VALS: sophisticated way to entice consumers

''Raise your hand if you agree that what you do at work is more important than the money you earn. ''Raise your hand if you agree there is too much power concentrated in the hands of a few large corporations.

''Raise your hand if you disagree that women should take care of their homes and leave the running of the nation to men.''

It was a rainy autumn night when Gloria Esdale McConnell of SRI International put these questions to members of the local community who packed the small auditorium at this scientific think tank. Despite the inclement weather, they had turned out in large numbers for an open meeting called ''Changing Values and Lifestyles of American Communities.''

''If you raised your hand to all three of these questions, you probably fall into a group which we call the Societally Conscious,'' continued Ms. McConnell, director of SRI's Values and Lifestyles (VALS) program, an approach to market research that is enjoying considerable success on Madison Avenue.

Essentially, VALS divides the United States public into nine groups, which vary not just in demographics (age, income, education, marital status, etc.) but also in basic values.

''Societally Conscious'' is the VALS name for one of these groups. It is part of a unique vocabulary, dubbed VAL-speak, that reflects a new and increasingly popular framework for trying to understand the effects of social trends in the United States.

Today VALS is a $2 million-a-year operation. Its client list reads like a Who's Who of corporate America. Its concepts lie behind some of the most successful ad campaigns of the last year or two. In 1983 a survey of marketing managers named it among the 10 most significant market-research breakthroughs of all time.

But up to five years ago it was just a modest in-house project.

In the late 1950s, Arnold Mitchell, an SRI marketing analyst, realized that an increasing number of people did not fit neatly into the old stereotypes. In 1960 Mr. Mitchell and two colleagues published a report suggesting that people's values influence their spending patterns. During the late '60s and early '70s he produced a number of reports that attempted to predict how the children of the ' 60s would affect consumer markets.

Through the 1970s, market research was dominated by demographics. Analysts divided consumers by such quantitative measures as age, income, amount of education, and marital status. But researchers became increasingly disenchanted with this approach. A number began experimenting with ''psychographics,'' the attempt to classify people into psychological groupings. VALS has emerged as the most popular method of this new approach.

''VALS,'' explains SRI's Teresa Kersten, ''classifies people into nine life-style groups: People are different, but in fundamental ways.''

A given individual may embody characteristics of more than one group. Also, at various stages in their lives, people may fall into different categories. But when you look at the population in the aggregate, it divides cleanly into these ''constellations of values,'' she maintains.

The VALS typology draws heavily on the thinking of psychologist Abraham Maslow and sociologist David Riesman. It divides the adult population into three broad categories - Need-driven, Outer-directed, and Inner-directed - each of which is further subdivided.

The Need-driven (11 percent of the public) are those at the bottom of the economic pyramid, the economically insecure. The actions of the Outer-directed ( 68 percent of the public) are driven by how other people think about them: Possessions, social standing, and traditional institutions are important to them. Inner-directeds (19 percent and growing) are a post-World War II category: Inner growth, aesthetics, and a simple but rich life style are distinguishing characteristics. Each of these groups is further sub-divided.

According to VALS, there are two basic types of Need-driven people: Survivors and Sustainers. Survivors tend to be older people who feel life has passed them by. They are concerned with security and maintain old life styles. Sustainers tend to be the young poor, those who want to get ahead but find it hard to do so. This group tends to be frustrated and feels that luck is the only way to get ahead.

Outer-directeds fall into three categories: Belongers, Emulators, and Achievers. Belongers are those who fall into the traditional middle-class mold. They like to fit in, not stand out. Patriotism, church, family are at the center of their lives. Emulators have higher aspirations. They are conspicuous consumers on a modest income and are most likely to be heavily in debt. They want to be Achievers, those who have realized the traditional American dream. Achievers are highly competitive. They feel they have worked very hard for their success and so reward themselves with a lavish life style.

If the Outer-directeds represent the traditional American stereotypes, the Inner-directeds represent a group that has become a significant influence since 1960. These include three types: I-Am-Me's, Experientials, and the Societally Conscious. I-Am-Me's tend to be young (18-24 years of age) and are a transitional group. They are rebellious and start fads just to make themselves stand out. Experientials throw themselves into life. They tend toward the athletic: jogging, windsurfing, rock climbing. They prefer being participants to being spectators in life. The Societally Conscious are similar to Achievers, but their primary motivation is making the world a better place. They tend to embrace causes such as the environment and the nuclear freeze.

Finally, at the pinnacle of the VALS typology, is an elusive group that combines the effectiveness of the Achievers with the sensitivity of the Societally Conscious. Called Integrateds, this small group (estimated at 2 percent of the population) balances making a living with enjoying life.

Until 1980 the VALS typology was highly speculative. In an attempt to validate its ideas, the group began conducting a series of national surveys. The original involved a questionnaire 85 pages long that ranged over topics such as basic attitudes, TV viewing, food preparation, product use, and sexual habits.

This provided the SRI researchers a wealth of information. They developed a closely guarded technique that uses a 30-item questionnaire to type a given group. Once this has been done they can estimate what products are of most interest to the group and what advertising techniques will be most successful in reaching it.

The campaign called ''A Breed Apart'' done by Merrill Lynch, the investment company, was based on VALS. The firm replaced its ''Bullish on America'' herd with a lone bull, because the SRI analysis suggests that the upwardly mobile and self-motivated people they want to attract view themselves as self-made visionaries rather than a part of a herd. A follow-up survey after 18 months showed an increase in viewer recognition of 8 to 55 percent, accompanied by a 2 -point growth in Merrill Lynch's share of the New York Stock Exchange market.

Timex also turned to VALS for guidance in positioning its new line of personal health products. It targeted two VALS groups and, after a year, it had grabbed 34 percent of the market.

The technique has its share of critics. Some advertising professionals feel it is overly theoretical, rather than empirical.

Others have suggested it is just a repackaged version of the traditional American status ladder and that SRI's statistics do not support divisions into some of its smaller groups, like Integrateds.

Another limitation is that it cannot distinguish minority groups. Even VALS users caution that it cannot be used blindly.