or may not be the same person). So a user is the same as a consumer. According to Blythe (2011), stakeholders are people who are impacted by corporate activities. An obvious stakeholder might be a shareholder since they have voting rights at annual general meetings. A less obvious stakeholder would be the person that owns the land next to your factory, or the family that is supported by the father that works in your warehouse. So stakeholders would include ‘publics’ such as shareholders, customers, staff and the local community. A connected stakeholder is one with the direct association with your business, and this would be a supplier or a shareholder. Obviously other stakeholders would not have the same strength of connection, for example in the case of the local community.

LESSON 2

Internal Influences – Emotion and Perception

Dr. Jill Novak, University of Phoenix, Texas A&M University

A. Emotion

Emotion is difficult to define, and even more difficult to predict. However, they are important to marketers because consumers tend to react to marketing messages and make purchases based on feelings and emotions. Emotion can be used to create product benefits. Such as with Tide detergent and Cheerios cereal; their commercials feature families having wonderful moments together, that couldn’t have happened without those products.

B. Perception

Perception is the process by which people select, organize, and interpret information Perception has four major steps:
1. Exposure – When a stimulus (like a billboard) comes within range of your senses (vision)
2. Attention – Determined by the individual and the situation; Nerves pass the information onto the brain for processing
3. Interpretation – when marketing messages are assigned meaning
4. Memory

a. Short-term—for immediate decision making
b. Long-term—for retention

For an ad to be successful it must have the following four elements:

1. Exposure
Must physically reach the consumer
2. Attention
The consumer must attend to it
3. Interpretation
It must be properly interpreted
4. Memory
Must be stored in memory that will allow retrieval
Emotion in advertising enhances attention, attraction, and is processed more thoroughly by the consumer and may be remembered better.
These are the elements of the relationship between emotion and understanding:

Self control-the ability to control your emotions
Emotional empathy-the ability to understand other people’s emotions
Positive/negative outlook-a person’s outlook on life can be upbeat and optimistic or depressed and negative; most people fall somewhere in between
Productivity-ability to use emotions to solve problems.

LESSON 3

Internal Influences – Learning

Dr. Jill Novak, University of Phoenix, Texas A&M University
Consumer behavior is largely learned behavior. Learning is a change of behavior following an interaction between a person and their environment. A person touches a hot stove and then gets hurt, because of that interaction they learn not to touch the hot stove again. Most attitudes, values, tastes, behaviors, preferences, symbolic meanings and feelings are acquired through learning.

Attention – the customer processes the stimulus.
Understanding – the customer interprets the information and acts on it either by purchasing the product or service, dismissing the information, seeking more information (asking family and friends, going on the Internet) or remembering it for future information.

The Learning Process:

Exposure – the customer becomes aware of product, service or advertisement through at least one of their five senses (sight, smell, taste, touch, hearing). When a customer walks into a store, goes onto a website, drives by a billboard, reads a magazine or tries a free food sample, the learning process begins.

People buy things and then make decisions for future purchases based on if they liked the product, quality, service, and price. Social organizations help people learn “appropriate” beliefs about issues like drinking and driving, proper nutrition, etc. Companies that help their customers learn about their products and create positive feelings with their product, service, brand name, and employees-have a competitive advantage.

LESSON 4

Internal Influences – Lifestyle and Attitude

Dr. Jill Novak, University of Phoenix, Texas A&M University

A. Lifestyle

Lifestyle is a common word to explain complicated consumer behaviors. Lifestyle is a way to segment people into groups based on three things: opinions, attitudes and activities. Lifestyle means the ways groups of consumers spend time and money. Lifestyle can include things like bowling, cooking, car racing, kayaking, attending charity events, having pets, interest in politics, watching sporting events and so on
In a purchase that requires a high level of involvement, such as a car, consumers will consider various choices and develop beliefs about each choice; then they develop feelings about the products (affect); and finally they act on the behavior and decide to purchase, or not. Whereas with a behavioral influence, the customer will act first (purchase), then develop beliefs about their purchase and that leads to developing feelings about the product or service.

ELM Model

One theory about attitude change is the Elaboration Likelihood Model (ELM). This model shows how attitudes are changed based on the level of involvement in the purchase. As soon as a message is received a consumer begins to process it, depending on the level of involvement and motivation it will then follow one of two routes—the central route or the peripheral route. See Petty and Cacioppo (1981) and Petty, Ostrom and Brock (1981).(
The central route: If the consumer is highly involved in the purchase, then they will put forth considerable effort toward understanding the marketing messages. They will look for cues in the message that pertain to the product, its attributes, and advantages.
The peripheral route: If the consumer is not highly involved in the purchase, or lacks the motivation to process information, they are more likely to pay attention to the attractiveness of the people in the advertisement, images and music, which are all non-product related information. These cues play a major role in persuading consumers to purchase. This usually leads to a product attitude change that doesn’t last.
Social Judgment Theory Another theory for explaining attitude changes, this theory states that consumers compare incoming information to a frame of reference previously formed; The incoming messages are then filtered down two paths—latitudes of acceptance and latitudes of rejection. If a message is accepted then the filtered information has to be close to the original attitude. This is when messages are considered favorable and consumers agree with the message. A message is rejected when it is seen as too far from, or opposed to the original attitude.
Everyone has two lifestyles-the one they are currently in and the one they want to be in, which is always better than the current one. Marketers exploit this desire to move into a better lifestyle by showcasing people who are better off than the intended target market in their ads. For example most ads targeting children show children that are almost too old for the product, this appeals to younger children who desire to be like them.

B. Attitude

An attitude is an internal evaluation, expressed outwardly about a person, object or issue. There are three components of attitude – affect, behavior and cognition. This sis sometimes called the ABC’s of attitude. These three components work together to form a hierarchy of effects:

Purhase	Hierarchy of effects
High involvement	Belief—affect—behavior
Low involvement	Belief—behavior—affect
Experiential	Affect—behavior—belief
Behavioral Influence	Behavior—belief—affect

References

Petty, R. E., & Cacioppo, J. T. (1981). Attitudes and persuasion: Classic and contemporary approaches. Dubuque, IA: William C. Brown.
Petty, R. E., Ostrom, T. M., & Brock, T. C. (Eds.) (1981). Cognitive responses in persuasion. Hillsdale: Erlbaum.

LESSON 5

Internal Influences – Memory

Dr. Jill Novak, University of Phoenix, Texas A&M University
Marketing messages can be effective only if the consumer correctly understands the messages, and remembers them when needed. Memory refers to a consumer’s ability to understand the marketing messages and assign them value and meaning. Value and meaning always together.

Color: Colors have an enormous impact on marketing messages, and color affects consumers in a subjective manner, so that most of the time consumers don’t even know they are being affected! For example, in the US, the color red makes people eat 25% more, therefore most restaurants use red as their main color. The meaning and value assigned to colors changes with the culture, so marketers need to be fully aware of how color is interpreted by different groups of people. For example, the Starbucks Coffee Company logo is green, but when they opened shops in Malaysia, they had to change the logo to brown because in that culture green is associated with sickness.
Font: The presentation of words and how they are shaped will also enhance the marketing message and contribute to the value and meaning. For example, these two different fonts for a cigarette company will convey entirely different meanings, and may attract two different customers.

Caribou Cigarettes

The first logo is block style, bold and more intense and may be more masculine. The second is a script font, with more curls, softer lines and may be more feminine. So which is better? Well, that depends on the product and the target market you are trying to attract.

Simplicity of the message: A simple message is generally easier to understand. Using short phrases and easy to read terminology, such as “heart healthy” will quickly and easily convey the message that the product is good for your heart.
Consistency of the message: The message needs to fit in with the surrounding information—style, color, text, photographs, music—all have to work together. For example, showing a television ad for travel to the Caribbean will have soft, flowing fonts, bright colors, and reggae music. It can sometimes be an advantage to have inconsistent messages, some consumers may remember the ad more if some of the elements don’t make sense.
Source of the message: Consumers will be more likely to remember and purchase products endorsed by credible sources, animated characters or celebrities. They have to be likeable, have some expertise or at least pretend that they have expertise), be trustworthy, and attractive.

Three things influence consumer’s ability to understand messages:

Physical Characteristics of message

Imagery: When the brand name, words, and slogan work together to create an image in the mind of the consumer, it will invoke ideas, feelings and objects, and a direct recovery of past experiences. Disney is big on evoking nostalgia and past experiences, they want adult customers to remember being taken to the Disney parks as a child and then repeat the experiences with their own children. Much of their advertisement depicts families having wonderful experiences together, while the adults are remembering being there as children.

Characteristics of the message receiver (consumer)

Intelligence: unless you are specifically marketing a product to extremely intelligent individuals, it is best to word marketing messages on a level most people can understand, and don’t ever talk to your customers in a way that would make them feel inferior.
Involvement: A customer with higher levels of involvement with the product, service and marketing information will have more recall than a consumer with less involvement. Creating more interest in the product and making a website more interactive will help to increase sales. More involvement means more sales.
Familiarity: Generally, the more familiar a customer is with a product, the more likely they are to purchase it; however, having too much familiarity can lead to adaptation, when customers become tired of their “familiar” purchases and seek out novelty items. For example, in the US in the 1990s, ketchup sales began slipping and to revamp sales, ketchup manufacturers created green and purple ketchup, these novelty items boosted sales, but only for a few months, when consumers became tired of them.
Expectations: If the customer doesn’t know what to expect from the product or service, then they are not going to purchase it. This explains why familiar brand names like Campbell’s Soup, Coca-Cola and Disney do not change their logos—customers are familiar with them, have positive thoughts about them and know what to expect.
Physical limits: Marketers need to remember that some consumers have limitations such as hearing impairment or color blindness and this needs to be taken into consideration when creating marketing messages.

Characteristics of the environment

Intensity of information: If a consumer is overloaded with stimuli in an environment, they are much more likely to avoid the ad, or not comprehend it at all. Let’s face it, we live in a world cluttered with advertisements, it can be difficult to break through all of it and get to your target market customers. Marketers have to be more creative since customers can now skip commercials (thanks to recordable television); marketers use product placement in the actual movie or television show, the characters in the show use the brand name products and may even talk about how they like the brand name. This is all part of the advertising. Marketers are also making use of new social marketing movements such as Twitter and Facebook that can be programmed to reach customers that want to see your marketing messages.
Framing: Messages can be framed to seem positive or negative and this will affect how customers assign value. “If you don’t use sunscreen, you could get skin cancer” or “Use sunscreen to moisturize and protect your delicate skin”.
Timing: Many factors will influence how a message is interpreted and assigned value including: amount of time customer has to view a message, time of day, and type of medium used. A customer driving in the morning 70mph past a billboard for coffee may only have a few seconds to interpret the message, but since it is a time of day when that product is most consumed, they may be more likely to act on the message.

The value and meaning assigned is largely determined by internal factors, (thoughts, feelings, emotion, attitude, perception, motivation, personality, lifestyle) which are different for each consumer.
For example, a consumer who drinks lots of milk, sees an advertisement that says “Got Milk?” and since they already have positive feelings for the product they will purchase more milk, whereas a consumer who does not enjoy drinking milk and sees the same ad, may dismiss the ad or may try drinking more milk for a short period of time and then decrease consumption again.

LESSON 6

Internal Influences – Motivation

Dr. Jill Novak, University of Phoenix, Texas A&M University
Motivation is an internal state that drives us to satisfy needs. Motivation is the energizing force that activates behavior. Once we recognize that we have a need, a state of tension exists that drives the consumer to the goal of reducing this tension and eliminating the need. Consequently, only unmet needs motivate.
According to Maslow’s hierarchy of human needs, for each need there are positives gained and negatives that are avoided by meeting that particular set of needs. Products that are purchased because of a need will satisfy a goal and avoid unwanted consequences. For example, people need to feel secure so they purchase smoke detectors, therefore gaining protection and avoiding loss and fear of fire.

Need	Gained	Avoided
Self-Actualization	Creativity, accomplishment	Unfulfilled potential
Esteem	Pride, recognition, prestige	Failure, inadequacy
Social	Acceptance, popularity	Rejection, embarrassment
Security	Safety, protection	Loss, danger, fear
Physiological	Health, comfort	Sickness, discomfort
Positives and Negatives for Each Need (Based on Maslow)

According to McGuire, there are 12 psychological motives, 12 reasons why consumers are motivated to make purchases.

1. Need for consistency
2. Need for attribute causation
3. Need to categorize
4. Need for cues
5. Need for independence
6. Need for self-expression
7. Need for ego-defense
8. Need for reinforcement
9. Need for affiliation
10. Need for modeling
11. Need for novelty
12 Need for Assertion

1. Need for consistency

People have a basic desire to have all parts of themselves consistent and they purchase products that fulfill this need. People that listen to country music will purchase products like cowboy boots, heavy duty trucks and pets.

2. Need for attribute causation

People have the need to determine who or what causes things to happen to them. For example, some people choose to attribute it to themselves, fate or an outside force like God.

3. Need to categorize

Categories allow people to process a large amount of information. Vehicles are categorized into cars, SUV’s, light trucks, heavy duty trucks, van, sporty, mid-size, hybrid, electric and so on. This helps consumers quickly narrow down their choices when purchasing a vehicle.

4. Need for cues

Most people will view others’ behavior and infer what they feel and think. Clothing plays an important role in presenting image of a person. People quickly judge others by the clothing they are wearing and the vehicle they drive.

5. Need for independence

Americans strive for individuality and self-expression and many products are marketed as “limited edition” or being different and unique
The Japanese culture discourages individuality and focuses on affiliation, and behavior that enhances family and culture.

6. Need for self-expression

Americans are known for letting others know who and what they are by their extravagant purchases, especially clothing and cars. Who really needs a $1,200 pen? What is that saying about that person?

7. Need for ego-defense

The need to defend your identity. An insecure customer will purchase well-known brand names for fear of being labeled socially incorrect.

8. Need for reinforcement

People are motivated to act because they are rewarded for doing it. For example, showing off a new diamond ring to your friends creates acceptance and approval.

9. Need for affiliation

Affiliation is the need to develop mutually helpful and satisfying relationships with others, which is a critical part of all people’s lives.

10. Need for modeling

Conformity and the need to base behavior on that of others. This is the major motivation of children, tweens (8-12 year olds), and especially teenagers-and in their social world conformity mean acceptance.

11. Need for novelty

People have variety seeking-behavior and this may be a reason for brand switching and impulse buys, but that depends on the person. People experiencing rapid life changes will seek stability, while people in stable life situations will seek change. The travel industry uses this by changing up their ads and showing adventure vacations where people are actively having fun and some ads showing relaxing vacations where people are swinging in a hammock.

12. Need for Assertion

Customer’s need to engage in activities that will increase self-esteem and self-esteem in the eyes of others. Most consumers respond positively to ads that appeal to this need. In an advertisement for a ladies razor, it will say “show off your beautiful legs to your man,” this will appeal to women by showing that the product increases your self-esteem.

LESSON 7

Internal Influences – Personality

Some marketers believe we choose products that express our personalities. Personality is defined as the thoughts, emotions, intentions and behavior that people express as they move through their environment. Personality is unique to individuals, but may be applied to groups, is a combination of characteristics and traits and influences purchasing behaviors. Marketers will use interviews and focus groups to understand personality and how it relates to the purchase of certain products.
The Five Factor Model Approach to personality identifies five core traits and how they manifest into behavior.

TRAIT	MANIFESTATION	PRODUCT / SERVICE
Extroversion	Prefer to be with others, talkative, bold, outgoing	Airline tickets, beer
Stability level	From even tempered to and moody and temperamental	Time share vacation home, fast sports car
Agreeableness	Kind, sympathetic, polite	Products that give money to charity
Openness to Experience	Imaginative, creative, open to new ideas	Art
Conscientiousness	Careful, precise, organized	Washing machine

Other personality traits that translate into consumer behavior purchases:

Frugality—consumers restrain themselves and think heavily about purchases
Impulsiveness—purchases are made without much thought beforehand
Anxiety—a person with lots of anxiety may have more post-purchase dissonance and feel upset about purchases after they get them home
Bargaining—some consumers prefer to bargain for purchases, it gives them a sense of control over their spending
Vanity—taking excessive pride in one’s appearance and accomplishments
Competence—being responsible and dependable
Excitement—craving daring and spirited purchases
Ruggedness—craving products that are tough and strong
Sincerity—honest and genuine
Sophistication—desiring products that are glamorous and prestigious

LESSON 8

The Six Living Generations In America

Lesson
Exercise
Answer

In America, there are six living generations, which are six fairly distinct groups of people. As a generalization each generation has different likes, dislikes, and attributes. They have had collective experiences as they aged and therefore have similar ideals. A person’s birth date may not always be indicative of their generational characteristics, but as a common group they have similarities.

GI Generation.

Born 1901-1926.
Children of the WWI generation & fighters in WWII & young in the Great Depression…all leading to strong models of teamwork to overcome and progress.
Their Depression was The Great One; their war was The Big One; their prosperity was the legendary Happy Days.
They saved the world and then built a nation.
They are the assertive and energetic do’ers.
Excellent team players.
Community-minded.
Strongly interested in personal morality and near-absolute standards of right and wrong.
Strong sense of personal civic duty, which means they vote.
Marriage is for life, divorce and having children out of wedlock were not accepted.
Strong loyalty to jobs, groups, schools, etc.
There was no “retirement” you worked until your died or couldn’t work anymore.
The labor-union-spawning generation.
“Use it up, fix it up, make it do, or do without.”
Avoid debt…save and buy with cash.
Age of radio and air flight; they were the generation that remembers life without airplanes, radio, and TV.
Most of them grew up without modern conveniences like refrigerators, electricity and air conditioning.
Sometimes called The Greatest Generation.

Mature/Silents.

Born 1927- 1945.
Went through their formative years during an era of suffocating conformity, but also during the postwar happiness: Peace! Jobs! Suburbs! Television! Rock ‘n Roll! Cars! Playboy Magazine!
Korean and Vietnam War generation.
The First Hopeful Drumbeats of Civil Rights!
Pre-feminism women; women stayed home generally to raise children, if they worked it was only certain jobs like teacher, nurse or secretary.
Men pledged loyalty to the corporation, once you got a job, you generally kept it for life.
The richest, most free-spending retirees in history.
Marriage is for life, divorce and having children out of wedlock were not accepted.
In grade school, the gravest teacher complaints were about passing notes and chewing gum in class.
They are avid readers, especially newspapers.
“Retirement” means to sit in a rocking chair and live your final days in peace.
The Big-Band/Swing music generation.
Strong sense of trans-generational common values and near-absolute truths.
Disciplined, self-sacrificing, & cautious.

Baby Boomers

Born between 1946 and 1964. Two sub-sets:
1. the save-the-world revolutionaries of the ’60s and ’70s;
and 2. the party-hardy career climbers (Yuppies) of the ’70s/’80s.
The “me” generation.
“Rock and roll” music generation.
Ushered in the free love and societal “non-violent” protests which triggered violence.
Self righteous & self-centered.
Buy it now and use credit.
Too busy for much neighborly involvement yet strong desires to reset or change the common values for the good of all.
Even though their mothers were generally housewives, responsible for all child rearing, women of this generation began working outside the home in record numbers, thereby changing the entire nation as this was the first generation to have their own children raised in a two-income household where mom was not omnipresent.
The first TV generation.
The first divorce generation, where divorce was beginning to be accepted as a tolerable reality.
Began accepting homosexuals.
Optimistic, driven, team-oriented.
Envision technology and innovation as requiring a learning process.
Tend to be more positive about authority, hierarchal structure and tradition.
One of the largest generations in history with 77 million people.
Their aging will change America almost incomprehensibly; they are the first generation to use the word “retirement” to mean being able to enjoy life after the children have left home. Instead of sitting in a rocking chair, they go skydiving, exercise and take up hobbies, which increases their longevity.
The American Youth Culture that began with them is now ending with them and their activism is beginning to re-emerge.

Generation X.

Born between 1965 and 1980*
The “latch-key kids” grew up street-smart but isolated, often with divorced or career-driven parents. Latch-Key came from the house key kids wore around their neck, because they would go home from school to an empty house.
Entrepreneurial.
Very individualistic.
Government and big business mean little to them.
Want to save the neighborhood, not the world
Feel misunderstood by other generations
Cynical of many major institutions, which failed their parents, or them, during their formative years and are therefore eager to make marriage work and “be there” for their children
Don’t “feel” like a generation, but they are
Raised in the transition phase of written based knowledge to digital knowledge archives; most remember being in school without computers and then after the introduction of computers in middle school or high school
Desire a chance to learn, explore and make a contribution
Tend to commit to self rather than an organization or specific career. This generation averages 7 career changes in their lifetime, it was not normal to work for a company for life, unlike previous generations.
Society and thus individuals are envisioned as disposable.
AIDS begins to spread and is first lethal infectious disease in the history of any culture on earth which was not subjected to any quarantine.
Beginning obsession of individual rights prevailing over the common good, especially if it is applicable to any type of minority group.
Raised by the career and money conscious Boomers amidst the societal disappointment over governmental authority and the Vietnam war.
School problems were about drugs.
Late to marry (after cohabitation) and quick to divorce…many single parents.
Into labels and brand names.
Want what they want and want it now but struggling to buy, and most are deeply in credit card debt.
It is has been researched that they may be conversationally shallow because relating consists of shared time watching video movies, instead of previous generations.
Short on loyalty & wary of commitment; all values are relative…must tolerate all peoples.
Self-absorbed and suspicious of all organization.
Survivors as individuals.
Cautious, skeptical, unimpressed with authority, self-reliant.

Generation Y/Millennium.

Born between 1981* and 2000*.
Aka “The 9/11 Generation” “Echo Boomers” America’s next great generation brings a sharp departure from Generation X.
They are nurtured by omnipresent parents, optimistic, and focused.
Respect authority.
Falling crime rates. Falling teen pregnancy rates. But with school safety problems; they have to live with the thought that they could be shot at school, they learned early that the world is not a safe place.
They schedule everything.
They feel enormous academic pressure.
They feel like a generation and have great expectations for themselves.
Prefer digital literacy as they grew up in a digital environment. Have never known a world without computers! They get all their information and most of their socialization from the Internet.
Prefer to work in teams.
With unlimited access to information tend to be assertive with strong views.
Envision the world as a 24/7 place; want fast and immediate processing.
They have been told over and over again that they are special, and they expect the world to treat them that way.
They do not live to work, they prefer a more relaxed work environment with a lot of hand holding and accolades.

Generation Z/Boomlets.

Born after 2001*
In 2006 there were a record number of births in the US and 49% of those born were Hispanic, this will change the American melting pot in terms of behavior and culture. The number of births in 2006 far outnumbered the start of the baby boom generation, and they will easily be a larger generation.
Since the early 1700’s the most common last name in the US was ‘Smith’ but not anymore, now it is Rodriguez.
There are two age groups right now:
(a) Tweens.
(a1) Age 8-12 years old.
(a2) There will be an estimated 29 million tweens by 2009.
(a3) $51 billion is spent by tweens every year with an additional $170 billion spent by their parents and family members directly for them.
(b)Toddler/Elementary school age.
61 percent of children 8-17 have televisions in their rooms.
35 percent have video games.
14 percent have a DVD player.
4 million will have their own cell phones. They have never known a world without computers and cell phones.
Have Eco-fatigue: they are actually tired of hearing about the environment and the many ways we have to save it.
With the advent of computers and web based learning, children leave behind toys at younger and younger age. It’s called KGOY-kids growing older younger, and many companies have suffered because of it, most recognizable is Mattel, the maker of Barbie dolls. In the 1990’s the average age of a child in their target market was 10 years old, and in 2000 it dropped to 3 years old. As children reach the age of four and five, old enough to play on the computer, they become less interested in toys and begin to desire electronics such as cell phones and video games.
They are Savvy consumers and they know what they want and how to get it and they are over saturated with brands.

References.

deMesa, A. (2008). Marketing and tweens. Retrieved on February 21, 2008.
Elegant, S. (5 November 2007). China’s me generation. Time Magazine.
Generational Generalities. (2005). America’s generations. Retrieved November 6, 2007.
Generational Imperative. (2006). Meet Americas 5 living generations. Retrieved on November 6, 2007.
Marketing Vox. (2008). Generation Z. Retrieved on February 14, 2008.
Parents. (December 2007). Check out this news. Parents Magazine, p.166.
This is only a guideline, remember that everyone is different and not everyone fits into this analysis, but for the most part you can generalize their behavior. As a marketer, it is important to know how to effectively communicate and market to these diverse generations. In understanding consumer behavior, you can create the right promotion, tailoring it specifically for each group’s needs and therefore effectively sell products and services.

The dates for GI, Mature, and Baby Boomer and the beginning of Gen X are set and do not change, the dates for the end of Gen X, Gen Y and Gen Z fluctuate depending on what source you are using.

Exercise: Marketing A Laptop Computer to Different Generations

Consider the Six Living Generations: If you were marketing a laptop, what would be the product offering? What would you talk to them about? How would you promote the laptop to each generation? Complete the table below, then check your answer.

	Product Offerings:	Talk To Them About:	Promotion:
GI Generation.
Mature Generation.
Baby Boom Generation.
Generation X.
Generation Y.
Generation Z

Answer – The Six Living Generations In America

Exercise: Marketing A Laptop Computer to Different Generations

	Product Offerings:	Talk To Them About:	Promotion:
GI Generation.	Warranty; Easy to understand Instructions, Live help from a 1-800 number.	Talk about how much the world has changed (in a positive way) and how the computer can make doing certain things easier and cheaper.	In Newspaper and with knowledgeable in-store salesperson.
Mature Generation.	Warranty; Easy to understand Instructions, Live help from a 1-800 number.	Talk about how they can use it to have fun, look up old classmates and see (and share) photos and video of their grandchildren.	In Newspaper and with knowledgeable in-store salesperson; also during the Nightly News.
Baby Boom Generation.	Use Credit to pay for it; Wi-Fi and portability.	Talk positively about how easy it is to learn to use it; also talk a lot about the Wi-Fi and portability.	TV and with knowledgeable in-store salesperson.
Generation X.	Use Credit to pay for it; storage capabilities are important and compatability with office/school equipment.	Talk about how they can play games, watch movies instantly; use it for career advancement and enhancing the education of their children; Use it to start up their own business or advance education; also play up the reliability of the brand name.	TV and Internet.
Generation Y.	"Free" Upgrades and extras; ability to create "skins" to make it a unique reflection of their personality.	Make sure you respect the knowledge they already have about the product; Unlimited access to friends, information; Use it to start up their own business or advance education; they can use it to make a contribution to their community; their ability to schedule their life; also mention the Wi-Fi and portability.	Internet.
Generation Z	"Free" Upgrades and extras	Make sure you respect the knowledge they already have about the product; talk about the ability to play games online, create their own videos and stay connected with friends; remember they are brand savvy, they know what they want already.	Internet and showing product being used by celebrity spokesperson that they can identify with.

Dr. Jill Novak, University of Phoenix, Texas A&M University

LESSON 9

Why People Buy

Marketers spend millions of dollars trying to understand why people buy products and services. Sometimes it seems that there is no reason for a purchase, but in reality there is always a reason. Many factors are involved in a customers’ buying decision, any one of which can become the deciding factor, such as:

Practical-Consumers purchase products because they need them to survive, such as shoes and medicine.
Impractical-is the opposite of practical, purchasing products that are not necessary.
Rational-Purchases are made with logical, thought out reasoning.
Irrational-products are purchased for foolish or absurd reasons.
Factual-Purchasing products based on researched reports.
Emotional-purchasing products based on feelings
Buy to satisfy a need (for a reason).
Buy to satisfy a want (desire).

Consumers Also Buy:

To Increase

Sales.
Profit.
Satisfaction.
Confidence.
Convenience.
Pleasure.
Production.

To Protect

Investment
Self
Employees
Property
Money
Family

To Make

Money
Satisfied customers
Good impressions

To Improve

Customer relations
Employee relations
Image
Status
Earnings
Performance

To Reduce

Risk
Investment
Expenses
Competition
Worry
Trouble

To Save

Time
Money
Energy
Space

Conspicuous consumption: Lavish spending for the purpose of displaying wealth or social status; preference for buying increases with price.
Snob effect: Desire to buy something nobody else has; preference for buying increases with rarity or scarcity.
Bandwagon effect: Desire to buy something everybody else is buying; preference for buying increases with perceived popularity.
Economic-To enhance their lifestyle or to fulfill two of Maslow’s needs: physiological (food, shelter) and Safety and Security.
Psychological-This is the study of how people interact with their environment, products are consumed to enhance their well being, for example air fresheners, furniture and convection ovens.

Sociological-The study of the thoughts, feelings, and behaviors of group interaction, especially in a social setting. People want to feel accepted and loved by their peers and they need to consume products that will appeal to their chosen groups. For example a consumer wants to join a kayaking team would have to purchase the proper gear, clothing and maybe even music genre in order to fit in with the group.

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