Presentation on theme: "Chapter 1 Buying, Having, Being"— Presentation transcript:
1Chapter 1 Buying, Having, Being CONSUMER BEHAVIOR, TestMichael R. SolomonThe book begins with a look at the role of consumers. We will look at how consumers influence the field of marketing and how marketers influence consumers.
2Chapter ObjectivesWhen you finish this chapter, you should understand why:Consumers use products to help them define their identities in different settings.Consumer behavior is a process.Marketers need to understand the wants and needs of different consumer segments.
3Chapter Objectives (continued) The Web is changing consumer behavior.Consumer behavior relates to other issues in our lives.Many different types of specialists study consumer behavior.There are two major perspectives that seek to understand and study consumer behavior.
4Learning Objective 1Consumers use products to help them define their identities in different situationsMarketers need to be able to understand consumer behavior and categorize them into useful segmentsConsumers interact with products and other aspects of the marketing system but for marketers to best meet consumer needs, they need to be able to understand their behavior and categorize them into useful segments.
5Consumers as Role Players Consumers need different products to help them play their various partsList the different roles you play in life.StudentSonDaughterBrotherSisterChurch goerClub partierMusic Listener (alone and with friends)Entertainment
6Consumer Identity as an Aid to Marketers Consumers segmented by demographics and psychographicsConsumers understood in part based on their consumption communities and reference groupsBrands target consumers using market segmentation strategiesConsumers may choose brands that match with their own identitiesThe average consumer can be classified and characterized based on demographics (e.g. age, gender, income, occupation) and psychographics (lifestyle and personality). The average consumer’s purchase decisions are heavily influenced by the opinions and behaviors of their family, peers, and acquaintances.Community heavily influences us. The growth of the Web has created thousands of online consumption communities where members share opinions and product recommendations.As members of a large society, U.S. consumers share certain cultural values or strongly held beliefs about the way the world should be structured.Subcultures, or smaller groups within the culture, also share values (e.g. Hispanics, teens, Midwesterners).The use of market segmentation strategies may be used to target a brand to only specific groups of consumers rather than to everybody.Brands often have clearly defined images or “personalities” created by product advertising, packaging, branding, and other marketing strategies that focus on positioning a product in a certain way.When a product succeeds in satisfying a consumer’s specific needs or desires it may be rewarded with many years of brand loyalty, a bond between product and consumer that is difficult for competitors to break.
7Here is an ad for Nike. What can you tell me about the target, or the consumer they are going after? Tell me a story…Questions:Would these girls relate to an ad for sketchers?What about athletic wear at JCP?Would this be a good market segment strategy for Maybelline makeup?
8Community heavily influences us. The growth of the Web has created thousands of online consumption communities where members share opinions and product recommendations.As members of a large society, U.S. consumers share certain cultural values or strongly held beliefs about the way the world should be structured.Subcultures, or smaller groups within the culture, also share values (e.g. Hispanics, teens, Midwesterners).Brands have a clearly defined image or personality.People believe that if they buy a product, the image will magically rub off on them.What is the personality of Weight Watchers.Is this a community?
9What is Consumer Behavior? Consumer behavior: the study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires.Consumer behavior is a process.Most marketers recognize that consumer behavior is an ongoing process, not merely what happens at the moment a consumer hands over money or a credit card and in turn receives some good or service (buyer behavior).The exchange—a transaction where two or more organizations or people give and receive something of value—is an integral part of marketing. However, the expanded view of consumer behavior emphasizes the entire consumption process. This view includes issues that influence the consumer before, during, and after a purchase.B. Consumer behavior involves many different actors.A consumer is a person who identifies a need or desire, makes a purchase, and then disposes of the product during the three stages in the consumption process.The purchaser and user of a product might not be the same person. A separate person might be an influencer. This person provides recommendations for or against certain products without actually buying or using them.Consumers may be organizations or groups (in which one person may make the decision for the group or a large group of people may make purchase decisions).
10What is Consumer Behavior ConsumersItems we ConsumeNeeds & Desires Satisfied8 year old girls buying Barbie DollsHaircutHunger75 year old grandparents buying a strollerRoot CanalLoveAsian businessmen deciding on a company serverPeasStatusTeenagers going to promMcDonaldsAcceptanceStudents buying booksTax AttorneySecurityHipsters at a clubSpotifyRespectGraduate Business StudentsStarbucksBelongingAdvertising executiveMatch.comFamily
11For ReflectionDo your consumption choices differ depending upon the role you are playing at the time?Give examples from your own life.How do your choices as a consumer differ depending upon whether you are in the role of student, child, employee, and so on?
12Expanded View of Consumer Behavior Embraces much more than the study of what and why we buy; it also focuses on how marketers influence consumers and how consumers use the products and services marketers sell
13Consumer behavior is a process. Learning Objective 2Consumer behavior is a process.In the early stages of development, researchers referred to the field as buyer behavior.this reflected an emphasis on the interaction between consumers and producers at the time of purchase.Marketers now recognize that consumer behavior is an ongoing process, not merely what happens at one point in the transaction cycle.We call the transaction of value between two or more an exchange.It’s an integral part of marketing but consumer behavior recognizes that the entire consumption process is relevant for marketers.Figure 1.1 in the text illustrates these issues.
14Figure 1.1 Stages in the Consumption Process Consumer behavior involves many different actors.A consumer is a person who identifies a need or desire, makes a purchase, and then disposes of the product during the three stages in the consumption process.The purchaser and user of a product might not be the same person.A separate person might be an influencer. This person provides recommendations for or against certain products without actually buying or using them.Consumers may be organizations or groups (in which one person may make the decision for the group or a large group of people may make purchase decisions).
15For ReflectionThinking about the three stages in the consumption process, what issues do you consider in each stage when you are making important decisions?PhoneJeansEducation
16Consumers Impact on Marketing Strategy Understanding consumer behavior is good business.Marketers can only satisfy consumer needs to the extent that they understand the people or organizations that will use the products and services they sell.Consumer response is the ultimate test of whether a marketing strategy will succeed.Data about consumers help organizations define the market, identify threats to and opportunities for a brand, and help ensure a product continues to appeal to its core market.Why is understanding consumer behavior important for marketing managers?Book uses the example of the Sony WalkmanNeeded to update its image, since the iPod was taking overSeen as dinosaursAdvertising agency followed 125 teens around to see how they use products in day to day lifeLaunched a product with a removable “memory stick”, plays videos, creates channels based on users listening preferenceToo little, too late to catch up with Apple.Marketers need to incorporate knowledge about consumers into every facet of a successful marketing campaign.
17Consumers are different! How do we divide them up Learning Objective 3Marketers need to understand the wants and needs of different consumer segments.Consumers are different!How do we divide them upConsumers Are Different! How We Divide Them UpSociety is evolving from a mass culture to a diverse one, which makes it more important to identify diverse market segments and to develop specialized messages and products for those groups.This change makes it even more important to identify distinct market segments and to develop specialized messages and products for these groupsA shift from television spending to alternative media by companies as McDonald’s provide evidence of this trend. (1/3 to TV, vs. 2/3 a few years ago)One alternate way of reaching diverse consumers, ARGs (alternate reality games – The Lost Ring), integrates multiple media channels (TV, , SMS, snail mail) to engage a community of players to solve a complex puzzle.The process of market segmentation identifies groups of consumers who are similar to one another in one or more ways and then devises strategies that appeal to one or more groups. There are many ways to segment a market.Companies can define market segments by identifying their most loyal, core customers or heavy users. Marketers use the 80/20 rule as a rule of thumb, where 20% of users account for 80% of sales.Fast Food Chains love targeting the Heavy User who account for 60% of the visitsTaco Bell – ChalupaHardee – Monster thickburger (1,400 calories) – Males under 30, working class jobs, loves loud music, does not read often, hangs out with friendsBurger King – “Super Fans” who are young men, and eat BK approximately 16 times a month
18Segmenting Consumers: Demographics AgeGenderFamily structureSocial class/incomeRace/ethnicityGeographyDemographics are statistics that measure observable aspects of a population.Some of the most common demographic measures are age, gender, family structure, social class, race or ethnicity, and geography.Even lifestyles can be useful to marketers in that consumers may share demographic characteristics but have very different lifestyles.Marketers try to understand their customers and develop lifelong relationships.Marketers who follow this approach are said to follow the philosophy of relationship marketing.They may also utilize database marketing in order to track the buying habits of consumers.Important demographic dimensions include:Age – different ages, have different needs and wants. Share a set of values and common cultural experiences that carry throughout life. (Red Bull)Gender – distinctions made early in life. Girls pink, boys blue. Footwear, clothes, fragrances. Crest toothpaste to women. Condoms to womenFamily structure – family/marital status has a huge effect of spending priorities. Fam’s with young purchasers are big spenders.Social class and income – Peop who belong to the same social class are approx equal in terms of income and social standing. Work in same occupations, same cars, clothing, leisure activities, art, music. Tend to socialize with each other.Race and ethnicity – African Am, Hispanics, Asians, fastest growing ethnic groups in the US . Multicultural society calls for more specialized goods. Ex. Colored contacts to AsiansGeography and Lifestyles (a psychographic variable) are other important bases for segmenting consumers.
19Visa Targets by Social Class People who belong to the same social class are approximately equal in terms of their incomes and social standing in the community.
20Relationship & Database Marketing Relationship marketing occurs when a company makes an effort to interact with customers on a regular basis, giving customers reasons to maintain a bond with the company over time.Database marketing involves tracking consumers’ buying habits very closely and creating products and messages tailored precisely to people’s wants and needs based on this information.
22Popular CulturePopular culture consists of the music, movies, sports, books, celebrities, and other forms of entertainment consumed by the mass market; it is both a product of and an inspiration for marketers.Product icons (e.g. Pillsbury Doughboy, Jolly Green Giant) often become central figures in popular culture.
24Popular CultureMusicMoviesSportsBooksCelebritiesEntertainmentMarketers influence preferences for movie and music heroes, fashions, food, and decorating choices.Many people don’t realize the extent to which marketers influence popular culture.Whether we are talking about music, movies, sports, or entertainment, these forms of popular culture both influence and are influenced by marketing.Marketing stimuli surrounds us as ads, stores, and products compete for our attention and our dollars.
25What does it mean to Consume? Premise that people often buy products not for what they do, but for what they mean.People, in general, will choose the brand that has an image (or even a personality) that is consistent with his or her underlying needs.Role theory takes the view that much of consumer behavior resembles actions in a play.Consumers have roles and they may alter their consumption decisions depending upon the role being played at the time.A fundamental premise of consumer behavior is that people often buy products not for what they do, but for what they mean.
27Consumer-Brand Relationships Self-concept attachmentNostalgic attachmentInterdependenceLoveWe find that consumers may develop relationships with brands over time. The slide lists some of the types of relationships we may see between consumers and their brands.People may have various relationships with a product:Self-concept attachment—the product helps to establish the user’s identity.Nostalgic attachment—the product serves as a link with a past self.Interdependence—the product is a part of the user’s daily routine.Love—the product elicits emotional bonds of warmth, passion, or other strong emotion. – Warm Delights by Betty Crocker
28For ReflectionWhat kind of relationship do you have with your car?Do these feelings correspond to the types of relationships consumers may develop with products?How do these relationships affect your behavior?
29The Global ConsumerA global consumer culture is one where people around the world are united by their common devotion to brand name consumer goods, movie stars, and musical celebrities.When companies expand overseas, it increases the pressure to understand how customers in other countries are the same or different from those in one’s own country.
30The Web is changing consumer behavior. Learning Objective 4The Web is changing consumer behavior.Access to the Internet is incredibly influential for consumer behavior. It changes who you may interact with, the information you can find, the choices you see as available, and the time and energy you spend dealing with various decisions. The Internet has made it possible for businesses to use an additional channel of distribution (B2C e-commerce) but it’s also made possible C2C e-commerce, in the form of outlets like Etsy.com.You are likely at the forefront of the impact of the Web on consumer behavior because you are a digital native. Digital natives grew up in a wired world.The Web hasn’t just changed consumer behavior by shifting our options in terms of channels of distribution. It’s also made possible a whole new form of media known as social media.
31The Digital Native: Living a Social Media Life Virtual brand communities are often brought together by their interests, which expand consumption communities beyond those available in local communities.Digital natives are consumers who grew up “wired” in a highly networked, always-on world where digital technology always existed.There is now B2C e-commerce (businesses selling to consumers) and C2C e-commerce (consumers selling to consumers).The digital revolution is one of the most significant influences on consumer behavior.Electronic marketing has increased convenience by breaking down barriers of time and location.Discussion Opportunity—Have students describe the characteristics of their virtual communities. Ask: How do these interactions shape your consumption behaviors?Ask students to give some examples of social media platforms they use. Have students offer examples of brands they interact with via social media. Ask: How do these interactions relate to your relationship with the brand?
34Online Communications User-generated content, where everyday people film commercials, voice their opinions about products, brands and companies on blogs, podcasts and social networking sites, is part of the Web 2.0 era, which shifted the Internet from a one-way transmission medium to a social, interactive medium.Social media is characterized by synchronous (real-time) and asynchronous interactions across social media platforms that enable a culture of participation.
3580% of companies use LinkedIn as their primary recruiting tool? For ReflectionDid you knowIf you were paid $1 for every time an article was posted on Wikipedia, you’d earn $156.23/hour?80% of companies use LinkedIn as their primary recruiting tool?More than 1.5 billion pieces of content are shared on Facebook daily?How do you participate in social media? Can you think of any instances in which social media influenced a purchase decision you made?
36Learning Objective 5Our beliefs and actions as consumers strongly connect to other issues in our lives.In business, conflicts often arise between the goal to succeed and the desire to maximize well-being of consumers by providing them with safe and effective products. Sometimes consumers expect too much of companies. Thus, thinking about marketing ethics means considering how businesses may manipulate consumers as well as how consumers may manipulate businesses.
37Marketing Ethics and Public Policy Business ethics are rules of conduct that guide actions in the marketplaceThere are cultural differences in what is considered ethical.It can be difficult to avoid ethical conflicts because our thoughts of what is right and wrong vary among people, organizations, and cultures. These cultural differences certainly influence whether business practices such as bribery are acceptable. Bribing foreigners to gain business has been against the law in the United States since 1977, under the Foreign Corrupt Practices Act. The Organization for Economic Cooperation and Development (OECD), to which most industrialized countries belong, also outlaws bribery. Still, these practices are common in many countries.Business ethics are rules of conduct that guide actions in the marketplace—the standards against which most people in a culture judge what is right and what is wrong, good, or bad.There are various universal values and many culture-specific ones (which influence whether business practices like bribery are acceptable).Some marketers violate consumer trust (using illegal mislabels on packages or using bait-and-switch selling).Some marketers engage in practices that are legal but have detrimental effects on society.
38Jillian Michaels – Being Sued Jillian Michaels of “The Biggest Loser” fame has been hit with a class action suit in connection with a diet drug she endorses. The suit alleges that her Maximum Strength Calorie Control dietary supplement is “worthless.” You can read the complaint here courtesy of E! Online.The suit alleges that Michaels et al. engaged in false advertising and thereby violated two of California’s tough consumer protection statutes, the Unfair Competition Act and the Consumers Legal Remedies Act. Remedies available under these statutes are what we might term ‘”the whole nine yards,” including injunctive relief, actual damages, restitution, punitive damages, and attorneys’ fees.According to the complaint, the contested statements include “Two Capsules Before Main Meals and You Lose Weight. That’s It.” As you can see to the left, that phrase is right on the front of the box. The lettering on the rest of the box is too small to read in this image, but Michaels’s website further indicates that the pills should be used “in conjunction with any sensible diet and exercise program,” a detail which doesn’t appear to be mentioned in the complaint.The Calorie Control FAQ on her website muddies the waters somewhat, stating, “[a]lthough the subjects in a scientific study who took the active compound contained in the Jillian Michaels Calorie Control product lost weight without diet and exercise, the Jillian Michaels Calorie Control should be used in conjunction with any sensible diet and exercise program.” That statement implies that the pills do work without diet or exercise. How many subjects took part in the study in question? Only twenty-four. Additionally, there’s no mention of how much weight the subjects lost.
39(a shift from marketer space where companies called the shots). ConsumerspaceConsumer space is an environment where individuals dictate to companies the types of products they want and how, when, and where, or even if, they want to learn about them(a shift from marketer space where companies called the shots).Who controls the market, companies or consumers? It seems that the “good old days” of marketerspace – a time when companies called the shots and decided what they wanted their costumers to know and do are dead and gone.Many people now feel empowered to choose how, and when, or if they will interact with corporations as they construct their own consumerspace.
40Do Marketers Create Artificial Needs? Objective of marketing: create awareness thatneeds exist, not to create needsversusNeed: a basic biological motiveWant: one way that society has taught us that the need can be satisfiedMarketing is commonly criticized as trying to convince consumers that they need something when they really don’t. This is an ethical issue. Marketers respond to this question by pointing out that the need already exists in the consumer, but marketers recommend ways to satisfy the need.Needs and Wants: Do Marketers Manipulate Consumers?Consumer space is an environment where individuals dictate to companies the types of products they want and how, when, and where, or even if, they want to learn about them (a shift from marketer space where companies called the shots).Do marketers create artificial needs? There are arguments to support both sides of this question.A need is a basic biological motive; a want represents one way that society has taught us to satisfy that need.A basic objective of marketing is to create awareness that needs exist, not to create needs.Restless Leg SyndromeRestless Leg Syndrome is a simple case of potassium deficiency. You can go to Walmart or anywhere else that they sell vitamin supplements. Buy a bottle of 99mg potassium. Chelated is best but not absolutely necessary. Take one and wait about an hour. Your "restless leg syndrome" will be gone. Yes it works that fast.Take one 99mg potassium every other day. Your restless legs syndrome will never return. Really!I have told this to many, many people and everyone who tried it was very pleased. Not one single person that I know of ever tried potassium for relief of restless leg syndrome and did not receive almost instant and ongoing relief. Not One Single Person!!!
44Are Advertising & Marketing Necessary? Does advertising foster materialism?Products are designed to meet existing needsAdvertising only helps to communicate their availabilityViewed as an important source of consumer communicationReduces consumer search timeYes, we can say that advertising and marketing are necessary because consumers may not know that solutions to problems exist without the information provided by advertising and marketing. This is the view of the economics of information perspective. It points out that there is an economic cost to searching for information. Advertising helps consumers by reducing search time.
45Do Marketers Promise Miracles? Advertisers simply do not know enough about people to manipulate them40% - 80% of new products failThe failure rate for new products ranges from 40 to 80%. Although people may think that advertisers use magic to sell products, marketers are only successful when they promote good products.
46Public Policy & Consumerism Concern for the welfare of consumersDepartment of AgricultureFederal Trade CommissionFood and DrugAdministrationSecurities and Exchange CommissionTable 1.1 presents consumer legislation that is designed to protect consumers.The Department of Agriculture, Federal Trade Commission, Food and Drug Administration, Securities and Exchange Commission, and Environmental Protection Agency are federal agencies that oversee consumer-related activities.Congress passed the Pure Food and Drug Act in 1906 and the Federal Meat Inspection act in 1907 in response to Upton Sinclair’s 1906 book The Jungle, which exposed awful conditions in the Chicago meatpacking industry.Recently, the Obama Administration issued voluntary guidelines that food products targeted to children ages 2-17 would have to provide a meaningful contribution to a healthy diet and would have to meet limits for harmful ingredients.Environmental Protection Agency
47If yes, is materialism a bad thing? If no, what are your reasons? For ReflectionAdvertisers are often blamed for promoting a materialistic society by making their products as desirable as possible.Do you agree with this?If yes, is materialism a bad thing?If no, what are your reasons?On January 7th 2012, 19 year old D.C. teen David Lee Robinson was robbed and shot to death over a pair of Nike Zoom Rookies after leaving a party with his cousin. From the feedback we have been getting from our sneakerheads in the D.C., Maryland, Virginia Metropolitan area, robberies and murders have become part of the sneaker culture in certain neighborhoods out there, and KicksOnFire.com finds this very disturbing.We love our sneakers and we work very hard for them. Some of us find some pretty elaborate ways to come up with the money to get our sneakers. Stealing and killing will never be and should never be a person’s way of getting kicks. Some people blame the robberies on the fact that so many of the most sought after sneakers, especially Nike and Jordan sneakers, come in very limited numbers. Due to limited numbers not everyone is able to get a pair. Match that with resellers selling these same sneakers at prices sometimes more than double the retail price, it keeps the sneakers out of the hands of people who can’t afford to get them if they are sold out in stores.
48Learning Objective 6 Many specialists study consumer behavior. Disciplinary FocusProduct RoleExampleExperimental PsychologyPerception, learning, and memory processesHow specific aspects of magazines, such as design or layout are recognized and interpreted; parts most likely to be readClinical PsychologyPsychological adjustmentHow magazines affect readers’ body imagesHuman EcologyAllocation of individual or family resourcesFactors influencing the amount of money a family spends on magazinesSocial PsychologyBehavior of individuals as members of social groupsWays ads affect readers’ attitudes toward the products depicted; peer pressure influencesSociologySocial institutions and group relationshipsPattern by which magazine preferences spread through a social groupMacroeconomicsConsumers’ relations with the marketplaceEffects of the price of fashion magazines and expense of items during high unemploymentDemographyMeasurable characteristics of a populationEffects of age, income, and marital status of magazine readersHistorySocietal changes over timeWays in which our culture depicts women has changed over timeCultural AnthropologySociety’s beliefs and practicesWays fashion and models affect readers’ definitions of masculine vs. feminineThe field of consumer behavior is interdisciplinary; it is composed of researchers from many different fields who share and interest in how people interact with the marketplace.
51There are two major perspectives on consumer behavior: Learning Objective 7There are two major perspectives on consumer behavior:Positivist approachInterpretivist approachTwo Perspectives on Consumer ResearchOne general way to classify consumer research is in terms of the fundamental assumptions the researchers make about what they are studying and how to study it. This set of beliefs is known as a paradigm. A paradigm shift may now be underway.The dominant paradigm currently is called positivism (or sometimes called modernism).It emphasizes that human reason is supreme, and that there is a single, objective truth that can be discovered by science. Positivism encourages us to stress the function of objects, to celebrate technology, and to regard the world as a rational, ordered place with a clearly defined past, present, and future.The emerging paradigm of interpretivism (or postmodernism) questions the previous assumptions.Proponents argue that there is too much emphasis on science and technology in our society, and that this ordered, rational view of consumers denies the complex social and cultural world in which we live. Others say positivism puts too much emphasis on material well being, and that this logical outlook is dominated by an ideology that stresses the homogeneous views of a culture dominated by white males.Interpretivists instead stress the importance of symbolic, subjective experience and the idea that meaning is in the mind of the person because we live a world composed of a pastiche, or mixture of images.