Consumer Participation Hierarchy and Consumer Profiling

copyright 2004

According to the Journal of Consumer Affairs, (1999), consumer participation can be divided into a six level hierarchy. Each level provides insight concerning the demographics of a given set of consumers and how involved they are in consumer activities. This information can be used when an entrepreneur is developing a profile of their ideal customer, which in turn is important in the development of a marketing strategy.

Tier six of the hierarchy is comprised of the “cosmopolitans”. This group of consumers tends to be very diverse socially. They tend to be mature adults in between the ages of 30-44 and are very proactive in making consumption decisions. They are highly aware of deficiencies and problems and tend to be very influential to those around them. They are viewed as leaders in their communities and actively seek out multiple forms of information and synthesize this information into useful units. Cosmopolitans tend to have higher levels of education but not necessarily higher levels of income.

Tier five of the hierarchy is made up of the “opinion leaders”. These consumers tend to have college education and are employed. This group also tends to have, on average, the highest levels of income. Most of this group is comprised of professionals and managers.

Tier four of the hierarchy is made up of the “active consumer”. This group tends to be predominately between the ages of 30 and 44 and has a large amount of homemakers. The vast majority of people in the group would be considered craftspeople or skilled laborers. Finally, this group tends to be erratic in it’s information gathering and comparative shopping.

Tier three of the hierarchy is made up of the “dependent consumer”. This is the stereotypical and average consumer. They tend to have lower levels of education and income and are generally poorly informed about consumer choices. They also tend to have “recognition-level” consumption knowledge. This group generally has a much lower desire for increased consumer knowledge and also contains a significant number of people 60 years of age and older.
Tier two of the hierarchy is the “hi-dependent” consumers. This group makes very poor consumer decisions, and have a very low desire for consumer information. They rely on others to make their consumer decisions for them. This group is lower in education and lower in income.

Finally, tier one of the hierarchy are the “non-decision makers”. This group represents 28 percent of all consumers. This group tends to make decisions based on default options or they leave consumption decisions to someone else.

Note that tiers two and three make up 60% of all consumers, with tier one making up another 28%. This leaves only 12 % of consumers who are well informed, desire multiple forms of consumer information, and do well in perceiving consumer needs and problems.

With the above information one can begin to create a general profile of their ideal customer. For example, here’s how I would apply the above hierarchy to marketing my ebook, “Micro Loans: Finance Your Dreams”. First, I would assume that 60 % of my market is going to made of people who have an average level of education, with average income. Many of the people in the majority market are also retired, but a majority are between the ages of 30 and 44. They tend to have a lowered desire for consumer information and also tend not to perceive consumer needs or problems. They also tend to be fairly dissatisfied with their place in life.


I can then ask myself is this the market I want to pursue? 28 % of the market is completely unmotivated and I don’t want to pursue that market with this product so I’ll choose to target the 12% of the consumer market that tends toward gathering information, perceiving needs, and comparing solutions. So now I can create a customer profile. My ideal customer will be between the ages of 30-44. They will have some college education. They will have an average to above average income but they will probably believe they should have a higher level of income. They will probably be employed and working for someone else. They will have some type of business knowledge based on probably being either a tradesperson, a manager, or a professional.

This customer will probably be open to information concerning wealth creation but the information will need to be credible and well presented without the gloss of appearing to be marketing or overt advertising. This customer will not believe in get rich quick schemes but will probably be interested in proven methods that can be validated. Finally, when this customer perceives a need or problem they will actively look for a solution.

Now it is my task to position my product as a credible, useful, product that will help my customer create wealth leading to increased life satisfaction.

Take a moment to use the above hierarchy in developing your ideal customer profile and see if you can’t create some unique marketing strategies for your product or service.