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CHAPTER 10
Acquiring Things
Chapter Summary
This chapter explores a number of behaviors related to the acquisition of goods and services.
Acquisition is a general consumer behavior concept. Marketers tend to focus their attention on
the important, but relatively impersonal marketplace exchanges that we call purchase behavior.
Purchase is the outcome of the array of other consumer behaviors and is often only an incidental
part of these behaviors. Acquisition may involve goods and services; but it may not involve
money. This is the case in barter transactions or counter-trade. In gift-giving behavior goods or
services may be obtained, but often the physical products are deemphasized relative to the
relational significance or feelings gifts evoke.
Homans’s exchange model provides a framework for understanding diverse consumer
acquisition behaviors. Homans showed that both outcomes and processes are important to people
in exchange, and identified some of the reasons people bring to exchange. A continuum of
exchange transactions may also be identified with utilitarian pure barter at one extreme, pure
gifts characterized by generalized reciprocity at the other, and social exchanges in the middle.
Five complementary models of purchase behavior employed in consumer research include (1)
utility-maximizing, (2) decision-making, (3) behavioral influence, (4) hedonic, and (5) meaning
transfer perspectives. Often purchase behavior is best explained by a combination of
perspectives. Impulse purchases are another kind of emotionally-driven purchase behavior that
conforms poorly to the standard decision-making models. Compulsive purchase behavior is an
extreme form of impulse behavior that occurs when normal behavioral inhibitors are somehow
suppressed.
Purchase behavior marketing is one goal of marketing. Two main issues of concern are purchase
frequency and timing, and brand switching behavior. Purchase timing refers to sequences of
repetitive purchase events that occur over time. Purchase frequency refers to patterns of repeat
purchases over time. Brand switching refers to consumers’ tendency to alternate purchases
between different brands. Mathematical tools of purchase behavior prediction make use of large
scanner panel databases that provide use models in stable markets for basic products. Marketers
tend to assume consumers adopt the utilitarian norms of pure barter in their purchase behavior.
Marketers face a number of limitations in managing purchase behavior including consumers’
evolving marketing savvy and the disruptive role of innovations.
Four main types of countertrade can be identified: barter, compensation deals, counter-purchase,
and product buy-backs. Each is significant for business-to-business acquisition behaviors and
helps to overcome market inefficiencies in some contexts. Consumer-to-consumer barter
emerges in some economies when formal markets fail. Formal, consumer-initiated barter
systems can be found in a number of countries around the world in which the exchange of
resources other than money is central to the acquisition process. These systems fall toward the
social exchange part of the exchange continuum.
Gift-giving is close to the pure gift on Homans’s exchange continuum. Gift-giving motivates a
very large volume of purchase behavior in all societies. In consumer culture, gift-giving
animates a moral economy of sentiment that parallels the formal economy. The cultural roots of
gift-giving may be found in pre-market economies. Two major types of gifts are interpersonal
gifts and self-gifts. Both structural and emergent occasions may provoke interpersonal giftgiving. Interpersonal gifts may be voluntary or opportunistic. Managers may identify giftgiving occasions, influence gift-giving purchases, and design retail environments to encourage
gift purchases.
Teaching Objectives
After completing this chapter, your students should be able to:
1. Describe consumer acquisition strategies, behaviors and major models of exchange.
2. Be familiar with some basic approaches to consumer purchase decision-making.
3. Recognize some links between purchase timing, frequency and marketing tactics.
4. Explain the relationships between brand switching and marketing tactics.
5. Discuss the nature of barter behavior and its implications in marketing.
6. Identify the uses of countertrade in interorganizational purchase behavior.
7. Recognize the importance of gift exchange in consumer behavior.
8. Describe the differences between interpersonal and self-gifts.
Chapter Outline – Lecture Notes for Instructors
Overview
Acquisition is at the heart of the consumer research. Consequently, it is that part of the wheel of
consumption that marketers know the most about. There is a sense in which all persuasive
marketing efforts are directed at facilitating commercial exchanges that lead to consumption
behaviors. We might assume that such transactions are the universal vehicle through which
customers obtain necessary goods and services in exchange for money. Marketers do tend to
focus their attention on this kind of purchase behavior. Also, purchase behavior is a good label
for impersonal marketplace transactions and exchanges of money for goods or services.
Purchase behaviors as diverse as haggling in a Turkish bazaar or buying Tupperware at a homeparty sale are embedded in interpersonal relationships. Interpersonal ties may cause customers to
buy when they have reasons for avoiding or postponing such a purchase. It may cause sellers to
extend favors to good customers or cause buyers to exhibit loyalty to a particular retail outlet or
service provider. Thus, purchase behaviors often include more than just impersonal acquisitions
of need-fulfilling goods and services. For example, embedded purchases are an integral part of
the surrounding social world.
Acquisition is a more general consumer behavior concept than purchase behavior. For example,
acquisition may involve goods and services, but not involve money. This is the case in barter
transactions, also called countertrade. Countertrade is quite common in international
marketing and in transfers of assets within large diversified holding companies or corporate
conglomerates. Barter is also common in unofficial, informal economic transactions. In many
developing nations, some consumers organize local bartering networks where goods and services
are exchanged.
Other types of acquisition behaviors may involve money, but the tangible goods or services
obtained are de-emphasized in favor of the meanings or feelings evoked by the goods and
services. This is the case with gift-giving behaviors. Gift giving is at the heart of a enormous
amount of consumer behavior, and the retail industry often lives or dies by its sales of gifts
during Christmas and other important international holidays. In the United States, for example,
consumers spend $4 billion per day or $2.8 million per minute during the Christmas season.
Discretionary purchase behavior, purchases devoted to satisfying wants rather than needs, is a
relatively recent phenomenon even in the Triad countries, although it has a history in ancient
China. So-called lifestyle shopping, shopping as a form of leisure devoted to cultivating a
consumer’s self-image, is a phenomenon that emerged only in the 19th century with the growth of
the department store in Europe.
Shopping is still an occasional activity in developing parts of the world, especially where
discretionary spending is quite limited. In these regions, the values and habits of older, giftbased economies characterize acquisition behaviors. In such economies, the value of possessions
is realized primarily through acts of generosity, literally giving things away.
Acquisition Models
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Consumer researchers and marketers examine acquisition behavior from five
perspectives: 1) utility-maximizing, 2) decision making, 3) experiential and hedonic, 4)
behavioral influence perspectives, and 5) meaning transfer. The utility-maximizing view
is derived from classical micro-economic theory. Marketers explore how consumers
deliberately collect information, weigh alternatives, and make acquisition decisions that
lead to the largest net benefit to them in terms of the exchange resources at issue. From
the decision making perspective, consumers engage in problem-solving tasks, in which
they move though a series of stages.
The experiential or hedonic perspective holds that, in some cases, consumers acquire
things in order to create feelings and experiences rather than to solve problems. The
behavioral influence approach argues that consumers often act in response to situational,
environmental pressures, such as perceptual cues in retail environments. The newest
view, the meaning transfer view, argues that acquisition and consumption behaviors are
often motivated by the desire to obtain meanings that are valuable within consumers’ life
stories. Each approach has merit. None alone is adequate to account for the full range of
acquisition behaviors.
The five perspectives are complementary because they focus on different aspects of the
acquisition process.
Social Exchange
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The sociologist, George Homans, proposed a model of exchange. One key idea presented
in Homans’s model of exchange is that buyers and sellers exchange resources (i.e., time,
money, goods, services, social status, information, emotion) in varying proportions to
meet their needs and in conformity with generally understood standards of fairness and
propriety, subject to constraints of time, knowledge, and experience. Homans’ exchange
model also includes the idea that consumers derive value both from the things acquired
and from the processes of acquisition, such as shopping, bartering, or gift giving.
Successful marketers blend resources in novel ways to create distinctive market
positionings and strive to ensure that both parties of an exchange derive benefit from it.
In a simple purchase of a packaged good, we derive the benefits of the good while the
marketer derives the benefits of the money we exchange for it. All acquisition behaviors
can be represented on an exchange continuum between “real barter” and “pure gifts.”
“Social exchange” also appears on this continuum, as a mid-point between real barter and
pure gifts.
Real barter conforms to the economic man acquisition model where we imagine
exchange partners to be calculating and highly rational in their exchange behaviors. At
this end of the continuum, we also imagine that transactions are a one-time phenomenon.
Partners place no value on future exchanges, so they try to maximize current value of
exchange resources. Real barter is associated with the ideal markets of micro-economic
theory. Commodities markets, used car sales, utilitarian shopping, or flea market
haggling all provide examples of such utilitarian acquisitions.
Purchases may also fall more towards the social exchange part of the continuum. In
social exchange, utility maximizing motives are present, but other factors moderate these
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motives. For instance, cultural norms of fairness may come into play. Exchange partners
also may consider the long-term value of ongoing exchanges, and hence be willing to
sacrifice current utility for the sake of the long-term relationship. Sometimes an
emotional, personal relationship develops with the exchange partner; mutual favors are
exchanged; social debt is incurred.
Marketers such as those created by in-home purchase parties can be explained as a form
of social exchange in which social outcomes are equal to, or larger than, material ones.
For example, many home shopping parties (where Tupperware or cosmetics might be
sold) exhibit traits associated with social exchange rather than pure barter. The
“relationship marketing” strategy in a business-to-business setting recognizes that
embedding acquisition in social ties can increase customer loyalty and enhance
organizational performance. Relationship marketing recognizes that firms should
manage their customer interactions with a long-term view, as repeat purchase behavior is
a key to creating a sustainable competitive advantage.
At the other extreme from pure barter are pure gifts. Here, acquisition processes are
embedded in relationships of generalized reciprocity. In such cases, exchange partners
who assume things will work out in mutually beneficial ways worry little about shortterm costs and benefits. Some behaviors characteristic of Japanese keiretsu, the immense
interlocking holding companies that dominate much of Japanese business, has a gift-like
quality. Such behavior is also characteristic of channel partners in some developing
countries, such as wholesalers and retailers who may prefer to “accumulate together”
rather than seek to maximize individual gain in their volatile marketing environments
Good marketing managers recognize that buying and selling involves multiple motives
and exchange orientations. No single orientation will drive every participant in a market
transaction.
Purchases
Purchase Decisions
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Consumers make many kinds of purchase decisions. We can distinguish a number of
them, each of which has different managerial implications. First, consumers may make a
basic purchase decision in response to need recognition, as when communication needs
trigger the decision to purchase a telephone. Second, the consumer may opt to make a
particular product category decision, such as buying a cellular phone rather than a
conventional phone or a short-wave radio. Third, consumers may make a brand
purchase decision, as when consideration of alternatives leads to the choice of a Nokia,
Ericsson, Philips, or Motorola cell phone. Much marketing communication in the Triad
countries, especially manufacturers’ advertising campaigns, aims to influence this kind of
decision. Fourth, consumers make channel purchase decisions. That is, they decide
whether to purchase from a retail outlet, directly from a manufacturer, through a
catalogue, in a duty-free airport shop, or perhaps on-line. Fifth, a payment decision is
made to determine the payment method and terms of payment. Both retailers and credit
card companies seek to influence these types of decisions. Sixth, we can distinguish
between an initial purchase decision and repeat purchase decision. This is especially
important in organizational buying decisions. Many utilities companies and consumer
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marketers have become interested in trying to automate repeat purchase decisions
through such devices as automatic payroll deduction plans.
Purchase decisions need not be made in the order indicated above. For example, a
payment decision may precede and even determine a brand decision or channel purchase
decision. An international business traveler may seek out a restaurant that accepts
American Express cards, because she lacks local currency.
In anticipation of making a purchase, consumers develop lists of criteria that are of
significance to them because of the perceived benefits (e.g., needs, feelings, meanings)
they provide. In addition, the model suggests that consumers rate these criteria in terms
of importance. When making a product category decision, buyers might rate
communication effectiveness highly, thus evaluating conventional versus cellular phones
differently. In deciding where to shop, buyers might rate discount stores differently than
specialty stores, depending upon whether price or selection and service were more
important criteria. Consumers also develop a set of alternative products, brands, or stores
that they think will provide these benefits from memory, through external information
search, or some combination of the two. They then combine all three types of
information to reach a decision.
Marketers seek to understand the criteria that consumers use to select and rank stores or
products or brands. Such knowledge can be used to position market offerings effectively
by highlighting these criteria and rankings in promotional messages or other
communications targeted to consumers.
Impulse Purchases
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A good example of a common purchase decision not explained well by the decisionmaking model of acquisition is impulse purchases. Although impulse purchases are
typically unplanned, not all unplanned purchases are impulse purchases. Impulse
purchases occur when a consumer experiences a sudden, often powerful, and persistent
emotional urge to buy immediately. Impulse purchases also entail a sudden mental match
between the meaning of a product and a consumer’s self-concept.
Impulse purchases do not conform to economic man or decision-making man
perspectives in consumer behavior. Instead, the impulse to buy is a hedonically (pleasure
seeking) complex one. High emotional activation, low cognitive control, and largely
reactive behavior characterize impulse buying. In one study, more than 75 percent of
impulse buyers reported that they felt better after making such a purchase. Those with
positive feelings believed that they got something they needed or accomplished a
necessary task. In contrast, 16 percent reported that they felt no different and only 8
percent reported that they feel worse after such a purchase. Those with negative
reactions reported feelings of guilt or ambivalence.
Impulse purchases have the potential to disrupt the consumer’s ordinary behavioral
stream. Because of the urge toward immediate action, impulse buying is prone to occur
with diminished regard for the consequences of making the purchase. It may stimulate
emotional conflict. Respondents often describe how the impulse arouses both pleasure
and guilt. Many consumers report negative consequences from impulse buying such as
financial problems, disappointment with the product, or the disapproval of significant
others.
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Some impulse buying is related to various aspects of general acquisitiveness and
materialism associated with the overall development of consumer culture. An increase in
recreational shopping is probably linked to impulse purchases too, since the positive
mood generated in recreation may decrease self-control. It may also be that various
marketing factors support impulsive purchase behavior, such as the availability of
consumer credit, credit cards, ATM machines, television and on-line shopping, and long
retail store hours.
Finally, impulse purchase behavior varies with individual personality traits such as
variety seeking and risk aversion. Variety seekers may be more prone to impulse
purchases, whereas risk-averse persons may be less prone.
On the surface, impulse purchases seem harmless enough. However, in some cases,
impulse purchase behavior is transformed into compulsive purchase behavior. This is a
“dark side” of consumer behavior—a clinical condition similar to eating disorders and
compulsive gambling that may require medical treatment.
Managing and Controlling Purchases
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One goal of marketing is to predict and manage consumers’ purchasing behavior. A
great deal of the work in this area has been spurred by the growth of purchase behavior
databases. Begun by the hotel and airline industries, database marketing has been
adopted by many retailers and financial services companies. To implement the
technique, marketers combine sophisticated marketing tools with equally sophisticated
statistical methods to manage purchase frequency and timing, repeat purchase behavior
and market share, and other indicators of marketing success.
Work focused on managing purchase timing and quantity traditionally adopts an
economic or decision-making perspective on consumer purchase behavior, more rarely a
behavioral influence perspective.
Timing and Frequency
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Marketers are very interested in the timing of consumer purchases. Purchase timing
refers to sequences of repetitive purchase events that occur over time. Consumers dispose of
many goods and therefore must replace them at regular intervals. Since a current purchase is
worth more to a firm than a future purchase, marketers stimulate consumers to purchase
frequently, and they attempt to shorten the interval between purchase occasions. Some
tactics used to stimulate purchases include coupons, price cuts, point-of-sale purchase
displays, and feature advertisements.
The notion of purchase frequency, especially repeat purchase behavior, is closely related
to timing. A knowledge of purchase frequency helps marketers time promotional mailings,
encourage greater purchase frequency, or estimate sales for particular product or service
categories. Generally, it is more profitable for a firm to stimulate repeat purchases among
loyal customers than to attract new ones. Through databases that identify frequent shoppers,
firms can target customers for promotional mailings that they hope (based on past purchase
behavior) will stimulate increased purchase frequency.
Predicting Timing and Frequency
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Marketers are interested in predicting and influencing purchase timing and frequency.
Predicting timing and frequency makes it possible to plan production, delivery, and
estimate revenues and profits. The goals of managing timing and frequency means that
marketers can improve their knowledge of how modifications of the marketing mix will
affect buying behavior.
We could assume that purchase timing is totally random. At the other extreme, we could
assume purchase behavior to be totally regular like clockwork. We call this
deterministic timing. What researchers have found is that for consumer goods like
crackers, coffee, yogurt, toothpaste, and the like purchase timing and frequency are
neither purely random, nor totally deterministic, but somewhere in between. To simplify,
the chance of a repeat purchase occurring over time varies. Most researchers agree that
there is a kind of dead period after a given purchase. Then the probability of a purchase
reoccurring increases for a while. After a certain interval, the probability of the purchase
reoccurring begins to decrease. In other words, for a segment of consumers, marketers
can predict the likelihood a purchase will occur, but they can never be certain when a
particular household or individual will make a purchase. This means that purchase
timing and frequency can be predicted using the laws of probability.
In addition to product purchases, probabilistic models have also extended to describe
frequency of household trips to grocery stores over time. Models that provide a standard
against which repeat purchase behavior can be compared are quite useful in stable
markets. Knowledge of purchase frequency enables marketers to time promotions
effectively.
Managing Purchase Timing and Frequency
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Promotions are often designed to increase purchase frequency; promotions are a powerful
tool for managing purchase timing. The three top promotion-using industries in the U.S.
are all markets crowded with many similar brands: a) food products, b) toiletries and
cosmetics, and c) beer, ale, and soft drinks. In the late 1980’s, U.S. manufacturers spent
over $20 billion on trade incentives and distributed over 215 billion manufacturer
coupons per year. Behind the promotions are fulfillment houses which process coupon
redemption’s and consumer mailings (e.g., sweepstakes entries, rebates), mail out checks
or merchandise, and judge sweepstakes or contests. The global market research firm
A.C. Nielsen is the largest coupon redemption firm in the U.S., as it handles coupon
offers from over 180,000 retailers.
Direct marketers use computerized databases to identify customers who are most likely to
provide repeat business. Cooperating clients are asked to answer questionnaires and
surveys in return for a coupon or premium. Results are entered into a database and the
information is used to determine the best promotional tactics for communicating with
these buyers in the future. By observing the purchase patterns from their customers’ lists,
early direct marketers developed a theory of purchase frequency known as the RFM rule
(recency, frequency, monetary value). That is, the likelihood of a response to a particular
promotional mailing was influenced by the recency of the last purchase, the frequency of
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purchases over the past year, and the monetary value of a given customer’s purchase
history. Segmenting markets in terms of deal proneness on the basis of criteria such as
these three variables, recency, frequency, and monetary value, helps marketers to predict
the impact of promotional programs on purchase timing.
Promotions are used to influence timing especially in product categories where there is
little reason for consumers to choose between competitive brands. Purchase timing is
also found to accelerate with advertised price cuts.
Limitations on Trying to Control Timing and Frequency
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The goal of managing purchase timing and frequency is likely to remain elusive in spite
of improvements in predictive models. One reason for this is that consumers are not
passive but active agents. Marketing tactics designed to influence purchase timing and
frequency can and do backfire. For example, marketing tactics may backfire in catalog
sales. Customers reach a catalog saturation point and tune out offers that exceed this
threshold. Catalog purchase frequency increases at low levels as more catalogs are
received within a year—until the mailbox hits “tilt” at some saturation point. After that
point, consumers become less likely to purchase if they receive more catalogs.
Promotions and other incentives designed to increase frequency can prove to be counterproductive in the long run. This effect occurs when consumers buy because of the
promotion, not because of the product itself. In some Triad countries, there is concern
that consumers buy many packaged goods only when they are on some special deal or
sale. Brand loyalty is thus sacrificed for purchase frequency. Consumers switch brands
in favor of promoted brands.
Purchase Quantity and Brand Switching
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Many marketing efforts are designed to create and maintain brand loyalty. Thus,
marketers are concerned with brand switching. Brand switching is the tendency for
consumers to purchase competitor’s brands within a product class. Many factors
stimulate brand-switching behavior. Environmental causes include: stock-outs, price
changes, deals and advertising. Consumer-related activities include curiosity, boredom,
and the need to balance among different needs and attributes possessed by competing
brands and products. Consumers may also engage in switching when motivated by the
desire for identification with an admired valued reference group.
Through switching, consumers sometimes seek to achieve a desired combination of
attributes or benefits that do not exist in any one brand. That is, consumers may have a
sense of an ideal product.
In a study of the French automobile market, it was found that brand-switching patterns
are non-random and structured. That is, managers can study these patterns and discover
underlying patterns that can help them understand and predict market behavior.
Managing and Controlling Brand Switching
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Determination of the brand switching cycle length can help managers develop a product
line and create competitive strategies.
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Deals and promotions affect switching behavior. That is, differences between brands can
influence brand-switching behavior. For example, retailers and manufacturers have an
interest in determining the cross-price elasticity (or price sensitivity) and switching
behavior associated with the complete set of ground and instant coffee brands. Such a
determination enables managers to evaluate the impact of a price change or a
competitor’s price change on the sales of all brands in a product class. Managers can also
develop indicators of the clout or vulnerability of individual brands. Clout can be
measured by evaluating the effect of a price cut on one brand on sales of the other
brands. Vulnerability is measured by summing the effects of price cuts of the other
brands on sales of the brand of interest.
Advertising affects switching behavior, as does consumers’ need for novelty. That is,
brand switching may result from the fact that desires for the perceived benefits of
competing brands often fluctuate while perceptions of the brands remain stable. One of
the marketing implications of this idea is that advertising for an established brand,
particularly a well-defined one, will be more effective if it exploits the brand’s
positioning. Specifically, advertising should exploit the important elements of
positioning that differentiate the brand from competing brands in a cluster in order to
stimulate desire for the particular pattern of benefits it provides relative to other, similar
brands.
Countertrade and Barter
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Countertrade is an inclusive term used to describe transactions where all partial payment
is made in kind (goods and services) rather than in cash. The basic countertrade where
goods are traded for other goods is an age-old feature of foreign trade. Countertrade
moves us away from Homans model of “pure barter” and towards the “social exchange”
part of his exchange continuum.
Countertrade is a popular means of acquisition. Estimates of the extent of countertrade in
international trade range from 20 to 30 percent. Countertrade in North America alone
amounted to $8.4 billion in 1997.
Why is countertrade a popular means of acquisition? Countertrade is a good way for
firms to open new markets and establish long-term relationships with new customers,
while reducing costs. Countertrade is also a good way of disposing of unwanted products
and services. Shortages of hard currency (convertible, stable money) plus the massive
foreign debt that burdens many of these countries makes countertrade an attractive
alternative to purchase. Countertrade is also a way to get around protectionist policies
that limit foreign imports in some countries. The countries where countertrade is popular
are also those most likely to experience rapid economic growth in the coming decades.
Firms engage in four types of countertrade. The first is barter. Barter is the direct
exchange of goods between two parties in a transaction. Corporate barter is attractive
because firms can usually recover their costs of goods and ultimately make a profit. It
also allows them to do business in regions of the world where traditional economic
transactions are somewhat difficult to secure.
Consumers also engage in barter trade. In every developed economy some people trade
goods and services informally through garage sales, swap meets or car boot sales to earn
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extra income, to get around the market economy, for fun, and/or to avoid paying income
taxes.
Compensation deals are barter transaction that involves payment, both in goods and in
cash. The former Soviet Union made frequent requests to Western suppliers for deals of
this type. In one deal, General Motors Corporation sold $12 million worth of
locomotives and diesel engines to Yugoslavia and took cash and $4 million in
Yugoslavian cutting tools as payment.
Counter purchase is the most common type of countertrade. In counter purchase, the
seller agrees to sell a product at a set price to a buyer and receives payment in cash;
however, the first deal is contingent on a second agreement in which the original seller
buys goods from the original buyer for the total monetary amount involved in the first
sale, or for an agreed upon percentage of that amount. There is often a delay between
completion of the first and second transaction so that the buyer of the goods in the second
transaction has the time to find markets for them.
Product buy-back agreement is the final type of countertrade. This type of agreement
usually involves an initial sale of plant, equipment, or technology. In one kind of buyback agreement, the seller of the plant or equipment accepts as partial payment a portion
of the output of the new facility. In the other, the seller receives full price initially, but
agrees to buy back a certain portion of the output.
Countertrade arrangements enjoy both advantages and disadvantages. Obviously, they
involve a higher level of trust and relationship management than a simple cash-for-goods
purchase. Hence, Countertrade gives rise to specialized firms and corporate departments
(Ford Motor Company has one, for example) that act as go-betweens and guarantors of a
partner’s trustworthiness.
Critics of business-to-business Countertrade point out that it increases administrative
costs, undercuts prices of competitive goods since goods are often sold at a discount, can
lead to charges of “dumping” in the country receiving the goods, and can be used to
conceal bribes or evade taxes. These criticisms have merit, but there is no doubt that
Countertrade is an effective means of clearing imperfect markets in a dynamic global
economy.
Gift Giving and Receiving
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As distinct from other acquisition strategies, gifts are ritualized offerings that frequently
represent connections to other people. Gift exchanges have the potential to affect social
relations in a way that purchases often do not. By “ritualized,” we are referring to
conventional gift-giving occasions when items or resources are given and occasions
where the giving/receiving partners conform to cultural norms.
The economic significance of gifts attracts marketers’ attention. Consider that at least 10
percent of retail purchases in North America are given as gifts. Recognizing the social
importance of gift giving, on-line retailers have jumped into the gift business.
The importance that consumers attach to gift giving provides many opportunities for
marketers. Although gifts often convey meanings that are difficult to put into words,
many find the language of gift giving hard to master. Mistakes, disappointment, and giftgiving failures are not uncommon.
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Marketers may try to position objects to reinforce their suitability as gifts. The cutflower market in the United States provides an example of a product category where
promotional campaigns are used to strengthen the positioning of the product as a gift.
Finally, marketers may try to provide gifts to match occasions or even create occasions
for gift giving, such as “Secretaries Day” in the U.S., Mother’s and Father’s Day in
China, or Christmas in non-Christian countries.
Although gift giving is universal, the language and rituals associated with gift giving are
culturally specific. Guide books on doing international business sometimes feature useful
discussions of the dos and don’ts associated with gift giving. In business-to-business
contexts, marketers often must distinguish gifts from bribes, and learn a new etiquette for
appropriate gift-giving to avoid embarrassment. Hence, analysis of gift giving as a mode
of acquisition and consumption requires culture-specific analysis of consumer behaviors.
Gift Exchange in Cross-Cultural Perspective
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Gift giving predates marketing; it is as old as human culture. The norm of reciprocity
describes the fact that receiving a gift often creates a strong sense of obligation to make a
return gift. Such reciprocity may take the form of a tangible object, but also of such
intangible resources as deference (status) and gratitude. As the Homans’ model suggests,
such exchanges tend to strengthen social bonds. Because of the norm of reciprocity, gift
giving encourages return giving, which, in turn, stimulates further giving.
In pre-market societies, gift exchanges organized numerous economic, social, and
religious activities.
Types of Gift Exchange
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Modern gift giving is different from that practiced in traditional societies. To understand
modern practices, we focus on gift relations between persons and groups.
Interpersonal Gifts
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Exchanges of interpersonal gifts are provoked by specific conditions. These conditions
can be either structural or emergent. Among the structural occasions, gift-giving marks
territorial passages, such as housewarmings, reunions, bon voyage parties, visiting and
farewell parties. Second, gift-giving occasions establish social placement, such as
weddings, showers, baptisms, and christenings. Structural gift-giving occasions include
those associated with rites of passage, such as debutante balls of society girls, initiation
into a motor cycle gang, French wedding showers, bar or bas mitzvahs, graduations, and
retirements. Third, there are those structural occasions associated with rites of
progression such as anniversaries, birthdays, and all the calendric holidays such as
Christmas, Mother’s Day, Halloween, and New Year. In part due to marketing activities,
many countries have imported these gift-giving holidays.
Among the emergent occasions for gift giving, we identify types. The significance for
marketers lies in identifying products that help consumers mark both structural and
emergent occasions, and in some cases, identifying and inventing occasions for gift
giving such as Secretaries Day.
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Gift giving differs from other modes of acquisition discussed here and in later chapters.
This is because gift giving, especially voluntary, altruistic giving, resists explanation in
terms of the economic man model of acquisition. Pure gifts are non-calculating, and
non-rational. They are altruistic, voluntary and may express unselfish love. Pure gifts
are given with no expectation of return. We sometimes refer to this form of giving as
generalized reciprocity. Donating time at a soup kitchen, cooking a casserole for a
bereaved neighbor, making a sacrifice in order to present a lover with a special gift,
provide examples of pure gifts.
Voluntarily, altruistic gifts are associated with devotion for a beloved person or even an
institution, such as a university or an historic building.
People are often willing to make low-value charitable donations, such as a bag of old
clothes or can of food, voluntarily. Such gifts are relative easy to elicit, but contributiondriven organizations often have difficulties eliciting donations above a certain threshold.
Unlike altruistic giving, self-serving gift giving is undertaken with some instrumental
purpose; it is a means to an end. Of course, altruistic giving may make givers feel better
about themselves, but this does not make it less antisocial. Similarly, instrumental
giving to enhance personal relationships is not necessarily anti-social.
Self-serving or instrumental giving often expresses power dynamics.
Self-serving gifts are also employed to communicate identity. A number of studies show
that gifts chosen in North America usually represent something about the giver’s selfconcept. “Unique” gifts help givers express their feelings about the uniqueness of the
recipient as well.
Voluntary giving is motivated by personal, idiosyncratic reasons, but social norms or
pressures drive obligatory giving. Some structural gift giving occasions such as an
exchange of Christmas cards or wedding gifts have an obligatory dimension to them.
Obligatory gift giving is associated with many structural gift-giving occasions, and lends
itself to stereotypical giving. This is the type of gift giving that communications can be
employed to create or reinforce associations between conventional items and
conventional gift-giving occasions.
Self-Gifts
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Self-gift behavior is not documented in pre-market societies and does not seem to be
recognized in China, but is common in Western societies. In self-gifts, consumers give to
themselves. Self-gifts are differentiated from other personal acquisitions by their
situational and motivational contexts. Self-gifting often occurs in a context of personal
accomplishment, distress, or holiday occasion. In terms of outcomes, self-gifting can
positively enhance self-concept, consistency, or esteem. Self-gifts can be products,
services, or experiences, such as the Hawaiian holidays popular among single Japanese
women.
Self-gifts include ritualistic dimensions. For instance, self-gifts establish “reward” versus
“therapy” and can involve sacrifices, such as abstaining from personal acquisitions in
preparation for self-giving. Certain products are conventionally used as self-gifts.
Clothing and travel are more frequently used as reward gifts than as therapy gifts, while
fast food, grocery food, and personal care services are more often used as therapy gifts
than reward gifts.
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Self-gift behavior correlates with socioeconomic traits such as age, financial condition,
and gender.
Self-gift purchasing may be linked to both cultural and personal values. A study showed
that materialists are more likely to give self-gifts than non-materialists. Self-gift behavior
may be particularly linked to cultural beliefs that purchasing and consumption are
appropriate to the pursuit of individual happiness.
Factors in the retail setting that affect self-gift behavior include the novelty or
preselection of the brand, the brand’s price, and the salespersons empathy for the buyer’s
personal situation.
The Power of Gifts and Marketing Implications
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Marketers will be most interested in gifts that take tangible form, although understanding
the intangible resources they convey (investments of love, status, and time is critical to
the successful gift marketing). Tangible gifts include items consumers have made
themselves or those held in their possession for a long time, such as heirlooms, and gifts
purchased with the intention to give them to others.
Some categories of goods are only given as gifts, such as greeting cards. Other
categories of goods may be treasured by particular market segments as especially
appropriate to give as gifts. Flowers, perfume, expensive liquors, or diamonds often
serve this function in the west. Status brands are preferred by new elite consumers in the
NIC countries and many Japanese tourists who shop for omiyage while abroad.
Is money an appropriate interpersonal gift? We recognize enormous cultural variation in
the symbolism of money that influences its suitability. Not surprisingly therefore, money
is sometimes an appropriate, sometimes an inappropriate gift depending upon cultural
and situational context. One poll conducted in the U.S. found that for nearly every age,
education, and income group, money is the most popular gift. Cash gifts lessen the
uncertainty felt by givers, but also increase anxieties associated with potential violations
of social norms.
Other studies reveal the existence of constraints on the use of money as a gift. Marketers
can provide alternative forms of giving money as gifts, such as American Express Gift
Cheques, investment accounts, cash contributions to charities, and gift certificates that
provide more symbolically suitable means of giving money than cash.
Gift shopping affects product category purchase selections. Sales may be affected when
a product is classed as appropriate for gift giving or as product classification changes.
Marketing communications can create or sustain the associations between goods and their
suitability as gifts. For example, marketers may encourage gift givers to reduce the risks
of their purchase decisions by buying status brands as gifts that may impress receivers
and increase the symbolic meaning of the presents.
The behavior associated with gift shopping search tends to differ from shopping for
personal use. For instance, consumers respond differently to pricing tactics when
shopping for gifts than for personal items. As the success of Restoration Hardware
indicates, high-status retailers can merchandise highly profitable, high-status brands that
are purchased as gifts effectively.
Perhaps the most dramatic influence of gift giving on retailing concerns specialty gift
stores. This type of store is found throughout the Triad countries and is also common in
tourist destinations that serve Triad consumers. Ethnographies of specialty gift retailers
lead to several managerial propositions. First, shoppers experience the store itself as a
gift. By creating delightfully fantastic environments, gift stores can impart an added
significance to the merchandise that consumers in turn imbue with meanings. Second,
because gift giving is the work of women in North American culture, gift stores play an
important role in the giving that helps them to maintain a gift economy. Third, personnel,
browsers and purchasers alike appreciate the objects in the store. Meanings imputed to
and through these objects by all of these stakeholders create and reinforce particular
values associated with the items selected as gifts. Hence, encouraging interaction in gift
stores is valuable to management. Fourth, purchasers recount that gift choice often is
imprecise or indescribable. Shoppers know the gift is concealed somewhere within the
store and assume it will reveal itself to them eventually. Search behavior for gifts
appears to be motivated by hedonic processes, involving longing, imagination, romance,
and desire. This finding suggests designing stores to facilitate a kind of treasure hunt and
training service personnel to aid consumers in the hunt. Fifth, successful owners are
highly involved with their businesses. Merchandise selection often reflects owners’
identity and values. Hence, target markets and merchandise should be allowed to evolve
with the owners’ interests over time.
Gifts Shape and Influence Behavior
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Gift giving can shape and influence consumer behavior. Often marketers use gifts in an
effort to command a counter gift. Experimental research provides support for use of this
tactic.
Gift giving can be used to improve customers’ evaluations of services. Providing
“extras” or unexpected touches can lead to an increase in customer satisfaction.
Gifts are often used in direct mail campaigns. Here they can be used as a foot-in-thedoor tactic to induce a purchase or charitable contribution, or to encourage participation
in marketing research. In devising direct mail campaigns, studies encourage the use of
free gift offers to get better responses from customers.
Tangible gifts are just one element of a successful direct-marketing campaign. Such
campaigns may also stress the intangible benefits of the offer. There is value in
providing a money-back guarantee, which customers may interpret as a kind of
(intangible) gift that lends credibility to the offer and confidence to the buyer.
Encouraging the consumer to interact with the company may also increase sales, by
offering the (intangible) gift of information.
The propriety of using gifts as a marketing tactic varies globally. Given its universality,
exchanges of token gifts among business partners are a widespread practice. However,
one must always be sensitive to the boundaries between relatively altruistic gifts and
relatively self-serving bribes. With this in mind, many countries restrict the use of
premiums, coupons, rebates, and other “gifts” to consumers. Nonetheless, in most
developing countries, the practice of occasionally gifting regular customers with extras is
widespread.
Review/Discussion Questions
1.
Ask a friend to keep a log of some purchases for a particular nondurable consumer
product category over a few weeks. Keep a log yourself of the same product
category. After a few weeks, compare your purchase histories. Discuss purchase
timing and frequency with your friend, and look for evidence of brand loyalty and
brand switching. What are the implications of your behavior for marketing
managers?
As students compare their purchase timing and frequency, they should look for
similarities and differences in sequences of repetitive behavior. They might also discuss
their response to marketing strategies such as promotional offers, coupons, and in-store
tactics that might have influenced the timing and frequency of their purchases.
In looking for evidence of brand loyalty or switching, students must determine if their
purchases involve a pattern of repeat purchases of a particular brand resulting from an
underlying positive attitude or commitment toward the brand signaling brand loyalty. Or,
if they exhibit a tendency to purchase competitors’ brands within a product class
signaling brand switching. Brand switching behavior is motivated by environmental
factors (e.g., stock-outs, price changes, deals, and advertising), consumer-related factors
(e.g., curiosity, boredom, the need to balance product attributes and needs across
competing brands), and desire for identification with a reference group.
Marketing efforts are designed to create and maintain brand loyalty. Research suggests
that some switching is nonrandom and structured. By studying switching behavior
marketers can discover underlying patterns to aid understanding and predicting of market
behavior.
2.
Does acquisition and self-gifting lead to happiness? Check out the World Data Base
of Happiness at www.eur.nl/fsw/research/happiness/index.htm maintained by
Erasumus University in the Netherlands. Look at some of the national happiness
scores. Compare scores between Triad, transitional, NIC, and developing nations.
What do these scores suggest about the relationship between consumer culture and
happiness?
This website contains several different questions for which students might compare
responses across countries. For example, comparing scores on the question, “All things
considered, how satisfied are you with your life as a whole today?,” with 10 representing
the highest possible score, revealed that people in the Triad nations reported higher scores
[e.g., USA (7.7), Japan (6.6), France (6.7) and Italy (6.9)]; transitional economies
reported lower scores [e.g., Hungary (5.9), Bulgaria (4.8), Poland (6.5), and Romania
(5.8)]; and the NIC gave more variable scores [e.g., China (7.1), South Korea (3.3),
Nigeria (6.7), and Brazil (7.0)].
3.
Identify a consumer barter network in your community. Are you part of such a
network? How does it work? What exchange model describes participants’
motivations and acquisition strategies?
Student participation in barter networks may exist for products and services such as
textbooks, child care, computers, and sports equipment. Barter networks refer to
consumer organized systems set up for direct exchange of goods and services between
parties. Theory suggests that bartering is motivated by an economic perspective where
partners are calculating, rational, and place no value on future exchange. They try to
maximize their current value of exchange resources, thus the overriding norm is caveat
emptor, “let the buyer beware.” Barter networks are motivated by consumers in
transitional economies, because of the lack of an established market infrastructure; and,
by consumers in developed economies who are trying to avoid the established market! A
barter network might also exist in international marketing between corporate
conglomerates, especially when there are volatile political and economic systems in one
or both relevant countries.
4.
Describe some features that impulse purchases and self-gifts have in common. How
does acquisition behavior involving gifts differ from other acquisition behaviors?
Students’ identification of the similarities between impulse purchases and self-gifts might
include their personal, situational, and motivational contexts. Both types of purchases
communicate highly symbolic messages to consumers about who they are and what they
deserve. Also, the retail setting (e.g., the prominence of the brand) influences both types
of acquisitions. Finally, both acquisitions involve a state of high emotion for consumers.
Impulse purchases occur when consumers experience a sudden, often powerful, and
persistent emotional urge to buy immediately. It is a highly emotional, largely reactive
behavior with little cognitive control. Research suggests the majority of impulse buyers
(75%) report feeling better after making such a purchase, while a few (8%) report feeling
worse. Impulse purchases are disruptive and may stimulate emotional conflict — arouses
both pleasure and guilt. Extreme frequency of impulse buying turns into compulsive
consumption, which is a clinical condition that may require medical treatment.
Self-gifts are items consumers give to themselves. Two types of self-gift experiences
have been identified — reward and therapeutic self-gifts. Also, different products are
used to reward (e.g., clothing and travel) than as therapy (e.g., food and personal care
services). Socioeconomic traits influence the tendency to self-gift with younger,
wealthier consumers self-gifting more than older, less well-off consumers. Women tend
to self-gift for therapeutic reasons, while men self-gift to create goal-related incentives.
5.
Not all feelings involved with gift giving are positive. What are some ways in which
gift giving can evoke negative feelings?
Student accounts of gift giving situations that evoked negative feelings are likely to be
times when they perceived they either gave or received too little, too much, a gift
inappropriate to the occasion, a gift suggesting an inaccurate personal impression, or a
situation in which they received a gift, but had not purchased something for the giver. In
all of these situations, givers and receivers take remedial action such as explaining,
apologizing, or returning the gifts. These negative feelings can be detrimental to the
personal relationship between the giver and receiver.
6.
What are some motivations for the purchases of self-gifts? What sorts of occasions
may motivate self-gifting? Describe a recent occasion when you gifted yourself.
Specific student examples of self-gifting occasions will vary. In general, it occurs in a
context of personal accomplishment (e.g., high performance on an exam), distress (e.g.,
finals’ week), and holiday occasion (e.g., Christmas). Self-gifts are ways that consumers
can positively enhance self-concept and self-esteem.
7.
Discuss a recent gift-giving purchase with a friend. Find out how the item was
chosen and what occasion stimulated the purchase. Did your friend take into
account the recipient’s personality? Does the gift reflect your friend’s self-image?
What message was your friend trying to convey? Was the gift successful? Why or
why not?
Students’ analyses of their friends’ gift-giving experience can use several different
factors. One is the specific conditions motivating the gift which could be either structural
or emergent occasions. Structural occasions mark territorial passage (e.g., farewells),
establish social placement (e.g., showers), rites of progression (e.g., anniversaries), and
calendric holidays (e.g., Easter). Emergent occasions include occasions designed to
initiate, repair, deepen, or intensify relationships. Another important consideration is
whether the gift was altruistic or self-serving. Altruistic or pure gifts are noncalculating,
nonrational expressing unselfish love; and are given with no expectation of return. Selfserving gifts are given with some instrumental purpose — a means to an end. It often
expresses power dynamics.
8.
Visit a gift store. Analyze the image created by the store in terms of the five
managerial propositions discussed in the text.
Students will need to apply the five perspectives used by consumer researchers
and marketers in examining acquisition behavior: (1) utility maximizing, (2)
decision making, (3) experiential or hedonic, (4) behavioral influence, and (5)
meaning transfer. The utility maximizing view is derived from microeconomic
theory and suggests that consumers deliberately collect information, weigh
alternatives, and make acquisition decisions that result in the largest net benefits.
The decision making perspective suggests that consumers engage in problem
solving tasks as they move through the acquisition process. The experiential or
hedonic view holds that consumers acquire things to create feelings and
experiences rather than to solve problems. The behavioral perspective contends
that consumers act in response to situational environmental pressures. The
meaning-transfer view holds that acquisition and consumption behaviors are
motivated by the desire to obtain meanings that are valuable within consumers’
life stories.
Chapter Case Notes
You Make the Call — “How to Sell More to Those Who Think It’s Cool to be
Frugal”
1.
Making use of this knowledge, give specific advice to corporate clients in one
of the industries affected by the belief that less is more.
Student responses to this question should apply their knowledge of the different
acquisition models. Applying the utility-maximizing view suggests that as
consumers are buying less, they will be expecting more value for the dollars they
do spend (e.g., vacation that is entertaining, interesting, and reduces stress).
Extending the decision-making perspective suggests that marketers must carefully
explain the reasons why a consumer should make a particular purchase (e.g.,
decorating a log-home takes less, because the logs themselves are an integral part
of its decor). The hedonic view suggests that acquisition of the product should be
linked to the values of the frugal consumer including satisfaction with self, getting
control of one’s life, and having a great family. Finally, the meaning-transfer
perspective suggests that marketers should communicate how the product can be
an integral part of the consumer’s life story (e.g., if this (log) house could talk it
would tell about the night ...).
2.
How should they modify their marketing strategies?
Using information from the case, the following changes in marketing strategies
are advisable:
 reposition products to match the relationship (happy marriage), family
(well-adjusted children), philosophical (balanced life), and experience
(interesting vacation) lifestyle goals of the “frugal” target market;
 reduce the number of items in product line(s);
 offer services that extend the useful life of products (repair and
refurbishing);
 sell restored products; and
 offer alternatives to ownership such as leasing.
3.
How can this business take advantage of the evolving values of the frugal
consumer?
If consumers are buying less and putting more emphasis on each purchase, then
marketers must make each acquisition more meaningful. Consumers are also
using highly abstract meanings to evaluate purchases. Thus, marketers must link
the acquisition to the consumer’s life along with its compatibility with the natural
environment.
As consumers are purchasing less frequently, strong emphasis needs to be given
to promotion strategies so that consumers remember products at the time of
purchase. Internet sites are critical. Additionally, as products become an integral
part of consumers’ lives, word-of-mouth sharing needs to be encouraged. Finally,
products’ potential as gifts is important including relationship gifts (e.g.,
heirlooms) or self-gifts.