1. Chapter 1 Consumers Rule
CONSUMER BEHAVIOR, 9e Michael R. Solomon
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2. Chapter Objectives
When 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.
The Web is changing consumer behavior.
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3. Chapter Objectives (continued)
Consumer behavior relates to other issues in our lives.
Consumer activities can be harmful to individuals and to society.
Many different types of specialists study consumer behavior.
There are two major perspectives that seek to understand and study consumer behavior.
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4. Aspects of Consumer Behavior
Segmented by marketers by demographics
Influenced by peer groups
Exposed to competing brands seeking her loyalty
Evaluates products by the appearance, taste, texture, smell
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5. What 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.
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6. Figure 1.1 Stages in the Consumption Process
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7. Actors in Consumer Behavior
A consumer is a person who identifies a need or desire, makes a purchase, and then disposes of the product.
Purchaser versus user versus influencer
Organization/group as consumer
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8. Consumers’ Impact on Marketing
Understanding consumer behavior is good business
Understanding people/organizations to satisfy consumers’ needs
Knowledge and data about customers:
Help to define the market
Identify threats/opportunities to a brand
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9. Segmenting Consumers: Demographics
Demographics: statistics that measure observable aspects of a population, such as
Age
Gender
Family structure
Social class/income
Race/ethnicity
Geography
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10. Redneck Bank 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. This bank boastfully targets rednecks.
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11. Discussion
What are some products or services that are widely used by your social group?
Do these products or services help you form bonds with your group? If yes, give examples.
Are there any product or services you would avoid because of the social group you belong to?
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12. Segmenting Consumers: Lifestyles
Psychographics
The way we feel about ourselves
The things we value
The things we do in our spare time
Consumers may have very different lifestyles. How we choose to spend our spare time can also help marketers to better target us.
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13. Tapping into Consumer Lifestyles
Relationship marketing: interact with customers regularly; give them reasons to maintain a bond with the company
Database marketing: tracking specific consumers’ buying habits and crafting products and messages tailored precisely to people’s wants
Marketers realize that a key to success is building relationships between brands and customers. This belief represents the philosophy of relationship marketing.
Relationship marketing is made easier by our ability to track consumer buying habits in computer databases. For instance, Wal-Mart stores massive amounts of information on the people who shop at its stores and the company uses the data to fine-tune its offerings.
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14. Popular Culture
Music
Movies
Sports
Books
Celebrities
Entertainment
Marketers influence preferences for movie and music heroes, fashions, food, and decorating choices.
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15. Consumer-Generated Content
When everyday people voice their opinions about products, brands, and companies on blogs, podcasts, and social networking sites such as Facebook
CGC, short for consumer-generated content, really refers to anything that people create and share. It includes blog posts, pictures, videos, ads made by consumers, and much more. It has been harnessed by marketers to invite consumers to help brands create ads. Doritos has been very successful with this strategy.
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16. The Meaning of Consumption
People often buy products not for what they do, but for what they mean
Consumers can develop relationships with brands:
Self-Concept Attachment
Nostalgic Attachment
People use products to reflect who they are and what’s important to them as well as for the functional aspects of the products. Role theory explains this somewhat by pointing out that people play a variety of roles in life. They may buy specific products to fit the roles.
People also develop relationships with brands. There are four types of relationships a person might develop with a brand. These are identified in the slide. The self-concept attachment means that the product helps to establish the user’s identity. The nostalgic attachment means that the product serves as a link to a past self. The interdependence relationship is based on the product being a part of the user’s daily routine. The love relationship means that the product elicits emotional bonds of warmth, passion, or other strong emotion.
Interdependence
Love
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17. The Global Consumer
The global consumer culture is one that unites people with a common devotion to
Brand name consumer goods
Movie stars
Celebrities
Leisure activities
Many multinational household firms are household names in multiple countries. Much of this interconnectedness is related to the ubiquitous networks, which can be thought of as U-commerce, around us. RFID tags contain computer chips and a small antenna to let the chip communicate with a network. Such technology helps our global commerce center run more smoothly.
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18. Virtual Brand Communities
C2C e-commerce in addition to B2B and B2C
“Wired” Americans spend…
Less time with friends/family
Less time shopping in stores
More time working at home after hours
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19. Marketing Ethics and Public Policy
Business ethics: rules of conduct that guide actions in the marketplace
Cultural differences in ethics:
Codes of ethics less formal in Mexico
U.S. Foreign Corrupt Practices Act prohibits use of bribery by U.S. businesspeople—no matter where they’re doing business
Bribery commonly practiced in other countries
It can be difficult to avoid ethical conflicts because our thoughts of what is right and wrong vary among people, organizations, and cultures.
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20. Sample of Federal Legislation Intended to Enhance Consumers’ Welfare
Year
Act
1951
Fur Product Labeling Act
1953
Flammable Fabrics Act
1958
National Traffic and Safety Act
Automobile Information Disclosure Act
1966
Fair Packaging and Labeling Act
Child Protection Act
1967
Federal Cigarette Labeling and Advertising Act
Year
Act
1968
Truth-in-Lending Act
1969
National Environmental Policy Act
1972
Consumer Products Safety Act
1975
Consumer Goods Pricing Act
Magnuson-Moss Warranty-Improvement Act
1990
Nutrition Labeling and Education Act
1998
Internet Tax Freedom Act
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21. Do Marketers Create Artificial Needs?
Objective of marketing: create awareness that
needs exist, not to create needs
versus
Need: a basic biological motive
Want: one way that society has taught us that the need can be satisfied
Marketing 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.
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22. Are Advertising & Marketing Necessary?
Does advertising foster materialism?
Products are designed to meet existing needs;
Advertising only helps to communicate their availability
Yes, 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.
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23. Do Marketers Promise Miracles?
Advertisers simply do not know enough about people to manipulate them
The failure rate for new products ranges from 40-80%. Although people may think that advertisers use magic to sell products, marketers are only successful when they promote good products.
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24. Discussion
Advertisers 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?
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25. Public Policy & Consumerism
Concern for the welfare of consumers
Department of Agriculture
Federal Trade Commission
Food and Drug
Administration
Securities and Exchange Commission
A summary of important consumer protection legislation is provided in Table 1.1.
Environmental Protection Agency
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26. Consumer Activism
Culture jamming is a strategy to disrupt efforts by the corporate world to dominate our cultural landscape.
Adbusters Media Foundation publishes the Adbusters magazine and website. It is an organization of consumer activists who seek to culture jam the work of the corporate world in order to protect consumers and our shared environment. Adbusters sponsors many initiatives including Buy Nothing Day and TV Turnoff Week.
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27. Consumerism & Consumer Research
JFK’s “Declaration of Consumer Rights” (1962)
The right to safety
The right to be informed
The right to redress
The right to choice
Social Marketing
Green Marketing
President John F. Kennedy began our modern era of consumerism when he created the Declaration of Consumer Rights in 1962.
Consumerism began in the 1960s but has continued strong. Today we have social marketing and green marketing which are outshoots of the earlier developments. Social marketing strategies use techniques marketers normally employ to sell beer or detergent to encourage positive behaviors such as increased literacy and to discourage negative activities like drunk driving.
Green marketing means trying to protect or enhance the natural environment as the company goes about its business activities.
Consumer researchers even use their research now as a way to solve problems rather than just study problems. This is known as transformative consumer research or participatory action research.
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28. The Consumer “Dark Side”
terrorism
Addictive
consumption
Compulsive
consumption
Consumed
consumers
Sometimes consumers are their own worst enemies. Despite regulations and research, there are consumer actions related to marketing that are harmful.
Consumers may be the perpetrators and targets of terrorism such as the cyanide lacing of Tylenol tablets. Consumers may experience addition. Consumer addition is a physiological or psychological dependency on products or services. Some say that social networking and texting are addictive. Compulsive consuption refers to repetitive shopping, often excessive, as an antidote to tension, anxiety, depression or boredom.
There are three common elements to destructive consumer behavior. First, the behavior is not done by choice. Second, the gratification from the behavior is short-lived. Lastly, the person experiences guilt or regret afterwards.
Consumed consumers are those who are exploited by others. Examples are prostitutes and babies for sale.
Not only are many consumer behaviors destructive to self or society, they are also illegal. Some estimate the cost of crimes consumers commit against businesses at $40 billion per year. Shrinkage is the term used to refer to the loss of inventory due to shoplifting.
Illegal activities
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29. Interdisciplinary Research Issues in Consumer Behavior
Disciplinary Focus
Product Role
Experimental Psychology
Perception, learning, and memory processes
Clinical Psychology
Psychological adjustment
Microeconomics/Human Ecology
Allocation of individual or family resources
Social Psychology
Behavior of individuals as members of social groups
Sociology
Social institutions and group relationships
Macroeconomics
Consumers’ relations with the marketplace
Semiotics/Literary Criticism
Verbal and visual communication of meaning
Demography
Measurable characteristics of a population
History
Societal changes over time
Cultural Anthropology
Society’s beliefs and practices
Consumer behavior relies upon many research fields.
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30. Figure 1.2 Disciplines in Consumer Research
MICRO CONSUMER BEHAVIOR
(INDIVIDUAL FOCUS)
Experimental Psych
Clinical Psychology
Developmental Psych
Human Ecology
Microeconomics
Social Psychology
Sociology
Macroeconomics
Semiotics/Literary Criticism
Demography
History
Cultural Anthropology
Consumer behavior
involves many different
disciplines
This figure provides a glimpse at some of the disciplines working in the field and the level at which each tackles research issues. The fields closer to the top of the pyramid concentrate on individual behavior. Those toward the base are more interested in the aggregate activities that occur among large groups of people.
MACRO CONSUMER
BEHAVIOR
(SOCIAL FOCUS)
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31. Table 1.3 Positivist versus Interpretivist Approaches
Assumptions
Positivist Approach
Interpretivist Approach
Nature of reality
Objective, tangible
Single
Socially constructed
Multiple
Goal
Prediction
Understanding
Knowledge generated
Time free
Context-independent
Time-bound
Contest dependent
View of causality
Existence of real causes
Multiple, simultaneous shaping events
Research relationship
Separation between researcher and subject
Interactive, cooperative with researcher being part of phenomenon under study
We call a set of beliefs that guide our understanding of the world a paradigm. Some belief consumer behavior is in the midst of a paradigm shift, which occurs when a competing paradigm challenges the dominant set of assumptions. The basic set of assumptions underlying the dominant paradigm is positivism or modernism. It emphasizes that human reason is supreme and there is a single, objective truth that science can discover.
The newer paradigm of interpretivism (or postmodernism) questions these assumptions. This perspective argues that societal beliefs deny the complex social and cultural world in which we really live.
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32. Figure 1.3 Wheel of Consumer Behavior
The plan of the book goes from micro to macro. We will depict the topic as the wheel of consumer behavior.
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33. Chapter Summary Consumer behavior is a process.
Consumer use products and brands to define their identity to others.
Consumers from different segments have different needs and wants.
Consumer activities can be harmful.
Consumer behavior benefits from several fields.
There are two major perspectives guiding our study of consumer behavior.
We’ve covered several key concepts in this chapter. Consumer behavior is the study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and wants. Consequently, it is a broad field.
4/16/2017
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