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How business tunes into living trends to sell products

Merrill Lynch - ''a breed apart.'' This brokerage house didn't always present itself as so exclusive. Originally , the firm was portrayed by a thundering herd of bulls. But it became clear that the ad was sending out the wrong message.

A herd of bulls appeals to ''belongers,'' people who flow with the crowd and prefer the conventional. But Merrill Lynch customers are ''achievers,'' explains a newly published book about American life styles and values. Achievers are the country's leaders, people willing to experiment and who have higher incomes. They definitely do not want to be lumped in with ''part of the herd.''

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This example shows how important an understanding of customer life styles and attitudes is to successful marketing. ''In the old days, [companies] just used demographics'' to figure out where and who their market was, says Arnold Mitchell, author of ''The Nine American Lifestyles: Who We Are & Where We Are Going'' (Macmillan).

''But [demographics] is no longer as comprehensive a measure.People have gotten more complex. If you are 28 and making $30,000, that doesn't say much about what you think is important,'' Mr. Mitchell said in an interview. Mitchell is also head of the Stanford Research Institute's values and life styles program - to which companies subscribe and in return get SRI's detailed market research on life style trends.

Companies and advertising agencies have been relying on information about consumer attitudes for at least 15 years. But living styles are changing, and marketers will be seeing different consumer attitudes emerge in the '80s than they saw in the '70s. The number of companies using life styles as a marketing guide to fine-tune demographic findings is still increasing, Mitchell says. One industry is just beginning to discover it.

''One of the changes I've noticed over the past few years are more and more service companies'' using life styles in marketing, says Adam Stagliano, vice-president with the consumer marketing group at Yankelovich, Skelly & White Inc., the other major firm with a subscriber service about life style trends. Mr. Stagliano says the financial services industry especially ''is becoming more market oriented and driven - they are seeing that life styles is a part of the market that they have to take into account.''

''Values and behavioral marketing - this is the leading edge, but most (brokerage) companies are just scratching the surface,'' says Jerry Rosenstrach, director of marketing development at Prudential-Bache Securities. Pru-Bache looks at the demographics, but also interviews groups of people ''to get the tone,'' Mr. Rosenstrach says.

He has noticed that ''the magnitude of real retirement has started to creep into lives way earlier. People are now thinking about it and getting more nervous.'' He also thinks young people are ''staying away from marriage and the overwhelming responsibility of having to account for what they're doing'' and are more speculative with their money. In July, Pru-Bache will begin advertising ''scenarios'' showing various life styles using the company's services.

What other life style trends are ahead?

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If you extend the direction of general economic, demographic, and social trends we've been moving through since the 1960s, Mitchell says, you'll start to see the decade of ''the real thing'' begin to take shape. By this ''we mean a shift in mood and values and power lines to seek the down-to-earth, the authentic, the direct, the honest, the unfrilly, the real,'' Mitchell says in his book.

The values group that's cited in the book as the fastest-growing segment is the ''inner-directed'' category, so named because ''the principal driving forces of their lives are internal, not external,'' says Mitchell. Money is of relatively little importance, compared with inner growth. Among many other profiles, this group represents environmentalists, the college-educated, punk-rockers, the societally conscious, rock climbers - about 20 percent of the American population.

Mitchell sees this group as accounting for 26 percent of the population by 1990 and thinks many companies will have difficulty marketing to it because they don't understand it.

The '80s trends noted by Mr. Stagliano at Yankelovich echo ''the real thing'' theme.

''The consumer will have more stringent quality criteria, will scrutinize the price/value relationship more often, and will be open to new distribution channels,'' Stagliano says. The health trend will still be very big, and so will home technologies.

But, he says, the '80s trends ''are still unfolding.''

''People are still trying to work through what works and what doesn't work from the '70s values.''

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