Download BEHAVIOR

S CIENCE E CONOMY C OHESION
EUROPEAN UNION
Creating the Future of Lithuania
UNIVERSITY OF APPLIED
SOCIAL SCIENCES
I NDRE R ADAVICIENE
CONSUMER
BEHAVIOR
AND PSYCHOLOGY
COURSE HANDBOOK
Klaipeda, 2015
Indre Radaviciene
CONSUMER BEHAVIOUR AND PSYCHOLOGY
Course Handbook
Approved by the decision of the Academic Board of
SMK University of Applied Social Sciences,15th April 2014, No. 4
Layout by Sigita Cesnauskiene
The publication is financed within project „Joint Degree Study programme “International Marketing
and Branding “ preparation and implementation“ No. VP1-2.2-ŠMM-07-K-02-086 funded in accordance with the means VP1-2.2-SMM-07-K “Improvement of study quality, development of Internationalization” of priority 2 “Lifelong Learning” of the Action Programme of Human Relations
Devel-opment 2007 – 2013.
ISBN 978-9955-648-35-2s
© Indre Radaviciene, 2015
© SMK University of Applied Social Sciences, 2015
1
CONTENTS
INTRODUCTION……………………………..…….…………………………….….....3
Part 1: Conceptions, goals, tasks of consumer’s psychology……………………............5
Part 2: Conception of consumer behaviour, contents, models……………...……........9
Part 3: Segmentation, targeting and positioning …….………………………....……..15
Part 4: Personal factors of a consumer, their influence on behaviour…………...…….22
Part 5: The influence of environmental factors on consumer behaviour………....…...32
Part 6: The features of perception…………………..……………………………….......39
Part 7: Learning and memory…..………..…………………..……...…………………...44
Part 8: Consumer motivation, attitudes and their change………………….…….……....51
Part 9: Consumers as problem solvers: the process of buying consumer goods..…….....58
Part 10: The methods of a research on psychological efficiency of advertising….…..…69
TASKS FOR INDIVIDUAL/GROUP WORKS………………………..………........82
CONSUMER BEHAVIOUR PROJECT STRUCTURE……………………………89
TRIAL CONSUMER BEHAVIOUR SETTLEMENT…….…………..…....………94
LITERATURE……………………………………………………………………....…122
2
INTRODUCTION
Consumer behaviour (in consumer business context) referred to as the study of when, why, how,
where and what people do or do not buy products. It blends elements from psychology, sociology, social, anthropology and economics. It attempts to understand the buyer decision making process, both
individually and in groups. It studies characteristics of individual consumers such as demographics
and behavioural variables in an attempt to understand people’s wants. It also tries to assess influences
on the consumer from groups such as family, friends, reference groups, and society in general. Customer behaviour study is based on consumer buying behaviour, with the customer playing the three distinct
roles of user, payer and buyer. Relationship marketing is an influential asset for customer behaviour
analysis as it has a keen interest in the re-discovery of the true meaning of marketing through the re-affirmation of the importance of the customer or buyer.
The programme of a course unit Consumer Behaviour and Psychology is to introduce students to the
basics of psychology and the features of consumer behaviour. The theoretical part of the course defines
the conception, goals and tasks of psychology, analyses the variety of advertising, place and meaning
in the modern public life; perception of examples is analysed, based on general patterns of psychology,
the relationship of advertising with the cognitive processes of personality and consumer needs, their
actualisation, formation. Models, features of consumer behaviour are analysed, the characteristics of
the impact of branding on consumer behaviour, in the context of marketing communication.
The aim of the programme of the course unit Consumer Behaviour and Psychology– to provide
students with knowledge on the psychological patterns of marketing, to help future specialist to understand the features of branding impact on consumers, to teach to systemise the acquired knowledge
and experience on the link between psychology and consumer behaviour, usage of this for a purposeful
consumer motivation, to apply psychological knowledge when designing and providing advertising of
various types, when modelling its impact on a consumer.
Learning outcomes of a course consumer behaviour and psychology:
1.
2.
3.
4.
5.
6.
7.
8.
Will be able to apply psychological knowledge, professional competences when designing branding.
Will be able to characterise the goals of psychological impact of branding in the context of integrated marketing communication.
Will be able to objectively and critically assess the success and problems of advertising or advertising projects, opportunities of timely development.
Will be able to identify the opportunities of using a branding and realisation strategies for the
implementation of goals of advertising campaigns.
Will be able to appropriately select the strategies of branding and realisation strategies.
Will be able to foresee the trends of self-development, to raise, develop one’s professional competences while acting in a dynamic business environment.
Will be able to use psychological knowledge, professional competences while maintaining a company’s communication.
Will be able to characterise the features and opportunities of the impact of different forms of
branding and their combinations on consumer behaviour
3
Acknowledgements
The context of this text has been adapted from the following product(s):
Schiffman L.G., Kanuk L.L., Hansen H. Consumer behaviour: a European outlook. Pearson Education
Limited, 2008, p.494, ISBN:978-0-273-70401-0
Perner L. (2010) The Consumer Behavior: The Psychology of Marketing, access via internet page: http://
www.consumerpsychologist.com/index.html, accessed March/April, 2014
M. Joseph Sirgy, Don R. Rahtz, and Laura Portolese Dias. Consumer Behavior Today v.1.0. Flat World
Education, Inc., 2014
Full copyright details and acknowledgements will appear in the aforementioned publications.
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CONCEPTIONS,
G OA L S , T A S K S O F C O N S U M E R ’ S P S YC H O L O G Y
Part 1
CONCEPTIONS, GOALS, TASKS OF CONSUMER’S
PSYCHOLOGY
Objective outline:
Chapter key terms:
1.
Types of Needs and Wants
2.
3.
To analyse critically the task of marketing
under contemporary conditions from a behavioural perspective.
Marketing Management Philosophies
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To examine the major functions that comprises the marketing task and their interactions with consumer behaviour.
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To develop an awareness of the major types
of marketing and consumer behaviour problems faced by organisations.
The study of consumers helps firms and organisations improve their marketing strategies by understanding issues such as how1:
-
The psychology of how consumers think, feel, reason, and select between different alternatives
(e.g., brands, products);
The psychology of how the consumer is influenced by his or her environment (e.g., culture, family,
signs, media);
The behaviour of consumers while shopping or making other marketing decisions;
Limitations in consumer knowledge or information processing abilities influence decisions and
marketing outcome;
How consumer motivation and decision strategies differ between products that differ in their level
of importance or interest that they entail for the consumer;
How marketers can adapt and improve their marketing campaigns and marketing strategies to
more effectively reach the consumer.
One “official” definition of consumer behaviour is “The study of individuals, groups, or organisations and the processes they use to select, secure, use, and dispose of products, services, experiences,
or ideas to satisfy needs and the impacts that these processes have on the consumer and society.” Although it is not necessary to memorise this definition, it brings up some useful points:1
Behaviour occurs either for the individual, or in the context of a group (e.g., friends influence
1
The part’s information is adopted from Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://www.consumerpsychologist.com/index.html, accessed March/April, 2014
5
CONCEPTIONS,
-
-
G OA L S , T A S K S O F C O N S U M E R ’ S P S YC H O L O G Y
what kinds of clothes a person wears) or an organisation (people on the job make decisions as to
which products the firm should use).
Consumer behaviour involves the use and disposal of products as well as the study of how they are
purchased. Product use is often of great interest to the marketer, because this may influence how
a product is best positioned or how we can encourage increased consumption. Since many environmental problems result from product disposal (e.g., motor oil being sent into sewage systems
to save the recycling fee, or garbage piling up at landfills) this is also an area of interest.
Consumer behaviour involves services and ideas as well as tangible products.
The impact of consumer behaviour on society is also of relevance. For example, aggressive marketing of high fat foods, or aggressive marketing of easy credit, may have serious repercussions for
the national health and economy.
There are four main applications of consumer behavior:1
The most obvious is for marketing strategy, i.e., for making better marketing campaigns. For example, by
understanding that consumers are more receptive to food advertising when they are hungry, we learn
to schedule snack advertisements late in the afternoon. By understanding that new products are usually
initially adopted by a few consumers and only spread later, and then only gradually, to the rest of the
population, we learn that (1) companies that introduce new products must be well financed so that they
can stay afloat until their products become a commercial success and (2) it is important to please initial
customers, since they will in turn influence many subsequent customers’ brand choices.
A second application is public policy. In the 1980s, Accutane, a near miracle cure for acne, was introduced. Unfortunately, Accutane resulted in severe birth defects if taken by pregnant women. Although
physicians were instructed to warn their female patients of this, a number still became pregnant while
taking the drug. To get consumers’ attention, the Federal Drug Administration (FDA) took the step of
requiring that very graphic pictures of deformed babies be shown on the medicine containers.1
Social marketing involves getting ideas across to consumers rather than selling something. Marty Fishbein, a marketing professor, went on sabbatical to work for the Centres for Disease Control trying to
reduce the incidence of transmission of diseases through illegal drug use. The best solution, obviously,
would be if we could get illegal drug users to stop. This, however, was deemed to be infeasible. It was
also determined that the practice of sharing needles was too ingrained in the drug culture to be stopped.
As a result, using knowledge of consumer attitudes, Dr. Fishbein created a campaign that encouraged
the cleaning of needles in bleach before sharing them, a goal that was believed to be more realistic.
$VDÀQDOEHQHÀWVWXG\LQJFRQVXPHUEHKDYLRXUVKRXOGPDNHXVEHWWHUFRQVXPHUVCommon sense suggests, for example, that if you buy a 64 liquid ounce bottle of laundry detergent, you should pay less per
ounce than if you bought two 32 ounce bottles. In practice, however, you often pay a size premium by
buying the larger quantity. In other words, in this case, knowing this fact will sensitise you to the need
to check the unit cost labels to determine if you are really getting a bargain.
There are several units in the market that can be analysed. Our main thrust in this course is the consumer. However, we will also need to analyse our own firm’s strengths and weaknesses and those of
competing firms. Suppose, for example, that we make a product aimed at older consumers, a growing
segment. A competing firm that targets babies, a shrinking market, is likely to consider repositioning
toward our market. To assess a competing firm’s potential threat, we need to examine its assets (e.g.,
technology, patents, market knowledge, and awareness of its brands) against pressures it faces from
the market. Finally, we need to assess conditions (the marketing environment). For example, although
we may have developed a product that offers great appeal for consumers, a recession may cut demand
dramatically.
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CONCEPTIONS,
G OA L S , T A S K S O F C O N S U M E R ’ S P S YC H O L O G Y
In the mainstream theory of consumer choice economists often refer to demand curves for goods
and services. Furthermore, they represent them as smooth continuous curves which slope downward
from left to right, reflecting the so-called ‘law of demand’. In fact, demand curves in reality may have
multiple segments with different slopes and breaks between them, implying very jerky responses of
sales to changes in price. Sometimes a demand curve may even slope upwards along part of its length.2
Discontinuities in demand curves can arise for psychological reasons, such as the consumer’s cognitive mechanisms being subject to threshold effects (a change may need to be substantial to be noticed),
or for institutional reasons, such as conventions being used in the setting of budgets. When a price goes
above normal ranges of expectations, sales can fall away sharply until customers get used to the idea of
that product being that expensive. This phenomenon is known as ‘sticker shock’ (here, ‘sticker’ refers to
the pricing stickers attached to products). Kinks in demand curves can also arise as a consequence of
how other firms respond to changes in the price charged for the product, by changing their prices. The
seemingly perverse case of higher prices leading to higher sales may arise if, in the face of uncertainty,
consumers use price as a proxy for quality (and perhaps do not even look at a product at all if its price
is less than the lower end of the budget range in which they have chosen to look), or if a higher price
means that the product serves better as a status symbol.
These phenomena might lead one to expect that when economists theorise about the nature of buyer behaviour they would do so in an interdisciplinary manner, bringing in ideas from psychology and
sociology. Pluralist economists do precisely this, but mainstream economists over the past century have
sought to distance themselves from these disciplines.
Theories of buyer behaviour present simplified pictures of the forces underlying choices in general.
They are not intended to provide insights about the distinctive way that a particular consumer chooses, say, which television programme to watch and how such a choice is made in a manner different
from a choice of which shampoo to buy, brand of hire car to rent, or whatever. Given this, it may
seem remarkable that they could be useful for thinking about consumer choice with respect to specific
products. In fact, the mainstream approach is weak in this role precisely because it tries to present all
choices as being made in the same way. The frameworks that we find most helpful are those that allow
for a variety of approaches to choice and provide a means of assessing which broad kinds of processes
are likely to be operating in particular kinds of contexts.
A brief introduction to the field of consumer behaviour and an indication of the increased importance that this domain of study has assumed in marketing would be a good starting point. The instructor should discuss the fact that to operationalise the marketing concept it is critical that the marketer
have an understanding of some of the consumer decision making processes. Likewise, to effectively
design effective advertising and promotions programs, these processes must be understood and considered. It is important to point out that the development of successful marketing communication
programs begins with understanding why consumers behave as they do. Those who develop advertising
and other promotional strategies begin by identifying relevant markets and then analysing the relationship between target consumers and the product/service or brand.
2
The part’s information adapted from Peter Earl & Tim Wakeley (2005) Business Economics: a Contemporary Approach. Maidenhead, McGraw-Hill. For more
detailed discussion and case studies please refer to the original.
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CONCEPTIONS,
G OA L S , T A S K S O F C O N S U M E R ’ S P S YC H O L O G Y
Review questions/discussion
1.
2.
3.
Describe the different factors that impact consumer behaviour. Which of these factors do you believe would have the greatest impact on how consumers behave?
Why should marketers be interested in consumer behaviour?
Why marketing managers should be interested in the study of consumer behaviour?
Project and teamwork exercises
1.
Please identify a risk associated with buying products and give the examples in the table.
Type of risk
Explanation
Examples
Physical risk
The fear of injury from the product
Financial risk
Losing or wasting money
Functional risk
Finding out the product will not do the job
you bought it for
Psychosocial risk
The fear of looking foolish
References for further reading
1.
2.
3.
Keller, K., Kotler, Ph. Marketing Management (12th edition). Essex: Pearson Education Limited,
2005.
S.A. Drakopoulos & A.D. Karayiannis (2004) ‘The historical development of hierarchical behaviour in
economic thought’, Journal of the History of Economic Thought, 26, pp.363-378.
Michael Solomon, Consumer Behaviour: Buying, Having and Being. Englewood Cliffs, NJ: Prentice-Hall, 2004. 6th edition.
8
CONCEPTION
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Part 2
&21&(37,212)&21680(5%(+$9,285
CONTENTS, MODELS
Objective outline:
Chapter Key Terms:
After studying this unit, you should be able to:
Freudian Personality Theory
1.
Define the terms “consumer behaviour”.
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2.
Describe the importance of ‘consumer behaviour’.
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Understand different consumer behaviour
models concept.
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3.
Decision making
The consumer as a decision maker is viewed in different ways by different groups of researchers.
The economic view holds that consumers are rational decision makers, while some other researchers
view the consumers as uninvolved, passive decision makers.
Yet another group of researchers view consumers as cognitive decision makers. But all these views
ignore the influence of emotions on consumers’ choices. There are three types of consumer decision
making - habitual decision making (low purchase involvement with no external information), limited
decision making (consumer evaluates limited alternatives with some external information), and extended decision making (large number of alternatives with the help of extensive information search
from both internal and external sources).
There are three phases in consumer decision making process – problem recognition, information
search, and alternatives evaluation and selection. Problem recognition is initiated with identification
of a gap in the actual state and the desired state as perceived by the consumer. The consumer may be
aware or unaware of the problem or need.
The need awareness can trigger through non-marketing and/or marketing triggers. Marketing triggers involve identifying consumer problems through various techniques and then acting on these. Marketers may also try to suppress problem recognition by consumers for products like cigarettes, alcohol,
etc. Information search is initially done from internal sources, i.e., memory and experience, and then
from external sources, i.e., friends, internet, etc. Consumer decision making involves seeking information on three important aspects of product – evaluation criteria, alternatives available, and attributes
of each alternatives. The amount of external search to be done depends on various market, product,
consumer, and situational variables. Alternatives evaluation and selection involves making the brand
The information is adopted from Schiffman L.G., Kanuk L.L., Hansen H. Consumer behaviour: a European outlook. Pearson Education Limited, 2008, p.494,
ISBN: 978-0-273-70401-0
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CONCEPTION
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choice after evaluating all the alternatives. There are three types of consumer choice processes – affective choice (based on ‘it feels right’ factor), attitude-based choice (based on decision rules), and attribute-based choice (based on attribute-by-attribute comparison across brands).
There are three important models which explain consumer decision making – the Howard-Sheth
model of buying behaviour, the Nicosia model, and the Engel-Blackwell-Miniard (EBM) model. The
Howard-Sheth model of buying behaviour attempts to explain the complexity of the consumer decision making process in case of incomplete information. However, is quite complex and difficult to
understand.
The Nicosia model explains the consumers’ buying behaviour from the marketers’ perspective.
However, it fails to explain in detail the firm’s and consumer’s attributes and doesn’t take into account
that consumer might already be having a predisposition with respect to a particular product/brand.
How do consumers make decisions? This question is at the core of much of marketing examination over the past 60 or 70 years. As marketers manipulate the various principles of marketing, so do
the consumers they seek to reach-choosing which products and services to buy, and which not to buy,
choosing which brands to use, and which brands to ignore. The focus of this paper is to examine the
major decision-making models, strategies, and theories that underlie the decision processes used by
consumers and to provide some clarity for marketing executives attempting to find the right mix of
variables for their products and services.
Three Decision Making Models
Early economists, led by Nicholas Bernoulli, John von Neumann, and Oskar Morgenstern, puzzled
over this question. Beginning about 300 years ago, Bernoulli developed the first formal explanation
of consumer decision making. It was later extended by von Neumann and Morgenstern and called
the Utility Theory. This theory proposed that consumers make decisions based on the expected outcomes of their decisions. In this model consumers were viewed as rational actors who were able to
estimate the probabilistic outcomes of uncertain decisions and select the outcome which maximised
their well-being.
However, as one might expect, consumers are typically not completely rational, or consistent, or
even aware of the various elements that enter into their decision making. In addition, though consumers are good at estimating relative frequencies of events, they typically have difficulty translating these
frequencies into probabilities. This Utility model, even though it had been viewed as the dominant
decision-making paradigm, had serious shortcomings that could not be explained by the model.
Nobel Laureate Herbert Simon proposed an alternative, simpler model in the mid-1950s. This model was called Satisfying, in which consumers got approximately where they wanted to go and then
stopped the decision-making process. An example of this would be in the search for a new apartment.
Under the Utility theory, consumers would evaluate every apartment in a market, form a linear equation based on all the pertinent variables, and then select the apartment that had the highest overall utility score. With Satisfying, however, consumers might just evaluate apartments within a certain distance
to their desired location, stopping when they found one that was “good enough.” This theory, though
robust enough to encompass many of the shortcomings of Utility Theory, still left significant room
for improvement in the area of prediction. After all, if a marketing executive can’t predict consumer
behaviour, then what use is a decision-making paradigm? Simon and others have extended this area in
the investigation of the field of bounded rationality.
Value provided a reference point and evaluated both gains and losses from that reference point.
Additionally, gains and losses have a marginally decreasing increase from the reference point. For
The part’s information is adopted from Richarme M. Consumer Decision-Making Models, Strategies, and Theories, Oh My! access by internet: http://www.
decisionanalyst.com/publ_art/decisionmaking.dai, accessed March/April, 2014.
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example, there is a much greater value for the first incremental gain from the reference point than for
subsequent gains.
Seven Decision-Making Strategies: What this all led to, was the development and exploration of a
series of useful consumer decision-making strategies that can be exploited by marketers. For each
product, marketers need to understand the specific decision-making strategy utilised by each consumer
segment acquiring that product. If this is done, marketers can position their product in such a manner
that the decision-making strategy leads consumers to select their product.
The first two strategies are called compensatory strategies. In these strategies, consumers allow a
higher value of one attribute to compensate for a lesser value of another attribute. For example, if a
consumer is looking at automobiles, a high value in gas mileage might compensate for a lower value in
seating space. The attributes might have equal weight (Equal Weight Strategy) or have different weights
for the attributes (Weighted Additive Strategy). An example of the latter might be to place twice as
much importance on gas mileage than seating space. The next three strategies are called no compensatory strategies. In these strategies, each attribute of a specific product is evaluated without respect to
the other attributes, and even though a product may have a very high value on one attribute, if it fails
another attribute, it is eliminated from consideration. From Simon, the first of these is Satisfying, in
which the first product evaluated to meet cut-off values for all attributes is chosen, even if it is not the
best. The second of these strategies, Elimination by Aspects, sets a cut-off value for the most important attribute, and allows all competing products that meet that cut-off value to go to the next attribute
and its cut-off value. The third strategy, Lexicographic, evaluates the most important attribute, and if
a product is clearly superior to others, stops the decision process and selects that product; otherwise, it
continues to the next most important attribute.
The next two strategies are called partially compensatory strategies, in that strategies are evaluated
against each other in serial fashion and higher values for attributes are considered. The first of these
strategies is called Majority of Conforming Dimensions, in which the first two competing products are
evaluated across all attributes, and the one that has higher values across more dimensions, or attributes,
is retained. This winner is then evaluated against the next competitor, and the one that has higher
values across more dimensions is again retained. The second partially compensatory strategy is called
Frequency of Good and Bad Features, in which all products are simultaneously compared to the cutoff values for each of their relevant attributes, and the product that has the most “good” features that
exceed the cut-off values is the winner.
There are other expansions upon these seven basic consumer decision-making strategies, but they
are generally captured as shown above. However, two major areas of marketing theory also help to
provide additional explanatory power to these strategies.
Two Marketing Theories: the first marketing theory is called Consideration. In this theory, consumers form a subset of brands from which the decision-making strategies are applied. For example, if
asked to enumerate all the restaurants that one could recall, the list might be quite extensive for most
consumers. However, when a consumer first addresses the question of where to dine that evening, a
short list of restaurants that are actively considered is utilised for the decision-making process. Multistage decision-making models were summarised by Allan Shocker, in which the increasing complexity
of a decision produces more steps in the decision process. In essence, more cognitive effort would be
expended in evaluating members of the consideration set and reducing that number to an eventual
choice.
The second marketing theory is called Involvement, in which the amount of cognitive effort applied
to the decision-making process is directly related to the level of importance that the consumer places on
acquisition of the specific product. For example, there is rarely a significant amount of decision-mak-
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ing applied to the selection of a pack of chewing gum at the grocery store checkout counter, but there
is a much greater amount of decision-making effort applied to the purchase of a new cell phone. This
degree of involvement is not necessarily a function of the price, but is more related to the perceived
impact on the quality of life of the consumer. The quality of life can come directly from the benefits
supplied by the product, or can come indirectly from the social accolades or sanctions provided by
members of the peer group.
Application of the three decision-making models, the seven decision-making strategies, and the two
marketing theories can be seen in current efforts by marketing practitioners and academicians to tease
apart the complex decisions made by consumers. For example, choice models and conjoint models
are multivariate analysis techniques based on these understandings. Consumers are presented with
choices in controlled environments that, hopefully, control for other confounding variables, and then
the choices are decomposed to understand both the conscious and unconscious elements driving the
consumer’s choices.
One caveat for practitioners is important to address at this point. When one is attempting to manipulate marketing variables such as price or promotion, or even conduct research into consumer decision-making, it is critical that a solid theoretical base be used.
7KHEODFNER[PRGHOShows the interaction of stimuli, consumer characteristics, decision process
and consumer responses. It can be distinguished between interpersonal stimuli (between people) or
intrapersonal stimuli (within people). The black box model is related to the black box theory of behaviourism, where the focus is not set on the processes inside a consumer, but the relation between
the stimuli and the response of the consumer. The marketing stimuli are planned and processed by the
companies, whereas the environmental stimulus is given by social factors, based on the economic, political and cultural circumstances of a society. The buyer’s black box contains the buyer characteristics
and the decision process, which determines the buyer’s response. The black box model considers the
buyers response as a result of a conscious, rational decision process, in which it is assumed that the
buyer has recognised the problem. However, in reality many decisions are not made in awareness of a
determined problem by the consumer.
The black box model shows the interaction of stimuli, consumer characteristics, and decision process and consumer responses. It can be distinguished between interpersonal stimuli (between people)
or intrapersonal stimuli (within people). The black box model is related to the black box theory of behaviourism, where the focus is not set on the processes inside a consumer, but the relation between the
stimuli and the response of the consumer.
ENVIRONMENTAL
FACTORS
BUYER’S
Marketing Stimuli
Environmental
Stimuli
Buyer
Characteristics
Product
Price
Place
Promotion
Economic
Technical
Political
Cultural
Attitudes
Motivation
Perceptions
Personality
Lifestyle
BLACK BOX
Decision Process
Problem recognition
Information search
Alternative
evaluation
Purchase decision
Post-purchase
behaviour
BUYER’S
RESPONSE
Product choice
Brand choice
Dealer choice
Purchase timing
Purchase amount
FIGURE 1. BUYER’S BLACK BOX MODEL
The source: Khosla, Swati (2010). Consumer psychology: The essence of Marketing. International Journal of Educational
Administration.
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The marketing stimuli are planned and processed by the companies, whereas the environmental
stimuli are given by social factors, based on the economic, political and cultural circumstances of
a society. The buyer’s black box contains the buyer characteristics and the decision process, which
determines the buyer’s response. The black box model considers the buyer’s response as a result of a
conscious, rational decision process, in which it is assumed that the buyer has recognised the problem.
However, in reality many decisions are not made in awareness of a determined problem by the consumer.
Review questions/discussions
1.
2.
Harley-Davidson Motorcycle Company has used consumer behaviour studies to advance the organisation’s knowledge about its consumers. This strategy has been pivotal in meeting the challenge of the Japanese motorcycle manufacturers. How has Harley-Davidson used focus groups to
keep up with its shifting market and varying consumer tastes? What information has the company
obtained about its customers?
Select five brands of toothpaste and explain how the appeals used in advertising these brands relate to buyer black box model.
Project and teamwork exercises
1.
Please read the following mini case before answering questions below.
Sunshine Cruise Lines is a cruise operator that offers three-to seven-day cruises along any of five Caribbean
routes. It has developed a reputation as a party cruise operator and the majority of its revenue comes from vacationing college students. Sunshine would like to scale up its reputation to attract more families and a more mature,
affluent clientele, while continuing to cater to the college student crowd. In order to do so, Sunshine has begun
offering cruises specifically geared toward families, with babysitting services, day time programming for younger
children, and a separate games room with pool tables and ping pong to appeal to older children. Having found that
a preponderance of its family passengers book through travel agents, Sunshine specifically promotes these family
cruises through travel agencies that will be able to fully explain the benefits of a Sunshine cruise to potential buyers. Sunshine also has remodelled a number of its smaller ships to offer more spacious cabins with more luxurious
fittings. These small “First Class Cruises,” which do not allow children, offer not only a gourmet chef, but a string
quartet to serenade passengers during their evening meal and a pianist to provide background music during their
evening cocktails. These “First Class Cruises” are advertised in business and travel magazines and have a dedicated website for travel information and reservations.
Questions:
What Sunshine is trying to do itself as a cruise carrier for young families and affluent empty nesters as well as for college spring breakers?
2. Sunshine offers different services to meet the needs of different market segments, advertising each
with a different campaign and strategy. What is the strategy Sunshine has?
3. Sunshine developed two completely new cruise options to meet the vacationing needs of families
and upper-class adults. What the segmentation of potential market did Sunshine?
4. Sunshine specifically markets its party cruises to college students in January and February in anticipation of spring break. What type of segmentation is it?
1.
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References for further reading
1.
Ayuba B. (2005), Marketing: Principles and Management, Kaduna: Shukrah Printing
2.
David L. and Albert J.D. (2002), Consumer Behaviour, New Delhi: Tata McGraw Hill.
3.
Del I.H. Roger J.B. and Kenneth A.C. (2001), Consumer Behaviour; Building Marketing Strategy, New
York: McGraw-Hill Irwin.
4.
Eric A. Linda P. and George Z. (2002), Consumer, New York: McGraw-Hill Irwin.
5.
Geoff, R. (1988); Modern Industrial Marketing; New York: McGraw-Hill,
6.
Kotler, P. (2000); Marketing Management; New Delhi: Prentice-Hall, Inc.
7.
Kotler, P. and Armstrong (1999); Principles of Marketing; New Delhi: Prentice-Hall,
8.
Inc. Leon G.S. and Leslie L.K (2004), Consumer Behaviour, Upper SaddleRiver, U.S.A: Pearson
Education, Inc. Pearson Prentice Hall.
9.
Levitt, T. (1960): The Marketing Mode; New Jersey, Prentice- Hall, Inc.8
10. Mc Carthy, E.J. (1996): Basic Marketing: A Management Approach. Illinois: Irwin.
11. Michael, J.B. (1992): Marketing Strategy and Management; London: Macmillan Press.
12. Morden, A.R. (1991): Elements of Marketing; London: DP Publications.
13. Onu, A.J (2000); Marketing Today; Zaria: Ndyson Publishers Ltd.
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Part 3
SEGMENTATION, TARGETING AND
POSITIONING
Objective outline:
Chapter Key Terms:
After studying this part, you should be able to:
Segmentation Strategies
1.
State the concept of market segmentation
%UDQG3RVLWLRQLQJ
2.
State the criteria for segmenting markets
%HQHÀW6HJPHQWDWLRQ
3.
Describe the process of conducting market
segmentation as well as the bases
Target group
Targeting
Demographics are clearly tied to subculture and segmentation. Here, however, we shift our focus
from analysing specific subcultures to trying to understand the implications for an entire population
of its makeup.
Several issues are useful in the structure of a population. For example, in some rapidly growing
countries, a large percentage of the population is concentrated among younger generations. In countries such as Korea, China, and Taiwan, this has helped stimulate economic growth, while in certain
poorer countries; it puts pressures on society to accommodate an increasing number of people on a
fixed amount of land. Other countries such as Japan and Germany, in contrast, experience problems
with a “greying” society, where fewer non-retired people are around to support an increasing number
of aging seniors. Because Germany actually hovers around negative population growth, the German
government has issued large financial incentives, in the forms of subsidies, for women who have children. In the United States, population growth occurs both through births and immigration. Since the
number of births is not growing, problems occur for firms that are dependent on population growth
(e.g., Gerber, a manufacturer of baby food). Social class is a somewhat nebulous subject that involves
stratifying people into groups with various amounts of prestige, power, and privilege. In part because
of the pioneering influence in American history, status differentiations here are quite vague. We cannot, for example, associate social class with income, because a traditionally low status job as a plumber
may today come with as much income as a traditionally more prestigious job as a school teacher. In
certain other cultures, however, stratification is more clear-cut. Although the caste system in India is
now illegal, it still maintains a tremendous influence on that society. While some mobility exists today,
social class awareness is also somewhat greater in Britain, where social status is in part reinforced by
the class connotations of the accent with which one speaks.
Textbooks speak of several indices that have been used to “compute” social class in the United
States, weighing factors such as income, the nature of one’s employment, and level of education.
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Segmentation, Targeting, and Positioning Today, Segmentation, Targeting and Positioning (STP) is a familiar strategic approach in Modern
Marketing. It is one of the most commonly applied marketing models in practice. This popularity is
relatively recent since previously, marketing approaches were based more around products rather than
customers.
Segmentation, targeting, and positioning together comprise a three stage process.
We first (1) determine which kinds of customers exist, then (2) select which ones we are best off
trying to serve and, finally, (3) implement our segmentation by optimising our products/services for
that segment and communicating that we have made the choice to distinguish ourselves that way.
Segmentation involves finding out what kinds of consumers with different needs exist. In the auto
market, for example, some consumers demand speed and performance, while others are much more
concerned about roominess and safety. In general, it holds true that “You can’t be all things to all people,” and experience has demonstrated that firms that specialise in meeting the needs of one group of
consumers over another tend to be more profitable.
Generically, there are three approaches to marketing. In the undifferentiated strategy, all consumers
are treated as the same, with firms not making any specific efforts to satisfy particular groups. This
may work when the product is a standard one where one competitor really can’t offer much that another one can’t. Usually, this is the case only for commodities. In the concentrated strategy, one firm
chooses to focus on one of several segments that exist while leaving other segments to competitors. For
example, Southwest Airlines focuses on price sensitive consumers who will forego meals and assigned
seating for low prices.
SEGMENTATION
INDENTIFYING
MEANINGFULLY
DIFFERENT GROUPS
OF CUSTOMERS
TARGETING
PRODUCT
PRICE
SELECTING WHICH
SEGMENT (S) TO
SERVE
POSITIONING
DISTRIBUTION
IMPLEMENTING
CHOSEN IMAGE AND
APPEAL TO CHOSEN
SEGMENT
PROMOTION
FIGURE 2. SEGMENTATION, TARGETING, AND POSITIONING PRINCIPLES
The source: Perner L.(2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://www.consumerpsychologist.com/index.html, accessed March/April, 2014
These travellers—usually business travellers—pay high fares but can only fill the planes up partially.
The same airlines then sell some of the remaining seats to more price sensitive customers who can buy
The part’s information is adopted from Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://www.con-
sumerpsychologist.com/index.html, accessed March/April, 2014
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two weeks in advance and stay over.
Note that segmentation calls for some tough choices. There may be a large number of variables
that can be used to differentiate consumers of a given product category; yet, in practice, it becomes
impossibly cumbersome to work with more than a few at a time. Thus, we need to determine which
variables will be most useful in distinguishing different groups of consumers. We might thus decide,
for example, that the variables that are most relevant in separating different kinds of soft drink consumers are (1) preference for taste vs. low calories, (2) preference for Cola vs. non-cola taste, (3) price
sensitivity—willingness to pay for brand names; and (4) heavy vs. light consumers.
We now put these variables together to arrive at various combinations.
Several different kinds of variables can be used for segmentation.
Demographic variables essentially refer to personal statistics such as income, gender, education,
location (rural vs. urban, East vs. West), ethnicity, and family size. Campbell’s soup, for instance,
has found that Western U.S. consumers on the average prefer spicier soups—thus, you get a different product in the same cans at the East and West coasts. Facing flat sales of guns in the traditional male dominated market, a manufacturer came out with the Lady Remington, a more compact,
handier gun more attractive to women. Taking this a step farther, it is also possible to segment on
lifestyle and values.”
Some consumers want to be seen as similar to others, while a different segment wants to stand
apart from the crowd.
Another basis for segmentation is behaviour. Some consumers are “brand loyal”— they tend
to stick with their preferred brands even when a competing one is on sale. Some consumers are
“heavy” users while others are “light” users. For example, research conducted by the wine industry shows that some 80% of the product is consumed by 20% of the consumers — presumably a
rather intoxicated group.
One can also segment on benefits sought, essentially bypassing demographic explanatory variables. Some consumers, for example, like scented soap (a segment likely to be attracted to brands
such as Irish Spring), while others prefer the “clean” feeling of unscented soap (the “Ivory” segment). Some consumers use toothpaste primarily to promote oral health, while another segment
is more interested in breathe freshening.
In the next step, we decide to target one or more segments. Our choice should generally depend on
several factors. First, how well are existing segments served by other manufacturers? It will be more
difficult to appeal to a segment that is already well served than to one whose needs are not currently
being served well. Secondly, how large is the segment, and how can we expect it to grow? (Note that
a downside to a large, rapidly growing segment is that it tends to attract competition). Thirdly, do we
have strengths as a company that will help us appeal particularly to one group of consumers? Firms
may already have an established reputation. While McDonald’s has a great reputation for fast, consistent-quality, family friendly food, it would be difficult to convince consumers that McDonald’s now
offers gourmet food. Thus, McDonald’s would probably be better off targeting families in search of
consistent quality food in nice, clean restaurants.
Positioning involves implementing our targeting. For example, Apple Computer has chosen to
position itself as a maker of user-friendly computers. Thus, Apple has done a lot through its advertising to promote itself, through its unintimidating icons, as a computer for “non-geeks.” The Visual C
software programming language, in contrast, is aimed a “techies.” Michael Treacy and Fred Wiersema
suggested in their 1993 book The Discipline of Market Leaders that most successful firms fall into one of
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three categories:
Operationally excellent firms, which maintain a strong competitive advantage by maintaining
exceptional efficiency, thus enabling the firm to provide reliable service to the customer at a significantly lower cost than those of less well organised and well run competitors. The emphasis
here is mostly on low cost, subject to reliable performance, and less value is put on customising
the offering for the specific customer. Wal-Mart is an example of this discipline. Elaborate logistical designs allow goods to be moved at the lowest cost, with extensive systems predicting when
specific quantities of supplies will be needed.
PRODUCT
PRICE
PREMIUM
PREMIUM
BASIC
POSITIONING
LOW PRICE
DURABLE
IMPLEMENTING
CHOSEN IMAGE AND
APPEAL TO CHOSEN
SEGMENT
VALUE
PROMOTION
DISTRIBUTION
PRESTIGE
INTENSIVE
FUN
SELECTIVE
POWERFUL
EXKLUSIVE
FIGURE 3. PRODUCT POSITIONING
The source: Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://www.consumerpsychologist.com/index.html, accessed March/April, 2014
-
Customer intimate firms, which excel in serving the specific needs of the individual customer
well. There is less emphasis on efficiency, which is sacrificed for providing more precisely what is
wanted by the customer. Reliability is also stressed. Nordstrom’s and IBM are examples of this
discipline.
Technologically excellent firms, which produce the most advanced products currently available
with the latest technology, constantly maintaining leadership in innovation. These firms, because
they work with costly technology that needs constant refinement, cannot be as efficient as the
operationally excellent firms and often cannot adapt their products as well to the needs of the
individual customer. Intel is an example of this discipline.
Repositioning involves an attempt to change consumer perceptions of a brand, usually because
the existing position that the brand holds has become less attractive. Sears, for example, attempted
to reposition itself from a place that offered great sales but unattractive prices the rest of the time to
a store that consistently offered “everyday low prices.” Repositioning in practice is very difficult to
accomplish. A great deal of money is often needed for advertising and other promotional efforts, and
in many cases, the repositioning fails.
To effectively attempt repositioning, it is important to understand how one’s brand and those of
competitors are perceived. One approach to identifying consumer product perceptions is multidimensional scaling. Here, we identify how products are perceived on two or more “dimensions,” allowing
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us to plot brands against each other. It may then be possible to attempt to “move” one’s brand in a
more desirable direction by selectively promoting certain points. There are two main approaches to
multi-dimensional scaling. In the a priori approach, market researchers identify dimensions of interest
and then ask consumers about their perceptions on each dimension for each brand. This is useful when
(1) the market researcher knows which dimensions are of interest and (2) the customer’s perception
on each dimension is relatively clear (as opposed to being “made up” on the spot to be able to give
the researcher a desired answer). In the similarity rating approach, respondents are not asked about
their perceptions of brands on any specific dimensions. Instead, subjects are asked to rate the extent
of similarity of different pairs of products (e.g., How similar, on a scale of 1-7, is Snicker’s to KitKat,
and how similar is Toblerone to Three Musketeers?) Using a computer algorithm, the computer then
identifies positions of each brand on a map of a given number of dimensions. The computer does
not reveal what each dimension means—that must be left to human interpretation based on what the
variations in each dimension appears to reveal. This second method is more useful when no specific
product dimensions have been identified as being of particular interest or when it is not clear what the
variables of difference are for the product category.
Review questions/discussions
1.
2.
3.
4.
5.
6.
7.
Explain the concept of market segmentation and describe the main forces that constitute the positioning.
Create a product positioning map (four cell matrix) for wristwatches. Use the dimensions of price
and prestige. Summarise your product positioning map and what you learned by doing this positioning map in a two-page report.
Think about some of your friends and what you have discovered by visiting their homes. Do they
buy different things than you do? If so, why? How might a company distinguish you from them in
terms of its targeting?
Staples and The Limited have attempted to thwart shoppers who abuse store return policies. When
a customer returns items, store clerks swipe the customer’s driver’s license through electronic card
readers that track buying and return patterns for any suspicious activity. [1] What drawbacks do
you think such a strategy could have?
Is it always harder to find new customers than it is to retain old ones? Or does it depend on the
business you’re in?
Does one-to-one marketing have to be expensive? How can small organisations interact with their
customers in a cost-effective way?
Are large companies better off using multi segment strategies and small companies better off using
niche strategies? Why or why not?
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Project and teamwork exercises
1. Everett M Rogers postulated that products would be adopted if they possessed most of the
attributes in the table below. Please give the examples for each attribute.
Attribute
Explanation
Examples
Relative advantage
The product must have some advantage over
the products already on the market. It must
offer the consumer a better range of benefits
than the existing solution.
Compatibility
The product must fit in with the consumers’
lifestyle.
Complexity
The product must not be too complex for the
consumer to understand.
Trialability
Products which can be tried out are more
likely to succeed.
Observability
The more observable the product, the quicker the diffusion process. If other potential
consumers are able to see the product in use,
this is bound to raise interest in it.
2. Once people have their core benefits, the market must be segmented to find out how many people have further needs which may be met by new products and services. Consider the changes in
transportation.
Product type
Core benefits
Other benefits and drawbacks
Horse & carriage
Model T Ford
Modern Ford vehicle range
3.
4.
Break the class into small groups and assign each group a specific industry. Have each group discuss the marketing strategies that they believe important to the effective marketing of products in
that industry.
Divide the class into three-member groups. Ask each group to bring three similar products (or
packages of those products) to class. Examples might include breakfast cereals, soft drinks, or
laundry detergent. Ask each group to analyse the target market for each of their three products.
Then, based on who they have identified as the target market for each product, ask each group to
discuss each element of the marketing mix – explaining how the marketing mix was “built” for
each product.
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5.
6.
T A RG E T I N G A N D P O S I T I O N I N G
Form groups of three students. Think of a product or service that one of you purchased recently
on campus. How might you go about developing a customer profile for the product? List the sources you would use.
Describe a product you like that you believe more people should use. As a marketer, how would
you reposition the product to increase its use? Outline your strategy.
References for further reading
1.
2.
3.
4.
Ayuba B. (2005), Marketing: Principles and Management, Kaduna: Shukrah PrintingEdward,
J. and William J. (1963), Fundamentals of Marketing; NewYork, Mc Graw-Hill,
Inc. Kotler P. (2002), Marketing Management 21C., Upper Saddle River, U.S.A: Pearson Education,
Inc. Pearson Prentice Hall.
Leon G.S. and Leslie L.K (2004), Consumer Behaviour, Upper Saddle River, U.S.A: Pearson Education, Inc. Pearson Prentice Hall.
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Part 4
PERSONAL FACTORS OF A CONSUMER, THEIR
,1)/8(1&(21%(+$9,285
Objective outline:
Chapter Key Terms
After studying this unit, you should be able to:
Consumer Personality
1.
Personality traits
Describe meaning and theories of personality and their potential for understanding
consumers.
2.
State how consumer personality is measured.
3.
Describe the nature of self-concept and
brand personality.
4.
Define family and a household.
5.
Describe traditional and modern family life
cycle.
6.
State variables affecting family purchase decision.
7.
Describe the importance of family influences on consumer behaviour.
Personality types
Family decision making
Definition and consumer personality
The sum total of an individual defines his personality. Just as an individual has a personality, similarly products also have a personality of their own. A study of personality as a subject area in consumer
behaviour assumes importance as consumers generally decide on product/brand choices on the basis
of their personality. A person’s decision with regard to the brand as well as the timing and place of
purchase, the amount purchased, its usage and disposal, are all based on his personality. Consumers
generally buy those products/brands, whose personality matches their own, or they buy such products/brands that help them fight their inferiority. Thus, the study of consumer personality, personality
traits and types as well as general and consumption specific personality traits is important, and holds
relevance for a marketer in the design, development and implementation of his marketing strategies.
Personality is defined as a sum total of outer physiological as well as the inner psychological charac
The part’s information is adopted from Sahney, S., Consumer Behaviour. NPIEL Vinod Gupta School of Management, access via internet page: http://www.
consumerpsychologist.com/index.html, accessed March/April, 2014.
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teristics that determine and reflect how a person reacts to his environment. It exhibits itself through a
unique psychological makeup that activates behaviour on the part of an individual in response to forces in his or her environment. However, the emphasis is on the inner characteristics, i.e., the qualities,
attributes, traits, and mannerisms that differentiate one individual from another individual, and make
him unique in his own way. It is noteworthy that as individuals we possess such traits, and people who
share a particular trait(s) are said to belong to a personality type. Specific to environment here, is the
social environment, which posits the social dimension of a person’s psychological makeup. A person’s
personal make up is to a large extent influenced by his social environment, e.g., the family, friends, social class, sub culture, culture, nationality and the environment in which he or she grows up. As Schiffman has put it consumer personality refers to the “unique dynamic organisation of characteristics of
a particular person, physical and psychological, which influence behaviour and responses to the social
and physical environment.” It is a consistent repeated pattern of behaviour.
The term personality has been defined variedly, so has been the evolution; while some researchers
have stressed the influence that heredity has on the make-up of personality, others have also included
experiences in early childhood; still others have laid emphasis on as well as environmental influences
across different periods in a person’s life cycle, and illustrated how personality continues to develop
over lifetime. The approach towards the study has also been debatable. While some look at personality
as a unified whole, others focus on specific personality traits.
Consumer personality is defined as the characteristics that determine and reflect how consumers
make choices with regard to buying patterns and consumption behaviour. Consumer purchase patterns
are always influenced by their personality traits. Just as we consumers, have different personality make
ups, the decision choices with regard to purchase of products/brands also differs, especially with the
assumption that consumer prefer such product/brand choices that match their personality traits. Such
personality traits could be general as well as consumption specific.
Personality traits and personality types: we need to differentiate between a “personality trait” and a
“personality type”. As mentioned in the above section, as individuals, each one of us is unique with
a wide array of qualities, attributes, traits and characteristics. However, each one of us shares with
each other a quality or a few trait (s). When we share a trait (s) with another (others), we are said to be
similar on that trait and thus we together with the other person (s), is said to fall in a personality type.
In other words, a personality trait is a person’s inclination to behave in a particular way while interacting with the external environment to achieve goals; this would be specific to an area of a person’s
life. Many personality traits put together, comprise the personal make-up of a person and culminate
into his personality.
On the other hand, a group of people who share personality traits are said to fall into a personality
class; they are expected to react to the environment in a similar manner as they are similar to each other
on the basis of certain trait (s).
For example, stubbornness may be a trait; dogmatism would become a personality type.
The study of personality has been a matter of discussion; contributions are varied and debatable.
Major contribution to the topic of study was made by the father of psychology, Sigmund Freud. Other
contributions came from psychologists like Carl Jung, the Neo-Freudians (like Adler, Sullivan and
Homey) and the Trait theorists. Theories on personality can be categorised as: i) individual theories; ii)
social learning theories. However, we would elaborate upon these without any such classification, as it
is rightly believed that it is the combination of both individual characteristics/traits (genetics) as well
as social learning (social environment) that impacts personality. This lesson deals with The Freudian
theory, the Jungian theory and the Neo-Freudian Theory.
Sigmund Freud, the father of psychology, became famous with its psychoanalytic theory of person-
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ality. In fact the theory is regarded as the cornerstone of modern psychology. Freud based his theory
on certain assumptions:
- unconscious needs or drives lie at the heart of human motivation and personality;
- the socialisation process that takes place within people in a social set up has a huge impact on individual behaviour.
Freud explained much of how the psyche or the mind operates, and proposed that the human psyche is composed of parts within our awareness and beyond our awareness. He said that all behaviour
within an individual cannot be explained, much lies in the sub-conscious. Freud viewed personality
as “an iceberg”; just as majority of the iceberg remains within water and only the tip of the iceberg is
above water, similarly, much of our personality exists below our level of awareness, as the unconscious
and just as a part of it lies above, as the conscious. Even though an individual is not aware of the contents and processes of the unconscious, much of our behaviour is attributed to it.
Based on the level of awareness, the human mind comprises three parts, i.e., conscious, preconscious and the unconscious or the sub-conscious. The conscious mind is what one is aware of at any
particular moment of time and reflects one’s present thoughts, feelings, perceptions, fantasies, etc.; it
restricts oneself to the current thinking processes and comprises a very large part of our current awareness. The preconscious mind or the “available memory,” is what can be retrieved and made conscious,
and brought to mind instantly or quickly; it is what we are aware of but not paying attention to at a
point of time; it is something that can be brought into the conscious mind. The larger part of the human mind consists of the unconscious, which is all that stays at the subconscious level, and comprises
the unaware, better known as our drives or instincts, feelings and memories and emotions related to
trauma; this part in content and process is out of direct reach of the conscious mind, and thinks independently; an individual has no access to because it is unknown and hidden. This unconscious part is
the source of all our drives and motives; yet we are often deny or refuse to accept and often resist them
from becoming conscious. This is because they form the unaware part and are in a disguised form. It is
because of this unconscious part that we are largely unable to control many aspects of our behaviour,
especially those acts which we would prefer to avoid. According to Freud, much of human behaviour is
driven directly from the subconscious mind; and so it is important that the unconscious material needs
to be brought into the conscious state so that it can be examined in a rational manner.
Apart from these, Freud spoke of the Id, Ego and Super ego. The Id contains consists of primitive
drives that lack the real perception of reality. It operates on the pleasure principle, with the objective
of seeking pleasure and avoidance of pain, and doing what one wants to do. The processes that come
into play are primary processes like hunger, thirst etc. The Ego is aware of reality and operates via the
reality principle, where it recognises what is real and understands that behaviour has consequences.
The processes that come into play are secondary processes, like learning and memory, perception etc.
It also includes the impact that socialisation has to play in the life of an individual; it recognises the
existence of social rules that are necessary in order to live and socialise with other people, and thus,
plans to satisfy ones’ needs within the social values and rules. The Super ego comprises the value
system and the morals, which emanate from what an individual learns in childhood from his parents.
It is contained in the conscious part of our memory. It believes in doing what the society says. While
the Ego and Super Ego are partly conscious and partly unconscious, the Id is the unconscious. Further, the Super ego acts as a counterbalance to the Id; the former seeks to restrict the pleasure-seeking
demands of the latter, and it is left for the Ego to balance the demands of the Id and Super ego with
the constraints of reality; it controls the higher mental processes such as logical reasoning to solve the
Id-Super ego dilemma.
According to Freud, personality is based on the dynamic and continuous interplay between the Id,
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Ego and Super Ego. The Id demands immediate gratification of needs and desires (pleasure principle)
regardless of constraints in the external environment; the Ego acts to realistically meet the desires of
the Id (reality principle); the Super Ego (conscience) blends morals and societal rules upon the ego,
so that the desires are met both realistically and morally. Thus, Freud also pointed out the impact of
socialisation on members of a society, especially with reference to how this socialisation impacts individual behaviour. According to him, there exists a state of tension within an individual; this tension
arises out if there is a mismatch between an individual’s needs and desires vis-à-vis the norms set up
by the society and the socialisation process; the manner in which an individual sorts out the dilemma
shapes his personality.
An Assessment of the Theory: The Freudian theory is the first comprehensive theory that was proposed on the subject of personality. He described several components that underlie how personality
emanates, thus leading to a better understanding of the subject. Other theories have emerged out of this
pioneering work. Yet is has been criticised. It is pointed out that his theory lacks reliability and validity;
one, it does not lend itself to empirical testing, primarily because the hypotheses are not testable; two,
Freud based his theory on the case study approach, and it would be inappropriate to make generalisations based on the case study approach; three, he concentrated only on the impact that childhood
experiences have on personality, and ignored other experiences across life span.
Carl Jung, a contemporary of Freud proposed the famous Jungian Theory. He elaborated on personality types, and his contribution has great relevance to the study of consumer behaviour.
Carl Jung has proposed a typology based upon four bipolar dimensions, where each pole represents
an opposite preference and thus illustrates four dichotomies, i.e., Extraversion – Introversion, Sensing –
Intuition, Thinking – Feeling, and Judging – Perceiving. The permutations of these 4 pairs help identify
sixteen different personality types. The sixteen personality types are defined in terms of acronyms of
the combination of the 4 dimensions they represent. The various types are Extraverted Sensing (ESFP,
ESTP), Introverted Sensing (ISTJ, ISFJ), Extraverted Intuition (ENFP, ENTP), Introverted Intuition
(INFJ, INTJ), Extraverted Thinking (ESTJ, ENTJ), Introverted Thinking (ISTP, INTP), Extraverted
Feeling (ESFJ, ENFJ) and Introverted Feeling (INFP, ISFP).
The personality types proposed by Carl Jung were developed and incorporated into a scale that
came to be famously known and applied as the MBTI or the Myers-Briggs Type Indicator. Essentially
a personality inventory, it has been used extensively in social sciences to measure the following pairs
of psychological construct/dimensions: sensing-intuiting, thinking-feeling, extroversion-introversion,
and judging-perceiving. Each of the four pairs is illustrative of two different personality characteristics.
While the scale has been applied successfully in studies on consumer behaviour and market research,
recent research has tended to focus on two mental bipolar dimensions or dichotomies, i.e., sensing-intuiting (S-N) and thinking-feeling (T-F). The two dimensions, sensing (S) and intuiting (N) measure
how a person receives, gathers and processes information; the people who fall under the S category
prefer to gather information through their senses directly; the people who fall under the N category
rely upon their understanding of things, based on their perception of the world. Thus we can perceive
information through our senses, or our intuition. The other two dimensions, thinking (T) and feeling
(F) refer to how individuals take decisions; the people who fall under the T category make decisions
based on an unbiased reasoning and logic; the people who fall under the F category base their decisions
on feeling and emotions. Thus we can make decisions based on objective logic, or subjective feelings.
According to Jung, we all use the S, N, T and F; however each one of us varies in their usage and frequency. The combination of our “preferences” defines our personality type. The same descriptions of
the sensing-intuiting (S-N) and thinking-feeling (T-F) personality types may be applied to consumer
behaviour; the S and N determine how a consumer gathers and processes information about products,
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while the T and F determine how he makes a purchase decision.
An Assessment of the Theory: Carl Jung was the first psychologist to speak of personality types. His
typology based upon four bipolar dimensions have been widely applied in research in social sciences;
it has also been successfully used in studies on consumer behaviour as well. He believed that our behaviour is shaped by past generations’ experience.
Families and Family Decision Making
The Family Life Cycle: Individuals and families tend to go through a “life cycle:” The simple life
cycle goes from:
YOUNG
SINGLE
YOUNG
COUPLE
EMPTY NEST
I/II
FULL NEST
I/II/III
OLDER
SINGLE
FIGURE 6. FAMILY LIFE CYCLE
The source: Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://www.consumerpsychologist.com/index.html, accessed March/April, 2014
For purposes of this discussion, a “couple” may either be married or merely involve living together.
The breakup of a non-marital relationship involving cohabitation is similarly considered equivalent to
a divorce.
Single parenthood can result either from divorce or from the death of one parent. Divorce usually
entails a significant change in the relative wealth of spouses. In some cases, the non-custodial parent
(usually the father) will not pay the required child support, and even if he or she does, that still may
not leave the custodial parent and children as well off as they were during the marriage. On the other
hand, in some cases, some non-custodial parents will be called on to pay a large part of their income
in child support.
In real life, this situation is, of course, a bit more complicated. For example, many couples undergo
divorce. Then we have one of the scenarios:
The part’s information is adopted from Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://
www.conVXPHUSV\FKRORJLVWFRPLQGH[KWPODFFHVVHG0DUFK$SULO-
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YOUNG
SINGLE
YOUNG
COUPLE
FULL NEST
I/II/III
SINGLE
PARENT
FIGURE 7. MODIFIED FAMILY LIFE CYCLE (I)
The source: Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://www.consumerpsychologist.com/index.html, accessed March/April, 2014
This is particularly a problem when the non-custodial parent remarries and has additional children
in the second (or subsequent marriages). In any event, divorce often results in a large demand for:
•
Low cost furniture and household items
•
Time-saving goods and services
Divorced parents frequently remarry, or become involved in other non-marital relationships; thus,
we may see:
FULL NEST
I/II/III
SINGLE
PARENT
BLENDED
FIGURE 8. MODIFIED FAMILY LIFE CYCLE (II)
The source: Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://www.consumerpsychologist.com/index.html, accessed March/April, 2014
Another variation involves:
YOUNG
SINGLE
SINGLE
PARENT
FIGURE 9. MODIFIED FAMILY LIFE CYCLE (III)
The source: Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://www.consumerpsychologist.com/index.html, accessed March/April, 2014
Here, the single parent who assumes responsibility for one or more children may not form a relationship with the other parent of the child.
Integrating all the possibilities discussed, we get the following depiction of the
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Family Life Cycle:
YOUNG
SINGLE
YOUNG
COUPLE
EMPTY NEST
I/II
FULL NEST
I/II/III
SINGLE
PARENT
OLDER
SINGLE
BLENDED
FIGURE 10. MODIFIED FAMILY LIFE CYCLE (IV)
The source: Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://www.consumerpsychologist.com/index.html, accessed March/April, 2014
Generally, there are two main themes in the Family Life Cycle, subject to significant exceptions:
•
As a person gets older, he or she tends to advance in his or her career and tends to get greater income (exceptions: maternity leave, divorce, retirement).
•
Unfortunately, obligations also tend to increase with time (at least until one’s mortgage has been
paid off). Children and paying for one’s house are two of the greatest expenses.
Note that although a single person may have a lower income than a married couple, the single may
be able to buy more discretionary items.
Family Decision Making: Individual members of families often serve different roles in decisions that
ultimately draw on shared family resources. Some individuals are information gatherers/holders, who
seek out information about products of relevance. These individuals often have a great deal of power
because they may selectively pass on information that favours their chosen alternatives. Influencers
do not ultimately have the power decide between alternatives, but they may make their wishes known
by asking for specific products or causing embarrassing situations if their demands are not met. The
decision maker(s) have the power to determine issues such as:7
•
Whether to buy;
•
Which product to buy (pick-up or passenger car?);
•
Which brand to buy;
•
Where to buy it; and
•
When to buy.
Note, however, that the role of the decision maker is separate from that of the purchaser. From the
point of view of the marketer, this introduces some problems since the purchaser can be targeted by
point-of-purchase (POP) marketing efforts that cannot be aimed at the decision maker. Also note that
the distinction between the purchaser and decision maker may be somewhat blurred:
•
The decision maker may specify what kind of product to buy, but not which brand;
•
The purchaser may have to make a substitution if the desired brand is not in stock;
•
The purchaser may disregard instructions (by error or deliberately).
It should be noted that family decisions are often subject to a great deal of conflict. The reality is that
few families are wealthy enough to avoid a strong tension between demands on the family’s resources.
Conflicting pressures are especially likely in families with children and/or when only one spouse works
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outside the home. Note that many decisions inherently come down to values, and that there is frequently no “objective” way to arbitrate differences. One spouse may believe that it is important to save for
the children’s future; the other may value spending now (on private schools and computer equipment)
to help prepare the children for the future. Who is right? There is no clear answer here. The situation
becomes even more complex when more parties—such as children or other relatives—are involved.
Some family members may resort to various strategies to get their way. One is bargaining—one
member will give up something in return for someone else. For example, the wife says that her husband
can take an expensive course in gourmet cooking if she can buy a new pickup truck. Alternatively, a
child may promise to walk it every day if he or she can have a hippopotamus. Another strategy is reasoning—trying to get the other person(s) to accept one’s view through logical argumentation. Note that
even when this is done with a sincere intent, its potential is limited by legitimate differences in values
illustrated above. Also note that individuals may simply try to “wear down” the other party by endless
talking in the guise of reasoning (this is a case of negative reinforcement as we will see subsequently).
Various manipulative strategies may also be used. One is impression management, where one tries to
make one’s side look good (e.g., argue that a new TV will help the children see educational TV when
it is really mostly wanted to see sports programming, or argue that all “decent families make a contribution to the church”). Authority involves asserting one’s “right” to make a decision (as the “man
of the house,” the mother of the children, or the one who makes the most money). Emotion involves
making an emotional display to get one’s way (e.g., a man cries if his wife will not let him buy a new
rap album).7
Review questions/discussion
1.
2.
3.
4.
5.
6.
Define Personality. Differentiate between a personality trait and personality types.
Explain the Freudian Theory of Personality? How does it relate to consumer behaviour?
Why are the meanings produced by elaborate comprehension processes more memorable?
What marketers must primarily attend to and examine to understand the inferences consumers
make?
What purchasing decisions have you been able to influence in your family and why? Is marketing
to children a good idea? If not, what if one of your competitors were successfully do so? Would it
change your opinion?
How do you determine what is distinctive about different groups? What distinguishes one group
from other groups?
Project and teamwork exercises
1.
Erving Goffman developed a useful analogy for the role playing behaviour when he developed his
idea, or analogy, of life-as-theatre. This is illustrated by the table below. Please take real examples
from life and provide them in the table.
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Theatrical terms
Explanation
Props
Items used to make gestures, or to support and
emphasis movement, or to set a scene.
Costume
Items of clothing which serve to establish a
role, or set a scene
Stage
The place where the performance is held, and
where the audience is assembled.
Backstage
The place where the dressing rooms are; where
the actors prepare for their performance, and
where they meet their friends and intimates.
Make-up
The face the actor puts on to emphasise the
characterisation.
Script
A pre-planned set of statements intended to
communicate the role to the audience.
Business
The movement’s actors make in the course of
playing the role.
Applause
Feedback from the audience; confirmation that
the role projection has been effective
2.
Real-life example
The family has its own life cycle as shown in the table below. Please give the explanation of each
stage of life cycle.
Stage of life cycle
Explanation
Single stage
Newly married couples
Full nest 1
Full nest 2
Full nest 3
Empty nest 1
Empty nest 2
Solitary survivor
Retired solitary survivor
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References for further reading
1.
2.
3.
4.
5.
6.
Assael, H. (1992), Consumer Behaviour & Marketing Action, 4th. Ed., PWS Kent, Boston, MA.
Loudon, D.L. and Bitta A.J. Della, Consumer Behaviour, Fourth Edition, 2002, Tata McGraw-Hill,
New Delhi.
Kotler P., and Keller K.L., Marketing Management, Thirteenth edition, 2009, Pearson.
Peter, P.J. and Olson, J.C., Consumer Behaviour and Marketing Strategy, Seventh Edition, 2005,
McGraw-Hill Higher Education.
Schiffman, L.G. and Kanuk, L.L., Consumer Behaviour, Eight Edition, 2004, Prentice Hall, India.
Wells W.D. and Prensky, D., Consumer Behaviour, 1996, John Wiley & sons, Inc.
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Part 5
7+(,1)/8(1&(2)(19,5210(17$/
)$&725621&21680(5%(+$9,285
Objective outline:
Chapter Key Terms:
After studying this unit, you be able to:
Consumer social groups
1.
Reference group
Define social group and identify different types of
consumer social groups
2.
Identify characteristics of a social group
3.
Describe reference group and its influence on consumer behaviour
4.
Describe the concept and meaning of social class
5.
State essential characteristics of a social class
6.
Describe social class categorisation and measurement
7.
Identify problems associated with measuring a social class
8.
Describe Meaning of culture and its essential features
9.
Describe nature of cultural values and how its influence consumer behaviour
Social class
Categorisation and measurement
Culture
Nature of cultural values
Cultural changes
Strategic marketing practices
10. Describe cultural changes and its implication for
strategic marketing practices
Culture and subculture
Culture is part of the external influences that impact the consumer. That is, culture represents influences that are imposed on the consumer by other individuals. The definition of culture offered in
one textbook is “That complex whole which includes knowledge, belief, art, morals, custom, and any
other capabilities and habits acquired by man person as a member of society.” From this definition,
The part’s information is adopted by Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://www.consumerpsychologist.com/index.html, accessed March/April, 2014.
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we make the following observations:
Culture, as a “complex whole,” is a system of interdependent components.
Knowledge and beliefs are important parts. In the U.S., we know and believe that a person who
is skilled and works hard will get ahead. In other countries, it may be believed that differences in
outcome result more from luck. “Chunking,” the name for China in Chinese literally means “The
Middle Kingdom.” The belief among ancient Chinese that they were in the centre of the universe
greatly influenced their thinking.
Other issues are relevant. Art, for example, may be reflected in the rather arbitrary practice of
wearing ties in some countries and wearing turbans in others. Morality may be exhibited in the
view in the United States that one should not be naked in public. In Japan, on the other hand,
groups of men and women may take steam baths together without perceived as improper. On the
other extreme, women in some Arab countries are not even allowed to reveal their faces. Notice,
by the way, that what at least some countries view as moral may in fact be highly immoral by the
standards of another country. For example, the law that once banned interracial marriages in
South Africa was named the “Immorality Act,” even though in most civilised countries this law,
and any degree of explicit racial prejudice, would itself be considered highly immoral.
Culture has several important characteristics:
(1) Culture is comprehensive. This means that all parts must fit together in some logical fashion. For
example, bowing and a strong desire to avoid the loss of face are unified in their manifestation of
the importance of respect.
(2) Culture is learned rather than being something we are born with. We will consider the mechanics
of learning later in the course.
(3) Culture is manifested within boundaries of acceptable behaviour. For example, in American society, one cannot show up to class naked, but wearing anything from a suit and tie to shorts and a
T-shirt would usually be acceptable. Failure to behave within the prescribed norms may lead to
sanctions, ranging from being hauled off by the police for indecent exposure to being laughed at
by others for wearing a suit at the beach.
(4) Conscious awareness of cultural standards is limited. One American spy was intercepted by the
Germans during World War II simply because of the way he held his knife and fork while eating.
(5) Cultures fall somewhere on a continuum between static and dynamic depending on how quickly
they accept change. For example, American culture has changed a great deal since the 1950s,
while the culture of Saudi Arabia has changed much less.
Whether dealing with issues of marketing, managing, or negotiating, the success or failure of a
company abroad depends on how effectively its employees can exercise their skills in a new location.
That ability will depend on both their job-related expertise and the individual’s sensitivity and responsiveness to the new cultural environment One of the most common factors contributing to failure in international business assignments is the erroneous assumption that if a person is successful in the home
environment, he or she will be equally successful in applying technical expertise in a different culture.
Hofstede’s dimensions: Gert Hofstede, a Dutch researcher, was able to interview a large number of
IBM executives in various countries, and found that cultural differences tended to centre around four
key dimensions:9
Individualism vs. collectivism: To what extent do people believe in individual responsibility and
reward rather than having these measures aimed at the larger group? Contrary to the stereotype,
Japan actually ranks in the middle of this dimension, while Indonesia and West Africa rank to-
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ward the collectivistic side. The U.S., Britain, and the Netherlands rate toward individualism.
Power distance: To what extent is there a strong separation of individuals based on rank? Power
distance tends to be particularly high in Arab countries and some Latin American ones, while it is
more modest in Northern Europe and the U.S.
Masculinity vs. femininity involves a somewhat more nebulous concept. “Masculine” values
involve competition and “conquering” nature by means such as large construction projects, while
“feminine” values involve harmony and environmental protection. Japan is one of the more masculine countries, while the Netherlands rank relatively low. The U.S. is close to the middle, slightly
toward the masculine side. (The fact that these values are thought of as “masculine” or “feminine”
does not mean that they are consistently held by members of each respective gender—there are
very large “within-group” differences. There is, however, often a large correlation of these cultural values with the status of women.)
Uncertainty avoidance involves the extent to which a “structured” situation with clear rules is
preferred to a more ambiguous one; in general, countries with lower uncertainty avoidance tend
to be more tolerant of risk. Japan ranks very high. Few countries are very low in any absolute
sense, but relatively speaking, Britain and Hong Kong are lower, and the U.S. is in the lower range
of the distribution.
Although Hofstede’s original work did not address this, a fifth dimension of long term vs. short term
orientation has been proposed.
+LJKYVORZFRQWH[WFXOWXUHV In some cultures, “what you see is what you get”—the speaker is expected to make his or her points clear and limit ambiguity. This is the case in the U.S.—if you have
something on your mind, you are expected to say it directly, subject to some reasonable standards of
diplomacy. In Japan, in contrast, facial expressions and what is not said may be an important clue to
understanding a speaker’s meaning. Thus, it may be very difficult for Japanese speakers to understand
another’s written communication. The nature of languages may exacerbate this phenomenon —while
the German language is very precise, Chinese lacks many grammatical features, and
the meaning of words may be somewhat less precise. English ranks somewhere in the middle of
this continuum.
Ethnocentrism and the self-reference criterion: The self-reference criterion refers to the tendency of
individuals, often unconsciously, to use the standards of one’s own culture to evaluate others. For
example, Americans may perceive more traditional societies to be “backward” and “unmotivated”
because they fail to adopt new technologies or social customs, seeking instead to preserve traditional
values. In the 1960s, a supposedly well-read American psychology professor referred to India’s culture
of “sick” because, despite severe food shortages, the Hindu religion did not allow the eating of cows.
Language issues: Language is an important element of culture. It should be realised that regional
differences may be subtle. For example, one word may mean one thing in one Latin American country,
but something off-colour in another. It should also be kept in mind that much information is carried in
non-verbal communication. In some cultures, we nod to signify “yes” and shake our heads to signify
“no;” in other cultures, the practice is reversed. Within the context of language:
There are often large variations in regional dialects of a given language. The differences between
U.S., Australian, and British English are actually modest compared to differences between dialects
of Spanish and German.
Idioms involve “figures of speech” that may not be used, literally translated, in other languages.
For example, baseball is a predominantly North and South American sport, so the notion of “in
the ball park” makes sense here, but the term does not carry the same meaning in cultures where
the sport is less popular.
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-
Neologisms involve terms that have come into language relatively recently as technology or society involved. With the proliferation of computer technology, for example, the idea of an “add-on”
became widely known. It may take longer for such terms to “diffuse” into other regions of the
world. In parts of the World where English is heavily studied in schools, the emphasis is often on
grammar and traditional language rather than on current terminology, so neologisms have a wide
potential not to be understood.
Slang exists within most languages. Again, regional variations are common and not all people in a
region where slang is used will necessarily understand this. There are often significant generation
gaps in the use of slang.
Writing patterns, or the socially accepted ways of writing, will differs significantly between cultures.
FIGURE 11. SOCIALLY ACCEPTED WAYS OF WRITING, WILL DIFFERS SIGNIFICANTLY BETWEEN CULTURES
The source: Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://www.consumerpsychologist.com/index.html, accessed March/April, 2014
In English and Northern European languages, there is an emphasis on organisation and conciseness. Here, a point is made by building up to it through background. An introduction will often
foreshadow what is to be said. In Romance languages such as Spanish, French, and Portuguese, this
style is often considered “boring” and “inelegant.” Detours are expected and are considered a sign of
class, not of poor organisation. In Asian languages, there is often a great deal of circularity. Because
of concerns about potential loss of face, opinions may not be expressed directly. Instead, speakers
may hint at ideas or indicate what others have said, waiting for feedback from the other speaker before
committing to a point of view.
Because of differences in values, assumptions, and language structure, it is not possible to meaningfully translate “word-for-word” from one language to another. A translator must keep “unspoken
understandings” and assumptions in mind in translating. The intended meaning of a word may also
differ from its literal translation. For example, the Japanese word hai is literally translated as “yes.” To
Americans, that would imply “Yes, I agree.” To the Japanese speaker, however, the word may mean
“Yes, I hear what you are saying” (without any agreement expressed) or even “Yes, I hear you are saying something even though I am not sure exactly what you are saying.”
Differences in cultural values result in different preferred methods of speech. In American English,
where the individual is assumed to be more in control of his or her destiny than is the case in many other cultures, there is a preference for the “active” tense (e.g., “I wrote the marketing plan”) as opposed
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to the passive (e.g., “The marketing plan was written by me.”)
Because of the potential for misunderstandings in translations, it is dangerous to rely on a translation from one language to another made by one person. In the “decentring” method, multiple translators are used.
FRENCH
Translator 1
SWAHILI
Translator 2
FRENCH
SWAHILI
Translator 3
FRENCH
If still not matched, continue process with the
new translators
FIGURE 12. TRANSLATION FROM ONE LANGUAGE TO OTHER SPECIFICS
The source: Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://www.consumerpsychologist.com/index.html, accessed March/April, 2014
The text is first translated by one translator—say, from German to Mandarin Chinese. A second
translator, who does not know what the original German text said, will then translate back to German
from Mandarin Chinese translation. The text is then compared. If the meaning is not similar, a third
translator, keeping in mind this feedback, will then translate from German to Mandarin. The process
is continued until the translated meaning appears to be satisfactory.
A consumer’s behaviour also influenced by social factors such as the consumer’s small groups, family and social roles and status.
Groups: A person’s behaviour is influenced by many small groups. Manufacturers of products and
brands subjected to strong group influence must figure out how to reach opinion leaders. An opinion
leader is a person within a reference group who because of special skills, knowledge, personality, or
other characteristics exerts on others. An aspiration group is one to which an individual wishes to belong.
Family:
–
Most important consumer buying organisation in the society.
–
Family members can strongly influence buyer behaviour.
–
Marketers are interested in the roles and influence of the husband, wife and children on the purchase of different products and services.
Roles and Status: a person belongs to many groups such as family, clubs, organisations etc. The
person’s position in each group can be defined in terms of both role and status. A role consists of the
activities people are expected to perform according to the persons around them. Each role carries a status reflecting the general esteem given it to by the society. People usually choose products appropriate
to their roles and status.
For example, as a brand manager, she will buy the kind of clothing that reflects her role and status
in her company.
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5ROH ([SHFWHGDFWLYLWLHV
Status = Esteem given to role by society
Reference groups come with various degrees of influence. Primary reference groups come with a
great deal of influence—e.g., members of a fraternity/sorority. Secondary reference groups tend to
have somewhat less influence—e.g., members of a boating club that one encounters only during weekends are likely to have their influence limited to consumption during that time period.
Another typology divides reference groups into the informational kind (influence is based almost
entirely on members’ knowledge), normative (members influence what is perceived to be “right,”
“proper,” “responsible,” or “cool”), or identification. The difference between the latter two categories
involves the individual’s motivation for compliance. In case of the normative reference group, the individual tends to comply largely for utilitarian reasons—dressing according to company standards is
likely to help your career, but there is no real motivation to dress that way outside the job. In contrast,
people comply with identification groups’ standards for the sake of belonging—for example, a member
of a religious group may wear a symbol even outside the house of worship because the religion is a part
of the person’s identity.
Review questions/discussions
1.
2.
3.
4.
Recently there has been a great deal of attention paid to environmental issues resulting in a number of companies embarking on “green” campaigns. Discuss some of the reasons as to why companies are developing such campaigns. Do you think these campaigns will change consumers’
attitudes toward the environment and/or these companies?
The chapter discusses the use of cultural anthropology to understand consumer behaviours. Why
is it necessary for marketers to use alternative approaches to consumer behaviour?
Why do people in different cultures buy different products? Discuss with your class the types
of vehicles you have seen other countries. Why are they different, and how do they better meet
buyers’ needs in those countries? What types of cars do you think should be sold in the Lithuania
today?
What is your opinion of companies like Google that gather information about your browsing
patterns? What advantages and drawbacks does this pose for consumers? If you were a business
owner, what kinds of information would you gather on your customers and how would you use
it?
Project and teamwork exercises
1.
a.
b.
Please watch the Mountain Man Brewing Company (MMBC) case via internet:
https://www.youtube.com/watch?v=ix8qWNBXrfU and discuss the questions:
Why has MMBC been successful in the past? Discuss all aspects of this success in terms of the
company, its customers and competitors.
Discuss the Mountain Man Lager brand from the perspective of Keller’s model of brand knowledge. Does Mountain Man Lager have strong brand equity and if so, why? What has MMBC
done to build customer-based brand equity?
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c.
d.
e.
2.
3.
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Why has MMBC experienced difficulties in recent years in spite of its strong brand?
What options does Chris have? In particular, what are the implications of the “do nothing” option?
What are the pros and cons of introducing Mountain Man Light? Discuss this issue from the
perspective of the model of brand extension discussed in class.
Break up into groups and visit an ethnic part of your town that differs from your own ethnicity(-ies). Walk around the neighbourhood and its stores. What types of marketing and buying
differences do you see? Write a report of your findings.
Identify how McDonald’s targets both users (primarily children) and buyers (parents, grandparents,
etc.). Provide specific examples of strategies used by the fast-food marketer to target both groups.
Make it a point to incorporate Happy Meals and Mighty Kids Meals into your discussion.
References for further reading
1.
2.
3.
4.
David L. and Albert J.D. (2002), Consumer Behaviour, New Delhi: Tata McGraw Hill.
Del I.H. Roger J.B. and Kenneth A.C. (2001), Consumer Behaviour; Building Marketing Strategy, New
York: McGraw-Hill Irwin.
Eric A. Linda P. and George Z. (2002), Consumer, New York: McGraw-Hill Irwin.
Inc. Leon G.S. and Leslie L.K (2004), Consumer Behaviour, Upper Saddle River, U.S.A: Pearson
Education, Inc. Pearson Prentice Hall.
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Part 6
THE FEATURES OF PERCEPTION
Objective outline:
Chapter Key Terms
After studying this unit, you should be able to:
Perception
1.
Describe nature of consumer perception
Processes of perception
2.
Identify elements and Processes of perception
Strategy marketing
3.
Describe implication of consumer perception in strategy marketing
Consumer perception
Consumer perception applies the concept of sensory perception to marketing and advertising. Just
as sensory perception relates to how humans perceive and process sensory stimuli through their five
senses, consumer perception pertains to how individuals form opinions about companies and the merchandise they offer through the purchases they make. Merchants apply consumer perception theory to
determine how their customers perceive them. They also use consumer perception theory to develop
marketing and advertising strategies intended to retain current customers -- and attract new ones.
Our perception is an approximation of reality. Our brain attempts to make sense out of the stimuli
to which we are exposed. This works well, for example, when we “see” a friend three hundred feet
away at his or her correct height; however, our perception is
sometimes “off ”—for example, certain shapes of ice cream containers look like they contain more
than rectangular ones with the same volume.
Factors in perception
Several sequential factors influence our perception. Exposure involves the extent to which we encounter a stimulus. For example, we are exposed to numerous commercial messages while driving on
the freeway: bill boards, radio advertisements, bumper-stickers on cars, and signs and banners placed
at shopping malls that we pass. Most of this exposure is random—we don’t plan to seek it out. Howev
The part’s information is adapted from the source: Blank, Ch., Demand, M. Consumer perception theory. The access via internet: http://smallbusiness.chron.
com/consumer-perception-theory-40176.html (accessed March/April, 2014).
The part’s information is adopted from Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://
www.consumHUSV\FKRORJLVWFRPLQGH[KWPODFFHVVHG0DUFK$SULO
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er, if we are shopping for a car, we may deliberately seek out advertisements and “tune in” when dealer
advertisements come on the radio.
Exposure is not enough to significantly impact the individual—at least not based on a single trial
(certain advertisements, or commercial exposures such as the “Swoosh” logo, are based on extensive
repetition rather than much conscious attention). In order for stimuli to be consciously processed,
attention is needed. Attention is actually a matter of degree—our attention may be quite high when
we read directions for getting an income tax refund, but low when commercials come on during a
television program. Note, however, that even when attention is low, it may be instantly escalated—for
example, if an advertisement for a product in which we are interested comes on. Interpretation involves
making sense out of the stimulus. For example, when we see a red can, we may categorise it as a Coke.
In today’s globalising economy, competition is getting fiercer. That means it becomes more difficult
for products and services to differentiate themselves from other offerings than ever before. Not only is
the number of competitive offerings rising due to globalisation of production, sourcing, logistics and
access to information. Many products and services face new competition from substitutes and from
completely new offerings or bundles from industry outsiders. Since product differences are closed at an
increasing speed and many companies try to win the battle for customers by price reductions, products
and services tend to become commodities.
On the other hand, customer behaviour becomes more hybrid. On one hand, customers are increasingly price sensitive – searching for bargains at marketplaces like eBay or buying their groceries at
discount markets. On the other hand they enjoy branded and luxury goods. One and the same person
may plan a weekend trip with a no-frills airline and a stay at a five-star-hotel. In the result, customers
have a wider choice of often less distinguishable products and they are much better informed. For
many offerings the balance of power shifts towards the customer. Customers are widely aware of their
greater power, which raises their expectations on how companies should care for them.
Bringing it all together, it becomes ever more difficult to differentiate a product or service by traditional categories like price, quality, functionality etc.
In this situation the development of a strong relationship between customers and a company could
likely prove to be a significant opportunity for competitive advantage. This relationship is no longer
based on features like price and quality alone. Today it is more the perceived experience a customer
makes in his various interactions with a company (e.g. how fast, easy, efficient and reliable the process
is) that can make or break the relationship. Problems during a single transaction can damage a so far
favourable customer attitude.
The consequence for companies is that they have to adapt their ways of competing for customers.
Traditionally, companies have focused their efforts of customer relationship management on issues
like customer satisfaction and targeted marketing activities like event marketing, direct marketing or
advertising. Although doubtless necessary and beneficial, these activities are no longer enough. They
narrow the relationship between company and customer down to a particular set of contacts in which
the company invests its efforts. Most likely this will produce not more than a satisfied customer who is
well aware of the companies’ offerings and has a positive attitude towards them. However, a satisfied
customer is not necessarily a loyal one.
If a customer is satisfied that means that a product of service has met his expectations and that he
was not dissatisfied by it. Customer satisfaction is doubtlessly very important. It is the precondition for
repeat purchases and it prevents the customer from telling others about his disappointing experiences.
A loyal customer, however, is more than a customer who frequently purchases from a company.
The difference is the emotional bond which links the customer so closely to the company that he
develops a clear preference for these products or brands and is even willing to recommend them to oth-
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ers. Loyal customers truly prefer a product, brand or company over competitive offerings. Thus loyalty
goes beyond a rational decision for known quality or superior price-performance-ratio. It is about the
customers’ feelings and perceptions about the brand or product.
When the customer makes his buying decision, he evaluates the benefits he perceives from a particular product and compares them with the costs. The value a customer perceives when buying and
using a product or service go beyond usability. There is a set of emotional values as well, such as social
status, exclusivity, friendliness and responsiveness or the degree to which personal expectations and
preferences are met. Similarly, the costs perceived by the customer, normally comprise more than the
actual price. They also include costs of usage, the lost opportunity to use another offering, potential
switching costs etc. Hence, the customer establishes an equation between perceived benefits and
per-ceived costs of one product and compares this to similar equations of other products. Based on this,
customer loyalty can be understood as to how customers feel about a product, service or brand, and
whether their perceived total investments with it live up to their expectations. The important point here is
the involvement of feelings, emotions and perceptions. In today’s competitive marketplace, these
perceptions are becoming much more important for gaining sustainable competitive advantage.
Customer perceptions are influenced by a variety of factors. Besides the actual outcome, i.e., did
the product or service deliver the expected function and did it fulfil the customers need – the whole
process of consumption and all interactions involved are of crucial importance. In today’s globalised
information driven economy this can also comprise issues like:
–
How other customers or influencing groups perceive the product or brand;
–
The degree to which the customer feels the actual marketing campaign addresses the most important issues;
–
Responsiveness and service quality of any affiliates, e.g., distribution partners.
Customer perceptions are dynamic. First of all, with the developing relationship between customer
and company, his perceptions of the company and its products or services will change.
The more experience the customer accumulates, the more his perceptions will shift from fact-based
judgements to a more general meaning the whole relationship gains for him. Over time, he puts a
stronger focus on the consequence of the product or service consumption. Moreover, if the customers’
circumstances change, their needs and preferences often change too. In the external environment, the
offerings of competitors, with which a customer compares a product or service will change, thus altering his perception of the best offer around. Another point is that the public opinion towards certain issues can change. This effect can reach from fashion trends to the public expectation of good corporate
citizenship. Shells intention to dump its Brent Spar platform into the ocean significantly altered many
customers perception of which company was worth buying fuel from. Research has been done on the
impact of market share on the perceived quality of a product. Depending on the nature of the product
and the customers’ preferences, increasing market share can have positive or negative effects on
how the customer perceives the product.
Surprising stimuli are likely to get more attention—survival instinct requires us to give more attention to something unknown that may require action. A greater contrast (difference between the stimulus and its surroundings) as well as greater prominence (e.g., greater size, centre placement) also tend
to increase likelihood of processing.
The information adapted from Krell, E. 2005. Differentiate a satisfied customer from a loyal one. Available under http://searchcrm.techtarget.com/
originalConWHQWVLGBJFLKWPO
Hellofs, L., Jacobson, R. 1999. Market share and customers’ perceptions of quality: When can firms grow their way to higher versus lower quality? Journal
of0DUNHWLQJSDJH
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Subliminal stimuli: Back in the 1960s, it was reported that on selected evenings, movie goers in a
theatre had been exposed to isolated frames with the words “Drink Coca Cola” and “Eat Popcorn” imbedded into the movie. These frames went by so fast that people did not consciously notice them, but
it was reported that on nights with frames present, Coke and popcorn sales were significantly higher
than on days they were left off. This led Congress to ban the use of subliminal advertising. First of all,
there is a question as to whether this experiment ever took place or whether this information was simply made up. Secondly, no one has been able to replicate these findings. There is research to show that
people will start to giggle with embarrassment when they are briefly exposed to “dirty” words in an experimental machine. Here, again, the exposure is so brief that the subjects are not aware of the actual
words they saw, but it is evident that something has been recognised by the embarrassment displayed.12
The concept of customer perception does not only relate to individual customers in consumer markets. It is also valid in business to business situations. For example, a competitor benchmarking survey
of a large industrial supplier revealed that the market leader, although recognised for excellent quality
and service and known to be highly innovative, was perceived as arrogant in some regions.
The backbone of any customer perception management and measurement system, however, is thorough market research and surveys. There are several aspects of measuring customer perceptions:
–
First of all the company has to find out, how it and its offerings are perceived by the customers.
It is essential to identify what the customer is actually buying and which features are the most
important to him. Besides that, surveys should also identify the relative importance of several
influencing variables in the eyes of the customer.
–
To know what matters the most to the customer and helps to set priorities for projects.
–
Of course, as with any market research activities, it should be based on careful customer segmentation. Customer groups that differ by frequency of use, social status, geographical region or
other criteria, are likely to have different expectations and preferences. Hence, they will probably
perceive an offering in different ways.
–
Zeithamel et al suggest to incorporate several behavioural-intentions questions to identify signals that are potentially favourable or unfavourable for the company. Questions for behaviour
intentions are potentially of higher validity and richer diagnostic value than the “overall service
quality” or “customer satisfaction” variables. Since these questions are directed at potential future
actions they can not only indicate of changes in demand and market trends. They also provide
early warning signs and help to take to take timely corrective action.
Only if a company knows which features of its products and services or which other points of
contact with the customer are considered most important by the customers, it can develop appropriate
strategies. Such a strategy will not only help the company to strengthen the emotional bond with the
customer through targeted improvements and activities. It may also have the positive side effect that
the customers’ whole experience leads him to the conclusion that this company really understands his
distinctive needs and really takes him seriously.
Zeithamel, V., Berry, L., Parasuraman, A. 1996. The behavioural consequences of service quality. Journal of Marketing. 60 (2), page 31
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Review questions/discussion
1.
2.
3.
4.
5.
6.
Explain how someone’s personality differs from his or her self-concept. How does the person’s
ideal self come into play in a consumer-behaviour context?
Describe the buying patterns women exhibit versus men.
Why are companies interested in consumers’ cognitive ages?
What are some of the consumer lifestyle factors firms examine?
Perceptionis defined as the process by which an individual selects, organises and interprets stimuli
into a meaningful and coherent picture of the world. It can be described as “how we see the world
around us”.
.
Find two advertisements depicting two different types of perceptual distortions. Discuss your
choice.
Project and teamwork exercises
1.
2.
3.
4.
Find three examples of print advertisements that use some of the stimulus factors discussed in this
chapter to gain attention. For each example, evaluate the effectiveness of the stimulus factors used.
Define selective perception. Thinking back, relate one or two elements of this concept to your own
attention patterns in viewing print advertisements and television commercials.
Select a company that produces several versions of the same product under the same brand name.
Visit the firm’s website and prepare a list of the product items and the positioning strategy for each
of the products.
Using Maslow’s Hierarchy of Needs, identify a list of popular advertising slogans that appeal to
each of the five levels.
References for further reading
1.
2.
3.
4.
5.
6.
David L. and Albert J.D. (2002), Consumer Behaviour, New Delhi: Tata McGraw Hill.
Eric A. Linda P. and George Z. (2002), Consumer, New York: McGraw-Hill Irwin.
Frederick E. Webster, Jr., and Yoram W. (1972), Organizational Buying Behaviour, Eaglewood Cliffs,
NJ: Prentice-Hall.
James F. E. Roger D.B and Paul W.M. (1990), Consumer Behaviour, U.S.A: The Dryden Press.
John A.H. and Jagdish N. S. (1969), Theory of Buyer Behaviour, NewYork: Wiley.
Robbins S.P. (2000), Organizational Behaviour, New Delhi: Prentice-Hall.
43
LEARNING
A N D M E M O RY
Part 7
LEARNING AND MEMORY
Objective outline:
Chapter Key Terms:
After studying this unit, you should be able to:
Learning
1.
Define learning and memory.
Conditioning
2.
Describe method of learning and its implication in understanding consumer behaviour.
Memory
3.
Explain consumer learning theory and identify the necessary
elements.
4.
Discuss the elements of Classical Conditioning theory.
5.
Identify the three strategic applications of Classical Conditioning.
6.
Discuss the concept of licensing and its importance to marketing.
7.
Review the elements of Instrumental Conditioning.
8.
Discuss the strategic applications of Instrumental Conditioning.
9.
Discuss the elements of Classical Conditioning theory.
Consumer behaviour
Marketing solutions
10. Explain and apply cognitive learning theory in a marketing
situation.
11. Describe three ways information may be stored in memory.
12. Relate involvement theory to consumer behaviour.
13. Understand how consumer learning can be measured.
Learning and memory
Learning involves “a change in the content or organization of long term memory and/or behaviour.”
The first part of the definition focuses on what we know (and can thus put to use) while the second
focuses on concrete behaviour. For example, many people will avoid foods that they consumed shortly
before becoming ill. Learning is not all knowledge based. For example, we may experience the sales
1
The part’s information is adopted from Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://
www.conVXPHUSV\FKRORJLVWFRPLQGH[KWPODFFHVVHG0DUFK$SULO
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people in one store being nicer to us than those in the other. We thus may develop a preference for the
one store over the other; however, if pressed, we may not be able to give a conscious explanation as to
the reason for our preference. Much early work on learning was actually done on rats and other animals (and much of this research was unjustifiably cruel, but that is another matter).
Classical conditioning: Pavlov’s early work on dogs was known as classical conditioning. Pavlov
discovered that when dogs were fed meat powder they salivated. Pavlov then discovered that if a bell
were rung before the dogs were fed, the dogs would begin salivating in anticipation of being fed (this
was efficient, since they could then begin digesting the meat powder immediately). Pavlov then found
that after the meat had been “paired” with the meat powder enough times, Pavlov could ring the bell
without feeding the dogs and they would still salivate.
In the jargon of classical conditioning, the meat powder was an unconditioned stimulus (US) and
the salivation was, when preceded by the meat powder, an unconditioned response (UR). That is, it is
a biologically “hard-wired” response to salivate when you are fed. By pairing the bell with the unconditioned stimulus, the bell became a conditioned stimulus (CS) and salivation in response to the bell
(with no meat powder) became a conditioned response (CR).
Many modern day advertisers use classical conditioning in some way. Consider this sequence:
US
UR
(Unconditioned stimulus)
(Unconditioned response)
US + Stimulus
UR
CS
CR
E. g.:
ATTRACTIVE WOMAN
Positive affect
ATTRACTIVE WOMAN + Car
Positive affect
Car
Positive affect
FIGURE 13. CLASSICAL CONDITIONING
The source: Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://www.consumerpsychologist.com/index.html, accessed March/April, 2014
Operant conditioning: Instrumental, or operant, conditioning, involves a different series of events,
and this what we usually think of as learning. The general pattern is:
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LEARNING
BEHAVIOR
A N D M E M O RY
CONSEQUNCES
LIKELIHOOD
OF BEHAVIOR
INCREASES OR
DECREASES
FIGURE 14. THE GENERAL PATTERN
The source: Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://www.consumerpsychologist.com/index.html, accessed March/April, 2014
There are three major forms of operant learning. In positive reinforcement, an individual does
something and is rewarded. He or she is then more likely to repeat the behaviour. For example, you
eat a candy bar (behaviour), it tastes good (consequence), and you are thus more likely to eat a similar
candy bar in the future (behavioural change).
REINFORCEMENT
LIKELIHOOD
OF BEHAVIOR
BEHAVIOR
NOT the
same thing!
NEGATIVE
REINFORCEMENT
PUNISHMENT
LIKELIHOOD
OF BEHAVIOR
FIGURE 15. PUNISHMENT IS THE OPPOSITE
The source: Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://www.consumerpsychologist.com/index.html, accessed March/April, 2014
Punishment is the opposite. You eat what looks like a piece of candy (behaviour), only to discover
that it is a piece of soap with a foul taste (consequences), and subsequently you are less likely to eat
anything that looks remotely like that thing ever again (changed behaviour).
An example of negative reinforcement is an obnoxious sales person who calls you up on the phone,
pressuring you into buying something you don’t want to do (aversive stimulus). You eventually agree to
buy it (changed behaviour), and the sales person leaves you alone (the aversive stimulus is terminated as
a result of consequences of your behaviour). In general, marketers usually have relatively little power
to use punishment or negative reinforcement. However, parking meters are often used to discourage
consumers from taking up valuable parking space, and manufacturers may void warranties if the consumers take their product to non-authorised repair facilities.
Several factors influence the effectiveness of operant learning. In general, the closer in time the
consequences are to the behaviour, the more effective the learning. That is, electric utilities would be
more likely to influence consumers to use less electricity at peak hours if the consumers actually had to
pay when they used electricity (e.g., through a coin-slot) rather than at the end of the month. Learning
is also more likely to occur when the individual can understand a relationship between behaviour and
consequences (but learning may occur even if this relationship is not understood consciously).
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LEARNING
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Another issue is schedules of reinforcement and extinction. Extinction occurs when behaviour stops
having consequences and the behaviour then eventually stops occurring. For example, if a passenger
learns that yelling at check-in personnel no longer gets her upgraded to first class, she will probably
stop that behaviour. Sometimes, an individual is rewarded every time a behaviour is performed (e.g., a
consumer gets a soft drink every time coins are put into a vending machine). However, it is not necessary to reward a behaviour every time for learning to occur. Even if a behaviour is only rewarded some
of the time, the behaviour may be learned. Several different schedules of reinforcement are possible:
•
Fixed interval: The consumer is given a free dessert on every Tuesday when he or she eats in a
particular restaurant.
•
Fixed ratio: Behaviour is rewarded (or punished) on every nth occasion that it is performed. (E.g.,
every tenth time a frequent shopper card is presented, a free product is provided).
•
Variable ratio: Every time an action is performed, there is a certain percentage chance that a
reward will be given. For example, every time the consumer enters the store, he or she is given a
lottery ticket. With each ticket, there is a 20% chance of getting a free hamburger. The consumer
may get a free hamburger twice in a row, or he or she may go ten times without getting a hamburger even once. Variable ratio reinforcement is least vulnerable to extinction.
Sometimes, shaping may be necessary to teach the consumer the desired behaviour. That is, it may
be impossible to teach the consumer to directly perform the desired behaviour. For example, a consumer may first get a good product for free (the product itself, if good, is a reward), then buy it with a
large cents off coupon, and finally buy it at full price. Thus, we reinforce approximations of the desired
behaviour. Rather than introducing Coca Cola directly in Indonesia, fruit flavoured soft drinks were
first introduced, since these were more similar to beverages already consumed.
9LFDULRXVOHDUQLQJ The consumer does not always need to go through the learning process himself
or herself—sometimes it is possible to learn from observing the consequences of others. For example,
stores may make a big deal out of prosecuting shop lifters not so much because they want to stop that
behaviour in those caught, but rather to deter the behaviour in others. Similarly, viewers may empathise
with characters in advertisements who experience (usually positive) results from using a product. The
Head ‘n’ Shoulders advertisement, where a poor man is rejected by women until he treats his dandruff
with an effective cure, is a good example of vicarious learning.
Memory ranges in duration on a continuum from extremely short to very long term. Sensory memory includes storage of stimuli that one might not actually notice (e.g., the colour of an advertisement
some distance away). For slightly longer duration, when you see an ad on TV for a mail order product
you might like to buy, you only keep the phone number in memory until you have dialled it. This is
known as short term memory.
In order for something to enter into long term memory, which is more permanent, you must usually
“rehearse” it several times. For example, when you move and get a new phone number, you will probably repeat it to yourself many times. Alternatively, you get
to learn your driver’s license or social security numbers with time, not because you deliberately
memorise them, but instead because you encounter them numerous times as you look them up.
Several techniques can be used to enhance the memorability of information. “Chunking” involves
rearranging information so that fewer parts need to be remembered. For example, consider the phone
number (800) 444-1000. The eight digits can be more economically remembered as an 800 number (1
piece), four repeated 3 times (2 pieces), and 1000 (1-2 pieces). “Rehearsal” involves the consumer repeating the information over and over so that it can be remembered; this is often done so that a phone
number can be remembered while the “memoree” moves to the phone to dial it. “Recirculation” involves repeated exposure to the same information; the information is not learned deliberately, but is
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gradually absorbed through repetition. Thus, it is to the advantage to a marketer to have an advertisement repeated extensively—especially the brand name. “Elaboration” involves the consumer thinking
about the object—e.g., the product in an advertisement—and thinking about as many related issues as
possible. For example, when seeing an ad for Dole bananas, the person may think of the colour yellow,
going to the zoo seeing a monkey eating a banana, and her grandmother’s banana-but bread. The Dole
brand name may then be activated when any of those stimuli are encountered.14
Memories are not always easily retrievable. This could be because the information was given lower
priority than something else—e.g., we have done a lot of things since last buying a replacement furnace
filter and cannot remember where this was bought last. Other times, the information can be retrieved
but is not readily “available”—e.g., we will be able to remember the location of a restaurant we tried
last time we were in Paris, but it may take some thinking before the information emerges.
“Spreading activation” involves the idea of one memory “triggering” another one. For example,
one might think of Coke every time one remembers a favourite (and very wise) professor who frequently brought one to class. Coke might also be tied a particular supermarket that always stacked a lot of
these beverages by the entrance, and to baseball where this beverage was consumed after the game. It
is useful for firms to have their product be activated by as many other stimuli as possible.15
There are numerous reasons why retrieval can fail or, in less fancy terms, how we come to forget.
One is decay. Here, information that is not accessed frequently essentially “rusts” away. For example,
we may not remember the phone number of a friend to whom we have not spoken for several months
and may forget what brand of bullets an aunt prefers if we have not gone ammunition shopping with
her lately. Other times, the problem may rest in interference. Proactive interference involves something we have learned interfering with what we will late later. Thus, if we remember that everyone in
our family always used Tide, we may have more difficulty later remembering what other brands are
available. You may be unable to remember what a new, and less important, friend’s last name is if
that person shares a first name with an old friend. For example, if your best friend for many years has
been Jennifer Smith, you may have difficulty remembering that your new friend Jennifer’s last name is
Silverman.
In retroactive interference, the problem is the reverse—learning something new blocks out something old. For example, if you once used WordPerfect than then switched to Microsoft Word, you may
have trouble remembering how to use WordPerfect at a friend’s house—more so than if you had merely
not used any word processing program for some time.
Memorability can be enhanced under certain conditions. One is more likely to remember favourable—or likable stimuli (all other things being equal). Salience—or the extent to which something is
highly emphasised or very clearly evident—facilitates memory. Thus, a product which is very visible in
an ad, and handled and given attention by the actors, will more likely be remembered. Prototypicality
involves the extent to which a stimulus is a “perfect” example of a category. Therefore, people will
more likely remember Coke or Kleenex than competing brands. Congruence involves the “fit” with a
situation. Since memory is often reconstructed based on what seems plausible, something featured in
an appropriate setting—e.g., charcoal on a porch next to a grill rather than in a garage or kitchen—is
more likely to be remembered (unless the incongruence triggers an elaboration—life is complicated!)
Redundancies involve showing the stimulus several times. Thus, if a given product is shown several
places in a house—and if the brand name is repeated—it is more likely to be remembered.
Priming involves tying a stimulus with something so that if “that something” is encountered, the
stimulus is more likely to be retrieved. Thus, for example, when one thinks of anniversaries, the Hallmark brand name is more likely to be activated. (This is a special case of spreading activation discussed
earlier). A special issue in memory is so called “scripts,” or procedures we remember for doing things.
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Scripts involve a series of steps for doing various things (e.g., how to send a package). In general, it is
useful for firms to have their brand names incorporated into scripts (e.g., to have the consumer reflexively ask the pharmacist for Bayer rather than an unspecified brand of aspirin).
Positioning involves implementing our targeting. For example, Apple Computer has chosen to position itself as a maker of user-friendly computers. Thus, Apple has done a lot through its advertising to
promote itself, through its unintimidating icons, as a computer for “non-geeks.” The Visual C software
programming language, in contrast, is aimed a “techies.”
Repositioning involves an attempt to change consumer perceptions of a brand, usually because
the existing position that the brand holds has become less attractive. Sears, for example, attempted
to reposition itself from a place that offered great sales but unattractive prices the rest of the time to
a store that consistently offered “everyday low prices.” Repositioning in practice is very difficult to
accomplish. A great deal of money is often needed for advertising and other promotional efforts, and
in many cases, the repositioning fails.
Review questions/discussions
1.
2.
3.
Imagine you are the instructor in this course and that you are trying to increase students’ participation in class discussions. How would you use reinforcement to achieve your objective?
Visit a supermarket. Can you identify any packages where the marketer’s knowledge of stimulus
generalisation and stimulus discrimination was incorporated into the package design? Note these
examples and present them in class.
Visit the news section at www.caru.org Select three of the press releases featured there (other than
the ones discussed in this chapter) and illustrate how they depict the ethics of applying learning
theory in advertising to children.
Project and teamwork exercises
1.
a.
b.
2.
3.
As indicated in the chapter, behavioural learning theories are sometimes referred to as stimulus-response theories because they are based on the premise that observable responses to specific external signals that learning has taken place. Behavioural theories are not so much concerned with
the process of learning as they are with the inputs and outcomes of learning, that is, in the stimuli
that consumers select from the environment and the observable behaviours that result. Which of
the behavioural learning theories relate most closely conduct of good business ethics?
Review each of the behavioural learning theories and briefly describe the theories that you perceive to be most closely associated with the ethical transmission of information for the purpose of
learning.
Create an example to illustrate your position in the above question.
Your group’s assignment is to learn about how Internet brokerage firms attempt to teach you
about online trading. Have one part of your group analyse eTrade.com and the other part analyse
Charles Schwab (www.charlesschwab.com). Each sub-group should construct a table that indicates how each of the Web sites attempts to enhance consumer learning. What behavioural learning theories does each Web site appear to be using? Gauge effectiveness of the effort. Share the
information with one another.
Family branding is the practice of marketing a whole line of company products under the same
brand name. This strategy capitalises on the consumer’s ability to generalise favourable brand
associations from one product to others. Your group assignment is to analyse two separate family
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branding giants—Kellogg’s and C.W. Post cereals. Go to both of the company’s Web sites and
make a list of all the products that are under the respective corporate umbrellas. After reviewing
the material in the chapter on family branding, evaluate which organisation appears to be superior.
How did your group determine this? What behavioural learning principles does each appear to be
using? Provide supportive evidence.
References for further reading
1.
2.
3.
4.
5.
6.
David L. and Albert J.D. (2002), Consumer Behaviour, New Delhi: Tata McGraw Hill.
Del I.H. Roger J.B. and Kenneth A.C. (2001), Consumer Behaviour - Building Marketing Strategy,
New York: McGraw-Hill Irwin.
Edward, J. and William J. (1963): Fundamentals of Marketing; New York, McGraw-Hill, Inc.
James F. E. Roger D.B and Paul W.M. (1990), Consumer Behaviour, U.S.A: The Dryden Press.
John A.H. and Jagdish N. S. (1969), Theory of Buyer Behaviour, New York: Wiley.
Robbins S.P. (2000), Organizational Behaviour, New Delhi: Prentice-Hall.
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Part 8
&21680(5027,9$7,21$77,78'(6$1'
THEIR CHANGE
Objective outline:
Chapter Key Terms:
After studying this unit, you should be able to:
Motives
1.
Motivation theories
Describe the nature of motives and their
role in influencing consumer behaviour;
2.
State the basic categories of motives;
3.
Motivation theories;
4.
Nature of consumer involvement and its
market implications.
5.
State features of consumer attitude.
6.
Describe how consumer attitude affects
marketing activities.
7.
Describe how attitudes are developed.
Consumer attitude
Consumer motivation
Consumer motivation is one of the driving forces of consumer behaviour. Consumers buy and use
products because they are motivated by the need or desire to do so. The key objective of marketing and
marketing communications is to motivate consumers to prefer and purchase one product or brand over
another.
Tied to motivation is the concept of affective states. Simply stated, affective states are emotions,
feelings, and moods that are connected with a purchase decision and that can motivate the consumer
to buy. In this chapter, we discuss the concepts of motives, emotions, mood, and involvement to show
how marketers should account for these concepts when developing strategies.
Consumer motivation is the drive to satisfy needs and wants, both physiological and psychological,
through the purchase and use of products and services. Some motives are simple—we need food, water, warmth, and shelter in order to survive. Others are more complex, such as the yearning for love or
the desire for status and admiration.
Marketers have long recognised it as an impelling and compelling force behind most marketplace
The part’s information is adapted from M. Joseph Sirgy, Don R. Rahtz, and Laura Portolese Dias. Consumer Behaviour Today v.1.0. Flat World Education, Inc.,
2014
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behaviours. Consumer motivation can be viewed as a process through which needs are satisfied. The
process has five stages, as demonstrated in Figure 16 “Motivation as a Process”. It begins with a latent
need, such as hunger. Once the need is recognised, we feel a drive to reduce it. You realise you are
hungry and start thinking about lunch options. Need translates into want or desire—you crave pizza.
Desire is manifested into a specific goal as you surf on your phone for alternative pizza restaurants and
decide on Pizza Hut. That goal is achieved through a behaviour that satisfies the original need and thus
reduces tension—you sit down in Pizza Hut and order a large pepperoni pizza.
Maslow believed that these motivating forces operate more or less sequentially. That is, as needs
at one level are partially or fully satisfied, those at the next are felt more intensely. Lower-level needs
must be met or partially met if higher-level needs are to emerge. Although no level of need may ever be
completely satisfied, as satisfaction at one level increases, the need at the next level becomes a stronger
and stronger motivator.17
FIGURE 16. MOTIVATION MOVES CONSUMERS FROM LATENT NEED THROUGH STAGES OF INCREASING SPECIFICITY TO THE BEHAVIOUR THAT SATISFIES THE NEED.
Source: M. Joseph Sirgy, Don R. Rahts, and Laura Portolese Dias. Consumer Behaviour Today v.1.0. Flat World Education, Inc., 2014
Psychologist Abraham Maslow described motivation as a means of satisfying human needs. As
summarised in Figure 17 “Maslow’s Hierarchy of Needs”, Maslow explained personal growth through
the identification and satisfaction of a hierarchy of needs, from the basics of food and shelter to sophisticated psychological desires.
At the base of the pyramid are physiological needs—basic physical needs, such as food and water,
and biological needs such as sleep, exercise, and sex. Once these needs are partially or fully met, we
begin to yearn for safety—protection from danger, security, and reliable order and routine in daily affairs. From safety evolves a need for love and belonging—the desire to give and receive affection and to
be accepted as one who belongs as part of a family or group. Once accepted into the group, we begin
to crave esteem or status—the desire for self-respect and the respect of others, as well as the need to
feel competent, confident, important, and appreciated. As needs become more abstract and sophisticated, we desire self-actualisation—the need to realise our own potential, to achieve our dreams and
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ambitions. As the desire for self-actualisation grows more potent, it evolves into a more specific hunger
for knowledge and understanding—the search for meaning and analysis of self and environment. Last
comes the most refined need of all: that for beauty.
Maslow believed that these motivating forces operate more or less sequentially. That is, as needs at
one level are partially or fully satisfied, those at the next are felt more intensely. Lower-level needs must
be met or partially met if higher-level needs are to emerge. Although no level of need may ever be completely satisfied, as satisfaction at one level increases, the need at the next level becomes a stronger and
stronger motivator. Marketers, managers, and social scientists have used Maslow’s hierarchy extensively
to understand what motivates people and how these motivations can be applied in a wide variety of
manners to consumers and people in general the world over.
FIGURE 17. AS EACH NEED IS SATISFIED, BEGINNING WITH THE BASICS OF FOOD AND SHELTER, HUMAN NEEDS
MOVE TO THE EMOTIONAL DESIRES AND FINALLY TO SOPHISTICATED PSYCHOLOGICAL NEEDS.
The source: Maslow, A. H. (1970), Motivation and Personality, 2nd ed., Harper & Row: New York
Consumer attitudes and beliefs
Consumer attitudes are a composite of a consumer’s (1) beliefs about, (2) feelings about, (3) and
behavioural intentions toward some object--within the context of marketing, usually a brand or retail
store. These components are viewed together since they are highly interdependent and together represent forces that influence how the consumer will react to the object.
%HOLHIV The first component is beliefs. A consumer may hold both positive beliefs toward an object
(e.g., coffee tastes good) as well as negative beliefs (e.g., coffee is easily spilled and stains papers). In
addition, some beliefs may be neutral (coffee is black), and some may differ in valance depending on
the person or the situation (e.g., coffee is hot and stimulates - good on a cold morning, but not well on
a hot summer evening when one wants to sleep). Note also that the beliefs that consumers hold need
The part’s information is adapted from Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://
www.consumHUSV\FKRORJLVWFRPLQGH[KWPODFFHVVHG0DUFK$SULO
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not be accurate (e.g., that pork contains little fat), and some beliefs may, upon closer examination, be
contradictory (e.g., that a historical figure was a good person but also owned slaves).
AFFECT
(FEELING)
BELIEFS
BEHAVIORAL
INTENTIONS
FIGURE18. BELIEFS AND AFFECT
The source: Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://www.consumerpsychologist.com/index.html, accessed March/April, 2014
Since a consumer holds many beliefs, it may often be difficult to get down to a “bottom line” overall
belief about whether an object such as McDonald’s is overall good or bad. .18
Market related beliefs are general beliefs about how the marketplace works and how to make good
decisions in marketplace transactions. The sidebar contains a list of common beliefs that consumers
have about the marketplace and how one (as a consumer) should conduct oneself in that environment.
Some consumer researchers call these market-related beliefs “decision heuristics,” which are rules of
thumb to help the consumer navigate the world of shopping and transactions with manufacturers, retailers, and other service establishments. Market beliefs can be can be related to brand (e.g., “When in
doubt, a national brand is always a safe bet”), advertising and sales promotion (e.g., “When you buy
heavily advertised products, you are paying for the label, not higher quality”), packaging (e.g., “Larger
sized containers are almost always cheaper per unit than smaller sizes”), product (e.g., “New products
are more expensive when they are first introduced. Prices tend to settle down as time goes by”), and
manufacturer (e.g., “Well-known companies can’t afford to jeopardise their reputations by introducing
inferior products”).18
Affect: Consumers also hold certain feelings toward brands or other objects. Sometimes these feelings are based on the beliefs (e.g., a person feels nauseated when thinking about a hamburger because
of the tremendous amount of fat it contains), but there may also be feelings which are relatively independent of beliefs. For example, an extreme environmentalist may believe that cutting down trees is
morally wrong, but may have positive affect toward Christmas trees because he or she unconsciously
associates these trees with the experience that he or she had at Christmas as a child.
Attitude Change Strategies: Changing attitudes is generally very difficult, particularly when consumers suspect that the marketer has a self-serving agenda in bringing about this change (e.g., to get the
consumer to buy more or to switch brands).
Changing affect: One approach is to try to change affect, which may or may not involve getting consumers to change their beliefs. One strategy uses the approach of classical conditioning try to “pair”
the product with a liked stimulus. For example, we “pair” a car with a beautiful woman. Alternatively,
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we can try to get people to like the advertisement and hope that this liking will “spill over” into the
purchase of a product.
For example, the Pillsbury Doughboy does not really emphasise the conveyance of much information to the consumer; instead, it attempts to create a warm, fuzzy image. Although Energizer Bunny ads
try to get people to believe that their batteries last longer, the main emphasis is on the likeable bunny.
Finally, products which are better known, through the mere exposure effect, tend to be better liked-that is, the more a product is advertised and seen in stores, the more it will generally be liked, even if
consumers to do not develop any specific beliefs about the product.19
Changing behaviour: People like to believe that their behaviour is rational; thus, once they use our
products, chances are that they will continue unless someone is able to get them to switch. One way
to get people to switch to our brand is to use temporary price discounts and coupons; however, when
consumers buy a product on deal, they may justify the purchase based on that deal (i.e., the low price)
and may then switch to other brands on deal later. A better way to get people to switch to our brand is
to at least temporarily obtain better shelf space so that the product is more convenient. Consumers are
less likely to use this availability as a rationale for their purchase and may continue to buy the product
even when the product is less conveniently located. (Notice, by the way, that this represents a case of
shaping).
Changing beliefs: Although attempting to change beliefs is the obvious way to attempt attitude
change, particularly when consumers hold unfavourable or inaccurate ones, this is often difficult to
achieve because consumers tend to resist. Several approaches to belief change exist:
Change currently held beliefs. It is generally very difficult to attempt to change beliefs that people
hold, particularly those that are strongly held, even if they are inaccurate. For example, the petroleum industry advertised for a long time that its profits were lower than were commonly believed,
and provided extensive factual evidence in its advertising to support this reality. Consumers were
suspicious and rejected this information, however.
Change the importance of beliefs. Although the sugar manufacturers would undoubtedly like
to decrease the importance of healthy teeth, it is usually not feasible to make beliefs less important--consumers are likely to reason, why, then, would you bother bringing them up in the first
place? However, it may be possible to strengthen beliefs that favour us, e.g., a vitamin supplement
manufacturer may advertise that it is extremely important for women to replace iron lost through
menstruation. Most consumers already agree with this, but the belief can be made stronger.
Add beliefs. Consumers are less likely to resist the addition of beliefs so long as they do not conflict with existing beliefs. Thus, the beef industry has added beliefs that beef (1) is convenient and
(2) can be used to make a number of creative dishes.
Change ideal. It usually difficult, and very risky, to attempt to change ideals, and only few firms
succeed. For example, Hard Candy may have attempted to change the ideal away from traditional
beauty toward more unique self-expression.20
Review questions/discussions
1.
2.
Select an advertisement designed to appeal to specific consumer motives. How does the advertiser
succeed—or fail—at appealing to those motives? Consider Maslow’s hierarchy of needs.
Take two minutes for each member of your team to write down his or her beliefs on soft drinks,
Nike athletic shoes, and Burger King restaurants. Compare notes and explain each of your beliefs.
Explore how these beliefs were formed.
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3.
Your team is working on a campaign for an on-campus child-care centre; the objective is to create
brand associations that will ensure a long-term positive image. Design a campaign strategy that
will build brand equity.
4. Are some products or brands more likely to stir affective responses than others? Talk about your
feelings toward fashions, cosmetics, computers, fast food, Disney World, Ivory liquid soap, Levi’s
jeans, and Hershey’s Chocolate Kisses. To what extent do you think your affective responses are a
result of advertising?
5. Using the belief-importance model, analyse two or three of the classes you are planning
to sign up for in your next academic year. First, list the attributes of each. Next, decide the importance
of those attributes in making your class selections. Next, decide how well you believe the classes
will compare on each attribute. Does this exercise help you make your class selections? How might
each department increase its enrolments?
6. Describe a purchase situation in which you changed your intention to buy a product. Perhaps you
bought an alternative brand, spent the money on something entirely different, or didn’t buy anything at all. What factors made your behaviour inconsistent with your earlier attitudes?
Project and teamwork exercises
1.
Express your preferences of the brands in terms of ranking choices, based on their personal judgment on importance of benefits and attributes, consumers develop a set of attitudes (or preferences) toward the various brands.
Underlying Needs
Benefits
Attributes
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2. Research Workshop
%DFNJURXQG The objective of this workshop is to explore motivations behind alcohol consumption.
As a college student aware of the social problems associated with drinking by college students, you
have decided to start up a service called Alcohol Breakers to help students give up the habit.
Methodology. Conduct a literature search in the area of behaviour modification in relation to drinking cessation. You may need the assistance of the office of student affairs, student clubs, fraternities/
sororities, the university police, the town police, and available support programs in the community.
To the Marketplace. Decide which motivational techniques will be most effective on the student
population. Identify all motives that lead students to drink. For each motive identified, list a product,
service, and/or program to neutralise the source of motivation.
3.
Creative Workshop
%DFNJURXQG The objective of this workshop is to find the best emotional positioning for a health
care organisation. You are marketing director of a company that owns and operates several health care
centres, including a women’s health care centre, a centre for home care, a paediatrics practice, and a
cancer treatment centre. You are assigned to develop a corporate image campaign to get community
residents to feel good about the company.
Methodology. You realise that emotions are central to the campaign. You need to get community
residents to feel warmth and trust and to care about the company. Make some notes about typical emotions related to each of the company’s four health services.
To the Marketplace. From your notes, generate a series of rough sketches for advertisements that will
induce feelings of warmth, trust, and caring toward the health care company.
4.
Managerial Workshop
%DFNJURXQGThe objective of this workshop is to relate involvement to marketing communication
decisions. As marketing manager of an electronics store, you are preparing an advertising plan for the
forthcoming year. You realise that understanding the psychology of involvement is extremely important in planning both the creative and media aspects of the campaign.
Methodology. Apply the learn-feel-do model in your development of the advertising plan.
To the Marketplace. Draft a two-page plan showing explicitly how the model is applied to creative
and media decisions.
References for further reading
1.
2.
3.
4.
5.
6.
David L. and Albert J.D. (2002), Consumer Behaviour, New Delhi: Tata McGraw Hill.
Del I.H. Roger J.B. and Kenneth A.C. (2001), Consumer Behaviour - Building Marketing Strategy,
New York: McGraw-Hill Irwin.
Edward, J. and William J. (1963); Fundamentals of Marketing; New York, McGraw-Hill, Inc.
Eric A. Linda P. and George Z. (2002), Consumer, New York: McGraw-Hill Irwin.
Frederick E. Webster, Jr., and Yoram W. (1972), Organizational Buying Behaviour, Eaglewood Cliffs,
NJ: Prentice-Hall.
James F. E. Roger D.B and Paul W.M. (1990), Consumer Behaviour, U.S.A: The Dryden Press.
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Part 9
&21680(56$6352%/(062/9(56
Objective outline:
Chapter Key Terms
1.
Identify the problem solving definition
3UREOHPVROYLQJGHÀQLWLRQ
2.
Analyse consumer problem solving process
Consumer problem solving process
3.
Build consumer information processing
model
Consumer Information Processing Model
Low involvement purchase
Level of consumer decision making
Problem Recognition
One model of consumer decision making involves several steps. The first one is problem recognition—you realise that something is not as it should be. Perhaps, for example, your car is getting more
difficult to start and is not accelerating well. The second step is information search—what are some
alternative ways of solving the problem? You might buy a new car, buy a used car, take your car in
for repair, ride the bus, ride a taxi, or ride a skateboard to work. The third step involves evaluation of
alternatives. A skateboard is inexpensive, but may be ill-suited for long distances and for rainy days.
Finally, we have the purchase stage, and sometimes a post-purchase stage (e.g., you return a product to
the store because you did not find it satisfactory). In reality, people may go back and forth between the
stages. For example, a person may resume alternative identification during while evaluating already
known alternatives.
The part’s information is adapted from Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://
www.conVXPHUSV\FKRORJLVWFRPLQGH[KWPODFFHVVHG0DUFK$SULO
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PROBLEM
RECOGNITION
INFORMATION
SEARCH
EVALUATION
ALTERNATIVES
PURCHASE
POSTPURCHASE
EVALUATION/
BEHAVIORS
Theory
Complications
FIGURE 4. INFORMATION SEARCH AND PURCHASE
The source: Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://www.consumerpsychologist.com/index.html, accessed March/April, 2014
Consumer involvement will tend to vary dramatically depending on the type of product. In general,
consumer involvement will be higher for products that are very expensive (e.g., a home, a car) or are
highly significant in the consumer’s life in some other way (e.g., a word processing program or acne
medication).
It is important to consider the consumer’s motivation for buying products. To achieve this goal, we
can use the Means-End chain, wherein we consider a logical progression of consequences of product
use that eventually lead to desired end benefit. Thus, for example, a consumer may see that a car has
a large engine, leading to fast acceleration, leading to a feeling of performance, leading to a feeling of
power, which ultimately improves the consumer’s self-esteem. A handgun may aim bullets with precision, which enables the user to kill an intruder, which means that the intruder will not be able to harm
the consumer’s family, which achieves the desired end-state of security. In advertising, it is important
to portray the desired end-states. Focusing on the large motor will do less good than portraying a successful person driving the car.
Information search and decision making: Consumers engage in both internal and external information search.
INTERNAL
Memory
Tninking
EXTERNAL
Word of mouth,media,
store visits, trial
FIGURE 5. INTERNAL AND EXTERNAL INFORMATION SEARCH
The source: Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://www.consumerpsychologist.com/index.html, accessed March/April, 2014
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Internal search involves the consumer identifying alternatives from his or her memory. For certain
low involvement products, it is very important that marketing programs achieve “top of mind” awareness. For example, few people will search the Yellow Pages for fast food restaurants; thus, the consumer
must be able to retrieve one’s restaurant from memory before it will be considered. For high involvement products, consumers are more likely to use an external search. Before buying a car, for example,
the consumer may ask friends’ opinions, read reviews in Consumer Reports, consult several web sites,
and visit several dealerships. Thus, firms that make products that are selected predominantly through
external search must invest in having information available to the consumer in need—e.g., through
brochures, web sites, or news coverage. A compensatory decision involves the consumer “trading off ”
good and bad attributes of a product. For example, a car may have a low price and good gas mileage
but slow acceleration. If the price is sufficiently inexpensive and gas efficient, the consumer may then
select it over a car with better acceleration that costs more and uses more gas. Occasionally, a decision
will involve a non-compensatory strategy. For example, a parent may reject all soft drinks that contain
artificial sweeteners. Here, other good features such as taste and low calories cannot overcome this one
“non-negotiable” attribute.
The amount of effort a consumer puts into searching depends on a number of factors such as the
market (how many competitors are there, and how great are differences between brands expected to
be?), product characteristics (how important is this product? How complex is the product? How obvious are indications of quality?), consumer characteristics (how interested is a consumer, generally, in
analysing product characteristics and making the best possible deal?), and situational characteristics.
Two interesting issues in decisions are:
•
Variety seeking (where consumers seek to try new brands not because these brands are expected to
be “better” in any way, but rather because the consumer wants a “change of pace,” and
•
“Impulse” purchases—unplanned buys. This represents a somewhat “fuzzy” group. For example,
a shopper may plan to buy vegetables but only decide in the store to actually buy broccoli and corn.
Alternatively, a person may buy an item which is currently on sale, or one that he or she remembers
that is needed only once inside the store.
A number of factors involve consumer choices. In some cases, consumers will be more motivated.
For example, one may be more careful choosing a gift for an in-law than when buying the same thing for
one self. Some consumers are also more motivated to comparison shop for the best prices, while others
are more convenience oriented. Personality impacts decisions. Some like variety more than others, and
some are more receptive to stimulation and excitement in trying new stores. Perception influences decisions. Some people, for example, can taste the difference between generic and name brand foods while
many cannot. Selective perception occurs when a person is paying attention only to information of interest. For example, when looking for a new car, the consumer may pay more attention to car ads than
when this is not in the horizon. Some consumers are put off by perceived risk. Thus, many marketers
offer a money back guarantee. Consumers will tend to change their behaviour through learning—e.g.,
they will avoid restaurants they have found to be crowded and will settle on brands that best meet their
tastes.
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Stages of consumer decision making
Traditionally, consumer researchers have approached decision making process from a rational perspective. This dominant school of thought views consumers as being cognitive (i.e., problem-solving)
and, to some but a lesser degree, emotional.
Such a view is reflected in the stage model of a typical buying process (often called the consumer
information processing model) depicted in Figure 19.
Problem Recognition
Information Search
Evaluation and Selection of Alternatives
Decision Implementation
Post-purchase Evaluation
FIGURE 19. THE CONSUMER INFORMATION PROCESSING MODEL
Source: Ken Matsuno (2013). Consumer decision making process. Babson College.
In this model, the consumer passes through five stages: problem recognition, information search,
evaluation and selection of alternatives, decision implementation, and post-purchase evaluation.
In this information processing model, the consumer buying process begins when the buyer recognises a problem or need. For example, Doug may realise that his best suit doesn’t look contemporary
any more. Or, Kathleen may recognise that her personal computer is not performing as well as she
thought it should. These are the kinds of problem that we as consumers encounter all the time. When
we found out a difference between the actual state and a desired state, a problem is recognised. When
we find a problem, we usually try to solve the problem. We, in other words, recognise the need to solve
the problem.
When a consumer discovers a problem, he/she is likely to search for more information. Kathleen
may simply pay more attention to product information of a personal computer. She becomes more attentive to computer ads, computers purchased by her friends, and peer conversations about computers.
Or, she may more actively seek information by visiting stores, talking to friends, or reading computer
magazines, among others. Through gathering information, the consumer learns more about some
The part’s information is adapted from Ken Matsuno (2013). Consumer decision making process. Babson College.
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brands that compete in the market and their features and characteristics. Theoretically, there is a total
set of brands available to Kathleen, but she will become aware of only a subset of the brands (awareness set) in the market. Some of these brands may satisfy her initial buying criteria, such as price and
processing speed (consideration set). As Kathleen proceeds to more information search, only a few
will remain as strong candidates (choice set).22
How does the consumer process competitive brand information and evaluate the value of the
brands? Unfortunately there is no single, simple evaluation process applied by all consumers or by one
consumer in all buying situations.
One dominant view, however, is to see the evaluation process as being cognitively driven and rational. Under this view, a consumer is trying to solve the problem and ultimately satisfying his/her need.
In other words, he/she will look for problem-solving benefits from the product. The consumer, then,
looks for products with a certain set of attributes that deliver the benefits. Thus, the consumer sees
each product as a bundle of attributes with different levels of ability of delivering the problem solving
benefits to satisfy his/her need. The distinctions among the need, benefits, and attributes are very important. One useful way to organise the relationships among the three is a hierarchical one (Figure 20).
Although simplified, Figure 20 is an example of how a bundle of attributes (i.e., a product or, more
specifically, personal computer) relates to the benefits and underlying needs of Kathleen.
From 20 figure and the preceding discussion, you might recognise that the product attributes are
relevant and important only to the extent that they lead to a certain set of benefits. Likewise, benefits
are meaningful only if they can address the problem and be instrumental to satisfy the underlying need.
As the underlying need is often personal, consumers differ as to their beliefs about what product benefits and attributes are more (or less) important and relevant in satisfying their needs. As the underlying
need is often personal, consumers differ as to their beliefs about what product benefits and attributes
are more (or less) important and relevant in satisfying their needs.
Helps Me Survive
Babson MBA Pogram
Underlying Needs
Portability
Benefits
Doesn’t Break
down
Economy
Computational
Horse Power
Warranty
Attributes
Size
Brand
Reputation
Price
CPU Speed
Software
Bundle
Hard Drive Size
GlobeNet
Ready
FIGURE 20. HIERARCHICAL VIEW OF NEEDS, BENEFITS, AND ATTRIBUTES
Source: Ken Matsuno (2013). Consumer decision making process. Babson College.
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Based on their personal judgment on importance of benefits and attributes, consumers develop a set
of attitudes (or preferences) toward the various brands. One may express his/her preferences of the
brands in terms of ranking, probability of choice, and so forth.
To actually implement the purchase decision, however, a consumer needs to select both specific
items (brands) and specific outlets (where to buy) to resolve the problems. There are, in fact, three ways
these decisions can be made: 1) simultaneously; 2) item first, outlet second; or 3) outlet first, item second. In many situations, consumers engage in a simultaneous selection process of stores and brands.
For example, in our Kathleen’s personal computer case, she may select a set of brands based on both the
product’s technical features (attributes) and availability of brands in the computer stores and mail-order
catalogues she knows well. It is also possible, that she decides where to buy (e.g., CompUSA in her
neighbourhood) and then chooses one or two brands the store carries. Once the brand and outlet have
been decided, the consumer moves on to the transaction (“buying”).
Post-purchase evaluation processes are directly influenced by the type of preceding decision-making
process. Directly relevant here is the level of purchase involvement of the consumer. Purchase involvement is often referred to as “the level of concern for or interest in the purchase” situation, and it determines how extensively the consumer searches information in making a purchase decision. Although
purchase involvement is viewed as a continuum (from low to high), it is useful to consider two extreme
cases here. Suppose one buys a certain brand of product (e.g., Diet Pepsi) as a matter of habit (habitual
purchase). For him/her, buying a cola drink is a very low purchase involvement situation, and he/she
is not likely to search and evaluate product information extensively. In such a case, the consumer would
simply purchase, consume and/or dispose of the product with very limited post-purchase evaluation,
and generally maintain a high level of repeat purchase motivation (Figure 21).
Purchase
Product Use
Simple
Evaluation
Disposition
Repeat Purchase
Motivation
FIGURE 21. LOW INVOLVEMENT PURCHASE
Source: Hawkins, Best, and Coney (1983)
However, if the purchase involvement is high and the consumer is involved in extensive purchase
decision making (e.g., personal computer), he/she is more likely to be involved in more elaborate
post-purchase evaluation – often by questioning the rightness of the decision: “Did I make the right
choice? Should I have gone with other brand?” This is a common reaction after making a difficult,
complex, relatively permanent decision. This type of doubt and anxiety is referred to as post-purchase
cognitive dissonance (Figure 22).
Post-purchase
Dissonance
Purchase
Dissatisfaction
Product Use
Elaborate
Evaluation
Disposition
Repeat Purchase
Motivation
FIGURE 22. ELABORATE POST-PURCHASE EVALUATIONS
Source: Adopted from Hawkins, Best, and Coney (1983)
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According to the research, the likelihood of experiencing this kind of dissonance and the magnitude
of it is a function of:
The degree of commitment or irrevocability of the decision,
The importance of the decision to the consumer,
The difficulty of choosing among the alternatives, and
The individual’s tendency to experience anxiety.
Because dissonance is uncomfortable, the consumer may use one or more of the following approaches to reduce it:
Increase the desirability of the brand purchased.
Decrease the desirability of rejected alternatives.
Decrease the importance of the purchase decision.
Reject the negative data on the brand purchased.
If the dissonance about the purchase is not reduced, the anxiety may transform into dissatisfaction
(general or specific). Certainly, this negative experience leads to new problem recognition (Figure 19),
and the consumer will engage in another problem solving process. The difference, however, is that in
the next round of process, memory of the previous negative experience and dissatisfaction will be used
as part of information. Therefore, the probability for the unsatisfactory brand to be re-selected and
repurchased will be significantly lower than before.
Another widely-used model in marketing that attempts to explain consumer decision making process is called the hierarchy of effects model. Although different researchers developed slightly different
models, the basic idea is the same: people experience a sequence of psychological stages before purchasing a product. Such a model is provided in Figure 23.
PURCHASE
CONVICTION
PREFERENCE
LIKING
KNOWLEDGE
AWARENESS
UNAWARENESS
FIGURE 23. A GENERAL MODEL OF THE HIERARCHY OF EFFECTS
Source: Adopted from Delozier (1976)
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Originally conceived to explain how advertising affects consumer’s purchase decisions, the hierarchy of effects (HOE) model focuses on consumer learning that takes place as he/she processes information from the external world. The HOE model begins with the state where a consumer has no
awareness about the brand (unaware) then develops awareness triggered by external stimuli, such as
advertising message or “word of mouth.” As he/she obtains and processes more information, the
consumer develops more specific knowledge about the brand. The knowledge, then, is used as basis to
form a liking (or disliking), leading to a preference of brand(s) relative to the others. However, people
need to be pushed beyond the preference stage to actually buy the brand of preference. The preference
stage, after all, simply means that the consumer has formed a preference psychologically. Now it takes
conviction for him/her before actually buying the brand.
By now, you might have realised at least two points. One, it seems reasonable that not all the consumers are at the same stage. For example, Susan may be in the unawareness stage relative to Samuel
Adams beer, but Melissa may be in the preference stage. Two, it also seems reasonable that not all people at one stage move onto the next stage. For example, some consumers who have formed preference
to Contadina pasta may not form any conviction to buy the product. Furthermore, some people may
need more time before moving onto the next stage than others.
The HOE model is quite similar to the consumer information processing model because it also
assumes that people are cognitively driven, thinking information processors. Controversy exists, of
course, as to whether that is necessarily true. Some may claim that they often form liking and preference (emotional response or feeling) toward brands before developing cognitive judgment (knowledge or thinking) on them. Others argue that people form preference and knowledge simultaneously.
Although each argument has its own support, the general model (cognition first, preference second)
seems to be valid especially in relatively complex – or high-involvement – decision making situations
(e.g., cars, computers), providing a conceptual framework for thinking about the sequence of events
which begins from the initial awareness to the final action (i.e., purchasing).
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Review questions/discussions
1.
2.
3.
4.
5.
6.
7.
What is your opinion of companies like Google that gather information about your browsing
patterns? What advantages and drawbacks does this pose for consumers? If you were a business
owner, what kinds of information would you gather on your customers and how would you use
it?
What purchasing decisions have you been able to influence in your family and why? Is marketing
to children a good idea? If not, what if one of your competitors were successfully do so? Would it
change your opinion?
Name some products that have led to post purchase dissonance on your part. Then categorise
them as high- or low-involvement products.
Describe the decision process for impulse purchases at the retail level. Would they be classified as
high- or low-involvement purchases?
Check out BMW’s website described in above in Chapter Eight (and watch one of the movies
there (‘ambush or ‘the hire’). Why would BMW go to such expense to produce these movies?
What is the price the viewer of the movie pays? Remember, price does not have to be economic in
nature. Explain your answer in a one-paragraph summary.
Go to a local supermarket and a local department store and write a half-page report that observes
differences in how prices are displayed at each store.
“College tuition is a price just like any other.” Agree or disagree with this statement and explain
your answer.
Project and teamwork exercises
1.
2.
3.
4.
The idea of the information processing model seems reasonable. But, we know that we as individuals are not living in a vacuum. That is, when we are making a purchase decision, we are constantly influenced by other factors than just information, such as family, friends, cultural values,
social class, or subculture. Oh, what about physiological needs, such as sex, hunger, safety? Might
these also affect which brand we choose and buy? How and where do these factors play roles in
the information processing model?
What would be some of the practical implications of the information processing model for a
marketing manager who is trying to market, say, mountain bikes? If he/she knows about the
information processing model, what could he/she do differently in, for example, the new product
introduction?
Under what circumstances consumers are more likely to develop “liking (feeling)” first, “knowing
(thinking)” second? What would be some of the products/services in those situations? Why?
Read the scenario below and see if you can recognise the factors that influenced Chris’ purchasing
decision as well as the buying process he went through to get his lunch:
Chris is on his 30-minute lunch break from his job as a cashier at a convenience store. He started his shift at 7:00
AM this morning and it is now 11:00 AM and he is hungry. He has to be back at his post by 11:30 AM. He checks
his wallet and has $5.34 to spend on lunch. He could use his employee discount and purchase lunch from the store,
but he knows if he stays at the store the person who is monitoring the cash register while he is gone will continue to
ask him questions which will cut into his break time. There is a Taco Bell and Burger King within walking distance
of his store. He remembers seeing a television advertisement for 69-cent tacos at Taco Bell and $1.00 hamburgers at
Burger King. Both of these options seem like good choices to him as his stomach continues to rumble. He chooses
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Taco Bell because it is on the right hand side of the road so he will not have to waste valuable time crossing the busy
intersection to get across the street to Burger King. He also remembers his co-worker raving about the new fire-roasted hot sauce Taco Bell is now offering and he decides he wants to try it. Chris purchases two tacos and a drink from
Taco Bell and eats his lunch. He is satisfied with his choice and thinks he might come back tomorrow to try the $99
cent bean burritos. When he is finished, he throws away the trash in the Taco Bell receptacle and returns to his job.
Discussion
Factors affecting Chris’s buying decision:
1) Economic: He had a limited amount of money to spend on his lunch. He only had 30 minutes so
location and convenience were also factors.
2) Psychological: Chris had seen the advertisements for Taco Bell and Burger King and he recognises
that both would fit his needs.
3) Sociological: He remembers his friend’s endorsement of Taco Bell’s new hot sauce which helps
him make his decision.
4) Situational: Chris was limited in time and money. His location and need (hunger) limited his
choices to two establishments.
Chris’s decision process:
1. Problem recognition: ………………………………………………….....................……………….
2. Information search: ………………………………………………......................…………………...
3. Alternative evaluation: ……………………………………………......................….....................
4. Purchase decision: ……………………………………………....................………………………..
5. Post-purchase behaviour: ………………………………………..................………………………..
6. Disposal of product: ……………………………………………....................………………………
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References for further reading
1.
Ayuba B. (2005), Marketing: Principles and Management, Kaduna: Shukrah Printing
2.
David L. and Albert J.D. (2002), Consumer Behaviour, New Delhi: Tata McGraw Hill.
3.
Del I.H. Roger J.B. and Kenneth A.C. (2001), Consumer Behaviour; Building Marketing Strategy, New
York: McGraw-Hill Irwin.
4.
Eric A. Linda P. and George Z. (2002), Consumer, New York: McGraw-Hill Irwin.
5.
Geoff, R. (1988); Modern Industrial Marketing; New York: McGraw-Hill,
6.
Inc. John A.H. and Jagdish N. S. (1969), Theory of Buyer Behaviour, NewYork: Wiley.
7.
Kotler, P. (2000); Marketing Management; New Delhi: Prentice- Halting.
8.
Kotler, P. and Armstrong (1999); Principles of Marketing; New Delhi: Prentice- Hall,
9.
Onu, A.J (2000); Marketing Today; Zaria: Ndyson Publishers Ltd.
10. Mc- Graw- Hill, Inc. Stanton, W.J. (1964); Fundamentals of Marketing; New Jersey: McGraw- Hill,
Inc.
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Part 10
THE METHODS OF A RESEARCH ON
PSYCHOLOGICAL EFFICIENCY OF
$'9(57,6,1*
Objective outline:
Chapter Key Terms:
1.
Market research methods
Identify the definitions of the research methods of consumer behaviour
2.
Analyse the research methods of consumer
behaviour in advertising
3.
Explain the Application of consumer research methods
4.
To understand the role that consumer behaviour plays in the development and implementation of advertising and promotional
programs.
5.
To understand various internal psychological
processes, their influence on consumer decision making, and implications for advertising and promotion.
Research methods of consumer behaviour in advertising
Market and consumer research methods
Market research is often needed to ensure that we produce what customers really want and not
what we think they want. Primary vs. secondary research methods: There are two main approaches to
marketing. Secondary research involves using information that others have already put together. For
example, if you are thinking about starting a business making clothes for tall people, you don’t need to
question people about how tall they are to find out how many tall people exist—that information has
already been published by the Lithuanian Statistics department.
Primary research, in contrast, is research that you design and conduct yourself. For example, you
may need to find out whether consumers would prefer that your soft drinks be sweater or tarter.
Research will often help us reduce risks associated with a new product, but it cannot take the risk
The part’s information is adapted from Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://
www.conVXPHUSV\FKRORJLVWFRPLQGH[KWPODFFHVVHG0DUFK$SULO
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away entirely. It is also important to ascertain whether the research has been complete. For example,
Coca Cola did a great deal of research prior to releasing the New Coke, and consumers seemed to
prefer the taste. However, consumers were not prepared to have this drink replace traditional Coke.
Surveys are useful for getting a great deal of specific information. Surveys can contain open-ended
questions (e.g., “In which city and state were you born? ____________”) or closed-ended, where the respondent is asked to select answers from a brief list (e.g., “__Male ___ Female.” Open ended questions
have the advantage that the respondent is not limited to the options listed, and that the respondent is
not being influenced by seeing a list of responses. However, open-ended questions are often skipped
by respondents, and coding them can be quite a challenge. In general, for surveys to yield meaningful
responses, sample sizes of over 100 are usually required because precision is essential. For example,
if a market share of twenty percent would result in a loss while thirty percent would be profitable, a
confidence interval of 20-35% is too wide to be useful.
Surveys come in several different forms. Mail surveys are relatively inexpensive, but response rates
are typically quite low—typically from 5-20%. Phone-surveys get somewhat higher response rates, but
not many questions can be asked because many answer options have to be repeated and few people
are willing to stay on the phone for more than five minutes. Mall intercepts are a convenient way to
reach consumers, but respondents may be reluctant to discuss anything sensitive face-to-face with an
interviewer.
Surveys, as any kind of research, are vulnerable to bias. The wording of a question can influence
the outcome a great deal. For example, more people answered no to the question “Should speeches
against democracy be allowed?” than answered yes to “Should speeches against democracy be forbidden?” For face-to-face interviews, interviewer bias is a danger, too. Interviewer bias occurs when the
interviewer influences the way the respondent answers. For example, unconsciously an interviewer
that works for the firm manufacturing the product in question may smile a little when something good
is being said about the product and frown a little when something negative is being said. The respondent may catch on and say something more positive than his or her real opinion. Finally, a response
bias may occur—if only part of the sample responds to a survey, the respondents’ answers may not be
representative of the population.24
Focus groups are useful when the marketer wants to launch a new product or modify an existing
one. A focus group usually involves having some 8-12 people come together in a room to discuss their
consumption preferences and experiences. The group is usually led by a moderator, who will start out
talking broadly about topics related broadly to the product without mentioning the product itself. For
example, a focus group aimed at sugar-free cookies might first address consumers’ snacking preferences, only gradually moving toward the specific product of sugar-free cookies. By not mentioning the
product up front, we avoid biasing the participants into thinking only in terms of the specific product
brought out. Thus, instead of having consumers think primarily in terms of what might be good
or bad about the product, we can ask them to discuss more broadly the ultimate benefits they really
seek. For example, instead of having consumers merely discuss what they think about some sugar-free
cookies that we are considering releasing to the market, we can have consumers speak about their
motivations for using snacks and what general kinds of benefits they seek. Such a discussion might
reveal a concern about healthfulness and a desire for wholesome foods. Probing on the meaning of
wholesomeness, consumers might indicate a desire to avoid artificial ingredients. This would be an
important concern in the marketing of sugar-free cookies, but might not have come up if consumers
were asked to comment directly on the product where the use of artificial ingredients is, by virtue of
the nature of the product, necessary.25
Focus groups are well suited for some purposes, but poorly suited for others. In general, focus
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groups are very good for getting breadth — finding out what kinds of issues are important for consumers in a given product category. Here, it is helpful that focus groups are completely “open-ended”.
The consumer mentions his or her preferences and opinions, and the focus group moderator can ask
the consumer to elaborate. In a questionnaire, if one did not think to ask about something, chances
are that few consumers would take the time to write out an elaborate answer. Focus groups also have
some drawbacks, for example, they represent small sample sizes. Because of the cost of running focus
groups, only a few groups can be run. Suppose you run four focus groups with ten members each. This
will result in an n of 4(10)=40, which is too small to generalise from. Therefore, focus groups cannot
give us a good idea of:
-
What proportion of the population is likely to buy the product.
What price consumers are willing to pay.
The groups are inherently social. This means that:
-
Consumers will often say things that may make them look good (i.e., they watch public television
rather than soap operas or cook fresh meals for their families daily) even if that is not true.
Consumers may be reluctant to speak about embarrassing issues (e.g., weight control, birth control).
Personal interviews involve in-depth questioning of an individual about his or her interest in or
experiences with a product. The benefit here is that we can get really into depth (when the respondent
says something interesting, we can ask him or her to elaborate), but this method of research is costly
and can be extremely vulnerable to interviewer bias.
To get a person to elaborate, it may help to try a common tool of psychologists and psychiatrists—
simply repeating what the person said. He or she will often become uncomfortable with the silence
that follows and will then tend to elaborate. This approach has the benefit that it minimises the interference with the respondent’s own ideas and thoughts. He or she is not influenced by a new question
but will, instead, go more in depth on what he or she was saying.
Personal interviews are highly susceptible to inadvertent “signalling” to the respondent. Although
an interviewer is looking to get at the truth, he or she may have a significant interest in a positive
consumer response. Unconsciously, then, he or she may inadvertently smile a little when something
positive is said and frown a little when something negative is said. Consciously, this will often not be
noticeable, and the respondent often will not consciously be aware that he or she is being “reinforced”
and “punished” for saying positive or negative things, but at an unconscious level, the cumulative effect
of several facial expressions are likely to be felt. Although this type of conditioning will not get a completely negative respondent to say all positive things, it may “swing” the balance a bit so that respondents are more likely to say positive thoughts and withhold, or limit the duration of, negative thoughts.
Projective techniques are used when a consumer may feel embarrassed to admit to certain opinions, feelings, or preferences. For example, many older executives may not be comfortable admitting
to being intimidated by computers. It has been found that in such cases, people will tend to respond
more openly about “someone else.” Thus, we may ask them to explain reasons why a friend has not
yet bought a computer, or to tell a story about a person in a picture who is or is not using a product.
The main problem with this method is that it is difficult to analyse responses. Projective techniques are
inherently inefficient to use. The elaborate context that has to be put into place takes time and energy
away from the main question. There may also be real differences between the respondent and the third
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party. Saying or thinking about something that “hits too close to home” may also influence the respondent, who may or may not be able to see through the ruse.
Observation of consumers is often a powerful tool. Looking at how consumers select products
may yield insights into how they make decisions and what they look for. For example, some American manufacturers were concerned about low sales of their products in Japan. Observing Japanese
consumers, it was found that many of these Japanese consumers scrutinised packages looking for a
name of a major manufacturer —the product specific-brands that are common in the U.S. (e.g., Tide)
were not impressive to the Japanese, who wanted a name of a major firm like Mitsubishi or Proctor &
Gamble. Observation may help us determine how much time consumers spend comparing prices, or
whether nutritional labels are being consulted.
A question arises as to whether this type of “spying” inappropriately invades the privacy of consumers. Although there may be cause for some concern in that the particular individuals have not
consented to be part of this research, it should be noted that there is no particular interest in what the
individual customer being watched does. The question is what consumers — either as an entire group
or as segments — do. Consumers benefit, for example, from stores that are designed effectively to
promote efficient shopping. If it is found that women are more uncomfortable than men about others
standing too close, the areas of the store heavily trafficked by women can be designed accordingly.
What is being reported here, then, are averages and tendencies in response. The intent is not to find
“juicy” observations specific to one customer.
By understanding the phenomena such as the tendency toward a right turn, the location of merchandise can be observed. It is also possible to identify problem areas where customers may be overly
vulnerable to the “but brush,” or overly close encounter with others. This method can be used to identify problems that the customer experiences, such as difficulty finding a product, a mirror, a changing
room, or a store employee for help.
Online research methods: The Internet now reaches the great majority of households in the U.S., and
thus, online research provides new opportunity and has increased in use.
One potential benefit of online surveys is the use of “conditional branching.” In conventional
paper and pencil surveys, one question might ask if the respondent has shopped for a new car during
the last eight months. If the respondent answers “no,” he or she will be asked to skip ahead several
questions, e.g., going straight to question 17 instead of proceeding to number 9. If the respondent
answered “yes,” he or she would be instructed to go to the next question which, along with the next
several ones, would address issues related to this shopping experience. Conditional branching allows
the computer to skip directly to the appropriate question. If a respondent is asked which brands he or
she considered, it is also possible to customise brand comparison questions to those listed. Suppose,
for example, that the respondent considered Ford, Toyota, and Hyundai, it would be possible to ask
the subject questions about his or her view of the relative quality of each respective pair—in this case,
Ford vs. Toyota, Ford vs. Hyundai, and Toyota vs. Hyundai.
There are certain drawbacks to online surveys. Some consumers may be more comfortable with
online activities than others—and not all households will have access. Today, however, this type of
response bias is probably not significantly greater than that associated with other types of research
methods. A more serious problem is that it has consistently been found in online research that it is very
difficult—if not impossible—to get respondents to carefully read instructions and other information
online—there is a tendency to move quickly. This makes it difficult to perform research that depends
on the respondent’s reading of a situation or product description.
Online search data and page visit logs provides valuable ground for analysis. It is possible to see
how frequently various terms are used by those who use a firm’s web site search feature or to see the
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route taken by most consumers to get to the page with the information they ultimately want. If consumers use a certain term frequently that is not used by the firm in its product descriptions, the need to
include this term in online content can be seen in search logs. If consumers take a long, “torturous”
route to information frequently accessed, it may be appropriate to redesign the menu structure and/or
insert hyperlinks in “intermediate” pages that are found in many users’ routes.
Scanner data: Many consumers are members of supermarket “clubs.” In return for signing up for
a card and presenting this when making purchases, consumers are often eligible for considerable discounts on selected products.
Researchers use a more elaborate version of this type of program in some communities. Here,
a number of consumers receive small payments and/or other incentives to sign up to be part of a
research panel. They then receive a card that they are asked to present any time they go shopping.
Nearly all retailers in the area usually cooperate. It is now possible to track what the consumer bought
in all stores and to have a historical record.
The consumer’s shopping record is usually combined with demographic information (e.g., income,
educational level of adults in the household, occupations of adults, ages of children, and whether the
family owns and rents) and the family’s television watching habits.
No. of ads seen by
shoper
Ads seen for competing
brands “Split cable”
TELEVISION
EXPOSURE
RECORDED
PURCHASES
HOUSEHOLD
FILE
DEMOGRAPHIC
INFORMATION
Family size
Occupation
Family size
Income
Home ownership
ANALYSIS
Purchase on occasion: Yes, no
Time since previous purchase
Previous purchases
Current price
Previous price
Current promotional status
Previous promotional status
Current display status
Previous display status
Display status of competing bran
Promotional status of competing
Coupon used: Yes, no
Coupon available: Yes, no
Coupon available for older brand
Amount of coupon
FIGURE 21. RELATIVE IMPACT OF A NUMBER OF FACTORS ON THE CONSUMER’S CHOICE
Source: Perner L. (2010) The Consumer Behaviour: The Psychology of Marketing, access via internet page: http://www.consumerpsychologist.com/index.html, accessed March/April, 2014
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It is now possible to assess the relative impact of a number of factors on the consumer’s choice, e.g.:
What brand in a given product category was bought during the last, or a series of past, purchase
occasions;
Whether, and if so, how many times a consumer has seen an ad for the brand in question or a
competing one;
Whether the target brand (and/or a competing one) is on sale during the store visit;
Whether any brand had preferential display space;
The impact of income and/or family size on purchase patterns; and
Whether a coupon was used for the purchase and, if so, its value.
A “split cable” technology allows the researchers to randomly select half the panel members in a
given community to receive one advertising treatment and the other half another. The selection is
truly random since each household, as opposed to neighbourhood, is selected to get one treatment or
the other. Thus, observed differences should, allowing for sampling error, the best result of advertising
exposure since there are no other systematic differences between groups.
Interestingly, it has been found that consumers tend to be more influenced by commercials that they
“zap” through while channel surfing even if they only see part of the commercial. This most likely
results from the reality that one must pay greater attention while channel surfing than when watching
a commercial in order to determine which program is worth watching.
Scanner data is, at the present time, only available for certain grocery item product categories, e.g.,
food items, beverages, cleaning items, laundry detergent, paper towels, and toilet paper. It is not available for most non-grocery product items. Scanner data analysis is most useful for frequently purchased
items (e.g., drinks, food items, snacks, and toilet paper) since a series of purchases in the same product
category yield more information with greater precision than would a record of one purchase at one
point in time. Even if scanner data were available for electronic products such as printers, computers,
and MP3 players, for example, these products would be purchased quite infrequently. A single purchase, then, would not be as effective in effectively distinguishing the effects of different factors, e.g.,
advertising, shelf space, pricing of the product and competitors, and availability of a coupon—since we
have at most one purchase instance during a long period of time during which several of these factors
would apply at the same time. In the case of items that are purchased frequently, the consumer has the
opportunity to buy a product, buy a competing product, or buy nothing at all depending on the status
of the brand of interest and competing brands. In the case of the purchase of an MP3 player, in contrast, there may be promotions associated with several brands going on at the same time, and each may
advertise. It may also be that the purchase was motivated by the breakdown of an existing product or
dissatisfaction or a desire to add more capabilities.
Physiological measures are occasionally used to examine consumer response. For example, advertisers may want to measure a consumer’s level of arousal during various parts of an advertisement.
This can be used to assess possible discomfort on the negative side and level of attention on the positive
side. By attaching a tiny camera to plain eye glasses worn by the subject while watching an advertisement, it is possible to determine where on screen or other ad display the subject focuses at any one
time. If the focus remains fixed throughout an ad sequence where the interesting and active part area
changes, we can track whether the respondent is following the sequence intended. If he or she is not,
he or she is likely either not to be paying as much attention as desired or to be confused by an overly
complex sequence. In situations where the subject’s eyes do move, we can assess whether this movement is going in the intended direction.
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Mind-reading would clearly not be ethical and is, at the present time, not possible in any event.
However, it is possible to measure brain waves by attaching electrodes. These readings will not reveal
what the subject actually thinks, but it is possible to distinguish between beta waves—indicating active
thought and analysis—and alpha waves, indicating lower levels of attention. An important feature of
physiological measures is that we can often track performance over time. A subject may, for example, be demonstrating good characteristics—such as appropriate level of arousal and eye movement—
during some of the ad sequence and not during other parts. This, then, gives some guidance as to
which parts of the ad are effective and which ones need to be reworked.27
In a variation of direct physiological measures, a subject may be asked, at various points during an
advertisement, to indicate his or her level of interest, liking, comfort, and approval by moving a lever
or some instrument (much like one would adjust the volume on a radio or MP3 player).
Research sequence: In general, if more than one type of research is to be used, the more flexible and
less precise method—such as focus groups and/or individual interviews—should generally be used before the less flexible but more precise methods (e.g., surveys and scanner data) are used. Focus groups
and interviews are flexible and allow the researcher to follow up on interesting issues raised by participants who can be probed. However, because the sample sizes are small and because participants in
a focus group are influenced by each other, few data points are collected. If we run five focus groups
with eight people each, for example, we would have a total of forty responses. Even if we assume that
these are independent, a sample size of forty would give very imprecise results. We might conclude, for
example, that somewhere between 5% and 40% of the target market would be interested in the product
we have to offer. This is usually no more precise than what we already reasonably new. Questionnaires, in contrast, are highly inflexible. It is not possible to ask follow-up questions. Therefore, we
can use our insights from focus groups and interviews to develop questionnaires that contain specific
questions that can be asked to a larger number of people. There will still be some sampling error, but
with a sample size of 1,000+ responses, we may be able to narrow the 95% confidence interval for the
percentage of the target market that is seriously interested in our product to, say, 17-21%, a range that
is much more meaningful.
Project and teamwork exercises
1.
Consider the statement that people do not buy goods or services; they buy benefits. What was the
last clothing product or personal-care service you purchased? What were the benefits you received
from it? Think about both tangible and intangible benefits.
2.
Apply the total product concept to the following goods and services: personal computer, movie
rental, college sporting event, and mountain bike. For each, identify the benefits that fit into the
basic core, the accessory ring, and the psychological ring. How does time affect selection?
3.
How is the restaurant marketplace in your town segmented? Describe three different restaurants
in terms of consumer benefits offered. Who are the customers in each restaurant segment? How
do they differ from one another? In what situations would you go to restaurants in different segments?
4.
Look through the advertising section of a daily newspaper and find an advertisement for a store
selling women’s apparel and one for a store selling men’s apparel. For each, who is the target market group for the store? What is it about the advertisement that makes you think so? Consider the
headline, subheads, body copy, visuals, and overall layout and appearance of the advertisements.
Are there any “mixed signals” in the advertisements, or are they totally on target?
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5.
Record a television commercial that you feel is right on target for you. Show it to team members
and explain why you chose it. Consider the product, the program during which the commercial
appeared, and the network. Consider the creative aspects such as the spokesperson used in the
commercial, the situation represented, the music, the visuals, and the copy.
6.
Review foreign periodicals in the library and find examples of intermarket segmentation. Also
look for examples of imported goods or services that have been localised.
7.
Members of the team should go to the Internet independently and find three websites of retailers
that sell clothing targeted toward college-age women and/or men. The team should meet and
mutually agree on three sites that all will evaluate. Now look at the sites as a team and come to an
agreement on how each one is positioned. Why do you think each site is positioned as it is?
8.
Think of an important purchase you have recently made. What triggered you to want the product?
Explain as clearly as you can the thought processes and the actions you went through as you decided what to buy, which brand to choose, how much to spend, and when and where to make the
purchase. How closely does your decision process resemble the five-step process described in the
text?
9.
On today’s city and suburban highways, we see more trucks or sports utility vehicles than ever before. Increasingly, they’re driven by the kinds of people who just ten years ago were driving sedans
or station wagons. Why do you think this is so?
10. Identity theft is often mentioned in the press and on television these days. How are marketers reacting to this situation as they position their products and services?
11. Your team is working for Ford. Ford wants to target young drivers, ages sixteen to eighteen, and
the company wants to design a new car for this target market. Research is to be conducted to
identify automobile characteristics that would be highly appealing to that target market. What
shopper/buyer/consumer behaviour model would you use to assist in this research? Discuss this
with your teammates and justify your model selection in the best way you can.
12. Your team is hired by the owner of a local restaurant. The owner wants to make changes to the
restaurant to increase patronage. She thinks marketing research is a good idea to help identify
possible changes. What shopper/buyer/consumer behaviour model would you use to guide this
research? Discuss your choice.
13. The owner of a local clothing boutique hires your team. He is convinced that targeting career
women who are somewhat overweight may be the way to develop the business. The owner needs
help with developing an ad campaign involving local television, radio, and newspaper. He does
not know what images, symbols, and messages to use in the ad campaign. Discuss with your team
how research could be conducted to identify those images, symbols, and messages. What shopper/buyer/consumer behaviour model can be used to guide this research? Discuss your choice.
14. Your team is asked to consult on the marketing of a new software package that is targeted to the
leaders of professional associations. The goal of this software is to allow association secretaries
to process membership applications, conference registrations, and order publications, all on the
Internet. Doing this would result in a reduction of paperwork processing and save considerable
money. How would your team advise the software developer to market this innovation? What
information needs do you have? What are the research questions? Discuss your decisions.
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15. Using the Question 14 example, have the team discuss potential shopper/buyer/consumer behaviour models that can be used to answer the following question: How will executive directors
of professional associations likely evaluate the new software? What decision criteria are they most
likely to use?
16. Your team is hired to provide advice on how to deal with shoplifting in a franchise sporting goods
store. The marketing manager wants to find ways to discourage shoppers from shoplifting. His
idea is to put up signs throughout the store counter arguing against the mental justifications shoplifters commonly use to sustain their illicit practice. What shopper/buyer/consumer behaviour
model can be used to conduct research to identify methods? Discuss your choice.
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DISCUSSION
Case study: The Kellogg Company
The Kellogg Company is the world’s leading producer of cereals. Its products are manufactured in 18 countries
and sold in more than 180 countries. For more than 100 years, Kellogg’s has been a leader in health and nutrition
through providing consumers with a wide variety of food products. These are designed to be part of a balanced diet
and meet the different tastes of consumers.
Kellogg’s focuses on sustainable growth. This involves constantly looking for ways to meet consumer needs by
growing the cereal business and expanding its product portfolio. Market research is a specific area of marketing
that informs businesses like Kellogg’s about the things consumers need, how best to design products to answer those
needs and how to advertise those products to consumers.
Market research goes beyond finding out what consumers are thinking today. It can identify what consumers
might want in the future. In this way market research helps a business to make more informed choices. This reduces
the risks for any new product development (NPD). It also increases the likelihood that products will be well received
by consumers when they are launched.
Kellogg’s launched Crunchy Nut Cornflakes in the UK in 1980. Since then, it has become one of the most important brands for Kellogg’s with a sales value of £68 million (according to IRI sales data).
In 2003 the Crunchy Nut brand created a brand extension. This involved using the Crunchy Nut name to launch
a new product called Crunchy Nut Clusters. This variant has two varieties, Milk Chocolate Curls and Honey and
Nut. Both of them have enabled the brand to reach a wider group of consumers. This brand extension is now worth
£21 million in annual value sales (according to IRI sales data).
This case study focuses on the importance of market research during the development and launch of Crunchy
Nut Bites, a more recent extension to the Crunchy Nut brand. The objective of this innovation was to provide a new
flavour and texture for consumers, helping Kellogg’s extend its share of the breakfast cereals market.
Many organisations are described as product orientated. This means they develop a product and then look for a
market to sell to. Kellogg’s is market orientated. This means that the whole organisation focuses on the needs of its
consumers. It is therefore essential that it identifies and anticipates changing consumer needs before the development
of new products
Market research adds value to businesses like Kellogg’s by identifying consumers’ needs. It helps Kellogg’s to plan
ahead, for example, looking at what products or extensions it should develop and for whom. It focuses the business
on the needs of its consumers. An organisation that does this can improve its competitive advantage.
In an established market, such as breakfast cereals, there is little room to increase the overall sales in the market.
Kellogg’s is therefore always looking for ways to strengthen its own portfolio. Designing new products is a good way
of doing this. However, this can take a long time and may involve considerable costs.
In addition to the resources required during development, suppliers must produce an advertising campaign to
raise awareness of the product among consumers and encourage retailers to stock the product. Launching a new
product can be a risky business.
Of the hundreds of products launched every year in consumer goods markets, very few reach significant market
share. In order to reduce risks, market research is, therefore, essential. A product extension is a less risky way of
increasing market share by providing consumer products with new features under an existing brand. New product
extensions give more choice to consumers and help them to feel more favourably about the existing brands.
To develop a new Crunchy Nut brand extension, Kellogg’s commissioned primary research. This is research
gathered first-hand to answer questions that are specific to the project. Although primary research is often time-con-
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suming and expensive, it is considered as a reliable source of information because it is directly from the consumer
and is specifically designed to meet the objectives of a project.
There are a number of different ways of collecting primary data. Sometimes agencies are employed to collect
data using, for example, street interviews or a questionnaire. This is a systematic list of questions that obtain feedback from the consumers.
Qualitative
For the development of Crunchy Nut Bites, Kellogg’s used various different methods of primary data collection.
Primary market data may involve qualitative research or quantitative research. Both types of data are valuable in
understanding what consumers want or need.
Qualitative data is concerned more about opinions, feelings and attitudes. Quantitative data is in numerical
form and is usually gathered from a large sample of respondents.
Qualitative research establishes a conversation with consumers. It prompts consumer reaction to, for example,
a new product idea and helps researchers understand what they think of it, how it makes them feel, why they find
it interesting or not.
Qualitative research may be obtained through focus groups, where a moderator captures feedback from a group
of six or seven consumers to the ideas shown to them. Those ideas may take the format of drawings or having new
food prototypes to taste.
Quantitative
Quantitative research may use questionnaires administered to large numbers of respondents. This allows statistical analysis, such as the calculation of a mean score or percentages. It aims to give a representative picture of
what consumers think of a new product idea or a new (real) food.
It may involve the use of scales, so numbers get associated with a particular meaning for example, on an
evaluation scale of 1 to 7, where 1 means ‘very poor’ and 7 means ‘excellent’. Crucially those numbers need to be
interpreted to enable the business to understand the consumer’s overall response.
Secondary research
In addition, Kellogg’s used secondary research which is existing research that has already been collected by other
organisations. Sources of secondary data include books, journals, the internet and government statistics. Market
research agencies collect a range of data which they process and use to provide organisations like Kellogg’s with
research.
The benefits of secondary research are that it is quicker and often less expensive than primary, although it may
not always be completely related to the needs of a specific project.
For Kellogg’s, the order in which the information is gathered is as important as the type of information being
gathered. In order to develop the new Crunchy Nut Bites, Kellogg’s undertook four distinct stages of research.
Stage 1: Discovery
Initial research aimed to identify a set of new food ideas that would be suitable for developing a new Crunchy
Nut product. Secondary research from [market research publications] Mintel and Datamonitor was used to find out
about innovation trends in the cereal market. It was also used to find out about new products, flavours and foods
from around the world. Food developers at Kellogg’s used this information to come up with a number of new food
ideas.
Focus groups
Focus groups were used to provide qualitative research. These were used to show consumers the new food ideas
in the form of a number of different (real) food prototypes, including a mini crispy lattice product and a nutty
triangle. The focus groups captured the attitudes and feelings of consumers towards the new foods.
This primary research helped Kellogg’s to find out how new product suggestions could be developed and still
fit in with the Crunchy Nut brand. It helped Kellogg’s to establish what consumers were looking for in terms of
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potential new flavours and textures.
The results allowed Kellogg’s to discard some ideas. Other ideas were appealing for consumers but needed refining and further development. At the end of this stage, Kellogg’s had a number of new food ideas that all seemed to
appeal to consumers.
Stage 2: Selecting the best idea
This stage aimed to select the best idea arising from the stage 1 research. Kellogg’s put the ideas from the focus
group on boards. The boards had pictures showing product ideas and a description of what the new product would
be like. These boards were then shown to a large group of representative consumers in a quantitative survey. They
were asked to rate those ideas against a number of scales, so Kellogg’s could identify which product ideas consumers
liked best or disliked.
The quantitative data created specific statistical information that indicated that a new Crunchy Nut Bites idea
was perceived as the most appealing amongst all the ideas tested. It established what proportion of people liked the
new product idea enough to buy it. It also identified those product ideas that had the best or least sales potential.
Once the best idea had been selected from stage 2, Kellogg’s needed to make this idea become a real product. The
Crunchy Nut Bites food prototype recipe was refined using the feedback from another qualitative and quantitative
survey.
The qualitative research helped Kellogg’s food technologists to explore the taste and texture of the new food idea
in more detail. Kellogg’s needed to understand the ‘eating experience’ of the consumer before a decision could be
made about how to develop the recipe in more detail.
Following this stage, four product recipes were developed and these prototypes were then tested with representative groups of consumers in a quantitative survey to see which product consumers preferred. This enabled Kellogg’s
to select the best one.
Also, at this stage, the pack design for the new Crunchy Nut Bites was developed. Several designs were developed aimed at giving the new product the same look and feel as the rest of the Crunchy Nut family. The packaging
designs were tested with consumers, which enabled Kellogg’s to select the final packaging design for Crunchy Nut
Bites.
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At Kellogg’s, every product has to undergo one final test prior to a new product launch. This is called the ‘In
Home Usage Test’. The consumers are given the product to try for several days and this enables Kellogg’s to capture
how consumers interact with the product for the first time.
At the end of the trial, consumers complete a report on what they thought of the food in the form of a questionnaire. This final survey measures how appealing the new product is to consumers and how likely they would be to
buy it in real life.
The data collected also helped to calculate a sales forecast for the new product for the first and second year in
market. The forecast was used by the finance department to set budgets, organise the supply chain and to schedule
food production.
Once the data was analysed and the product concept tested, Kellogg’s was able to make the strategic decision to
go ahead with the new product. Production could then take place.
Kellogg’s used market research throughout the whole development process for a new product for the Crunchy Nut
range, from the initial idea to the planning of production and delivery.
During the earlier stages of research, consumer responses helped Kellogg’s to explore lots of different ideas in an
open way. It then crafted some ideas in more detail and screened those ideas with consumers to select the one which
seemed to have the highest appeal.
The idea became real by testing several recipes, refining the food prototype selected and developing the design
for packaging. Once the food and packaging elements for the new product had been developed, the whole product
was tested with consumers to ensure it met their needs. The data also provided a sales forecast to predict the first
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two years of sales of Crunchy Nut Bites. Crunchy Nut Bites has extended the Crunchy Nut family of products. In
doing so it has brought new consumers to the brand and increased its consumption.
Kellogg’s launched Crunchy Nut Bites in September 2008. Sales data shows it was one of the best performing
brands to launch in the breakfast cereal category with a sales value of £6.9 million in its first full year of sales (IRI
sales data). This illustrates that the detailed market research undertaken during the planning stages was valuable.
It helped to ensure that the product extension hit the spot with consumers straight away.
The source:
http://manikmukherjee.blogspot.com/2013/09/kelloggs-case-study.html
Study case questions:
1.
2.
3.
4.
Describe the purpose of market research.
Explain the difference between primary research and secondary research.
Analyse why an organisation like Kellogg’s would use both qualitative and quantitative data.
Evaluate why market research can reduce the risks of a new product launch.
References for further reading
1.
Ayuba B. (2005), Marketing: Principles and Management, Kaduna: Shukrah Printing
2.
David L. and Albert J.D. (2002), Consumer Behaviour, New Delhi: Tata McGraw Hill.
3.
Del I.H. Roger J.B. and Kenneth A.C. (2001), Consumer Behaviour; Building Marketing Strategy,
New York: McGraw-Hill Irwin.
4.
Eric A. Linda P. and George Z. (2002), Consumer, New York: McGraw-Hill Irwin.
5.
Geoff, R. (1988); Modern Industrial Marketing; New York: McGraw-Hill,
6.
Kotler, P. and Armstrong (1999); Principles of Marketing; New Delhi: Prentice- Hall,
7.
Inc. Leon G.S. and Leslie L.K (2004), Consumer Behaviour, Upper Saddle River, U.S.A: Pearson
Education, Inc. Pearson Prentice Hall.
8.
Levitt, T. (1960): The Marketing Mode; New Jersey, Prentice- Hall, Inc.8
9.
Mc Carthy, E.J. (1996): Basic Marketing: A Management Approach. Illinois: Irwin.
10. Onu, A.J (2000); Marketing Today; Zaria: Ndyson Publishers Ltd.
11. Schewe, C.D and Smith, R.M (1980); Marketing Concepts and Applications. USA.
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7$6.6)25,1',9,'8$/*5283:25.6
CASE STUDIES
Lecturers often prefer to set their own questions on case studies. Here I restrict myself to making
some general observations on the case studies which may be useful in answering many questions that
may be posed and related to the case studies.
Case Study No.1
Why Do People Buy Hybrid Cars?
Consumers are buying increasing numbers of environmentally friendly cars. Increasingly, many of
these environmentally conscious consumers choose to purchase petrol-electric hybrid vehicles. In this category of
“greener-cars”, Toyota’s Prius model is reported to be the market leader. In 2009-10, it was the best-selling car in
Japan, an important leading market for automobile trends (Mick 2010). Sales of the Prius keep growing despite
well-publicised quality and safety problems (Mitchell & Linebaugh 2010). In fact, the demand for petrol-electric
hybrids is so strong that Toyota has introduced a second and larger Camry branded hybrid vehicle into Australia.
Other car manufacturers are following with their own models, indicating that there is likely to be sustained demand
for this type of light-duty passenger vehicle.
Toyota markets the Prius as an environmentally better alternative to conventional vehicles because it uses less
fuel and has lower emissions. This marketing position appears to appeal to consumers who do not wish to further
degrade the environment. It has been suggested that these consumers choose to help by driving a car that is more
environmentally friendly (Griskevicius, Tybur & Van den Bergh 2010; Bamberg 2003). Popular sentiment has it
that intrinsic motives to preserve the environment are the driving force behind the popularity of these vehicles. This
is because consumers keep buying petrol-electric hybrid cars like the Prius even though they cost more than twice
the amount of a comparable conventional car. But are intrinsic reasons really why consumers choose to buy a car
like the Prius? Are there other reasons behind its popularity?
It has been recognised that encouraging the adoption of environmentally friendly products is a key challenge for
the behavioural scientists (Kaplan 2000). This appears to be why there has been a great deal of research into the
reasons behind this adoption. This article seeks to add to this knowledge by exploring the reasons that drive adoption of environmentally friendlier automobiles, specifically, the petrol-electric hybrids that are gaining popularity.
This information may potentially be valuable to increase adoption rates for other environmentally friendly products
and ideas.
Environmental sensitivity and consumption
The currently popular paradigm for discussing the environment originated in the 1970s, when the ideas of
global warming and finite oil reserves were first proposed (Minton & Rose 1997; Pelletier et al. 1998). While some
debate continues on the veracity of these propositions, this thinking has influenced the way people live by increasing
their efforts to reduce energy use and to have fewer by-products as a result of consumption. It has been suggested
that this type of thinking has led some consumers to prefer products like the Prius (Jansson, Marrell & Nordlund
2009). These consumers with ecological and environmental concerns have been described in various ways, and
are sometimes called environmentally-sensitive, -conscious, or as environmentalists. This group of consumers are
reportedly more positively oriented towards conservation and environmental issues when compared to other con-
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sumer groups (Casey & Scott 2006; Minton & Rose 1997; Stern et al. 1995) and are widely documented as having
a higher tendency to adopt eco-friendlier products (Gatersleben, Steg & Vlek 2002; Minton & Rose 1997; Anable
2005; Bamberg 2003; Hansla et al. 2008; Maloney & Ward 1973; Stisser 1994). This hypothesis has also been
tested in its inverse, leading to the finding that consumers who were inclined towards eco-friendlier products were
also the most sensitive to the environment (Jansson, Marell & Nordlund 2009). The literature into reasons for
buying environmentally friendly products appears to be split along the streams of intrinsic versus extrinsic motives.
The methodology employed appears to be correlated with the finding for either intrinsic (unmasked data collection
methods) or extrinsic (masked/disguised data collection) motivations for adoption.
The source:
http://www.ukessays.com/essays/marketing/the-concept-of-green-marketing-marketingessay.php
Case study questions:
1.
2.
In a wide-ranging study that employed disguised surveys on a range of products, Bamberg (2003)
reported only a low to moderate association between consumers’ concern about the environment
and adoption of consumption behaviour that was considered to be environmentally friendly. If
this is the case, is it possible that there are other reasons behind adopting ‘greener’ products?
For many consumers, choosing an automobile is often a complicated and high-involvement process. Although cars are regularly used products, they are also rarely bought products. Additionally, an automobile is expensive, there is a large selection and the consequences of not choosing
well typically lasts a long period of time and may cost a lot to rectify. Build the consumer decision
making process of buying the hybrid cars.
Case study No.2
Behavioural Analysis of USA consumers – Nike story
The Nike story begins with its founder, running enthusiast Phil Knight. In 1962, Knight started Blue
Ribbon Sports, the precursor to Nike. At the time, the athletic shoe industry was dominated by two German companies, Adidas and Puma. Knight recognised a neglected segment of serious athletes who had specialised needs
that were not being addressed. The concept was simple: Provide high-quality running shoes designed especially for
athletes by athletes. Knight believed that “high-tech” shoes for runners could be manufactured at competitive prices if imported from abroad. Without much cash to do any advertising for his products, Knight crafted his “grass
roots” philosophy of selling athletic shoes: Speaking to athletes in their language and on their level; sharing their
true passion for running; and listening to their feedback about his products and the sport. Each weekend Knight
would travel from track meet to track meet—both high school and collegiate competitions—talking with athletes
and selling Tiger shoes from the trunk of his green Plymouth Valiant.
The company’s commitment to designing innovative footwear for serious athletes helped it build a cult following that rapidly reached the American consumer. By 1980, after just under two decades in the business, Nike had
become the number one athletic shoe company in the United States. Unfortunately for the company, this wave of
success was soon to crest as rival companies positioned themselves to take advantage of the aerobics craze, which
Nike largely ignored. Companies like Reebok and L.A. Gear developed fashionable and comfortable products
aimed at women fitness enthusiasts that sold remarkably well.
Nike refused to join a market it saw as low in quality and heavy on cosmetic properties and continued making
durable, performance-oriented products. The company lost millions in sales and allowed Reebok to gain basically
uncontested market share points. By 1987, Reebok had nearly doubled Nike’s market share, with 30 percentage
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points compared to Nike’s 18. Fortunately for Nike, the company chose to fight back with product innovations and
persuasive marketing. The company’s “Air” technology revitalised the company with the additional aid of successful advertising campaigns such as the 1987 “Revolution in Motion” spot for the new Air Max shoes and the “Air
Jordan” commercials. When Nike unveiled its now-famous “Just Do It” campaign in 1988, just as Reebok developed the “Reeboks Let U.B.U” slogan, the company was on its way to a full recovery. By 1989, Nike had regained
the market leader position in America as market share rose three points above Reebok to 25 percent that year.
In the 1990s, Nike continued its consumer focus. Nike kept its “finger on the pulse” of the shoe-buying public
in part through the use of “EKINs” (Nike spelled backwards) – sports-loving employees whose job was to hit the
streets to disseminate information about Nike and find out what was on the minds of retailers and consumers.
Nike’s “Brand Strength Monitor” formally tracked consumer perceptions three times a year to identify marketplace
trends. In areas where it felt less knowledgeable, e.g., outside of track and basketball, Nike was more likely to commission customised research studies. Nike’s inventory control system, called “Futures,” also helped it better gauge
consumer response and plan production accordingly.
Innovative product development had always been a cornerstone of the company. By 1998, Nike was unveiling
a new shoe style, on average, every day. In 1999, the company put the power to design shoes in the hands of its
customers with the NIKEiD project. NIKEiD enabled customers to personalise a pair of selected shoe models using
online customisation software. The software led consumers through a step-by-step process: customers could choose
the size and width of the shoes, pick the colour scheme, and affix their own 8-character personal ID to the product.
Early reviews of the NIKEiD project were full of criticism of the limited selection and availability, so less than
a year after its debut, Nike added additional shoe models and more customisation options while increasing site
capacity.
Though the company had become a household name throughout the world and, more important, achieved
the position of global sportswear leader, Nike was still $3 billion shy of reaching the goal of $12 billion that Phil
Knight initially intended the company to reach by 2000. In a letter in Nike’s 2000 annual report, Knight addressed
the issue of how to jumpstart his company’s slowed growth and offered the following formula: “We need to expand
our connection to new categories and toward new consumers.” This quotation is indicative of Nike’s relentless drive
to build its brand with a strong consumer focus.
The source:
http://wps.prenhall.com/bp_kotler_mm_11/2/633/162107.cw/index.html
Questions
1.
2.
While Nike made significant changes to maintain its global leadership position, there appear to
be some problems in maintaining and growing that position. Is Knight correct in his formula for
jumpstarting Nike’s growth (last paragraph), or is the matter more complicated?
Develop and evaluate the types of pro and con marketing environmental changes that you see for
Nike. Given the options and challenges that Nike faces, how would you proceed with a strategic
marketing plan for the firm?
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Case study No. 3:
ADIDAS case study
Since it was established in Germany in 1949, by Adolf Dassler, Adidas has been synonymous with the sporting
industry. Today, Adidas is a global public company and is one of the largest sports brands in the world. It is a
household brand name with its three stripes logo recognised in markets across the world.
The company’s product portfolio is vast, ranging from state-of-the-art sports footwear and clothing to accessories
such as bags, watches, eyewear and other sports-related goods and equipment. Employing over 46,000 people worldwide, the Adidas Group consists of around 170 subsidiaries including Reebok, Taylor Made-Adidas Golf, Rockport
and CCM-Hockey. The Group’s headquarters are in Herzogenaurach, Germany. In the second quarter of 2013 the
Group’s revenue was €3.383 billion.
The Adidas brand is built on a passion for sports excellence and innovative design to help athletes perform to
the best of their ability. It is therefore no surprise that Adidas has supported many iconic athletes to achieve great
things at the Olympic Games. In the UK, Adidas has partnered and supplied Team GB since 1984. The company’s
heritage with the Olympic Games dates back to the Games in Amsterdam in 1928 when Adidas’ running shoes
were debuted. Footwear and clothing by Adidas has been seen on athletes at every Olympic Games since. In fact, all
British medal-winning athletes at the last 8 Olympic Games wore Adidas products.
There are countless historic sporting achievements that have taken place in Adidas products. These include:
•
Jesse Owens’ 4 gold medals in Berlin 1936
•
Cassius Marcellus Clay (Muhammad Ali) taking gold in the boxing light-heavyweight division at Rome 1960
•
Dick Fosbury’s revolutionary new back-first high jump technique at Mexico 1968, known as the ‘Fosbury
Flop’
•
Gymnast Nadia Comaneci’s perfect 10 at Montreal 1976.
This case study demonstrates how Adidas used innovative marketing strategies in its sponsorship deal
with the London 2012 Olympic Games to engage with young consumers in the UK and across the globe.
For most organisations the marketing function is vital for survival. The Chartered Institute of Marketing
defines marketing as:
‘Marketing is the management process responsible for identifying, anticipating and satisfying consumer requirements profitably.’
This definition outlines the key purposes of the marketing function. These are:
•
to compete in a competitive marketplace
•
to identify and anticipate consumer requirements and then satisfy these requirements
•
to make a profit.
As a market-orientated organisation Adidas continuously identifies and reviews consumers’ needs to ensure
its products meet these needs. It aims to exceed customer expectations by adapting its product portfolio to meet the
changing needs of consumers. It is this focus on its customers, teamed with product and marketing innovation, that
plays a key role in Adidas’ success.
Every organisation must look at its marketing in relation to the marketing mix. The marketing mix, often
referred to as the 4Ps, is a means of assessing how to balance the elements of the mix in order to meet customers’
needs. The elements include:
•
the right product
•
sold at the right price
•
in the right place
•
using the most suitable form of promotion.
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No two businesses are identical, as such, every organisation must decide on its own balance of the 4Ps to suit
its consumers’ needs. There are many internal and external factors that will influence an organisation’s marketing
mix. Key factors include the size of the business, the markets it operates in and available resources.
Sports marketing
For a global organisation like Adidas its marketing mix is tailored to specific markets. This is known as international marketing as it takes cultural and social differences into account when planning marketing activity. Sports
marketing is a key focus for Adidas’ marketing mix. The growing popularity of sports as entertainment has led to
a huge increase in sports marketing. The founder of Adidas was one of the first people to see the potential of this
form of marketing when he sponsored the FIFA World Cup back in 1978. Sponsorship involves a business paying
to be associated with another organisation, event or TV programme.
Like many new developments, the sports marketing function has changed dramatically since its introduction.
Just consider Sony’s first ever Walkman in 1979 to today’s iPod. The same dramatic difference is evident in the
sports marketing arena with sponsorship deals now worth tens of millions of pounds. Rather than simply trying
to gain positive associations with particular sports, companies use sports marketing to drive the brand and increase
sales.
Within the marketing function of any organisation there will be key goals, or objectives, to be achieved. For
example, increasing the market share by 3% or entering a new market overseas. To achieve these marketing objectives requires a plan that details the actions needed. These plans are referred to as marketing strategies. A key
challenge for Adidas’ marketing strategies is finding innovative ways to inspire and engage its 14-19 year old target
audience.
Sponsorship
For Adidas, London is a key focus for the sportswear market, for both performance sportswear and sports
fashion. This market sets more trends than anywhere else in the country. London 2012 gave Adidas a platform
to target this audience but with a global reach. The sponsorship deal obtained by Adidas was the broadest set of
sportswear rights in Olympic history. It became the Official Sportswear Partner of the London Games and the
exclusive licensee of all branded (Adidas + London 2012) and event branded (London 2012 only) clothing. From
these rights Adidas set four key marketing objectives:
•
To ensure a clear association as Sportswear Partner of London 2012, Team GB and Paralympics GB.
•
To engage and excite the 14-19 year old audience in order to drive brand preference in the UK.
•
To deliver a Licensed Product Return on Investment (ROI) (branded and event branded licensee rights).
•
To become the most talked about sports brand in 2012.
A major aspect of this sponsorship deal was the athletes’ kit. The kit provided the opportunity to be innovative
and excite the target audience whilst creating products to meet commercial sales targets. Market research undertaken by Adidas showed the youth audience wanted something ‘untraditionally British’. Designer Stella McCartney
fulfilled this brief with her deconstructed union flag design.
Preparations to equip the team started 2 ½ years before the Games were due to start. Over 550 athletes were
fitted for over 680 items of kit. This meant the marketing activity for the campaign also started long before the
Games in 2012. A photo booth shoot captured every athlete in their kit. These images were used to create excitement
around the Team GB kit product launch.
All elements of the marketing mix are important. However, in increasingly competitive markets innovative
methods of promotion can create a competitive advantage. Promotional activity is used to communicate with consumers about the brand and its products. As there were more than 50 London 2012 sponsors, Adidas needed to ensure it communicated the right messages, at the right time, through the appropriate channels for its target audience.
It aimed to create national support for Team GB through its ‘Take the Stage’ campaign.
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The acronym AIDA is useful when planning promotional activity, promotion should aim to:
•
initiate awareness amongst consumers
•
generate interest for and desire to have the product
•
ensure action to purchase.
Above-the-line promotion
There are many different methods of promotion. Above-the-line promotion refers to traditional methods of
advertising, such as, print adverts in magazines and newspapers, billboards or online and TV advertisements. This
form of promotion is expensive. As mass audiences become harder to reach through advertising, for example, an
increasing number of people record TV and fast-forward the adverts, innovative methods of below-the-line activity
is becoming increasingly important to engage the audience.
Above-the-line activity for Adidas’ campaign included TV adverts that showcased the best UK talent across
sport, street and style. The adverts contained carefully planned product placement. Amongst those featured were
David Beckham, Wretch 32 and Derrick Rose. In addition to a significant outdoor media spend, Adidas featured
artist impressions of athletes on 17 London Metro front pages.
TV adverts featuring athletes such as Jessica Ennis and Tom Daley were used to rally support for Team GB. In
these adverts athletes shared their intimate goals, fears and thoughts, something which was dramatically different
to other sponsors of London 2012.
Below-the-line promotion
In contrast, below-the-line promotion aims to reach more targeted groups of consumers. For example, through
sponsorship deals, direct marketing, public relations and social media. Below-the-line promotion targeted at the
youth audience was a key method for Adidas to achieve its marketing objectives. It used a wide range of promotional activities to create deeper engagement with its audience, mixing traditional media with an innovative use of
social and digital channels. The scale of the activation of this campaign was an industry first.
Its TV adverts aimed to drive consumers to a website where they could demonstrate their talents for a chance
to meet their idols. Through ‘Project 32’, Adidas had already rewarded 32 talented youngsters in London with the
chance to meet leaders in their chosen fields, such as the sporting and musical industry, giving undiscovered talent
the chance to ‘Take the Stage’.
Social media played an integral part in Adidas’ campaign. For example, on Twitter #takethestage became the
summer trend for supporting Team GB. Videos on YouTube created hundreds of millions of views, including a
video of Team GB athletes singing along to Queen’s ‘Don’t stop me now’. In addition, a large photo booth was
set up at Westfield shopping centre in Stratford. Members of the public then entered the booth to show support for
Team GB. Videos of peoples’ reactions to David Beckham making a surprise appearance received 3.2 million views,
as well as international TV coverage
Promotional activity is very expensive. Organisations want to see a return on investment (ROI) for the money
they spend on a promotional campaign. Sponsorship of London 2012 was no exception. Every aspect of its promotional campaign, both online and offline was continuously monitored and measured. This enabled Adidas to
demonstrate that becoming the Official Sportswear Partner of the London Games and the exclusive licensee of all
branded (Adidas + London 2012) and event branded (London 2012 only) apparel was cost effective.
Throughout the campaign Adidas monitored all of its media coverage. This data was then used to establish
whether the marketing objectives had been achieved. The table below demonstrates the significant return achieved
through this campaign and how Adidas successfully achieved its marketing objectives.
An organisation’s marketing mix is its own way to uniquely position the brand and drive sales. For Adidas, this
includes understanding what its consumers want and producing innovative products that fulfil these needs. Using
innovative methods of sports marketing, on a scale never before seen in the industry, enabled Adidas to target the
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youth audience in London whilst also having a global reach through social media and online promotion.
Sponsorship deals such as Adidas’ heritage with the Olympic Games are very expensive. However, as this case
study shows, through well planned marketing strategies with clearly defined objectives they can offer a way of creating deeper engagement with consumers. Partnering the brand with London 2012, Team GB and the Paralympics
engaged Adidas’ target consumers and created huge amounts of support for Team GB before, during and after the
Games.
The source:
http://businesscasestudies.co.uk/adidas/planning-effective-marketing-strategies-for-a-target-audience
Questions and teamwork exercises
1.
2.
3.
Evaluate whether below-the-line promotion is better than above-the-line promotion for Adidas.
Recognition and recall tests are conducted to determine whether consumers remember seeing an
ad, the extent to which they have read it or seen it and can recall its content, their resulting attitudes toward the product and the brand, and their purchase intentions. A number of syndicated
research services conduct recognition and recall tests. One such organisation is the Starch Readership Service (see http://www.nopworld.com/products.asp?go=product&key=91). This service
evaluates the effectiveness of magazine advertisements. See Figure 7-13 for an example of an ad
that has been “Starched.”
a. Go to the Starch Readership Service Web site and describe other services that Starch provides
to marketers and advertisers.
b. Which of these services (beyond the Readership Service) seems to most closely match the
marketer or advertiser’s desire to learn how consumers learn, recognise, and recall information?
c. After reviewing the information about the Starch services found in the chapter and seen on
their Web site, pick a magazine ad and devise your own method for measuring recognition
and recall. How does your method match that of Starch? How does your method differ? Try
administering your test method to five fellow students. Critique your results.
As indicated in the chapter, the basis of co-branding (in which two brand names are featured on
a single product) is to use another product’s brand equity to enhance the primary brand’s equity.
Notice the synergy that occurs when Nabisco combines its name with Ocean Spray to form Cranberry Newton’s. Your assignment is to go to the Web and find three examples where companies
doing business on the Internet have formed co-branding opportunities. List the examples you have
found and comment on what you perceive to be the strategies behind these moves. Lastly, suggest
a co-branding opportunity among e-commerce companies that has yet to materialise. Comment
on why your suggested opportunity would be a good one.
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Consumer behaviour project outline
All of the following categories need to be addressed by your analysis, unless it can be shown that
they are not relevant to your segment or product/service.
I.
Cover page
II.
Introduction—overview of project (1-2 pages)
a.
Market segment description
b.
Product or service description
c.
Applicable ethical theory(ies) and societal marketing efforts
d.
Research method(s) utilised
e.
Market segmentation
f.
Basis for segmentation, e.g., geographic, demographic, psychological, etc.
g.
Criteria for targeting market segment
h.
Strategies for segmentation
III. Consumer motivation
a.
Needs
b.
Goals
c.
Positive/negative aspects
d.
Rational/emotional components
IV. Personality
a.
Personality traits
b.
Cognitive factors
c.
Materialism, fixated and/or compulsive consumption behaviours
d.
Ethnocentrism
e.
Brand personality
f.
Self-image
g.
Perception
h.
Perceptual selection
i.
Perceptual organisation
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j.
Perceptual interpretation
k.
Positioning and repositioning
l.
Perceptual mapping (one or more maps as appropriate)
m. Perceived price
n.
Perceived quality
o.
Perceived image (store/manufacturer as appropriate)
p.
Perceived risk
V.
Consumer learning
a.
Involvement theory (particularly related to marketing strategy)
b.
Recognition and recall
c.
Brand loyalty
d.
Brand equity
VI. Consumer attitude formation and change
a.
Attitude models
b.
Attitude change strategies
c.
Cognitive dissonance
d.
Attribution theory
e.
Communication
f.
Credibility
g.
Comprehension
h.
Mood
i.
Barriers
j.
Feedback
k.
Communications strategy
l.
Media strategy
m. Message strategies
Rhetoric and persuasion
Involvement theory
Message presentation
Advertising appeals
Audience participation
VII. Reference groups and family influences
a.
Reference group influence factors
b.
Reference groups (assess all that apply)
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Friendship groups
Shopping groups
Work groups
Virtual groups or communities
Consumer-action groups
c.
Reference group appeals
Celebrities
Experts
“The common man”
The executive and employee spokesperson
Trade or spokes-characters
Other
d.
The family
Family structure
Family consumption roles
Family decision-making
Family life cycle
Non-traditional families
VIII.
Social class
a.
Social class categories/clusters
b.
Affluent/non-affluent consumers
c.
The “techno-class”
d.
Selected applications (as appropriate)
IX. Culture
a.
Content analysis
b.
Value measurement
Achievement and success
Activity
Efficiency and practicality
Progress
Material comfort
Individualism
Freedom
External conformity
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Humanitarianism
Youthfulness
Fitness and health
X.
Subcultures
a.
Nationality—Hispanic, etc.
b.
Religion (or not)
c.
Geographic region
d.
Race—African American, Asian American, etc.
e.
Age—Gen X, Baby Boomers, older consumers, etc.
f.
Gender—sex roles, working woman, etc.
g.
Occupation
h.
Social class
XI. Cross-cultural (international) behaviours
a.
Cultural traits (as appropriate)
b.
Strategies (as appropriate)
XII. Consumer influence and diffusion of innovations
a.
Opinion leadership
Credibility
Positive/negative information
Information and advice
Category
Leader/receiver motivations
b.
Opinion leadership marketing strategies
Programs
Advertisements
Word of mouth
c.
Diffusion of innovations
Product characteristics
Resistance barriers
Channels of communication
The social system (market segment)
Adopter categories
1.
Stage
2.
Rate
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Consumer innovators (as appropriate)
XIII.
Consumer decision making
a.
Level of decision making
b.
Models of decision making
Economic
Passive
Cognitive
Emotional
c.
Purchase behaviour
d.
Post purchase evaluation
e.
Consuming and possessing (as appropriate)
f.
Relationship marketing (as appropriate)
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MULTIPLE CHOICE QUESTIONS
1.
_________________ refers to the buying behaviour of final consumers.
a. Consumer buyer behaviour
b. Target market buying
c. Market segment buying
d. Business buying behaviour
Answer: (a)
2.
____________ is individuals and households who buy goods and services for personal consumption.
a. The target market
b. A market segment
c. The consumer market
d. The ethnographic market
Answer: (c)
3.
According to the text, the American consumer market consists of:
a. 189 million consumers.
b. 284 million consumers.
c. 375 million consumers.
d. 438 million consumers.
Answer: (b)
4.
Understanding consumer buying behaviour is not easy. The answers are often locked deep within
the consumer’s head. The central question for marketers is:
a. how much money is the consumer willing to spend?
b. how much does the consumer need the product being offered for sale?
c. how much does a discount or a coupon affect the purchase rate?
d. how do consumers respond to various marketing efforts the company might use?
Answer: (d)
5.
The starting point in understanding how consumers respond to various marketing efforts the company might use is the:
a. Lipinski model of buying behaviour.
b. stimulus-response model of buyer behaviour.
c. Freudian model of buying behaviour.
d. Maslow’s model of life-cycle changes.
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Answer: (b)
6.
According to the stimulus-response model of buyer behaviour (as presented in your text), the place
where consumers process marketing stimuli prior to making a purchase decision is called the:
a. consumer’s value chain.
b. consumer’s cognitive schema.
c. consumer’s black box.
d. consumer’s thoughts-emotions network.
Answer: (c)
7.
Consumer purchases are influenced strongly by cultural, social, personal, and:
a. psychographic characteristics.
b. psychological characteristics.
c. psychometric characteristics.
d. supply and demand characteristics.
Answer: (b)
8.
______________ is the most basic cause of a person’s wants and behaviours.
a. Culture
b. Social class
c. Personality
d. Lifestyle
Answer: (a)
9.
A child in the United States is normally exposed to all of the following values EXCEPT:
a. achievement and success.
b. activity and involvement.
c. material comfort.
d. collectivism.
Answer: (d)
10. Marketers are always trying to spot ____________ in order to discover new products that might be
wanted.
a. opinion graphers
b. dissonant groups
c. cultural shifts
d. benchmarks
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Answer: (c)
11. The cultural shift toward _____________ has resulted in more demand for casual clothing and simpler home furnishings.
a. liberal political causes
b. conservative political causes
c. informality
d. downsizing
Answer: (c)
12. A ________________ is a group of people with shared value systems based on common life experiences and situations.
a. culture
b. subculture
c. lifestyle composite
d. social class
Answer: (b)
13. Hispanics are often called an emerging market. Which of the following general product categories
do not sell well to Hispanics?
a. automobiles
b. computers
c. photography equipment
d. generics
Answer: (d)
14. African American consumers are strongly motivated by:
a. quality and ability to return merchandise.
b. quality and selection.
c. stores who honour their cultural traditions.
d. stores who have store credit.
Answer: (b)
15. The fastest growing and most affluent U.S. demographic segment is the:
a. Hispanic American consumers.
b. African American consumers.
c. Middle Eastern-American consumers.
d. Asian American consumers.
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Answer: (d)
16. The greatest barrier to effectively marketing to the Asian American market is thought to be:
a. reluctance to grant credit to this group.
b. language and cultural traditions.
c. the urban nature of their neighbourhoods.
d. lack of a mass media that reaches this group.
Answer: (b)
17. Mature consumers are becoming a very attractive market. Currently, the 50 and older population
is estimated to be about ___________ strong.
a. 75 million
b. 85 million
c. 95 million
d. 115 million
Answer: (a)
18. Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviours are called:
a. cultures.
b. subcultures.
c. social classes.
d. social factors.
Answer: (c)
19. Which of the following is most true about social class in America?
a. Social class is not determined by a single factor.
b. Social class is determined by income.
c. Social class lines are fixed.
d. Social class lines are rigid.
Answer: (a)
20. According to the characteristics of the major American social classes, the ________________ are
the social elite who live on inherited wealth and have well-known family backgrounds.
a. upper-uppers
b. lower-uppers
c. upper-middles
d. upper-lowers
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Answer: (a)
21. According to the characteristics of the major American social classes, the ________________ are
primarily concerned with “attaining the better things in life.” They have attained positions as professionals, independent businesspersons, and corporate managers.
a. upper-uppers
b. lower-uppers
c. upper-middles
d. upper-lowers
Answer: (c)
22. According to the characteristics of the major American social classes, the ________________ are
the class who leads a “working-class lifestyle.” They depend heavily on relatives for economic and
emotional support.
a. upper-uppers
b. lower-uppers
c. upper-middles
d. working class
Answer: (d)
23. Sybil, Sara, and Janice are all on the school tennis team. They are very proud of the fact that the
team pulled together to accomplish the goal of winning a state championship for their school.
Which is the best characterisation of the relationship between these three girls and the rest of their
school tennis team?
a. group
b. trend setters
c. VALS pattern
d. lifestyle concept
Answer: (a)
24. Groups which have a direct influence and to which a person belongs are called:
a. membership groups.
b. facilitative groups.
c. bonding groups.
d. social groups.
Answer: (a)
25. As a form of a reference group, the _______________ are ones to which the individual wishes to
belong.
a. secondary groups
b. facilitative groups
c. primary groups
d. aspirational groups
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Answer: (d)
26. The __________________ is a person within a reference group who, because of special skills,
knowledge, personality, or other characteristics, exerts influence on others.
a. facilitator
b. referent actor
c. opinion leader
d. social role player
Answer: (c)
27. Even though buying roles in the family change constantly, the ___________ has traditionally been
the main purchasing agent for the family.
a. wife
b. husband
c. teenage children
d. grandparent
Answer: (a)
28. A major reason for the changing traditional purchasing roles for families is that:
a. the economic conditions are forcing more teens to work.
b. more women than ever hold jobs outside the home.
c. children are spending more time on the Web.
d. men and women now shop together or “shop until you drop” for entertainment purposes.
Answer: (b)
29. A(n) ________________ consists of the activities people are expected to perform according to the
persons around them.
a. behaviour
b. attitude
c. role
d. status
Answer: (c)
30. The stages through which families might pass as they mature over time is a description of what is
called the:
a. adoption process.
b. lifestyle cycle.
c. Values and Lifestyle (VALS) topology.
d. family life cycle.
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Answer: (d)
31. A ______________ is a person’s pattern of living as expressed in his or her activities, interests, and
opinions.
a. role
b. status
c. position
d. lifestyle
Answer: (d)
32. According to the SRI Consulting’s Values and Lifestyles (VALS) typology, _____________________
consumers are those that buy based upon their desire for activity, variety, and risk taking.
a. principle-oriented
b. status-oriented
c. action-oriented
d. value-oriented
Answer: (c)
33. According to Forrester’s Technographics scheme for segmenting Internet customers according to
motivation, desire, and ability to invest in technology, __________ are the biggest spenders on
computer technology. They adopt new technology for home, office, and personal use before most
others.
a. New Age Nurturers
b. Fast Forwards
c. Techno-Strivers
d. Mouse Potatoes
Answer: (b)
34. ______________ is(are) a person’s unique psychological characteristics that lead to relatively consistent and lasting responses to his or her own environment.
a. Psychographics
b. Personality
c. Demographics
d. Lifestyle
Answer: (b)
35. The basic premise of the _____________ is that people’s possessions contribute to and reflect their
identities; that is, “we are what we have.”
a. lifestyle concept
b. self-concept
c. personality concept
d. cognitive concept
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Answer: (b)
36. A _____________ is a need that is sufficiently pressing to direct the person to seek satisfaction of
the need.
a. motive
b. want
c. demand
d. requirement
Answer: (a)
37. A good synonym for motive is a(n) _____________.
a. omen
b. need
c. drive
d.cue
Answer: (c)
38. The theory of motivation that views people as responding to urges that are repressed but never fully
under control was developed by:
a. Marshall.
b. Kant.
c. Freud.
d. Maslow.
Answer: (c)
39. Dr. Ken Kaser designs qualitative research to probe consumers’ hidden, subconscious motivations.
He specialises in using nondirective and projective techniques to uncover underlying emotions and
attitudes towards brands and buying situations. Which of the following terms would most appropriately describe what Dr. Kaser is doing?
a. market segment research
b. cohort research
c. psychodemographic research
d. motivation research
Answer: (d)
40. According to Maslow’s Hierarchy of Needs, the lowest order of needs are called:
a. self-actualisation needs.
b. social needs.
c. safety needs.
d. physiological needs.
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Answer: (d)
41. According to Maslow’s Hierarchy of Needs, the highest order of needs are called:
a. self-actualisation needs.
b. social needs.
c. safety needs.
d. physiological needs.
Answer: (a)
42. __________________ is the process by which people select, organise, and interpret information to
form a meaningful picture of the world.
a. Readiness
b. Selectivity
c. Perception
d. Motivation
Answer: (c)
43. People can form different perceptions of the same stimulus because of three perceptual processes.
These processes are best described as being:
a. selective attention, selective distortion, and selective retention.
b. subliminal perception, selective remembrance, selective forgetting.
c. closure, modelling, and perceptual screening.
d. needs distortion, wants analysis, and perceptual screening.
Answer: (a)
44. Kellye is a loyal Sony user. Her television, DVD player, cassette player, and VCR are all Sony products. When she hears or sees ads for Sony products, she almost always remembers the good points
about the brand. In addition, when she hears or sees an ad for a competing product that points out
the strengths of its products, she tends forget these points quickly or does not process them at all.
The process that Kellye is has gone through is best described as being one of:
a. selective retention.
b. selective attention.
c. selective distortion.
d. stimulus actualisation.
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Answer: (a)
45. In 1957, a researcher announced that he had flashed the phrases “Eat popcorn” and “Drink Coca-Cola” on a screen in a movie theatre every five seconds for 1/300th of a second. He reported
that although viewers did not consciously recognise these messages, they absorbed them subconsciously and bought 58 percent more popcorn and 18 percent more Coke. This process was eventually named:
a. deceptive advertising.
b. subliminal advertising.
c. psychological manipulation.
d. psychological modelling and transfusion.
Answer: (b)
46. _______________ describes changes in an individual’s behaviour arising from experience.
a. Modelling
b. Motivation
c. Perception
d. Learning
Answer: (d)
47. A ___________ is a strong internal stimulus that calls for action.
a. drive
b. cue
c. response
d. perception
Answer: (a)
48. Jack Lerma has a special relationship with his dog, Chris. Seeing dog toys in a pet store window,
hearing of a special price on dog food during a television commercial, or talking with a friend and
receiving a recommendation a on kennel are all forms of __________, which may eventually impact Jack’s purchasing decisions and responses to the objects he has seen or heard about.
a. drives
b. cues
c. reinforcements
d. dyads
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Answer: (b)
49. If a consumer describes a car as being the “most economical car on the market,” then this descriptor is a(n):
a. rule.
b. attitude.
c. belief.
d. cue.
Answer: (c)
50. If a consumer tells friends “I like my car more than any other car on the road,” then the consumer
has expressed a(n):
a. rule.
b. attitude.
c. belief.
d. cue.
Answer: (b)
51. ___________ puts people into a frame of mind of liking or disliking things, of moving toward or
away from them.
a. A rule
b. An attitude
c. A belief
d. A cue
Answer: (b)
52. Which of the following is NOT one of the five stages of the buyer decision process?
a. need recognition
b. brand identification
c. information search
d. purchase decision
Answer: (b)
53. According to the buyer decision process suggested in the text, the first stage is characterised as
being one of:
a. awareness.
b. information search.
c. need recognition.
d. demand formulation.
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Answer: (c)
54. The buying process can be triggered by a(n) __________ when one of the person’s normal needs—
hunger, thirst, sex—rises to a level high enough to become a drive.
a. awareness
b. external stimuli
c. internal stimuli
d. experiential motivation
Answer: (c)
55. The stage in the buyer decision process in which the consumer is aroused to search for more information is called:
a. information search.
b. evaluation of alternatives.
c. search for needs.
d. perceptual search.
Answer: (a)
56. The consumer can obtain information from any of several sources. If the consumer were to obtain
information from handling, examining, or using the product, then the consumer would have obtained the information by using a(n):
a. personal source.
b. commercial source.
c. informative source.
d. experiential source.
Answer: (d)
57. How the consumer processes information to arrive at brand choices occurs during which stage of
the buyer decision process?
a. need recognition
b. information search
c. evaluation of alternatives
d. purchase decision
Answer: (c)
58. Generally, the consumer’s purchase decision will be to buy the most preferred brand, but two factors can come between the purchase intention and the purchase decision. These two factors are best
described as being:
a. the cost and availability of the product.
b. the attitude of others and the cost of the product.
c. the availability of the product and unexpected situational factors.
d. the attitude of others and unexpected situational factors.
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Answer: (d)
59. With respect to post-purchase behaviour, the larger the gap between expectations and performance:
a. the greater likelihood of re-purchase.
b. the greater the customer’s dissatisfaction.
c. the less likely the consumer will be influenced by advertising.
d. the less likely the consumer will need sales confirmation and support.
Answer: (b)
60. Cognitive dissonance occurs in which stage of the buyer decision process model?
a. need recognition
b. information search
c. evaluation of alternatives
d. post-purchase conflict
Answer: (d)
61. A company must always guard against dissatisfying customers. On average, a satisfied customer
tells 3 people about a good purchase experience. A dissatisfied customer, however, on average
gripes to ________ people.
a. 7
b. 9
c. 11
d. 30
Answer: (c)
62. The _________________ is the mental process through which an individual passes from first hearing about an innovation to final adoption.
a. adoption process
b. consumption process
c. innovation process
d. new product development process
Answer: (a)
63. All of the following are part of the adoption process that consumers may go through when considering an innovation EXCEPT:
a. awareness.
b. process.
c. interest.
d. trial.
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Answer: (b)
64. With respect to adopter categories, the _______________ are guided by respect, are the opinion
leaders in their communities, and adopt new ideas early but carefully.
a. seekers
b. innovators
c. early adopters
d. early majority
Answer: (c)
65. With respect to adopter categories, the ___________________ are sceptical and they adopt an innovation only after a majority of people have tried it.
a. early adopters
b. early majority
c. late majority
d. laggards
Answer: (c)
66. Several characteristics are especially important in influencing an innovation’s rate of adoption.
_________ is the degree to which the innovation may be tried on a limited basis.
a. Relative advantage
b. Synchronisation
c. Compatibility
d. Divisibility
Answer: (d)
67. If a company makes products and services for the purpose of reselling or renting them to others at a
profit or for use in the production of other products and services, then the company is selling to the:
a. business market.
b. international market.
c. consumer market.
d. private sector market.
Answer: (a)
68. All of the following are among the primary differences between a business market and a consumer
market EXCEPT:
a. purchase decisions to satisfy needs.
b. market structure and demand.
c. the nature of the buying unit.
d. the types of decisions and the decision process involved.
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Answer: (a)
69. The business marketer normally deals with _____________ than the consumer marketer does.
a. far greater but smaller buyers
b. far greater and larger buyers
c. far fewer but far larger buyers
d. far fewer and smaller buyers
Answer: (c)
70. When demand comes (as it does in the business market) from the demand for consumer goods, this
form of demand is called:
a. kinked demand.
b. inelastic demand.
c. cyclical demand.
d. derived demand.
Answer: (d)
71. General Motors buys steel because consumers buy cars. If consumer demand for cars drops, so will
General Motors’ demand for steel. This is an example of the relationships found in:
a. kinked demand.
b. inelastic demand.
c. cyclical demand.
d. derived demand.
Answer: (d)
72. That business markets have more buyers involved in the purchase decision is evidence of which of
the following characteristic differences between business and consumer markets?
a. market structure and demand
b. the nature of the buying unit
c. types of decisions made
d. type of decision process itself
Answer: (b)
73. Purchases in the business market often involve large sums of money, complex technical and economic considerations, and interactions among many people at many levels of the buyer’s organisation. This is evidence of which of the following characteristic differences between business and
consumer markets?
a. market structure and demand
b. the nature of the buying unit
c. types of decisions made and the decision process
d. type of business classification
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Answer: (c)
74. The place in the business buying behaviour model where interpersonal and individual influences
might interact is called the:
a. environment.
b. response.
c. stimuli.
d. buying centre.
Answer: (d)
75. In a _______________, the buyer reorders something without any modifications.
a. habitual rebuy
b. straight rebuy
c. modified rebuy
d. new task buy
Answer: (b)
76. In a _______________, the buyer wants to change something about product specifications, prices,
terms, or suppliers.
a. habitual rebuy
b. straight rebuy
c. modified rebuy
d. new task buy
Answer: (c)
77. When a firm buys a product or service for the first time, it is facing a:
a. habitual rebuy situation.
b. straight rebuy situation.
c. modified rebuy situation.
d. new task situation.
Answer: (d)
78. The “in” suppliers are most likely to get nervous and feel pressure to put their best foot forward in
which of the following types of buying situations?
a. modified rebuy
b. new task buying
c. straight rebuy
d. indirect rebuy
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Answer: (a)
79. If a firm were to bid to do a “turnkey” operation where they would choose a building site, design
a cement factory to build the plant, hire construction crews, assemble materials and equipment to
run the new factory, and turn over the finished factory ready to operate to the owners, the bidding
firm would be using which of the following?
a. core process products selling
b. design products selling
c. reciprocal selling
d. systems selling
Answer: (d)
80. The decision-making unit of a buying organisation is called its _____________: all the individuals
and units that participate in the business decision-making process.
a. buying centre
b. purchasing centre
c. bidding centre
d. demand-supply centre
Answer: (a)
81. Considering the major influences on business buyer behaviour, as shown in a model in the text,
under which influence stage would you expect to find the influences of authority, status, empathy,
and persuasiveness?
a. environmental
b. organisational
c. interpersonal
d. individual
Answer: (c)
82. The stage of the business buying process where the buyer describes the characteristics and quantity
of the needed item is called:
a. problem recognition.
b. general need description.
c. product specification.
d. proposal solicitation.
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Answer: (b)
83. If a buying team is asked by the purchasing department to rank the importance of reliability, durability, price, and other attributes of an item, then the team is going through a business buying
process stage called:
a. problem recognition.
b. general need description.
c. product specification.
d. proposal solicitation.
Answer: (b)
84. ________________ is the stage of business buying where an organisation decides on and specifies
the best technical product characteristics for a needed item.
a. Problem recognition
b. General need description
c. Product specification
d. Proposal solicitation
Answer: (c)
85. _________________ is an approach to cost reduction in which components are studied carefully to
determine if they can be redesigned, standardised, or made by less costly methods of production.
a. Cost analysis
b. Order analysis
c. Product analysis
d. Value analysis
Answer: (d)
86. Reviewing trade directories, doing a computer search, or phoning other companies for recommendations would be methods that an interested buyer might perform in which of the following stages
of the business buying process model?
a. problem recognition
b. vendor analysis
c. product specification
d. supplier search
Answer: (d)
87. Factors such as supplier reputation for repair and servicing capabilities are important criteria for
evaluation at which stage in the business buying process?
a. problem recognition
b. supplier search
c. supplier selection
d. order-routine specification
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Answer: (c)
88. Blanket contracts are typically part of which of the following stages in the business buying process?
a. general need description
b. product specification
c. supplier selection
d. order-routine specification
Answer: (d)
89. The stage of the business buying process in which the buyer writes the final order with the chosen
supplier(s), listing the technical specifications, quantity needed, expected time of delivery, return
policies, and warranties is called:
a. general need description.
b. product specification.
c. supplier selection.
d. order-routine specification.
Answer: (d)
90. The _______________ may lead the buyer to continue, modify, or drop the arrangement that has
been entered into by the buyer and seller.
a. performance review
b. order-routine specification
c. supplier selection
d. general need description
Answer: (a)
91. Increasingly, business buyers are purchasing all kinds of products and services electronically, either
through electronic data interchange links (EDI) or on the Internet. The descriptive term for such
purchases, exchanges, and links is:
a. e-marketing.
b. e-commerce.
c. e-procurement.
d. e-transaction.
Answer: (c)
92. E-purchasing by businesses has its drawbacks and problems. More than 80 percent of companies
say that __________ is the leading barrier to expanding electronic links with customers and partners.
a. security
b. privacy
c. cost
d. lack of correct technology
Answer: (a)
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True/false questions
93. One of the beauties of studying consumer buying behaviour is its simplicity.
Answer: (False)
94. With respect to studying consumer or buyer behaviour, the central question for marketers is: “How
do consumers respond to various marketing efforts the company might use?”
Answer: (True)
95. In a simple model of buyer behaviour, marketing and other stimuli are processed in a consumer’s
black box.
Answer: (True)
96. If consumers have a cultural shift toward greater concern about health and fitness, then a correct
marketing response would be to manufacture or market health and fitness services, exercise equipment, and sports clothing.
Answer: (True)
97. If the U.S. population of Asian Americans were a separate nation, its buying power of $500 billion
annually would rank twelfth in the free world.
Answer: (False)
98. The fastest growing and most affluent racial or ethnic subculture within the United States culture
is the Asian American group.
Answer: (True)
99. In the United States, a source of concern is the fixed lines between social classes and the problems
that this rigidity brings.
Answer: (False)
100. Inherited wealth characterises the lower upper social class category.
Answer: (False)
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101. Upper lowers in the United States social class lead a “working-class lifestyle.”
Answer: (False)
102. Opinion leaders are people within a reference group who, because of special skills, knowledge,
personality, or other characteristics, exert influence on others.
Answer: (True)
103. Women account for nearly one-half of all hardware purchases. The most accurate correlation
with this example would be that of changing social class distinctions.
Answer: (False)
104. A person’s lifestyle is reflected by his or her activities, interests, and opinions.
Answer: (True)
105. In the VALS typology, action-oriented buyers base their purchases on the actions and opinions of
others.
Answer: (False)
106. A good illustration of the “Mouse Potatoes” lifestyle (as described by Forrester’s Technographics
scheme) would be a person who is dedicated to interactive entertainment and willing to spend for
the latest in “technotainment.”
Answer: (True)
107. A person’s self-concept is also called the self-image.
Answer: (True)
108. Another term for motive is self-concept.
Answer: (False)
109. The highest order of needs within Maslow’s hierarchy of needs scheme is esteem needs such as
self-esteem, recognition, or status.
Answer: (False)
110. Selective attention is the tendency for people to screen out most of the information to which they
are exposed.
Answer: (True)
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111. Numerous studies by psychologists and consumer researchers have found no link between subliminal messages and consumer behaviour.
Answer: (True)
112. Learning occurs through the interplay between drives, stimuli, cues, responses, and reinforcement.
Answer: (True)
113. Research has shown that attitudes are relatively easy to change while beliefs are extremely difficult
to change.
Answer: (False)
114. The buyer decision process model begins with information search.
Answer: (False)
115. The larger the gap between expectations and performance, the greater the consumer’s dissatisfaction.
Answer: (True)
116. The early majority segment of adopter classification scheme shown in the text are characterised
as being guided by respect—they are the opinion leaders in their communities, and adopt new ideas
early but carefully.
Answer: (False)
117. In the adopter classification scheme, innovators account for about half of the bell-shaped adoption curve.
Answer: (False)
118. The business market consists of all the organisations that buy goods and services to use in the
production of other products and services that are sold, rented, or supplied to others.
Answer: (True)
119. The business market is huge, however, at present the consumer market still involves more dollars
and items for sale.
Answer: (False)
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120. Business buyers usually face more simple situations when purchasing than do consumers because
of the amount of information that they have prior to purchase.
Answer: (False)
121. A straight rebuy occurs when a business buyer wants to modify product specifications, prices,
terms, or suppliers.
Answer: (False)
122. The buying centre, by its very nature, is a fixed and formally identifiable unit within an organisation.
Answer: (False)
123. Unlike consumer buying behaviour, business buying behaviour is not influenced by interpersonal
factors.
Answer: (False)
124. The first stage of the business buying process is that of problem recognition.
Answer: (True)
125. Value analysis is performed in the supplier search stage of the business buying process model.
Answer: (False)
126. In business buying, MRO stands for maintenance, repair, and operations.
Answer: (True)
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Essay questions
Harley-Davidson Motorcycle Company has used consumer behaviour studies to advance the organisation’s knowledge about its consumers. This strategy has been pivotal in meeting the challenge of the Japanese motorcycle manufacturers. How has Harley-Davidson used focus groups to keep up with its shifting market and varying consumer
tastes? What information has the company obtained about its customers?
Answer:
Harley-Davidson uses focus groups to explore its consumers’ feelings about the company’s products.
For example, cut-and-paste collages of pictures (assembled by representative consumers) showed how
consumers felt about the company’s motorcycles. This focus group exercise was then followed by a
more extensive (16,000 surveys) battery of psychological, sociological, and demographic questions that
attempted to classify Harley users into distinct groups (advertising could then be directed toward these
specific groups). The company found that Harley customers were buying more than just motorcycles
when the company’s product was purchased. The customers were making a lifestyle statement and
displaying an attitude. These lifestyle statements and attitudes were then captured in advertisements
directed toward the target audiences. The company believes that knowledge of consumer behaviour is
very important to the overall success of their strategy and campaigns.
Define the consumer market and briefly describe the elements of a simple model of buying behaviour as identified
in your text.
Answer:
The consumer market is made up of all the final consumers of products and services combined. A
simple model of consumer behaviour consists of (1) marketing and other stimuli (such as the 4Ps
[product, price, place, and promotion] and environmental forces [economic, technological, political,
and cultural forces]), (2) the buyer’s black box (that includes the buyer’s characteristics and the buying
decision process), and (3) the buyer’s responses (which includes product choice, brand choice, dealer
choice, purchase timing, and purchase amount).
Describe the importance of culture, subculture, and social class influences on consumer buying behaviour.
Answer:
Culture is the most basic cause of a person’s wants and behaviour. Subcultures are smaller groups of
shared value systems based upon common life experiences or situations. Subcultures often make up
significant market segments. Social classes are relatively permanent and ordered divisions in a society
whose members share similar values, interests, and behaviours related to product preferences and purchase behaviours.
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Briefly, characterise the Hispanic, African American, and Asian American subcultures found in the United States
market.
Answer:
a) Hispanic Americans consist of Cuban, Mexican, Central American, South American, and Puerto
Rican peoples. They are approximately 35 million strong, and buy more than $400 billion worth of
goods and services each year. They are expected to grow by 64 percent in the next 20 years. They
are somewhat easy to reach through the growing number of Spanish media stations and publications. This group has long been a target for food, beverages, and household care items.
b) African Americans, if a separate nation, would (with a buying power of $500 billion annually) rank
twelfth in the free world. This group is growing in affluence and sophistication. They are strongly
motivated by quality and selection. They are brand loyal and do less shopping around.
c) Asian Americans are the fastest-growing and most affluent of the subculture segments. They now
number 10 million with a disposable income of $229 billion annually. They are estimated to reach
30 million by 2050. Presently, the Chinese group is the largest.
Describe what a group is, and the various forms of groups that (according to the text) a consumer might be a part of.
Answer:
A group is two or more people who interact to accomplish individual or mutual goals. Types of groups
would include:
a) Membership groups—groups that have a direct influence and to which a person belongs.
b) Reference groups—serve as a direct (face-to-face) or indirect points of comparison or reference in
forming a person’s attitudes or behaviour.
c) Aspirational groups—one to which the individual wishes to belong.
List and briefly describe the five categories of Forrester’s Technographics scheme, which segments consumers according to motivation, desire, and ability to invest in technology.
Answer:
The five categories as outlined in the text include:
a) Fast Forwards — the biggest spenders on computer technology. Fast Forwards are early adopters of
new technology for home, office, and personal use.
b) New Age Nurturers — also big spenders but focused on technology for home uses, such as a family
PC.
c) Mouse Potatoes — consumers who are dedicated to interactive entertainment and willing to spend
for the latest in “technotainment.”
d) Techno-Strivers — consumers who use technology primarily to gain a career edge.
e) Hand-shakers — older consumers, typically managers, who don’t touch computers at work and leave
that to younger assistants.
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List and briefly describe Maslow’s Hierarchy of Needs.
Answer:
Beginning at the bottom of the pyramid model:
a) physiological needs — hunger, thirst
b) safety needs — security, protection
c) social needs — sense of belonging, love
d) esteem needs — self-esteem, recognition, status
e) self-actualisation needs — self-development and realisation
Discuss and illustrate the difference between an attitude and a belief.
Answer:
A belief is a descriptive thought that a person holds about something. An attitude is a person’s consistently favourable or unfavourable evaluations, feelings, and tendencies toward an object or idea. Beliefs
may be based on knowledge, opinion, or faith, and they may carry an emotional charge. Attitudes are
primarily feelings of like and dislike. Attitudes are difficult to change.
Identify each of the stages of the buyer decision process. Be sure to give a brief description of each stage.
Answer:
a) Need recognition: The first stage of the buyer decision process, in which the consumer recognises a
problem or need. The buyer senses a difference between his or her actual state and some desired
state. The need can be triggered by internal or external stimuli.
b) Information search: The stage of the buyer decision process in which the consumer is aroused to
search for more information; the consumer may simply have heightened attention or may go into
active information search.
c) Evaluation of Alternatives: The stage of the buyer decision process in which the consumer uses
information to evaluate alternative brands in the choice set. The consumer can use product attributes, degrees of importance, brand beliefs, total product satisfaction, or an evaluation procedure
to perform alternative evaluation.
d) Purchase decision: The stage in the buyer decision process in which the consumer actually buys the
product. Factors that can influence this action phase are: the purchase intention, the attitudes of
others, and unexpected situational factors.
e) Post purchase behaviour: The stage of the buyer decision process in which consumers take further
action after purchase based upon their satisfaction or dissatisfaction. The considerations are the
consumer’s expectations and the product’s perceived performance. Cognitive dissonance can set in,
and must be dealt with before complete satisfaction can be achieved.
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People differ in their readiness to adopt or try new products. Take each of the five adopter groups mentioned in the
text and give a synonym or brief description of each primary characteristic that sets each particular group apart
from the others.
Answer:
a) Innovators — venturesome — they try new ideas at some risk.
b) Early adopters — respected — they are the opinion leaders in their communities and adopt new
ideas early but carefully.
c) Early majority — deliberate — although they are rarely leaders, they adopt new ideas before the
average person.
d) Late majority — sceptical — they adopt an innovation only after a majority of people have tried it.
e) Laggards — tradition bound — they are suspicious of changes and adopt the innovation only when
it has become something of a tradition itself.
An innovative product’s rate of adoption is influenced by five characteristics. List and then briefly discuss each of
these characteristics.
Answer:
a) Relative advantage—the degree to which an innovation appears superior to existing products.
b) Compatibility—the degree to which the innovation fits the values and experiences of potential consumers.
c) Complexity—the degree to which the innovation is difficult to understand or use.
d) Divisibility—the degree to which the innovation may be tried on a limited basis.
e) Communicability—the degree to which the results of using the innovation can be observed or described to others.
Explain how business markets differ from consumer markets.
Answer:
The main differences include market structure and demand, the nature of the buying unit, and the
types of decisions and the decision process within the two. Business markets are geographically concentrated and have derived, inelastic, and fluctuating demand. Buying is more professional and involves more people. Decisions are more complex, more formalised, and the buyer and seller are more
dependent upon one another.
There are three types of buying situations faced by the business buyer. List and briefly explain or characterise each
of these situations.
Answer:
a) Straight rebuy—the buyer reorders something without any modifications. It is usually handled on a
routine basis by the purchasing department.
b) Modified rebuy—the buyer wants to modify product specifications, prices, terms, or suppliers. More
people in the firm are involved in this situation.
c) New-task—a company buys a product for the first time. In such cases, the greater the cost or risk,
the larger the number of decision participants and the greater their efforts to collect information
will be.
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List and define the stages in the business buying decision process.
Answer:
(a) Problem recognition: the stage in which someone in the company recognises a problem or need
that can be met by acquiring a good or a service.
(b) General need description: the stage in which the company describes the general characteristics and
quantity of a needed item.
(c) Product specification: the stage in which the buying organisation decides on and specifies the best
technical product characteristics for a needed item.
(d) Supplier search: the stage in which the buyer tries to find the best vendors.
(e) Proposal solicitation: the stage in which the buyer invites qualified suppliers to submit proposals.
(f) Supplier selection: the stage in which the buyer reviews proposals and selects a supplier or suppliers.
(g) Order-routine specification: the stage in which the buyer writes the final order with the chosen
supplier(s), listing the technical specifications, quantity needed, expected time of delivery, return
policies, and warranties.
(h) Performance review: the stage in which the buyer rates its satisfaction with suppliers, deciding
whether to continue, modify, or drop them.
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L I T E R AT U R E
LITERATURE
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2.
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3.
Barr S., 2004. Are we all environmentalist now? Rhetoric and reality in environmental action.
Geoforum 35 (2), 231-249
4.
Brassington F., Pettitt S. Principles of Marketing. Pearson Education Ltd, 2010.
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Casey P.J., Scott, K. 2006. Environmental concern and behaviour in an Australian sample within
an ecocentric-anthropocentric framework. Australian Journal of Psychology 58 (2), 57-67.
6.
Chan T.S., 1996. Concerns for environmental issues and consumer purchase preferences: A
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