CHAPTER
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CONSUMERS RULE
CHAPTER OBJECTIVES
When students finish this chapter they should understand why:
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Consumer behavior is a process.
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Consumers use products to help them define their identities in different settings.
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Marketers need to understand the wants and needs of different consumer segments.
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The Web is changing consumer behavior.
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Consumer behavior is related to other issues in our lives.
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Consumer activities can be harmful to individuals and to society.
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A wide range of specialists study consumer behavior.
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There are two major perspectives on understanding and studying consumer behavior.
CHAPTER OUTLINE
1. Consumer Behavior: People in the Marketplace
a. The average consumer can be classified and characterized on the basis of:
1) Demographics—age, sex, income, or occupation.
2) Psychographics—refers to a person’s lifestyle and personality.
b. The average consumer’s purchase decisions are heavily influenced by the opinions
and behaviors of their family, peers, and acquaintances.
1) The growth of the Web has created thousands of online consumption
communities where members share views and product recommendations.
2) Groups exert pressure to conform.
c. As a member of a large society, U.S. consumers share certain cultural values or
strongly held beliefs about the way the world should be structured.
1) Some of the values are based on subcultures (such as Hispanics or teens).
d. The use of market segmentation strategies may be used to target a brand to only
specific groups of consumers rather than to everybody.
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Section 1: Consumers in the Marketplace
e. Brands often have clearly defined images or “personalities” created by product
advertising, packaging, branding, and other marketing strategies that focus on
positioning a product in a certain way.
f. When a product succeeds in satisfying a consumer’s specific needs or desires, it
may be rewarded with many years of brand loyalty.
1) This bond is often difficult for competitors to break.
2) A change in one’s life situation or self-concept, however, can weaken the
bond.
g. Consumers’ evaluations of products are affected by their appearance, taste, texture,
or smell.
1) A good Web site helps people to feel, taste, and smell with their eyes.
2) A consumer may be swayed by the shape and color of a package, symbolism
used in a brand name, or even in the choice of a cover model for a magazine.
h. In a modern sense, an international image has an appeal to many consumers.
Increasingly, consumers opinions and desires are shaped by input from around the
world.
What Is Consumer Behavior?
i. Consumer behavior is the study of the processes involved when individuals or
groups select, purchase, use, or dispose of products, services, ideas, or experiences
to satisfy needs and desires.
1) Consumers are actors on the marketplace stage.
a) The perspective of role theory takes the view that much of consumer
behavior resembles actions in a play.
b) People act out many roles and sometimes consumption decisions are affected.
c) Evaluation criteria may change depending on which role in the “play”
a consumer is following.
2) Consumer behavior is a process.
a) Most marketers recognize that consumer behavior is an ongoing process,
not merely what happens at the moment a consumer hands over money or
a credit card and in turn receives some good or service (buyer behavior).
b) The exchange—a transaction where two or more organizations or people
give and receive something of value—is an integral part of marketing.
1. The expanded view emphasizes the entire consumption process.
2. This view would include issues that influence the consumer before,
during, and after a purchase.
3) Consumer behavior involves many different actors.
a) A consumer is generally thought of as a person who identifies a need or
desire, makes a purchase, and then disposes of the product during the
three stages in the consumption process.
b) The purchaser and user of a product might not be the same person.
c) A separate person might be an influencer. This person provides
recommendations for or against certain products without actually buying
or using them.
d) Consumers may be organizations or groups (in which one person may
make the decision for the group).
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Chapter 1: Consumers Rule
2. Consumers’ Impact on Marketing Strategy
a. Understanding consumer behavior is good business. A basic marketing concept
states that firms exist to satisfy consumers’ needs.
1) Consumer response is the ultimate test of whether a marketing strategy will succeed.
2) Data about consumers helps organizations to define the market and to identify
threats and opportunities to a brand.
Segmenting Consumers
b. The process of market segmentation identifies groups of consumers who are
similar to one another in one or more ways and then devises strategies that
appeal to one or more groups. There are many ways to segment a market.
1) Companies can define market segments by identifying their most faithful, core
customers or heavy users.
2) Demographics are statistics that measure observable aspects of a population,
such as birth rate, age distribution, and income.
a) The U.S. Census Bureau is a major source of demographic data on families.
3) Important demographic dimensions include:
a) Age.
b) Gender.
c) Family structure.
d) Social class and income.
e) Race and ethnicity.
f) Geography.
4). Lifestyles: Beyond Demographics. Segmentation variables that involve values, activities,
and the ways that people see themselves are known as lifestyle or psychographic variables.
Relationship Marketing: Building Bonds with Consumers
c. Relationship marketing occurs when a company makes an effort to interact with
customers on a regular basis, giving them reasons to maintain a bond with the
company over time.
d. Database marketing involves tracking consumers’ buying habits very closely and
crafting products and messages tailored precisely to people’s wants and needs
based on this information. Wal-Mart is a good example of a company that effectively
utilizes database marketing.
3. Marketing’s Impact on Consumers
a. For better or worse, we all live in a world that is significantly influenced by the
actions of marketers.
Marketing and Culture
b. Popular culture consists of the music, movies, sports, books, celebrities, and
other forms of entertainment consumed by the mass market; it is both a product of
and an inspiration for marketers. Product icons often become central figures in popular
culture.
1) The meaning of consumption—A fundamental premise of consumer behavior is
that people often buy products not for what they do, but for what they mean.
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Section 1: Consumers in the Marketplace
2) People, in general, will choose the brand that has an image (or even a
personality) that is consistent with his or her underlying needs.
3) People may have various relationships with a product:
a) Self-concept attachment—the product helps to establish the user’s identity.
b) Nostalgic attachment—the product serves as a link with a past self.
c) Interdependence—the product is a part of the user’s daily routine.
d) Love—the product elicits emotional bonds of warmth, passion, or other
strong emotion.
4) The global consumer. One highly visible—and controversial—byproduct of
sophisticated marketing strategies is the movement toward a global consumer
culture, where people around the world are united by their common devotion
to brand name consumer goods, movie stars, and musical celebrities.
5) Virtual consumption. The Digital Revolution is one of the most significant
influences on consumer behavior right now.
a) Online shopping.
b) Electronic marketing has increased convenience by breaking down many of
the barriers caused by time and location.
c) New venues include B2C e-commerce and C2C e-commerce.
d) Virtual brand communities.
1. Chat rooms.
2. The ability to exchange information in new and exciting venues.
e) Security concerns.
f) An altered shopping experience.
g) Will the Web bring us closer together or drive us into our on little
private world? Are we, for example, spending less time with friends and
family in the traditional way?
Blurred Boundaries: Marketing and Reality
c. Marketers and consumers co-exist in a complicated, two-way relationship. There
is often a “blurring” between the two.
4. Marketing Ethics and Public Policy
Business Ethics
a. Business ethics are rules of conduct that guide actions in the marketplace—the
standards against which most people in a culture judge what is right and what is
wrong, good, or bad. There are various universal values.
Needs and Wants: Do Marketers Manipulate Consumers?
b. One of the most stinging criticisms of marketing is that marketing (especially
advertising) is responsible for convincing consumers that they “need” many
material things that they honestly do not need.
1) In the old days, companies called the shots in what was called marketspace.
2) Today, consumers seem to be taking more control of what might be called
consumerspace.
3) Consumers still “need” companies—but in new ways and on their own terms.
4) Do marketers create artificial needs? Before answering, consider that a need
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Chapter 1: Consumers Rule
is a basic biological motive and a want represents one way that society has
taught us that the need can be satisfied.
5) Are advertising and marketing really necessary? Yes, if approached from an
information dissemination perspective. The view of advertising as consumer
information is known as economics of information.
6) Do marketers promise miracles? Not it if they are honest. They do not have
the power to create miracles. Many marketers do not know enough about
consumers to manipulate them.
Public Policy and Consumerism
c. Consumer activism: America™ Adbusters is one of various organizations that has the
objective of discouraging rampant commercialism.
1) Such organizations employ the strategy of culture jamming that aims to disrupt
efforts by the corporate world to dominate our cultural landscape.
2) Recent scandals in corporate America have fueled the arguments presented by culture
jammers.
3) Consumer activism has developed to the extent that coordinated consumer protest
movements are becoming more common.
d. Consumerism and consumer research.
1) A famous essay on consumerism was The Jungle by Upton Sinclair (1906).
2) Consumer and product safety have been important issues in Congress
for most of the twentieth century.
3) Other famous consumer proclamations include:
a) President John F. Kennedy’s Declaration of Consumer Rights in 1962.
b) Rachel Carson’s Silent Spring in 1962.
c) Ralph Nader’s Unsafe at Any Speed in 1965.
4) Social marketing uses marketing techniques normally employed to sell beer or
detergent to encourage positive behaviors such as increased literacy and to
discourage negative activities such as drunk driving.
5) As a response to consumer efforts, many firms have chosen to protect or
enhance the natural environment as they go about their business activities.
This practice is known as green marketing
5. The Dark Side of Consumer Behavior
a. Despite the best efforts of researchers, government regulators, and concerned
industry people, sometimes consumers’ worst enemies are themselves. Examples
are:
Consumer Terrorism
1) The terrorist attacks of 2001 had a tremendous impact on consumerism throughout the
world. Such effects give the indication that both natural and man-made disruptions to
financial, electronic, and supply networks can be devastating.
2) Although bioterrorism has occurred in the past, the threat of such attacks are more
prevalent than ever.
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Addictive Consumption
3) Consumer addiction is a physiological and/or psychological dependency on
products or services. New examples of this might be Internet or SMS addictions.
Compulsive Consumption
4) Compulsive consumption refers to repetitive shopping, often excessive, as an
antidote to tension, anxiety, depression, or boredom. These people are often
called “shopaholics.” Note that compulsive consumption is different from
impulse buying.
5) Negative or destructive consumer behavior. Three aspects are:
a) The behavior is not done by choice.
b) The gratification derived from the behavior is short-lived.
c) The person experiences strong feelings of regret or guilt afterward.
6) Gambling is an example of consumption addiction that touches every segment
of society.
Consumed Consumers
7) People who are used or exploited, whether willingly or not, for commercial gain in the
marketplace can be thought of as consumed consumers. Examples include:
a) Prostitutes
b) Organ, blood, and hair donors
c) Babies for sale
Illegal Activities
8) Consumer activities that are illegal are exemplified by:
a) Consumer theft—shrinkage is an industry term for inventory and cash losses due
to shoplifting and employee theft. A growing form of fraud involves “serial
wardrobers” who abuse exchange and return policies.
b) Some types of destructive consumer behavior can be thought of as
anticonsumption whereby products and services are deliberately defaced
or mutilated.
c) Anticonsumption is manifested by a range of activities from relatively harmless acts
such as gifting dog manure, to destructive political protests.
6. Consumer Behavior as a Field of Study
a. It is a rather recent practice that consumers have become the objects of formal study.
Most colleges did not even offer a course in consumer behavior prior to the 1970s.
Interdisciplinary Influences on the Study of Consumer Behavior
b. Consumer behavior may be studied from many points of view—such as psychology,
sociology, social psychology, cultural anthropology, economics, etc.
The Issue of Strategic Focus
c. Many regard the field of consumer behavior as an applied social science.
Accordingly, the value of the knowledge generated should be evaluated in terms
of its ability to improve the effectiveness of marketing practice.
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The Issue of Two Perspectives on Consumer Research
d. One general way to classify consumer research is in terms of the fundamental
assumptions the researchers make about what they are studying and how to study
it. This set of beliefs is known as a paradigm. A paradigm shift may now be
underway.
1) The dominant paradigm currently is called positivism (or sometimes called
modernism). It emphasizes that human reason is supreme, and that there is a
single, objective truth that can be discovered by science. Positivism
encourages us to stress the function of objects, to celebrate technology, and to
regard the world as a rational, ordered place with a clearly defined past,
present, and future.
2) The emerging paradigm of interpretivism (or postmodernism) questions the
previous assumptions.
a) Proponents argue that there is too much emphasis on science and
technology in our society, and that this ordered, rational view of consumers
denies the complex social and cultural world in which we live.
b) Others say positivism puts too much emphasis on material well-being,
and that this logical outlook is dominated by an ideology that stresses the
homogeneous views of a culture dominated by white males.
c) Interpretivists instead stress the importance of symbolic, subjective
experience and the idea that meaning is in the mind of the person.
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