The Fastest-growing U.s. Population Subsegment Now Number Nearly 50 Million

Characteristics Affecting Consumer

Behavior (pp 161-175)

Consumer purchases are influenced strongly by cultural, social, personal, and psychological characteristics, shown in 0 Figure 5.2 on the next page. For the most part, marketers cannot control such factors, but they must take them into account.

Cultural Factors

Cultural factors exert a broad and deep influence on consumer behavior. The marketer needs to understand the role played by the buyer's culture, subculture, and social class.

Culture

Culture is the most basic cause of a person's wants and behavior. Human behavior is largely learned. Growing up in a society, a child learns basic values, perceptions, wants, and behaviors from the family and other important institutions. A child normally learns or is exposed to at least some of the following values: achievement and success, activity and involvement, efficiency and practicality, progress, hard work, material comfort, individualism, freedom, human-itarianism, youthfulness, and fitness and health. Every group or society has a culture, and cultural influences on buying behavior may vary greatly from country to country (see Real Marketing 5.1). Failure to adjust to these differences can result in ineffective marketing or embarrassing mistakes.

Marketers are always, trying to spot cultural shifts in order to discover new products that might be wanted. For example, the cultural shift toward greater concern about health and fitness has created a huge industry for health-and-fitness services, exercise equipment and clothing, organic foods, and a variety of diets. The shift toward informality has resulted in more demand for casual clothing and simpler home furnishings.

Subculture

Each culture contains smaller subcultures, or groups of people with shared value systems based on common life experiences and situations. Subcultures include nationalities, religions, racial groups, and geographic regions. Many subcultures make up important market segments, and marketers often design products and marketing programs tailored to their needs. As a case in point, we will look at examples of four important subculture groups in the United States: Hispanic, African American, Asian American, and mature consumers.

Hispanic Consumers. The U.S. Hispanic market—Americans of Cuban, Mexican, Central American, South American, and Puerto Rican descent—consists of nearly 45 million consumers. The U.S. Hispanic population has grown fivefold since 1966, making it the fastest growing U.S. subsegment. By 2050, this group will make up nearly one-third of the U.S. population. Hispanic purchasing power now exceeds $850 billion and is expected to top $1.2 trillion by 2012, an 86 percent increase over 2003 levels.4

Although Hispanic consumers share many characteristics and behaviors with the mainstream buying pubic in the United States, there are also distinct differences. Hispanic consumers tend to buy more branded, higher-quality

The environment

Marketing stimuli

Other

Product

Economic

Price

Technological

Place

Social

Promotion mm^MBHMS

Cultural

But it's very difficult to "see" inside the consumer's head and figure out the whys of buying behavior

(that's why it's called the black box). Marketers spend a lot of time and dollars trying to figure out what makes customers tick. V________________J

Buyer's black box

Buyer's characteristics Buyer's decision process

Buyer responses

Buying attitudes and preferences Purchase behavior: what the buyer buys, when, where, and how much Brand and company relationship behavior

FIGURE I 5,1 Model of Buyer Behavior

Buyer Decision

products—generics don't sell well to this group. They tend to be deeply family-oriented and make shopping a family affair—children have a big say in what brands they buy. Perhaps more important, Hispanics, particularly first-generation immigrants, are very brand loyal, and they favor companies who show special interest in them.5

Even within the Hispanic market, there exist many distinct subsegments based on nationality, age, income, and other factors. For example, a company's product or message may be more relevant to one nationality over another, such as Mexicans, Costa Ricans, Argentineans, or Cubans. Companies must also vary their pitches across different Hispanic economic segments. Language is another issue. Older, first-generation Hispanics, might prefer Spanish as their primary or only language. Younger second- or third-generation Hispanics might be more comfortable with English.

Thus, companies often target specific subsegments within the larger Hispanic community with different kinds of marketing efforts. Consider two campaigns created by Hispanic agency Conill Advertising of New York for two very different Toyota brands, the full-size Tundra pick-up truck on the one hand and the Lexus on the other.6

The Tundra is a high-volume seller among Mexican immigrants in the Southwest who are characterized as Jefes, local heroes considered pillars of strength in their communities. To reach that consumer, Conill devised a campaign that catered to El Jefe's penchant for regional Mexican music and the national Mexican sport of charreadas (Mexican-style rodeos). The campaign consisted of a series of successful Tundrazo charreadas events and a Tundrazo Music Tour, supported by TV and print ads, all emphasizing the Tundra's size, ruggedness, and power. The pitch: The Tundra is as tough as the guy who gets behind the wheel.

AConill's campaign for Lexus, couldn't be more different. For Lexus, the agency targeted the luxury market in the city of Miami, in the U.S. state of Florida, reaching out to affluent Hispanics who appreciate refinement, art, and culture with a campaign that centered on art and design. Lexus joined forces with local artists Hector Cata and Christian Duran, asking them to create their view of "the pursuit of perfection in South Florida." The result was a brightly displayed Lexus print campaign placed in the Hispanic lifestyle magazine, Ocean Drive en Espanol. The Miami campaign helped to move Lexus from the fourth-ranked player in the luxury market to market leader in only 18 months.

Hispanic Subsegment Toyota Car

Targeting diverse Hispanic subsegments: Toyota's various brands target different Hispanic markets with very different programs and appeals. This ad for Lexus targets the luxury market in the city of Miami, in the U.S. state of Florida, reaching out to affluent Hispanics who appreciate refinement, art, and culture with a campaign that centers on art and design.

Targeting diverse Hispanic subsegments: Toyota's various brands target different Hispanic markets with very different programs and appeals. This ad for Lexus targets the luxury market in the city of Miami, in the U.S. state of Florida, reaching out to affluent Hispanics who appreciate refinement, art, and culture with a campaign that centers on art and design.

Pnc Bank Targeting Hispanics

Procter & Gamble's roots run deep in targeting African American consumers. For example, its CoverGirl Queen Latifah line is specially formulated "to celebrate the beauty of women of color."

African-American Consumers. With annual buying power of $799 billion, estimated to reach $1 trillion by 2012, the 38.7 million African-American consumers also attract much marketing attention. The U.S. black population is growing in affluence and sophistication. Although more price conscious than other segments, blacks are also strongly motivated by quality and selection. Brands are important. So is shopping— black consumers seem to enjoy shopping more than other groups, even for something as mundane as groceries. Black consumers are also the most fashion conscious of the ethnic groups.7

In recent years, many companies have developed special products, appeals, and marketing programs for African-American consumers. A For example, P&G's roots run deep in this market. Procter & Gamble currently spends six times more on media targeting black consumers than it did just five years ago. It has a long history of using black spokespeople in its ads, beginning in 1969 with entertainer Bill Cosby endorsing Crest. Today, you'll see actress Angela Bassett promoting the benefits of Olay body lotion for black skin, pro golfer Tiger Woods discussing the virtues of Gillette razors, and the actress and comedian Queen Latifah in commercials promoting a CoverGirl line for black women. "The new Queen Collection was inspired by me to celebrate the beauty of women of color," says Latifah, "and it gives women the confidence they are looking for by accentuating our natural features."8

P&G has also tailored a number of its products to the special preferences of African-American consumers. For example, when market research showed that blacks prefer more scents and flavors, P&G added new scents to Gain detergent and flavors to Crest Whitening Expressions toothpaste. And the consumer products giant has created a line of Pantene Relaxed and Natural shampoos specially formulated for women of color. Such moves have made P&G an acknowledged leader in serving African-American consumers. Says one industry watcher, "Without question, P&G has to be seen as one of the companies that other companies pattern their behavior after."9

Asian-American Consumers. Asian Americans are the most affluent U.S. subculture. They now number more than 14.4 million and wield more than $450 billion in annual spending power, expected to reach $670 billion in 2012. They are the second-fastest-growing population subsegment after Hispanics. Chinese Americans constitute the largest group, followed by Filipinos, Japanese Americans, Asian Indians, and Korean Americans. The U.S. Asian-American population is expected to more than double by 2050, when it will make up nearly nine percent of the U.S. population.10

Asian consumers may be the most tech-savvy segment—more than 90 percent of Asian Americans go online regularly and are most comfortable with Internet technologies such as online banking and instant messaging. As a group, Asian consumers shop frequently and are the most brand conscious of all the ethnic groups. They can be fiercely brand loyal. As a result, many firms are now targeting the Asian-American market, from, Toyota and FedEx to Southwest Airlines and Wal-Mart. Here's an example:11

A PNC Bank builds relationships with Asian Americans through advertising and public relations campaigns that focus on family values and savings, both central to the Asian American culture. Starting with its Lunar New Year campaign, celebrating the most important holiday in many Asian cultures, PNC Bank promotes specific services such as account openings and small business banking tailored specifically to Korean and Chinese [American] customers. The bank sponsors events such as PNC Merry Wind Summer Festival, complete with ethnic food, family entertainment, and free financial consultations. It also provides in-language financial consultants at many branch locations.

Mature Consumers. Mature consumers are becoming a very attractive market in the United States and other developed countries around the world. By 2015, the entire U.S. "baby boom" generation, the largest and wealthiest demographic cohort in the country for more than half a century, will have moved into the 50-plus age bracket. They will control a larger proportion of wealth, income, and consumption than any other generation.

Procter & Gamble's roots run deep in targeting African American consumers. For example, its CoverGirl Queen Latifah line is specially formulated "to celebrate the beauty of women of color."

Social Class Ads

Targeting Asian Americans: Because of the segment's affluence and rapidly growing buying power, financial institutions like PNC Bank cater directly to this segment with specially developed ads and marketing programs.

Social class

Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors.

Almost every society has some form of social class structure. Social classes are society's relatively permanent and ordered divisions whose members share similar values, interests, and behaviors. Social scientists have identified seven typical social classes shown in — tfc Figure 5.3.

Social class is not determined by a single factor, such as income, but is measured as a combination of occupation, income, education, wealth, and other variables. In some social systems, members of different classes are reared for certain roles and cannot change their social positions. In other countries, however, the lines between social classes are not fixed and rigid; people can move to a higher social class or drop into a lower one.

Marketers are interested in social class becausc people within a given social class tend to exhibit similar buying behavior. Social classes show distinct product and brand preferences in areas such as clothing, home furnishings, leisure activity, and automobiles.

Pharmaceuticals, travel, and financial services companies have long targeted older consumers. But as this group grows in numbers and buying power, companies in all industries—from groceries, beauty products, and clothing to furniture and consumer electronics—are devising new ways to lure aging big spenders.12

Contrary to popular belief, mature consumers are not "stuck in their ways." To the contrary, a recent study showed that older consumers for products such as stereos, computers, and mobile phones are more willing to shop around and switch brands than their younger counterparts. For example, notes one expert, "some 25 percent of Apple's recently released iPhones—the epitome of cool, cutting-edge product—have been bought by people over 50."13

The growing cadre of mature consumers creates an attractive market for convenient services. For example, the home-improvement stores Home Depot and Lowe's now target older consumers who are less enthusiastic about do-it-yourself chores than with "do-it-for-me" handyman services. And their desire to look as young as they feel also makes more-mature consumers good candidates for cosmetics and personal care products, health foods, fitness products, and other items that combat the effects of aging. The best strategy is to appeal to their active, multidimensional lives. For example, Dove's Pro.Age hair and skin care product line claims that "Beauty has no age limit." Pro.Age ads feature active and attractive, real women who seem to be benefiting from the product's promise. Says one ad, "Embrace the best years of your life with Dove Pro.Age, a new line of products for skin and hair created to let women in their best years realize the beautiful potential that lies within. This isn't anti-age, it's pro-age."

Social Class

Group

Two or more people who Interact to accomplish individual or mutual goals.

Social Factors

A consumer's behavior also is influenced by social factors, such as the consumer's small groups, family, and social roles and status.

Groups and Social Networks

Many-small groups influence a person's behavior. Groups that have a direct influence and to which a person belongs are called membership groups. In contrast, reference groups serve as direct (face-to-face) or indirect points of comparison or reference in forming a person's attitudes or behavior. People often are influenced by reference groups to which they do not belong. For example, an aspirational group is one to which the individual wishes to belong, as when a young football player hopes to someday emulate star David Beckham and play professional football.

The Major American Social Classes ra a>

Upper Class

Upper Uppers: The social elite who live on inherited wealth. They give large sums to charity, own more than one home, and send their children to the finest schools.

Lower Uppers: People who have earned high income or wealth through exceptional ability. They are active in social and civic affairs and buy expensive homes, educations, and cars.

Social class is not determined by a single factor, but by a combination of all of these factors.

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Responses

  • anna-liisa
    Which group is the fastestgrowing u.s population subsegment, now number nearly 50 million?
    8 years ago
  • muhammad
    What is the fastest growing customer segments for car buying?
    5 years ago

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