Chapter 1 - 2 Review: Buying, Having, and Being: An Introduction to Consumer Behavior

Section 1- Foundations of Consumer Behavior

1. Consumer Behavior: People in the Marketplace
a. The average consumer can be classified and characterized on the basis of:
 - Demographics: age, sex, income, or occupation
 - Psychographics: refers to a person's lifestyle and personality

b. The average consumer's purchase decisions are heavily influenced by the opinions and behiviors of their family, peers, and acquaintances.
- The growth of the Web has created thousands of online consumption communities where members share views and product recommendations.
-. Groups exert pressure to conform.
- As a member of a large society, U.S consumers share certain cultural values or strongly held beliefs about the way the world should be structured.
- Some of the values are based on subcultures.

2. The use of market segmentation strategies may be used to target a brand to only specific groups of consumers rather than to everybody.
- Brands often have clearly defined images or personalities created by product advertising, packaging, branding, and other marketing strategies that focus on positioning a product in a certain way.
- When a product succeeds in satisfying a consumer's specific needs or desires, it may be rewarded with many years of brand loyalty.

1) This bond is often difficult for competitors to break.

     2) A change in one’s life situation or self-concept, however, can weaken the

        bond.

   g. Consumers’ evaluations of products are affected by their appearance, taste, texture,

     or smell.

     1) A good Web site helps people to feel, taste, and smell with their eyes.

     2) A consumer may be swayed by the shape and color of a package, symbolism

        used in a brand name, or even in the choice of a cover model for a magazine.

   h. In a modern sense, an international image has an appeal to many consumers.

     Increasingly, consumers opinions and desires are shaped by input from around the world

   What Is Consumer Behavior?

   i. Consumer behavior is the study of the processes involved when individuals or

     groups select, purchase, use, or dispose of products, services, ideas, or experiences

     to satisfy needs and desires.

     1) Consumers are actors on the marketplace stage.

        a) The perspective of role theory takes the view that much of consumer

           behavior resembles actions in a play.

        b) People act out many roles and sometimes consumption decisions are affected.

        c) Evaluation criteria may change depending on which role in the “play”

          a consumer is following.

   

2) Consumer behavior is a process.

        a) Most marketers recognize that consumer behavior is an ongoing process,

           not merely what happens at the moment a consumer hands over money or

           a credit card and in turn receives some good or service (buyer behavior).

        b) The exchange—a transaction where two or more organizations or people

           give and receive something of value—is an integral part of marketing.

           1. The expanded view emphasizes the entire consumption process.

           2. This view would include issues that influence the consumer before,

             during, and after a purchase.

     3) Consumer behavior involves many different actors.

        a) A consumer is generally thought of as a person who identifies a need or

          desire, makes a purchase, and then disposes of the product during the

          three stages in the consumption process.

        b) The purchaser and user of a product might not be the same person.

        c) A separate person might be an influencer. This person provides

          recommendations for or against certain products without actually buying

          or using them.

        d) Consumers may be organizations or groups (in which one person may

           make the decision for the group).

Segmenting Consumers

   b. The process of market segmentation identifies groups of consumers who are

     similar to one another in one or more ways and then devises strategies that

     appeal to one or more groups. There are many ways to segment a market.

     1) Companies can define market segments by identifying their most loyal, core

       customers or heavy users.

     2) Demographics are statistics that measure observable aspects of a population,

        such as birth rate, age distribution, and income.

        a) The U.S. Census Bureau is a major source of demographic data on families.

     3) Important demographic dimensions include:

        a) Age.

        b) Gender.

        c) Family structure.

        d) Social class and income.

        e) Race and ethnicity.

        f) Geography.

     4). Lifestyles: Beyond Demographics. Segmentation variables that involve values, activities,

       and the ways that people see themselves are known as lifestyle or psychographic variables. 

   Relationship Marketing: Building Bonds with Consumers

   c. Relationship marketing occurs when a company makes an effort to interact with

     customers on a regular basis, giving them reasons to maintain a bond with the

     company over time.       

   d. Database marketing involves tracking consumers’ buying habits very closely and

     crafting products and messages tailored precisely to people’s wants and needs

     based on this information. Wal-Mart is a good example of a company that effectively
     utilizes database marketing. 

3. Marketing’s Impact on Consumers

   a. For better or worse, we all live in a world that is significantly influenced by the

     actions of marketers.

   Marketing and Culture

   b. Popular culture consists of the music, movies, sports, books, celebrities, and

     other forms of entertainment consumed by the mass market; it is both a product of

     and an inspiration for marketers. Product icons often become central figures in popular 

     culture.

     1) The meaning of consumption—A fundamental premise of consumer behavior is

        that people often buy products not for what they do, but for what they mean.

     2) People, in general, will choose the brand that has an image (or even a

       personality) that is consistent with his or her underlying needs.

     3) People may have various relationships with a product:

        a) Self-concept attachment—the product helps to establish the user’s identity.

        b) Nostalgic attachment—the product serves as a link with a past self.

        c) Interdependence—the product is a part of the user’s daily routine.

        d) Love—the product elicits emotional bonds of warmth, passion, or other

          strong emotion.

     3) People may have various relationships with a product:

        a) Self-concept attachment—the product helps to establish the user’s identity.

        b) Nostalgic attachment—the product serves as a link with a past self.

        c) Interdependence—the product is a part of the user’s daily routine.

        d) Love—the product elicits emotional bonds of warmth, passion, or other

          strong emotion.

4. Marketing Ethics and Public Policy

  

   Business Ethics

   a. Business ethics are rules of conduct that guide actions in the marketplace—the

     standards against which most people in a culture judge what is right and what is

     wrong, good, or bad. There are various universal values and many culture-specific ones 

   Needs and Wants: Do Marketers Manipulate Consumers?

   b. One of the most stinging criticisms of marketing is that marketing (especially

     advertising) is responsible for convincing consumers that they “need” many

     material things that they honestly do not need.

     1) In the old days, companies called the shots in what was called marketspace.

     2) Today, consumers seem to be taking more control of what might be called

       consumerspace.

     3) Consumers still “need” companies—but in new ways and on their own terms.

     4) Do marketers create artificial needs? Before answering, consider that a need

       is a basic biological motive and a want represents one way that society has

       taught us that the need can be satisfied.

   Public Policy and Consumerism

   c. Consumer activism: America^™ Adbusters is one of various organizations that has the 

     objective of discouraging rampant commercialism.

     1) Such organizations employ the strategy of culture jamming that aims to disrupt

       efforts by the corporate world to dominate our cultural landscape.

     2) Recent scandals in corporate America have fueled the arguments presented by culture

       jammers.

     3) Consumer activism has developed to the extent that coordinated consumer protest

       movements are becoming more common.

   d. Consumerism and consumer research.

     1) A famous essay on consumerism was The Jungle by Upton Sinclair (1906).

     2) Consumer and product safety have been important issues in Congress

       for most of the twentieth century.

     3) President John F. Kennedy ushered in the modern era of  consumerism with the Declaration of Consumer Rights in 1962.  Other famous consumer proclamations include:

         a) Rachel Carson’s Silent Spring in 1962.

         b) Ralph Nader’s Unsafe at Any Speed in 1965. 

     4) Social marketing uses marketing techniques normally employed to sell beer or

        detergent to encourage positive behaviors such as increased literacy and to

        discourage negative activities such as drunk driving.

     5) As a response to consumer efforts, many firms have chosen to protect or

       enhance the natural environment as they go about their business activities.

       This practice is known as green marketing.

5. The Dark Side of Consumer Behavior

Consumer Terrorism

     1) The terrorist attacks of 2001 had a tremendous impact on consumerism throughout the

       world. Such effects give the indication that both natural and man-made disruptions to 

       financial, electronic, and supply networks can be devastating.

     2) Although bioterrorism has occurred in the past, the threat of such attacks are more                    

       prevalent than ever.

     Addictive Consumption

     3) Consumer addiction is a physiological and/or psychological dependency on

        products or services. New examples of this might be video gaming or SMS addictions.

     Compulsive Consumption

     4) Compulsive consumption refers to repetitive shopping, often excessive, as an

        antidote to tension, anxiety, depression, or boredom. These people are often

        called “shopaholics.” Note that compulsive consumption is different from

        impulse buying.

     5) Negative or destructive consumer behavior. Three aspects are:

        a) The behavior is not done by choice.

        b) The gratification derived from the behavior is short-lived.

        c) The person experiences strong feelings of regret or guilt afterward.

6) Gambling is an example of consumption addiction that touches every segment

       of society.

     Consumed Consumers

     7) People who are used or exploited, whether willingly or not, for commercial gain in the

       marketplace can be thought of as consumed consumers. Examples include:

        a) Prostitutes

        b) Organ, blood, and hair donors

        c) Babies for sale

     Illegal Activities

     8) Consumer activities that are illegal are exemplified by:

        a) Consumer theft—shrinkage is an industry term for inventory and cash losses due

          to shoplifting and employee theft. A growing form of fraud involves “serial 

          wardrobers” who abuse exchange and return policies. 

        b) Some types of destructive consumer behavior can be thought of as

          anticonsumption whereby products and services are deliberately defaced

          or mutilated.

        c) Anticonsumption is manifested by a range of activities from relatively harmless acts

          such as gifting dog manure, to destructive political protests.

6. Consumer Behavior as a Field of Study

   a. It is a rather recent practice that consumers have become the objects of formal study.

    Most colleges did not even offer a course in consumer behavior prior to the 1970s.

   

   Interdisciplinary Influences on the Study of Consumer Behavior

   b. Consumer behavior may be studied from many points of view—such as psychology,

     sociology, social psychology, cultural anthropology, economics, etc.

   The Issue of Strategic Focus

   c. Many regard the field of consumer behavior as an applied social science.

     Accordingly, the value of the knowledge generated should be evaluated in terms

     of its ability to improve the effectiveness of marketing practice.

   The Issue of Two Perspectives on Consumer Research

   d. One general way to classify consumer research is in terms of the fundamental

     assumptions the researchers make about what they are studying and how to study

     it. This set of beliefs is known as a paradigm. A paradigm shift may now be

     underway.

     1) The dominant paradigm currently is called positivism (or sometimes called

       modernism). It emphasizes that human reason is supreme, and that there is a

       single, objective truth that can be discovered by science. Positivism  

       encourages us to stress the function of objects, to celebrate technology, and to 

       regard the world as a rational, ordered place with a clearly defined past,  

       present, and future.

     2) The emerging paradigm of interpretivism (or postmodernism) questions the

       previous assumptions.

         a) Proponents argue that there is too much emphasis on science and

           technology in our society, and that this ordered, rational view of consumers

           denies the complex social and cultural world in which we live.

         b) Others say positivism puts too much emphasis on material well-being,

           and that this logical outlook is dominated by an ideology that stresses the

           homogeneous views of a culture dominated by white males.

         c) Interpretivists instead stress the importance of symbolic, subjective

           experience and the idea that meaning is in the mind of the person.