CTD 231 Lecture 3: CTD 231 Chapter 3 Notes

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Clothing, Textiles and Interior Design
CTD 231

CTD 231 Chapter 3 Notes Consumer Markets The Consumer-Producer Relationship • Central to product development • Relying only on demographic and psychographic classifications is not enough • Consumer is more pragmatic, less spontaneous, and less brand loyal • Marketplace is increasingly diversified • Innovation, creativity, and service are required to connect with consumers • Production Era ➢ Production output was limited ➢ Goal of most companies was to increase production in order to keep up with demand ➢ Evolved into sales era • Sales Era ➢ Businesses manufactured and sold product without first determining consumers’ wants and needs ➢ Up to sales force and advertising to convince consumers they needed products • Marketing Era ➢ Companies research consumer preferences and appeal to preferences through advertising ➢ Input gathered form consumers used to make decisions on design, price, distribution channels, and promotions ➢ Competition to product products grew and supply began to exceed demand ➢ Late 1970s into 2000s ➢ Wave of business mergers and acquisitions created conglomerates with large marketing and product research and development departments ➢ Created demand by saturating market through advertising • Today’s Consumer ➢ Balances careers with family; young people and men are more involved with shopping ➢ Seeks discounts when available but may be willing to pay more for better quality, personal service, newest item ➢ Expects to find what they want with minimal time and energy but don’t want to look like cookie-cutter clones • To develop consumer intimacy, a developer must: ➢ Develop an individual knowledge of consumers ➢ Create environments where consumers come first ➢ Create organizational structure where innovation and imagination are rewarded • Entering consumer era ➢ Producers provide products tailored to consumer preferences ➢ As consumers invest time in teaching a company about their preferences, they form a partnership which will ultimately give the company a competitive advantage Consumer Analysis and Market Segmentation • Target market – well-defined customer group to which a business wants to sell • Necessary to find out as much about consumers as possible • Capture and use of consumer data will be the competitive weapon of the future; focus on core customer • Market segmentation – breaking down markets into increasingly smaller, well-defined markets • Niche market – a market that appeals to a narrowly focused target customer • 80/20 principle – 20% of customers typically account for 80% of sales for a product Demographics • Statistics about a given population • Used to reach target market effectively by learning about preferred customers • Federal Census of Population can be broken down by zip code to enable companies to distribute and sort products • Demographic Markets ➢ Age ➢ Gender ➢ Marital status ➢ Family size ➢ Income ➢ Spending habits (consumer price index – CPI) ➢ Occupation ➢ Education ➢ Religion ➢ Ethnicity Sources of Demographic Data • Census Data • Local Chamber of Commerce • Nielsen PRIZM (formerly Claritas, Inc.) Applications and Limitations of Demographic Data • Available by region/city, county, state, and zip code, providing snapshots of specific populations • Allows developers and retailers to assort product to specific regions • Used by chain stores entering new market; guides stocking of store, editing, and advertising • Limitation – too broad for small markets, specialized product categories, quickly dated Psychographics • The study of social and psychological factors that influence consumer lifestyles ➢ Social aspects of a lifestyle – reference groups, life stage, and activities ➢ Psychological aspects – personality, attitudes, level of class consciousness,
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