INTERGENERATIONAL DIFFERENCES IN RESPONSES TO MARKETING STIMULI

STP MARKETING
MARKET SEGMENTATION Identify segmentation variables and segment the market Develop profiles of resulting segments MARKET TARGETING Evaluate the attractiveness of each segment Select the target segment(s) MARKET POSITIONING Identify possible positioning concepts for each target segment Select, develop, and communicate the chosen positioning concept

Source: Philip Kotler, Marketing Management, 8th edition

SEGMENTATION VARIABLES
GEOGRAPHIC Region City or Metro size Density Climate PSYCHOGRAPHIC Social Class Lifestyle Personality DEMOGRAPHIC Age Gender Family size Income Occupation Education Religion Race Nationality
Source: Philip Kotler, Marketing Management, 8th edition

BEHAVIORAL Occasions Benefits User status Loyalty status Readiness stage Attitude toward product

Family life cycle Usage rate

SEGMENTATION VARIABLES
Traditional demographic breakdowns used in

the past are no longer relevant. Society and culture are changing. (Geller, Geller Media International) Segmenting by age is ineffective because age and life stages do not go hand in hand anymore (Rice & Seals-McDonald, 1995) Marketers need to grasp that there is a difference between the over-fifties of today and those of previous generations (Carrigan & Szmigin, 2000)

SEGMENTATION VARIABLES
Generational issues have come to the

forefront in understanding consumer habits, tastes, and buying preferences (Fisherman, 2000) Generationally determined lifestyles and social values exercise as much influence on buying and purchasing as do more commonly understood demographic factors like income, education, and gender (Walker & Clurman, 1997)

GENERATIONS
Generations are whole groups of persons who

move through life with a common identity based on their dates of birth. (Crouch, 1999)
By knowing how the motivations of customers

are tied to the underlying values of the generation to which they belong marketers will be able to tailor their products, services, and communications to their customers needs, interests, and desires. (Walker & Clurman, 1997)

GENERATIONS
A generation is linked by the shared life experiences that occur in its formative years but individuals are also impacted by unique personal experiences via family experiences.

FAMILY

SOCIETY

PERSONAL EXPERIENCES

SHARED EXPERIENCES

GENERATIONS

Ref: Sullivan & Ross (1999)

BUYER BEHAVIOUR
Marketin g Stimuli Product Price Place Promotio n Generational characteristi cs Cultural Social Personal Psychological Generational responses Product choice Brand choice Dealer choice Purchase timing Purchase amount
Source: Philip Kotler, Marketing Management, 8th edition (abridged and revised)

FACTORS INFLUENCING BEHAVIOUR/RESPONSES

CULTURAL Culture Subculture Social Class SOCIAL Reference PERSONAL Age & life-cycle PSYCHOLOGICAL Motivation Perception Learning Beliefs & Attitudes

groups Family Roles and statuses

stage Occupation Economic situation Lifestyle Personality & self-concept

Source: Philip Kotler, Marketing Management, 8th edition

GENERATIONS
FAMILY GENERATIONS

U.S. GENERATIONS

Grandparents Parents Children

GI (pre 1930) Depression (1930-39) War Babies (1940-45) Baby Boomers (1946-64) Generation X (1965-76) Generation Y (1977-95) Echo Bust (1996-?)

(Ref: American Demographics, 1993)

Average generational span = 20 yrs. Age bands are no longer consistent Intergenerational Transfer Children wide diversity of ages

No standard system of definition or nomenclature Not internationally representative Many commonalities, but also differences within generations

CRITERIA FOR SEGMENTATION VARIABLES

EASY TO MEASURE IDENTIFY A GROUP OF CONSUMERS

WHO CAN BE REACHED EFFICIENTLY (Gwinner & Stephens, 2001)

Familial Generations Research Findings

There is clear evidence that consumer preferences,

skills, and behaviors are transmitted generationally (Moore-Shay & Berchmans, 1996) The character of communication and quality of relationship between parent and child significantly influences the degree of IG consensus Character and tenor of the home environment that influence the degree to which children adopt parents values and attitudes rather than actual economic status Chidrens influence greatest where the product is less expensive & for own use (Foxman et al, 1989)

Familial Generations Research Findings

The balance of power is shifting towards the older

generation. Older consumers will switch to brands which recognize their existence and portray them as attractive people with plenty to offer. (Carrigan &Szmigin, 2000) Private necessities attract the greatest amount of IG transfer. (Childers & Rao, 1992) Distinction between luxuries & necessities greater for US than for Thai families Owning the same brand as ones parents less likely to be considered a social faux pas in Thailand as older generation is accorded high respect

Familial Generations Research Findings

Grandmothers enjoy shopping for their

grandchildren generally prefer discount stores, value quality and price, guided by grandchildren on items to be purchased (Kinley & Sivils, 2000) 2/3 of adult generation reported at least a fair amount of influence on parents purchase decision (Sorce, Loomis & Tyler, 1989) Mothers are primary socialization agents and influence the MAB of their children (Carlson et al., 1994)

Familial Generations Research Findings

FCP may play a role in the acquisition of marketplace

MAB (Carlson et al., 1994) Greater communication and influence lead to greater similarity in family members brand purchase behaviour (Moore et al.,2000) Intergenerational effects decrease with age. Most prominent in early adulthood. Cultures where the emphasis is on interdependence and cohesion due to extended family structure lead to a greater cumulative impact on intergenerational influence

Familial Generations Research Findings

Parental style has an influence on the

consumer socialization of children (Carlson et al., 2001)

FAMILY INFLUENCES
Consumer Socialization Research Intergenerational Transfer Research
Family Characteristics Parenting Styles Time Away from Home Dyad Linkages Product Category Level of Childrens Education Perception of Parents values & views Communication Pattern Brand Preference Brand Loyalty Store Loyalty/Preference Shopping Strategies Information search beh. Response to promotion Price-Quality Beliefs Price Consciousness Price Sensitivity

INTERGENERATIONAL INFLUENCE

Older

Younger

SOCIETY
N

FAMILY INDIVIDUAL FAMILY SOCIETY

SOCIETAL GENERATIONS
Sociologists report that common experiences create a central

tendency that differentiates one generation from another Should not make sweeping generalizations (Zill & Robinson, 1995) e.g. Net Generation (4 groups identified) (Napoli & Ewing, 2001) Each has distinctive differences due to a different historical perspective (Sullivan & Ross, 1999) Knowing the nature of the shared experiences, based on when people were born, allows us to predict motivations, attitudes and behaviour (Smith & Clurman, 1997; Sullivan & Ross, 1999) Each has specific buying behaviour, responsiveness to different media & require different marketing approaches (Harris, 1999; Smith & Clurman, 1997)

SOCIETAL GENERATIONS
Every generation will ultimately pass through the

same life stages youth to old age but will respond based on shared values of their generation. Preferences are deeply implanted. (Smith & Clurman, 1997) Pre Baby Boomers (Late 50s and over) have a more constrained set of expectations and hold to traditional values hence are slow to embrace new products (Smith & Clurman, 1997) Now more than willing to spend on themselves. (Fisherman, 2003) Over 70s are avid readers (Fisherman, 2003) Older minds are more responsive to nuances, subtleties, emotional content and context of information. Prefer narrative-style presentations (Sullivan & Ross, 1999)

SOCIETAL GENERATIONS
Boomers most populous and influential

generation in US.(Smith & Clurman, 1997) They love self-improvement and are self-absorbed. (Fisherman, 2003) Baby Boomers are externally motivated; appearances and possessions count. (Tycer, 1999) Have a belief in, and search for the quick fix and are hesitant to change. (Tycer, 1999)

SOCIETAL GENERATIONS
GENERATION Xers: More likely to seek a balance of work and leisure

activities than boomers were as young adults. (Ritchie, 1995) Very diverse group (teams of psychologists and cultural anthropologists id 4 groups) (Rice & Seals McDonald, 1995) Dislike overstatement, hype, self-importance in ads (Ritchie, 1995) Very practical orientation (Ritchie, 1995). Prefer honest, straight-forward approach (Fisherman, 2003; Tycer, 1999)

SOCIETAL GENERATIONS
GENERATION Xers (continued): Place importance on traditional values of family

and stability (Ritchie, 1995) Tend to be more self-confident and start about 70% of new businesses in the US (Tycer, 1999) Like alternative methods and new products, are computer-dependent, need flexibility, value opportunities to learn and to improve themselves (Tycer, 1999)

SOCIETAL GENERATIONS
Young adults are more interested in art, TV, and movies

than physical exercise. Unifying traits are insecurity, importance of education, length of time to enter the adult world (Zill & Robinson, 1995) Generation Y needs constant change and speed (Fisherman, 2003) Younger minds are more literal, generally respond to a more direct and detailed language style (Sullivan & Ross, 1999) Kids are not the same all over the world but resemble each other more than any other generation in history (Sellers, 1989) Brand preferences established between ages 15 25. Brand not as important as fit, style and look. Brand is a short cut for decision making (Taylor & Cosenza, 2002)

ALTERNATIVE VIEWS
Generations (dates of birth) vs cohorts (important

external events that occur during formative years) (Rice & Seals McDonald, 1995) Generational marketing vs Lifestages Transition, Early, Expansion, and Mature stages. More applicable to some products (CRMTrends.com, 2000) The role of cognitive age (Gwinner & Stephens, 2001) Apart from Baby Boomers other American generations are an arbitrary timeframe. Generation is a construct that owes its existence, its plausibility, and its vitality to consumer culture. (Crouch, 1999)

RECOMMENDATIONS
Advertising targeted toward older consumers

when portraying old age should use fit, active and healthy role models from their own generation (Carrigan & Szmigin, 2000) Print media (newspapers) can be used to target older consumers (Somerville, 2001) Sales by mail catalogue sales preferred. (Fisherman, 2003) Use messages with emotional content and narrative-style presentations. Word-pictures, analogies, and metaphors are effective tools of communication (Sullivan & Ross, 1999) Seniors need a lot of hand holding, a high touch relationship (Harris, 1999)

RECOMMENDATIONS
For older consumers product needs to be

promoted as economical and provides great value for money (Knight, 2003) Will respond very well to coupons and discount offers. (Knight, 2003) For older consumers products should be focused on family values (Knight, 2003) Baby Boomers require quicker and more convenient service (Wilkening, 1999)

RECOMMENDATIONS
Do not use direct mail for Boomers (Wilkening,

1999) Promote quality of life when getting older (Wilkening, 1999) Perfect services and products for Boomers require little change in the users habit and provide the quick fix. (Tycer, 1999) Sales can be dealt with over the telephone, or in person but needs to be quick and easy, with no hassle (Harris, 1999)

RECOMMENDATIONS
For Gen Xers use good eye-catching

graphics (Knight, 2003) New alternative services or products offering a non-traditional experience, or an opportunity for growth and improvement (Tycer, 1999) Provide flexibility and control either in acquisition or in use (Tycer, 1999)

RECOMMENDATIONS
Teens international coverage easier due to

youth culture that revolves around music, fashion, & humour (Sellers, 1989) Family branding not recommended for teens who like brands specifically designed for them. Sub-brands to achieve a different image is appropriate. Always keep in mind the coolness factor. (Taylor & Cosenza, 2002) Must attempt to create word of mouth buzz (Taylor & Cosenza, 2002)

RECOMMENDATIONS
Products targeted to young adults must be

perceived as useful not just for status or to make a statement (Ritchie, 1995) Advertising is an effective tool for Gen Xers (young adults). Message must be deemed as sincere (Paterson, 1994; Ritchie, 1995) Shift advertising away from print media and towards cable TV, progressive media, and computer access media (Paterson, 1994) Channel information through the Internet or by way of peers. (Anonymous, 1999) Use interactive media. (Wilkening, 1999) Promotional message should be informational (Paterson, 1994)

RECOMMENDATIONS
Net Generation (Generation Y): prefer

magazine ads and shopping catalogues, hate unsolicited e-mail and radio ads. Need to develop integrated communication strategies that combine the use of interactive technologies with the more traditional media channels (Napoli & Ewing, 2001; Oakley, 2000) is direct and detailed, avoid ambiguity and subtlety (Sullivan & Ross, 1999)

For younger minds use a language style that

RECOMMENDATIONS
Marketers who target children must

consider the complexities of family consumer socialization processes (Carlson et al., 1994) Targeting children Children in ads about 2 years older than target, create a cool image for the product (Cool = confident, respected, & always knowing the right thing to say). Dont forget Mom (Sellers, 1989)