Consumer Behavior Summary
Mod: 1 – People as Consumers
Studying People as consumers:
Positivist Aproach: Focuses on predicting what the consumer will do under
certain specified conditions. Uses scientific research. Focuses on the
following points:
1. All behavior has objectively identifiable causes and effects that can be
studied and measured.
2. When faced with a problem people process all the relevant
information available to deal with it.
3. After processing this information people make a rational decision
about the best choice.
The main problem is that it leaves a lot of human behavior unaccounted for.
Reductionist Approach: All human behavior can be reduced to
consumerism, such as a doctor-patient relationship. What is missing is the
psychological content of the relationship.
Interpretivist Aproach: Combines Positivist and Reductionist approaches.
1. Cause and effect can’t be isolated.
2. Reality is an individuals subjective experience of it. Each consumers
experience is unique.
3. People are not always rational. This takes into account emotional
states, fantasies, feelings and fun.
Consumer: is a much more general term
Customer: usually implies a relationship over time between the buyer and a
particular brand or retail outlet.
Consumer Behavior: The emotional, mental and physical activities that
people engage in when selecting, purchasing using, and disposing of
products and services so as to satisfy needs and desires.
Markets and Marketing:
Production Orientation: Demand exceeds supply. Consumers are forced to
buy what there is rather than what they really want.
Marketing Concept: The producer first has to Identify the needs, wants and
preferences of the consumer and then satisfy them better than the
competition would. Supply exceeds demand.
Mod: 2 – Market Segmentation
Positioning: Products are positioned to satisfy different segments in the
market.
A number of marketing conditions must be met for segmentation to work:
1. Identify: The consumer must be identifiable and distinguishable form
other consumers.
2. Access: How easy is it to reach this segment with marcom?
3. Size: Is the segment large enough to justify the cost of marketing to
them?
Types of segmentation:
1. Geographic segmentation: People living in a given location have the
same needs, wants and preferences that differ from people living in
other locations. For example Campbell’s Southwestern US soups are
much spicier than the Midwestern versions. This is known as
micromarketing.
Climactic conditions also vary. For example many more swimming
pools are sold in Florida than Illinois. And the water in Scotland is
harder and therefore less foaming to soap than the water in London.
Cultural effects also differ over different locales.
2. Demographic segmentation: Deals with statistically categorizing the
people of a population. Several trends may be discerned in the
industrialized world:
1. The population is aging.
2. Baby boomers are now middle aged.
3. The proportion of young people is declining.
4. Average household sizes have declined.
5. Women are having fewer children later in life.
Types of demographic segmentation:
1. Age: People of the same age usually have the same needs,
wants and interests. A problem is people that perceive
themselves as being a different age than what they actually are.
2. Sex
3. Socio-Economic: Education, Income and Occupation. Income
is usually considered the most important SES Variable because
it is so easily measured.
4. Geodemographic segmentation: deviding up markets
according to Neighborhoods.
PRIZM – Uses 40 categories to divide up Americas zip code
districts From the Blue Blood estates to Public assistance to
Grain Belt.
ACORN - Devides Britain into 38 types of Neighborhoods.
5. Psychological (Lifestyle) segmentation:
Divides consumers into segments based on Activities, Interests
and Opinions. Using this approach the American market has
been divided into 10 segments of which the five female
segments are:
Thelma: Traditionalists, devoted to husband children and home
is a churchgoer has no higher education and watches a lot of
TV. 25%
Candice: Chic suburbanite, Highly educated and sophisticated
reads and watches little TV. 20%
Mildred: Militant mother, Maried young and has children.
Husband has insecure job, not happy with her lot, listens to rock
and watches a lot of TV. 20%
Cathy: Contented housewife, a younger version of Thelma but
without the religion avoids news and looks for wholesome
family entertainment. 18%
Eleanor: Elegant socialite, Big city version of Candice through
career rather than community. 17%
VALS: (Values and Lifestyles) The most elaborate
psychological segmentation classification. Was carried out in
the 70’s and classified Americans into 9 categories such as
Survivor, sustainer, believer, belonger, struggler. Updated in
the 80’s VALS-2 reduced to 8 categories.
6. Usage Segmentation: Uses EPOS (electronic point of sale)
systems to gather info. The market is usually divided into users
and non users. Only a small percentage of users will be heavy
users. 80-20 rule. Infrequent buyers may still buy the product in
great bulk. There is some evidence that it is easier to increase
sales by getting existing buyers to increase usage. Time is also
important. Students who have small bank accounts now will
most likely turn into much more attractive customers after
graduation.
7. Benefit Segmentation: Based on a knowledge of the benefits
that consumers seek from a product.
Mod: 3 – New Products and Innovations
Pressures that lead companies to the development of new products:
1. Declining birth rates.
2. Technological innovation the shortening of PLC’s.
3. Pressure of organizational change and renewal.
Total Product Concept: Theodore Levitt sees a product as being a
combination of various attributes that increase in complexity through 4
levels:
1. Generic Product: The core of the product (Hamburger, shoes, life
insurance).
2. Expected Product: The Generic attributes PLUS minimal
expectations (price, packaging, delivery).
3. Augmented Product: The Generic attributes PLUS the attributes that
differentiate the product from it’s competitors (bonuses, gifts, free
service included)
4. Potential Product: What is possible but not yet attained.
Potential Product
INNOVATIONS
Augmented Product
Expected
Product
Levitt’s Total Product
Concept
Generic
Product
Successful Innovation – The most potent secret lies in changing some
aspect, however small, of the way society is organized, which results in
satisfying a demand that consumers were perhaps unaware that hey had.
Kaizen – continuous improvement.
Big leaps forward are much more satisfying than small incremental changes.
Yet, it is notoriously slow and difficult to make money from a great
invention. It is the small innovations targeted directly at someone’s needs
that produce the quick and generous paybacks.
Product Life Cycle
S
a
l
e
s
Introduction Growth
Maturity
Time
Saturation
Decline
The five stages of the life cycle will be common to all products but the shape
of the curve will differ from product to product.
Product Champions: Can be difficult to work with because they are
unusual to the corporate world. Tom Peters list their characteristics as:
Energy, passion, idealism, pragmatism, impatience, don’t recognize barriers,
love hate relationships with colleagues.
Opinion Leaders: As consumers they are not always innovators but are
more open to new ideas. They range from 10 to 25% of the population. They
tend to be more outgoing, and knowledgeable about the product in question.
Are very important for the word of mouth communication about the product.
La Coste gave away shirts to famous tennis players. Advertisers use
celebrities in advertisements.
Diffusion of new Products and Innovations: The process by which an
innovation is communicated through certain channels over time among the
members of a social system.
3 main types of Innovation
1. Continuous: Modifications to existing products, new models and
flavors. New model car, a new flavor of yougurt.
2. Dynamically Continuous: Requires more change in consumer
behavior. Can be the modification of an existing product or the
creation of a new one. Compact disks, new foods.
3. Discontinuous: Requires a new form of consumer behavior. The
rarest innovations but th ones with the greatest social impact.
Telephone, Radio, TV.
5 product characteristics which determine consumer response:
1. Relative Advantage
2. Compatibility
3. Complexity
4. Trialability
5. Observability
Adoption of new Products:
 Different generations grow up with different innovations.
 Some innovations are so widely diffused they are accepted by
all generations.
 Some innovations are so user friendly that all generations use
them.
 Some innovations can achieve widespread penetration because
of usefulness but only be user friendly to the younger
generation.
 No innovation will ever be adopted by everyone
A
D
13.5%
O
P
2.5%
T
E
R
34%
S
Inovators Early
Early
Adopters Majority
16%
34%
Late
Majority
Some
commercially
successful
innovation are
actually rejected
by most of the
population!
Laggards
Mod: 4 – Perception
We each perceive the world differently and construct our own reality out of
it.
Using our senses
Traditionally people have referred to the 5 senses:
1.Vision
2.Hearing 3.Touch
4.Taste
5.Smell
We can now add two more senses:
1.Bodily movement
2.Balance
There are really 4 senses of taste:
1. Bitter
2. Sweet
3. salty
4. Sour
There are really 4 senses of touch:
1. Pressure 2. Pain
3. Cold
4. Warmth
There are two senses of Vision:
1. Color 2. Black and white
Vision
We rely most on our sense of vision, Package designers know this and make
packages easy to recognize and read.
Hearing
Volume – It was found that people spent more time shopping when music
was quiet.
Tempo – It was found that when the tempo was slow people walked slower
and sales went up!
Common Properties of the Senses
Threshold of Awareness: A stimulus has to be strong enough for us to be
aware of it. This is known as the absolute threshold.
Difference Threshold: The minimum amount of difference that you can
detect is the J.N.D..
 A product that claim to be better than the competition must be
noticeably better.
 Producers can reduce the size of products by less than the JND.
Sensory Adaptation: You are not aware of thing that are constant such
ass te pressure exerted on your skin by a watch. If the stimulus changes
your sensual receptors are back in business.
Processing Sensory Information: We have to learn how to interpret
sensory information as to make it useful. Past experience and current
emotional states can effect our perceptions and change a bush in a dark
alley into a mugger!
Focusing and Attention: By focusing our perceptions we give attention
to certain stimuli. We concentrate on only immediately important stimuli
and ignore the rest, filtering out all of the unimportant noise.
Selective Perception and Distortion: In order to perceive something we
must give it attention.
Psychologists refer to external and internal factors in trying to
understand attention-getting and selective perception.
External Factors
Internal Factors
1. Change
1. Emotional States
2. Contrast
2. Different Interests
3. Movement
3. Perceptual Set
4. Repetition
5. Size
6. Intensity
Perceptual Distortion: People distort their perception to fit what they
expect to see.
Organizing Perceptual Clues:
1. Illusions
2. Figure and Background
3. Contour
4. Grouping
5. Closure
Zeigarnik Effect – Because of our need to complete the incomplete
interrupted tasks tend to stick in our memory better than completed tasks.
Gestalt Psychology – We perceive things as a gestalt, German for
configuration.
Perceptual Constancy: From our angle of sight we see the top of a cup as
an ellipse but we know that it is round.
Depth and Distance: Helps us to translate two-dimensional information
into three-dimensional.
Movement – Much of the movement that we perceive is illusionary such as
films and flashing neon light that look like they are moving. The Phi
Phenomenon.
Subliminal Perception
James Vicary flashed messages into movies. Remains suspect as to it’s
effect.
Self imposed psychological impressions of how we se ourselves are potent
forces in marketing.
For example young executives see themselves driving BMWs and teachers
sdee themselves driving VWs.
Perceived Risk – 6 forms have been Identified:
1. Performance
2. Financial
3. Physical
4. Time
5. Social
6. Psychological
Uncertainty about Purchase Goals – Is the car for commuting or
occasional trips?
Uncertainty about best alternative choice – is the blue or red hair ince
more effective in achieving a youthful look.
Uncertainty about making or not making a purchase
Coping with Risk: We cope with risk by:
1. Information Gathering
2. Relying on brand loyalty
3. Some official seal of approval
4. The image of a major new brand
5. The image of the store
Mod: 5 – Personality
Personality – The traits that make a person unique, the Characteristic ways
in which he behaves,.
4 Formal Theories of Personality
1. Freudian Psychoanalysis
The human personality is made up of the id, ego and superego.
a. Id – raw impulses of sex and aggression. Unconscious.
b. Ego – rational conscious thinking part of our personality.
c. Superego – Unconscious, deals with morality our conscience.
Responsible for our feelings of guilt.
Freud believed the first few years of a person’s life to be crucial in
shaping his personality.
Freud’s Developmental Stages
a. Oral Stage – Lack of Satisfaction produces a hostile sarcastic
personality and to much satisfaction a dependant gullible
personality.
b. Anal Stage – Strictness leads to an anal personality and laxness
leads to disorder and messiness.
c. Phallic Stage – is crucial to determining ones attitudes towards
people of the opposite sex and positions of authority.
Applications to Marketing Earnest Dicter
The consumer is often unaware of the needs that the product may be
satisfying.
The consumer might be trying to live out his fantasies.
Marketers try to appeal to lifestyles with the key element being wish
fulfillment rather than the attributes of the product itself.
Marketers use personality tests to get behind the public face of the
individual
Minnesota Multiphasic Personality inventory (MMPI): has 550
questions where the testee answers true, false or cannot say. Is good
for revealing patterns of behavior and attitudes.
Thematic Appreciation Test (TAT): Requires the subject to project
onto some vaguely defined picture what is on his mind. Consists of 20
black and white pictures. The pictures act like a screen on which the
testees inner life is projected.
Rorchach Ink Blot Test: Ten Pictures of ink blots are used 5 in color
and 5 in black and white. Subjects are asked what they see in the ink
blot, what it reminds them off. No right or wrong answers.
2. Neo- Freudian Psychoanalysis
Felt that Freud gave to much importance to biological drives. NeoFreudians tend to de-emphasize the id in favor of the Ego.
Karen Horney states that people can be classified according to their
relationships with others:
1. Compliant
2. Aggressive
3. Detached
This is measured on a CAD personality scale.
Compliant people preferred recognized brands.
Detached people were less interested in being consumers.
3. Self Theory
Centered on the work of Carl Rogers.
People try to live up to their potential. The fact that their potential so
often remains unfulfilled is due to the oppressive effects of family
school and other social institutions that shape the lives of the subjects.
Rogers believes that people are basically rational and are motivated to
be the best that they can be.
The concept of Self:
As infants grow they explore themselves and their surrounding.
Young children have no choice but to think of themselves as how their
parents tell them they are. By the end of adolescence our selfimage
has been set although not finalized. Thus it has long been known that
the way you think of yourself has bearing on how others see you.
Marketing the concept of self:
Actual self Image – How we actually see ourselves.
Ideal self Image – How we would like to see ourselves.
Social self Image – How we think others see us.
Ideal social self Image – How we would like others to see us.
Advertisers try to appeal to the different self-images for different
products. It is especially important when people are trying to change
an actual physical self-image into an Ideal one. An example is as the
black self-image improved the sale of hair straiteners declined.
4. Trait Theory:
The leading theorist is Raymond Cattell. He states that we all have
characteristics called traits that are shared but we all differ on the
strengths of various traits.
Cattel eventually came up with a list of 16 different factors on which
he bases personality profiles. His personality test known as the 16PF
is now widely used in job selection and vocational guidance. Cattell
suggests that there are 3 important sources of personality data: Life
data, self-report questionnaire data, and objective data from
personality tests.
Over 300 studies found very few strong links between aspects of personality
and particular products. There are probably a number of reasons for this:
1. The above techniques were adopted from clinical tools.
2. Personality and consumer choice are so complex that it is hard to find
a correlation.
3. There are many other factors excluding personality that lie behind
consumer behavior. Money and availability being the most obvious.
Brand Personality
A more modest and attainable approach in marketing is the development of a
brand personality. To give a product characteristics such as old fashioned,
elegant rugged or masculine.
Ego
Conscious
Unconscios
Id
Superego
Mod: 6 – Learning Memory and Thinking
Learning is the relatively permanent process by which changes in behavior,
knowledge, feelings or attitudes occur as the result of prior experience.
1. Is permanent and not temporary.
2. Based on previous experience and not maturation.
3. Behavior and knowledge refer to the two dominant schools.
Behaviorist Approach
Founded by J.B. Watson, is purely objective and the goal is the prediction
and control of behavior.
Watson believed that the only thing to be studied was someone’s observable
physical behavior.
Pavlov and Classical Conditioning
Unconditioned Stimulus
US
Food
Unconditioned Response
UR
Salivation
Conditioned Stimulus
CS
Bell
Conditioned Stimulus
CS
Bell
Conditioned Response
CR
Salivation
Marketing application of Classical Conditioning
Unconditioned Stimulus
US
Sun / Sea / Model
Unconditioned Response
UR
Feeling of Pleasure
Conditioned Stimulus
CS
Product being Advertised
Conditioned Stimulus
CS
Product being Advertised
Conditioned Response
CR
Feeling of Pleasure
Stimulus Generalization – The dog would salivate not only at the usual bell
but also at other bells with a similar sound.
Stimulus Discrimination – The dog can be trained not to salivate at certain
bells and salivate at the sound o others.
Marketers want to be careful to when to and not to use stimulus
generalization and discrimination!
Campari and Cinzano example!
Skinner and Operant Conditioning
Operant Behavior - An animal exploring it’s surroundings in order to
operate on them.
Operant Conditioning – Training using conditional techniques.
Positive Reinforcement – Press the bar to get a reward.
Extinction – Remove the reward to stop the behavior.
Negative reinforcement – Press the bar to avoid pain.
Punishment – Giving pain after an undesirable action.
Consumer Applications of Operant Conditioning
It is important at all cost that consumers are not punished (get a bad product)
after a purchase.
There is no cheaper form of positive reinforcement than saying thank you or
following up with a thank you note.
The Cognitive Approach
Was founded By Wolfgang Kohler.
The cognitive school emphasizes the importance of knowledge and insight.
The greatest advantage of an insightful solution is that unlike trial and error
learning it can be applied to new situations.
There is a link between the psychology of perception and the psychology of
learning, the concept of memory.
Information Processing and the Concept of Memory
Information Processing – Whatever we learn will be of no use unless we
can retrieve it.
When we store information and experience it is called memory.
Whatever can be retrieved is remembered and whatever can’t be retrieved
is forgotten.
People can recognize more advertisements than they can recall.
It is important for the marketer to decide whether to aim for recognition or
recall in planning a marketing campaign. Recognition will be a much
cheaper option.
The process of committing to memory seems to involve 3 distinct stages.
1. You register a stimuli. Less than a second.
2. Short term memory. Decide whether you want to remember the
stimuli. Up to 30 seconds.
3. Long term memory. The information is processed, repeated or
rehearsed so that it sticks.
Information
Sense
Memory
Short-term
Memory
Long-term
Memory
Information is forgotten
Not
Registered
Not
Encoded
Not
Available
If we can’t remember something maybe we have not been given a strong
enough stimulus or else we don’t want to remember it.
Making Learning Meaningful
Repetition has diminishing returns.
May be very effective when there is little competition but may cancel each
other out when there is a lot of competition.
Visuals are very effective. That is why symbols are used to represent brands.
Self-referencing – The act of relating information to ones own life.
Mnemonics – Breaking information down into groups and associating each
group of information to a trigger.
Meaningfulness – We learn things by linking them to thing that we already
know. We organize our memories into packages called schemas.
Modeling – Seeing other people doing something and using them as models
for our own behavior.
Mod: 7 – Motivation
Motivation – A hypothetical psychological process which involves the
experiencing of needs and drives and the behavior that leads to the goal that
satisfies them.
Buying
Behavior
=
Ability
+
Opportunity
BB = f(A,O,M)
Fulfillment of Needs
Primary Biological and Physiological needs.
Secondary Psychological needs.
Abraham Maslow Hierarchy of Needs
Self
Actualization
Self
Esteem
Social Needs
Safety Needs
Physiological Needs
+
Motivation
Consumer Applications of Maslow
People might trade some needs to satisfy others.
Example students spend less on housing (Physiological) and more on
education (Self-Actualization, Self-esteem).
Marketers can aim a product at satisfying more than one level of need.
If I am thirsty then water will satisfy my Physiological need but advertisers
can advertise Coke to satisfy both Physiological and Social Needs.
Perception Mapping
Hierarchy
5
Value
For (Lo)
Money
(Hi)
0
The Motivational Mix
Multiple Motives – There are many reasons why people shop.
To get out of the house.
Entertainment.
Meet Friends.
They need something.
Marketers should therefore consider factors that underlie impulse buying.
Approach and Avoidance
Kurt Lewin suggested that motivational pressures can be either positive or
negative. Conflicts arise in 3 types of situations:
1. Approach-Approach conflict: The consumer has to choose between
two equally good choices. Fudge cake or strawberry-cheese cake?
2. Avoidance-Avoidance Conflict: The consumer has to choose
between two undesirable choices. To fix the vacuum cleaner or two
buy a new one.
3. Approach-avoidance Conflict: The consumer must choose between
positive and undesirable choices. Buy the dream car or avoid the large
mortgage associated with it.
Marketers try to emphasize the approach part of the sale. In addition they
can reduce the Avoidance part by lowering cost.
The Force of Inertia
Changing habits that have been well learned is very difficult.
Therefore it takes a lot of effort to overcome inertia.
Involvement
Is concerned with the relationship a consumer has with a product.
1. Antecedents of Involvement
a. Person – Who is the person. People that like cars will be more
likely to go to car races demonstrating higher involvement.
b. Product - People react to the same product in different ways.
The les generic a product the higher the involvement with it. As
involvement increases so does perceived risk.
c. Situation – The situation in which a product is purchased can
effect the level of involvement. Buying a gift requires much
more involvement than buying for oneself.
2. Properties of Involvement – People with a higher level of
involvement with a product will tend to seek out information on the
product actively. Consumers with les involvement should be
advertised to on a more passive medium such as TV.
3. Outcomes of Involvement – Will depend upon the interaction of the
Antecedents and Properties Involvement.
 Brand names will have a hard time entering the memory of someone
with low involvement.
 On the other hand mere exposure to a heavily advertised product may
be enough to get a customer with low involvement to buy it if he has
no relationship with the competing brands.
Specific Needs
1. Need for Achievement
McClelland: people with a high n ach level exhibit a need for:
a. Moderate risk with worthwhile payback
b. Feed back of their performance.
c. Individual responsibility recognized.
People in sales and marketing usually have a higher n ach.
2. Need for Affiliation
Most teenagers would fall into this category.
3. Need for Power
The lowest level of the 3 needs. Powerful cars and computers are to be
marketed to people with a high need for power.
Unconscious Motivation
Motivational Research – The most direct application of Freudian theory
was the work of Ernest Dichter. Some examples are:
When a woman pulls a baked cake out of the over she is subconsciously
giving birth.
Ice Cream taps into the unconscious of love and nurturing.
Men who wear suspender are afraid of castration.
Criticism – these tools were developed for the clinic to help people with
psychological problems.
Creating Needs
There is no evidence that needs can be created, however existing needs can
be stimulated.
Semiotics
The use of symbols to represent products. Symbols are much more powerful
than words.
It is hard to tell what a symbol means to a particular individual. Even Freud
said sometimes a cigar is just a cigar.
Remember the prunes example and what they represent.
Mod: 8 – Family Influences
What is a Family? A group of two or more people living together who may
be related by blood, marriage or adoption.
Nuclear Family – Immediate Family.
Extended Family – Grandparents cousins and the list goes on.
Family of Origin – The family that you are born into.
Family of Procreation
Every family is a primary group because of the face-to-face interaction.
Families may also be reference groups as long as members refer to family
values as a guide to their own decisions and actions.
Changes in Family
The extended family is now pretty rare in western countries.
It is now also pretty rare for the man to be the sole bread winner.
The rate of divorce has also increased.
Households
Households are based on where people live together rather than with whom.
People living together in institutions are not considered households.
People who live alone are considered a household.
Socialization
The way in which an individual child becomes an adult and a functioning
member of his society. Socialization is a two way process.
Age
Family Household Non-Family Household Institution
0-18
Family of Origin
18-22
College/Army
22-28
Sharing house/roomates
28-38 Procreation family
38-43
Divorced
43-78 Step Parent
78-85
Nursing home
Childhood
Some babies are more active than others this effects how people will react to
them in turn shaping their socialization process.
Effects of Institutions
Family - Crucial in determining a child’s adult personality. The parents are
know it alls therefore their way of dealing with the world becomes the
child’s way.
School – Here the child actually becomes part of the world and must deal
with it alone. Children learn how to behave in an extremely complex mass
society and maintain and develop their own individuality.
As children go through school their peers will become more important in
influencing them than their parents.
Nation State – National governments are the legitimate source of social
power in a given country. Different nation states may produce different adult
social beings with different outlooks on the world.
Consumer Socialization
Parents do not give specific training in this area they act as role models.
Co-shopping usually is a mother child thing and it is a useful way to spend
time together in today’s busy world. On these trips children learn about
budgeting, choosing between products, brands and quality. Co-shopping
once again is a two way process. Children may become role models for their
parents when shopping for such stuff as VCRs and CDs.
Family Buying Decisions
The instrumental role is one of providing material support and leadership
and is usually assumed by the father. Wereas the mother would perform the
expressive role of giving emotional support and aesthetic expression.
Family buying roles:
1. Initiator
2. Influencer
3. Decider
4. Buyer
5. User
6. Gatekeeper
Either the:
1. husband or wife may be dominant.
2. The partners may be autonomic – an equal number of joint decisions
are made by each.
3. The partners may be syncratic – decisions are made jointly.
Resolving conflicts
4 major strategies may be used in Conflicts:
1. Coercion: By expertise, authority and/or threats.
2. Persuasion
3. Bargaining
4. Manipulation
Changing Roles
Most families will go to great lengths to avoid open conflict.
Studies of people buying houses showed that they did not act rationally but
rather muddled through the process. People were not aware of their partners
preferences or even their own until the process got under way.
With greater sexual equality decisions are becoming less husband or wife
specific with more discussion and negotiation taking place.
Although attitudes have changes behavior usually lags behind.
Life Cycle Effects
Consumer Life Cycle Changes:
1. Bachelor
2. Newly Married
3. Full nest I –Children under 6
4. Full nest ii – Children 6-12
5. Full nest iii – Children in teens
6. Empty nest I – Children left home
7. Empty nest ii – Retired and Children left home
8. Solitary survivor
9. Retired solitary survivor
Non Family Households
Now about 30% of American households. Single people tend to be more
insecure and spend more on the way they present themselves to the pulic.
Mod: 9 – Social and Developmental Issues
Maturation – The process of growth and development which are common to
all members of a species and appear regardless of individual heredity or
environment.
Maturation happens at it’s own pace. No amount of encouragement will
speed up the maturation process.
Stages of Development
Jean Piaget defined 4 stages of development:
1. Sensory Motor Stage – (0 to 2 years) The major achievement is
object constancy.
2. Preoperational Stage – (2 to 7 years) Acquisition of language and
use of symbols.
3. Concrete Operations Stage – (7 to 11) Can understand the Law of
Conservation and can classify people into more than one group.
4. Formal Operations Stage –(11 years on) The use of logical
reasoning in solving problems.
Piaget found out that children perceived differently than adults. And that
children in different stages gave the same kinds of wrong answers.
Child development does not happen gradually but in leaps.
Assimilation and Accommodation
Children can assimilate new information into their cognitive system.
Sometimes however the new material requires that they change their whole
way of thinking. This is called accommodation.
From Egocentric to Reciprocal
Egocentric – During the early years the child can visualize the world but
can not imagine how it would look to someone else.
As the child develops he decentres from himself and learns reciprocity, a
cognitive achievement that allows him to deal with equity, impartiality, and
fairness. They learn how to play the game bay fair rules even if it means
loosing.
Differences make more sense than similarities.
Language and Culture
Language reflects the things that are important to the people that speak it.
The language that a person speaks affects the way that person perceives the
world
The manipulation of language by marketers is such a pervasive feature of
our consumer environment that we have been socialized not only to accept it
but perhaps not even to notice it.
Message
Tourist class
Imposing residence
Premium product
Meaning
second class
Ugly house
Expensive
Development of Economic Concepts
Unlike the mental capacities studied by Piaget economic concepts are
learned.
Children who have experience of handling money have a better
understanding of it at an earlier age than children who don’t.
Phase I: Pre –economic
Under 7. Children do not have an understanding of money.
Phase II: 7-14 Micro-economic
Children understand money on the micro level of buying and selling and
what it can do for them.
Phase III: over 14 Macro-economic
Children learn about the institutions that link money and economies like
banks.
External Influences On consumer Socialization
Parents
The mother-child influence is of specific consumer importance. It is likely
that more educated mothers are better able to help their children understand
the economic concepts surrounding consumerism.
Having an allowance seems to help children develop economic and
consumer understanding at an earlier age. Middle class children tend to
receive less of an allowance than working class children but they also tend to
save more of it.
School - there are 3 ways in which school contributes to consumer
socialization:
1. Peers – Peers opinions are more important than parents. It is crucial to
play the right, games have the right toys and wear the right clothing.
2. Teachers – Are not trusted any more than parents.
3. Courses – Courses like economics help.
Social Norms
A norm is a behavior that is expected of people in a society and is
considered normal.
By studying norms we can predict the behavior of others with a high degree
of accuracy. Such prediction is necessary for social life to exist.
Children in Zimbabwe have been found to have a better understanding of the
concept of profit than British children because trade was more prevalent.
Marketing and Advertising
In Britain and Canada direct advertising to children is forbidden.
How justified is this?
Children are not passive recipients of messages. Children are able to make
the distinction between advertisements and programs.
In the America children view about 20,000 advertisements a year! These
advertisements show fun rather than give real information.
Advertisers claim that children watch tv at home under the guidance of
parents. But how many parents watch children’s programs?
Mod: 10 – The Influence of Small Groups
A group is two or more people who regard themselves as a collectivity and
interact with each other while sharing the same norms.
Types of Groups
Primary groups are small face to face groups, typically around 4 to 8
people. Most of us belong to several such groups as these at any given time.
Secondary groups are to large to be considered primary usually above 20
people. Members of a dental association or of religions are examples.
Formal groups
Informal groups
Membership group – As a child you have no choice about this as an adult
you do.
Reference group – is the group with which people identify. If people feel
good about their membership group then it will also be their reference group.
If not then their reference group will be their aspirational or symbolic
group. Reference groups have become very important to consumer behavior
study!
Properties of Group Life
Unintended group influence Couples tend to have similar patterns of
consumer behavior to each other, patterns that are systematically different
fromother couples who met in different kinds of neighborhoods. This is an
extension of Geodemographic segmentation.
Word of mouth and Opinion Leadership
Friendship patterns are important to CB because ones friends are the source
of advise and word of mouth referrals.
Opinion leaders leadership is situational depending upon the following:
1. It is usually specific to a particular product or category.
2. It is a relationship between at least 2 people where the influence goes
both ways.
Opinion leaders are sometimes known as Market Mavens.
Conditions Necessary for someone to exert consumer influence:
1. There is an ongoing personal relationship.
2. The other person is an expert or knowledgeable in the field.
3. You do not personally have the information to evaluate the product.
4. You do not trust the vendor’s sale pitch.
Group Norms and the Power of Conformity
As adults group norms have become so internalized that we are non even
conscious of them. It is only when we have to go against a norm that we
learn how powerful it is.
Conformity is the Norm!
Solomon Asch did the line experiment on groups of six people 5 of which
were confederates. The most important factor was weather the majority was
unanimous or not.
Cruchfield did away with confederates and validated Asch’s results by
making up to 80% of his subjects agree with statements that were clearly
false.
Stanley Milgram Did the shock experiments. Only about a third of the
subjects refused to give the high voltage shocks.
1.
2.
3.
4.
Conformity and consumer Norms
Most of us feel uncomfortable if our buying behavior is out of step
with the people around us for example not owning a TV.
People who do not mind such conformity are likely to be opinion
leaders. Especially of new products and innovations.
It might just take the support of one other person to make conformity
resistable.
Most of us accept some silly opinions if they seem to be the norm of
our group. For example Bermuda shorts are attractive. The whole
fashion industry is based on this.
With no real competition on a product it is hard for us to know how
conformist as apposed to manipulated we are. The car has remained
basically the same since 1913. While the state of the art home entertainment
system has gone from a piano to what we have today! It is Ironic that the
most advanced Manufacturing companies in the world regard the consumer
As a valued colleague to be consulted rather than manipulated.
5 types of PowerPower
1. Reward
2. Coercive
3. Legitimate
4. Referent
5. Expert
Reference Groups and Consumer Behavior
Direct Influences In Asch’s and Crutchfield’s experiments had the group’s
opinions not mattered the subject would have come up with the correct
response every time. The same applies to buying decisions. When asked to
choose the best three identical suits the choices were randomly distributed.
When the confederates all chose the same suit then so did the Naïve subject.
Indirect Influence Consumers are very concerned what other people will
think of them. In the 50 people thought differently of a woman whether she
bought ground or instant coffee. A follow up experiment 20 years later after
instant coffee became accepted showed that it did not alter peoples
perceptions.
Variability of Products
Two dimensions seem to be important:
1. How exclusive the product is.
2. Where it is used
Reference group influence will be strongest on public luxuries.
Public necessities
Public luxuries.
Private necessities.
Private Goods
Public Goods
Necessity Good
Low Influence
Medium Influence
Luxury Good
Medium Influence
High Influence
Differences in Consumer Susceptibility
Group Factors
Students are more susceptible to conformity as a group than are housewives.
The more integrated a group is and the stronger the sense of belonging the
greater it’s influence will be on it’s members.
Individual factors People who are more self-confident and have high self
esteem are less susceptible to group influence. These are usually the people
who are the opinion leaders.
High Involvement
Low involvement
Attitudes
lead to
Behavior leads to
Behavior
Attitudes
Mod: 11 – Social Class
Qualitative
Quantitative
Social Stratification
Sorting people by different rank-ordered classes.
SES socio economic status – Determined by education occupation and
income.
As well as different levels of SES social stratification also highlights
differences between sexes and ethnic groups.
Social stratification also implied that people in each stratum will tend to
interact largely within that stratum.
Rank is accorded in different ways, through the power of being a legislator,
wealth of being an entrepreneur, or prestige of a talent.
Different societies ascribe different degrees of social status in different
ways.
Social Status and Symbols
Conspicuous Consumption – The buying of products for what they stand for
so as to claim status.
Having a carpet in your office or the key to the executive lavatory can be a
matter of great importance to people. It is also a cheap way for companies to
reward employees.
People settle for symbols of status. For example organized crime gives to
charity in order to get respect.
The effectiveness of a product or service as a status Symbol rests on 5
factors:
1. Exclusivity
2. Expense
3. Quality
4. Limited supply
5. Honor and respect
Life Chances and Lifestyles
The social status of a family is the status that individual will have.
As adults people can become socially mobile.
Families afford their children different life chances.
A persons future education, income and occupation depend more on
anything else the family that he was born into.
The life chances of an individual will have a great effect on his life style.
People have what is called class consciousness.
Measuring Social Class
1. Objective Methods – uses quantifiable SES measures:
A. Single-variable index- Occupation is generally regarded as the
best single-Variable index.
B. Multi-variable index-Uses more than one variable. The
Census bureau’s Socioeconomic Status Core is based on SES,
and Richard Coleman’s Computerized Status Index CSI.
2. Subjective Methods – Asks people to rank themselves. Not good
because most people claim to be middle class. The really rich and
really poor don’t claim their real status.
3. Reputational Method – People are asked to rate each other.
4. Interpretive Methods – Involves measuring the written and visual
content of a society to gain insight on their norms of social class
behavior.
Social Class Categories
American Classification
Upper-Upper (0.3%) Smallest class. Membership is based on inheritance.
Their consumer behavior will tend to be tweedy rather than trendy.
Old Money.
Lower-Upper (1.2%) Wealth is not inherited. May even be richer than
upper-upper class. New money. Would have been very successful in what
they do for a living. Their consumer behavior tends to be more expressive
and less conservative.
Upper-Middle (12.5%) High in all SES indicators especially education.
Tend to be I occupational positions where there education can help them.
Consumption patterns tend to center on the home and family.
Middle Class (32%) White collar workers. Have less job security.
Consumption patterns tend to be conformist rather than colorful and are
willing to delay gratification.
Working Class (38%) Largest class. Consumption patterns tend to be
traditional with heavier purchases of cigarettes and alcohol.
Lower Class (9%) Unskilled workers. Tend to spend a grater percentage of
their income on luxury items. This is called compensatory consumption.
Lower-Lower (7%) Usually out of work and are likely to be getting welfare
benefits.
British Classification
A
B
C1
C2
D
E
Upper middle Class
3%
Middle Class
10%
Lower Middle Class
24%
Skilled Working Class 30%
Unskilled Working Class 25%
Lower Class
8%
Changing Social Class
There is some evidence that there is more social mobility at the extreme ends
of the status hierarchy.
Marketing and Consumer Behavior
There is an obvious temptation for marketers to target people in the higher
classes. They do have the highest disposable income and are also the classes
from which marketers tend to come from. In America the working class is
more than a third of the population with almost a third of the disposable
income and they may display greater brand loyalty.
Note the different class attitudes towards money.
The higher classes tend to be more future oriented.
Many people aspire to the rich luxurious life-styles, Therefore marketers try
to increase the occasions when lower classes can partake in the luxurious
lifestyle such as drinking vintage champagne.
Mod: 12 – Cultural Influences
Culture is usually defined as shared beliefs, values, attitudes and
expectations about appropriate ways to behave.
The most obvious differences are language, dress, food and history.
Every nation has a dominant culture and subcultures.
Everyone in a nation is socialized into the national culture – a process called
enculturation – regardless of the sub-culture they belong to.
When we move to a different country we must adapt to their culture a
process called acculturation.
Culture is something that we learn as we grow up.
Similarities across cultures
All cultures share universals such as:
Calendar making
Joking
Religious rituals
Music and Courting
Every culture has to grapple with the same universal questions. It is just the
specific answers that are different.
Differences between Cultures
Language
Speaking the same language is no guarantee against differences in national
culture. The gap in communication becomes quite wide when people trying
to communicate in the same language come from very different cultures. It
becomes more pronounced between two different languages.
Non-Verbal Communication
Style of clothing facial expressions and body language.
Cultural Values
The content of communication is often referred to as cultural values.
Predictability of the behavior of a culture is crucial to marketing strategy.
The differences in cultural values can lead to failures. In America the
washing machine is a convenient disposable item. In Europe it is consumer
durable. This is alien to Americans.
The factors of values fall into 2 categories:
Ideals
Actualities
Individualism
Materialism
Equality
Progress, achievement and success
Humanitarianism
Efficiency and practicality
Youthfulness
Activity
Social conformity
Mastery of Environment
Ideals are usually not attained in practice. They represent an
Ideal state of mind.
Actualities represent more of the everyday lives that people
actually lead
Differences in Cultural Values
The cultural values of two countries are clearly evident in the different ways
their children perceive the social world.
Subcultures
Ethnicity – Has two components National origin and race.
Changes in Culture
Cultures are always in the process of change.
One important method used to track such change is called content analysis.
Mod: 13 – Attitudes
Attitude – A stable, long-lasting, learned predisposition to respond to
certain thin s in a certain way. The concept has cognitive (belief), an
affective (feeling), and conative (action) aspects.
1. Stable – once formed will keep that form.
2. Long Lasting – will be stable over years.
3. Learned – we are not born with it.
4. Predisposition to respond – links to the actual behavior.
5. In a certain way – emphasizes consistency.
Cognitive component
Attitude =
Belief
Affective component
Feeling
Conative component
Intention
A measure of any one of the 3 components could be very misleading. Even
intentions may not be an indicator of actual buying behavior.
Forming Attitudes
Nobody is born with an attitude about anything. There are different ways in
which attitudes can be formed:
1. Classical conditioning
2. Stimulus generalization – Heinz 57 varieties.
3. Stimulus discrimination – To negate the effects of me to products.
4. Operant conditioning or reinforcement
5. Cognitive learning
Sources of Attitudes
1. Family
2. Peers
3. Direct experience –The greatest former of attitudes.
Theories of Attitudes
Single attribute Model – Measures one of the components of an attitude.
Multiple –attribute models: Pioneered by Martin Fishbein
n
AB = Σ biei
i=1
AB= Global Attitude
bi = The strength of the belief about i.
Ei = Evaluation of i.
n = The number of Salient beliefs.
Behavioral Intentions Model - Adds a measure of intention to the model
Subjective norms – these norms are represented by significant others,
family, friends and so on.
Fishbien’s Models are not so helpful in explaining unreasoned behavior
such as why we go out for a loaf of bread and return with two magazines and
a jar of pickles.
Changing Attitudes
1. Mere exposure
2. Persuasive communication
3. Cognitive dissonance
Usually market leaders are more interested in strengthening attitudes than in
changing them. Competitors will usually have more to gain from changing
attitudes.
Strategies
Low consumer involvement – use an advertising blitz or conditioning.
Increasing involvement - Try to increase the consumers involvement by
associating the product with a political cause or health concern.
Involvement – Use the multi-attribute model
a. Change beliefs – anything that claims to last the longest, be the
most reliable or give the best value for the money.
b. Changing Evaluations – Changing the way a consumer
evaluates a product. For example baked beans have always been
cheap and convenient but when consumers discovered that they
were high in fiber and healthy the way they were evaluated
changed.
c. Changing beliefs and evaluations – Removing or adding
attributes. Adding fiber to bread or removing caffeine from
coffee. Adding vitamins to milk and removing it’s fat content.
Attitudes and Behavior
Leon Festinger – Cognitive Dissonance –
Subjects did very boring tasks.
They were asked to tell subjects who did not yet do the tasks that the tasks
were enjoyable.
The subjects were then asked what they thought about the tasks.
The subjects that were paid $20 said that the tasks were boring.
The subjects that were paid $1 said that the tasks were enjoyable.
The less people were paid the more readily they changed their minds!
Cognitive dissonance studies show that if the appropriate behavior comes
first then it is more likely that the attitude change will follow.
Behavior is a lot more resistant to change than attitude.
Mod: 14 - Communication and Persuasion
Sende
r
E
N
C
O
D
E
S
Message
Receive
r
Medium
DECODES
No Change
Attitude
and/or
behavior
change
FEEDBACK
The Source
The two most important factors in changing peoples attitudes are:
1. Credibility – The communicator should be perceived as an expert and
trustworthy. Arguing against ones own interests is especially
effective! Fast smooth talkers seem to be perceived as more credible.
Sleeper effect – a not so credible spokesperson gives a message. After
time the sender is forgotten but the message remembered.
2. Attractiveness – Using celebrities. It is said that this technique works
only up to a point on trivial issues.
The Communication or Message
Several key questions are considered in evaluating the effectiveness of
the message:
1. Reason or Emotion – Modern research looks more into the effects of
different levels of emotion rather than the distinction between the two.
It seems to be the combination of high emotional arousal plus specific
instructions on what to do that is most effective.
2. Images or Statistics – Apparently the vividness of an individual
picture is much more persuasive than words. All the cracks adding up
to the size of a basketball.
3. One sided or two sided argument - For uninformed people or people
that share the same opinion the one sided argument approach is more
effective. For well informed people or people that don’t share the
same opinion the two sided approach is more effective.
4. Primacy or Recency effect – There is an obvious relevance to the
timing of adds on radio and TV with relation to the time of the
purchasing decision.
5. Size of attitude discrepancy – It is much easier to change the
attitudes of the target audience when there is only a small discrepancy.
The Audience
Factors which effect the way the audience will perceive a message and how
they will respond to it:
1. Self-Esteem – It seems that people with low self-esteem are much
more susceptible to persuasion. This seems to concur with Milgams
and Asch’s studies.
2. Social approval – Allied to self-esteem is finding people who have a
deeply felt need for social approval.
3. Prior Experience – The most important factor in audience attitude
change. Inoculation and forewarning.
4. Public commitment – When people make a public commitment that
jives with group norms rather than a private commitment they are
more likely to change their behavior. Examples are, Kurt Lewin’s
Offal studies. Tupperware parties.
5. Mood –
a. Content – The add should be upbeat and happy.
b. Context – The add should be placed in a program that is upbeat.
Feedback and Evaluation
1. Elaboration Likelihood Method (ELM) – Suggests that there are
two different routes to persuasion. The central route when
consumer’s involvement is high and a peripheral route.
2. Attitudes toward the add - If people dislike the add itself it might
transfer on to the product.
3. Feedback – Up until now only one way communication was
discussed. With salesmen you can have two way communication. This
is much more expensive. However many post advertisement surveys
are conducted and data from UPS scanners is analyzed. With
interactive media feedback might become integral.
Cultural Factors in Advertising
The two most important aspects are Humor and Sex.
Both can backfire if not used correctly and if they do not target the
correct audience.
Humor in Advertising
 Over 40% of advertisements use Humor
 Attracts attention
 Can enhance attitude towards the advertisement
 May not increase credibility
 Does not increase persuasiveness
 Is more effective if related to the product
 Is more effective with existing products rather than new
 Is more effective with low involvement products
 Effectiveness varies with audience
 Effectiveness varies with product
Sex in Advertising
 More prevalent that humor.
 Very good at grabbing attention
 Nudity might have a negative effect when the model is
of the same sex.
 Male consumer finds sex in advertisements distracting.
 Female consumers are more likely to recall the product
of a sexy comercial
Mod: 15 – Approaching a Decision
We do not know the outcomes of each of the alternatives that we are faced
with. It is evaluating their probabilities that is so difficult to do. The closer
the alternatives are the harder it is to make the decision.
Rationality - Very rarely do we make a rational decision.
Most decisions are made in a state of incomplete information.
Often we are not even trying to find the best solution but a satisficing
solution.
Heuristics – A procedure or method for solving a problem or making a
decision. Kind of like a rule of thumb.
We are all cognitive misers.
We want to make sense out of situations with the least amount of cognitive
processing.
Three forms of Heuristics:
1. Representative – We pick out something familiar in the new situation
and equate it with something we already know. The best example is
judging quality on the basis of price.
2. Attitude – Starting with liking or disliking a product and then
believing what we would want to be true about it.
3. Availability - The more available relevant information is the more
likely we thing the event to occur. That is why we trust the validity of
hindsight.
The consumer Decision making Process
Stage 1
Stage 2
Recognising the problem
External
Information
Search
Internal
Information
Search
Stage 3
Evaluating Alternatives
Stage 4
Purchase Process
Stage 5
Post-Purchase Process
Stage 1: Recognising A Problem
The consumer feels that something is missing from his life this triggers off
the process. The consumers problem is the gap between the their actual
state and their desired state.
However, just because a consumer recognized a problem does not mean that
he will act upon it.
1. The consumer might not consider the problem important enough.
2. The consumer might not be able to satisfy the need.
There are 5 antecedents that cause a customer to act on a problem:
1. Changing circumstances
2. Depleted stock
3. Dissatisfaction with stock
4. Marketing influences
5. Product add-ons
Changing Circumstances
a. Changes in finances
b. Changes in needs
c. Changes in wants
Depleted Stock – You run out of milk.
Dissatisfaction with stock – the Whole fashion industry is based upon this.
Marketing influences – most try to persuade the customer how their gap
will be closed by owning the product.
Product Add-ons – you buy a CD player therefore you now have a new
need for CDs.
Stage 2: Searching for Information
Decisions usually become more difficult with more information and brands
available.
Because of our cognitive miserliness we usually curtail our information
search at the earliest opportunity.
1. Internal Search
a. Undirected – Unintended learning or incidental learning. We
learn the names of all the stores on our way to work..
b. Directed – We deliberately try to retrieve relevant information
from our memory.
The adequacy of the internal search is effected by brand loyalty and
previous experiences.
2. External Search
Most important source of information is other people. If someone
wants to be more thorough he will then read up on the subject or turn
to a specialist.
.
 Many consumers do very little external searching even on large
purchases such as a house or car!
 Searches might be quite limited before being terminated.
 For fast moving consumer goods the information search time
can be measured in seconds!
Situational Factors
Increase Search
Decrease Search
 Social pressure
 Time pressure
 High cost
 Product can easily be
exchanges or returned
 Shopping is convenient
 Low cost
 Info is easy to obtain
 Difficult shopping
 Clear differences in
conditions
price or quality
 Influential salesperson
 Long lasting product

Individual Factors
Increase Search
Decrease Search
 High involvement in
 Low involvement in the
decision
decision
 Ability to access
 Brand loyalty
process and use info
 Difficulty coping with
 Confidence and
the info
enjoyment in learning
 Difficulty with the
 High SES
salesperson
 Enjoyment of shopping
 General dislike of
in general
shopping
 High perceived benefits
 A lot of past experience
The risk factor
Brand loyalty is the most popular way of coping with risk. It is also a good
way of avoiding a decision.
A related way of dealing with risk is to build up a set of basic beliefs or
stereotypes.
 All brands are basically the same.
 Locally owned stores give the best service.
 The more salespeople in a store the more expensive the
products.
 The most heavily advertised products are the best.
Stage 3: Evaluating Alternatives
The Criteria of Evaluation will vary from product to product and from
consumer to consumer. Brand name and price are some of the criteria
considered.
Arriving at the Alternatives – The alternatives to be chosen from are
known as the evoked set.
Assessing the alternatives – Usually we have cutoff points.
Choosing a Decision Rule
1. Compensatory Decision Rules – Offsetting week attributes with
strong attributes. The chooser then sums up all the plusses an minuses
and chooses the product with the highest score.
2. Noncompensatory Decision rules
1. Conjunctive - The user establishes a minimum acceptable
standard on each attribute.
2. Disjunctive – If the alternative achieves a minimum threshold
it is acceptable.
3. Lexicographic – Criteria are assessed in order of importance.
4. Elimination – The decider establishes minimum acceptable
standards for all the attributes and eliminates alternatives that
do not reach these levels of standards.
A decider may use one or more of these decision rules when making a
decision.
Marketing Implications
Three issues seem to be important:
1. Knowing the decision rules used by the consumers on a given product
2. The cues that consumer use in assessing alternatives.
3. The presentation of the appropriate information to the consumer.
The most used cue is personal referral.
One of the least important cues is advertising!
There is a fine Balancing act between putting to much information and not
enough on packages. On the one hand you want the information to be big
enough to read and inform the consumer but you do not want to overwhelm
him with information. Different consumers seek different information.
Mod: 16 – The Decision and it’s Consequenses
Stage 4: Purchasing Process
1. In store purchasing
Why do people go shopping?
 To get out of the house.
 To get info on what is available.
 To meet friends.
 To break up routine.
 Exercise
 To feel important as a household provider.
It has been said that the shopping process might be an end in itself.
How do people choose a shop?
About 15 to 20% of Americans are thought to be anti-Shoppers. They
hate Shopping and are usually married couples with kids for whom
shopping is a hassle.
The places to shop are usually chosen in the same models as the brand
to purchase.
The 4 major factors that influence the choice of store are:
1. Location – All things being equal people will usually choose
the store closest to home.
2. Layout – People will match their self-images to shops they feel
are appropriate for them. Ambience also has a large effect.
3. Merchandising – The products that a store caries will have an
effect on who shops there.
4. Service – Salespeople are very influential to many shoppers.
Other services are the acceptance of credit cards, interest free
credit, gift wrapping and shot check out lines.
Buying Behavior
1. Merchandising –
 The two most important aspects are time and planning.
 Usually people spend very little time in deciding which brand
to buy.
 Items that need label reading take a little longer to decide on.
 Only a minority of shoppers plan to buy a particular product
when entering a retail outlet.
 Unplanned purchases are therefore of great interest to
marketers.
 It would be wrong to assume that all unplanned purchases are
impulse buying.
 Enticing Impulse buying is not easy. It might take the following
Forms:
* A spontaneous urge to purchase something seen.
* An intense motivational pressure strong enough to
override all other considerations.
* A feeling of Excitement.
* A disregard for potential harmful consequences.
 There is no way for marketers to know what is going to excite a
given shopper at a given time.
 Point of sale promotions are used.
 Shelf level is important.
 Location of displays are important.
2. Price Multiple pricing – a discount is given for buying more than one of
the item. Getting a good deal seems to be very important to
shoppers but rather than causing them to switch brands it seems to
cause bargain hunting.
3. At home Purchasing –
Seems to be growing in recent years. Includes:
 Mail order catalogues
 Door to door selling
 Party plans (Tupperware parties)
 Telecommunications – Internet, interactive shopping channels
etc.
It does not seem though like at home shopping will ever compete with
in store shopping because of the Psychological and social benefits
involved.
Stage 5: Post Purchase Process
Consumer Satisfaction/Dissatisfaction (CS/D)
What is important here is the evaluation of an emotion.
Did the consumer enjoy the product as much as he expected to enjoy it?
This is known as negative or positive disconfirmation.
Stage 3
Evaluating Alternatives
Stage 4
Purchase Expectation
Stage 5
Post Purchase Comparison
> Expected
Satisfaction
< Expected
Dissatisfaction
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Dealing with Consumer Dissatisfaction
It is very difficult for marketers to convince a dissatisfied
customer to make a subsequent purchase.
Dissatisfied customers are more than twice as likely to tell other
people about their dissatisfaction as satisfied customers.
Because of cognitive dissonance customers routinely convince
themselves that they have made the right choice.
After a bad purchase consumers can:
1. Admit they made a bad mistake.
2. Or they can re-evaluate the product until it becomes a good
purchase.
There limits to the cognitive dissonance situation. No one who
has bought a car that doesn’t start on a regular basis will change
his attitude favorably towards the car brand.
Cognitive Dissonance will be at it’s height when the purchase is
important to us.
Most dissatisfied consumers don’t complain to the seller.
They are more likely to complain to family and friends.
They are likely never to make a repeat buy.
60% of customer complaints get no response.
What matters to the customer is that he be taken seriously.
What matters the most is expectations:
If a purchase was good but not as good as we expected we will be let down
having experienced Negative Disconfirmation.
We can also experience positive disconfirmation if a purchase was better
than we expected it to be.
Mod17: Consumer Awareness
9 Images of the consumer:
1. Chooser – The most prevalent image.
2. Communicator – The acts of buying are nonverbal communication.
3. Explorer – Hunting for bargains, exploring.
4. Identity-Seeker – Defining who one is through purchases.
5. Hedonist
6. Victim – Overcharging manipulation cartels.
7. Rebel – Younger people, Tearing jeans.
8. Activist – Greens and boycotts
9. Citizen - Political linked to a community
Caveat emptor – Buyer beware
Co-operative movement
Set up in the North of England in 1844.
An attempt by groups of workers to take back from the factory owner some
control over their lives.
Seikatsu – Japanese groups that buy food in bulk.
American Consumerism
Upton Sinclair- Wrote the Jungle. Had more of an effect on setting food
Hygiene laws rather than helping the laborers.
The Fordist Deal – If you keep your mouth shut and work hard you will
enjoy and increasing standard of living.
Kennedy’s “Consumer Bill of Rights”
1. The right to Safety – The name most associated here is Ralph Nader.
He took the view that the consumer is largely defenseless and that acts
by governments on their behalf are rare.
2. The right to be informed – consumers shall not be deceived by
exaggeration. This is more of a problem in the food industry. With
expensive goods people tend to look into the product more.
3. The right to choose – How much choice do consumers have?
Manufacturers always try to reduce competition by pursuing
monopoly power or forming cartels or protectionism. How real is the
choice? In Britain there are over 2k types of apples but only 9 types
can be purchased in the super market.
4. The right to be heard – The most problematic of Kennedy’s rights.
There are 3 ways to protect the consumer:
a. Prevention – Listening to the consumer before problems arise.
Codes of conduct such as in the Medical field.
b. Restitution – Often the company has a legal obligation to give
restitution but even when not it might be in the companies
interests. It does not take much to turn a dissatisfied customer
into a loyal fan.
c. Punishment – Hugely expensive and time consuming. Bad
publicity.
Other Consumer Rights:
1. The right to a clean environment
2. The right to privacy – With credit card purchasing databases are
being built and consumers are worried about unauthorized
Transmission and use of this data.
Mod 18: The Future Consumer
The Producer
Customer Responsiveness – A trend that began in the 70’s and that will
continue into the future. Began in Japan with MBWA – Management by
walking around and Kaizen – continuous improvement.
Lean-Production - Trying to marry Mass production with Individual
customizing.
Business Ethics
1. Codes of Ethics
2. Changes in the board of directors – inclusion of external appointees.
3. Social Marketing being socially responsible as well as making a
profit.
Employees will only follow these ethics if senior management does and
sets the example.
The Market Place
Political changes – changes o government can have effects on the
enforcement of regulation and on the amount of regulation. Reagan and
Thatcher were very much for self-regulation.
Regulatory agencies would include:
 Federal Trade Commission
 Food and Drug Administration
 FCC
 SEC
Shopping Trends and Buyer Behavior
Identification of new needs that are really wants rather than necessities.
For most people choice means brand choice.
Own Brand or private label growth.
The Consumer
Direct Action against the Producer
1. Boycotts
2. Organized Complaints
3. Legal Action
Alternative Lifestyles
1. Green consumerism – There are limits. People will buy unleaded gas
but not give up their car.
2. Ethical investment
3. Exchange economy – Informal Economy. Black economy.
Grey economy – unpaid – LETS (local exchange trading system)