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Summary Consumer Behaviour

by

AnikaOchel

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Consumer Behaviour

A European Outlook, Second Edition

by Leon G. Schiffman, Leslie Lazar Kanuk & Havard Hansen

Summary

by Anika Ochel

Introduction

Ch 1 An introduction to the study of consumer behaviour 2

Ch 2 Consumer research 8

Ch 3 Market segmentation 14

The Consumer as an Individual

Ch 4 Consumer decision-making 18

Ch 5 Consumer motivation 25

Ch 6 Personality and consumer behaviour 30

Ch 7 Consumer perception 36

Ch 8 Consumer learning 43

Ch 9 Consumer attitude formation and change 51

Ch 10 Communication and consumer behaviour 56

Consumers in their Social and Cultural Settings

Ch 11 Reference groups and family influences 60

Ch 12 Social class and consumer behaviour 65

Ch 13 The influence of culture and subculture on consumer behaviour 68

Ch 14 Cross-cultural behaviour: an international perspective 73

More on the Consumer’s Decision-Making Process

Ch 15 Consumer influence and the diffusion of innovations 76

Ch 16 Consumer decision-making – again 84

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2

Part 1: Introduction

Chapter 1: An introduction to the study of consumer

behaviour

consumer behaviour

the behaviour that consumers display in searching for, purchasing, using, evaluating

and disposing of products and services that they expect will satisfy their needs

focuses on how individuals make decisions to spend their available resources (time,

money, effort) on consumption-related items

includes

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 the purchase

the impact of such evaluations on future purchases

how they dispose of it

consumers use and consume on a regular basis

food

clothing

shelter

transport

education

equipment

holidays

necessities

luxuries

services

ideas

the purchase decisions consumers make affect the demand for

basic raw materials

transport

production

banking

employment of workers

deployment of resources

the success of some industries and

the failures of others

two different kinds of consuming entities:

personal consumer

buys goods and services for his or her own use, for the use of the household

or as a gift

the products are bought for final use by individuals (end-users, ultimate

users)


3

organisational consumer

includes companies, charities, government agencies (local, national) and

institutions (schools, hospitals, prisons)

buy products, equipment and services in order to run their organisations

Development of the Marketing Concept and the Discipline of Consumer Behaviour

production concept

assumes that consumers are mostly interested in product availability at low prices

marketing objectives are cheap, efficient production and intensive distribution

consumers will buy what Is available rather than wait for what they really want

in developing countries or when main objective is to expand the market

product concept

assumes that consumers will buy the product that offers them the highest quality,

the best performance and the most features

constant strive to improve product quality and add features that are technically

feasible (without finding out whether the consumers really want them)

may lead to market myopia (a focus on the product rather than on the consumer

needs)

selling concept

marketer’s primary focus is selling the product that has unilaterally been decided to

produce

assumes that consumers are unlikely to buy the product unless they are aggressively

persuaded to do so

fails to consider customer satisfaction

the marketing concept

marketers began to realise that they could sell more goods, more easily if they

produced only those goods they had already determined that consumers would buy

assumes that to be successful a company must determine the needs and wants of

specific target markets and deliver the desired satisfactions better than the

competition

focuses on the needs of the buyer, rather than the seller

focuses on profits though customer satisfaction, rather than sales volume

implementing the marketing concept

to identify unsatisfied consumer needs, companies had to engage in extensive

marketing research

consumers are highly complex, subject to a variety of psychological and social needs

strategic tools to implement the marketing concept

segmentation

targeting

positioning

marketing mix

the role of consumer research

consumer research: the process and tools used to study consumer behaviour

two theoretical perspectives that guide development of consumer research

methodology


4

positivists

tend to be objective and empirical

seek causes for behaviour

conduct research studies that can be generalised to larger

populations

e.g. consumer research designed to provide data to be used for

strategic managerial decisions

interpretivists

tend to be qualitative, based on small samples

tend to view each consumption situation as unique and

unpredictable

seek to find common patterns of operative values, meanings and

behaviour

focus of the marketing concept: consumer needs

seek to identify the many similarities and constants that exist among people

three elements of the strategic framework:

market segmentation: the process of dividing a market into subsets of

consumers with common needs or characteristics

targeting: selection of one or more of the segments to pursue

positioning

developing a distinct image for the product or service in the mind of

the consumer

an image that will differentiate the offering from competing ones

communicate to consumers that the particular product or service

will fulfil their needs better than competing brands

two key principles:

communicating the benefits of the product rather than

product features

develop and communicate unique selling proposition

the four elements of the marketing mix

product or service

features

designs

brands

packaging

post-purchase benefits

price

list price

discounts

allowances

payment methods

place: distribution

promotion

advertising

sales promotion

public relations

sales efforts

demand


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Customer Value, Satisfaction and Retention

providing customer value

customer value: the ratio between the customer’s perceived benefits (economic,

functional and psychological) and the resources (monetary, time, effort,

psychological) used to obtain those benefits

perceived value is relative and subjective

value proposition: a term rapidly replacing the popular business phrase unique

selling proposition

customer satisfaction

an individual’s perception of the performance of the product or service in relation to

his/her expectations

‘loyalists’

completely satisfied

keep purchasing

‘apostles’

completely satisfied

experiences exceed their expectations

provide positive word-of-mouth about the company to others

‘defectors’

feel neutral or merely satisfied

are likely to stop doing business with the company

‘terrorists’

had negative experiences

spread negative word-of-mouth

‘hostages’

unhappy customers

stay with the company because of a monopolistic environment or low prices

are difficult and costly to deal with because of their frequent complaints

‘mercenaries’

very satisfied

no real loyalty

may defect because of a lower price elsewhere or on impulse

customer retention

objective of providing value to customers continuously and more effectively than the

competition is to have highly satisfied customers

in the best interest of the customer to stay with the company rather than switch to

another firm

usually more expensive to win new customers than to keep existing ones

loyal customers

buy more products

are less price sensitive

pay less attention to competitors’ advertising

spread positive work-of-mouth


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The Impact of Digital Technologies on Marketing Strategies

digital technologies allow much greater customisation of products, services and promotional

messages

customers have more power and access to more information than ever before

the exchange between marketers and customers is increasingly interactive

marketers face challenges

Marketing Ethics and Social Responsibility

the marketing concept is sometimes inappropriate, in situations in which the means for need

satisfaction can be harmful to the individual or society (e.g. drugs, tobacco) or cause

environmental deterioration

societal marketing concept

requires that all marketers adhere to principles of social responsibility


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they should endeavour to satisfy the needs and wants of their target markets in ways

that preserve and enhance the well-being of consumers and society as a whole

fulfil the needs of the target audience in ways that improve society

short-term orientation

embraced by most business executives in their drive for increased market share and

quick profits

managerial performance is usually evaluated on the basis of short-term results

societal marketing concept advocated a long-term perspective and recognises that all

companies would be better off in a stronger, healthier society

some critics are concerned that an in-depth understanding of consumer behaviour makes it

possible for unethical marketers to exploit human vulnerabilities

many trade associations have developed industry-wide codes of ethics

marketing ethics and social responsibility are important concepts of organisational

effectiveness

most companies recognise that socially responsible activities improve their image

among consumers, shareholders, the financial community and others

ethical and socially responsible practices are simply good business resulting in a

favourable image and in increased sales

Consumer Behaviour and Decision-Making are Interdisciplinary

cognitive and emotional aspects to consumer decision-making

a simplified model of consumer decision-making


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Chapter 2: Consumer research

marketing concepts states that to be successful a company must understand the needs of

specific groups of consumers and satisfy them more effectively than the competition

satisfaction of consumer needs is delivered in: product, price, place and promotion

consumer research, an extension of marketing research

Consumer Research Paradigms

motivational research: technique by Ernest Dichter, developed in the late 1950s, based on

Freudian psychoanalytic techniques, base for quantitative and qualitative research

quantitative research

research approach is known as positivism, consumer researchers primarily

concerned with predicting consumer behaviour as positivists

experiments, survey techniques, observation

findings are descriptive, empirical and can be generalised to larger population

sophisticated statistical analysis

qualitative research

depth interviews, focus groups, metaphor analysis, collage research, projective

techniques, administered by a highly trained interviewer-analyst

findings tend to be somewhat subjective

samples sizes are small

findings cannot be generalized to larger population

primarily used to obtain new ideas for promotional campaigns and products

interest in understanding consumer experiences has led to the term interpretivism,

researchers who adopt this paradigm are known as interpretivists

comparison between positivism and interpretivism

positivism interpretivism

purpose prediction of consumer actions understanding consumption practices

other

descriptive

terms

modernism, logical empiricism,

operationalism, objectivism

experientialism, postmodernism,

naturalism, humanism, postpositivism

methodology

and research

tools

surveys, experiments,

observations

qualitative research: depth interviews,

projective techniques

ethnography: researcher places himself

in the society

semiotics: study of symbols and

meanings

assumptions

rationality, causes and effects of

behaviour can be identified and

isolated, individuals are problem

solvers, one single reality, events

can be objectively measured,

causes of behaviour can be

identified, findings can be

generalised to larger populations

no single objective truth, reality is

subjective, cause and effect cannot be

isolated, each consumption experience is

unique, researcher-respondent

interactions affect research findings,

findings are often not generalizable to

larger populations


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combining qualitative and quantitative research findings

the two research paradigms are really complementary in nature

the prediction made possible by quantitative (positivist) research and the

understanding provided by qualitative (interpretivist) research together produce a

richer and more robust profile of consumer behaviour

The Consumer Research Process

developing research objectives: helps to define the type and level of information needed

collecting secondary data

secondary data

any data originally generated for some purpose other than the present

research objectives

sometimes provide sufficient insight into the problem to eliminate the need

for primary research

primary research: original research performed by individual researchers to meet

specific objectives

syndicated data: data of interest to a large number of users that are collected

periodically and compiled and analysed according to a standard procedure, then sold

to interested buyers

customer profitability and lifetime value data

80/20 rule: a relatively small percentage of all customers (20%) accounts for

a disproportionately large portion of the company’s sales and profits (80%)

increased focus on building and maintaining long-term relationships with

customers


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identify highly profitable customers as quickly as possible and target those

with special offers to buy even more

customer lifetime value profiles for various customer segments

computed from acquisition costs, the profits generated from individual sales,

the costs of handling customers and their orders and the expected duration

of the relationship

designing primary research

quantitative research designs

observational research

the best way to gain an in-depth understanding of the relationship

between people and products is by watching them in the process of

buying and using products

better understanding of what the product symbolises to a consumer

greater insight into the bond between people and products that is

the essence of brand loyalty

experimentation

controlled experiment (causal research)

only some variables are manipulated (independent variables)

while other elements are kept constant

any difference in outcome is due to different treatments of

the variable under study and not to extraneous factors

e.g. test marketing


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surveys

personal interview surveys

telephone surveys

postal surveys

online surveys

quantitative research data collection instruments

to systematise the collection of data and to ensure that all respondents are

asked the same questions in the same order

includes questionnaires, personal inventories, attitude scales and discussion

guides

validity: the study collects the appropriate data needed to answer the

questions or objectives stated in the objective stage of the research process

reliability: the same question asked to a similar sample would produce the

same findings

split-half-reliability: if sample is divided into two parts and results from each

half are similar

questionnaires

include both substantive questions that are relevant to the purpose

of the study and pertinent demographic questions

disguised or undisguised as to its true purpose

open ended (requiring answers in the respondent’s own words) or

closed-ended (the respondent merely ticks the appropriate answer

from the list of options)

attitude scales

Likert scale

consumers tick the number corresponding to their level of

agreement or disagreement

equal number of agreement-disagreement choices on either

side of a neutral choice

semantic differential scale

typically consists of a series of bipolar adjectives anchored at

the ends of an odd-numbered continuum

sometimes an even-numbered scale is used to eliminate the

option of a neutral answer

behaviour intention scale

measures the likelihood that consumers will act in a certain

way in the future

e.g. buying a product again or recommending it to a friend

rank-order scale

rank items such as products in order of preference in terms

of some criterion

provide competitive information and enable marketers to

identify needed areas of improvement


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qualitative research designs and data collection methods

depth interviews

lengthy, non-structured interview between a respondent and a

highly trained interviewer

respondents are encouraged to talk freely

provide marketers with valuable ideas about product design or

redesign and provide insight for positioning or repositioning

focus groups

8 to 10 respondents who meet with a moderator-analyst for a group

discussion focused on a particular product or category

respondents are encouraged to discuss their interests, attitudes,

reactions, motives, lifestyles, feelings, usage experiences and so on

respondents are recruited on the basis of a carefully drawn

consumer profile

projective techniques

designed to tap the underlying motived of individuals despite their

unconscious rationalisations or efforts at conscious concealment

variety of disguised tests that contain ambiguous stimuli, such as

incomplete sentences, untitled pictures or cartoons, ink blots, word-

association tests and other-person characterisations

metaphor analysis

suggests that most communication is non-verbal and that people do

not think in words but in images

important to enable consumers to represent their images in an

alternative, non-verbal form rather than in words

through the use of e.g. sounds, music, drawings or pictures

metaphor: the use of one form of expression to describe or

represent feelings about another

customer satisfaction measurement

customer satisfaction surveys

customers’ expectations versus their perceptions of the product or service

delivered

mystery shoppers (professional observer posing as customer)

critical incident method (asking customers to think back in order to train

employees better)

analysing customer complaints (encourage customers to complain,

categorize and analyse the complaints)

analysing customer defections (customer loyalty, find out why they leave)

sampling and data collection

three questions

who to survey (the sampling unit)

how many to survey (the sample size)

how to select them (the sampling procedure)

probability sample: findings should be projectable to the total population

simple random sample: everyone has an equal chance of being

selected


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systematic random sample: every nth person is selected

stratified random sample: population is divided into mutually

exclusive groups (e.g. age) and random samples are drawn from each

group

cluster (area) sample: population is divided into mutually exclusive

groups (e.g. streets) and researcher draws a sample of the groups

non-probability sample: sufficient to have the findings representative of the

population

convenience sample: selection of most accessible population

members

judgement sample: researcher uses his/her judgement to select

population members (e.g. experts in a relevant field)

quota sample: prescribed number of people from several categories

(e.g. 50 men, 50 women)

data analysis and reporting research findings

includes a brief executive summary of the findings

may or may not include recommendations for marketing action

full description of the methodology used

includes tables and graphics to support the findings


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Chapter 3: Market segmentation

necessary conditions for successful segmentation of any market:

a large enough population with

sufficient money to spend (general affluence) and

sufficient diversity to lend itself to partitioning in the market into sizeable segments

when diverse consumer interests are met, consumers are better satisfied and their overall

happiness, satisfaction and quality of life are enhanced

market segmentation is a positive force for both consumers and marketers

What is Market Segmentation?

market segmentation: the process of dividing a market into distinct subsets of consumers

with common needs or characteristics and selecting one or more segments to target with a

distinct marketing mix

mass marketing: offering the same product and marketing mix to all consumers

strategy of segmentation allows producers to avoid head-on competition in the marketplace

by differentiating their offerings in price, styling, packaging, promotional appeal, method of

distribution or superior service

after segmenting the market into homogeneous clusters, the marketer must select one or

more segments to target

marketer must decide on a specific marketing mix (product, price, channel, promotional

appeal)

positioning the product so that it is perceived by the consumers in each target segment as

satisfying their needs better than other competitive offerings

Criteria for effective targeting of segments

identification: marketer must identify relevant product or service characteristics

sufficiency: segment must consist of sufficient number of people to warrant tailoring to its

specific needs or interests

stability

marketers prefer to target consumer segments that are relatively stable in terms of

demographic and psychological factors and needs and that are likely to grow

prefer to avoid ‘fickle’ segments that are unpredictable in embracing fads

accessibility: marketers must be able to reach the market segments they want to target in an

economical way

congruent with the firm’s objectives and resources

not every firm is interested or has the resources to reach or serve all the market

segments available

e.g. fitness centres have chosen to tailor their services to women only due to limited

space, limited access to certified instructors, limited marketing budgets

choice to use their limited resources to serve a more specialised segment as well as

possible

other firms choose not to serve one or more segments because they do not fit the

long-term objectives of the firm


15

Bases for Segmentation


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geographic segmentation: market divided by location

demographic segmentation: refers to the vital and measurable statistics of a population

age

sex

marital status

income, education and occupation

psychological segmentation: refer to the inner or intrinsic qualities of the individual

psychographic segmentation: measures activities, interests and opinions

sociocultural segmentation

family life cycle

social class

culture and subculture

cross-cultural or global marketing segmentation

use-related segmentation: categorises consumers in terms of product, service or brand usage

characteristics such as level of usage, level of awareness and degree of brand loyalty

LoLows: low current share, low consumption customers

HiLows: high current share, low consumption customers

LowHighs: low current share, high consumption customers

HiHighs: high

current share,

high

consumption

customers

usage-situation

segmentation

benefit segmentation:

identify the one most

important benefit of the

product or service

hybrid segmentation:

combining several

segmentation variables

psycho-graphic-

demographic

profiles

geodemo-

graphic

segmentation

strategic

business

insights VALS

system


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Implementing Segmentation Strategies

Concentrated versus differentiated marketing

differentiated marketing: targeting several segments using individual marketing

mixes

concentrated marketing: targeting just one segment with a unique marketing mix

counter-segmentation

reconsider the extent to which markets are segmented

company seeks to discover a more generic need or consumer characteristic that

would apply to the members of two or more segments and recombine those

segments into a larger single segment that could be targeted with an individually

tailored product or promotional campaign


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Part 2: The consumer as an individual

Chapter 4: Consumer decision-making

What is a Decision?

general

the selection of an option from two or more alternative choices

for a person to make a decision, a number of alternatives to choose from must be

available

no-choice/Hobson’s choice

no alternatives from which to choose

customer is literally forced to make a particular purchase or take a particular action

Levels of Consumer Decision-Making

extensive problem-solving

no established criteria for evaluating a product category or specific brand

number of brands that will be considered to a small subset is not narrowed

consumer needs a great deal of information to establish a set of criteria on which to

judge specific brand

usually occurs when buying products that are expensive, important and technically

complicated, implies long time commitments

e.g. car, apartment, high-definition tv

limited problem-solving

consumers have established basic criteria for evaluating the product category

preferences concerning a select group of brands has not been fully established

search for additional information like fine-tuning, must gather additional brand

information to discriminate among the various brands

occurs when purchasing an updated version of a product

e.g. replacing a mobile phone, buying a food processor, replacing an old laptop

routinized response behaviour

consumers have experience with the product category, well-established criteria

hardly ever implied a need for additional information

e.g. buying a refill of laundry detergent, toothpaste or hand soap

Models of Consumers: Four Views of Consumer Decision-Making

an economic view

perfect competition

consumers are characterised as making rational decisions

economic man theory

consumers are aware of all available product alternatives

consumers are capable of correctly ranking each alternative in terms of its

benefits and disadvantages

consumers are able to identify the one best alternative


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classical economic model of an all-rational consumer is unrealistic because people

are limited by

their existing skills, habits and reflexes

their existing values and goals

the extent of their knowledge

consumers operate in an imperfect world

too idealistic and simplistic

a passive view

consumers are impulsive, irrational purchasers ready to yield to the aims of

marketers

fails to recognize motivation, selective perception, learning, attitudes,

communication and opinion leadership

simple, single-minded, rather unrealistic

an emotional view

consumers are likely to associate deep feelings or emotions (joy, fear, love, hope,

sexuality, fantasy, magic) with certain purchases or possessions

feelings or emotions are likely to be highly involving

consumers are likely to make purchases on impulse, on a whim or because of an

emotional drive

less emphasis on the search for pre-purchase information

more emphasis placed on current mood and feelings

moods are important to decision-making

store’s image or atmosphere can affect shoppers’ moods

shoppers’ moods can influence how long they stay in the store or other

behaviour that retailers wish to encourage

a cognitive view

consumer as a thinking problem solver

consumers are frequently pictures as either receptive to or actively searching for

products and services

focuses on the processes by which consumers seek and evaluate information about

selected brands and retail outlets

consumers are viewed as information processors

leads to the formation of preferences and purchase intentions

consumers are likely to cease their information-seeking efforts when they perceive

that they have sufficient information about some of the alternatives to make a

satisfactory decision

consumers often develop short-cut decision rules (heuristics) to facilitate the

decision-making process

use decision rules to cope with exposure to too much information

consumers cannot make perfect decisions but actively seek information and

attempts to make satisfactory decisions

consumer behaviour is goal directed


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A Model of Consumer Decision-Making


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input

marketing inputs

direct attempt to reach, inform and persuade consumers to buy and use the

product

includes the product itself, mass-media advertising, direct marketing,

personal selling, other promotional efforts, pricing policy, distribution

channels

governed by the consumer’s perception of these efforts

sociocultural inputs

non-commercial influences

e.g. comments of friends, editorial in a newspaper, use by a family member

unwritten codes of conduct per culture indicate right or wrong consumption

inputs that affect what consumers purchase and how they use what they

buy: impact of firm’s marketing efforts, influence of family, friends and

neighbours, society’s existing code of behaviour

process

need recognition

likely to occur when a consumer is faced with a problem

two different need or problem recognition styles

actual state types: perceive that they have a problem when a

product fails to perform satisfactorily

desired state types: the desire for something new may trigger the

decision process

pre-purchase search

past experience might provide the consumer with adequate information to

make the choice

if there is no prior experience, consumer has to engage in search for useful

information to base a choice

past experience/internal source

the greater the relevant past experience, the less external information the

consumer is likely to need to reach a decision

marketing and non-commercial information/external sources

perceived risk influences decision process

internet has high impact on pre-purchase search

evaluation of alternatives

two types of information: list of brands from which to make the selection,

criteria used for evaluating brands (model)

evoked set/consideration set: specific brands a consumers considers in

making a purchase within a particular product category

inept set: consists of brands the consumer excludes from purchase

consideration because they feel unacceptable

inert set: consists of brands the consumer is indifferent towards because

they are perceived as not having any particular advantages


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consumer decision rules/heuristics/decision strategies/information-

processing strategies

compensatory decision rule: consumer evaluates brand or model

options in terms of each relevant attribute and computes a weighted

or summated score for each brand

non-compensatory decision rule: do not allow consumers to balance

positive evaluations of a brand on one attribute against a negative

evaluation on some other attribute

non-compensatory conjunctive decision rule: to be found acceptable

a particular brand cannot be judged to perform below a cut-off point

established by the consumer on any one attribute

non-compensatory disjunctive rule: accepted if an option meets or

exceeds the established minimum cut-off level established for any

one attribute

non-compensatory lexicographic decision rule: consumer first ranks

the attributed in terms of perceived relevance or importance then

compares the alternatives in terms of the single attribute that is

considered most important

consumer segment and the specific shopping rules

practical loyalists: look for ways to save on brands they would buy

anyway

bottom-line price shoppers: buy the lowest-priced item with little

regard for brand

opportunistic switchers: use coupons or sales to decide among

brands and products that fall within their evoked set

deal hunters: look for the best bargain and are not brand loyal

affect referral decision rule: selection of the brand with the highest

perceived overall rating

an understanding of which decision rules consumer apply in selecting a

particular product or service is useful to marketers concerned with

formulating a promotional programme


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output

purchase behaviour

trial purchase

consumer purchases a product for the first time, buys a smaller

quantity than usual

consumers attempt to evaluate a product through direct use

repeat purchase

when new brand is established consumers are likely to repeat the

purchase

closely related to brand loyalty

signified that products meets consumer’s approval, willing to use it

again and in larger quantities

long-term commitment purchases

post-purchase evaluation

neutral feeling: actual performance matches expectations

positive disconfirmation of expectations/satisfaction: performance exceeds

expectations

negative disconfirmation of expectations/dissatisfaction: performance is

below expectations

important component: reduction of any uncertainty or doubt that the

consumer might have about the selection

degree of post-purchase analysis depends on importance of the product

decision and experience acquired in using the product

customer satisfaction may be related to customer retention (if a consumer is

satisfied with his adidas shoes he will buy other adidas products)

Consumer Gifting Behaviour

associated with such important events as Mother’s Day, births and birthdays, engagements,

weddings, graduations and other accomplishments and milestones

the process of gift exchange that takes place between a giver and a recipient

an act of symbolic communication with explicit and implicit meanings ranging from

congratulations, love and regret to obligation and dominance

five gifting subdivisions:

intergroup gifting: one group exchanges gifts with another group (one family and

another)

intercategory gifting: either an individual is giving a gift to a group (single friend

giving a couple an anniversary gift) or a group is giving an individual a gift (friends

chip in and give a friend a joint birthday gift)

intragroup gifting: group gives a gift to itself or its members (an anniversary gift to

ourselves)

interpersonal gifting: occurs between two individuals, a gift giver and a gift receiver

intrapersonal gifting/self-gift/monadic giving: giver and receiver are the same

individual, gift is something special perceived as a treat to oneself


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Beyond the Decision: Consuming and Possessing

experience of using products and services and the sense of pleasure derived from possessing,

collecting or consuming things and experiences contribute to consumer satisfaction and

overall quality of life

consumption outcomes or experiences affect consumers’ future decision processes

products have special meaning and memories


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Chapter 5: Consumer motivation

marketing orientation

focuses on the needs of the buyer

implies that the manufacturer will make only what it knows people will buy

production orientation

focuses on the needs of the seller

implies that the manufacturer will try to sell whatever it decides to make

Charles Revson summed up his philosophy by saying: “In the factory, we make cosmetics; in

the store, we sell hope.”

Motivation as a Psychological Force

motivation

the driving force within individuals that impels them to action

is produced by a state of tension which exists as the result of an unfulfilled need

specific goals that consumers wish to achieve and course of action they take to attain

these goals are selected on the basis of their thinking processes (cognition) and

previous learning

needs

innate needs/primary needs: physiological including food, water, air, clothing, shelter

and sex

acquired needs/secondary needs: psychological needs that we learn in response to

our culture or environment including self-esteem, prestige, affection, power and

learning

goals

goals are sought-after results of motivated behaviour

all behaviour is goal-oriented

generic goals: general classes or categories of goals that consumers see as a way to

fulfil their needs


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product-specific goal: specifically branded products and services that consumers

select for goal fulfilment

individuals set goals on the basis of their personal values and they select means that

they believe will help them achieve their desired goal

the selection of goals

goal selection depends on a

person’s experiences, physical

capital, cultural norms and values,

goal’s accessibility

promotion focus: interested in their

growth and development, have

more hopes and aspirations (ideals),

favour the presence of a positive

outcome

prevention focus: interested in

safety and security, more concerned

with duties and obligations (oughts),

favour the absence of a negative

outcome

extrinsic benefits: financial success,

social status, being attractive to

others

intrinsic benefits: self-acceptance, affiliation, connection with community

interdependence of needs and goals

individuals are usually somewhat more aware of their physiological needs

than they are of their psychological needs

they may subconsciously engage in behaviour that satisfied their

psychological needs

positive and negative motivation


27

positive negative

driving force towards some object or

condition

driving force away from some object or

condition

may be referred to as needs, wants or

desires may be referred to as fears or aversions

approach object: behaviour is directed

towards

avoidance object: behaviour is directed away

from

rational versus emotional motives

rationality

consumers behave rationally by carefully considering all alternatives and

choosing those that give them the greatest utility

consumers select goals based on totally objective criteria (size, weight, price)

emotional motives

imply the selection of goals according to personal or subjective criteria

(pride, fear, affection, status)

do not always maximise utility or satisfaction

The Dynamics of Motivation

needs are never fully satisfied

new needs emerge as old needs are satisfied

success and failure influence goals

individuals who successfully achieve their goals usually set new and higher goals

which raises their level of aspiration

when an individual cannot attain a specific goal or type of goal that he/she

anticipates will satisfy certain needs, behaviour may be directed to substitute goals

failure to achieve a goal often results in feelings of frustration

defence mechanisms that people sometimes adopt to protect their egos from

feelings of failure when they do not attain their goals

aggressions: response to frustration, aggressive behaviour in attempting to

protect self-esteem

rationalisation: inventing plausible reasons for being unable to attain their

goals to resolve frustration

regression: childish and immature behaviour as a reaction to a frustrating

situation

withdrawal: simply withdrawing from the situation to resolve frustration

projection: redefine frustrating situation by projecting blame for his/her own

failures and inabilities on other objects or persons

autism: thinking dominated by needs and emotions, daydreaming or

fantasising enables individual to attain imaginary gratification of unfulfilled

needs

identification: subconsciously identifying with other persons or situations

that they consider relevant

repression: repressing the unsatisfied need, force the need out of their

conscious awareness

multiplicity of needs: a consumer’s behaviour often fulfils more than one need


28

arousal of motives

physiological arousal: bodily needs at any specific moment in time based on the

individual’s physiological condition at the moment

emotional arousal: daydreams (when people are bored or frustrated) may result in

the arousal or stimulation of latent needs

cognitive arousal: random thoughts can lead to cognitive awareness of needs

environmental/situational arousal: set of needs an individual experiences at a

particular time which is often activated by specific cues in the environment

behaviourist school

considers motivation to be a mechanical process

behaviour is the response to a stimulus

elements of conscious thought are ignored

consumer’s cognitive control is limited

he/she does not act but reacts to stimuli in the marketplace

cognitive school

all behaviour is directed at goal achievement

needs and past experiences are reasoned, categorised and

transformed into attitudes and beliefs that act as predispositions to

behaviour

focused on helping the individual satisfy needs and determine

actions that he/she takes to achieve satisfaction

Types and Systems of Needs

Henry Murray’s list

detailed list of psychogenic needs

everyone has the same basic set of needs but individuals differ in their priority

ranking of these needs

Dr Abraham Maslow’s hierarchy of needs

Motivational


29

research

the development of motivational research

foundation for the development of motivational research: Sigmund Freud’s

psychoanalytical theory of personality

unconscious needs or drives are at the heart of human motivation and personality

Dr Ernest Dichter adapted Freud’s techniques to study consumer buying habits

two problems in applying:

psychoanalytical theory was structured for disturbed people whereas

consumer behaviour was interested in explaining the typical consumer

Freudian theory was developed in entirely different social context (19th

century, Vienna) whereas motivational research was introduced in the 1950s

in post-war America

evaluation of motivational research

still regarded as an important tool by marketers who want to gain deeper insights

into consumer behaviour

principal use today is development of new ideas for promotional campaigns, ideas

that can penetrate consumer’s conscious awareness by appealing to unrecognised

needs

basic orientation for new product categories

enables to explore consumer reactions to ideas and advertising copy at an early

stage to avoid costly errors

provide consumer researchers with basic insights that enable them to design

structures, quantitative marketing research studies to be conducted on larger, more

representative samples of consumers


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Chapter 6: Personality and consumer behaviour

What is personality?

personality is defined as those inner psychological characteristics that both determine and

reflect how a person responds to his/ her environment

inner characteristics are those specific qualities, attributes, traits, factors and mannerisms

that distinguish one individual from other individuals

the nature of personality

personality reflects individual differences

no two individuals are exactly alike because the inner characteristics that

constitute an individual’s personality are a unique combination of factors

useful concept that enables to categorise consumers into different groups on

the basis of one or several traits

personality is consistent and enduring

if marketers know which personality characteristics influence specific

consumer responses they can attempt to appeal to their target group

consumption behaviour varies considerably although personalities are

consistent

personality is only one of a combination of factors that influence how a

consumer behaves

personality can change: an individual’s personality may be altered by major life

events or a gradual maturing process

Theories of Personality

Freudian theory

Id

warehouse of

primitive and

impulsive drives

(basic

physiological

needs)

individual seeks

immediate

satisfaction

without concern for the specific means of satisfaction

Superego

internal expression of society’s moral and ethical codes of conduct

sees that the individual satisfies needs in a socially acceptable fashion

a kind of brake that restraints or inhibits the impulsive forces of the id

Ego

conscious control

functions as an internal monitor that attempts to balance the impulsive

demands of the id and the sociocultural constraints of the superego


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Freudian theory and ‘product personality’

human drivers are largely unconscious

consumers are primarily unaware of their true reason for buying

neo-Freudian theory

believe that social relationships are fundamental to the formation and development

of personality

Alfred Adler

humans are seeking to attain various rational goals

individual’s efforts to overcome feelings of inferiority

Harry Stack Sullivan

people continuously attempt to establish relationships with others

individual’s efforts to reduce tensions such as anxiety

Karen Horney

impact of child-parent relationships and individual’s desire to conquer

feelings of anxiety

three personality groups

compliant: move towards others (desire to be loved, wanted and

appreciated)

aggressive: move against others (desire to excel and win admiration)

detached: move away from others (desire independence, self-

reliance, self-sufficiency and individualism)

trait theory

focus on the measurement of personality in terms of specific psychological traits

trait: any distinguishing, relatively enduring way in which one individual differs from

another e.g. consumer innovativeness, consumer materialism or consumer

ethnocentrism

Personality and Understanding Consumer Diversity

consumer innovativeness and related personality traits

consumer innovativeness

consumer innovators: those who are likely to be the first to try new products

positive relationship between innovative use of the internet and buying

online

dogmatism

measures the degree of rigidity (versus openness) that individuals display

towards the unfamiliar and towards information that is contrary to their own

established beliefs

marketers have used celebrities and experts in their new-product

advertisements to make it easier for potentially reluctant consumers to

accept the innovation

social character

inner-directedness: consumers tend to rely on their own inner values or

standards in evaluating new products and are likely to be consumer

innovators

other-directedness: consumers tend to look to others for direction on what

is right or wrong, less likely to be consumer innovators


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need for uniqueness

optimum stimulation level

high optimum stimulation level: greater willingness to take risks, to try new

products, to be innovative, to seek purchase related information, to accept

new retail facilities

low optimum stimulation level: prefer a simple, uncluttered and calm

existence

sensation seeking

variety or novelty seeking

cognitive personality factors

need for cognition

measures a person’s craving for or enjoyment of thinking

high in need for cognition: likely to be responsive to the part of an

advertisement that is rich in product-related information or description

low in need for cognition: likely to be attracted to the background or

peripheral aspects of an advertisement (attractive model, celebrity)

positive relationship between need for cognition and the internet

visualizers versus verbalisers

visualizers

consumers who prefer visual information and products that stress

the visual

more likely to respond to and prefer visual images or messages as

sources of information

marketers stress strong visual dimensions

verbalizers

consumers who prefer written or verbal information and products

more open to and prefer the written word as a way of securing info

marketers raise a question and provide the answer or feature a

detailed description or explanation

from consumer materialism to compulsive consumption

consumer materialism

materialism 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:

value acquiring and showing off possessions

self-centred and selfish

seek lifestyles full of possessions

many possessions do not give them greater personal satisfaction

fixated consumption behaviour

being fixated with regard to consuming or possessing (collectors, hobbyists)

characteristics:

deep interest in particular product category

willingness to go considerable lengths to secure additional examples

dedication of a considerable amount of discretionary time and

money to searching out the object


33

compulsive consumption behaviour

abnormal behaviour

consumers have an addiction, are out of control, their actions may damage

them or those around them

to control or eliminate compulsive problems generally requires some type of

therapy or clinical treatment

consumer ethnocentrism: responses to foreign-made products

highly ethnocentric: consumers are likely to feel that it is inappropriate or wrong to

purchase foreign-made products because of resulting economic impacts on domestic

economy

non-ethnocentric: consumers tend to evaluate foreign-made products for their

extrinsic characteristics

varies by country and product

Brand Personality

brand personification

tries to recast consumers’ perception of the attributes of a product or service into a

human-like character

many consumers express their inner feelings about products or brands in terms of

their association with known personalities

consumers sometimes develop relationships with a brand

brand zealots: develop a communal relationship with the product and

demonstrate a passion that is typically associated with friends or family

exchange relationships: consumer gets something in return

product personality and gender

endows products or brands with a gender

allows marketers to better select visuals and text for various marketing messages

product personality and geography

consumers may possess a strong geographical association with certain products

employing geography in product name creates a geographic product personality

consumer’s memory of the brand is associated with geography

geographical association may be familiar, unfamiliar or even fictitious


34

personality and colour

blue commands respect, authority, appeals particularly to females

yellow caution, novelty, temporary, warmth

green secure, natural, relaxed or easy-going, living things

red human, exciting, hot, passionate, strong

orange powerful, affordable, informal

brown informal, relaxed, masculine, nature

white goodness, purity, chastity, cleanliness, delicacy, refinement,

formality

black sophistication, power, authority, mystery

combination black

and white

communicates that product is carefully engineered, high-tech and

sophisticated in design

silver, gold, platinum regal, wealthy, stately

Self and Self-Image

one or multiple selves

historically individuals have been thought to have a single self-image

consumers have multiple selves

consumer is likely to act quite differently with different people and in different

situations

a normal person is likely to display different personalities in different situations or

social roles

marketers should target their products and services to consumers within the context

of a particular “self”

the make-up of the self-image

each individual has an image of himself as a certain kind of person with

certain skills, habits, possessions, relationships and ways of behaving

products and brands have symbolic value for individuals

consumers attempt to preserve or enhance their self-images by selecting

products and brands with images or personalities that are congruent with

their own self-images and avoiding products that are not

kinds of self-image:

actual self-image: how consumers see themselves

ideal self-image: how consumers would like to see themselves

social self-image: how consumers feel others see them

ideal social self-image: how consumers would like others to see them

two other types of self-images

expected self: how consumers expect to see themselves at some future time

ought-to self: consists of traits or characteristics that an individual believes it

is his/her duty or obligation to possess

the extended self

interrelationship between consumers’ self-images and their possessions

measurement instruments designed to reflect how particular possessions might

become part of extended self

human emotions that are connected to valued possessions are considered

extensions of the self


35

possessions can extend the self in a number of ways:

actually: allowing to do things that otherwise would be very difficult or

impossible to accomplish

symbolically: making the person feel better or bigger

conferring status or rank (ownership of a masterpiece of art)

bestowing feelings of immortality: leaving valued possessions to young

family members

endowing with magical powers (grandfathers amulet)

altering the self

consumers may wish to change themselves to become a different or improved self

modify appearance (sunglasses, cosmetics, tattoos)

personal vanity: acting self-important, self-interested or admiring one’s own

appearance or achievements

self-monitoring: how well a person is guided by situational cues regarding social

appropriateness

Virtual Personality or Self

internet, online chat rooms, participants may never get to see each other

creates an opportunity for chat room participants to try out new identities or to change their

identities while online

provides individuals with the opportunity to try on different personalities or identities

if they fit, individuals may decide to keep the new personality in favour of his/her old

personality


36

Chapter 7: Consumer perception

Elements of perception

perception:

the process by which an individual selects, organises and interprets stimuli into a

meaningful and coherent picture of the world

how we see the world around us

sensation

the immediate and direct response of the sensory organs to stimuli

a stimulus is any unit of input to any of the senses (see, hear, smell, taste and feel)

human organs receive sensory inputs

functions are called into play, either singly or in combination in the evaluation and

use of most consumer products

human sensitivity refers to the experience of sensation

83% of all communication today appeal to sight

the absolute threshold

the lowest level at which an individual can experience a sensation

the point at which a person can detect a difference between something and nothing

adaptation: as our exposure to the stimulus increases we notice it less

concern of marketers: consumers will get used to current print advertisements and

commercials that they will no longer see them

the differential threshold/just noticeable difference

the minimal difference that can be detected between two similar stimuli

Weber’s law: the stronger the initial stimulus, the greater the additional intensity

needed for the second stimulus to be perceived as different

marketing applications of the JND

remain below JND: so that negative changes (reductions in size or quality,

increase in price) are not readily discernible to the public

at or just above the JND: so that improvements (updated packaging, larger

size, lower price) are very apparent to consumers without being wastefully

extravagant

subliminal perception

people are stimulated below their level of conscious awareness

stimuli that are too weak or too brief to be consciously seen or heard may

nevertheless be strong enough to be perceived by one or more receptor cells

evaluating the effectiveness of subliminal persuasion

one theory claims that constant repetition of very weak stimuli has an

incremental effect that enables such stimuli to build response strength over

many presentations

another theory is based on the theory that subliminal sexual stimuli arouse

unconscious sexual motivations

no evidence that subliminal advertising persuades people to buy goods or

services

subliminal stimuli may influence affective reactions


37

Dynamics of perception

perception: the study of what we subconsciously add to or subtract from raw sensory inputs

to produce or own private picture of the world

perception is the result of two kinds of inputs:

physical stimuli: from the outside environment

previous experience: provided by individual in form of certain predispositions

(expectations, motives, learning)

each individuals perceptions are unique

individuals are very selective as to which stimuli they recognize, they subconsciously organize

the stimuli they do recognize according to widely help psychological principles and interpret

them subjectively in accordance with their personal needs, expectation and experiences

perceptual selection

consumers subconsciously exercise a great deal of selectivity as to which aspects of

the environment they perceive

which stimuli gets selected depends on two factors in addition to the nature of the

stimulus itself:

consumers’ previous experience affects their expectations

motives at the time (needs, desires, interests)

nature of stimulus

contrast

extreme attention getting devices

degree of differentiation

differentiation of packaging to ensure rapid consumer perception

expectations

people usually see what they expect to see and what they expect to see is

usually based on familiarity, previous experience or preconditioned set

stimuli that conflict sharply with expectations often receive more attention

than those that conform to expectations

motives

people tend to perceive things they need or want

the stronger the need the greater the tendency to ignore unrelated stimuli

decreased awareness of stimuli that are irrelevant to those needs

selective perception: based on the interaction of expectations and motives with the

stimulus itself

selective exposure

consumers seek out messages that they find pleasant or to which

they are sympathetic, selectively expose themselves to ads that

reassure them

actively avoid painful or threatening messages

selective attention

higher awareness of stimuli that meet needs or interests and

minimal awareness of irrelevant ones

people vary in the kinds of info in which they are interested and the

form of message and type of medium they prefer


38

perceptual defence: screen out stimuli that are psychologically threatening,

even though exposure has already taken place

perceptual blocking: self-protection from bombarding stimuli by tuning out,

blocking such stimuli from conscious awareness

perceptual organisation/Gestalt psychology

people tend to organise numerous stimuli they select from

the environment into groups

figure and ground

stimuli that contrast with their environment are

more likely to be noticed

the figure is perceived more clearly because in

contrast to its ground it appears to be well defined,

solid and in the forefront

grouping: individuals tend to group stimuli so that they

form a unified picture or impression

closure: organizing perceptions so that they form a complete picture

perceptual interpretation

perception is a personal phenomenon

interpretation of stimuli is uniquely individual

perceptual distortion

physical appearances: tendency to attribute the qualities associated with

certain people to others who may resemble them

stereotypes: tendency to carry pictures in mind of the meanings of various

kinds of stimuli that serve as expectations

first impressions: first impressions tend to be lasting

jumping to conclusions: before examining all the relevant evidence

halo effect: evaluation of multiple objects on the basis of the evaluation of

just one dimension

Consumer imagery

product positioning

image that a product has in the mind of the consumer

most important to the ultimate success of a product than its actual characteristics

core: unique position that the product occupies in the mind of the consumer

stress the benefits that the brand provides rather than product’s physical features

essence of the marketing mix

complements the company’s definition of the competition, its segmentation strategy

and its selection of target markets

conveys concept or meaning of product in terms of how it fulfils a consumer need

result: distinctive brand image on which consumers rely in making product choices

positive brand image:

leads to consumer loyalty, positive beliefs about brand value and willingness

to search for the brand

promotes consumer interest in future brand promotion

affects consumer beliefs about its brand’s attributes and the prices consumers are

willing to pay


39

product repositioning

marketer may be forces to reposition product in response to market events

(competitor cutting into the brand’s market share, too many competitors stressing

the same attribute)

perceptual mapping

helps marketers

to determine just

how their

products appear

to consumers in

relation to

competitive

brands

enables them to

see gaps in the

positioning of all

brands in the

product class and

to identify areas

in which

consumers needs

are not being

adequately met

positioning of services

marketing objective is to enable the consumer to link a specific image with a specific

brand name

provide customers with visual images and tangible reminders of the service offerings

name must be distinctive, memorable and relevant to the service it features

perceived price

high, low or fair

strong influence on both purchase intentions and purchase satisfaction

perceptions of price unfairness affect consumers’ perceptions of product value and

their willingness to patronise a shop or a service

three pricing strategies focused on perceived value

satisfaction-based pricing

recognizing and reducing customer’s perceptions of uncertainty

e.g. service guarantees, benefit-driven pricing, flat-rate pricing

relationship pricing

encouraging long-term relationships with company that customers

view as beneficial

e.g. long-term contracts, price bundling

efficiency pricing

sharing with customers the cost sayings that the company has

achieved by understanding, managing and reducing the costs of

providing the service

e.g. cost-leader pricing


40

reference prices

products advertised as “on sale” tend to create enhanced customer

perceptions of savings and value

reference price: any price that a consumer uses as a basis for comparison in

judging another price

external:

advertisement offering a lower sales price to persuade the

consumer that the product advertised is a really good buy

e.g. “sold elsewhere at …”

internal: those prices retrieved by the consumer from memory

consumers’ price reference points include past prices, competitors’ prices

and the cost of goods sold

two types of utility that are associated with consumer purchases

acquisition utility

consumer’s perceived economic gain or loss associated with

a purchase

a function of product utility and purchase price

transaction utility

the perceived pleasure or displeasure associated with the

financial aspect of the purchase

is determined by the difference between the internal

reference price and the purchase price

can be external or internal perceived quality

perceived quality of products

intrinsic cues

physical characteristics of product itself e.g. size, colour, flavour,

aroma

enable consumer to justify their product decision as being rational or

objective

extrinsic cues

e.g. consumers often cannot differentiate among various cola drinks,

they base their preferences on packaging, pricing and advertising

e.g. price, brand image, manufacturer’s image, retail store image,

country of origin

perceived quality of services

distinctive characteristics of services: intangible, variable, perishable,

produced and consumed simultaneously

consumers are unable to compare competing services side by side, which is

why they rely on extrinsic cues to evaluate them

actual quality of services can vary from day to day, from employee to

employee and from customer to customer, which results in service

standardisation

peak hours play a role

predicted service: the sum total of a consumer’s expectations of a service

before receiving it


41

price/quality relationship

perceived product value: trade-off between the product’s perceived benefits and the

perceived sacrifice (monetary and non-monetary) necessary to acquire it

consumers rely on price as an indicator of product quality

consumer characteristics (e.g. age, income) affect perception of value

consumers rely on well-known (expensive) brand name as an indicator of quality

without actually relying directly on price per se

shop image

manufacturers’ image

Perceived risk


42

perceived risk: the uncertainty that consumers face when they cannot foresee the

consequences of their purchase decisions

perception of risk varies

narrow categorisers

high-risk perceivers

limit their choices to a few safe alternatives

broad categorisers

high-risk consumption activities e.g. smoking

have lower perceived risk

make their choices from a much wider range of alternatives

types of perceived risks

type explanation example

functional

risk

risk that the product will not

perform as expected

Can the new PDA operate a full week

without needing to be recharged?

physical risk risk to self and others that

the product may pose

Is a mobile phone really safe or does

it emit harmful radiation?

financial risk risk that the product will not

be worth its cost

Will a new and cheaper model of a

plasma tv monitor become available

six months from now?

social risk

risk that a poor product

choice may result in social

embarrassment

Will my classmates laugh at my purple

Mohawk haircut?

psychological

risk

risk that a poor product

choice will bruise the

consumer’s ego

Will I be embarrassed when I invite

friends to listen to music on my five-

year-old stereo?

time risk

risk that the time spent in

product search may be

wasted if the product does

not perform as expected

Will I have to go through the shopping

effort all over again?

how consumers handle risk

consumers seek information

consumers are brand loyal

consumers select by brand image

consumers rely on store image

consumers buy the most expensive model

consumers seek reassurance through money-back guarantees, government and

private laboratory test results, warranties and pre-purchase trials

Ethics and consumer perception

ethical issues: how marketers use the knowledge of perception to manipulate consumers

marketers manipulate consumers’ interpretations of marketing stimuli through the context

in which they are featured

Chapter 8: Consumer learning


43

the reason that marketers are concerned with how individuals learn: they are vitally

interested in teaching them their roles as consumers, about products, product attributes and

their potential benefits

interested in how effectively they have taught consumers to prefer their brands and to

differentiate their products from competitive offerings

based on communicating with consumers directly (advertisements) or indirectly (product

appearance, packaging, price, distribution channels)

two major schools of thought concerning the learning process

behavioural theories: focus almost exclusively on observable behaviours that occur

as the result of exposure to stimuli

cognitive theories: view learning as a function of purely mental processes

Elements of consumer learning

from a marketing perspective consumer learning is the process by which individuals acquire

the purchase and consumption knowledge and experience that they can apply to future

related behaviour

in order for learning to occur certain basic elements must be present including

motivation

based on needs and goals

degree of relevance (of something to someone) or involvement determines

the consumer’s level of motivation to search for knowledge or information

about a product or service

cues

are the stimuli that give direction to the motives that stimulate learning

cue or stimulus suggests a specific way to satisfy a salient motive

e.g. price, styling, packaging, advertising or shop displays

response

how individuals react to a drive or cue (how they behave) constitutes their

response

a need or motive may evoke a whole variety of responses

cues provide some direction but there are many cues competing for the

consumer’s attention, which response the consumer makes depends heavily

on previous learning which depends on how related responses were

reinforces previously

reinforcement: increases the likelihood that a specific response will occur in the

future as the result of particular cues or stimuli

Behavioural learning theories

sometimes referred to as stimulus-response theories because they are based on the premise

that observable responses to specific external stimuli signal that learning has taken place

when one acts (responds) in a predictable way to a stimulus, he is said to have learned

concerned with the inputs and outcomes of learning/the stimuli that consumers select from

the environment and the observable behaviours that result

classical conditioning


44

Ivan Pavlov: conditioned learning results when a stimulus that is paired with another

stimulus that elicits a known response serves to produce the same response when

used alone

cognitive associative learning

classical conditioning is seen as cognitive associative learning rather than

being a reflexive action, not the acquisition of new reflexes but the

acquisition of new knowledge about the world

according to neo-Pavlovian conditioning optimal conditioning requires:

forward conditioning

repeated pairings of the conditioned stimulus (CS) and the

unconditioned stimulus (US)

a CS and a US that logically belong together

a CS that is novel and unfamiliar and

a US that is biologically or symbolically salient


45

consumer can be viewed as an information seeker who uses logical and

perceptual relations among events along with his own preconceptions to

form a sophisticated representation of the world

conditioning is the learning that results from exposure to relationships

among events in the environment

strategic applications of classical conditioning

repetition

increases the strength of the association between a CS and an US

and slows the process of forgetting

advertising wear-out

at some point an individual can become satiated with

numerous exposures and attention and retention will decline

con be moderated by varying the advertising message and

using cosmetic variations

substantive variations: changes in advertising content across

different versions of an advertisement

three-hit theory: just three exposures to an advertisement are

needed: one to make consumers aware, a second to show

consumers its relevance and a third to remind them of its benefits

stimulus generalisation: making same response to slightly different stimuli

product line, form and category extensions: adding related products

to an already established brand because the new product is more

likely to be adopted

family branding: marketing a whole line of company products under

the same brand name

licensing

allowing a well-known brand name to be affixed to products

of another manufacturer

names of designers, manufacturers, celebrities, corporations

or cartoon characters are attached to a variety of products

enabling the licensees to achieve instant recognition and

implied quality for the licensed products

stimulus discrimination

the opposite of stimulus generalisation

results in the selection of a specific stimulus from among similar

stimuli

positioning

the key to stimulus discrimination

the image/position of a product in the mind of the consumer

is critical to its success

want products to be recognised as uniquely fulfilling

consumers’ needs

product differentiation: successfully differentiate brands on an

attribute that may actually be irrelevant to creating the implied

benefit, such as a non-contributing ingredient or a colour


46

instrumental conditioning

requires a link between a stimulus and a response

the stimulus that results in the most satisfactory response is the one that is learned

learning occurs through a trial-and-error process

B. F. Skinner

most individual learning occurs in a controlled environment in which

individuals are rewarded for choosing an appropriate behaviour

a favourable experience is instrumental in teaching the individual to repeat a

specific behaviour

reinforcement of behaviour

positive reinforcement: events that strengthen the likelihood of a specific

response by adding something to the situation

negative reinforcement

removes something from the situation which also serves to

encourage specific behaviour

e.g. fear appeals in advertising messages

the consumer is encouraged to avoid the negative consequences by

buying the advertised product

extinction

when a learned response is no longer reinforced, it diminishes to the

point of extinction

when behaviour is no longer reinforced, it is unlearned

forgetting

behaviour is unlearned because of lack of use rather than lack of

reinforcement

often related to the passage of time

strategic applications of instrumental conditioning

customer satisfaction (reinforcement)

objective of all marketing efforts: to maximise customer satisfaction


47

marketers must be certain to provide the best possible product for

the money and to avoid raising consumer expectations for product

performance beyond what the product can deliver

relationship marketing

developing a close personalised relationship with customers

form of non-product reinforcement

reinforcement schedules

product quality must be consistently high and provide

customer satisfaction with each use for desired consumer

behaviour to continue

total (continuous) reinforcement: provided every time

systematic (fixed ratio) reinforcement: provided every ‘nth’

time the product is purchased

random (variable ratio) reinforcement: on a random basis or

on an average frequency basis

shaping

reinforcement performed before the desired consumer

behaviour actually takes place

increases the probability that certain behaviour will occur

massed versus distributed learning

distributed learning massed learning

learning schedule spread out over a period of time “bunched up” all at once

usually results in learning that persists longer produced more initial learning

goal is long-term repeat buying on a regular basis advertisers want an immediate

impact

is relatively immune to extinction

modelling/observational learning/vicarious learning

the process through which individuals learn behaviour by observing the behaviour of

others and the consequence of such behaviour

considerable amount of learning takes place in the absence of direct reinforcement

consumers often observe how other behave in response to certain situations

(stimuli) and the ensuing results (reinforcement) that occur and they imitate (model)

the positively reinforced behaviour when faced with similar situations

role models are usually people they admire because of such traits as appearance,

accomplishments, skills and social class

basis of much of today’s advertising

Cognitive learning theory

cognitive learning

learning takes place as a result of consumer thinking and problem-solving

learning is based on mental activity

the kind of learning most characteristic of human beings is problem-solving which

enables individuals to gain some control over their environment

learning involved complex mental processing of information

emphasises the role of motivation and mental processes in producing a desired

response


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information processing

imagery: the ability to form mental images, influences the ability to recall info

how consumers store, retain and retrieve information

central importance: human memory

information processing occurs in stages, there are separate storehouses in

memory: a sensory store, a short-term store and a long-term store

sensory store

all data come to us through our senses

each sense receives a fragmented piece of information and transmits

it to the brain in parallel where the perceptions are synchronised and

perceived as a single image

input lasts for 1 or 2 seconds in the mind’s sensory store

if it is not processes, it is lost immediately

short-term store/working memory

information is processed and held for just a brief period

if information undergoes rehearsal, it is then transferred to the long-

term store

transfer process takes from 2 to 10 seconds

if information is not rehearsed and transferred it is lost in 30 seconds

storage is limited to 4 or 5 items

long-term store

retains information for relatively extended periods of time

data lasts for days, weeks or even years

rehearsal and encoding

failure to rehearse an input can result in fading and eventual loss of

the information

information can be lost because of competition of attention

the purpose of rehearsal is to hold information in short-term long

enough for encoding to take place

encoding: the process by which we select a word or visual image to

represent a perceived object

learning a picture takes less time than learning verbal information

information overload: consumers are presented with too much

information and may encounter difficulty in encoding and storing it

retention

information is constantly organised and reorganised as new links

between chunks of information are forged

activation: the process of gaining more knowledge about a subject,

expanding ones network of relationships and searching for additional

information


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schema: the total package of associations brought to mind when a

cue is activated

chunking: consumers recode what they have already encoded to

include larger amounts of information

information is stored in two ways

episodically: by the order in which it is acquired

semantically: according to significant concepts

retrieval: process by which we recover information from long-term storage

interference

the greater the number of competitive advertisements in a product

category, the lower the recall of brand claims in a specific ad

confusion with competing advertisements, make information

retrieval difficult

limited and extensive information processing

involvement theory

the right and the left hemispheres of the brain specialise in the kinds of information

they process

left hemisphere right hemisphere

primarily responsible for cognitive activities

such as reading, speaking and attributional

information processing

concerned with non-verbal, timeless,

pictorial and holistic informations

is rational, active and realistic is emotional, metaphoric, impulsive

and intuitive

involvement theory and media strategy

there is high- (print ads, internet) and low-involvement (tv) media

right-brain theory of passive processing of information is consistent with

classical conditioning

stresses the importance of the visual component of advertising, including the

creative use of symbols

involvement theory and consumer relevance

there are high- and low-involvement consumers

there are high- and low-involvement purchases

consumer’s level of involvement depends on the degree of personal

relevance of the product (e.g. in terms of perceived risk)

narrow categorisers: highly involved consumers find fewer brands acceptable

broad categorisers: uninvolved consumers are likely to be receptive to a

greater number of advertising messages and will consider more brands


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central and peripheral routes to persuasion

illustrates the concepts of extensive and limited problem-solving for high-

and-low-involvement purchase situations

for high-involvement purchases, the central route to persuasion which

requires considered thought and cognitive processing is likely to be the most

effective marketing strategy

for low-involvement purchases, the peripheral route to persuasion is likely to

be more effective

the elaboration likelihood model

level of involvement during message processing is a critical factor in

determining which route to persuasion is likely to be effective

as the message becomes more personally relevant people are more

willing to expend the cognitive effort required to process the

message arguments

when involvement is high, consumers follow the central route and

base their attitudes or choices on the message arguments

when involvement is low, they follow the peripheral route and rely

more heavily on other message elements (spokesperson,

background music) to from attitudes or make product choices

measures of involvement

semantic differential scale: ranking different aspects

personal involvement inventory: list of product aspects

Measures of consumer learning

recognition and recall measures: determine whether consumers remember seeing an

advertisement, the extent to which they have read it or seen it and can recall its content,

their resulting attitudes towards the product and the brand and their purchase intentions

cognitive responses to advertising: the degree to which consumers accurately

comprehend the intended advertising message

attitudinal and behavioural measures of brand loyalty

attitudinal measures: concerned with consumers’ overall feelings about the

product and the brand and their purchase intentions

behavioural measures: based on observable responses to promotional

stimuli

brand equity: the value inherent in a well-known brand name

megabrands: well-known brand names e.g. Coca Cola, Apple, Nike

co-branding: two brand names are features on a single product


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Chapter 9: Consumer attitude formation and change

What are attitudes?

attitudes are not directly observable but must be inferred from what people say or do

attitude: a learned predisposition to behave in a consistently favourable or unfavourable way

with respect to a given object

the attitude object: in conducting attitude research consumers tend to be object specific

attitudes are learned predispositions

attitudes are learned

attitudes relevant to purchase behaviour are formed as a result of direct experience

attitudes have a motivational quality

attitudes have consistency

attitudes are relatively consistent with the behaviour they reflect

are not necessarily permanent, they do change

when consumers are free to act as they wish, they are anticipated that their actions

will be consistent with their attitudes

attitudes occur within a situation

attitudes occur within and are affected by the situation

individuals can have a variety of attitudes towards a particular behaviour each

corresponding to a particular situation

Structural models of attitudes

tricomponent attitude model

the cognitive component

the knowledge and perceptions that

are acquired by a combination of

direct experience with the attitude

object and related information from

various sources

commonly take the form of beliefs

the affective component

a consumer’s emotions or feelings

about a particular product or brand

emotions and feelings are frequently treated by consumer researchers as

primarily evaluative in nature

e.g. evaluative (affective) scale or affective response scale

experiences also manifest themselves as emotionally charged states (e.g.

happiness, sadness, shame, disgust, anger, distress, guilt or surprise)

the conative component

likelihood or tendency that an individual will undertake a specific action or

behave in a particular way with regard to the attitude object

expression of the consumer’s intention to buy

e.g. intention-to-buy scale


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multi-attribute attitude models

the attitude towards object model

especially suitable for measuring attitudes towards a product category or

specific brand

consumer generally have favourable attitudes towards those brand that they

believe have an adequate level of attributes that they evaluate as positive

the attribute towards behaviour model

the individual’s attitude towards behaving or acting with respect to an object

rather than the attitude towards the object itself

corresponds somewhat more closely to actual behaviour than does the

attitude towards object model

the theory of reasoned action model

the theory of planned behaviour model

extension of the theory of reasoned action

includes perceived behavioural control: the consumer’s perception whether

the behaviour is in his control

theory of trying to consume model: designed to account for the cases in which the action or

outcome is not certain but instead reflects the consumer’s intention to consume

attitude towards the ad models

understanding the impact of advertising or some other promotion on consumer

attitudes towards particular products or brands

positive relationship between attitude towards the advertisement and purchase

intention for each


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Attitude formation

how attitudes are learned

attitude formation

the shift from no attitude to an attitude

the result of learning

consumers often purchase new products associated with a favourable brand name

sometimes attitudes follow the purchase and consumption of a product

in situations in which consumers seek to solve a problem or satisfy a need, they are

likely to form attitudes about products on the basis of information exposure and

their own cognition (knowledge and beliefs)

sources of influence on attitude formation: personal experience, influence of family and

friends, direct marketing and mass media

personality factors

individuals with a high need for cognition (crave info) are likely to form positive

attitudes in response to ads or direct mail that are rich in product-related info

consumers relatively low in need for cognition are more likely to form positive

attitudes in response to ads that feature an attractive model or well-known celebrity

attitudes towards new products and consumption situations are strongly influences

by specific personality characteristics of consumers

Strategies of attitude change

changing the basic motivational function (to make particular needs prominent)

the utilitarian function

attitude because of brand’s utility

when a product has been useful or helpful in the past, attitudes towards it

tend to be favourable

a way of changing attitudes: showing people that it can serve a utilitarian

purpose that they may not have considered


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the ego-defensive function

most people want to protect their self-images from inner feelings of doubt,

replace their uncertainty with a sense of security and personal confidence

by acknowledging this need, the relevance to consumers and the likelihood

of a favourable attitude change may be increased

the value-expressive function

attitudes are an expression or reflection of the consumer’s general values,

lifestyle and outlook

by knowing target consumers’ attitudes, marketers can better anticipate

their values, lifestyle or outlook and can reflect these characteristics in their

advertising and direct-marketing efforts

the knowledge function

individuals generally have a strong need to know and understand the people

and things they encounter

an important characteristic of such ads is the appeal and usefulness to

consumers’ need to know

combining several functions

associating the product with a special group, event or cause

possible to alter attitudes towards products, services and brands by pointing out

their relationship to particular social groups, events or causes

e.g. companies mentioning in their ads that they sponsor or give to charity

resolving two conflicting attitudes

altering components of the multi-attribute model

changing the relative evaluation of attributes: when a product category is naturally

divided according to distinct product features or benefits (e.g. regular coke and diet

coke), marketers usually have an opportunity to persuade consumers to cross over to

shift their favourable attitudes towards another version of the product

changing beliefs or perceptions about the brand itself

adding either an attitude that has previously been ignored or one that represents an

improvement or technological innovation

changing the overall brand rating

alter consumers’ assessment of the brand without attempting to improve or

change their evaluation of any brand attribute

e.g. “this is the largest-selling brand”, “the one all others try to imitate”

changing beliefs about competitors’ brands

the elaboration likelihood model

consumer attitudes are changed by two distinctly different routes to persuasion:

central route to persuasion peripheral route to persuasion

relevant to attitude change when motivation or

ability to assess the attitude object is high

consumer’s motivation or

assessment skills are low

attitude change occurs because consumer

actively seeks out info relevant to attitude object

learning occurs without the

consumer focusing on info

consumers are willing to exert the effort to

comprehend, learn or evaluate info

attitude change as an outcome of

secondary inducements

more persistent

dual mediation model: adds a link between attitude towards ads and brand cognition


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Behaviour can precede or follow attitude formation

cognitive dissonance theory

discomfort or dissonance occur when a consumer holds conflicting thoughts about a

belief or an attitude object

post-purchase dissonance: the feeling of cognitive dissonance when thinking of the

unique, positive qualities of the brands not selected after purchase decision

marketing strategies to reduce post-purchase dissonance

attribution theory

explain how people assign causality to events on the basis of either their own

behaviour or the behaviour of others

the process of making inferences about one’s own or another’s behaviour is a major

component of attitude formation and change

self-perception theory

individual’s inferences or judgements as to the causes of their own

behaviour

suggests that attitudes develop as consumers look at and make judgements

about their own behaviour

internal and external attributions

consumers are likely to accept credit personally for success (internal) and to

credit failure to others or to outside events (external attribution)

foot-in-the-door technique

individuals look at their prior behaviour and conclude that they are the kind

of person who says yes to such requests, which increases the likelihood that

they will agree to similar more substantial requests

contrast door-in-the-face technique: a large costly first request that is

probably refused is followed by a second more realistic less costly request

attributions towards others influences responds

attributions towards things: judging product performance leads consumers to form

product attributions

how we test our attributions

distinctiveness: consumer attributes an action to a particular product if the

action occurs when the product is present and does not occur in its absence

consistency over time: whenever the person or product is present, the

consumer’s interference or reaction must be the same

consistency over modality: the inference or reaction must be the same even

when the situation in which it occurs varies

consensus: the action is perceived in the same way by other consumers


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Chapter 10: Communication and consumer behaviour

Components of communication

communication: the transmission of a message from a sender to a receiver via a medium (or

channel) of transmission

furthermore includes feedback

the sender

formal or informal

consumers often rely on informal communication sources in making purchase

decisions because the sender won’t gain from subsequent actions

marketers should stress positive word-of-mouth communication

the receiver

in marketing communications a targeted prospect or a customer

intermediary and unintended audiences may receive marketer’s communications

the medium

impersonal (mass medium) or interpersonal (conversation with salesperson)

mass media: print (newspaper), broadcast (radio, tv) or electronic (internet)

the message

verbal (spoken or written) or non-verbal (photo, illustration or symbol)

verbal message usually contains more specific product info

a combination provides more info to receiver than either would alone

non-verbal info takes place in both interpersonal and impersonal channels and often

takes the form of symbolic communication

feedback: permits the sender to reinforce, change or modify the message to ensure that it is

understood in the intended way

The communications process

the message initiator (source)

credibility (the extent to which you can believe in the source) of informal sources

friends, neighbours and relatives

strong influence on receiver’s behaviour because they are perceived as

having nothing to gain from a product transaction that they recommend

opinion leaders: informal communication sources

credibility of formal sources

neutral formal sources have greater credibility than commercial sources

because they are perceived to be more objective

consumers recognise profit-oriented intentions of commercial sources, they

judge on past performance, reputation, image and quality


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credibility of spokespeople and endorsers

pitchman who appears in person or in a commercial or ad has major

influence on message credibility

increasing use of celebrities to promote products

effectiveness of spokesperson is related to the message itself

synergy between endorser and type of product advertised is important

endorsers who have similar demographic characteristics to the target

audience are viewed as more credible and persuasive

endorser’s credibility is not a substitute for corporate credibility

specific wording of the endorsement should lie within the competence of the

spokesperson

message credibility

reputation of the retailer has influence on message credibility

reputation of medium that carries the ad enhances the credibility of the

advertiser

consumer’s previous experience with the product or retailer has major

impact on credibility of the message

effects of time on source credibility: the sleeper effect

persuasive effect of high-credibility sources do not endure over time

sleeper effect: both positive and negative credibility effects tend to

disappear after six weeks or so

consumers simply forget the source of the message faster than they forgot

the message itself

reintroduction of the same message by the source serves to job the

audience’s memory and the original effect manifests itself again

the target audience (receivers)

receivers decode messages on the basis of personal experiences and characteristics

personal characteristics and comprehension

personal characteristics influence the accuracy with which the individual

decodes a message

demographics, sociocultural membership, lifestyle

personality, attitudes, prior learning

perception, expectations, motivation, past experience

involvement and congruency: level of involvement plays key role in how much

attention is paid to message and how carefully it is decoded

consumer mood affects the way in which an ad is perceived, recalled and acted upon

barriers to communication

selective exposure to messages

consumers selectively perceive ad messages and tend to ignore

advertisements that have no special interest or relevance to them

technology provides consumers with increasingly sophisticated

means to control their exposure to media

psychological noise

competing advertising messages or distracting thoughts

strategies to overcome psychological noise: repetition, contrast,

teasers, customised ads


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feedback – the receiver’s response

the ultimate test of marketing communications is the receiver’s response

essential for the sender to obtain feedback as promptly and accurately as possible

interpersonal communications: verbal and non-verbal cues

mass communications feedback: resulting action of target audience, degree of

customer satisfaction

Designing persuasive (convincing) communications

communications strategy: establishing primary communication objectives

target audience

selecting the appropriate audience

segmentation enables sender to create specific messages for each target group and

to run them in specific media that are seen, heard and read by the target group

media strategy

placement of ads in a specific media read, viewed or heard by each target audience

consumer profile includes specific media they read or watch

cost-effective media choice is one that matches the consumer profile to a medium’s

audience profile

message strategies

the message is the thought, idea, attitude, image or other info that the sender

wishes to convey to the intended audience

the sender must design a message strategy through words and/or pictures that will

be perceived and accurately interpreted (decoded) by the target audience

three personality types:

righteous buyer: looks to recommendations from independent sources

social buyer: relies on recommendations of friends or celebrities

pragmatic buyer: looks for the best value for money

involvement theory

individuals are more likely to devote active cognitive effort to evaluating the

pros and cons of a product in a high-involvement purchase situation and

more likely to focus on peripheral message cues in low-involvement

situations

for high-involvement products marketers should follow the central route to

persuasion (presenting ads with strong, well-documented, issue-related

arguments that encourage cognitive processing)

when involvement is low marketers should follow the peripheral route to

persuasion (emphasising non-content visual or symbolic material that

provide the consumer with pleasant, indirect associations with the product

and provoke favourable inferences about its merits)

message structure and presentation

resonance

wordplay often used to create a double meaning used in combination with a

relevant picture

improves the change that the ad will be noticed and create favourable and

lasting impressions


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message framing

positive message framing: stressing the benefits to be gained by using a

specific product

negative message: stressing the benefits to be lost by not using the product

one-sided versus two-sided messages

one-sided/supportive two-sided/refutational

telling the good points about product also mentioning the bad points

pretending product was the only of its kind acknowledge competing products

audience is friendly, initially favours the

communicator’s position, it is not likely to

hear opposing argument

audience is critical, unfriendly, well-

educated and it is likely to hear

opposing claims

stresses only favourable info tend to be more credible

comparative advertising

a marketer claims product superiority for its brand over one or more

explicitly named or implicitly identified competitor

on an overall basis or on selected product attributes

order effects

the order in which a message is presented affects audience receptivity

first and last are more likely to be retained in the audience’s memory than

those in between

the position of a commercial in a commercial pod can be critical

order is important in listing product benefits within an ad

repetition: affects persuasion, advertisement recall, brand-name recall and brand

preferences

advertising appeals

fear

humour

abrasive advertising

(unpleasant or annoying)

sex

audience participation

Marketing communication and ethics

precision targeting

consumer’s loss of privacy is an increasingly problematic ethical issue

narrowcasting: a technique that allows to send very directed messages to very small

audiences on an ongoing basis

enables the compilation of extremely specialised lists of consumers

ethical issue of targeting and manipulating consumers who are less capable of

making sound consumption decisions

the contents of promotional messages

accuracy of info provided, impact of values portrayed in ads, potential misuse of

persuasive abilities of promotional messages

potential manipulative impact of promotional messages on children

impact of promotional messages on societal values must be considered

repeated exposure to very thin ideal figures in promotions leads to negative self-

perceptions and is partially responsible for increase in eating-related disorders


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Part 3: Consumers in their social and

cultural settings

Chapter 11: Reference groups and family influences

What is a group?

group: two or more people who interact to accomplish either individual or mutual goals

membership group: a group to which a person either belongs or for membership of which

he/she would qualify

symbolic group: groups in which an individual is not likely to receive membership, despite

acting like a member by adopting the group’s values, attitudes and behaviour

Understanding the power of reference groups

reference group: any person or group that serves as a point of comparison/reference for an

individual in forming either general or specific values and attitudes or a specific guide for

behaviour

reference group from a marketing perspective: groups that serve as frames of reference for

individuals in their purchase or consumption decisions

normative reference groups: reference groups that influence general or broadly defined

values or behaviour

comparative reference groups: reference groups that serve as benchmarks for specific or

narrowly defined attitudes or behaviour

a broadened perspective on reference groups

major consumer reference groups: individual, family, friends, social class, selected

subcultures, one’s own culture, other cultures

indirect reference groups: stars, sports heroes, political leaders, tv personalities or

well-dressed ad interesting-looking people in the street

factors that affect reference group influence

information and experience: an individual who has experience with a product can

easily obtain full info about it and is less likely to be influenced by the advice of

others

credibility, attractiveness and power of the reference group

different reference groups may influence the beliefs, attitudes and behaviour

of an individual at different points in time or under different circumstances

individuals are likely to be persuaded by those whom they consider

trustworthy and knowledgeable

conspicuousness (noticeability) of the product

reference groups and consumer conformity

some marketers are interested in the ability of reference groups to change

consumer attitudes and behaviour by encouraging conformity

other brands may wish for consumers to strike out and be different


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Selected consumer-related reference groups

friendship groups

informal groups are usually unstructured and lack specific authority levels

seeking and maintaining friendships is a basic drive of most people

the opinions and preferences of friends are an important influence in determining

the products or brands a consumer ultimately selects

shopping groups

often offshoots of family or friendship groups

motives range from social motive to helping reduce the risk when making an

important decision

in-home shopping party

work groups

formal work group: consists of individuals who work together as part of a team and

influence each other’s consumption-related attitudes and actions

informal friendship-work groups: consist of people who have become friends as a

result of working for the same firm

virtual groups or communities

community: set of social relations among people

brand community: a specialized, non-geographically bound community, based on a

structured set of social relationships among admirers of a brand, marked by a shared

consciousness, rituals and traditions and a sense of moral responsibility

consumer-action groups: dedicated to providing consumers with assistance in their effort to

make the right purchase decisions, consume products and services in a healthy and

responsible manner and generally to add to the overall quality of their lives

Celebrity and other reference group appeals

based on admiration (athlete), aspiration (celebrity, lifestyle), empathy or recognition

celebrities

represent an idealisation of life that most people imagine they would love to live

testimonial: based on personal usage, a celebrity attests to the quality of the product

or service

endorsement: celebrity lends his name and appears on behalf of a product or service

in which he may or may not be an expert

actor: celebrity presents a product or service as part of character endorsement

spokesperson: celebrity represents the brand over an extended period of time

celebrity credibility is important

the expert: a person who is in a unique position to help the prospective consumer evaluate

the product that the ad promotes because of his occupation, special training or experience

the ‘common man’: demonstrates to prospective customers that someone just like them

uses and is satisfied with the product

the executive and employee spokesperson: spokespeople seem to be admired because of

their achievements and the status implicitly conferred on business leaders

trade or ‘spokes-characters’: present an idealised image and dispense info that can be very

important for the product that they work for

other reference group appeals


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The family is a concept in flux

family traditionally: two or more persons related by blood, marriage or adoption who reside

together

married couple: husband and wife

nuclear family: husband and wife and one or more children

extended family: nuclear family together with at least one grandparent living with them

single-parented family: one parent and at least one child

Socialisation of family members

in the case of young children: includes imparting to children the basic values and modes of

behaviour consistent with the culture

include moral and religious principles, interpersonal skills, dress and grooming standards,

appropriate manners and speech and the selection of suitable educational and occupational

or career goals

marketers frequently target parents looking for assistance in the task of socialising their

children

consumer socialisation of children

consumer socialisation: the process by which children acquire the skills, knowledge,

attitudes and experiences necessary to function as consumers

through observation of parents or siblings, looking to friends for models of

acceptance, shared shopping experiences (co-shopping)

child’s age and sex, family size, social class and race are important factors in the

consumer socialisation process

adult consumer socialisation

ongoing process

begins in early childhood and extends throughout a person’s entire life

intergenerational socialisation

intergenerational brand transfer: certain product loyalties or brand preferences to be

transferred from one generation to another

two-way street: the young person both is socialised and influences those who are

doing the socialising

Other functions of the family

economic well-being

providing financial means to its dependants is a basic family function

growth in women’s’ contributions to family income

teenager are expected to pay for their amusements, contribute to cost of education

and prepare themselves to be financially independent

emotional support

provision of emotional nourishment (love, affection, intimacy) to family members

provision of support and encouragement, assistance in decision-making

suitable family lifestyles

establishment of a suitable lifestyle for the family

upbringing, experience and goals determine education, career, reading, tv, computer

skills, dining out, entertainment and recreational activities


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Family decision-making and consumption-related roles

key family consumption roles

influencers: provide info to other members about a product

gatekeepers: control the flow of info about product into the family

deciders: have the power to determine unilaterally or jointly whether to shop for,

purchase, use, consume or dispose of a specific product

buyers: make the actual purchase of a particular product

preparers: transform the product into a form suitable for consumption

users: use or consume a particular product

maintainers: service or repair the product so that it will provide continues

satisfaction

disposers: initiate or carry out the disposal or discontinuation of a product

dynamics of husband-wide decision-making: family consumption decision are

husband dominated

wife dominated

joint (equal or syncretic) or

autonomic (solitary or unilateral)

the expanding role of children in family decision-making

trend towards children playing a more active role in what the family buys as well as

the family decision-making process

reasons: families having fewer children, more dual-income couple (can afford to

permit their children to make choices) and the encouragement by media to allow

children to express themselves

tactics employed by children to influence their parents:

pressure tactics: child makes demand, uses threats or intimidation to

persuade to comply his request

upward appeal: child seeks to persuade, saying that the request was

approved or supported by any older family member or even a family friend

exchange tactics: child makes promise to give some service (e.g. washing the

car, cleaning the house) in return for a favour

coalition tactics: child seeks the aid of others to persuade to comply with his

request or uses the support of others as an argument

ingratiating tactics: child seeks to get parent in a good mood or think

favourably of him before asking to comply with a request

rational persuasion: child uses logical arguments and factual evidence to

persuade to agree with request

inspirational appeals: child makes emotional appeal or proposal that arouses

enthusiasm by appealing to values and ideals

consultation tactics: child seeks involvement in making a decision

the extent to which children influence a family’s purchases is related to family

communication patterns

advertisers recognise the importance of children’s ‘pester power’ and encourage

children to ‘pester’ their parents to purchase what they see in advertisements


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The family life cycle

decline in percentage of families that progress through a traditional FLC

caused by increased divorce rates, explosive number of births outside marriages and a

decline in the number of extended families

traditional family life cycle

stage 1: bachelorhood – young single adult living apart from parents

spend their incomes on rent, basic furniture, cars, travel and entertainment

lucrative target niche: travel agents, housing developments, sports clubs

stage 2: honeymooners – young married couple

combined income permits different lifestyle

considerable start-up expenses when establishing a new home

stage 3: parenthood – married couple with at least one child living at home

throughout interrelationships of family members and structure change

financial resources of the family change significantly throughout

stage 4: post-parenthood – an older married couple with no children living at home

time to travel, to entertain, to refurnish homes or to purchase new property

couples tend to be comfortable financially and have more leisure time

market for luxury goods, new cars, expensive furniture and holidays

stage 5: dissolution – one surviving spouse

occurs with the death of one spouse

surviving spouse tends to follow more economical lifestyle

modifications – the non-traditional FLC

non-traditional FLC stages includes: childless couples, couples who marry late,

couples who have children late, single parents, extended families, unmarried

couples, divorced persons, single persons, widowed persons

consumption in non-traditional families

when households undergo status changes (divorce, retirement, death,

someone moving in) they undergo spontaneous changes in consumption-

related preferences and become attractive targets for many marketers

dual-income households also tend to muddy the lifestyle assumptions

implicit in the traditional FLC


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Chapter 12: Social class and consumer behaviour

What is social class?

social class and social status

status: the relative rankings of members of each social class in terms of specific

status factors e.g. wealth, power, prestige

individuals compare their own material possessions with those owned by others in

order to determine their relative social standing

status is often associated with consumers’ purchasing power

the dynamics of status consumption

status consumption: the process by which consumers endeavour to increase their

social standing through conspicuous consumption or possessions/the degree to

which a consumer is likely to consume for status

conspicuous consumption: the extent to which a consumer is to consume

conspicuously (observable to others)

self-monitoring: tendency for consumers to use products as ‘props’ (requisite)

social class is hierarchical and a natural form of segmentation

social class categories suggest that others are either equal, superior or inferior

social class membership serves consumers as a frame of reference for the

development of their attitudes and behaviour

hierarchical aspect of social class is important to marketers

provides a natural basis for market segmentation

social class categories

little agreement exists among sociologists on how many distinct class divisions are

necessary to describe adequately the class structures of different countries

choice of how many classes to use depends on amount of detail necessary

The measurement of social class

subjective measures

individuals are asked to estimate their own social class positions

class consciousness: feeling of social group membership

reputational measures

selected community informant makes initial judgements concerning the social class

membership of others within the community

researcher assigns community members to social class positions

objective measures

consist of selected demographic or socio-economic variables concerning the

individuals under study

measurement through questionnaires that ask factual questions e.g. occupation,

amount of income, education

single-variable indexes: uses one socio-economic variable to evaluate social class

membership

occupation

education

income

other variables e.g. possessions


composite-variable indexes

systematically combine a number of socio-economic factors to form one

over-all measure of social-class standing

may better reflect the complexity of social class than single-variable indexes

Lifestyle profiles of the social classes

within each of the social classes there is a constellation of specific lifestyle factors (shared

beliefs, attitudes, activities and behaviours) that tends to distinguish the members of each

class from the members of all other social classes

e.g. six social classes: upper-upper class, lower-upper class, upper-middle class, lower-middle

class, upper-lower class, lower-lower class

a hybrid of two or more classes is possible concerning certain values, attitudes or patterns

Social-class mobility

varies between countries and cultures

upward mobility because of education and self-development opportunities

individuals often aspire to the lifestyle and possessions of members of a higher social class,

marketers incorporate symbol of higher-class membership in ads targeted to lower social

class audiences

products and services may filter down to lower social classes

downward mobility is possible

The affluent (rich) consumer

increasingly attractive market

defined by income or net worth including lifestyle and psychographic factors

have an abundance of money, but are time-poor and interested in improving the quality of

their lives with overseas holidays and sports cars

focus on saving or reducing time and effort

segmenting the affluent market

well-feathered nests: households with at least one high-income earner and children

present

no strings attached: households with at least one high-income earner and no

children

nanny’s in charge: households with two or more earners, none earnings high

incomes, children present

two careers: households with two or more earners, none earning high incomes, no

children present

the good life: households with a high degree of affluence with no person employed

or with the head of household not employed

marketers are able to profile users of a variety of goods and services frequently targeted to

the affluent consumer


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Middle-class consumers

middle market: middle 50 percent of household incomes

middle class: households that range from lower-middle to middle-middle class in terms of

some acceptable variable or combination of variables

differentiation between children of middle-class parents and those from working-class and

poor families

increasing number of middle-class consumers in Asian and Eastern European countries

moving up to more ‘near’ luxuries

luxury and technological product have been becoming more affordable for more

consumers

some middle-class consumers are willing to pinch pennies on certain purchases

companies offering ‘luxury to the masses’ must be careful how they position their

products

The working class and other non-affluent consumers

working-class or blue-collar people represent a group of consumers marketers cannot ignore

lower-income or lower-class consumers may actually be more brand loyal

Recognising the ‘techno-class’

degree of literacy, familiarity and competence with technology, especially computers and the

internet appears to be a new basis for a kind of class standing or status

the inability to use technology adequately is having a negative impact on the lifestyles and

quality of life of those who are not computer-literate

those without necessary computer skills will increasingly find themselves to be underclasses

and disadvantaged

the geek gets status

increasingly positive image of geeks has made them and their lifestyles the target of

marketer’s messages designed to appeal to their great appetite for novel

technological products

in an environment where children naturally take to computers it is often the parents

who find themselves technologically disfranchised


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Chapter 13: The influence of culture and subculture on

consumer behaviour

What is culture?

culture is a society’s personality

culture: the sum total of learned beliefs, values and customs that serve to direct the

consumer behaviour of members of a particular society

beliefs and values refer to the accumulated feelings and priorities that individuals

have about things and possessions

values differ from beliefs because they are fewer, serve as guides, are enduring, are

not tied to specific objects or situations and are widely accepted

customs: overt modes of behaviour that constitute culturally approved or acceptable

ways of behaving in specific situations and consist of everyday or routine behaviour

The invisible hand of culture

impact of culture is natural, automatic and usually taken for granted

often it is only exposed to people when confronted with a different culture

consumers view themselves in their cultural context, react based upon their cultural

framework and perceive the world through their own cultural lens

Culture satisfies needs

culture offers order, direction and guidance

associated with what a society’s members consider to be a necessity or luxury

provides insight as to suitable dress for specific occasions (dress code)

cultural beliefs, values and customs continue to be followed as long as they yield satisfaction

Culture is learned

how culture is learned

formal learning: adults and older siblings teach a young family member how to

behave

informal learning: a child learns primarily by imitating the behaviour of selected

others (family, friends, tv heroes)

technical learning: teachers instruct child in an educational environment about what

should be done, how any why

marketers provide the audience with a model of behaviour to imitate

repetition of ads creates and reinforces cultural beliefs and values

enculturation and acculturation

enculturation: the learning of one’s own, native culture

acculturation: the learning of a new, foreign culture

language and symbols

members of a society must be able to communicate

to communicate effectively marketers must use appropriate symbols to convey

desired product images or characteristics


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symbols

verbal or nonverbal

may have several, even contradictory, meanings so the advertiser must

ascertain what the symbol is communicating to the intended audience

price and channels of distribution are significant symbols

ritual

a type of symbolic activity consisting of a series of steps occurring in a fixed sequence

and repeated over time

extend over the human life cycle from birth to death, including a host of

intermediate events

can be very public, elaborate, religious or civil ceremonies or they can be as

mundane as an individual’s grooming behaviour or flossing

likely to occur repeatedly over time (e.g. singing the national anthem before a rugby

game)

specific artefacts associated with rituals

wedding: white gown

birth: silver baby spoon

birthday: card, present, cake

50th

wedding anniversary: party, card, gift, photos

graduation: pen, card, wristwatch

new year’s eve: champagne, party, fancy dress

going to the gym: towel, exercise clothes, water, iPod

sunday football: beer, crisps

starting a new job: haircut, new clothes

retirement: party, watch, plaque

death: card, giving to charity

the way something is traditionally done

ritualistic behaviour: any behaviour that is made into a ritual

Culture is shared

to be considered a cultural characteristic, a particular belief, value or practice must be shared

by a significant portion of the society

family serves as the primary agent for enculturation

educational institutions, houses of worship and mass media share much of the responsibility

for the transfer of selected aspects of culture

consumers receive important cultural info from ads

Culture is dynamic

marketer must carefully monitor the sociocultural environment

many factors are likely to produce cultural changes within a given society e.g. new

technology, population shifts, resource shortages, wars, changing values and customs

borrowed from other cultures

changing nature of culture means that marketers have consistently to reconsider


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The measurement of culture

content analysis

focuses on the content of verbal, written and pictorial communications

can be used as a relatively objective means of determining what social and cultural

changes have occurs or as a way of contrasting aspects of two different societies

consumer fieldwork

consumer fieldwork: to select a small sample of people from a society, observe their

behaviour and draw conclusions about their values, beliefs and customers of the

society under investigation based on the observations

field observations take place within a natural environment, are sometimes

performed without the subject’s awareness and focus on observation of behaviour

participant-observers: researcher becomes active member of the environment under

study

value measurement survey instruments

researchers use data collection instruments to ask people how they feel about basic

personal and social concepts as freedom, comfort, national security and peace

Rokeach Value Survey: a value inventory that is divided into two party each part

measuring different but complementary types of personal values

List of Values: asks consumers to identify their two most important values from a list

What is subculture?

members of a specific subculture possess beliefs, values and customs that set them apart

from other members of the same society

subculture: a distinct cultural group that exists as an identifiable segment within a larger,

more complex society

Nationality subcultures

important subcultural reference that guides what people value and what they buy

especially true for populations that have a history of attracting people from all over the globe

Religious subcultures

members of religious groups at times are likely to make purchase decisions that are

influenced by their religious identity (e.g. kosher food for jews)

products that are symbolically and ritualistically associated with the celebration of various

religious holidays (e.g. gifts for Christmas)

Geographic and regional subcultures

wide range of climatic and geographic conditions throughout one continent

mental picture and stereotype of persons (a true Scandinavian)


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Age subcultures

the generation y market

individuals born between 1977 and 1994

pragmatic, clever, socially and environmentally aware and open to new experiences

appealing to generation y

spends significant amounts of money and influences purchases by parents

grown in a media-saturated environment, are aware of marketing hype

shifted some tv viewing to internet, less likely to read newspaper

the generation x market

individuals born between 1965 and 1979

do not like labels, are cynical and do not wanted to be singled out or marketed to

have been in no rush to marry, start a family or work excessive hours to earn high

salaries

job satisfaction is typically more important than salary

important to enjoy life and to have a lifestyle that provides freedom and flexibility

appealing to generation x

pride themselves on their sophistications, are not materialistic, purchase

good brand names

baby boomer media do not work with them

the baby boomer market

who are the baby boomers?

born between 1946 and 1964

are trying hard to look and feel young, do not want to age gracefully but will

pay whatever is necessary to look young

consumer characteristics of baby boomers

tend to be motivated consumers, enjoy buying, are consumption-oriented

generally well off financially

older consumers

a significant number of these consumers are employed

seniors are involved in the daily care of grandchildren and many do voluntary work

defining ‘older’ in older consumers

elderly population due to declining birth rates, ageing of the huge baby

boomer segment and improved medical diagnoses and treatment

people’s perceptions of their ages are more important in determining

behaviour than their chronological age

elderly consumers perceive themselves to be younger than their

chronological age

New-Age Elderly: more adventurous, more likely to perceive themselves to

be better off financially and more receptive to marketing info

segmenting the elderly market

diverse in interest, opinions and actions

age is not necessarily a major factor in determining how older consumers

respond to marketing activities

segmentation based on chronological age or in terms of motivation and

quality of life orientation


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Sex as a subculture

sex roles and consumer behaviour

all societies tend to assign certain traits and roles to males and females

women have historically been cast at homemakers with responsibility for childcare

and men as the providers or breadwinners

marketers are increasingly appealing to consumers’ broader vision of gender-related

role options

women show superior affect and purchase intentions towards ads that are verbal,

harmonious, complex and category-oriented

men exhibit superior affect and purchase intention towards ads that are

comparative, simple and attribute-oriented

consumer products and sex roles

products that are exclusively or strongly associated with the members of one sex

for most products sex role links have diminished or disappeared, for other the

prohibition still lingers

women go online to seek out reference materials, online books, medical info,

cooking ideas, government info and chatting

men tend to focus on exploring, discovery, identifying free software and investments

the working woman

large and growing market segment

needs differ from those of women who do not work outside the home

e.g. hotels provide services women want such as healthy foods, gyms, spas and

wellness centres for female business travellers

segmenting the working woman market

e.g. stay-at-home housewives, plan-to-work housewives, just-a-job working

women and career-oriented working women

working women spend less time shopping

Subcultural interaction

consumers are simultaneously members of more than one subcultural segment

marketers should strive to understand how multiple subcultural memberships interact to

influence target consumers’ relevant consumption behaviour

promotional strategy should not be limited to targeting a single subcultural membership


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Chapter 14: Cross-cultural consumer behaviour: an

international perspective

The imperative to be multinational

corporations are actively marketing their products beyond their original national borders

issue to market a brand other countries: how to do it

glocal: companies that are both global and local

firms are developing strategies to take advantage of emerging economic opportunities

attractiveness of multinational markets, products originating in one country are increasingly

being sought out by consumers in other parts of the world

reasons: opportunity for future growth, expansion of horizon, consumers increasingly eager

to try foreign products

acquiring exposure to other cultures

consumers come in contact with the material goods and lifestyles of people living in

other parts of the world

opportunity to adopt different products and practices

a portion of consumers’ exposure to different cultures tends to come about through

consumers’ own initiatives e.g. travels, living and working abroad, immigration

contact with foreign films, theatre, art and artefacts, exposure to unfamiliar products

country-of-origin effects

consumers use their knowledge of where products are made in the evaluation of

their purchase options

consumers tend to have an attitude or even a preference when it comes to a

particular product being made in a particular country

when consumers are less familiar with foreign products, country of origin becomes

an important extrinsic cue

animosity e.g. jewish consumers avoiding to purchase German-made products

national identity

belief structure:

a true Italian

would never

reject their

religious belief

cultural

homogeneity:

people

frequently

engage in

activities that

identify them as Italian

national heritage: important people from the country’s past are admired by

people today

consumer ethnocentrism: only those products that are unavailable in Italy

should be imported


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Cross-cultural consumer analysis

cross-cultural consumer analysis: the effort to determine to what extent the consumers of

two or more nations (or subcultures) are similar or different

provides understanding of psychological, social and cultural characteristics of foreigners

similarities and differences among people

if the cultural beliefs, values and customs of specific target countries are found to

differ, individualised marketing strategies are applicable to each country

time effects

the pace of life differs from one nation to another

how time is spent on the job varies from country to country

the growing global middle class

growing middle class (particularly in developing countries) attracts global marketers

who are eager to identify new customers

sales opportunities next to rather mature home markets

emerging middle class with rising incomes and rising demands on their time

many transnational corporations think in terms of regions as markets or even the

entire world as their market

acculturation in a necessary marketing viewpoint

strategic error of believing that if its product is liked by local or domestic consumers

then everyone will like it

increases the likelihood of marketing failures abroad

lack of appreciation of the unique psychological, social, cultural and

environmental characteristics of different cultures

acculturation: to learn everything that is relevant about the (potential) usage of a

product in foreign countries in which they plan to operate

distinctive characteristics of cross-cultural analysis

in Saudi Arabia it is illegal to stop people on the streets and gatherings of

four or more people are outlawed

information in Russia is limited

marketing research in China is usually inadequate

applying research techniques

language and word usage in different nations may be a burden

issue of scales of measurement

consumer researchers must familiarise themselves with the availability of research

services

Alternative multinational strategies: global versus local

some marketers have argued that world markets are becoming increasingly similar and

standardised marketing strategies are becoming more feasible

in contrast, others feel that differences between consumers of various nations are far too

great to permit a standardised marketing strategy

favouring a world brand

would brand products that are manufactures, packaged and positioned in exactly the

same way regardless of the country in which they are sold

marketers may use a world branding strategy (selectively)


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are global brand different?

global brands are viewed differently compared with local brands

are associated with: quality signal, global myth and social responsibility

four segments in each country with respect to how its citizens view global brands:

global citizens (55%): use global success as indication of quality and

innovativeness, concerned with social responsibility

global dreamers (23%): quality products

anti-globals (13%): high quality, don’t trust global companies to act

responsibly, try to avoid them

global agnostics (8%): evaluate them the same way as local brands

adaptive global marketing

embracing a strategy that adapts advertising messages to specific values of particular

cultures

trying to localise advertisements

world brand concept may be going too far

combining global and local marketing strategies

mixed or combination strategy, global strategies with local executions

ability to create a general consensus of meaning across cultures by using

strong visual images whose fundamental message is highly apparent

frameworks for assessing multinational strategies

challenge of creating marketing and advertising programmes capable of

communicating effectively with a diversity of target markets

five stage continuum: ranges from mere awareness of a foreign brand in a local

market area to complete global identification of the brand

alternative global marketing strategies framework

communication strategy

standardised

communications localised communications

product

strategy

standardised

product

global strategy: uniform

product / uniform

message

mixed strategy: uniform

product / customised

message

localised

product

mixed strategy:

customised product /

uniform message

local strategy: customised

product / customised

message

product standardisation appears to be most successful for high-involvement

products

key to success may be to be global and to act local

Cross-cultural psychographic segmentation

although worldwide consumers may be similar in many ways, any differences in attitudes or

behaviour can be crucial in determining satisfaction and may provide an opportunity for

segmenting consumers in terms of cultural differences

six global value groups:

strivers (23%): wealth, status

devouts (22%): traditional

altruists (18%): social

intimates (15%): family and friends

fun seekers (12%): adventure and pleasure

creatives (10%): knowledge and technology


Part 4: More on the consumer’s

decision-making process

Chapter 15: Consumer influence and the diffusion of

innovations

What is opinion leadership?

the process by which one person informally influences the actions or attitudes of others who

may be opinion seekers or merely opinion recipients

influence is personal and informal

opinion leaders offers advice or information to opinion receiver

concerned with the measurement of the behavioural impact of opinion leaders on

consumption habits of others

word-of-mouth in today’s ‘always in contact’ world

always available to friends, family and business associates

friends recommendations make people comfortable with a company

Dynamics of the opinion leadership process

credibility

highly credible sources of info

perceived as objective

intentions are perceived as being in the best interest of the opinion recipient, no

compensation for advice

advice reduces the opinion receivers perceived risk or anxiety

positive and negative product information

opinion leaders provide both favourable and unfavourable info

compared with positive or neutral comments negative comments are relatively rare

consumers are more likely to share a negative experience than a positive one

information and advice: opinion leaders give advice on

which brand is the best

how best to use a product

where to shop and

who provides the best service

opinion leadership is category specific: they often specialise in certain product categories

about which they offer info and advice

opinion leadership is a two-way street: consumers who are opinion leaders in one product-

related situation may become opinion receivers in another


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The motivation behind opinion leadership

the needs of opinion leaders

people may provide info or advice to others to satisfy basic needs of their own

may be unaware of their own motives

may simply be trying to reduce own post-purchase dissonance

self-involvement

may find themselves so pleased or disappointed with a product that they must tell

others about it

need to share product-related experiences

the needs of opinion receivers

obtain new product or usage info

reduce perceived risk

reduce search time

purchase pals

male: sources of product category expertise, product info and retail store and price

info

female: moral support and to increase confidence in buyer’s decisions

when strong ties exist people rely on their purchase pal’s familiarity with and

understanding of one’s individual characteristics and needs

surrogate buyers versus opinion leaders

surrogate buyers may replace opinion leaders

e.g. working women turning to wardrobe consultants for help in purchasing business

attire

Measurement of opinion leadership

self-designating method: respondents are asked to evaluate the extent to which they have

provided others with info or have influenced the purchase decisions of others

sociometric method: measures the person-to-person informal communication of consumers

and asks about specific individuals whom they have influenced or by whom they have been

influenced

key informant method: key informant is asked to identify individuals in the group who are

most likely to be opinion leaders

objective method: placing new products or new info with selected individuals and tracing the

resulting web of interpersonal communication

A profile of the opinion leader

general attributes across product categories category-specific attributes

innovativeness

willingness to talk

self-confidence

gregariousness

cognitive differentiation

interest

knowledge

special-interest media exposure

same age

same social status

social exposure outside group


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Frequency and overlap of opinion leadership

opinion leadership tends to overlap across certain combinations of interest areas

opinion leaders in one product are often opinion leaders in related areas

market mavens

possess a wide range of information about many different types of products, retail

outlets and other dimensions of markets

influence extends beyond the realm of high-involvement products

motivated by a sense of obligation to share info, a desire to help others and a feeling

of pleasure that comes with telling others about products

The situational environment of opinion leadership

product discussions generally occur within relevant situational contexts

opinion leaders and opinion receivers are often friends, neighbours or work associates

The interpersonal flow of communication

multi-step flow of communication theory

advertising designed to stimulate/simulate word-of-mouth

objective of promotional strategy of stimulation is to run ads or direct-marketing

programme sufficiently interesting and info to provoke consumers into discussing

benefits of a product

stimulating vs simulating word-of-mouth

word-of-mouth may be uncontrollable e.g. rumours

Marketers seek to take control of the opinion leadership process

designing products with characteristics or design factors that make them easy to talk about

seeking to manage word-of-mouth

creating products with greater word-of-mouth potential

creating products with built-in buzz potential

buzz-potential: new product should give customers something to talk about

e.g. technologies, luxury brands, films

strategies designed to stimulate buzz

internet has inspired marketers to expand opportunities to take control of the

process of word-of-mouth

volunteer consumer buzz agents or hired actors to go out and simulate buzz

viral marketing

any strategy that encourages individuals to pass on a marketing message to

others, creating a potential for exponential growth in message exposure and

influence

marriage of email and word-of-mouth


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allows a message to spread like a virus

uncodified buzz

occurs when an innovator encounters a new product that he likes

and passes on the info

high trust and credibility

not controllable

codified buzz

incubated, fostered and unwritten by the firm

e.g. trial versions, testimonials, observable usage, endorsements, gift

certificated, hosted chat rooms

buzz can spread quickly through the forwarding of emails

viral maven: individual who received and sends pass-along emails frequently

weblogs as word-of-mouth

one of the newest mediums for disseminating word-of-mouth

facebook or twitter

Diffusion of innovations

diffusion of innovations: framework for exploring consumer acceptance of new products

diffusion process: a macro process concerned with the spread of new product innovations

from its source to the consuming public

adoption process: a micro process that focuses on the stages through which an individual

consumer passes when deciding to accept or reject a new product

consumer innovators: the first to purchase a new product

The diffusion process

diffusion: the process by which the acceptance of an innovation (new product, new service,

new idea, new practice) is spread by communication (mass media, salespeople, informal

conversations) to members of a social system (target market) over a period of time

the innovation

firm-oriented definitions

product is new to the company

ignores whether or not the product is actually new to the marketplace

product-oriented definitions

the extent to which a new product is likely to disrupt established behaviour

patterns

types of product innovations:

continuous innovation

least disruptive influence on established patterns

introduction of a modified product rather than a totally new

product

dynamically continuous innovation

more disruptive

does not alter established behaviour patterns

may involve the creation of a new product or the

modification of an existing one


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discontinuous innovation

requires consumers to adopt new behaviour patterns

e.g. aircraft, radios, tv, cars

market-oriented definitions

judged the newness of a product in terms of how much exposure consumers

have to the new product

definitions of product innovation:

has been purchased by a relatively small percentage of the potential

market

has been on the market for a relatively short period of time

basically subjective because leaves researcher with the task of establishing

the degree of sales penetration within the market that qualifies the product

as an innovation or how long the product can be on the market and still be

considered new

consumer-oriented definitions

new product is any product that a potential consumer judged to be new

newness is based on the consumer’s perception of the product rather than

on physical features or market realities

use innovativeness: consumer uses previously adopted products in novel or

unusual way

product characteristics that influence diffusion

all new products do not have equal potential for consumer acceptance

relative advantage: the degree to which potential customers perceive a new

product as superior to existing substitutes

compatibility: the degree to which potential consumers feel a new product is

consistent with their present needs, values and practices

complexity: the degree to which a new product is difficult to understand or

use

trialability: the degree to which a new product is capable of being tried on a

limited basis

observability: the ease with which a product’s benefits or attributes can be

observes, imagined or described to potential consumers

resistance to innovation

high consumer resistance when perceived relative advantage, perceived

compatibility, trialability and communicability are low and perceived

complexity is high

innovation overload: situation in which the increase in info and options

available to consumer is so great that is seriously impairs decision-making

the channels of communication

how quickly an innovation spreads through a market depends ton communication

between the marketer and consumers as well as communication among consumers

impersonal sources (ads, editorial matter), interpersonal sources (salespeople,

opinion leaders)

internet as a major consumer-related source of info

new channels of communication


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the social system

the diffusion of a new product usually takes place in a social setting frequently

referred to as social system, market segment or target market

a physical, social or cultural environment to which people belong and within which

they function

social system with its own special values and norms influences the acceptance or

rejection of new products

time

purchase time: the amount of time that elapses between consumers’ initial

awareness of a new product and the point at which they purchase or reject it

adopter categories: involves a classification scheme that indicates where a consumer

stands in relation to other consumers in terms of time

rate of adoption

how long it takes a new product or service to be adopted by members of a

social system/how quickly it takes a new product to be accepted by those

who will ultimately adopt it

the diffusion of products worldwide is becoming a more rapid phenomenon

objective in marketing new products is usually to gain wide acceptance of

the product as quickly as possible

desire a rapid rate of product adoption to penetrate the market and quickly

establish market leadership

penetration policy is usually accompanies by a relatively low introductory

price designed to discourage competition from entering the market

The adoption process

stages in the adoption process

awareness: first exposure to innovation

interest: interest in product, search for additional info

evaluation: decision whether or not to believe that the product will satisfy needs

trial: use of the product on a limited basis

adoption/rejection: if trial is favourable decision to use product, if trial is

unfavourable decision to reject it


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the adoption process and information sources

provides a framework for determining which types of information sources consumers

find most important at specific decision stages

impersonal mass media sources tend to be most valuable for creating initial product

awareness

as the purchase decision progress continues, the relative importance of these

sources declines while the relative importance of interpersonal sources (friends,

salespeople, others) increases

A profile of the consumer innovator

defining the consumer innovator: relatively small group of consumers who are the earliest

purchasers of a new product

interest in the product category: much more interested than others in the product category

the innovator is an opinion leader

consumer innovators often influence the acceptance or rejection of new products as

do opinion leaders

when innovators are enthusiastic about a new product and encourage others to try it

the product is likely to receive broader and quicker acceptance

personality traits

less dogmatic than non-innovators (tend to approach new or unfamiliar products

with considerable openness and little anxiety)

need for uniqueness

inner-directed, rely on their own values and standards to make decisions

more willing to risk trying new products

accept new retail facilities

tend to be brand switchers

perceived risk and venturesomeness

perceive little to no risk in the purchase of a new product

willing to accept the risk of purchasing new products

purchase and consumption characteristics

possess purchase and usage traits that set them apart from non-innovators

less brand loyal

likely to take advantage of special promotional offers e.g. free samples


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media habits

have a greater exposure to magazines than non-innovators, particularly to

special-interest magazines

less likely to watch tv

social characteristics

more socially accepted and socially involved than non-innovators

more socially integrated into the community

demographic characteristics

age of consumer innovator is related to specific product category

tend to be younger

have more formal education, have higher personal or family incomes and are more

likely to have higher occupational status

are the generalised consumer innovators?

overlap of innovativeness across product categories seems to be limited to product

categories that are closely related to the same basic interest area

good marketing strategy to target a new product to consumers who were the first to

try other products in the same product category

technology innovators

change leaders

high-tech innovators

tend to embrace and popularise many innovations that are

ultimately accepted by the mainstream population

technopiles

individuals who purchase technologically advanced products soon

after their market debut

tend to be technically curious people

techthusiasts

people who are most likely to purchase or subscribe to emerging

products and services that are technologically oriented

are typically younger, better educated and more affluent

technology acceptance model: measures the relationship between

technology and consumer innovation


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Chapter 16: Consumer decision making – again

Input

consumer needs for a

product are often

caused by marketing

efforts or his

sociocultural

environment

sociocultural issues act

as input into the

decision-making

process and offer

directions to the

completion of the

decision task

Process

where decisions are

actually made

how a consumers goes

about searching for info

and evaluate the info

depends on individual’s

psychological

characteristics

motivation, perception,

learning, personality and attitudes are features influencing the decision process and are

important criteria for segmentation

consumers do not necessarily emphasise any given attitude to the same degree

identifying an accurate segment and reasonable target group will increase the profitability of

working towards a homogeneous group of consumers

Output

need fulfilment, customer satisfaction ,cognitive dissonance

purchases that satisfy needs often lead to the purchased brand earning a place in the evoked

set

challenge to develop a fine-tuned conception of the target group that firm is able to present

its offer in a way that takes account of the psychological, sociological, anthropological and

economic characteristics of the consumers


stuvia 75825 consumer behaviour summary f

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