CHAPTER SEVEN Consumer Learning 1.

CHAPTER SEVEN Consumer Learning 1

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
Learning The process by which individuals acquire the purchase and consumption knowledge and experience that they apply to future related behavior This definition of learning can be looked at more specifically. It is important to realize that it is a process, that it changes over time as new knowledge and experiences are gained by the consumer. New knowledge and experience serve as feedback to the consumer and will influence their future behavior. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2 Chapter Seven Slide 2

Elements of Learning Theories
Motivation – Unfilled needs lead to motivation Cues – Stimuli that direct motives Response – Consumer reaction to a drive or cue Reinforcement – increases the likelihood that a response will occur in the future as a result of a cue

Two Major Learning Theories
Behavioral Learning Based on observable behaviors (responses) that occur as the result of exposure to stimuli Cognitive Learning Learning based on mental information processing Often in response to problem solving These are the two general categories of learning that will be discussed in this chapter. Each is covered in extensive detail on future slides. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4 Chapter Seven Slide 4

Behavioral Learning Classical Conditioning: A stimulus is repeatedly paired with another stimulus that elicits a known response. After some time the new stimulus produces the same response when used alone. Instrumental (Operant) Conditioning: Based on a trial-and-error process. Repetitions and their positive outcomes result in the formation of a habit. In behavioral learning, it is classical conditioning and instrumental conditioning that are the two most researched, explored, and applied within consumer behavior. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5 Chapter Seven Slide 5

Strategic Applications of Classical Conditioning
Repetition: Increases the association between the conditioned and unconditioned stimulus; Slows the pace of forgetting; Advertising wearout is a problem Stimulus generalization: Having the same response to slightly different stimuli; Helps “me-too” products to Succeed; Useful in: product extensions, family branding; licensing Stimulus discrimination: Selection of a specific stimulus from similar stimuli; Opposite of stimulus generalization. This Discrimination is the basis of positioning which looks for Unique ways to fill needs

A Model of Instrumental Conditioning Figure 7.9
Here is a model of instrumental conditioning. You can see this consumer tried on four brands. The first three brands ended with no rewards – they simply did not fit. The final brand, Brand D gave the consumer the reward of a perfect fit. The consumer has learned that these jeans are a good fit and will likely repeat this behavior the next time they are in the stimulus situation of needing good-looking jeans. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 7 Chapter Seven Slide 7

Reinforcement of Behavior
Positive reinforcement strengthens likelihood of repeat behavior Negative reinforcement encourages alternative behaviors Extinction: When a learned response is no longer reinforced, the link between stimulus and reward is broken Forgetting: The reinforcement is forgotten

Reinforcement of Behavior
Customer Satisfaction (Reinforcement) Reinforcement Schedules Shaping Massed versus Distributed Learning These are four applications of instrumental conditioning that are used by marketers. Customer satisfaction means that each time the customer has an experience with the product or company, there has been positive reinforcement. This is the reason relationship marketing is so important. Reinforcement schedules can vary. They can be total (or continuous) reinforcement, systemic (fixed ratio) reinforcement, or a random (variable ratio) reinforcement schedule. Marketers will often used random reinforcement as a bonus for the customer and fixed reinforcement as loyalty points or rewards. Shaping occurs by having the reinforcement BEFORE the behavior occurs. In this situation, the consumer can be given the offer of a reward before they actually make their decision and purchase a product. The final application is the choice of massed versus distributed learning. Should the learning and the exposure to the stimuli happen in a relatively short period of time or be drawn out? Media planners are often faced with this decision when putting together an advertising campaign. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 9 Chapter Seven Slide 9

Observational Learning (modeling or vicarious learning)
A process by which individuals learn behavior by observing the behavior of others and the consequences of such behavior Observational learning occurs NOT through responses directly to the consumer but by observation of the behavior and responses of others. Marketers often use role models in their advertising so that consumers can understand the rewards of purchasing the advertisers’ products. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 10 Chapter Seven Slide 10

Information Processing and Memory Stores - Figure 7.10
The large blocks in this process are the three places where a consumer will store information before processing. The sensory store is very short term; it is where an image or sound will last for just a few minutes and then be forgotten. The short-term store is the stage where information is processed. Similarly to the sensory store, it is just held for a brief time. Information will move, through encoding, to the long-term store. Information here can last for relatively extended periods of time. Rehearsal, encoding, and retrieval move information from one place to the next. Rehearsal can be done either by repeating the information or relating it to other data. If held long enough, the information can be encoded, or given a word or visual image to represent the object. Retention, though not shown on this process chart, describes what happens with the information in long-term storage. As it is retained, it is constantly organized and reorganized. Finally, retrieval, the last stage of our process, describes how we recover information. Situational cues are the most common reason to retrieve information. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 11 Chapter Seven Slide 11

Retention Information is stored in long-term memory
Episodically: by the order in which it is acquired Semantically: according to significant concepts Total package of associations is called a schema

Associative Knowledge Network.
Double Frosty Chicken McNuggets Wendy’s Quarter Pounder McDonald’s Single Hamburgers Big Mac Burger King Best Combination Fries Whopper Had it last night Tasty

Involvement and Passive Learning Topics
Definitions and Measures of Involvement Marketing Applications of Involvement Central and Peripheral Routes to Persuasion Hemispheral Lateralization and Passive Learning These are the four major topics of involvement and passive learning. They will be covered more thoroughly on the following slides. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 14 Chapter Seven Slide 14

Involvement Degree of personal relevance that the product or purchase holds for that customer. High involvement purchases are very important to the consumer Low-involvement hold little relevance, have little perceived risk, and have limited information processing Involvement is focused on the personal relevance a product holds for an individual. Understanding whether a product is high or low involvement helps the marketer with all aspects of their planning and strategy. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 15 Chapter Seven Slide 15

Marketing Applications of Involvement
Ads in video games Avatars Sensory appeals in ads to get more attention Forging bonds and relationships with consumers Marketers want consumers to be involved with their brands and products. Advertisers are always searching for ways to do this, including the list on this slide. Product placement is also helpful in building involvement with a certain product. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 16 Chapter Seven Slide 16

Central and Peripheral Routes to Persuasion
Central route to persuasion For high involvement purchases Requires cognitive processing Peripheral route to persuasion Low involvement Consumer less motivated to think Learning through repetition, visual cues, and holistic perception When a product is of high importance, a consumer is likely to think through the advertising and examine details and information. This is the central route to persuasion. On the other hand, if the purchase is lower involvement, the consumer is more likely to be persuaded by music, pictures, and short slogans in the ads. This is the peripheral route to persuasion, which we often see for low-involvement products, especially on television advertising. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 17 Chapter Seven Slide 17

Hemispheral Lateralization and Passive Learning
Also called split-brain theory Left Brain Rational Active Realistic Right Brain Emotional Metaphoric Impulsive Intuitive Most of you know whether you tend to be more right or left brain. The ad on the next slide pokes fun at hemispheral lateralization but makes the point that many products and services have to appeal to both sides of the brain. There are researchers who prove that learning occurs in a passive way from watching television. A consumer sees an ad and it is absorbed and processed by the right brain. Through repeated exposure, the consumer could in fact purchase the product without even having a change in their attitude. This contradicts the models we saw in an earlier slide where changes in affect preceded changes in behavior. If you think about it, this is consistent with classical conditioning. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 18 18 Chapter Seven Slide 18

Measures of Consumer Learning Brand Loyalty
Personal degree of risk aversion or variety seeking; Reputation and availability of the brand; Social group influences  No loyalty Brand Equity – the value Covetous loyalty inherent in a well-known Inertia loyalty brand Premium loyalty

Consumer Attitude Formation and Change
CHAPTER EIGHT Consumer Attitude Formation and Change 20

Attitude A learned predisposition to behave in a consistently favorable or unfavorable manner with respect to a given object. We have attitudes toward many things – to people, products, advertisements, ideas, and more. For the most part, these attitudes have been learned and guide our behavior toward the object. This web link brings you to one of many sites that helps measure attitudes via online surveys. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 21 Chapter Eight Slide 21

What Are Attitudes? The attitude “object” Attitudes are a learned predisposition Attitudes have consistency Attitudes occur within a situation It is important to understand these four concepts. The first is that we must clearly define the object which we are discussing or measuring the attitude toward. Is it a product category, a specific brand, or a particular model? The second is the agreement among researchers that attitudes are learned, either through direct experience or from others. Attitudes are consistent, they are not necessarily permanent and can change over time. We all know how our attitude can be affected by a situation – think about the times you have to eat foods that are not necessarily your favorite but they are what is available or what you are being served at a friend’s house. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 22 Chapter Eight Slide 22

Structural Models of Attitudes
Tricomponent Attitude Model Multiattribute Attitude Model The Trying-to-Consume Model Attitude-Toward-the-Ad Model These are models that attempt to understand the relationships between attitude and behavior. They will be explained in more detail on the following slides. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 23 Chapter Eight Slide 23

A Simple Representation of the Tricomponent Attitude Model - Figure 8.3 The tricomponent attitude model has three components, as seen on this figure – the cognitive, affective, and conative components. Each of these will be explained in more detail in the slides that follow. Cognition Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 24 Chapter Eight Slide 24

The Tricomponent Model
Cognitive: Knowledge and perceptions acquired by a combination of direct experience with the attitude object and related information from various sources Affective: Emotions or feelings about a particular product or brand (attitude object) Conative: The likelihood or tendency that an individual will undertake a specific action or behave in a particular way with regard to the attitude object

Functional Theory of Attitude
Primary functions performed by attitudes : Adjustive or utilitarian function Ego defensive Value expressive Knowledge defensive

Multiattribute Attitude Models
examine the composition of consumer attitudes in terms of selected product attributes or beliefs. Just as the name implies, these are models that breakdown overall attitude into the attributes or beliefs which form an overall opinion. There are several of these models, as you will see on the next few slides. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 27 Chapter Eight Slide 27

Multiattribute Attitude Models
The attitude-toward-behavior model: Is the attitude toward behaving or acting with respect to an object, rather than the attitude toward the object itself Corresponds closely to actual behavior Theory-of-reasoned-action model: Includes subjective norms in addition to attitude

The Fishbein Model A = Attitude towards a brand
where, A = Attitude towards a brand Bi = Belief that the brand possesses attribute i Ei = Evaluation or desirability of attribute i I = attribute 1, 2, … m

Example of TC/MA Model.

Theory of Trying to Consume
for the many cases the action or outcome is not certain but instead reflects the consumer’s attempt to consume (or purchase). The theory of trying to consume addresses the fact that many people may want to purchase but in many cases they cannot. This may occur for personal reasons, such as not having enough money, or environmental reasons, such as not being able to go to a particular store. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 31 Chapter Eight Slide 31

Attitude-Toward-the-Ad Model
a consumer forms various feelings (affects) and judgments (cognitions) as the result of exposure to an advertisement, which, in turn, affect the consumer’s attitude toward the ad and attitude toward the brand. The attitude-toward-the-ad model helps us understand how advertising impacts attitudes. The model is more thoroughly diagramed on the next slide. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 32 Chapter Eight Slide 32

A Conception of the Relationship Among Elements in an Attitude-Toward-the-Ad Model - Figure 8.6 Here we see that everything begins with exposure to the ad. After this exposure, the consumer has feelings (affect) and thoughts (cognition) regarding the ad. This forms an attitude which works with beliefs about the brand to help form an attitude toward the brand. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 33 Chapter Eight Slide 33

Issues in Attitude Formation
How attitudes are learned Conditioning and experience Knowledge and beliefs Attitudes are formed through learning. Recalling the concepts of classical and operant conditioning from earlier chapters, we recall that two stimuli can be paired or linked together to form a learned response. In addition, consumers can learn attitudes from rewards or outcomes from behavior. If attitudes are learned, then it is through experiences that this learning occurs. This can be from personal experience or from experiences with friends or exposure to marketing influences. Another topic studied in an earlier chapter comes into play with attitude formation. This is the consumer’s need for cognition. People will form attitudes based on the information that best suits them, information for the high need for cognition consumer, and images and spokespeople for the low need for cognition. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 34 Chapter Eight Slide 34

Issues in Attitude Formation
Sources of influence on attitude formation Personal experience Influence of family Direct marketing and mass media Personality factors Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 35 Chapter Eight Slide 35

Attitude Change Altering Components of the Multiattribute Model Changing relative evaluation of attributes Changing brand beliefs Adding an attribute Changing the overall brand rating Changing Beliefs about Competitors’ Brands If we think analytically about a multiattribute model, we realize there are many different attributes that make up an overall attitude. As marketers, we can change the way the consumer evaluates a certain attribute. Perhaps the consumer thinks inexpensive is fine for a product, but a marketer might be able to point out that it is often worth paying a bit more for better quality. A marketer can also change the way consumers believe a brand rates on a certain attribute. Maybe a consumer thinks a brand is very expensive when in fact it is less expensive then several other brands. There may be an attribute that does not even exist. Who thought chewiness was an attribute that could even exist for a vitamin until Gummy Vites came along? Finally, we can step away from looking individually at the attribute and attempt to change the consumer’s overall assessment of the brand. We can do any of these attitude change strategies by changing beliefs of our own product or our competitor's product. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 36 Chapter Eight Slide 36

Elaboration Likelihood Model (ELM)
Customer attitudes are changed by two distinctly different routes to persuasion: a central route or a peripheral route. The ELM is a much more global view of attitude change than the models reviewed on the previous slide. A more detailed description is provided in a diagram on the next slide. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 37 Chapter Eight Slide 37

Elaboration Likelihood Model
On the left-hand side of the model, we see central variables on the top and peripheral variables on the bottom. Central variables, which lead to the central route, will be effective on highly-motivated consumers. They will do the thinking necessary to understand the information they are presented. Peripheral variables, including music, spokespeople, and bright packaging, work on lower-involvement consumers. Together, or alone, they create an attitude change that results in a certain behavior. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 38 Chapter Eight Slide 38

Behavior Can Precede or Follow Attitude Formation
Cognitive Dissonance Theory Holds that discomfort or dissonance occurs when a consumer holds conflicting thoughts about a belief or an attitude object. Attribution Theory A theory concerned with how people assign causality to events and form or alter their attitudes as an outcome of assessing their own or other people’s behavior. Up to this point, we have always had an attitude change, which led to a behavior. It is now time to consumer a behavior that might change attitude. There are two main theories that address this difference in sequencing. The cognitive dissonance theory occurs after the consumer has done something, let’s say purchase a product or accepted admission to a college. They begin to create an attitude around their behavior which is often based on dissonance or discomfort. Attribution theory is related to the question we have after a behavior of “Why did I do that?” This process of making inferences about behavior can lead to attitude formation and change. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 39 Chapter Eight Slide 39

Attribution Theory Internal attribution External attribution Towards others Towards things Defensive attribution Here are some interesting issues in attribution theory. Self-perception theory is the inferences or judgment as to the causes of your behavior. Did something happen, like you won an award, because you were really good, because the competition was weak, or because the judges were rushed? We are constantly examining our behavior and often try to stay consistent. This is considered the foot-in-the-door technique, the fact that if you say yes to something, you will probably say yes to a similar act later on to remain consistent in your behavior. We have attribution toward others and always ask ourselves “why” about other’s acts. We question their motives. Would you believe we also have attribution toward things? Do you sometimes ask yourself, “Why do I like this software or that movie so much?” Over time, we like to test our attributions to see if they are correct. We may decide that if something happens when we use this product, it has distinctiveness. We also see if we have the same reaction to behavior over time, in different situations (modality), and if others agree. There are thousands of dating services online. This web link goes to therightstuff.com, a dating service for Ivy-league graduates only. People have a certain attribution toward others who attend the same colleges or group of colleges as themselves. Because they had this behavior (attended an Ivy League school) they must be like me. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 40 Chapter Eight Slide 40

Communication and Consumer Behavior
CHAPTER NINE Communication and Consumer Behavior 41

Basic Communication Model
Figure 9.1 Noise Noise Noise Noise Noise

The Communications Process
The Source/Sender (Message Initiator) Formal sources (marketers) Informal sources (friends, family, reference groups, etc.) Encoding The Message The Medium The Receiver/Target audience (Decoding) Feedback - the Receiver’s Response Noise

Issues with Credibility
Credibility of Informal Sources: Word of mouth or opinion leadership (not always credible), Buzz agents, viral marketing… Credibility of Formal Sources: role, affiliations, intentions, past performance, reputation, appearance, etc. Neutral sources have the greatest credibility Spokesperson/Endorser Credibility: Synergy between endorser and type of product, demographic characteristics of endorser, corporate credibility Media Credibility: Perception of magazines, TV/radio shows Message Credibility: Topic, Appeals, Arguments, Style, etc. Receiver variables: Involvement, motives, congruency, mood,… Sleeper Effect: Consumer forgets the source over time

Overcoming Psychological Noise
Repeated exposure Contrast Customized promotional messages Effective positioning Offering unique value propositions Using non-traditional media Etc.

Message Structure and Presentation
Message framing: Positive/Negative framing One-Sided versus Two-Sided Messages: Depends on nature of the audience and nature of competition First or last: Order Effects: Primacy, Recency, Order of benefits, Brand name

Advertising Appeals Comparative Fear Humor Abrasive Sex Audience participation Timely Celebrities (Testimonial, Endorsement, Actor, Spokesperson) These are the major types of advertising appeals. Let’s look at them one by one. Comparative advertising is very commonly used. Some say it helps the viewer remember the competitor’s brand and that might reduce its effectiveness. Fear is effective but only if the threat is strong enough to actually make the consumer response. Humor is the most popular appeal because it is believed that it increases acceptance and persuasiveness. In fact, studies show that humor attracts attention, increases liking of the product, does not make an ad hard to understand, and is better for low-involvement products. Believe it or not, abrasive or unpleasant ads are sometimes effective if they are well targeted. Sex in advertising seems to be on the rise. They do get attention but studies show that they rarely encourage actual consumption. In fact, these appeals often detract consumers from the message and comprehension is reduced. Audience participation will almost always help the receiver internalize the information. Appeals can also be very timely with ties into political issues or seasonal activities. Celebrities are also used as was discussed earlier in the chapter. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 47 47 Chapter Nine Slide 47

Feedback Determining Effectiveness
Exposure Effects (how many received the message) People meters Persuasion Effects (was the message received and interpreted correctly?) Message Attention, Interpretation, and Recall Physiological measures Attitudinal measures Recall and recognition measures Sales Effect: Did the ads increase sales? The question as to how many people receive the message is often debated by marketers. Nielsen is a leader in measurement, including television, online, and other new media. The persuasion effects are also hard to measure. Some marketers have used physiological measurements, such as eye tracking and brain wave analysis, to measure how people look at their ads. Surveys can be given to receivers regarding their attitudes and engagement with messages, as well as traditional recall tests, including the popular day-after recall tests. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 48 Chapter Nine Slide 48

The Family and Its Social Class Standing
CHAPTER TEN The Family and Its Social Class Standing 49

The Changing U.S. Family Types of families Nuclear Extended (including joint) Single-parent Changes in household spending patterns There are many different types of families. The nuclear family is two parents and at least one child. If the household has at least one grandparent, it is called an extended family. In addition, there is an increasing number of single-parent households. There are changes that have an effect on spending patterns. With more women working, many households have double income. In addition, families are shopping for time-saving products and services since they have less time at home. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 50 Chapter Ten Slide 50

Consumer Socialization
The process by which children acquire the skills, knowledge, and attitudes necessary to function as consumers. Parents teach their children basic values and modes of behavior. These include moral and religious principles, as well as everyday skills such as manners and speech, grooming, and interpersonal skills. Do parents teach children consumption skills? Absolutely, they learn about spending versus savings, how to shop, and how to make purchase decisions. Children today are exposed to marketing messages at a very young age, especially through television advertising and the Internet. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 51 Chapter Ten Slide 51

Other Functions of the Family
Economic well-being Emotional support Suitable family lifestyles In addition to socialization , the family provides other functions. The family provides economic security to its members, emotional support, and a way to share common goals and experiences. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 52 Chapter Ten Slide 52

Family Decision Making
Dynamics of Husband-Wife Decision Making Husband-Dominated Wife-Dominated Expanding Role of Children In Family Decision Making Choosing restaurants and items in supermarkets Teen Internet mavens Pester power Husbands and wives often need to make decisions together. The way they balance their influence will differ as to whether it is joint, single, or dominated by one member. The balance between the husband and wife will differ from culture to culture. Furthermore, kids are very involved in family decision making. We are seeing an increase in this as kids are given more responsibility and are exposed to more media. Because kids are online so much, they are constantly finding information on products that they will share with the family. And kids don’t give up easily; when they want something they will ask many times. We say kids have pester power because they don’t give up and ask so many times. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 53 Chapter Ten Slide 53

The Family Life Cycle Traditional Family Life Cycle Stage I: Bachelorhood Stage II: Honeymooners Stage III: Parenthood Stage IV: Postparenthood Stage V: Dissolution Modifications - the Nontraditional FLC Marketers have long used the family life cycle, also known as FLC. It gives us an idea of the stages that many families pass throughout their life. The fact is that this traditional life cycle is only passed through by a certain percent of families, so many modifications have been made and a nontraditional family life cycle has been created. In terms of the traditional FLC, we see the 5 stages. Stage I, Bachelorhood, includes single men and women who have moved out of their parents’ home and are living on their own. The next stage, the Honeymooners, occurs immediately after marriage before the arrival of the first child. They often have start-up expenses as they establish a new home. Stage III, parenthood, occurs with the arrival of the first child. In this stage, people’s financial status often changes. Stage IV, postparenthood occurs when the children have left home. This is also called the empty-nest stage and is a time when couples have more time to themselves. The final stage, dissolution, occurs with the death of one spouse. Many in this stage will remarry or begin to live a more economical lifestyle. This web link takes you to Fidelity, a very well know financial services company. You can see that they have products that are targeted to all stages of the family life cycle. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 54 Chapter Ten Slide 54

Nontraditional FLC Family Stages
Alternative FLC Stage Definition/Commentary Childless couples Increasingly acceptable with more career-oriented married women and delayed marriages Couples who marry later in life Likely to have fewer or no children Couples with first child in late 30’s or later Likely to have fewer children. Want the best and live quality lifestyle Single parents I High divorce rate - about 50% lead to this Single parents II Child out of wedlock Single parents III Single person who adopts Extended family Adult children return home. Divorced adult returns home. Elderly move in with children. Newlyweds live with in-laws. As you can see from this table, there are many more types of family households than described in the traditional life cycle. In addition to the ones here, there are many nonfamily households not described in the traditional family life cycle. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 55 Chapter Ten Slide 55

Social Class The division of members of a society into a hierarchy of distinct status classes, so that members of each class have either higher or lower status than members of other classes. Here is a definition of social class. A description of the classes and their names will be provided in the following slide. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 56 Chapter Ten Slide 56

Social Class Measure and Distribution Table 10.8
SOCIAL CLASSES and PERCENTAGE Upper % Upper-middle % Middle % Working % Lower % These are the major social class categories and the percent of U.S. households they represent. As you can see, the upper is a relatively small percent of the overall population. In this chart, we see the hierarchal nature of social classes where they range from low to high. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 57 Chapter Ten Slide 57

Social Class Measurement
Subjective Measures Self-Reporting: individuals are asked to estimate their own social-class positions Reputational method: individuals are asked to estimate social-class positions of people they know Objective Measures individuals answer specific socioeconomic questions and then are categorized according to answers Researchers measure social class either by subjective or objective measures. In the subjective, people estimate their own class whereas in the objective measures, researchers use common objective measures, which are seen on the following slide. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 58 Chapter Ten Slide 58

Objective Measures Single variable indices: Occupation, Education, Income Composite variable indices: Index of Status Characteristics: weighted index of Occupation, Source of income, House Type and Dwelling Area Socioeconomic Status Score (Census Bureau): Occupational status, family income, educational attainment

Geodemographic Clusters
A composite segmentation strategy that uses both geographic variables (zip codes, neighborhoods) and demographic variables (e.g., income, occupation) to identify target markets

The Affluent Consumer Growing number of households can be classified as “mass affluent” with incomes of at least $75,000 Some researchers are defining affluent to include lifestyle and psychographic factors in addition to income Affluent households are an especially attractive target to marketers because they have a large share of discretional income. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 61 Chapter Ten Slide 61

The Mass Market Lower Middle Class (non-professional white collar) The “middle” 50% of household incomes - households earning between $25,000 and $85,000 Emerging markets middle class Moving up to more “near luxuries” + Working Class Households earning $40,000 or less control more than 30% of the total income in the U.S. Tend to be more brand loyal than wealthier consumers. It is not easy to define the middle class, but we can categorize them most easily by their incomes. We see that in certain countries, especially China, there is a growing middle class who are driven by a desire for social status and will purchase status symbols. As luxury products become more affordable, middle-class consumers will be drawn to purchasing them. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 62 Chapter Ten Slide 62

The Techno Class Having competency with technology Those without are referred to as “technologically underclassed” Parents are seeking computer exposure for their children Geeks now viewed as friendly and fun Technology is becoming increasingly important to adults and children. Those very involved in technology, commonly referred to as geeks, are seeing that they are gaining popularity, both as adults and teens. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 63 Chapter Ten Slide 63

Consumer Behavior and Social Class
Clothing, Fashion, and Shopping: lower classes – logo T-shirts, caps etc., upper classes – subtle fashions; preference for stores where similar social classes shop. The Pursuit of Leisure: upper classes – concerts, museum, college football; lower classes – fishing, baseball, DIY; middle classes: increasing emphasis on “experiences” that bring family together, etc. Saving, Spending, and Credit: convenience vs. necessity Social Class and Communication: middle classes – broader and longer point of view Social class is important to keep in mind for marketers. Consumers of different social classes purchase clothes and spend their leisure time with different activities. In addition, different social classes tend to view savings vs. spending differently and will view different television shows and visit different websites. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 64 Chapter Ten Slide 64

Influence of Culture on Consumer Behavior
CHAPTER ELEVEN Influence of Culture on Consumer Behavior 65

Culture The sum total of learned beliefs, values, and customs that serve to regulate the consumer behavior of members of a particular society. The Invisible Hand of Culture: Each individual perceives the world through his own cultural lens

Nature of Culture Culture Satisfies Needs:
Culture Is Learned: Enculturation; Acculturation; Language and Symbols; Rituals Culture in Inculcated: Passed on from one generation to the next Culture is Dynamic: Evolves because it fills needs; Certain factors change culture (technology, population shifts, economic development, wars, changing values, influences from other countries)

The Measurement of Culture
Content Analysis: systematically analyzing the content of verbal and/or pictorial communication. Is frequently used to determine prevailing social values of a society. Consumer Fieldwork: Field Observation (natural setting, subject unaware, focus on observation of behavior); Participant Observation Value Measurement Instruments: Rokeach Value Survey (RVS); List of Values (LOV); VALS Measurement techniques are used to track values and social trends for government and business. Each one will be looked at individually on the following slides. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 68 Chapter Eleven Slide 68

Value Measurement Survey Instruments
Rokeach Value Survey (RVS) A self-administered inventory consisting of eighteen “terminal” values (i.e., personal goals) and eighteen “instrumental” values (i.e., ways of reaching personal goals) List of Values (LOV) A value measurement instrument that asks consumers to identify their two most important values from a nine-value list that is based on the terminal values of the Rokeach Value Survey Values and Lifestyles (VALS) A value measurement based on two categories: self-definition and resources Instead of observing behavior, these techniques use surveys of consumers. As you can see, there are a variety of these studies, each a bit different in the number of questions that are asked and the categories they choose to emphasize. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 69 Chapter Eleven Slide 69

Achievement and success Efficiency and practicality
American Core Values (Values must be pervasive, enduring & Customer-related) Achievement and success Activity Efficiency and practicality Progress Material comfort Individualism Freedom External conformity Humanitarianism Youthfulness Fitness and health These eleven values can be considered the “building blocks” of American culture. Take a minute to think about each one. There is probably a good chance that you can picture an advertisement that appeals to each of these values. Most of these values are clearly stated and should be easily understandable. The ones that might need some description are progress and external conformity. Progress relates to the fact that people and the society can improve themselves. It is closely tied to the related values of achievement, success, efficiency, and practicality. External conformity relates to the fact that although consumers like freedom of choice and individualism, they all accept the reality of conformity. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 70 Chapter Eleven Slide 70

Subcultures and Consumer Behavior
CHAPTER TWELVE Subcultures and Consumer Behavior 71

Subculture A distinct cultural group that exists as an identifiable segment within a larger, more complex society. A subculture has beliefs, values, and customers that set them apart from the other members of the same society. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 72 Chapter Twelve Slide 72

Relationship Between Culture and Subculture - Figure 12.2
This diagram gives a good visualization of a subculture. The general U.S. culture is shared by the members of a subculture, but at the same time they have their own unique traits. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 73 Chapter Twelve Slide 73

Nationality Subculture - Hispanic
Stronger preference for well-established brands Prefer to shop at smaller stores Some are shifting food shopping to non-ethnic American-style supermarkets Youths are more fashion conscious than non-Hispanic peers Nationality is an important variable for defining subculture in the U.S. since census data shows that more than 1 in 10 Americans is foreign born. The Hispanic subculture is growing in the United States. Some consider it a single group but there are actually several subgroups in the United States. These subgroups can be seen on the following slide. The Hispanic culture does show some differences from the American culture in general. They like brands and see them as more prestigious. They tend to be very fashion conscious. They tend not to be impulsive buyers and prefer to shop at smaller stores; this may be in part because they prefer fresh to frozen or prepared foods. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 74 Chapter Twelve Slide 74

Religious Subcultures
200+ organized religious groups in the U.S. Primary organized faiths include: Protestant denominations Roman Catholicism Islam Judaism Consumer behavior symbolically and ritualistically associated with the celebration of religious holidays. Religion is an important subculture when we think about rituals that are performed by subcultures. Think of all the symbolic shopping that is done in preparation and for Christmas day. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 75 Chapter Twelve Slide 75

Regional Subcultures Many regional differences exist in consumption behavior Westerners have a mug of black coffee Easterners have a cup of coffee with milk and sugar White bread is preferred in the South and Midwest Rye and whole wheat are preferred on the East and West coasts Food is an example of where we see very different consumption behavior depending on the region where someone lives. There are differences in category sales, as well as brand sales, in different areas. This web link goes to a regional news site boston.com. In addition to local news and sports, what other differences might be regional? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 76 Chapter Twelve Slide 76

Major Racial Subcultures African American
The African American Consumer 13 percent of the U.S. population Purchasing power estimated at $845 billion Although representing only 13 percent of the U.S. population, the African American population is very important to marketers due to their increasing purchasing power and their interest in certain products. For instance, the African American teen spends more on many products compared to same-aged Anglo-white or Hispanic teens. These products include martial arts, basketball, iced tea drinks, body powder, and breath fresheners. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 77 Chapter Twelve Slide 77

Major Racial Subcultures African American
Prefer leading brands over private-label brands Brand loyal Higher than average trips to grocery store and higher spending Spend more then other segments on telephone services Some other interesting consumption patterns include a preference for brand names and more frequent trips for grocery shopping. Hair care and telephone services are two other products that tend to be bought more than other segments. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 78 Chapter Twelve Slide 78

Major Racial Subcultures Asian American
Fastest growing racial segment Diverse group including 6 major ethnicities: Chinese, Filipino, Indian, Vietnamese, Korean, and Japanese 95% live in metropolitan areas and business ownership is high The Asian market is a challenge for marketers because it is so diverse and there are so many languages spoken. It is hard to determine whether to run an ad to this target in their native language or in English. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 79 Chapter Twelve Slide

Region of Residence for Selected Subcultural Groups – Figure 12.7
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 80 Chapter Twelve Slide

Major Age Subcultures Generation Y Generation X Baby Boomers Seniors You have probably heard these terms before. Marketers and other researchers divide the population into groups depending on the year they were born. There are many differences between these age subcultures, which will be explored in the following slides. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 81 Chapter Twelve Slide 81

Generation Y According to sources, born OR Three groups Gen Y Adults – 19-28 Gen Y Teens – 13-18 Gen Y Tweens 8-12 Twixters – and live with parents Gen Y has shifted from TV viewing to the Internet and are less likely to read newspapers. They are the largest users of text messaging and spend a lot of time with online social networks. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 82 Chapter Twelve Slide 82

Generation X Born between 1965 and 1979 Also referred to as Xers, busters, or slackers Do not like labels, are cynical, and do not want to be marketed to Gen X is careful to work at jobs they like, regardless of salary. The tend to work to live rather than the baby boomers who lived to work. Although they are not designer focused, they do tend to purchase brand names such as Sony. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 83 83 Chapter Twelve Slide 83

Baby Boomers Born between 1946 – 1964 More than 40 percent of the adult population Motivated consumers Not anxious to retire and handle it as: Opportunity for a new start A continuation of preretirement life Unwelcome disruption Transition to old age The baby boomers have a lot of purchasing power due to their size and their propensity to purchase for themselves, others, and their homes. They are mixed on their views of retirement and will therefore purchase in different ways during these golden years. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 84 84 Chapter Twelve Slide 84

Older Consumers Roughly 65 years and older Growing segment due to better medical care, declining birthrate and the aging of the large baby boomer segment Three segments by age The Young-Old (65-74) The Old (75-84) The Old-Old (85 and older) The older consumer is an important and growing segment. People are living longer and are healthier and more active at an older age. Many people tend to clump seniors together when, in fact, there are several segments within this group. The young-old tend to travel and purchase at a very high rate. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 85 Chapter Twelve Slide 85

Older Consumers Segmentation can also be done on motivations and quality-of-life orientation Cyberseniors Some research has shown that perceived or cognitive age might be a better way to segment people. Those who feel and act younger will purchase consumer products that are generally consumed by a somewhat younger group. This web link is to AARP, the American Association of Retired People and one of the largest and most powerful associations in the country. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 86 Chapter Twelve Slide 86

Issues in Understanding Gender as a Subculture
Sex Roles and Consumer Behavior Masculine vs. Feminine Traits Consumer Products and Sex Roles Women as depicted in Media Gender plays an important role in some marketing issues. Men and women react differently toward print ads and have very different shopping motives. As such, some consumer products are much more focused to one sex versus the other. It is only in the past few years that men have increased their purchases of consumer care products, including moisturizers and hair care products. Many women are concerned with the way they are depicted in media and would like to see more of the “real” women that advertisers like Dove have begun to use. Follow this web link to the Campaign for Real Beauty by Dove to learn more about the campaign. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 87 Chapter Twelve Slide 87

Working Women Segments of ALL women Stay-at-home Plan-to-work Just-a-job working Career-oriented working Working women are important consumers and comprise about 60 percent of American women. They can be broken into many segments based on “why” they work and their occupational category. Think of women you know who work. Which ones are focused on their career versus working just to pay the bills? How might this affect their purchasing behavior? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 88 88 Chapter Twelve Slide 88

Subcultural Interaction
Marketers should strive to understand how multiple subcultural memberships jointly influence consumers behavior It is important for marketers to realize that an individual can belong to several of the subcultures presented in these slides and must consider how these influences will work together. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 89 Chapter Twelve Slide 89

Consumer Decision Making and Beyond
CHAPTER FIFTEEN Consumer Decision Making and Beyond 90

Levels of Consumer Decision Making
Extensive Problem Solving A lot of information needed Must establish a set of criteria for evaluation Limited Problem Solving Criteria for evaluation established Fine tuning with additional information Routinized Response Behavior Usually review what they already know Not all consumer decision-making situations are the same and marketers generally put them into these three groups. At one extreme is extensive problem solving which usually involves a lot of information, whereas routinized response behavior usually requires little or no information. Limited problem solving lies in the middle of these two extremes where new information is often added and a criterion for evaluation is formed. Consumers tend to have little experience with the product category when engaging in extensive problem solving as opposed to being very familiar with a routinized purchase. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 91 Chapter Fifteen Slide 91

Models of Consumers: Four Views of Consumer Decision Making
An Economic View A Passive View A Cognitive View An Emotional View There are four types of models which explain why consumers act the way they do. In an economic view, there is perfect competition and the consumer makes rational decisions. They are aware of all choices, can rank their benefits, and can choose the best alternative. Unfortunately for many, the perfect consumer does not exist. On the other extreme is the passive view, in which the consumer is passive to the marketer in making their decisions. Here the consumer plays no role as they would in a cognitive view where the consumer is a thinking problem solver. We have discussed emotions and they are at the center of the emotional model of consumer decision making. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 92 Chapter Fifteen Slide 92

Consumer Decision Making Figure 15.3
An overview of consumer decision making shows three main sections. The first includes all the external influences on a consumer. This includes sociocultural factors as discussed in previous chapters, as well as the marketer’s efforts. The second section includes the individual’s consumer decision making, which occurs in the three stages of need recognition, prepurchase search, and evaluation of alternatives. This process is guided by psychological factors and the consumer’s experiences. The third major section includes the actual purchase and how the consumer feels and what they think after they purchase the product. This web link brings you to Microsoft’s search engine Bing. How is it better than other search engines in helping consumers through this process? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 93 Chapter Fifteen Slide 93

Process - Need Recognition
Usually occurs when consumer has a “problem”, i.e., perceives a difference between an Actual state and Desired state A consumer usually realizes they have a need when they have a problem. Maybe they are hungry or are having friends over for dinner on Saturday night so they seek out choices in food. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 94 Chapter Fifteen Slide 94

Prepurchase Search Begins with internal search and then moves to external search The impact of the Internet There are many factors that increase search Product factor Situational factors Social acceptability Consumer factors Once the consumer has decided they have a need, they search through their mind for information on the product or service. After this, they may use the Internet, contact friends, or go to retail locations to learn more about a product. Some consumers will search for information for a long time, whereas others will make the search as short as possible. The time of the search can be related to the complexity and price of the product, the situation, experience with the product, or the social acceptability tied to the product. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 95 Chapter Fifteen Slide 95

Evaluation of Alternatives
Evoked set Criteria used for evaluating brands Consumer decision rules Decisions by functionally illiterate population Going online for decision-making assistance Lifestyles as a consumer decision strategy Incomplete information Applying decision rules Series of decisions Decision rules and marketing strategy When looking at the choices available and how they rate, the consumers will blend the list of brands they have acquired with the list of criteria that they have decided is important. The specific brands that the consumer considers is called the evoked or consideration set. A diagram of this set is shown on the following slide. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 96 Chapter Fifteen Slide 96

The Evoked Set Figure 15-5 The evoked set is the group of acceptable brands that the consumer has found through internal and external search. Unknown brands cannot be in this set since they are unknown. Decision making is very hard for intangible services. This web link helps consumers who are trying to find a doctor – a difficult service to evaluate. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 97 Chapter Fifteen Slide 97

Issues in Alternative Evaluation
Evoked Set Criteria used for evaluating brands Consumer decision rules and their application Decisions by functionally illiterate population Going online for decision-making assistance Lifestyles as a consumer decision strategy Incomplete information Applying Decision Rules Series of decisions Decision rules and marketing strategy Consumers will establish criteria which are important to evaluate brands. These are usually product attributes such as auto focus, flash, image stabilization, lens type, size and weight for a new digital camera. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 98 Chapter Fifteen Slide 98

Consumer Decision Rules
Compensatory evaluates each brand in terms of each relevant attribute and then selects the brand with the highest weighted score. Noncompensatory positive evaluation of a brand attribute does not compensate for a negative evaluation of the same brand on some other attribute Conjunctive, disjunctive, or lexicographic These rules are also referred to as heuristics, decision strategies, and information-processing strategies. They are the procedures that a consumer uses to make their brand choices. If they are compensatory, the consumer will evaluate each attribute and add them up for the brand. The belief is that the consumer will choose the brand with the highest rating. In a noncompensatory decision, the consumer does not balance positive attributes against negative, but every attribute must reach a minimum level or it will be disqualified. In a conjunctive rule, the consumer will establish a minimally acceptable cutoff point for each attribute evaluated. Brands that fall below the cutoff point on any one attribute are eliminated from further consideration. In a disjunctive rule, the consumer will establish a minimally acceptable cutoff point for each relevant product attribute. In a lexicographic rule, a consumer will first rank product attributes in terms of importance, then compare brands in terms of the attribute considered most important. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 99 Chapter Fifteen Slide 99

Hypothetical Use of Decision Rules Table 15.7
Mental Statement Compensatory rule I selected the netbook that came out best when I balanced the good ratings against the bad ratings Conjunctive rule I selected the netbook that had no bad features Disjunctive rule I picked the netbook that excelled in at least one attribute Lexicographic rule I looked at the feature that was most important to me and chose the netbook that ranked highest on that attribute Affect referral rule I bought the brand with the highest overall rating This table helps explain some of the decision rules and the statements a consumer would make when basing a decision on the rule. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 100 100 Chapter Fifteen Slide 100

Evoked Set Criteria used for evaluating brands Consumer decision rules and their application Decisions by functionally illiterate population Going online for decision-making assistance Lifestyles as a consumer decision strategy Incomplete information Applying Decision Rules Series of decisions Decision rules and marketing strategy It may be shocking to hear that 20 percent of Americans do not possess the language and math skills required from a typical retail environment. In fact, illiterate consumers make decisions in different ways as seen on the figure on the following slide. They tend to base their decisions on less information and use more basic processing tactics. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 101 Chapter Fifteen Slide 101

The Decision Process for Functionally Illiterate Consumers - Figure 15.6 This figure presents the decision process for an illiterate consumer. They tend to use a different variety of cognitive and emotional tactics as well as decision heuristics. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 102 Chapter Fifteen Slide 102

Evoked Set Criteria used for evaluating brands Consumer decision rules and their application Decisions by functionally illiterate population Going online for decision-making assistance Lifestyles as a consumer decision strategy Incomplete information Applying Decision Rules Series of decisions Decision rules and marketing strategy Many consumers will no longer make a decision without going online. In addition, many consumers will purchase products to maintain a lifestyle they have chosen. For many, purchase decisions are related to healthy lifestyles, luxury living, or simplifying their lives. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 103 Chapter Fifteen Slide 103

Coping with Missing Information
Delay decision until missing information is obtained Ignore missing information and use available information Change the decision strategy to one that better accommodates for the missing information Infer the missing information In some situations, the consumer does not have all the information they need to make their decision. Some consumers will move ahead by ignoring the missing information, changing their strategy or inferring the missing information. Others will wait until they can find the missing information in the hopes of making a more thorough and sound decision. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 104 Chapter Fifteen Slide 104

Evoked set Criteria used for evaluating brands Consumer decision rules and their application Decisions by functionally illiterate population Going online for decision making assistance Lifestyles as a consumer decision strategy Incomplete information Applying Decision Rules Series of decisions Decision rules and marketing strategy Consumers can apply their decision rules to similar or dissimilar alternatives. They may decide between a vacation and a new car. They will use decision rules focused on these alternatives and may include attributes such as fun, excited, necessary. In either case, this is just the first decision in a series of decisions. If they pick the vacation, they would have decisions on where to visit, who to bring, where to stay, and what airline to fly. Marketers must be aware of these decision rules so they can send the right messages through the correct channels at the best time to reach the consumer. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 105 Chapter Fifteen Slide 105

Output of Consumer Decision Making
Purchase behavior Trial purchases Repeat purchases Long-term commitment Postpurchase evaluation There are three types of purchases consumers make – trial, repeat, and long-term commitment. Trial includes the first time a consumer buys a product when there is potential for repeat purchases. This is their attempt to evaluate the product to see if they really like it. If so, there will be repeat purchases over time. Products which are rarely purchased and kept for a long time are different then those trial-and-repeat purchases. These long-term commitment products include cars, appliances, and housing. In either situation, the consumer will always have postpurchase evaluation, which is further explained on the following slide. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 106 Chapter Fifteen Slide 106

Postpurchase Evaluation
Actual Performance Matches Expectations Neutral Feeling Actual Performance Exceeds Expectations Positive Disconfirmation of Expectations Performance Is Below Expectations Negative Disconfirmation of Expectations The performance of a product will meet, exceed, or not meet expectations that the consumer had for the product when they purchased. Consumers and marketers prefer to reduce cognitive dissonance, which is the feeling a consumer has that they made the wrong choice. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 107 Chapter Fifteen Slide 107

Gifting Behavior Gifting is an act of symbolic communication, with explicit and implicit meanings ranging from congratulations and love, to regret, obligation, and dominance. The definition of gifting or gift giving or gift exchange is very broad and involves gifts given voluntarily as well as through obligation. Gifts represent about 10 percent of all retail purchases in North America so are an important part of the economy. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 108 Chapter Fifteen Slide 108

Reported Circumstances and Motivations for Self-Gift Behavior Table 15.13 CIRCUMSTANCES Personal accomplishment Feeling down Holiday Feeling stressed Have some extra money Need Had not bought for self in a while Attainment of a desired goal Others MOTIVATIONS To reward oneself To be nice to oneself To cheer up oneself To fulfill a need To celebrate To relieve stress To maintain a good feeling To provide an incentive toward a goal Others People often purchase a gift for themselves. This self-gifting behavior or intrapersonal gifts are very common and are often due to a variety of circumstances as provided in this slide. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 109 Chapter Fifteen Slide 109

Gifting Relationships - Table 15.14
DEFINITION EXAMPLE Intergroup A group giving a gift to another group A Christmas gift from one family to another family Intercategory An individual giving a gift to a group or a group giving a gift to an individual A group of friends chips in to buy a new mother a baby gift Intragroup A group giving a gift to itself or its members A family buys a VCR for itself as a Christmas gift Interpersonal An individual giving a gift to another individual Valentine’s Day chocolates presented from a boyfriend to a girlfriend Intrapersonal Self-gift A woman buys herself jewelry to cheer herself up Here are the five major gifting relationships with their definitions and an example of each. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 110 Chapter Fifteen Slide 110

Consuming and Possessing
Consumers find pleasure in possessing, collecting, or consuming Products have special meanings and memories Consumers purchase and own things and experiences for a variety of reasons. Many people collect as a hobby and we have many possessions which are much more important to us than the price for which they could be sold. Products help us remember the past and view the future. This web link brings you to eBay. What is the most unlikely possession you can imagine people collecting? You will likely find it here. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 111 111 Chapter Fifteen Slide 111

Relationship Marketing
Marketing aimed at creating strong, lasting relationships with a core group of customers by making them feel good about the company and by giving them some kind of personal connection with the business. Relationship marketing is important to all firms. Trust between the firm and its consumers will lead to strong and long-lasting relationships. It is usually much more economical for a company to retain an existing customer than to recruit a new customer. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 112 Chapter Fifteen Slide 112

CHAPTER SEVEN Consumer Learning 1.

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