Describing Customers & Meeting the Needs of Specific Groups

It’s important for retailers to understand their customers because their needs and desires shape their actions and purchases. Consumers are influenced by their life experiences, as well as demographic factors, so understanding how they make decisions can help retailers with promotions. Their decisions are also a result of their attitude and motivation, so even if two customers have similar life experiences and are members of the same demographics, they may make different choices.

Demographic Measurements

Common demographic data include age, gender, race, religion, income, education, and employment and marital status. However, as stated earlier, we should be cautious about using demographic segmentation to avoid being left with large non-homogenous populations and because segmenting populations on demographic variables can lead to stereotyping.

Previously, we considered a population segmented by gender. What if we changed our segmentation variable to income level. Would you be confident saying that individuals with incomes of $100,000 annually were largely homogenous? That their attitudes, beliefs, needs, and wants are all relatively the same?

How would you reconcile for life stage, comparing earners who may not yet have families with those that do? What about earners who have a working spouse vs. those with non-working spouses? How would you account for regional differences and the associated costs of living? Is the buying power of $100,000 the same in San Francisco and Tulsa? Very quickly we begin to see how other factors make segmentation on a demographic variable incomplete.

Similarly, when a population is segmented demographically, stereotypes can be reinforced. Consider again the population segmented by marital status. Are you willing to project attitudes, beliefs, needs, and wants on married couples, assuming they are all the same? What about singles? How would you account for people who are divorced? What about people in long-term committed relationships but are unmarried? You see, we cannot say, “All married people think…” or “All single people believe…” or “All married couples want…” because this obviously is not and cannot be true. People of the same age, gender, race, or income, do not all think, believe, and act the same way. They are different people influenced by all of their experiences with their own unique perspectives.

Consumer Lifestyle Factors

One of the ways that we can put to use our demographic data is to consider the psychographic or lifestyle data of our customers. Psychographic data includes consumer attitudes, values, perceptions, beliefs, and interests. As noted earlier, psychographic segmentation is closely related to behavioral segmentation, though they do have important differences.

For example, psychography is interested in understanding the consumer’s motivations, whether stated or unstated. For the customer, the focus is on “why” of the purchase. By comparison, behavioral segmentation is focused on tracking consumer actions and activity; it cannot infer motivation. The focus of behavioral segmentation is focused on “what” they do. When we consider the motivation (the why) of the customer, we’ll have better insight into their behaviors (the what).

Motivation, Attitude & Buying Choices

As you learned, when reading about the multi-attribute attitude model, attitudes are the enduring assessment a consumer makes about a product or brand or firm, based on their personal experiences, positive and negative. Typically, attitudes are described as being composed of three parts, reflected in the ABC model.

• Affect
• Behavior
• Cognition

Affect refers to how a consumer feels about a product or brand or firm, behavior refers to actions the consumer takes relative to the product or brand or firm, and cognition refers to the beliefs the consumer has about the product or brand or firm. In this way, attitudes are composed of feelings, thoughts, and actions.

These three parts work together to create a hierarchy of effects:

• Standard-learning hierarchy
• Low-involvement hierarchy
• Experiential hierarchy of effects

That is, the sequencing and relative importance of the three parts influence the consumer’s motivation for their decision.

For example, the standard-learning hierarchy describes how an attitude is motivated by cognition with feelings developing from them. Sometimes referred to as the high-involvement hierarchy, it assumes that the consumer will do significant pre-purchase research, during the information gathering stage of the buying process. In turn, they develop beliefs about the available alternatives. Related to this, they’ll develop feelings about the product or brand or firm that is the best “fit” for them. Then, they’ll take action on those beliefs and feelings. Thus, the standard-learning hierarchy would be reflected as C to A to B. This approach implies that the consumer’s attitude is motivated in cognitive beliefs followed by feelings related to them.

By comparison, the low-involvement hierarchy describes attitudes motivated by cognition with feelings ascribed after the purchase decision is made. In these purchase decisions, the shopper is guided by what they know, either from previous experience or as influenced by advertising. Thus, the low-involvement hierarchy would be reflected as C to B to A, where a consumer uses their knowledge at-hand to make a decision, developing feelings about the product or brand or firm after the purchase and consumption.

The experiential hierarchy of effects describes attitudes that are motivated entirely by the consumer’s feelings about a product or brand or firm. Reflected as A to B to C. Feelings lead the decision with cognition and beliefs following the purchase, either reinforcing the feelings or undermining them.

Appreciating the components of attitudes, affect, behavior, and cognition, and how they influence the consumer’s motivation for their decision is important because it helps marketers and sales people understand how they can influence and change consumer attitudes:

• Changing affect
• Changing behavior
• Changing beliefs

Changing affect can be accomplished by pairing or associating a product or brand or firm with something that is perceived favorably by the consumer. When brands use spokespeople, influencers or brand ambassadors, they’re trying to make a favorable association for their brand or product. Marketers may also do this by using endorsers on-pack or in advertising, for example “Made with real Fruit Juice” or “100% All Natural.”

Changing behavior is generally accomplished through short-term promotion or price-discounting. This is the fastest and most direct way to influence behavior. However, because it erodes profitability and is easily copied by competitors, it is not sustainable long-term. As an alternative, firms can re-position a product or brand or firm to better address consumer needs. This does not necessarily imply that the product is actually changed. Instead, the firm may change the way it messages product benefits to better convey that it meets a consumer’s needs.

Changing beliefs is the most difficult, as attitudes are built upon individual experiences and are enduring. Further, marketers tools for engaging consumers are limited, especially those who may have an unfavorable attitude toward your product or brand or firm. Without engagement, marketers are left with single direction communication, in other words, advertising. Nevertheless, they can seek to influence beliefs by changing the currently held ones (Admittedly, this is very, very difficult). Or, they could change the importance of that belief by adding other relevant attributes or changing expectations around what is ideal. For example, Alfa-Romeo has overcome some negative consumer attitudes about the quality of their cars by emphasizing that their relaunch in the United States included the Alfa-Romeo Giulia, a sports sedan with a Ferrari engine.

In all consumers’ attitudes are the enduring assessment they make about a product or brand or firm, based on their personal experiences. They are composed of feelings, beliefs, and actions. Further, they are motivated by the relative importance of these feelings, beliefs and actions and their sequence. Understanding this, marketers can seek to influence consumer attitudes to affect their purchase decisions.

Brand Community

A brand community is a community formed on the basis of attachment to a product or brand, stressing the connection between brand, individual identity, and culture. In the advertising and marketing world, “brand community” has become a term used to encompass a brand’s customers, fans, and advocates. Having a strong and loyal brand community can turn a small brand into a success if it is nurtured and appreciated properly.

The advertising agency Blade Creative Branding writes, “The people out in the marketplace who embrace the values of the brand, as customers and/or purchase influencers, are the brand’s true ‘owners.'” This philosophy has become especially popular with marketers creating and working on social media campaigns with easier interaction and more opportunities to tap into the brand community to leverage the brand.