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A Simple Model of

Consumer Decision Making

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Reference Group

A group that serves as a point of comparison (or reference) for an

individual in the formation of either general or specific

values, attitudes, or behavior.

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Indirect Reference

Groups

Individuals or groups with whom a person

identifies but does not have direct face-to-face contact, such as movie

stars, sports heroes, political leaders, or TV

personalities.

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Teens are very

influenced by indirect reference groups.

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Major Consumer Reference Groups

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A Reference Group Must ...

• Inform or make the individual aware of a specific product or brand

• Provide the individual with the opportunity to compare his or her own thinking with the attitudes and behavior of the group

• Influence the individual to adopt attitudes and behavior that are consistent with the norms of the group

• Legitimize the decision to use the same products as the group

10 - 7Copyright 2007 by Prentice Hall

Brand Communities

• Harley-Davidson Owner Groups

• Amul advertisement likers in Social Networking sites

• Apple product users’ groups

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Influence of Family

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Households

Households

Family Households: Married couple, Nuclear family, Extended family

Nonfamily Households: Unmarried couples,

Friends/ Roommates, Boarders

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Evidence of the Dynamic Nature of U.S. Households (Refer Page 316 – text book for Indian scenario)

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Consumer Socialization

The process by which children acquire the

skills, knowledge and attitudes necessary to

function as consumers.

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A Simple Model of the Socialization Process

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Family Decision-Making Process – Aspect 1

ROLEROLE DESCRIPTIONDESCRIPTIONInfluencers Family member(s) who provide information to other members about a

product or service

Gatekeepers Family member(s) who control the flow of information about a product or service into the family

Deciders Family member(s) with the power to determine unilaterally or jointly whether to shop for, purchase, use, consume, or dispose of a specific product or service

Buyers Family member(s) who make the actual purchase of a particular product or service

Preparers Family member(s) who transform the product into a form suitable for consumption by other family members

Users Family member(s) who use or consume a particular product or service

Maintainers Family member(s) who service or repair the product so that it will provide continued satisfaction.

Disposers Family member(s) who initiate or carry out the disposal or discontinuation of a particular product or service

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Family Decision-Making Process – Aspects 2

• Husband-Dominated

• Wife-Dominated

• Joint

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The Family Life Cycle

• Traditional Family Life Cycle– Stage I: Bachelorhood– Stage II: Honeymooners– Stage III: Parenthood– Stage IV: Post-parenthood (Empty nest stage)

– Stage V: Dissolution

• Modifications - the Nontraditional FLC

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Influence of Social Class

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Social Class

The division of members of a society into a hierarchy of

distinct status classes, so that members of

each class have relatively the same

status and members of other classes have

either higher or lower status

10 - 18Copyright 2007 by Prentice Hall

Social Class Measurement• Subjective Measures

– individuals are asked to estimate their own social-class positions

• Objective Measures– individuals answer specific socio-economic

questions and then are categorized according to answers

10 - 19Copyright 2007 by Prentice Hall

Objective Measures

• Single-variable indexes– Occupation– Education– Income– Other Variables

• Composite-variable indexes– Index of Status

Characteristics– Socioeconomic

Status Score

10 - 20Copyright 2007 by Prentice Hall

Socioeconomic Status Score

(SES)

A multivariable social class measure used by

the United States Bureau of the Census

that combines occupational status, family income, and

educational attainment into a single measure of

social class standing.

10 - 21Copyright 2007 by Prentice Hall

Geodemographic Clusters

A composite segmentation

strategy that uses both geographic

variables (zip codes, neighborhoods) and

demographic variables (e.g.,

income, occupation) to identify target

markets.

10 - 22Copyright 2007 by Prentice Hall

PRIZM (Potential

Rating Index by Zip

Market)

A composite index of geographic and

socioeconomic factors expressed in

residential zip code neighborhoods from

which geodemographic

consumer segments are formed.

10 - 23Copyright 2007 by Prentice Hall

Explore the Prizm Product

at Clarita’s Web site.

weblink

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Consumer Behavior and Social Class

• Clothing, Fashion, Accessories and Shopping

• The Pursuit of Luxury, Leisure

• Saving, Spending, and Credit

• Social Class and Media / Communication

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Influence of Culture

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Culture

The sum total of learned beliefs, values and

customs that serve to regulate the consumer

behavior of members of a particular society.

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A Theoretical Model of Cultures’ Influence on Behavior

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Culture Is Learned

• Enculturation and acculturation

• Language and symbols

• Ritual• Sharing of culture

• Enculturation– The learning of one’s

own culture• Acculturation

– The learning of a new or foreign culture

Issues

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The Measurement of Culture

• Content Analysis

• Consumer Fieldwork

• Value Measurement Instruments

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Content Content AnalysisAnalysis

A method for systematically

analyzing the content of verbal and/or pictorial

communication. The method is frequently

used to determine prevailing social values

of a society.

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Field Field ObservationObservation

A cultural measurement technique that takes

place within a natural environment that

focuses on observing behavior (sometimes without the subjects’

awareness).

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Characteristics of Field Observation

• Takes place within a natural environment

• Performed sometimes without the subject’s awareness

• Focuses on observation of behavior

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Participant-Observers

Researchers who participate in the

environment that they are studying without notifying those who are being observed.

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Value Measurement Survey Instruments

• Rokeach Value Survey (RVS)– A self-administered inventory consisting of

eighteen “terminal” values (i.e., personal goals) and eighteen “instrumental” values (i.e., ways of reaching personal goals)

• List of Values (LOV)– A value measurement instrument that asks

consumers to identify their two most important values from a nine-value list that is based on the terminal values of the Rokeach Value Survey

• Values and Lifestyles (VALS)– A value measurement based on Values, Attitudes

and Lifestyles

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Table 12.5 Excerpt from the Rokeach Value Survey

TERMINAL VALUES INSTRMENTAL VALUES

A comfortable life Ambitious

An exciting life Broad-minded

A world at peace Capable

Equality Cheerful

Freedom Clean

Happiness Courageous

National security Forgiving

Pleasure Helpful

Salvation Honest

Social recognition Imaginative

True friendship Independent

Wisdom Intellectual

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Page 231: HSBC’s “Different Values” campaign

10 - 37Copyright 2007 by Prentice Hall

SubcultureSubculture

A distinct cultural group that exists as an

identifiable segment within a larger, more

complex society.

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Relationship Between Culture and Subculture

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An ad showing many racial subcultures

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This ad for Vibe Vixen magazine

targets the African

AmericanUrban

subculture.

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Issues in Studying Hispanic American Subcultures

• Hispanic Consumer Behavior– Stronger preference for well-established

brands– Prefer to shop at smaller stores– Some are shifting food shopping to non-

ethnic American-style supermarkets– Youths are more fashion conscious than

non-Hispanic peers

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Regional Subcultures

• Many regional differences exist in consumption behavior– Westerners have a mug of black coffee– Easterners have a cup of coffee with milk

and sugar– White bread is preferred in the South and

Midwest– Rye and whole wheat are preferred on the

East and West coasts

10 - 43Copyright 2007 by Prentice Hall

Major Age Subcultures

Generation X Market

Baby Boomer Market

SeniorsMarket

Generation YMarket

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Generation Y

Born between 1980 and 1999; also called

echo boomers and millennium generation.

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Three Subsegments of Gen Y

• Gen Y Adults

• Gen Y Teens

• Gen Y Tweens

10 - 46Copyright 2007 by Prentice Hall

Generation X

Born between 1965 and 1979; post baby

boomer segment (also referred to as Xers or

busters).

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Baby Boomers

Individuals born between 1946

and 1964 (approximately 40

percent of the adult population).

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Baby Boomers

• The largest age category alive today

• Frequently make important consumer purchase decisions

• Include a small subsegment of trendsetting consumers (yuppies) who influence consumer tastes of other age segments

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Seniors

Generally older consumers. Consist

of subcultures, including the 65-plus

market and the “elderly consumers”

market.

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Gender as a Subculture

• Gender Roles and Consumer Behavior– Masculine vs Feminine Traits

• The Working Woman– Segmentation Issues– Shopping Patterns

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Cross-Cultures and Consumer Behaviour

10 - 52Copyright 2007 by Prentice Hall

The Imperative to Be Multinational

• Acquiring Exposure to Other Cultures

• Country-of-origin Effects

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The World’s Most Valuable Brands

1. Coca-Cola2. Microsoft3. IBM4. GE5. Intel6. Disney7. McDonald’s8. Nokia9. Toyota10.Marlboro

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Most of these brands offer

different Web sites for each

country.

weblink

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Swiss Watches

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Can’t Beat the EngineeringThe “American” Twist

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Cross-CulturalConsumer Analysis

The effort to determine to what

extent the consumers of two

or more nations are similar or different.

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Cross-Cultural Consumer Analysis

• Similarities and differences among people

• The growing global middle class

• The global teenage market

• Acculturation

• The greater the similarity between nations, the more feasible to use relatively similar marketing strategies

• Marketers often speak to the same “types” of consumers globally

Issues

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Comparisons of Chinese and American Cultural Traits

Chinese Cultural Traits• Not-individual centred• Submissive to

authority• Ancestor worship• Values a person’s

duty to family and state

American Cultural Traits• Individual centered• Emphasis on self-

reliance• Primary faith in

rationalism• Values individual

personality

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Cross-Cultural Consumer Analysis

• Similarities and differences among people

• The growing global middle class

• The global teenage market

• Acculturation

• Growing in Asia, South America, and Eastern Europe

• Marketers should focus on these markets

Issues

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Cross-Cultural Consumer Analysis

• Similarities and differences among people

• The growing global middle class

• The global teenage market

• Acculturation

• There has been growth in an affluent global teenage and young adult market

• They appear to have similar interests, desires, and consumption behavior no matter where they live… GENERATION Y

Issues

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The iPod has global appeal to the young

market.

weblink

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Cross-Cultural Consumer Analysis

• Similarities and differences among people

• The growing global middle class

• The global teenage market

• Acculturation

• Marketers must learn everything that is relevant about the usage of their product and product categories in foreign countries

Issues

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Basic Research Issues in Cross-Cultural Analysis

FACTORS

Differences in language and meaning

Differences in market segmentation opportunities

Differences in consumption patterns

Differences in the perceived benefits of products and services

EXAMPLES

Words or concepts may not mean the same in two different countries.

The income, social class, age, and sex of target customers may differ dramatically in two different countries.

Two countries may differ substantially in the level of consumption or use of products or services.

Two nations may use or consume the same product in very different ways.

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FACTORS

Differences in the criteria for evaluating products and services

Differences in economic and social conditions and family structure

Differences in marketing research and conditions

Differences in marketing research possibilities

EXAMPLES

The benefits sought from a service may differ from country to country.

The “style” of family decision making may vary significantly from country to country.

The types and quality of retail outlets and direct-mail lists may vary greatly among countries.

The availability of professional consumer researchers may vary considerably from country to country.

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World Brands

Products that are manufactured, packaged, and

positioned the same way regardless of the country in which they

are sold.

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Are Global Brands Different?

• According to a survey – yes.

• Global brands have:– Quality signal– Global myth– Social responsibility

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Multinational Reactions to Brand Extensions

• A global brand does not always have success with brand extentions

• Example Coke brand extension – Coke popcorn– Eastern culture saw fit and accepted the

brand extension– Western culture did not see fit

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Adaptive Global Marketing

• Adaptation of advertising message to specific values of particular cultures

• McDonald’s uses localization– Example Ronald McDonald is Donald

McDonald in Japan– Japanese menu includes corn soup and

green tea milkshakes

• Often best to combine global and local marketing strategies

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Alternative Multinational Strategies: Global Versus Local

• Framework for Assessing Multinational Strategies– Global– Local– Mixed

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Table 14.8 A Framework for Alternative Global Marketing Strategies

PRODUCT STRATEGY

COMMUNICATON STRATEGY

STANDARDIZED COMMUNICATIONS

LOCALIZED COMMUNICATIONS

STANDARDIZED PRODUCT

Global strategy:Uniform Product/ Uniform Message

Mixed Strategy:Uniform Product/ Customized Message

LOCALIZED PRODUCT

Mixed strategy:Customized Product/ Uniform Message

Local Strategy:Customized Product/ Customized Message

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Cross-Cultural Psychographic Segmentation

The only ultimate truth possible is that humans are both deeply the same and

obviously different.

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Six Global Consumer Segments – An Example

Strivers 23%

Altruists18%

Devouts22%

Fun Seekers12%

Creatives10%

Intimates15%