Introduction to Consumer Behavior

Consumer Behavior: People in the Marketplace

1. The average consumer can be classified and characterized on the basis of demographics and psychographics. 
2. The average consumer’s purchase decisions are heavily influenced by the opinions and behaviors of their family, peers, and acquaintances.

We are heavily influenced by community.

1. The growth of the Web has created thousands of online consumption communities where members share views and product recommendations.
2. As a member of a large society, U.S.consumers share certain cultural values or strongly held beliefs about the way the world should be structured.
3. The use of market segmentation strategies may be used to target a brand to only specific groups of consumers rather than to everybody.

1. 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.

1. When a product succeeds in satisfying a consumer’s specific needs or desires, it may be rewarded with many years of brand loyalty.

What Is Consumer Behavior?

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 desires.

1. Consumer behavior is a process.

1. 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).
2. The exchange—a transaction where two or more organizations or people give and receive something of value—is an integral part of marketing. The expanded view emphasizes the entire consumption process. This view would include issues that influence the consumer before, during, and after a purchase.

     B.  Consumer behavior involves many different actors.

1. A consumer is generally thought of as 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.
2. 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.
3. Consumers may be organizations or groups (in which one person may make the decision for the group).

III. Consumers’ Impact on Marketing Strategy

1. Consumers Are Different! How We Divide Them Up

1. The process of market segmentationidentifies 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.
   1. Companies can define market segments by identifying their most loyal, core customers or heavy users.
   2. Demographics are statistics that measure observable aspects of a population, such as birth rate, age distribution, and income.
   3. Important demographic dimensions include:

• Age
• Gender
• Family structure
• Social class and income
• Race and ethnicity
• Geography
• Lifestyles

1. Relationship and Database Marketing

1. Relationship marketing occurs when a company makes an effort to interact with customers on a regular basis, giving them reasons to maintain a bond with the company over time.

1. Database marketing involves tracking consumers’ buying habits very closely and crafting products and messages tailored precisely to people’s wants and needs based on this information.

IV. Marketing’s Impact on Consumers

1. Popular Culture

1. Popular 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.
2. Product icons often become central figures in popular culture.

1. Consumer-Generated Content

1. Consumer-generated content is the content created when everyday people voice their opinions about products, brands, and companies on blogs, podcasts, and social networking sites such as Facebook and MySpace. It even includes consumer-generated commercials.
2. Web 2.0 refers to the rebirth of the Internet as a social, interactive medium from its original roots as a form of one-way transmission.

1. What Does It Mean to Consume?

1. A fundamental premise of consumer behavior is that people often buy products not for what they do, but for what they mean.
2. People, in general, will choose the brand that has an image (or even a personality) that is consistent with his or her underlying needs.
3. 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.

 4.  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.

1. The Global Consumer

1. A 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.
2. U-commerce is the use of ubiquitous networks that will slowly but surely become a part of us, whether in the form of wearable computers or customized advertisements beamed to us on our cell phones.
3. RFID tags contain computer chips and a tiny antenna that lets the chip communicate with a network.

1. Virtual Consumption and the Power of Crowds

Electronic marketing has increased convenience by breaking down barriers of time and location. There is now B2C e-commerce and C2C e-commerce.

1. Blurred Boundaries: Marketing and Reality

Marketers and consumers co-exist in a complicated, two-way relationship.

V.  Marketing Ethics and Public Policy

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.

1. Needs and Wants: Do Marketers Manipulate Consumers?

1. Welcome to Consumerspace: Consumerspace 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.
2. Do marketers create artificial needs? There are arguments to support both sides of this question.
   1. A need is a basic biological motive; a want represents one way that society has taught us to satisfy that need.
   2. A basic objective of marketing is to create awareness that needs exist, not to create needs.

1. Are advertising and marketing really necessary? Yes, if approached from an information dissemination perspective. The view of advertising as consumer information is known as economics of information.
2. Do marketers promise miracles? Not it if they are honest. They do not have the power to create miracles. Many marketers do not know enough about consumers to manipulate them.

1. Public Policy and Consumerism

1. Table 1.1 presents consumer legislation that is designed to protect consumers.
2. Consumer activism: America^™ Adbusters is one of various organizations that have the objective of discouraging rampant commercialism.
3. Such organizations employ the strategy of culture jamming that aims to disrupt efforts by the corporate world to dominate our cultural landscape. Recent scandals in corporateAmerica have fueled the arguments presented by culture jammers.
4. Some consumer researchers are not only seeking to study consumer responses but to rectify what they see as pressing social problems in the marketplace. This is known as participatory action research (PAR) or Transformative Consumer Research (TCR).
5. Social marketing uses marketing techniques normally employed to sell beer or detergent to encourage positive behaviors such as increased literacy and to discourage negative activities such as drunk driving.
6. As a response to consumer efforts, many firms have chosen to protect or enhance the natural environment as they go about their business activities. This practice is known as green marketing.

VI. The Dark Side of Consumer Behavior

Despite the best efforts of researchers, government regulators, and concerned industry people, sometimes consumers’ worst enemies are themselves.

1. Consumer Terrorism

The terrorist attacks of 2001 had a tremendous impact on consumerism throughout the world. Such effects give the indication that both natural and man-made disruptions to     financial, electronic, and supply networks can be devastating. Although bioterrorism has occurred in the past, the threat of such attacks is more prevalent than ever.

 B.  Addictive Consumption

Consumer addiction is a physiological and/or psychological dependency on products or services. New examples of this might be video gaming or SMS addictions.

1. Compulsive Consumption

1. Compulsive consumption refers to repetitive shopping, often excessive, as an antidote to tension, anxiety, depression, or boredom. These people are often called “shopaholics.” Note that compulsive consumption is different from impulse buying.

2.  Negative or destructive consumer behavior. Three aspects are:

• The behavior is not done by choice.
• The gratification derived from the behavior is short-lived.
• The person experiences strong feelings of regret or guilt afterward.

1. Gambling is an example of consumption addiction that touches every segment of society.

1. Consumed Consumers

People who are used or exploited, whether willingly or not, for commercial gain in the  marketplace can be thought of as consumed consumers. Examples include:

• Prostitutes
• Organ, blood, and hair donors
• Babies for sale

E.  Illegal Activities

1. Shrinkage is an industry term for inventory and cash losses due to shoplifting and employee theft. A growing form of fraud involves “serial wardrobers” who abuse exchange and return policies.
2. Some types of destructive consumer behavior can be thought of as anticonsumption whereby products and services are deliberately defaced or mutilated.
3. Anticonsumption is manifested by a range of activities from relatively harmless acts such as gifting dog manure, to destructive political protests.

VII. Consumer Behavior as a Field of Study

1. Where Do We Find Consumer Researchers? Just about anywhere we find consumers.

1. Interdisciplinary Influences on the Study of Consumer Behavior – Many fields shape the field of consumer behavior. Table 1.2 lists the interdisciplinary research issues in consumer behavior. Figure 1.2 lists the disciplines in consumer research.
2. Should Consumer Research Have an Academic or an Applied Focus?

It’s still a debate.

1. Two Perspectives on Consumer Research

1. One 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.
2. 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.
3. 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.

Source: Consumer Behavior 9e Michael R. solomon

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