Generation Y Consumers - Essay Example

Assignment: Consumer Behavior Generation Y consumers continue to perplex Marketers". Firstly, discuss this assertion, and then offer advice to marketers wanting to address this consumer segment. 500 Words "Generation Y consumers continue to perplex Marketers" Generation Y consumers are young consumers who are born after1979 to late 1990’s. Generation Y consumers are children of baby boomers. They differ from their parents in taste, likes and dislikes and preferences. The generation gap with their parents is clear as this group of consumers is technology savvy, large in size, racially and economically diverse in their backgrounds, level of education aspirations are different, family size and pattern are different and different prom their elder generations in many ways. These children and youths are very different from the group of consumers marketers have been serving in past few years. This group within itself is very diverse. They are better decision makers; they do not follow any celebrity or big names to buy brands of their choices. The purchasing power of these children is much more than their parents at the same age. Gen Y poses mammoth risks. Boomer brands flopped in their attempts to reach Generation X, but with a mere 17 million in its ranks, that miss was tolerable. The boomer brands wont get off so lightly with Gen Y. This is the first generation to come along thats big enough to hurt a boomer brand simply by giving it the cold shoulder--and big enough to launch rival brands with enough heft to threaten the status quo. (Neuborne, 1999) Marketer has new challenges from the understanding of these consumers their needs, choices to dealing with their own perception of consumer needs and choices. Marketer has been using celebrity to endorse products. For instance sports brands like Nike, Reebok or Adidas have been going for celebrities to endorse their brands. Michael Jordan endorses brand Nike. Worldwide Adidas has various sports stars associated with it like Steven Gerrard, Lionel Messi, Djibril Cissé, Juan Román Riquelme, Zinedine Zidane, David Beckham, Jermain Defoe, Oliver Kahn, Santiago Solari, Frank Lampard, Arjen Robben and others. Marketers as well as advertisers are facing challenges to find out ways to attract Generation Y. This is due to diversity of this generation it has become increasingly challenging. Consumers are young people, teenagers and children. The age varies from 7 years to late twenties. These teen and young people belong to different kind of families like single parent earning, both parents earning, divorced, living relationship, adopted and many others. Household income of these families also varies. Level of awareness among these people is high and they understand marketing gimmicks much better than their elder generations. The attention span for any advertisement of marketing effort is for short. In such case things which can attract them and lead to sales are difficult to understand. In such scenario marketer need to study consumer behavior in such a way that previous study or perception does not influence the results. Marketing efforts should be directed towards the emotional aspects of consumers such as humor, fun and excitement and many others. Marketers should try to change the image of the brand which meets the preferences of Generation Y in best way without distorting brand image. This generation is more towards realty shows, adventures and excitement. Marketers can use these tools and provide real time experience to the consumers. 2. "Think globally, act locally". Discuss this statement in relation to the diffusion of consumer culture. 500 Words. In today’s global market place each company is looking to expand its business. Organizations are looking for international business and market opportunities and trying to cater needs of these markets. Market differs with each other in demographics, consumer choices and preferences, taste, culture, traditions and many others. In such scenario it becomes important for the international player to cater the need of any market respecting these factors related to it. Diffusions in consumer culture can be analysed by studying the way various organisations has been catering the needs of local customers in global market. Best examples of act locally are companies into food business like Pizza Hut, Domino’s, McDonald’s and others. McDonald’s Big Mac is replaced by the Maharaja Mac in India. The mutton of its ingredient has been replaced by chicken here. In Israel McShawarma and McKabab is included in the menu, in Greece Greek Mac, McFarmer burger in Germany and others are examples of local variations of international organization. The automobile market is one of the most attractive industries in the world. Product development process in this sector is knowledge intensive and technically complex. The knowledge requirement will range from product knowledge, knowledge of consumer preferences and choices, knowledge of competitors, knowledge of new technological updates and many other factors. The requirement of knowledge varies from nation to nation and incorporating even small changes can be technologically complicated. There are several other issues and areas affecting the knowledge management process in the international automobile sector. Unlike the European markets where the sophisticated models are more in demand or US where large spacious models are preferred in countries like India and China fuel efficient and small passenger cars are in demand. The growing number of finance companies and banking institutes to provide long term loans and growing per capita income are other factors that encourage car sales in the market. Automobile sector is growing with a fast rate in some parts of the world like China, India, Russia and others. At the same time in other part of world like most of the European markets, USA and other matured markets the players need to be innovative in their product offerings. Imagine a single player operating in these two different parts of the worlds. The kind of challenges this will have will be enormous. The challenges will be in every area of management like operations, marketing, human resource management, technology and others. The social cultural environment impacts the strategic decisions for retailers like Wal-Mart. Wal-Mart has to take care of the consumer choices and preferences of the particular location which will be highly influenced by the social and cultural set up of the location. The language, religion, preferences and choices each are important while deciding on the offerings for the consumers. Wal-Mart is operating in different economies from developed to developing countries. In US or UK where economical conditions are stable, gross national income is high and disposable income is high for individual customers, consumer spending is high on overall products of day to day need to the lifestyle products. The markets are matured and competition is high in these developed world markets. 3. Discuss the differences involved in buying something for yourself versus buying something for someone else. 500 Words. Buying something for someone else is always challenging as there are various aspects attached to it. These can be understood as follows: Price: The product which someone is buying for somebody else will have certain budget range. Usually when we buy gifts for someone we allocate some money based on the relationship we have with the person. Usually it happens that we want to buy costly and valuable gifts for the people who are close to us. On the other hand when people buy for themselves they will be least concerned about prices. People can buy low range as well as high range products. It depends on their choice. Chances for impulse purchase will be high when people buy for themselves. Occasion: Occasion also have impact on the kind of shopping we do for others. If it is festival season like Christmas or New Year or special days like birthday and anniversaries we buy different products. Sometimes there is no need of any occasion to buy something for someone. It happens in point of purchase where we see something which reminds liking of someone and we buy the product for him or her. Place: Depending upon our shopping preferences and perceived choice for the person we are buying we can choose different buying places. This differs in the case where one is buying for himself. One may buy things from any place depending on his likes or dislike but when one is buying for someone else he or she may give a second thought to the places from where s/he is buying. Help in Buying: While shopping for others people usually try to get help from someone else to ensure that they are buying right thing. They can take advice or help during, before or after shopping. On the other hand for buying for themselves most of the time they will rely on the decision they are taking for themselves. Psychological Aspects: The more intense relationship one has with other the more confident he would be buying for that person. In other case the person buying something for someone else will always lack confidence. People might get confused between their choices and the things they know about the choices of other person. Cultural Aspects: People buying for someone else might not know all the cultural aspects of other person. It influences shopping behavior of a person when he buys for someone else. Apart from all the points discussed there are several other aspects which influences buying of a person. Current trends and fashion influences shopping behavior in both cases where one is buying for himself or someone else. People are very likely to go for buying substitute when they shop for themselves if they do not get the product of their choice but in the case where they are buying for someone else deciding for substitute becomes challenging. 4. Discuss why children and teenagers form such important segments and demonstrate how marketers might reach these young consumers.500 Words. In a passage of time, the culture of children has absolutely become indistinguishable from the consumer culture during the last century. The children want to have a brand name shoe, skirt etc., the parents are put in such a dilemma either to meet the demands of children to purchase or risking the children to be seen out-casting on the play ground. The marketing of consumer items and children’s relationship is reciprocal. Childhood is a creative, innovative and generative. In the society the children consumers are more than adult consumers. The attitude of this generation is a direct product of their parents. Being born into the age of “active parenting,” these kids were overindulged, overprotected and over supervised. Because of this, Gen Y’ers want constant feedback. Unlike their predecessors, Generation X, these are not latchkey kids, forced to be independent. These kids know that their parent are behind them, and rely on them for personal and financial support. (NAS Insights, 2006) The lifetime value of a child consumer is much more than an adult consumer. This fact has made this segment very attractive for the marketers and corporate. The kid’s consumer’s culture fuses it with a most distant system in the market. In a passage of time we have become the conspirators of reproduction generation by generation. The children have become adults by passage of item and bonded with memories of commercial culture of youth. At present, the marketing strategy for selling children product is to lure the children for branded products such as food items; play in branded spaces and exposing them to TV channel. The marketers and advertising agencies work and trade on psychology of our children for marketing their product. Marketers spend and invest lots of money in developing strategies of different methods to attract children towards their produce and capitalize the opportunities to make or amass money. The marketers conduct research to defend, develop counter measures to meet the market competition. The ability of the youth to remove and neutralize the technique of advertising is snubbed by the other agency so as to increase the sale of their product. In the market, the Internets are counteracted by the here of e-commerce web sites. Now various product brands have also started providing experience to the consumer group especially children and teenagers. It has been a differentiation strategy so that these brands can be in the in the top of the mind of consumer groups for longer period of time. Along with the products companies today are focusing on the experience customer can get from their products and services. There are wide range of products and services from the leading brands of the world, which are creating or associating some or other kind of experience with their product and services. These innovative ways differ in the approach and the delivery methods. Time technology, authentication, sophistication, ambience and theme are among the many factors that are considered before planning to delivery of any kind of experience for the consumer. Sports companies like Nike, Adidas have adopted various innovative ways to provide an experience to each consumer or potential consumer. There are various factors which influence the planning and implementation part of any marketing plan. It varies with the target group and their demographic details. Multinationals have utilised their branding strategy to create the image they wanted among their target consumer groups. These things have been focus of studies for marketers, scholars and researchers. 5. Outline the traditional family life cycle, apply it to current US society, and then evaluate the need for its updating. 500 Words In traditional family in US parents had different responsibilities altogether. Mothers were taking care of children and household tasks whereas fathers were earning money and contributing financial needs of the family. Decision makers were the elders of the family. The values of traditional families are rooted in love, support, tolerance, caring, nurturing and sense of humor. Leibman defines the family as "very much constructed along traditional lines: the working father, the helpmate mother, the child who is both nuisance and source of comfort." (As cited by Blaser, 1999) Traditional family had main earning male member who when retired another earning ale member would have taken his place. Nuclear families have parents and children while in large families grand parents or other members are also included. Now in the present scenario definitions of family has changed. Family is all about caring each other. It can be of single parent, brothers and sisters, uncles or aunts. Types of family range from single parents to dual income families. Parenting has changed as people are relying on outside services like day care centers and others to take care of their children. People can be categorized into generations by their birth years. Three generations are “baby boomers” (1946 – 1962), “generation X” (1963 – 1978) and “generation Y” (1979 – 1988). Recent demographic and related research endows members of the baby boomers, X and Y generations with particular attitudinal and behavioral characteristics. (Gainsford, 2005) In this current scenario marketers need to update themselves about new definitions and types of families which is very different from the traditional families. Self dependency among children has increased as compared to the traditional society. They are more exposed to various kinds of media and communication channels. 6. Select any three religious, ethnic or social groups and show how the values and attitudes of consumers in each shape their behaviors, and the strategies marketers can use to reach them. 500 Words The advent of global markets has resulted in a plethora of product choice, retail channels (e.g., mail catalogues, television, Internet, and stores) and promotional activity, which make consumers’ decision increasingly complex. In the extant consumer behavior literature, most studies that all consumers approach shopping with certain decision-making traits that combine to form a consumer’s decision-making style. There are various factors which influence consumer buying behavior such as consumer’s decision-making: Perfectionism, Brand Consciousness, Novelty-Fashion Consciousness, Recreational, Price-Value Consciousness, Impulsiveness, and Confused by over choice, and Brand-Loyal/Habitual and others. There are several social groups like urban uptown, elite suburbs, city society and Middle America. Each group is divided into various sub groups. The five segments in Urban Uptown are home to the nations wealthiest urban consumers. Members of this social group tend to be affluent to middle class, college educated and ethnically diverse, with above-average concentrations of Asian and Hispanic Americans. (PRIZM NE Social Groups, 2007) Five segments mentioned in the above paragraph are Young Digerati, Money and Brains, Bohemian Mix, The Cosmopolitans and American Dreams. These consumer groups are very strong in terms of their purchasing power and dream of any marketer. It is very competitive to serve these consumers as they look for products and services customized to their specific needs and they are ready to pay premium for these services. They go to the shops of exclusive retailers. They spend heavily on latest technologies and luxury products. They frequently travel abroad and market place for them is not limited to any specific geography as they can visit any country for their specific needs. The most affluent suburban social group, Elite Suburbs is a world of six-figure incomes, post-graduate degrees, single-family homes and managerial and professional occupations. The segments here are predominantly white with significant concentrations of well-off Asian Americans. (PRIZM NE Social Groups, 2007) This is another most attractive segment for marketers where the profit margins are high as compared to the sales volume. This group of consumer spends on beautiful and big houses and household products, expensive clothes and accessories, luxury cars, adventures and traveling. Among second-tier cities, Second City Society stands at the top of the heap, a social group consisting of the wealthiest families who live outside the nations metropolitan core. (PRIZM NE Social Groups, 2007) The second tier city provides volume to the marketers. People living outside the metropolitan area contribute to economy and has been catered by various marketers from the past. These groups of consumer live with family including teenage and college going children. This group is dominated by white Americans. They have large homes and mostly into executive jobs. They spend on technology and communication products, business and cultural media and are fond of luxury cars. They usually shop from upscale retailers. Competition in above mention three groups is high. The first group forms niche market for the marketers as they prefer customized products. There are number of players trying to serve these segments as profit margins are high here. In the case where any marketer is looking for these specific social segments they need to be very careful about their product quality, service they provide and dealing with the customers. 7. Discuss how demographics are essential measures in consumer behavior analysis with particular reference to the US consumer. 500 Words American market is growing in its diversity day by day. Consumers differ in various demographic and economic aspects from each other. Understanding this diversity in order to serve the customers in the best possible ways is equally important. Companies operating in US market are highly competitive in terms of products and services they offer. Pizza Hut targets youth, young couple and children who prefer to eat out. It claims that it offers more than a meal; it will host your childs birthday party, complete with a candle lit cake and entertaining activities. Whenever Pizza Hut is opening any franchise or outlet it studies demographic and social background of the particular region. This helps them understanding and evaluation the kind of business which can be generated from that specific location and growth opportunities it offers. On the other hand Walt Disney with their Disney Parks is the recognized expert in offering experiences. It gives due importance to the reason why people are coming to these parks. People look for a holiday place to enjoy and entertain with their family. The workers are called actors, you the visitor are the guests and the theme park becomes the stage. They know the demographic profile of their guests. Consumer visiting Disney parks are families with children. On the basis of that Disney has put special emphasis on the overall presentation aspect of Disney theme parks. The use of bright colours and cartoon characters shows that target consumers are children. British Airways regard the flight as a supplied unique experience stage. According to each customer’s preference, it provides personal service to release the passenger’s nervousness and anxiety over the long-distance travel. Besides British Airways, American Southwest Airlines and Virgin Atlantic Airways also have the same tactic: let customers have a unique memorable experience. Larger companies or established brand could use the outsourced products rather than manufacturing it and can sell it with the help of advertising and branding efforts. Advertising which is a part for large branding exercise same as sponsorship or any other promotional activities has been utilised in a large way for the success of any brand. Branding provided long term values to the companies. Companies created more brands offered more values to the customers. The branding efforts utilised advertising in a large scale to establish itself in various class, age group or gender of the society. Understanding of demographics is important for any marketer in the world no matter which part of the world it is serving. Failure of understanding consumer and consumer demographics may lead to total rejection of products and services any organisation offers. Better the marketer understand his consumer, better are the chances that he will serve them profitably. Companies which have understood demographics of their target markets are those which have been able to sustain in this competitive scenario. 8. Discuss a consumption subculture to which a member of your family or extended family belongs. How does it affect their consumption behavior? How do marketers attempt to influence their behavior with respect to this subculture? Use appropriate examples. 500 Words Companies are now giving importance to understanding the subculture of American market. American market is growing in diversity and minority groups have increased in size. Whites, African American, African Black, American Asian, Asian, Black, Black Hispanic and others, American society has become very diverse. These groups differ from each other in their social identities and norms, cultural values and languages etc. A particular sigh or color can have different meaning in different subcultures. The living habits, eating, clothing and other aspects of lifestyle will also be different. In such scenario marketer needs to understand all these aspects of the subculture and try to incorporate different strategies for these ethnic groups. In my family my maternal uncle has married an Asian woman. Uncle and aunt had spent couple of years in Asian countries like India, Nepal, Bangladesh, Japan, China and others. Their children have also spent time there and have completed some part of their schooling in these countries. I can easily say with their food habit and the way they live that cultures of these places has influenced them. They not only share their good and bad experiences from these countries but also have learnt various things of day to day life from these countries. Extensive traveling have helped them developing better understanding and respect for all the cultures. They sometimes cook food or dishes they learnt during their stay in these countries and subsequently they visit those market areas where raw materials for these dishes are available. In this case of subculture marketers catering needs of Asian population attracts my family members as well. They read advertisement and watch any important news from these area with interest which is not that much interesting for me as I can not associate myself with that. They read advertisements and sometimes visit the restaurants as well. Marketers from Asian origin or dealing with Asian products easily attract them. The channels they utilize are news, pamphlets, billboards and advertisement in local television. The message usually is simple and clear. My aunt and cousin speak language other than English as well. My aunt feels that still marketers in American market are not been able t identify needs of people from different subcultures. These people specifically go to market or shops which are exclusively dealing with needs of their community or can meet needs. But in large scale or to a large extent there is no big marketer which is serving their needs as effectively as it is required. Trends are changing in the market and most probably in near future large companies and big players in the market will also try understanding needs of these specific to these subcultures. 9. Discuss the factors used by marketers to determine social class, and illustrate how some of these might be used in television or print advertising campaigns. 500 Words Marketers use various demographic and economic factors to determine social class of consumers. Demographic characteristics, such as age, sex, martial status, income, occupation and education are most often used as the basis for market segmentation. Demographic refers to the vital and measurable statistic of a population, it also acts as one of the most efficient and cost affective ways to locate a target market. Chosen the appropriate target market is an integral part to all organizations, understanding psychological and socio-cultural characteristics help to describe whom its members are and how they think and feel. Marketer collects data regarding his target market place. This data includes information like gender, age, household income, types of products used by the household, number of cars and family members and other factors. Household income and size of the family gives an idea about the expenses and affordability. Dual Income No Kids (DINKs) will have more purchasing power than dual income with a kid or kids. More the number of family members more will be distribution of household income to meet their needs according to the social status and social circle. Social class has been divided as follows for America: (As cited in the Class notes of University of Delaware) Upper Americans-upper-upper class, .3%, inherited wealth, aristocratic names. Lower-upper class, 1.2%, newer social elite, from current professionals and corporate elite Upper-middle class, 12.5%, college graduates, managers and professionals Middle Americans-middle class, 32%, average pay white collar workers and blue collar friends Working class, 38%, average pay blue collar workers Lower Americans-lower class, 9%, working, not on welfare Lower-lower class, 7%, on welfare Understanding of the social class of target consumers helps in various ways. It is used in product development, designing, packaging, communication, branding and advertising. Media planning is always based on the profile of target consumer groups and channels available to reach them. The social class determines the kind of publications and channels watched or preferred by target consumers. In a particular area it is possible that people read particular news paper because it covers the local news better than any other news paper or watch a particular entertainment or news channel. In such scenario marketer or advertiser will try to find out the most preferred mode of entertainment and information source of the consumer to reach them effectively. Internet is growing at fast rate and has become one of the important sources of entertainment, information sharing and communication. Number of internet users can be determined by the number of families having computers and internet connectivity. For example, target audience of marketer is young male of age group twenty five to thirty five years and of executive class will have specific preferences according to their demographic profiles. They will like touring and traveling. They will be very keen to know about what is happening around the world or in business world. They will also be very particular about the way they dressed up. Their purchasing power will be high as most of them will be earning for themselves only. They can prefer night club and out doors in week ends. All these factors indicate their choices about reading habit and channels they watch. Most of them will be reading business news papers and magazines and watching business news channels. Marketer can utilize these channels to reach these consumer groups. Reference: PRIZM NE Social Groups (2007), Claritas Inc. Marketing segments available from http://www.claritas.com/claritas/Default.jsp?ci=3&si=4&pn=prizmne_segments accessed on 24th May 2007 NAS Insights, (2006 ) available from http://www.nasrecruitment.com/TalentTips/NASinsights/GenerationY.pdf accessed on 24th May 2007 Kotler, Philip, Marketing Management, Prentice-Hall Inc. New Jersy, 10th Edition, 2000 Blaser, 1999, No Place for a Woman: The Family in Film Noir, World War II, the Traditional Family, and Classical Hollywood Cinema retrieved on 24th May 2006 from http://www.lib.berkeley.edu/MRC/noir/np02wwii.html Neuborne, (1999) Generation Y: Todays teens--the biggest bulge since the boomers--may force marketers to toss their old tricks, retrieved on 24th May 2006 from http://www.businessweek.com/1999/99_07/b3616001.htm Gainsford L, (2005)Baby Boomers, Gen X and Gen Y – Who’s Afraid of Compliance? retrieved on 24th May 2006 from http://www.riskmanagementmagazine.com.au/articles/3A/0C03953A.asp?Type=125&Category=1241 Read More