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Target Marketing
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Socio-Economic Classification
Urban Pakistan
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Variables Used: Education of Chief earner +
Occupation of the chief earner
Chief Earner: The member of the household whocontributes the most to the household and bears the
greatest proportion of the overall household
expanses.
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Rationale for the classification of household on these two
variables are:
1. The consumption, income and lifestyle of a household is
strongly correlated with how educated and economically
sound the chief earner is.
2. Income alone is not the true indicator as it is highly
misinterpret. It is either understated or overstated.3. In many households the chief earner is also the head of
household. In such cases behavior/opinion/attitude of the
chief earner may influence the behavior and lifestyle of all
other members.
According to the population survey of Pakistan 1998, there are
6,24 million urban households. The average urban household
size reported is 6.8
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A1
Most urbanized, predominantly metropolitan class
Most educated and affluent group
Chief earner self employed/employed/professionals,
medium/large businessmen or senior officers, executives in
government, private or public limited companies.
Substantial percentage of house wives are either graduates or
post-graduates.
Extremely high durable ownership with high penetration of
entertainment durables.
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A1
Extremely high durable ownership with high penetration of
entertainment durables.
Highest consumption of packaged edible and daily use products.
Use of high-tech items such as personal computers, internet
connection, credit card and mobile phones.
Greater per capita income smaller average household size
Highest consumption of both electronic and print media
Videos, elite magazines and English movies are possible media
for marketing.
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A2
Broadly labeled as well educated employed class of urban
Pakistan
Chief earners in A2 class households are predominantly
postgraduates working as lower/middle executives or officers in
government/semigovernment institutions.
High penetration of all large, brown and white appliances.
Entertainment durables such as decoders for satellite channels,
Cd players etc.
House wives are reasonably well educated and have a fewer
number of children.
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A2.
Convenient packaged items i.e. packed spices and achaars are
part of kitchen budget.
Bank account ownership of chief earners and housewives is
relatively higher than lower SECs
Media consumption is quite high.
Reachable by urdu, English daily morning paprers.
Television viewer-ship, radio listener-ship and magazinereadership is substantial.
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B
Exhibits characteristics of an upper middleclass. In almost half
households, chief earners are small sopkeepers, one quarter arelower/middle officers or executives and remaining are
supervisors.
Majority of chief earners have college education (i.e.intermediates, graduates) while house wives have either some
college education, or are matriculates.
On an average, household have three children (persons less
than 12 years of age).
Half of the HHs who have children send them to English
Medium schools.
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B
Relatively high consumption of squashes /red syrups and
shampoo as compared to lower SEC.
Consumption of most packaged items is as high that in A2 class
with exception of noodles & cereals.
Substantial penetration of durables such as air conditioners,
freezers, cooking ranges, 20 inch TV sets.
90% in this class can be reached through either print or
electronic media.
30 % listen to radio and read magazine.
This class is quite reachable through Urdu video cassettes.
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C
Class which can be said to be small retailer class of urban
Pakistan.
In 605 C class households, the chief earner is a small
shopkeeper.
Education distribution of chief earner is broad ranging fromprimary to post graduate/professional.
30% house wives are illiterate.
Household size and presence of black and white TV are higher
than 3 upper SECs.
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C
27% of households have telephone connections.
Penetration of expensive durable is low.
There is a substantial usage of packed items and
essential durables as sewing and washing machines arewidely owned.
Individuals in this class can be reached through Urdu
monthly digests, television, radio and Urdu newspapers.
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D
The lower middle class of urban Pakistan
Owns major brown household durables and send children
mostly to Urdu medium schools.
The chief earners in this class are; skilled workers, small
shopkeepers, and non-executives employees with some school or
college education not exceeding intermediate.
Consumption of packed edibles and FMCGs is moderate. This
class can be reached through monthly digests, television, radio,
and Urdu newspapers.
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E1: This class owns very basic durables such as black and white
television sets, bicycles, sewing machines, etc.
In half households, the housewife is illiterate.
The chief earner has only some basic education (510 years).
HHS are finaced/run by chief earners who are skilled/unskilled
workers or petty traders, i.e. the lower status occupation
categories.
On an average more children are present per household than
upper SECs.
70% are media contactable.
They can be reahed mostly by television and Urdu newspapers
especially the afternoon papers.
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Classification of Socio-Economic Classes by Provinces
Punjab Sindh NWFP Baluchistan
A1 2% 4% 2% 2%
A2 3% 4% 4% 5%
B 10% 10% 9% 7%
C 18% 19% 18% 16%
D 21% 22% 24% 205
E1 22% 17% 13% 17%
E2 24% 24% 30% 32%
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Socio-Economic Classes in Metros/Small Towns
Karachi Lahore Islamabad/Rawalpindi
RemainingUrban Centers
A1 4% 3% 4% 25
A2 4% 4% 5% 4%
B 11% 11% 15% 9%
C 19% 19% 17% 18%
D 23% 23% 27% 205
E1 17% 20% 185 20%
E2 22% 20% 14% 27%
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Average number of 12+ Years Household Members
A1 A2 B C D E1 E24.89 5.07 5.25 5.38 5.14 5.04 4.48
Average Number of Children
A1 A2 B C D E1 E2
2.67 3.00 2.89 3.06 3.14 3.19 3.26
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Household Size in each SEC
A1 A2 B C D E1 E2
6.6 6.93 7.14 7.62 7.46 7.49 7.47
5% of households in A1 class are 2 members household.
14% in A1, 11% in A2, 10% in B class are 4 members HHs.
17% in A1, 18% in A2, 15% in class B are 5 member HHs.
10% of HHs in E1 and E2 are 9 member HHs.
15% of A1 HHs, 185 of A2 HHs, 20% of B HHs, 24% of C HHs,
21% of D HHs, 22% of E1 HHs and 22% E2 HHs are 10 or more
than 10 member households.
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Number of Earners
No. ofEarners
A1 A2 B C D E1 E2
1 61% 59% 60% 55% 58% 58% 56%
2 21% 26% 24% 25% 24% 25% 24%
3 12% 8% 10% 12% 11% 12% 12%
4 4% 5% 4% 65 5% 4% 5%
5 or more 2% 2% 1% 2% 2% 3%
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Defined
Identifying and communicating with groups
of prime prospects
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Has the target changed?
Is it going to be profitable?What is the rationale for
selecting this target?
Who Is Going To Buy YourProduct?
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Exhibit 4.1:
The head andvisual attracts the
prime prospects
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Marketers have a tendency togeneralize
Yet, we know betterA cardinal rule in marketing
has always been to know yourmarket
Marketing Generalization
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Target marketing
Defining Prime Prospects
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Exhibit 4.2:This Internet site
attracts musicians
and buyerswith a
novel idea, TheyBuy it. We pay you.
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Where Do We Start?
Census Data
Minority Markets
Defining Prime Prospects(continued)
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Households
Household Income
Spending
Marrieds
Birthrate
Population
Defining Prime Prospects(continued)
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What other demographic factors
do you think might be important
in defining prime prospects?
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Marketing concept
A management orientation that views the needs ofconsumers as primary to the success of a firm
Customer valueheart of concept
Develop customer relationship ( customerorientation )vis a vis making a sale
Target marketing , positioning, value proposition
Market intelligence- to develop total marketing
programs Profitability vs sales vol
Continuous improvement
Customer focused organizational structure
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What is a product
A bundle of ingredients put together for sale
as something useful to a consumer
Represent a bundle of satisfactions,
WEIGHTAGE GIVEN TO different
satisfactions, designed for different groups
Matching people with benefits creates
loyalty & insulation against competitive
attacks
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Brand Loyalty -Six segments
Nationalbrand loyal- buy single national brandat regular price
National Brand Deal-purchases made on price /better deal- more store switching
Private label loyal- segment buys the private labeloffered by the store where they shop.
Private label deal-segment shops at many stores
and buys the private label of each store on dealNational brand switcher- switch regularly among
various national brands in the market.
Private label switcher- segment isn't very deal
prone, buys private labels at regular price.
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Market is a group of people:
Who can be identifiedWho could use our product
Who could afford to buy it
Who can be reached
What Is a Market?
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Some trends to watch
Population- determine fastest growing
markets
Income- and spending- discretionary
Living patterns- singles, single parents,
childless young couples, dual earner
married couples with children, empty
nesters
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Market
group of people who can be identified by somecommon characteristic, interest, or problem, use a
certain product to advantage,
Can afford to buy it, and can be reached through
some medium
EG: IDB, CB, FB, NLB- market constituencies
Concept of Majority fallacy: initial entrants
into a field will do good, and appeal to abroader group, later entrants may gain a larger
market share by tapping minority segments-
niches
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Exhibit 4.4: Visualpuns attract people
with lawns that have
weeds
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From Generic to Product Markets
Generic MKT- market with broadly similar needs
and sellers offering various , diverse ways of
satisfying those needs.
Looks at markets from a customers point of vieweg Status Seekers have different ways to satisfy
their status needs-MERC, designer outfit, Luxury
cruise.
Sellers in the generic status seeker market focuss
on the need the customer wants satisfied- not on
how the sellers product is better than that of
another producer.
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From Generic to Product Markets
Product MKT- A market with very similar
needs and sellers offering close substitute
ways of satisfying those needs
If the status seeker wants to satisfy his
status need with a new expensive car(
Product market)In this product market
there may be options-Merc, Lexus, BMW,
Jaguar-competing for consumers money
h i i i
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What is competition
Product category &subcategories, What products in what categories compete for
consumers attention and $
Marketers need to answer a number of questio
:
1. Who are our competitors
2. What brands
3. What other product categories4. Are there many brands or few
5. Which are strong, which are vulnerable
6. Are there any strong well established brands, o
is the market volatile
h i i i
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What is competition
A major purpose of target marketing is toposition a brand effectively within a
product category ( eg soft drinks) or
subcategory( lemon lime soft drinks)
Products are normally competitive amonga segment rather than across several
groups EgShampoos
Competition more broadly includes all the
forces that inhibit the sale of the product- (
same product class or subclass)
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Market Segmentation Geographical Segmentation
Product User Segmentation
Lifestyle Segmentation
Planning The Advertising
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Exhibit 4.6:
Lifestyle isimportant for many
product and
services,
Congoleum says,
Floors for the way
you live.
Steps in Segmentation
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Steps in Segmentation,
Targeting, and Positioning
1. Identify Basesfor Segmenting the Market
2. Develop Profilesof Resulting Segments
3. Develop Measuresof Segment Attractiveness
4. Select TargetSegment(s)
5. Develop Positioningfor Each Target Segment
6. Develop MarketingMix for Each Target Segment Market
Positioning
MarketTargeting
Market Segmentation
Step 1 Market Segmentation
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Step 1. Market SegmentationLevels of Market Segmentation
Mass Marketing
Same product to al l consum ers(no segmentat ion )
Segment MarketingDifferent pro ducts to one or mo re segments
(som e segmentat ion)
Micromarketing
Products to sui t the tastes of indiv iduals and locat ions
(com plete segmentat ion )
Niche MarketingDifferent produ cts to subg roup s w ith in segments
(more segmentat ion )
Local Marketing
Tailor ing b rands/ prom ot ions
to local custom er group s
Individual Marketing
Tailor ing produ cts / programs
to indiv idual customers
Step 1 Market Segmentation
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Step 1. Market SegmentationBases for Segmenting Consumer Markets
Geographic
Demographic
Age, gender,family size andlife cycle, orincome
PsychographicSocial class, lifestyle,
or personality
BehavioralOccasions, benefitssought, user status,usage rate, loyalty
Nations, states,regions or cities
Requirements for Effective Segmentation
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Requirements for Effective Segmentation
Size, purchasing power, profilesof segments can be measured.
Segments can be effectivelyreached and served.
Segments are large or profitableenough to serve.
Measurable
Accessible
Substantial
Differential
Actionable
Segments must respond
differently to different marketingmix elements & programs.
Effective programs can bedesigned to attract and serve
the segments.
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Segmenting
Clustering people with similar needs into a
market segment
Market segment- a homogenous group of
customers who will respond to a marketing
mix in a similar way
i i f i b d
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Criteria for segmenting a broad
product market
Homogenous( similar) within- The customers in
a market segment should be as similar as possible
with respect to their likely responses to marketing
mix variables and their segmenting dimensions
Heterogeneous ( different) between- the
customers in different segments should be as
different as possible with respect to their likelyresponses to marketing mix variables and their
segmenting dimensions
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Specific Targets
Single TM approach- Segmenting the market andpicking one of the homogenous segments as thefirms target market
Multiple TM approach- Segmenting the marketand choosing 2 or more segments, then treatingeach as a separate target market needing adifferent marketing mix
Combined approach- combining 2 or more submarkets into 1 larger target market as basis for 1strategy
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Market Segmentation Sometimes When you talk to everybody , you
end up talking to no body
MS- The division of an entire market ofconsumers into groups whose similarity makesthem a market for products serving their specialneeds
Types :
Geographic
Product user( amt of product usagemarkets withhighest sales potentialSement divided into allusers and subdivided into H/M/L users)
The definition of usage varies with the product
category
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Life Style Segmentation-AIO measure
1. Activities, leisure time, preferences, preferences
for social events, community involvement
2. Interests, family orientation, sports interests,
media usage
3. Opinion, political preferences and views onvarious social issues
Benefits and attitude segmentation- cluster people
into groups based upon what they want in a
product.
Speed Bump:
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Speed Bump:
Linking the
Concepts
Using the segmentation bases youve just
read about, segment the Pakistani footwearmarket.
>Describe each of the major segments andsubsegments.
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Do you think some general-market
advertising efforts are effective in
reaching ethnic groups?
Market Targeting
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Market TargetingEvaluating Market Segments
Segment Size and Growth
Analyze sales, growth rates and expected
profitability for various segments.
Segment Structural Attractiveness
Consider effects of: Competitors,
Availability of Substitute Products and,
the Power of Buyers & Suppliers.
Market Targeting
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Market TargetingMarket Coverage Strategies
Segment 1
Segment 2
Segment 3
Segment 1
Segment 2
Segment 3
Company
MarketingMix
CompanyMarketing
Mix
Company
Marketing Mix 1
CompanyMarketing Mix 2
Company
Marketing Mix 3
Market
A. Undifferentiated Marketing
B. Differentiated Marketing
C. Concentrated Marketing
Step 3 Positioning for Competitive
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Step 3. Positioning for Competitive
Advantage
Products Position - the way the
product is defined by consumers on
important attributes - the place theproduct occupies in consumers
minds relative to competing
products.
Step 3 Positioning for Competitive
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Step 3. Positioning for Competitive
Advantage
Marketers must:
Plan positions to give their
products the greatest advantage inselected target markets,
Design marketing mixes to create
these planned positions.
Step 3 Positioning for Competitive
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Step 3. Positioning for Competitive
Advantage strategies
Against a
Competitor
Usage
Occasions
Away from
Competitors
Product
Attributes
Product
Class
Benefits
Offered
User Class
B
A
ED
CH
G
F
Steps to Choosing and Implementing
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Steps to Choosing and Implementing
a Positioning Strategy
Step 1. Identifying Possible
Competitive Advantages:
Competitive Differentiation.
Step 2. Selecting the Right
Competitive Advantage: Unique
Selling Proposition (USP).
Steps to Choosing and Implementing
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Steps to Choosing and Implementing
a Positioning Strategy
Step 3. Communicating andDelivering the Chosen Position.
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According to Exhibit 4.9, the heavy
users of brand X are women aged 55
and older. What products would beappropriate for this target market?
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NEED
Segmentation on needs, social values
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NEED
" The lack of something requisite,desirable, or useful;
the lack of the means
of subsistence."
Maslows Hierarchy of Needs
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Maslow s Hierarchy of Needs
PHYSIOLOGICAL OR SURVIVAL NEEDS
MOST NEEDS HAVE TO DO WITHSURVIVAL PHYSICALLY AND
PSYCHOLOGICALLY
Maslows Hierarchy of Needs
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Maslow s Hierarchy of Needs
PHYSIOLOGICAL OR SURVIVAL NEEDS
SAFETY NEEDS
ON THE WHOLE AN INDIVIDUAL
CANNOT SATISFY ANY LEVEL
UNLESS NEEDS BELOW ARE
SATISFIED
Maslows Hierarchy of Needs
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Maslow s Hierarchy of Needs
PHYSIOLOGICAL OR SURVIVAL NEEDS
SAFETY NEEDS
LOVE, AFFECTION, ANDBELONGINGNESS NEEDS
Maslows Hierarchy of Needs
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Maslow s Hierarchy of Needs
PHYSIOLOGICAL OR SURVIVAL NEEDS
SAFETY NEEDS
LOVE, AFFECTION, ANDBELONGINGNESS NEEDS
ESTEEM NEEDS
Maslows Hierarchy of Needs
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Maslow s Hierarchy of Needs
SELF-ACTUALIZATION
NEED
FOR
MASLOW EMPHASIZES NEED FOR SELFACTUALIZATION IS
A HEALTHY MANS PRIME
MOTIVATION
Maslows Hierarchy of Needs
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Maslow s Hierarchy of Needs
SELF-ACTUALIZATION
NEED
FOR
MASLOW EMPHASIZES NEED FOR SELFACTUALIZATION IS
A HEALTHY MANS PRIME
MOTIVATION
SELF-ACTUALIZATION MEANS ACTUALIZING
ONES POTENTIAL BECOMING ALL ONE IS
CAPABLE OF BECOMING
Maslows Hierarchy of Needs
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Maslow s Hierarchy of Needs
PHYSIOLOGICAL OR SURVIVAL NEEDS
SAFETY NEEDS
LOVE, AFFECTION, ANDBELONGINGNESS NEEDS
ESTEEM NEEDS
SELF-ACTUALIZATION
NEED
SOCIAL VALUE GROUPS
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SOCIAL VALUE GROUPS
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CONTENTED
CONFORMERS
Want to be 'normal' so go
along with the herd.
Accepting of their lot, they
are comfortable and
contented in the secure
world they have created.
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DI SCONNECTED
Stand apart and are
embittered, and
therefore apathetic.
Tend to live in the ever
present now, not
thinking of tomorrow'sconsequences.
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ESTEEM SEEKERS
Acquisitive andmaterialistic they
aspire to what they
see as the symbols
of success, both in
terms of
'possessions' and
'experiences'.
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I NNOVATORS
Self confident risktakers, they seek out
the new and the
different and set
their own targets to
achieve.
SELF ACTUALISERS
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Seeking the highest levels of
personal development,
they are people and relationship
oriented and consequently are
tolerant and empathetic.
Innovative and experimental by
nature they are open, sociable, far-
sighted and non-materialistic.
They have the self confidence to
back their own judgment and the
vitality to sweep others along with
them.
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STRIVERS
Looking towards Outer
Directedness, image and
status are important but
only to provideacceptance from their
peer group so hold on to
traditional values.
TRADITIONALISTS
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TRADITIONALISTS
Risk averse, they
look to traditional
values and
behaviors for
guidance.
Quiet and
reserved, they
hang back and tryto blend in with
the crowd.
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Gear up for Generation Next
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They were born between 1976 & 1987. They represent16% of the population (45 million), and will be
societys key influencer group in 2005
What Are Their Values?
They want it all -- fame, luxury, fortune
Self-confident, assured, not intimidated
A sense of entitlement -- they want it easily andquickly
Theyre in command & control of their own destiny,play by their own rules
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More likely to be ruled by their instinctsthan homework
They value the fast pace of life
Technology is an important part of theirpersona
Theyre multicultural-- tolerant, pluralistic,diverse
Highly parochial -- little interest in things
beyond their realm, they are their own******
Th t b t t h t
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Theyre great consumers but tough customers
Consumption oriented, but demanding negotiators withhigh expectations
Its all about them
They must be in the spotlight, putting their personalstamp on everything
They want to form relationships with their brands, whichincludes a significant emotional component
The brand must stay fresh
It must be fun and entertaining
Dont expect em to play by the rules
They distrust the system and want to beat it
The Most Intelligent, Informed
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The Most Intelligent, Informed
Consumer Ever
Concurrent with the shifts in power toindividuals is the emergence of an incrediblysavvy, wise consumer.
Key trend drivers:
More access to & utilization of information
More competitors aggressively seeking their
business
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Hard-earned lessons learned during thedownsizing and recession of the early 90s
Greater buying power
More experience in finding deals anddiscounts
Higher levels of education
Higher levels of sophistication
This increasingly discerningconsumer will demand more recognitionand respect from both advertisers andagencies
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More sophisticated consumers (not
just in urban areas) demand moresophisticated products: design andfunction. (e.g targets designers)
Successful brands must offer morethan status: a good value and connection
with consumers personal values andpriorities