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of MARKETING Chapter 8 Consumer Behaviour Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Objectives 8-1 1. Describe how consumer behaviour is affected by two main categories of influence: environmental & individual factors. 2. Explain the role of culture in consumer behaviour. 3. Consider the effects of reference groups on consumer behaviour. 4. Distinguish between needs and motives. 5. Explain perception. 6. Define attitude and its three main components, and explain how attitude influences behaviour. 7. Demonstrate how learning theory can be applied to marketing strategy. 8. Show the steps of the consumer decision process and how environmental and individual factors affect this process. 9. Differentiate among routinized response behaviour, limited problem solving, and extended problem solving. Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Consumer Behaviour • The activities of individuals in obtaining, using, and disposing of goods and services, including the decision processes that precede and follow these actions. 8-2 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Figure 8.1 Determinants of Consumer Behaviour Individual factors and psychological processes Environmental factors Consumer behaviour 8-3 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Figure 8.2 Environmental Factors That Affect Consumer Behaviour Cultural Influences Social Influences • Group influences • Reference groups • Social class • Family influences CUSTOMER DECISIONS 8-4 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Culture • The complex of values, ideas, attitudes, institutions, and other meaningful symbols created by people that shape human behaviour, and the artifacts of that behaviour, transmitted from one generation to the next. 8-5 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Table 8.1 Chapter 8 Summary of Significant Canadian Characteristics As a Function of Being a Part of the North American Reality •Modern orientation •Openness to new ideas •Egalitarianism •A rich, developing society with many needs and high materialistic expectations •Growing, more diffuse middle class 8-6 In Relation to the United States •Conservative tendencies •Traditional bias •Greater confidence in bureaucratic institutions •Collectivity orientation--reliance on institutions such as state, big business, and the church vs. personal risk taking •Less achievement-oriented •Lower optimism--less willing to take risks •Greater acceptance of hierarchical order and stratification •Tolerance for diversity--acceptance of cultural mosaic •Family stability •Selective emulation of the United States--resistance to some American characteristics and dominance, yet willingness to emulate •Elitist and ascriptive tendencies Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Microculture • A subgroup with its own distinguishing modes of behaviour. 8-7 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Status • Relative position in a group. 8-8 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Role • The rights and duties expected of an individual in a group by other members of the group. 8-9 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Asch Phenomenon • The impact that groups and group norms can exhibit on individual behaviour. 8-10 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Reference Group • A group whose value structures and standards influence a person’s behaviour. 8-11 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Membership Group • A type of reference group to which individuals actually belong. 8-12 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Aspirational Group • A type of reference group with which individuals wish to associate. 8-13 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Disassociative Group • A type of reference group with which an individual does not want to be identified. 8-14 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Figure 8.3 Group Influence as a Function of Product Type and Consumption Situation Strong reference Weak reference Product or Brand group influence (-) group influence (+) Strong reference group influence (+) Weak reference group influence (-) 8-15 Public necessities Influence: Weak product and strong brand Examples: Wristwatch, automobile, man’s suit Public luxuries Influence: Strong product and brand Examples: Golf clubs, snow, skis, sailboat Private necessities Influence: Weak product and brand Examples: Mattress, floor lamp, refrigerator Private luxuries Influence: Strong product and weak brand Examples: TV game, trash compactor, icemaker Source: William O. Bearden and Michaeli Etzei, “Reference Group Influence on Product and Brand Purchase Decisions,” Journal of Consumer Research 9 (September 1982), p. 185, published by the University of Chicago Press. Reprinted with permission. Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Social Class • The relatively permanent divisions in a society into which individuals or families are categorized based on prestige and community status. 8-16 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 PSTYE • A geodemographic classification system that identifies lifestyle cluster profiles across Canada. 8-17 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Table 8.2 Chapter 8 PSYTE Cluster Profile, Estimated 1999 Canadian Households (1 of 2) 8-18a Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Table 8.2 Chapter 8 PSYTE Cluster Profile, Estimated 1999 Canadian Households (2 of 2) 8-18b Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Opinion Leaders • Trendsetters – individuals who are more likely to purchase new products early and to serve as information source for others in a group. 8-19 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Figure 8.4 Chapter 8 Relative Influence of Husbands and Wives in Decision Making 8-20 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Figure 8.5 Environmental and Individual Factors that Influence Behaviour Environmental • Cultural influences • Social influences -group influences -reference groups -social class -family influences Psychological Processes • Information processing • Learning • Attitude formation • Perceptual screening Individual • resources • needs • motives • perceptions • attitudes • lifestage Customer Decisions 8-21 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Need • The perceived difference between the current state and a desired state. 8-22 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Motive • An inner state that directs us toward the goal of satisfying a felt need. 8-23 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Perception • The meaning that each person attributes to incoming stimuli received through the five senses. 8-24 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Perceptual Screen • The filter through which messages must pass. 8-25 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Subliminal Perception • A subconscious level of awareness. 8-26 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Weber’s Law • The higher the initial intensity of a stimulus, the greater the amount of the change in intensity that is necessary in order for a difference to be noticed. 8-27 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Attitudes • A person’s enduring favourable or unfavourable evaluations of some object or idea. 8-28 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Figure 8.7 Three Components of Attitude Cognitive component (knowledge and beliefs) Affective component (overall feelings) Overall Attitude (overall orientation toward object or idea) Conative component (behavioural tendencies) 8-29 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Cognitive Component • The knowledge and beliefs one has about an object or concept. 8-30 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Affective Component • One’s feelings or emotional reactions. 8-31 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Conative Component • The way one tends to act or behave. 8-32 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Learning • Changes in knowledge, attitudes, and behaviour, as a result of experience. 8-33 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Drive • Any strong stimulus that impels action. 8-34 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Cue • Any object existing in the environment that determines the nature of the response to a drive. 8-35 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Response • The individual’s reaction the cues and drives. 8-36 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Reinforcement • The reduction in drive that results from a proper response. 8-37 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Shaping • The process of applying a series of rewards and reinforcement so that more complex behaviour can evolve over time. 8-38 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Shaping • The process of applying a series of rewards and reinforcement so that more complex behaviour can evolve over time. 8-39 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Figure 8.8 Chapter 8 Application of Learning Theory and Shaping Procedure to Marketing Approximation Sequence Shaping Procedure Induce product trial Free samples distributed, large discount coupons enclosed Induce purchase with financial obligation Discount coupon prompts purchase with little cost; coupon good for small discount on next purchase enclosed Induce purchase with moderate financial obligation Induce purchase with full financial obligation Reinforcement Applied Product performance and coupon Product performance and coupon Small discount coupon prompts purchase with moderate cost Product performance Purchase occurs without coupon association Product performance Terminal Goal: Repeat Purchase Behaviour 8-40 Source: Adapted from Michael Le. Rothschild and William C. Gaidis, “Behavioral Learning Theory: Its Relevance to Marketing and Promotion,” Journal of Marketing ( Spring 1981), p. 72. Reprinted by Permission of the American Marketing Association. Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Figure 8.9 Consumer Decision Process Input Problem recognition -from marketing activities -other stimuli Information Processing Information search Alternative evaluation Environment Factors •Cultural influences •Social influences -group influences -needs -reference groups -social class -family influences Decision Process Purchase decision and purchase act Postpurchase evaluation Individual Factors -motives -perceptions -attitudes -learning 8-41 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Evoked Set • The number of brands that a consumer actually considers in making a purchase decision. 8-42 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Evaluative Criteria • Features the consumer considers in making a choice among alternatives. 8-43 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Cognitive Dissonance • The postpurchase anxiety that occurs when there is a discrepancy between a person’s knowledge and beliefs (cognitions). 8-44 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Consumer Problem-Solving Categories • Routinized response • Limited problem solving (LPS) • Extended problem solving (EPS) 8-45 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 Low-Involvement Products • Products with little significance, either materially or emotionally, that a consumer may purchase first and evaluate later (while using them). 8-46 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Consumer Behaviour Chapter 8 High-Involvement Products • Products for which the purchaser is highly involved in making the purchase decision. 8-47 Copyright © 2003 by Nelson, a division of Thomson Canada Limited.