Chapter 1 Consumers Rule By Michael R. Solomon Consumer Behavior Buying, Having, and Being Sixth Edition

MTV Cognitive Component (Measuring Beliefs about Specific Attributes Using the Semantic Differential Scale) Diet Coke Good music —— —— —— —— —— —— —— Bad music Interesting —— —— —— —— —— —— —— Not interesting Fun shows —— —— —— —— —— —— —— Boring shows Sucks —— —— —— —— —— —— —— Doesn’t suck

Thought listing (cognitive response) We would now like for you to list your thoughts that come to mind as you view the product. Next to the first number write the first thought that comes to your mind regarding the product shown, next to the second number write the second thought that comes to your mind regarding the product shown, etc. Please put only one thought next to each number. 1.

Sentence Completion and In-Depth Response Please complete the following question: People who watch MTV: _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Please describe what MTV means to you.

Why study Buyer Behavior? What is Marketing myopia? What companies have fallen prey to this? Saturation + Myopia = Failure Saturation + Consumer Identification, Need matching, and Relationship maintenance = Long term stability. Success stories?

Who are your customers? End-use consumer Employees Shareholders Members of supply chain Society (including critics): Treat them as disgruntled customers (Holt et. al 2004).

What is 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 Role Theory: Identifies consumers as actors on the marketplace stage Consumer Behavior is a Process: Exchange: A transaction in which two or more organizations give and receive something of value

Some Issues That Arise During Stages in the Consumption Process Figure 1.1

Consumer Behavior Involves Many Different Actors A person who identifies a need or desire, makes a purchase, and then disposes of the product Many people may be involved in this sequence of events. Purchaser / User / Influencer Consumers may take the form of organizations or groups.

Consumers’ Impact on Marketing Strategy Market Segmentation: Identifies groups of consumers who are similar to one another in one or more ways and then devises marketing strategies that appeal to one or more groups Demographics: Statistics that measure observable aspects of a population Ex.: Age, Gender, Family Structure, Social Class and Income, Race and Ethnicity, Lifestyle, and Geography

A Lesson Learned Nike was forced to pull this advertisement for a running shoe after disabilities rights groups claimed the ads were offensive. How could Nike have done a better job of getting its message across without offending a powerful demographic?

Market Segmentation Finely-tuned marketing segmentation strategies allow marketers to reach only those consumers likely to be interested in buying their products.

Marketing Strategy and Consumer Behavior 1-1 Outcomes Individual Firm Society Consumer decision process Problem Recognition Information Search Alternative Evaluation Purchase Use Evaluation Marketing strategy Product, Price, Distribution, Promotion, Service Marketing segmentation Identify product-related need sets Group Customers with similar need sets Describe each group Select attractive segment(s) to target Marketing analysis Company Competitors Conditions Consumers Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.

Consumers’ Impact on Marketing Strategy (cont.) Relationship Marketing: Building Bonds with Consumers Relationship marketing: The strategic perspective that stresses the long-term, human side of buyer-seller interactions Database marketing: Tracking consumers’ buying habits very closely, and then crafting products and messages tailored precisely to people’s wants and needs based on this information

Marketing’s Impact on Consumers Marketing and Culture: Popular Culture: Music, movies, sports, books, celebrities, and other forms of entertainment consumed by the mass market. Marketers play a significant role in our view of the world and how we live in it.

Popular Culture Companies often create product icons to develop an identity for their products. Many made-up creatures and personalities, such as Mr. Clean, the Michelin tire man and the Pillsbury Doughboy, are widely recognized figures in popular culture.

Marketing’s Impact on Consumers: The Meaning of Consumption People often buy products not for what they do, but for what they mean. Types of relationships a person may have with a product: Self-concept attachment Nostalgic attachment Interdependence Love

Marketing’s Impact on Consumers: The Global Consumer By 2006, the majority of people on earth will live in urban centers. Sophisticated marketing strategies contribute to a global consumer culture. Even smaller companies look to expand overseas. Globalization has resulted in varied perceptions of the United States (both positive and negative).

The Global Consumer American products like Levi jeans are in demand around the world.

Marketing’s Impact on Consumers: Virtual Consumption The Digital Revolution is one of the most significant influences on consumer behavior. Electronic marketing increases convenience by breaking down the barriers of time and location. U-commerce: The use of ubiquitous networks that will slowly but surely become part of us (i.e., wearable computers, customized advertisements beamed to cell phones, etc.) Cyberspace has created a revolution in C2C (consumer-to-consumer) activity.

Blurred Boundaries Marketing and Reality Marketers and consumers coexist in a complicated two-way relationship. It’s increasingly difficult for consumers to discern the boundary between the fabricated world and reality. Marketing influences both popular culture and consumer perceptions of reality.

Marketing Ethics and Public Policy Business Ethics: Rules of conduct that guide actions in the marketplace The standards against which most people in the culture judge what is right and what is wrong, good or bad Notions of right and wrong differ among people, organizations, and cultures.

Needs and Wants: Do Marketers Manipulate Consumers? Consumerspace Do marketers create artificial needs? Need: A basic biological motive Want: One way that society has taught us that need can be satisfied Are advertising and marketing necessary? Economics of information perspective: Advertising is an important source of consumer information. Do marketers promise miracles? Advertisers simply don’t know enough to manipulate people.

Discussion Question This ad was created by the American Association of Advertising Agencies to counter charges that ads create artificial needs. Do you agree with the premise of the ad? Why or why not?

Public Policy and Consumerism Consumer efforts in the U.S. have contributed to the establishment of federal agencies to oversee consumer-related activities. Department of Agriculture Federal Trade Commission Food and Drug Administration Securities and Exchange Commission Environmental Protection Agency Culture Jamming: A strategy to disrupt efforts by the corporate world to dominate our cultural landscape

Culture Jamming Adbusters Quarterly is a Canadian magazine devoted to culture jamming. This mock ad skewers Benetton.

Consumerism and Consumer Research Green Marketing: When a firm chooses to protect or enhance the natural environment as it goes about its activities Reducing wasteful packaging Donations to charity Social Marketing: Using marketing techniques to encourage positive activities (e.g. literacy) and to discourage negative activities (e.g. drunk driving)

Kennedy’s “Declaration of Consumer Rights” (1962) The right to the satisfaction of basic needs. The right to be protected against hazardous products and processes. The right to have the facts needed to make an informed choice. The right to choose between a variety of products and services. The right to be heard in the making and execution of government policy. The right to a fair settlement of just claims. The right to acquire the skills and knowledge to be an informed and responsible consumer. The right to live in a healthy and sustainable environment.

Consumer Related Issues UNICEF sponsored this advertising campaign against child labor. The field of consumer behavior plays a role in addressing important consumer issues such as child exploitation.

The Dark Side of Consumer Behavior Consumer Terrorism: An example: Susceptibility of the nation’s food supply to bioterrorism Addictive Consumption: Consumer addiction: A physiological and/or psychological dependency on products or services Compulsive Consumption: Repetitive shopping as an antidote to tension, anxiety, depression, or boredom

Positivist vs. Interpretivist Approaches to CB

Consumer Behavior As a Field of Study Consumer behavior only recently a formal field of study Interdisciplinary influences on the study of consumer behavior Consumer behavior studied by researchers from diverse backgrounds Consumer phenomena can be studied in different ways and on different levels

Journal of Consumer Research

The Pyramid of Consumer Behavior Figure 1.2

The Wheel of Consumer Behavior Figure 1.3