Meaning of consumption and consumer behaviour (CB) Sheth et al.,1999 “Mental, emotional, and physical activities in which people engage while select, buy, use and dispose of products and services to satisfy needs and desires” Needs: State of deprivation Wants: Satisfy the need Demand: Wants + Purchase 7 Keys It`s motivated Includes many activities It`s a process Varies in time and complexity Involve different roles It`s influenced by external factors Differs from person to person Consumer behaviour definition: set of activities the people go about to address and attempt to address real needs. If there is a need, customer will find ways to fill it. Consumer behaviour as a field of study CB is the study of consumers as they go through the consumption process. CB is the science of studying how consumers seek value to address real needs. By understanding CB it`s possible: - design products with greater value potential - a greater chance of enhancing the well-being of stakeholders (company, customers) - better business for companies - better public policy for governments - better life for individuals and households Consumer as a Process: consumption is the process by which consumers use goods, services or ideas and transform the experience into value; the process in which the marketer and the consumer interact to produce value. Role of CB in today´s business and society CB study is essential for the marketing area companies. Facilitates exchanges between consumers and companies. Provides comprehension of why, what, and why buy. To buy something means use resources in the form of time, money, energy to obtain value (products, services). Dynamic field of CB with respect to technological advances (Information and data-driven marketing) Nowadays, is essential understanding the current consumer by knowing central elements, such as technological changes, and sharing economy to design specific strategies to provide value. Google, Facebook, Twitter, Pinterest are still good sources of digital media for reaching consumers. Companies may use spokespeople on short live videos, experts present content, present live news, brand website. Big data: the massive amounts of data available to the companies can potentially be used to predict costumers’ behaviours. Data include internal records of costumer behaviour (scanner purchase data, survey responses, web traffic records); data from social network interactions; GPS tracking. Factors that influence consumers behaviours during the decision-making process Consumer Behaviour Model - Internal Influences * Psychological *Motivation *Perception * Learning * Beliefs and attitudes * Personal * Personality, Lifestyle, Self-concept * Occupation * Economic Situation * Life-cycle - Social Influences * Social identity – Roles and Status * Reference groups - Family * Opinion leader - Cultural Influences: * Culture * Subculture * Social class - Situational Influences By keeping in mind these influences it´s possible design specific marketing strategies to project a successful value delivery to the consumer. Value is a key component that consumers consider during CB; it is a personal assessment of the net worth for the consumer. Needs and desires motivate the consumer to carries out valuable actions/activities to obtain value. Value is the product/service and gratification (more or less) a consumer receives from consummation. Identity-Based Value Identity-Based Motivation (IBM) model theory (Oyserman, (2007-2019)): * Identities are constructed in the context * People engage in identity-congruent actions * Identities change the interpretation of difficulty In-groups/out-groups (Tajfel & Turner) * Ingroup favouritism (positive self-concept) * Outgroup homogeneity “they are alike; we are diverse”. * Social proximity (distance) ID-Value Value To Customers/Value Delivered to Client (A -B) A) Total value to the client/ Expected benefits Image Value Personal Value Services Value Product Value B) Total cost to the client/ Expected costs Monetary Cost Cost of Time Physical energy Cost Psychic Cost Balbin et al. (1994) framework Considers two types of value, hedonic and utilitarian values. Utilitarian value is gratification that helps consumer with practice issues (solve problems, accomplish tasks). So, activities and objects that help consumer accomplish some task lead to high utilitarian value. In this case, the consumer has a rational explanation for these purchases. Hedonic value is the immediate gratification consumer experiences by some activity. Hedonic value is an end in itself. Hedonic value, different from utilitarian value, is emotional and subjective. The consumer action to obtain hedonic value may be very difficult to explain objectively. Utilitarian and hedonic value are present in many acts of consumption. One experience offers different levels of utilitarian and hedonic value. Value: Pleasure or Usefulness? Utilitarian need * Basic functions and benefits * Rational choice Hedonic need * Pleasure and self-expression * Emotional choice Holbrook (1996) framework Organizes consumer values into eight main categories: Utilitarian *efficiency (convenience) *excellence (quality) Social *status (impression management) *esteem (possession) Emotional *play (fun) *aesthetics Altruistic *ethics (justice) *spirituality (sacredness) Each one of these values is related to one each other in terms of being extrinsic/intrinsic, self/other-orientated, and active/reactive. 7 O`s Model and the 7 O`s companies` answers - What does the market buy? Objects/ Products - Why does the market buy? Objectives/ Motivation - How does the market buy? Operations/ Process - When does the market buy? Occasions - Where does the market buy? Outlets (store/online) - Who participates in the purchase? Organization/ Stakeholders - Who constitutes the market? Occupants/ Consumers Starbucks Case What is the function of the coffee? * Utilitarian: “Energy and flavour of coffee” * Hedonic: “The coffee that you drink says something about what you are”. Marketing can change these priorities. Consumer Decision Process Activities involved in the consumer decision-making process. Needs Awareness/Recognition Maslow Hierarchy/Basic Needs Self-Actualization: *Morality *Creativity *Spontaneity Self-Esteem: *Respect of and by others *Confidence *Achievement Belonging: *Social Interaction *Friends *Family Safety: *Health *Employment *Home Physiological: *Food *Water *Sleep *Breathing *Sex Otto Sharmer Bubbles OWNERSHIP BUBBL: Do we really need to own? Freedom from ownership Need Recognition Stimulus -> Behaviour - Individual and Social Aspects - Influences of the Environment - Decision Process *Case Contrex Change the basic motivational function Associate the product with a target Change beliefs about the product category *Case Havaianas Brand repositioning Celebrity endorsement From commodity to desire object Consumer`s actual state is the perceived current state. Consumer`s desired state is the perceived state for which consumer strives. The need is the gap between these two states. Consumer recognizes a need when actual state begins to drop. Factors that affect desired states: reference group information; consumer novelty seeking; cognitive thought processes; novelty itself. Consumers may anticipate future needs; consumers don`t satisfy all needs quickly; the recognition of a need doesn`t always trigger the other activities. Information Search Internal Search Consumers use their knowledge about products, services, and experiences. Consumers usually begin the search by scanning their memories. External Search (specific, continuous, or accidental): includes friends, family, salespeople, advertising, independent research reports (e.g., costumer reports), the internet, search applications. Consumers usually consider information from family and friends dependable and information from commercial sources less credible. Depends on the consumer experience. A Proposed Model of External Consumer Information Search External Information Search Activity Perceived Ability to Search Motivation to Search Perceived Benefits of Search Perceived Costs of Search Enduring Involvement Need for Cognition Shopping Enthusiasm Education Knowledge – objective/subjective Satisfaction Perceived financial sacrifice Perceived risk Situational involvement Info required for choice rule Perceived product differences Need to justify decision Desire for optimum decision Evoked set size Product complexity Information accessibility Time pressure ZMOT is a concept developed by google, related with digital search. It considers different moments: - Stimulus (need) - Zero Moment of Truth (digital search) - First Moment of Truth (shelf) - Second Moment of Truth (becomes the next person`s ZMOT) Ongoing and Pre-purchase Search: consumer is interested in a particular topic (e.g., a product, an organization). Consumers are usually highly involved. They seek information just for enjoyment and they have an enduring interest. Browsing behaviour is different because in ongoing search information is related to a specific purchase. Factors that influence consumer ‘search activity - Level of involvement (if consumers have a high level of purchase involvement the search will increase) - Perceived risk - The value of search effort - Time availability - Attitude toward shopping - Personal factors - Situational influences Types of information - The number of alternatives available - The price of various alternatives - The relevant attributes that should be considered and their importance - The performance of each alternative on the attributes Evaluating Alternatives Consumers take in consideration: -attributes -feature(s) - performance characteristic of an object; -benefit(s) – perceived favourable result related with a performance. Consumers choose the offer that they believe can deliver the expected value for their needs under the conditions (e.g., time, price, process). Choice Overload (Journal of Consumer Psychology) When large assortments impede choice? When large assortments can benefit choice and when can be detrimental to choice? Factors that moderate the impact of assortment size on choice overload: -Extrinsic (objective) factors *choice set complexity *decision task difficulty -Intrinsic (subjective) factors *preference uncertainty *decision goal Greater choice set complexity; higher levels of decision task ; higher preference uncertainty; more prominent effort-minimizing goal facilitate choice overload. Consequences of choice overload: -Behavioural Outcomes *choice deferral (adiamento) *switching likelihood (probabilidade) *assortment choice (à sorte) *option selection -Subjective State *choice satisfaction *decision regret *decision confidence *Satisfaction/confidence *regret *choice deferral *switching likelihood (measures of choice overload used in prior research) are also power measures of choice overload and can be used interchangeably. Evoked Set: All Brands Unknown Brands Known Brands Overlooked (unnoticed) Indifferent Brands Unacceptable Brands Acceptable Brands Not Buy Buy Level of Involvement High – Extensive More complexes Detailed Rigorous Limited Low - Usual Loyalty Inertia Feature Fatigue: When products capabilities become too much of a good thing (Debora Thomson, Journal of Marketing Research) A: Before Use Capability - Expected utility B: After Use Usability – Experienced utility Purchase Decision Situational Influences (circumstances that involve the purchase of a product) *Social Environment *Physical Environment *Task Management (Mall Task) * Mood Main purchase Roles User: consumer Influencer: salesperson, a celebrity, a friend, another customer Initiator: initiates the decision process Decider: decides for the purchase, the conditions, and the product specifications Buyer: purchases the product and generally pays for it *Case Chocomel Post Purchase/Consumption Post Purchase behaviour Consumers experience the product and verify if the solution can satisfy the need or if it doesn´t satisfy. Satisfaction: Performance ≥ Expectation Strategies to stimulate satisfaction - True Expectations - Warranty - Quick responses Dissatisfaction: Performance < Expectation - Complains - Negative WOM Other emotions: delight, disgust, surprise, exhilaration, anger. Negative emotions are often much more strongly linked to behaviour as they are often much stronger. Post Consumption Discard Consumers refuse packaging that is no longer necessary or any good that is no longer providing value. Disposal alternatives: trashing, recycling, converting, trading, donating, reselling. Motivation Drivers Consumer Motivation Motivation is the driving force in individuals that impels to action. Consumer motivation are the inner reasons behind human actions that drive consumers to address real needs. Homeostasis: the behaviour aimed at maintaining one in a current acceptable state. Self-Improvement: the behaviour(s) aimed at changing one´s current state to a level that is more ideal; consumers ‘acts that cause emotions that help creating hedonic value. Motivation Process (p. 9) Unfulfilled Needs/Desires -> Tension -> Drive ->*Behaviour -> Need Fulfilment/Goal Need Fulfilment/Goal -> Learning Learning ->* Learning -> Tension Need Fulfilment/Goal -> Tension Reduction Tension Reduction -> Cognitive Process ->* Tension Reduction -> Tension Mindset fix vs malleable (apontamentos) Needs are dynamic. Never 100% satisfied. New needs emerge as old needs are satisfied. Motivational Goals (p. 11) People who eat fit granola before exercise, ate more and did less exercise. Motivation + Perception Classic View (demographics) Age -> Life Cycle Stage -> Occupation -> Wealth Recent View (identity-based-motivation) Personality -> Values -> Lifestyle -> Self-Concept It`s all about id goals! Situational cognition Self-Discrepancy Theory: what patterns of self-beliefs cause people to suffer? Higgins, 1989 (p. 14) Self-concept What´s your “actual” self? What´s your “ideal” self (idealized version of yourself created from life experiences)? What`s your “ought” self (who persons feel they should be or should become)? Inconsistences between “actual”, “ideal “and “ought” are associated with emotional discomforts (fear, threat, restlessness). Self-discrepancy is the gap between two of these self-representations that lead to negative emotions. Own Actual – Self-Concept Own Ideal/Ought -Self-Guide Other Actual – Self-concept Other Ideal/ought – Self-Guide Motivation, goals or change a habit (having too many goals at the same time can demotivate) Self-control (is a muscle) versus indulgence. Motivation (perfume exercise; the framework considers value, but we did it with goals) Affiliation Need - desire to affiliate himself with strong characters such as his desire for friendship, acceptance. I belong! (example of goal) Achievement Need - desire to achieve accomplishments (professional, personal, academic). I can do it! Power Need - desire to control the environment, people, and objects around. I master it! Uniqueness Need - desire to be unique, special, different than others. I am different! Basic Consumer Motivations Theory of Motivation by Abraham Maslow look upon two focus that orient consumers behaviour. A prevention focus orients consumers toward avoiding negative consequences (motivation to maintain homeostasis). A promotion focus orients consumers toward the opportunistic pursuit of aspirations or ideals (similarity with self-improvement). Regulatory Focus Theory (Higgins, 1977) Regulatory Focus Beyond Pleasure and Pain. Higgins, 2011 (pág. 20) Psychological Variables with Distinct Relations to Promotion and Prevention Focus Nurturance Needs -> Strong Ideals -> Gain/Non-gain Situations -> Promotion Focus -> Sensitivity to Presence/Absence of Positive Outcomes -> Approach as Strategics Means -> Insure Hits and Insure Against Errors of Omission -> Cheerfulness/Dejection Emotions Security Needs -> Strong Oughts -> Non-loss/Loss Situations -> Prevention Focus -> Sensitivity to Presence/Absence of Negative Outcomes -> Avoidance as Strategics Means -> Insure Correct Rejections and Insure Against Errors of Commission -> Quiescence/Agitation Emotions Attitudes are our evaluations of objects/brands Goodness (I like it) Likeability (I am positive to this) Desirability (I feel like buying it) Attitude Model Think = Cognitive (Thoughts) What a person believes to be true about something Feel = Affective (Feelings) Physiological reactions to an object (feel happy, secure, etc) Actions (ACT) = Behavioural (Conation) I use it, I recommend it, … Ex: Intentions to purchase a brand Hierarchies in Attitude Attitude hierarchies references to the sequence in which the three components occur. Learning Hierarchy Step 1 Cognitive (Think) Step 2 Affective (Fell) Step 3 Conative (Act) Emotional Hierarchy Step 1 Affective (Fell) Step 2 Conative (Act) Step 3 Cognitive (Think) Low-involvement Hierarchy Step1 Conative (Act) Step 2 Affective (Fell) Step 3 Cognitive (Think) Hierarchies in Attitude (p. 24) Emotional Hierarchy (Emotion) – Consideration of emotions Begins with mood Low Involvement (Hierarchy) -> High involvement Rational Hierarchy (Learning) – Consideration of multiple features Begins with consideration of features Low Involvement (Hierarchy) -> High involvement Involvement Matrix (p. 25) #Hight Involvement/Thinking (Rational/Cognitive) Informative (Economic) Media: blogs, websites magazines #Low Involvement/Thinking (Rational/Cognitive) Habitual (Responsive): in-store merchandising, ads/banners #Hight Involvement/Emotional (Affective) Affective (Psychological): Visual Media: YouTube, tv Generate Engagement #Low Involvement/Emotional (Affective) Satisfaction (Social): Check-out hedonism, tempting images. Impulsive Buying Self-control exercise (Sometimes we buy things that we don`t want to buy) Consumer Emotions Consumer emotions: specific psychobiological reactions to appraisal. Consumers react most immediately to their feelings. So, behaviours including consumer behaviour are closed tied to emotions. When an action bring value to a consumer it creates the desirable emotional states. Therefore, emotions are also tied to value. Cognitive appraisal theory Specific types of thoughts are the basis for specific emotions. There are four types of cognitive appraisals, relevant for consumer behaviour. Anticipation appraisal: focuses on the future. Anticipatory emotions are hopefulness, anxiety among others. Agency appraisal: reviews responsibility for events. Evoke emotions such as gratefulness, guilt, sadness. Equity appraisal: evaluate how fair some event is. Evoke emotions like warmth or anger. Outcomes appraisal: considers how something turned out relative to one`s goals. Evoke emotions like joyfulness, satisfaction, sadness, pride. Pleasure-arousal-dominance (PAD) scale: PAD scale evaluates three dimensions of emotional experiences. Consumers are asked to rate their feelings by using several semantic differential items (bipolar opposites). PAD considers pleasure as the evaluative dimension of emotion. Pleasure is bipolar. So, a consumer who experience joyful can`t simultaneously experience sadness. The same with arousal. A consumer who is aroused isn´t bored. Positive-affect-negative-affect (PANAS): this scale considers 20 emotional adjectives. Consumers self-report the extent to which one they are feeling. PANAS capture the relative amount of positive and negative emotions consumers are experimenting at some point in time. So, every PANAS item represents either a good or a bad feeling. Perception Drivers Consumer Perception Perception, the way we see the world (parfum exercise) Behavioural psychologists now estimate that about 80% of the impressions we make when communicating with other people are not verbal. Which means they are sensorial. (Lindstrom, 2012) Perception reflects how consumers became aware of the environment and how they interpret the reality. Perception Process Perception is influenced by a person`s needs, values, and expectations. Therefore, perception is subjective, differently from objective reality. Consumers perception shape learning and behaviours. So, it`s important for consumer researchers to understand how perception influences consumer behaviour. Sensation - pay attention to an object (stimulus) Ex: the taste of ice cream Organization - classifying the stimulus according to categories stored in memory Ex: McSunday with chocolate sauce Interpretation: - forming a rule about it being or not being appreciated Ex: good/ bad, worse/better than previous. (Seth et al, 2001) Perceptual Process Overview Sensory Stimulus (Image, Sound, Fragrance, Taste, Texture) Sensory Receivers (Eyes, Ears, Nose, Mouth, Skin) Exposition, Attention, Interpretation Perception Process begins when consumers are exposed to a stimulus. A stimulus can be sensed by one (or more) of the five human senses: sight, smell, taste, touch, sound. The context influences how each stimulus is perceived. Sensing is an immediate response to stimuli that had contacted with one of the consumers ‘five senses. Organizing is the cognitive organization process by which the human brain assembles the sensory evidence into something recognizable. Consumers classify stimuli according to categories stored in memory. In this important part of perception, comprehension takes place in form of an interpretation, that constitutes an initial cognitive and affective meaning. Some stimuli may be difficult to organize. In this case, brain continues processing as a way of reconciling inconsistences. If consumer remain uncertain, he/she will generally avoid the stimulus. Assimilation: the stimulus has characteristics of an example of a specific category already recognized. Accommodation: the stimulus shares same characteristics. It allows fit stimulus nearly in an existing category. Contrast: the stimulus doesn`t share enough in common with existing categories to allow categorization. Interpreting/Retinting : when an object is recognized there it is almost certain an automatic reaction. Biases (preconceitos) in the Perception/Perceptual selection Perception is selective. Some stimulus aren`t processed. Selective perception avoids overload minds. 1 – Previous consumer experiences affect expectations 2 – Motives at the time (needs, desires,) Selective exposure: consumers filter stimuli and screen out most stimulus. Consumers exposed to only a small part of stimuli (seeking for pleasant messages). Selective attention: consumers filter stimuli again. Consumers pay attention to only certain stimuli (noticing products that will satisfy needs). Selective interpretation/Retention: consumers interpret information according to previously hold beliefs. *Case: Dans le noir? Uses of Perception Brand Perception Perceived Price: reference price, cues (dicas) of quality The Price Is Unfair! A conceptual Framework of Price Fairness Perceptions (pág. 37) The Sensorial Consumer Sensorial Consumer Behaviour Case: Jinsop Lee (p. 4) Design for the Senses/Sensorial Experience Design Nitendo wii: the interactive game controller saved Nintendo. Environment Stimulus The marketing professional should know in detail the environment stimuli that interfere with the buying behaviour in order to influence consumers ‘decision making. Research about Senses (p. 7/8) Importance to the market: Consumers stimulated by more than one sense increase their experience with the product and the brand. Consumers explore environment (including products, brands) as a full experience. When consumers purchase objects, they want to perceive their surroundings from a different perspective. Formerly, for marketing it was important the quality aspect of products in terms of performance. Nowadays design is also an important element (visual aspect of the products). Sensorial consumers behaviour is the use of all five senses. One or more than one senses are used in a particular situation (evaluating, consumption, disposing of the products). Therefore, marketers must consider all aspects of products or services. The environment stimulus interferes with consumers ‘decision making process. So, marketers must know it in detail as well. Visual Perception - helps to transmit positioning - aims to understand the consumer ‘perception to draw a profile of how to influence the visual resources During shopping, vision is the first human sense responsible for the process of choice because it is the first stimulus that causes the brain to react in the direction of the product. Importance to the market: Merchandising works the first consumer impression: The Vision. The costumer takes an average of 15 seconds to see the product that interests him. Name a brand: Sensory Signature Brand Signature Colours in practice How can colours affect you? Red and Yellow (intense): attract impulsive consumers. Blue and Green (calm): attract planned consumers. (O tom também influencia. Com vermelho-escuro as pessoas confiam menos, enquanto que com vermelho claro confiam mais) Importance to the market: For stores `facades it is advised intense colours and for the store`s inside calm colours. Colours: emotions (p. 12) Colours: lighting (p. 13) Visual (sight): is the first consumer impression. Stimulus causes brain reaction in direction of the product. Consumers in general see the product of their interest in an average of 15 seconds. Therefore, visual perception is very important to marketers. Colours help enhance visual perception as lighting. Colours stimulate consumers emotional state so can affect consumers behaviour purchase. Different colours create different environments, thus influence consumer emotional state differently. Olfactory system - is associated with the processing of emotions and memories *Case: Bloomingdale´s - Different smells in the departments - Coconut – beach items (tropical paradise) - Flowers – underwear (sensuality) - Talcum Powder – children`s clothing (care) *Case: Cinnabon and Panera Scents in practise (p. 16) How do scents affect us? People pay more for a product in a scented environment. Perfume Activity Analyse the smell and describe the main characteristics of a brand from it: - Is it a popular or sophisticated brand? - Young or old consumer? - What kind of product? - Which Kind of store? Smell and Taste: the olfactory system is associated with emotions and memories. Marketers use different smells to stimulate imaginary, activate memories and create emotions. In fact, marketers use many strategies such as: associating each store department with a particular smell; using smells outside store to increase the number of visitors; introducing specific smell on products. Music in practice (Hearing) How music change behaviour? - Classical (adds sense of quality). Tea Shops, Spas, Wine Shops. - Calm (increases time and money spent). Supermarkets, department stores. - Fast (eat faster and quit before). Fast food restaurants. Importance to the market: Brand/Store can change the type of music during the day according to the customers ‘profile. *Case: FAO (toy store) - Different songs in the departments: - POP – girls department (Barbie) - Dramatic – boys department (Star Wars) *Case: Harrods London Music (hearing): music can change consumers behaviour. Thus, brands and stores may use different types of music according to costumers ‘profile. They can also change the environment by using different musical genres to influence consumer ‘behaviour response. Touch in practice Do soft chairs “soften” the negotiations? In a study conducted by Harvard, consumers paid 28% less in a car negotiation when siting in an uncomfortable chair. Notebooks in Apple Store By touching the product, consumers have more interaction with the brand. *Case: Abercrombie Touch: the design or the materials of the product can stimulate the touch. Negotiations may be influenced by how comfortable consumer is. Interactions with brands can be increased by stimulating touch. Activity Chose a brand and analyse its Brand Sense. For each unidentified sense think how the brand could explore it. Learning Learning can be considered as a change in the content of consumers ‘long-term memory (Sheth et al., 2001). Learning is related to consumers retention information of products and brands. Thus, it is important to consumers behaviour. When consumers already Know about a brand decision process may be faster. Cognitive learning: learning is an active mental process in which consumers process information, form associations between concepts, and gains knowledge. During that process, consumers comprehend, elaborate, and act upon the information. Classical condition: learning is the process in which consumers learn an association between two stimuli. This occurs because the two stimuli are constantly coupled. It is based on Pavlov’s experiments: a conditioned stimulus doesn’t cause an answer or a pre-existing response; an unconditioned stimulus causes a specific response; a conditioned stimulus coupled with an unconditioned stimulus originate a new response, that will be the conditioned response. Instrumental conditioning: learning is the process in which a response to an instrument lead to a reward. During the process, if consumer has a certain behaviour, he will obtain a reward or/and a strengthening. But if the consumer behaviour is a little different, he will be punished. The marketing uses instrumental conditioning. Marketers use intrinsic reward when a product itself owns reward. An extrinsic reward can be, for instance, a promotion or a discount. Modeling: learning process occurs by observing others and repeating their behaviour. Marketers may use opinion leaders. Consumers tend to behave as suggested by social influencers. This process varies from one culture to another. Toward marketing messages consumers understand meaning and value as inseparable. This understanding may be influenced by three categories of factors: characteristics of the message, the receiver, and the environment. Self/Personality Personality - psychological characteristics that both determine and reflect how a person responds to his/her environment. - the totally of: > thoughts (cognition), > emotions (affectivity), > intentions (motivation), > tendencies and > behaviours that a person exhibits consistently as he/she adapts to the environment. Nature of Personality -> reflects individual differences It is unique to an individual. Consumers may be distinguished by their owned characteristics. -> is consistent and enduring An individual`s personality combination of his/her many stable characteristics or traits. Personality traits interact with situations, influencing behaviour. Behaviours are influenced by a combination of traits with situational influencers (interaction between person and situation). - Personality can change. A consumer´s trait doesn`t determine per si a tendency over time. Specifics behaviours can vary across the time. Freudian Theory (p. 11) Id (instinct). I want it now! Nonconscious – unconscious Ego. I need to do a bit of planning to get it. Nonconscious – unconscious/preconscious; Conscious Superego (moral and ethical). You can`t have it. It`s not right. Nonconscious – Preconscious Trait Theory: Measurement of personality in terms of specific psychological characteristics (traits) Consumer innovativeness Consumer materialism Consumer ethnocentrism The five-factor model, “Big Five” of personality, proposes that human personality has five dominant traits. Extroversion: extroverted consumers are outgoing and talkative with others. Agreeableness: agreeable consumers are kind-hearted and sympathetic. Openness to Experience (creativity): creative consumers are imaginative and enjoy new ideas. Stability (or Instability (clinically neuroticism)): stable consumers tend to be able to control their emotions and avoid mood swings. Conscientiousness: conscientious consumers are careful, orderly, and precise. This model is a multi-trait approach. Each consumer has his/her traits and consumer`s personality will be a combination of these traits. Brand personality refers to associate human characteristic with a brand (Aaker (1997)). Dimensions of brand personalities: *Competence *Excitement *Ruggedness *Sincerity *Sophistication Marketers use brand`s personalities to build strong relationships with consumers. They can do it especially when they understand their costumers ‘personalities. Personal values Value is a unique belief that leads to actions and judgments (Rokeach (1973)) Values have two important functions: - guidance through social standards and norms (guides people`s behaviour) - motivational (guiding efforts towards value). According to Schwartz (1992) Values are beliefs (objective and ideas). Values are motivational constructs; it refers to the desirable goals that people seek to achieve. Norms and attitudes usually refer to specific actions, objects, or situations. However, values have an abstract nature. They transcend specific actions and situations. Values guide the choices or evaluations of actions, policies, and events. Values serve as standards or criteria. An individual orders his/her values by importance to each other, forming an orderly system of priorities. This hierarchy characterize the individual and establishes distinctions between values in relation to norms and attitudes. A value-conscious consumer can be expected to pay close attention to his/her devote to transactions versus the benefits that he/she receives. Thus, for marketing value consciousness is an important concept in consumer behaviour. Lifestyles Consumption Constellation (Solomon) Cluster of products/brands used to define, communicate a social role or lifestyle. What are the products/brands (5-7) that better describe you? Lifestyle and Personality are intrinsically related topics. Lifestyles are related to a context-specific personality trait. Lifestyles are influenced by others individual processes, culture, groups. Consumers often choose products linked to a lifestyle. Product purchase and consumption are considered an important manifestation of social stratification. Thus, marketers often target consumers based on lifestyles. “Values and Lifestyles” (VALS) is a successful segmentation approach that classifies consumers into eight segments. This is based on resources available to the consumer (including financial, educational, and intellectual) and in three primary motivations (ideals motivation, achievement motivation, and selfexpression motivation). Self-concept Self-concept: - the totality of thoughts and feelings that an individual has about him/herself - the way a person defines or gives meaning to his/her own identity, as in a type of selfschema Consumers are motivated to act in accordance with their self-concepts. According to symbolic interactionism approach, consumers agree on the shared meaning of products and symbols. They use products as symbols to convey their selfconcepts to others. “Concepts” consumers have about themselves Actual self: how consumers currently perceived themselves. Ideal self: how consumers would like to perceive themselves. Social self: beliefs that consumers have about how they are seen by others. Ideal self: the image that the consumer would like others to have about oneself. Possible self: the image of what the consumer could became. Extended Self (Belk) Consumer´s possessions (clothing, jewellery, technology) get attached to emotions and feelings and become part of one`s personality. The possessions that a consumer owns that help him forming perceptions about oneself. Consumers express their self-concepts by purchasing and displaying products, while products help to define how they see themselves. Attitudes - can express consumers judgments, reflected in behaviour - motivate people to behave in relative consistent - attitudes and value are closely related. Consumers, generally have positive attitudes toward products that deliver value. It is very important, for marketing to know about consumers attitudes because they can express consumers judgments, reflected in consumer behaviour. Marketers might use strategies to recover negative and neutral attitudes in positives attitudes. Attitudes ‘components according to ABC approach Affect refers to feelings about an object. Cognition refers to beliefs that consumer has about the object. Behaviour refers to behaviours that consumer exhibit and consumer intentions to behave. High-involvement hierarchy of effects (standard learning) First, are formed beliefs about products. Next, are formed feelings or evaluations about products. Finally, consumer decides to act in some way toward the product. A purchase decision is made. Hight-involvement decisions are important to a consumer and often contain significant risk. Low-involvement hierarchy of effects Consumer has some basic beliefs about products they consider purchase. Consumer doesn`t have necessarily strong feeling toward products. Experiential hierarchy of effects Consumers purchases are based on feelings. This perspective can explain impulse purchase. Consumers buy products spontaneously with little concern for consequences. Behavioural influence hierarchy of effects Consumers behaviours occur without beliefs or affect (feelings) strongly formed previously. Behaviour is influenced by environment issues. Strong environment pressure leads to specific behaviours. Social Influence Social Identity Theory Social relationships are fundamental to the formation and development of personality (also Neo-Freudian) Identity-Based Motivation (IBM) model theory (Oyserman, (2007-2019)): * Identities are constructed in the context * People engage in identity-congruent actions * Identities change the interpretation of difficulty In-groups/out-groups (Tajfel & Turner) * Ingroup favouritism (positive self-concept) * Outgroup homogeneity “they are alike; we are diverse”. * Social proximity (distance) Social identity perspective: ingroup is a group that a person identifies with as a member; outgroup is a group with which a person doesn`t identify. Social relationships are fundamental to the formation and development of personality. Social influence aims to understand how others can influence consumers behaviours. Reference Groups - persons, groups, and institutions one uses as a point of comparison (or reference) - group of individuals how has significant relevance and guide individual behaviour by serving the points of reference, the sources of norms, values, and conduct. Group influence is the ways by which group members influence the attitudes, opinions, and behaviours of other members. Group members: share common goals and interests; communicate with and influence one another; share a set of expectations, rules, and roles; view themselves as members of a common social unit. Type of Influence Informational Basis: expertise, accuracy People: professional advisors, enthusiasts, experienced consumers Products: medication, computers, travel destination, technology Identificational Basis: self-concept, identity People: cultural heroes (ex. sports celebrity) Products: shoe brand Normative Basis: belonging, rewards, sanctions People: work groups, family Products: work clothes, alcohol/smoking Distinction/Classification Frequency or interaction consistency Primary group - the members have frequent direct contact with one another - generally, have the most influence on their members. Social ties are very strong - family, friends Secondary group - interaction is much less frequent than within a primary group. - associations; professional organizations; social clubs; brand communities - groups of consumers who developed relationships based on shared interests in a product. Type of influence Positive - contact groups (association) or aspirational - a group in which a consumer desires to become a member. Aspirational group membership often appeals to the consumer´s ideal self. Consumer identifies his ideal self as belonging to certain groups. Negative - avoidance groups - a group in which a consumer doesn´t want to belong. Formality of groups Formal group - the consumers became formally members - there is a set of stated rules, accepted values, and codes of conduct - church congregation Informal group - a group that hasn`t membership or applications requirements - codes of conduct don`t necessary exist - groups that meet regularly to exercise or to have coffee Membership Primary: family, co-workers, church groups, fraternities/sororities Secondary: professional associations, political campaign, volunteers, greenpeace/YMCA (Young Men`s Christian Association) Symbolic Primary: personal role model, a person one secretly admires Secondary: celebrities or other artists (for an artist) Communication Process and Persuasion Persuasion depends on how communication occurs. Message effects: how appeal of a message and its construction affect persuasion. Source effects: characteristics of the person or character delivering a message that influences persuasion. The source of the message influences consumers ´attitudes TEARS Model Trustworthiness: believe it, dependable and someone who can be trusted Expertise: specific skills, knowledge or abilities that can be related to the endorsed bran Attractiveness: not just physical attractiveness. Intellectual skills, personality properties, lifestyle characteristics and athletic skills Respect: admired due to personal qualities and accomplishment Similarity: how the endorser matches with the audience in terms of age, gender, ethnicity, social class, etc Source credibility Credible sources tend to be more persuasive than less credible sources. Credible sources influence highly involved consumers, especially if they have clear credentials. The credibility of the source may increase the levels of certainty held to consumer attitudes. Credibility consists of two elements: > trustworthiness - how spokesperson semes to truly believe the presenting message. > expertise - perceived amount of knowledge that the spokesperson has about the product; Source attractiveness Attractive models seem to possess desirable qualities and personalities. They tend to be more persuasive than unattractive spokespeople. Regarding to the use of sex appeal, research reveals that attractive model are more effective when promoting products that have an intimate appeal and unattractive modes are more effective when promoting products without intimate appeal. Source likeability When using likable sources, spokespeople are more persuasive. Source likeability affects persuasion more for consumers with a low need for cognition than for consumers with a high need of cognition. Opinion Leadership (p. 25) Social power refers to the impact of social influence. It can be: *referent power *legitimate power *expert power *reward power *coercive power The type of power may be exerted both by referent groups and other individuals.With these forms of power members are aware that the power base exists and members desire to maintain or establish membership in the group. Factors that determine the level of social influence Susceptibility to Interpersonal Influence: consumer want to achieve the image others hold of him/her by acquiring and using products (conforming to others’ expectations) and learning about products by observing others. Attention to Social Comparison Information (ATSCI): consumer concern about how other people react to is behaviour. Consumer with strong level ATSCI might buy an expensive product when he/she is shopping with other but a less expensive when he/she is shopping alone. Separateness – Connectedness: - a consumer with a separated self-schema perceives his/herself as distinct and separated from others; - a consumer with a connected self-schema perceives his/herself as an integral part of a group. Culture is important in this topic. Social media and social networking, as social influence: it has big roles on consumer behaviour. Consumers get hedonic value and utilitarian value through social networking. Consumers might prefer to buy online over physical stores. Social media: media through which communication occurs. Social networks: networks of consumers that are formed on common interests, associations, or goals. Social networking websites (“online social network sites”): websites that facilitate online social networking. Apps (mobile applications): specific types of software that runs on devices like smartphones or tablets, and other computer-based tools. Word-of-mouth (WOM): information about products, services, and experiences that are transmitted from consumer to consumer. It can be distinguished in organic and amplified WOM. Positive WOM occurs when consumers are satisfied with a company or product. Consumers who believe strongly in a brand might be brand advocates or brand ambassadors. Negative WOM is more influential than positive WOM. Thus, negative WOM is very damaging to a company. Cultural Influence Consumer Culture Culture “…that complex whole which includes knowledge, belief, art, morals, custom, and any other capabilities and habits acquired by man as a member of society.” “…provides people with a sense of identity and an understanding of what is acceptable or unacceptable in the society.” Consumer Culture: beliefs within a community that define what is social gratifying in a considered society. Those beliefs shape value. Thus, culture determines what consumption behaviours are acceptable. The source of values “the personality of the society” Knowledge: learned and shared beliefs about the world Symbols and Rituals: the symbols, rituals, language, images, and music that allow communication. Values: judgements about what is “good” and “bad” Norms: customs for appropriate behavior Symbols -> Heroes -> Rituals -> Values Cultural Norms: rules that specify the appropriate behaviour in each situation within a specific culture. Culture beliefs define what religion is acceptable, what types of arts and recreation are preferred, what manners are considered polite, the roles for different individuals, and others. If a consumer acts inconsistent with culture norms he will be sanctioned. He may be shunned or suffer banishment from a group. Causes of Culture Ecological factors that change relative value of objects. Physical characteristics of an environment and habitat of a particular place. Tradition: costumes and accepted ways of structuring society, such as family and political structures of a society. Culture-influenced characteristics - Mental process and learning - Communication and language - Values and norms - Sense of self and space - Awareness of time - Habits and work practices - Relationships - Food - Dress and appearance Culture, Significance of the product Market luxury: products as symbols Country-of-Origin effects How much would you pay for this wine? Subculture/Microculture A distinct cultural group of consumers with similar values as an identifiable segment, differing from society. Age Cohort: group of people who have lived the same major experiences in their lives Greatest generation (prior to 1928) Silent generation (1928-1945) Baby Boomers (1946-1964) Generation X/Baby Bust (1965-1980) Generation Y/Millennials (1981-1995) Generation Z/Digital Natives (1995-2010) Generation Alpha Dimensions of Culture National Culture (Hofstede 2010) Geert Hofstede ‘theory is a value-based theory that considers that differences in cultures are based on multiple dimensions. Each dimension represents an identifiable core societal value aspect or cultural value. Core social values are agreed upon consensus and serve as mechanism by which culture affects value. Core social values ‘dimensions. Individualism (USA) vs Collectivism ->Individualist societies attribute high value on self-resilience, individual initiative, and personal achievement. ->Highly collectivist societies tend to live in extended families, take identity from the groups and will be very loyal with these groups. That differences influence greatly the way consumers make decisions and the way that consumers extract value from consumption. Power Distance (China) Extent in which people accept as fact the principle of the division of authority and privileges among different groups. ->Lower-power distance nations are more equalities. ->In high-power distance nations the differences between status are more considerable. Uncertainty Avoidance (Portugal) High in uncertainly avoidance - culture is uncomfortable with things that are ambiguous or unknown - nation is slower to adopt the product or react to novel price promotions - consumer prefers things the way they are and avoid taking risks Masculinity (China) vs Femininity Masculinity: traits as assertiveness and control Femineity: traits as caring and conciliation are identified as. In these terms, masculinity and femineity are considered opposites. Long-Term Oriented (China) vs Short-Term Oriented A high long-term orientation means consumer value thriftiness, pragmatism, perseverance, and maintenance of long-term relationships. Future rewards are prioritized over short-term benefits. Indulgence (USA) vs Restraint Culture and information processing (Hong and Lee, 2010) Independent -> analytic (concrete) Interdependent -> holistic (abstract) Alternative Models Conservation: Security, Conformity/Tradition Self-Enhancement: Power, Achievement, Hedonism Openness to Change: Hedonism, Stimulation, Self-Direction Self-Transcendence: Universalism, Benevolence
