Consumer Behavior Chap. Summary 1,4,5,6,7,8,9,13 Chapter 1 – Consumer Behavior: Meeting Changes and Challenges 1.1 - To Understand What Consumer Behavior Is and the different Types of Consumers What Is Consumer Behavior? Consumer Behavior is the behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect End-use consumption is the most pervasive behavior, because it involved every individual, of every age and background, in the role of the buyer or user or both. 1.2 - To Understand the Relationship Between Consumer Behavior and the Marketing Concept, the Societal Marketing Concept, as Well as Segmentation, Targeting, and Positioning Consumer Behavior and the Marketing Concept
Transcript
Consumer Behavior Chap. Summary 1,4,5,6,7,8,9,13
Chapter 1 – Consumer Behavior: Meeting Changes and Challenges 1.1 - To Understand What Consumer Behavior Is and the different Types of Consumers What Is Consumer Behavior? Consumer Behavior is the behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs Consumer behavior focuses on how individual consumers and families or households make decisions to spend their available resources (time, money, effort) on consumption-related items. - what they buy, why they buy it, when they buy it, where they buy it, how often they buy it, how often they use it, how they evaluate it after purchase, impact of evaluations on future purchase, how they dispose it As consumers, we play a vital role in the health of the economy – local, national, and international. Our purchase decisions affect the demand for basic raw materials, transportation, production, banking; employment of workers and development of resources, success of some industries and failure of others Marketer’s need to know everything they can about consumers—what they want, what they think, how they work, and how they spend their leisure time They need to understand the personal and group influences that affect consumer decision and how to identify and know how to reach there target audience The term consumer behavior describes two different kinds of consuming entities: the personal consumer and the organizational consumer Personal Consumer buys goods and services for his or her own use, for the use of the household, or as a gift for a friend The products are bought for final use by individuals, who are referred to as end users or ultimate consumers Organizational Consumer includes profit and not-for-profit business, government agencies (local, state, and national), and institutions (e.g. schools, hospitals, and prisons), all of which must buy products, equipment, and services in order to run their organizations End-use consumption is the most pervasive behavior, because it involved every individual, of every age and background, in the role of the buyer or user or both. 1.2 - To Understand the Relationship Between Consumer Behavior and the Marketing Concept, the Societal Marketing Concept, as Well as Segmentation, Targeting, and Positioning Consumer Behavior and the Marketing Concept
Strategic and applied field of consumer behavior is rooted in 3 philosophically different business orientations that lead up to one orientation called the marketing concept 1) Production orientation (1850-1920) – the focus during this period was gearing up manufacturing skills in order to expand production—to make more products Focus was on perfecting production capabilities of the company Demand exceeded supply and consumers were happy with what they got No emphasis on product variation, but were satisfied to be able to produce larger quantities of the product 2) Sales Orientation (1930-1950) – the focus was to sell more of what the manufacturing department was able to produce This second orientation extended out from the expanded capacity that was created during the production era Additional products being produced needed to be sold; the orientation shifted from producing to selling Supply reached a point where it was greater than demand Created a need for some really different thinking on the part of businesses eager to expand but were held back by oversupply of similar products 3) Marketing orientation (1950’s) – at the “heart” of the emerging marketing orientation was the realization that it was time for businesses to focus more of their attention on consumers and their preferences; to put consumers first in their business thinking and planning Consider what consumers wanted, rather than what the company finds easiest to make or least expensive to make, is in keeping with the marketing concept Accepting market orientation leads to the core philosophy of marketing, the marketing concept What is the Marketing Concept? Key assumption of marketing concept is in order to be successful, a company must determine the needs and wants of specific target markets and deliver the desired satisfactions better than the competition A satisfactory profit is envisioned as an appropriate reward for satisfying consumers’ needs, not as a right of simply being in business Marketing Concept (defined) is a consumer-oriented philosophy that suggests that satisfaction of consumer needs provides the focus for product development and marketing strategy to enable the firm to meet its own organizational goals Example of repositioning and market targeting page 8-9 Marketing concept is a highly useful guideline and philosophy for managing businesses because it has effectively served to remind businesses to keep consumers’ needs up-front when contemplating new products and services, crafting marketing communications, or planning other strategies Societal Marketing Concept suggests that consumers may on occasion respond to their immediate needs or wants, while overlooking what is in effect in their own
long-run best interest, or the best interest of their family and neighbors, the best of their country or region, or even the best interest of the entire planet “Societal Marketing” refers to the role of enlightened marketers; management who takes it upon itself to remind consumers as to what is in consumers long-run best interest and also sets out what its own company is doing in order to be a good corporate citizen FIGURE 1.1 Embracing the Marketing Concept Consumer Research represents the process and tools used to study consumer behavior Companies continuously conduct marketing research to monitor consumers’ needs and preferences Consumers are complex with psychological and social needs apart from their functional needs The needs and priorities of different consumer segments differ dramatically, and the objectives of a company should be to target different products and services to different market segments in order to satisfy the needs Segmentation, Targeting, and Positioning Market Segmentation is the process of dividing a market into subsets of consumers with common needs or characteristics Because most companies have limited resources, few companies can pursue all the market segments identified Market Targeting is the selection of one or more of the segments identified for the company to pursue Positioning refers to the development of a distinct image for the product or service in the mind of the consumer, an image that will differentiate the offering from competing ones and faithfully communicate to the target audience that the particular product or service will fulfill their needs better than competing brands Successful positioning centre’s around two key principles: 1) Communicating the benefits that the product will provide rather than the products features. “Consumers do not buy drill bits—they buy what makes holes” 2) Because there are many similar products in the marketplace, effective positioning strategy must develop and communicate a unique selling proposition—a distinctive benefit or point of difference—for the product or service “me too” products lack a unique image or benefit The Marketing Mix The Marketing Mix consists of a company’s service and/or product offerings to consumers and the methods and tools it selects to accomplish the exchange Marketing Mix consists of 4 elements known as “four P’s”: 1) the Product - features, designs, brands, and packaging of a good or service offering, along with post purchase benefits such as warranties and return policies 2) the Price
- the list price, including discounts, allowances, and payment methods 3) the Place - the distribution of the product or service through specific store and non-store outlets 4) Promotion - the advertising, sales promotion, public relations, and personal selling efforts designed to build awareness of and demand for the goods or service 1.3 – To Understand the Relationship Between Consumer Behavior and Customer Value, Satisfaction, Trust, and Retention Consumer Value, Satisfaction, Trust, and Retention Many companies have adopted the marketing concept since it emerged in the 1950’s The result is more products in more sizes, models, versions etc. and more precise target markets. This has resulted in increasingly competitive marketplace. Internet has allowed very less costly distribution. This has accelerated the rate at which new competitors enter markets and sped up rate at which segmentation, targeting and positioning approaches must be updated or changed. Most of all, these changes have been very positive for consumers to be proactive in seeking out online information, opinions, product availability, and price comparisons. Marketers today must make the customer the core of the company’s organizational culture, across all departments and functions, and ensure each and every employee views any exchange with a customer as part of a customer relationship, not as a transaction. Four drivers of successful relationships between marketers and customers are 1) Customer Value 2) High levels of customer satisfaction 3) Strong sense of customer trust 4) Building a structure that ensures customer retention Providing Customers with Value Customer Value can be thought of as the ratio between the customers’ perceived benefits (economic, functional, and psychological) and the resources (monetary, time effort, psychological) used to obtain those benefits. Perceived value is relative and subjective Developing a value proposition (term replacing the popular business term unique selling proposition) and looking for the impact of emerging “megatrends” (e.g. individualism, choice overload, hiving, geek chic) are influential factors in attaining successful positioning of a brand Ensuring Customer Satisfaction Customer Satisfaction is the individual consumer’s perception of the performance of the product or service in relation to his or her expectations The concept of customer satisfaction is a function of customer expectations A customer whose experience falls below expectations will be dissatisfied. A customer whose experiences match expectations will be satisfied, and customers whose expectations are exceeded will be very satisfied or even delighted.
On the positive side, there are completely satisfied customers who are either loyalists who keep purchasing, or apostles whose experiences exceed their expectations and who provide very positive word-of-mouth about the company to others On the negative side there are defectors who feel neutral or merely satisfied and are just as likely to stop doing business with the company; consumer terrorists who have had negative experiences with the company and who spread negative word of mouth; and hostages who are unhappy customers who stay with the company because of a monopolistic environment or low prices and who are difficult and costly to deal with because of their frequent complaints. Then there are mercenaries who while being satisfied customers, really o not have any real loyalty to the company and may defect at any point for a lower price elsewhere or on impulse, defying the satisfaction—loyalty rationale Companies should strive to create apostles, raise satisfaction of defectors and turn them into loyalists, avoid having terrorists or hostages and reduce the number of mercenaries Building Customer Trust Consumers trust of a range of different consumer information sources reveals that word-of-mouth communications or recommendations from other consumers is in a league by itself in terms of being the most trusted source of consumer information Newspapers, consumer opinions posted online, and brand Web sites are also high scoring in terms of being trustworthy in the minds of consumers. Ads before movies, online banner ads, search engine ads, text mobile ads etc. are on the bottom of the list Specific dimension of trust is privacy TABLE 1.2 If a customers relationship is at risk in terms of trust, there is also the related concept of delight, in which a company seeks to recover in the eyes and minds of consumers by setting things in right with the customer and further demonstrates to that customer that he or she is valued Securing Customer Retention A strategy of customer retention is designed to make it in the best interest of customers to stay with a company rather than switch to another company Customer Retention (defined) is providing value to customers continuously so they will stay with the company rather than switch to a competitor More expensive to secure new customers than to keep existing ones Small reductions in customer defections produce significant increases in profits because 1) loyal customers buy more products 2) loyal customers are less price sensitive and pay less attention to competitors advertising 3) servicing existing customers, who are familiar with the company’s offerings and processes, is cheaper 4) loyal customers spread positive word of mouth and refer other customers
Internet and cell phone are important “tools of interaction” for both marketers and consumers to communicate with each other Marketers can create customized products and services coupled with customized marketing messages that cater to the needs of consumers called one-to-one marketing) Sophisticated marketers build selective relationships with customers, based on where customers rank in terms of profitability, rather than merely strive to retain customers Customer profitability-focused marketing tracks costs and revenues of individual customers and then categorizes them into tiers based on consumption behaviors that are specific to the company’s offerings “Customer Pyramid” 1) The platinum tier includes heavy users who are not price sensitive and who are willing to try new offerings 2) The gold tier consists of customers who are heavy users but not as profitable because they are more price sensitive than those in the higher tier, ask for more discounts, and are likely to buy from several providers 3) The iron tier consists of customers whose spending volume and profitability do not merit special treatment from the company 4) The lead tier includes customers who actually cost the company money because they claim more attention than is merited by their spending, tie up company resources, and spread negative word of mouth TABE 1.3 1.4 – To Understand How New Technologies Are Enabling Marketers to Better Satisfy the Needs and Wants of Consumers The Impact of New Technologies on Marketing Strategies These new technologies and new media have made it easier for marketers to adapt the elements of the marketing mix to specific consumers’ needs and to more quickly and efficiently build and maintain relationships with customers Online communication and emerging digital technologies have introduced several dramatic changes into the marketing environment Consumers Have More Power Than Ever Before They can use “intelligent agents” to locate the best prices for products or services, bid on various marketing offers, bypass distribution outlets and middlemen, and shop for goods around the globe and around the clock from the convenience of there own home. Consumers Have More Access To Information Than Ever Before They easily find reviews for products they are considering buying that have been posted by previous buyers and participate in virtual communities of persons who share the same interests they do Marketers Can and Must Offer More Services and Products Than Ever Before
The digitization of information enables sellers to customize the products and services they are selling and still sell them at reasonable prices. Also allows marketers to customize the promotional messages directed at many customers. Increasing Instantaneous Exchanges between Marketers and Customers Traditional advertising is a on way street where the marketer pays a large sum of money to reach a large number of potential buyers via mass medium, and then assesses whether or not the message was effective. Digital or new media communication enables a two-way interactive exchange in which consumers can instantly react to the marketers message by clicking on links in a Web site. Marketers Can Gather More Information About Consumers More Quickly And Easily Many marketers now employ narrowcasting—a method that enables them to develop and deliver more customized messages to increasingly smaller market segments on an ongoing basis Impact Reaches Beyond the PC-Based Connection Of the Web Page 16 1.5 – To Understand How Marketers Are Increasingly Able to Reach Consumers Wherever Consumers Wish to Be Reached The Mobile Consumer We can expect expanded use of wireless media messages as 1) the availability of flat-rate data traffic to consumers increases 2) with creation of enhanced screen image quality 3) increased consumer-user experiences with improved Web-related applications FIGURE 1.3 1.7 – To Understand the Makeup and Composition of a Model of Consumer Behavior Consumer Behavior and Decision Making Are Interdisciplinary Consumer behavior was a new field of study until the mid-late 1960’s. Marketing theorists borrows heavily from the concepts developed in other scientific disciplines, such as psychology (study of the individual), sociology (study of groups), social psychology (study of how an individual operates in groups), anthropology (the influence of society on the individual), and economics to form the basis of this new marketing discipline A Model of Consumer Decision Making The process of consumer decision-making can be viewed as three distinct but interlocking stages: the input stage, the process stage, and the output stage FIGURE 1.4 Input stage influences the consumers recognition of a product need and consists of two major sources of information: the company’s marketing efforts (the product itself, its price, its promotion, and where its sold) and the external sociological
influences on the consumer (family, friends, social class, cultural and sub cultural memberships) The process stage focuses on how consumers make decisions. Psychological factors inherent in each individual (motivation, perception, leaning, personality, attitude) affect how the external inputs from the input stage influence the consumer’s recognition of a need, prepurchase search for information and evaluation of alternatives. The output stage of the consumer decision-making model consists of two closely related post-decision activities: purchase behavior and post-purchase evaluation. Page 19 Page 20 for Summary
Chapter 4: Consumer Motivation
Motivation as a Psychological Force
Motivation: the driving force within individuals that impel them to act
o this driving force is produced by a state of tension resulting from an
unfulfilled need
NEEDS Innate: physiological, needs like water, food, air, shelter, sex etc.
o they are required to sustain life and are therefore considered primary needs
Acquired: needs we have learned in response to our environment & culture, needs
like self esteem, power, learning etc.
o they are considered psychological, not necessary to sustain life, secondary
needs
Example: finding shelter is an innate need; seeking a ritzy condo to provide the
shelter is a secondary need
Needs can have a positive direction (wants, desires) or a negative one (fears,
aversions)
GOALS Goals are sought after results of motivated behaviour
Generic goals: general classes of goals consumers see as a means of fulfilling
their needs
o Example: Completing an undergrad degree
Product specific goals: specifically branded goals consumes chose to fulfill their
needs
o Example: Completing a BComm program at the University of Guelph
Goal selection
o Goal selection is based on experience, physical capability, norms, values,
capability etc.
o Approach object: a positive goal, behaviour is directed towards it
o Avoidance object: a negative goal, behaviour directed away from it
RATIONAL VS EMOTIONAL MOTIVES Rational: select goals based on objective info like size, price, weight etc.
Emotional: selecting goals based on personal criteria like pride and affection
The Dynamics of Motivation
Needs are never fully/permanently satisfied
o Ex: throughout the day we experience hunger needs that must be satisfied
New needs emerge as old needs are satisfied
o Ex: Maslow’s hierarchy of needs
Success and failure influence goals
o Once you achieve a goal you are likely to set the next one higher, raising
your levels of aspiration
o Works in reverse, those who don’t reach their goals lower their levels of
aspiration
o Substitute goals sufficiently take the place of the original goal
o When people do not attaint their goals, multiple defense mechanism come
into play
Ex: aggression, rationalization, withdrawal etc.
AROUSAL OF MOTIVES Physiological
Emotional
Cognitive
2 opposing views on motive arousal
o Behaviourist school – motivation is a mechanical process, no conscious
thought involved
Ex: an impulse buy
o Cognitive school – all behaviour is directed at goal achievement
Types and Systems of Needs
MASLOW`S HIERARCHY
Physiological
Safety and security
Social needs
Ego needs
Self-actualization
These stages are ranked in order or importance, lower level needs (physiological) must be satisfied before the higher level needs emerge. Each level is generally mutually exclusive although there is some overlap as no need will ever be fully satisfied. Marketers use the needs triangle to determine how their products can be matched to a level that the majority of consumers are currently at.
MURRAY`S LIST OF PSCHOGENIC NEEDS Needs associated with inanimate objects
o Ex: retention, order
Needs that reflect ambition, power, accomplishment, and prestige
o Ex: recognition, achievement
Needs concerned with human power
o Ex: dominance, autonomy
Sadomasochistic needs
o Ex: aggression
Needs concerned with affection between people
o Ex: affiliation, rejection
Needs concerned with social intercourse
o Ex: exposition
Murray`s approach was the first systematic approach to understanding human needs that aren`t biological.
A TRIO OF NEEDS Power
o Desire to control your environment, closely related to the Ego need
Affiliation
o Behaviour is strongly influenced by the desire for friendship, acceptance
or belonging, a social dependence
Achievement
o More self confident and see accomplishment as an end in itself
o Closely related to self actualization and ego
The Measurement of Motives
Because motives are intangible, no single measure can really be set
Combinations of measures are used instead, these can include anything from
surveys to focus groups
Qualitative (aka projective) techniques are often used because ambiguous stimuli
require participants to tap into their subconscious
Motivational Research
o First coined in the `50s (by Dichter) to describe these qualitative methods
o Created to uncover consumers subconscious based on the fact we are not
always aware of these motives
o Examples of qualitative methods:
Storytelling – customers tell it as it is regarding certain products
they`ve used
Thematic apperception tests – pictures are shown and participants
are asked to tell a story about the picture, these ideas are used in ad
creation and marketing technique
Chapter 5- Personality and Consumer Behaviour
Personality can be defined as those inner psychological characteristics that both
determine and reflect how a person responds to his or her environment.
inner characteristics- specific qualities, attributes, traits, factors and mannerisms
that distinguishes one individual from another.
3 distinct properties in the study of personality:
1- Personality reflects individual differences
2- Personality is consistent and enduring
3- Personality can change (personality changes not only in response to abrupt
events but also as
part of a gradual maturing process)
Theories of Personality
Freudian Theory: Sigmund Freud’s psychoanalytic theory of personality is one
of the cornerstones of modern psychology. It was built on the premise that
unconscious needs or drives are at the heart of human motivation and personality.
He constructed his theory on the basis of patients’ recollections of early childhood
experiences, analysis of dreams, and the specific nature of their mental and
physical adjustment problems. He proposed that human personality consists of 3
interacting systems:
1- Id (primitive and impulse drives such as thirst, hunger, sex)
2- Superego (internal expression of society’s moral and ethical codes of conduct)
3- Ego (the individual’s conscious control, the balance between Id and Superego)
Freud emphasized that individuals pass through a number of childhood
development stages that are named; oral, anal, phallic, and genital stages. When
Freud’s theory is applied by researchers it is believed that human drives are
largely unconscious and that consumers are primarily unaware of their true
reasons for buying what they buy.
Neo-Freudian Personality Theory: Believed that social relationships are
fundamental to the formation and development of personality. Alfred Adler
viewed human beings as seeking to attain various rational goals, which he called
style of life. He also places emphasis on the individual’s efforts to overcome
feelings of inferiority. Harry Stack Sullivan, another neo- Freudian, stressed that
people continuously attempt to establish significant and rewarding relationships
with others. He was particularly concerned with the individual’s efforts to reduce
tensions, such as anxiety. Karen Horney was also interested in anxiety, and
focused on the impact of child parent relationships and the individual’s desire to
conquer feelings of anxiety. Horney proposed that individuals be classified into 3
personality groups:
1- Compliant individuals move toward others (desire to be loved)
2- Aggressive individuals move against others (desire to excel and win
admiration)
3- Detached individuals move away from others (desire independence,
individualism)
Trait Theory: The orientation of trait theory is primarily quantitative or
empirical; it focuses on the measurement of personality in terms of specific
psychological characteristics, called traits (any distinguishing relatively enduring
way in which one individual differs from another). Single-trait personality tests
measure just one trait, are often developed specifically for use in consumer
behaviour studies. They measure traits such as consumer innovativeness (how
receptive a person is to new consumer-related experiences), consumer
materialism (the degree of the consumer’s attachment to worldly possessions) and
consumer ethnocentrism (the consumer’s likelihood to accept or reject foreign-
made products). Trait researchers believe it is more realistic to expect personality
to be linked to how consumers make their choices and to the purchase or
consumption of a broad product category as opposed to a specific brand.
Personality traits that have been useful in differentiating between consumer
innovators and non-innovators include consumer innovativeness, dogmatism,
social character, need for uniqueness, optimum stimulation level, sensation
seeking, and variety novelty seeking.
Consumer innovators: Those who are open to new ideas and to be among the
first to try new products, services or practices.
The 3 personality traits of Consumer Innovativeness:
1- Global innovativeness- exists independent of any context; one that represents
the “very nature”
2- Domain-specific innovativeness- narrowly defined activity within a specific
domain or product
category
3- Innovative behaviour- a pattern of actions or responses that indicate early
acceptance of
change and adoption of innovations
Consumer Dogmatism: a personality trait that measures the degree of rigidity
(vs. openness) that individuals display towards the unfamiliar and toward
information that is contrary to their own established beliefs. Ex. Someone who is
highly dogmatic approaches the unfamiliar defensively and with considerable
discomfort and uncertainty, and is more likely to choose established products.
Someone who is low dogmatic (open minded) will readily consider the unfamiliar
or opposing beliefs and prefers innovative products.
Social Character: the classification of individuals into distinct sociocultural
types. Inner-directedness consumers tend to rely on their own inner values or
standards in evaluating new products and are likely to be consumer innovators
(prefer ads that stress product features and benefits). Other-directedness
consumers tend to look to others for guidance as to what is appropriate or not and
are less-likely to be consumer innovators (prefer ads that feature an approving
social environment or group).
Need for Uniqueness: People who strive to be differentiated and conformity to
others’ expectations is avoided. Research indicated that people with high NFU are
not concerned about being criticized, and are receptive to making unique choices.
Optimum Stimulation Level: the level of stimulation an individual desires.
Some people prefer a simple, uncluttered, and calm existence, whereas others
prefer an environment crammed with novel, complex, and unusual experiences.
High OSLs (exploratory behaviours) are linked with greater willingness to take
risks, to try new products, to be innovative, to seek purchase-related information,
and to accept new retail facilities than low OSLs.
Sensation Seeking: a trait characterized by the need for varied, novel, and
complex sensations and experience, and the willingness to take physical and
social risks. Closely related to OSL.
Variety or Novelty Seeking: another personality-driven trait closely related to
OSL. There appear to be many different types of consumer-variety seeking:
exploratory purchase behaviour (switching brands to experience new, different
and possibly better alternatives), vicarious exploration (securing information
about a new or different alternative and then contemplating about the option), and
use innovativeness (using an already adopted product in a new or novel way).
Cognitive Personality Factors
1. Need for Cognition: a promising cognitive personality characteristic that
measures a person’s craving for or enjoyment of thinking. Consumers who are
high in NTC are more likely to be responsive to the part of an ad that is rich in
product-related information or description; whereas consumers with low NFC are
more likely to be attracted to the background or peripheral aspects of an ad
(attractive model).
2. Visualizers versus Verbalizers: cognitive personality research classifies
consumers into two groups: visualizers (consumers who prefer visual information
and products that stress the visual) or verbalizers (consumers who prefer written
or verbal information and products). There are two different types of visualizers;
object visualizers encode and process images as a single perceptual unit, while
spatial visualizers process images piece by piece.
Consumer Materialism
Materialism (the extent to which a person is considered materialistic)
distinguishes between individuals who regard possessions as essential to their
identities and their lives and those for whom possessions are secondary.
Characteristics of materialistic people include (1) They especially value acquiring
and showing off possessions; (2) they are particularly self-centered and selfish;
(3) they seek lifestyles full of possessions, and (4) their many possessions do not
give them greater personal satisfaction. “Tightwads” generally spend less than
they would like to due to anticipated pain they associate with making purchases,
while “spendthrifts” find little pain in paying and therefore they spend more.
Consumption dreaming: consumer dreams about material objects and
experiences. Five categories of consumption dreams:
1- consumption
2- information
3- planning
4- communication
5- visualization
Fixated Consumption Behaviour: is in the realm of normal and socially
acceptable behaviour. Fixated consumers do not keep their objects or purchases of
interest a secret; rather, they frequently display them. For example, people who
collect something and keep their collection on display. Fixated consumers have
the following characteristics: (1) a deep interest in a particular object or product
category, (2) a willingness to go to considerable lengths to secure additional
examples of the object or product, and (3) the dedication of a considerable amount
of discretionary time and money to search.
Compulsive Consumption Behaviour: is in the realm of abnormal behaviour,
the “dark side” of consumption. Consumers who are compulsive have an
addiction; in some aspects they are out of control, and their actions may have
consequences. Oniomania is a new term for people who suffer from a shopping
addiction.
Consumer Ethnocentrism: Responses to Foreign-Made Products
CETSCALE has been successful in identifying consumers with a predisposition
to accept (or reject) foreign-made products, and has been shown to be a reliable
measure in both the US and other nations. Consumers who are highly ethnocentric
are likely to feel that it is inappropriate to purchase foreign-made products due to
the resulting economic impact on the domestic economy, whereas
nonethnocentric consumers tent to evaluate foreign-made products-ostensibly
more objectively- for their extrinsic characteristics.
Country-by-Country Ethnocentrism- evidence suggests that ethnocentrism varies
by country and product. For example, Mexican consumers are more ethnocentric
than their French and American counterparts.
Cosmopolitanism is opposite of the ethnocentric view, that is a consumer with a
cosmopolitan orientation would consider the world to be his or her marketplace,
and would consciously be attracted to products, experiences, and places from
other cultures.
Brand Personality
Consumers subscribe to the notion of brand personality, that is, they attribute
various descriptive personality-like traits or characteristics to different brands in a
wide variety or product categories. A brand personality provides an emotional
identity for a brand, and encourages consumers to respond with feelings and
emotions toward the brand. A Brand’s personality can either be functional
(“dependable and rugged”) or symbolic (“the athlete in all of us”). Marketing
communication most often has the greatest influence in creating a brand
personality. There are two categories or service brand personality types: (1) traits
derived from the Brand Personality Scale, and (2) traits derived from the Five
Factor Model of Personality.
BPS Traits: sincerity, excitement, competence, sophistication and ruggedness.
FFM Traits: Agreeableness, extroversion, creativity, stability and
conscientiousness.
**See pg. 139 for description and examples.
Product Anthropomorphism
Anthropomorphism is attributing human characteristics to something that is not
human. Products presented as human but which lack human features tend to be
evaluated less favourably by consumers than products that are presented as human
and have human-like attributes.
Brand Personification
Brand personification tries to recast consumers’ perception of the attributes of a
product or service into a human-like character. Sometimes the consumer develops
a relationship with a brand that is similar in certain respects to the relationships
they have with other humans. The brand personality framework is as follows:
o Attitudes are Learned: formed as a result of direct experience with a product,
word or mouth, information or exposure to mass media.
o Attitudes have consistency: relatively consistent with the behaviour they
reflect; are not necessarily permanent, they do change
o Attitudes occur within a situation
“situation”: events of circumstances that, at a particular point in time,
influence the relationship between an attitude and behaviour
Someone may buy a new brand of a product every time they
purchase the product, this behaviour seems to reflect negative
attitude when really they could just been looking for the least
expensive at the time
Someone may constantly go to a hotel such as Hampton Inn
not because they think it is the best but because they think it is
“good enough” for their value
When measuring attitudes it is important to consider the situation in
which the behaviour takes place or we can misinterpret the
relationship between attitudes and behaviours
Structural Models of Attitudes Tricomponent Attitude Model: attitudes consist of three major components - Cognitive component
o Consist of a person’s cognitions; the knowledge and perceptions that are
acquired by a combination of direct experience with the attitude object
Take the form of beliefs
Consumer believes attitude object possess various attributes and
specific behaviour will lead to specific outcomes
- Affective component
o Consumers emotions of feelings about a particular product or brand
They capture an individual’s direct or global assessment of the
attitude object
Direct and indirect effects on attitudes are influenced by brand
familiarity
- Conative component
o Likelihood or tendency that an individual will undertake a specific action of
behave in a particular way with regard to the attitude object
Frequently treated as an expression of the consumer’s intention to buy
(intention-to-buy scales)
Multiattribute models - Portrays consumer attitudes with regard to an attitude object as a function of
consumer’s perception and assessment of the key attributes of beliefs held with
regard to the particular attitude object.
- Three models it considers:
o Attitude-toward-object model:
Suitable for measuring attitudes toward a product(or service) category
or specific brand
Attitude is a function of the presence or absence of product specific
beliefs or attributes
Simply put: consumers have favourable attitudes toward those
brands they believe have adequate level of attributes
o Attitude-toward-behaviour model:
Captures individual’s attitude toward behaving or acting with respect
to an object rather than toward the object itself
Consumer might have a positive attitude toward an expensive
BMW but a negative attitude toward his prospects for
purchasing such an expensive car
o Theory-of-reasoned-action model:
Integration of attitude components (cognitive, affective, conative) into
a structure designed to lead to better explanation and predictions of
behaviour
In order to measure intention we need to measure the
subjective norms that influence an individual’s intention to act
o A student asks/talks to parents before getting a tattoo
Theory of Planned behaviour: an extension of the TRA model which
includes an additional factor leading to intention – a customer’s
perception whether a behaviour in within his or her control
Tooth brushing in within an individual’s control, weight loss
may not be under complete control
Theory of trying-to-consume model - The outcome or action may not be certain but it is to reflect the consumer’s attempts
to consume
o Personal impediments: someone trying to lose weight but they love to cook,
trying to find shoes to go with a new outfit for under $50
o Environmental impediments: only the first 50 people in line will be able to
purchase the product at a discounted price
o Failure to try to consume:
Fail to see or are ignorant of their options
Make a conscious effort not to consume
Attitude-toward-the-ad model: - Effort to understand the impact of advertising or some other promotional vehicle on
consumer attitudes toward a particular product or brand
o These feelings or judgements affect how the consumer feels about the ad
which in turn affects their attitudes toward the brand
Attitude Formation How attitudes are learned - Formation – shift from having no attitude to having some attitude toward an object
o A result of learning
- Consumers often purchase based on favourably viewed brand name – a result of
repeated satisfaction
- Some attitudes follow the purchase and consumption of a product
o May purchase a brand name without having prior experience because it is the
only product of its kind available
o This is a trial purchase, if they are satisfied they are likely to develop
favourable attitude towards it
- Likely to form attitudes based on information, the more info available the more likely
they are to form an attitude
Sources of influence - Formation of attitudes is strongly influences by:
o personal experience: trying and evaluating a product for themselves
marketers stimulate trial by offering coupons, and samples
o influence of family and friends: provides us with many basic values and wide
range of less central beliefs
o direct marketing: (niche or micromarketing), highly personalized and shows
they understand special needs and desires, has a higher “hit rate” than mass
media
o mass media: provide important source of information
emotional appeals are most effective with consumers who lack
product experience
o Internet: provides “telepresence”; the simulated perception of direct
experience
Personality factors - High need for cognition (crave information) likely to form positive attitudes in
response to ads and direct mail rich in product information
- Low need for cognition likely to form positive attitudes from ads that feature an
attractive model or celebrity
Strategies of Attitude Change - Attitude changes are learned, they are influenced by personal experience and sources
of information
- Strategies available to marketers are:
o Changing the consumer’s basic motivational function
Need to make particular needs prominent
This is the functional approach, attitudes can be classified in terms of
4 functions
Utilitarian: hold certain brand attitudes partly because of
bran’s utility (how helpful or useful it has been to us in the
past)
Ego-defensive: the want to protect self-images from inner
feelings of doubt – want to replace uncertainty with sense of
security and personal confidence
Value-Expressive: attitudes are an expression of general
values, lifestyle and outlook
Knowledge: individuals generally have a strong need to know
and understand the people and things they encounter
o Associating the product with an admired group or event
Pointing out their relationships to particular groups, events, causes
Yoplait yogurt supports fight against breast cancer
o Resolving two conflicting attitudes
Consumers can be made to see that their negative attitude toward a
product or brand is really not in conflict with other attitudes they may
be induced to change their evaluation of the brand
o Alerting components of the multiattribute model
Changing the relative evaluation of attributes
When a product category is naturally divided according to
distinct product features or benefits marketers usually have an
opportunity to persuade consumer to “cross over”, the
persuade consumers who prefer one version of a product to
shift their favourable attitudes toward another version of the
product
Changing brand beliefs
Adding an attribute:
Adding an attribute that has previously been ignored or one
that involves an improvement or technological innovation
Changing the overall brand rating:
Alter overall assessment of brand without attempting to
change their overall evaluation of any single brand attribute
Relies on some form of global statement “this is the largest
brand” or “the one all others try to imitate”
o Changing consumer beliefs about competitor’s brands
A dramatic assertion of product superiority
How Attitudes lead to behaviour and vice versa Cognitive Dissonance Theory - Discomfort or dissonance occurs when a consumer hold conflicting thoughts about a
belief or attitude object
o When they think of what they “left behind” with another brand (positive or
unique qualities not selected)
- When it occurs after a purchase it is called post purchase dissonance
o Can reduce by seeking advertisements that would rationalize their decision as
being wise
Attribution Theory - Attempts to explain how people assign causality (blame or credit) to events on the
basis of either their own behaviour or the behaviour of others
- Self-perception theory
o Individuals inference or judgements as to the causes of their own behaviour
o Internal attributions: something within your control
o External attributions: something out of your control
o Defensive attribution: tendency to accept credit personally for success
(internal attribution) and to credit failure to other or outside events (external
attribution)
- Foot-in-the-door technique
o A theory of attribute change that suggests individuals form attitudes that are
consistent with their own prior behaviour
o Door-in-the-face technique
A situation in which a large, costly, or high first request that is
probably refused is followed by a second, more realistic, less costly
request
- Attributions toward others:
o When consumer feel that another person is responsible for either positive or
negative product performance
- Attributions toward things
o Consumer judge a product’s performance and attribute its success or failure to
the product itself
How we test our attributions - Distinctiveness
o The consumer attributes an action to a particular product or person if the
action occurs when the product (or person) is present and does not occur in its
absence
- Consistency over time
o Whenever the person or product is present, the consumer’s inference or
reaction must be the same or nearly so
- Consistence over modality
o The inference or reaction must be the same, even when the situation in which
it occurs varies
- Consensus
o The action is perceived in the same way by other consumers
Chapter 9: Communication and Consumer Behaviour
Communication is the transmission of a message from a sender to a receiver via a medium (or channel) of transmission. 9.2 Communication Model:
A formal source represents either a for-profit (commercial) or a not-for-profit organization; an informal source is defined as a person whom the message receiver knows personally, such as a parent or friend who gives product information or advise. Consumers often rely on informal communications sources in making purchase decisions because, unlike formal sources, these sources are perceived as having nothing to gain from the receiver’s subsequent actions. The sources of impersonal communications are organizations that develop and transmit appropriate messages through their marketing departments, advertising or public relations agencies and spokespersons. The senders of interpersonal communications can be either formal sources, or informal sources. The key factor underlying the persuasive impact of a personal or interpersonal message received from either a formal or informal source is the source’s credibility.
Reference groups are groups that serve as frames of reference for individuals in their consumption decisions because they are perceived as creditable sources. Reference groups influencing broadly defined values or behavior are called normative reference groups. An example of a child’s normative reference group is the immediate family, which plays an important role in modeling the child’s general consumer values and behavior. Reference groups serving as benchmarks for specific or narrowly defined attitudes or behaviors are called comparative reference groups. An example of this would be the upper-level executives at one’s place of employment whose lifestyle, clothing, and other possessions appear to be admirable and worthy of imitation by a person holding a lower managerial position. A group to which a person either belongs or would qualify for membership is called a membership group. There are also groups in which an individual is not likely to receive membership, despite acting like a member by adopting the group’s values, attitudes and behaviors, which are called symbolic groups. Sociologists who studied the informal communications process named it opinion leadership and it’s defined as the process by which one person (the opinion leader) informally influences the actions or attitudes of others who may be opinion seekers or opinion recipients. An opinion leader however, may become an opinion receiver later on. For example, a new father contemplating the purchase of a baby car seat sought information and advice from other people in deciding which brand to select. After purchasing the car seat, he experienced post purchase dissonance and was compelled to talk favorably about the purchase to other people, thus confirming the wisdom of his own choice. In the first instance, he was an opinion receiver (seeker); in the second, he assumed the role of opinion leader. Three dimensions underlying consumers’ engagement in e-WOM(online word of mouth)
1. Tie strength- the degree of intimacy and frequency of contacts between the
information seeker and the source
2. Similarity- among the group’s members in terms of demographics and lifestyles
3. Source credibility- the information seeker’s perceptions of the source’s expertise
in the area of sought advice.
Buzz agents agree to promote products by bringing them to family gatherings, read books promoted by publishers on mass transit with the titles clearly visible, suggest to store owners who do not carry a given product that they should do so, and talk other consumers into trying certain products during shopping trips. These “agents” generally do not receive direct payment from the companies they represent, although they often receive free samples. Viral marketing consists of encouraging individuals to pass on an e-mail message to others, thus creating the potential or exponential growth in the message’s exposure and influence.
Consumers judge commercial source credibility on such factors as past performance, reputation, the kind and quality of products and service they are known to render, the image and attractiveness of the spokesperson used, they type of retail outlets through which they sell, and the media carrying their promotions. Institutional advertising is designed to promote a favorable company image rather than to promote specific products. Source amnesia or sleeper effect is a phenomenon where a high-creditability source is initially more influential than a low-creditability sources, research suggests that both positive and negative credibility effects tend to disappear after six weeks or so. Sleeper’s effect is caused by disassociation of the message from the source over time, leaving just the message content in one’s memory. The theory of differential decay suggests that the memory of a negative cue simply decays faster than the message itself, leaving behind the primary message content.
Market maven possess a wide range of information about many different types of products, retail outlets, and other dimensions of markets. New media are more dynamic than traditional mass media. Messages transmitted via new media are:
1. Addressable- they can be customized and addressed to a particular receiver and
different receiver can get varied renderings of the same basic message
2. Interactive- the receivers can interact with the sender during its transmission
3. Response-measurable- a receiver’s response to a promotional message can be
measured more precisely and directly than his or her response to a message
transmitted via mass media.
Advertising resonance is wordplay, often consisting of a humorous double meaning, and usually accompanied by a relevant picture. Marketers hope to increase the chances that consumers will notice their ads, remember them, and view them favorably. Comparative advertising is a widely used marketing strategy in which a marketer claims product superiority for its brand over one or more explicitly named or implicitly identified competitors, either on an overall basis or on selected product attributes. Ordered protection motivation model (OPM) proposes that individuals cognitively appraise the available information regarding the severity of the threat, then they apprise the likelihood that the threat will occur; they evaluate whether coping behavior can eliminate the threat’s danger, and if so, whether they have the ability to perform the coping behavior. Studies on humor in advertising indicated that:
(1) Humor attracts attention and enhances one’s liking of the product advertised.
(2) Humor does not harm the comprehension of ads, and, in some cases, it aids
comprehension.
(3) Humor does not increase an ad’s persuasive impact or a source’s credibility.
(4) Humor that is relevant to the product is more effective than humor unrelated to
the product.
(5) Humor is more effective in ads of existing products than in ads of new products
and more effective in targeting consumers that already have a positive attitude for
the product.
(6) Using humor is more appropriate for advertising low-involvement than high-
involvement products
(7) The effects of humorous ads vary by the audience’s demographics
A recent study developed a measure of a personality trait named need for humor(NFH) that is focused on a person’s tendency to enjoy, engage, or seek out amusement and suggested that these cognitive factors can better explain how consumers respond to humorous advertisements
Communication feedback is an essential component of both interpersonal and impersonal communications because it enables the sender to reinforce or change the message to ensure that it is understood in the intended way. In evaluating the impact of their advertising messages, marketers must measure their exposure effects (i.e. how many consumers were exposed to the message?), persuasion effects (i.e. was the message received, understood, and interpreted correctly?), and their sales effects (i.e. did the ad increase sales?) Advertisers gauge the exposure and persuasion effects of their messages by buying data from firms monitoring media audiences and conducting audience research to find out which media are read, which television programs are viewed, and which advertisements were remembered by their target audience(s). The sales effects of mass communications are difficult to assess (although retailers usually can assess the effectiveness of their morning newspaper ads by midday on the basis of sales activity for the advertised product). A widely used method of measuring the sales effects of food and other packaged goods advertising is based on the Universal Product Code (UPC), which is tied to computerized cash registers. Portable people meters- small, GPS-enabled personal devices, that will clip to your belt, wear all day, and plug into a cradle at night that will transmit the data the device has collected. Physiological measures track bodily responses to stimuli. For example, eye tracking is a method where a camera tracks the movement of the eye across store shelves and gauges to which labels or brands respondents paid more attention. Attitudinal measures gauges consumers’ cognitive responses to messages, including their levels of engagement and involvement with the messages tested. For example, in theater tests, TV programs or commercial are shown in a theater setting and viewers use dials (located in their armrests) to indicate their levels of interest or disinterest during the showing of the program or advertisement. Chapter 13: Cross-Cultural Consumer Behaviour
Developing Multinational Marketing Strategies is Imperative
o The issue is generally not whether to market a brand in other countries but
rather how to do it.
o Because of this emphasis on operating as a multinational entity, new terms
such as glocal, which refer to the companies that are both global and local,
that is they include in their marketing efforts a blend of standardized and
local elements to secure the benefits of each strategy.
o The North American Free Trade Agreement (NAFTA), which currently
consists of the US, Canada and Mexico, provides free market access to
more than 440 million consumers. All trades between the three has
increased by 200 percent.
o Many firms are developing strategies to take advantage of these and other
emerging economic opportunities.
o Firms are selling their products worldwide for a variety of reasons. First
because the general attractiveness of multinational markets, and second,
many firms have learned it is the single most important opportunity for
their future growth.
o Acquiring Exposure to Other Cultures
How consumers in one culture secure exposure to the goods of
other people living in other cultures is an important part of
consumer behaviour.
It impacts the well-being of consumers worldwide and of
marketers trying to gain acceptance for their products in countries
that are often quite different from their home country.
A portion of consumers’ exposure to different cultures tends to
come about through consumers’ own initiatives.
International marketing provides a form of culture transfer.
o Country of Origin Effects
A number of recent research studies have examined country of
origin effects.
One study found no difference in brand image or purchase
intention whether the subject through that a product was a brand
from one country or another.
Another found that respect to relative quality and purchase
intention, country of origin was more important than price for both
intangible services ad tangible goods, whether consumers prefer
products made in their own country, compared to other countries.
When consumers are making purchase decisions, they may take
into consideration the COO of their choices.
Such a COO effect seems to come about because consumers are
often aware that a particular firm or brand name is associated with
a particular country.
One research conducted in China found that the effect of COO can
influence four different factors: (1) consumer ethnocentrism, (2)
knowledge of the product and country of origin, (3) degree of a
consumer’s involvement in the product, and (4) individual
differences in information processing.
They also found that the COO was more influential for consumers
with low multicultural competence when making product quality
evaluations than was true for consumers with greater multicultural
competence.
Consumers tend to have an established attitude or even a
preference when it comes to a particular product being made in a
particular country.
Refining the COO concept, a study that contrasted US and Mexico
consumers decomposed COO into three separate entities: country
of design (COD), country of assembly (COA), and country of parts
(COP).
Of these three, COP has the strongest influence on product
evaluations. And COD was more important due in the US then
Mexico.
Another study showed the effects of COD and country of
manufacture (COM). The research found that in an emerging
market, consumers place greater value in a product’s COM than its
COD.
Figure 13.2 presents a conceptual model of COD and Com impact
on the perception of branded products.
o Animosity and Country of Manufacturer
Some consumers may refrain from purchasing products from
particular countries due to animosity.
Example includes Jewish consumers not buying German-made
products because of the Holocaust.
Cross-Cultural Consumer Analysis
o To determine whether and how to enter a foreign market, marketers need
to conduct some form of cross-cultural consumer analysis. It is defined as
the effect to determine to what extent the consumers of two or more
nations are similar or different.
o Such analysis can provide marketers with an understanding of the
psychological, social, and cultural characteristics of the consumers they
wish to target.
o Similarities and Differences Among People
Countries like China and Mexico are collectivistic (we) cultures,
while the US and the UK are individualistic (I) cultures.
Collectivists rely more on word of mouth, preferring information
from trusted, familiar sources when forming the service
expectations.
Individualists, rely on unambiguous verbal or written
communication, and attach more importance to explicit and
implicit promises and third parties.
The greater the similarity between nations, the more feasible it is to
use relatively similar marketing strategies in each nation.
Base on consumer style, researchers were able to segment
consumers into four clusters: (1) price sensitive seeking
