Consumers Rule

Chapter 1

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Factors in Consumer Behavior• The story of Gail in the marketplace…

– Demographics– Psychographics– Opinions and behaviors of others

• Market segmentation– Targeting a brand only to specific groups of

consumers rather than to everybody

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What is Consumer Behavior?

• The study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires

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Consumer Behavior is a “Process”

Figure 1.1 (Abridged)

CONSUMER’S PERSPECTIVE

MARKETER’S PERSPECTIVE

PREPURCHASE ISSUES

How does a consumer decide about needing

a product?

How are consumer attitudes

formed/changed?

PURCHASE ISSUES

Is product acquisition a stressful or pleasant

experience?

How do situational factors affect

purchase decision?

POSTPURCHASE ISSUES

Does product provide pleasure or perform

function? How is product disposed of?

What determines customer satisfaction

and repurchase?

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Actors in Consumer Behavior

• Consumer: A person who identifies a need or desire, makes a purchase, and then disposes of the product– Purchaser vs. user vs. influencer– Organization/group as consumer

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Segmenting Consumers

• Market Segmentation– Similar consumers

• Example: “Heavy Users” of fast-food industry

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Market Segmentation

Finely-tuned marketing

segmentation strategies

allow marketers to

reach only those

consumers likely to be

interested in buying

their products.

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Segmenting Consumers: Demographics

• Age

• Gender

• Family Structure & Marital Status

• Social Class & Income

• Race & Ethnicity

• Geography

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A Lesson Learned

• Nike was forced to pull this advertisement for a running shoe after disabilities rights groups claimed the ads were offensive.

• How could Nike have done a better job of getting its message across without offending a powerful demographic?

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Segmenting Consumers: Lifestyles

• Psychographics– The way we feel

about ourselves– The things we value– The things we do in

our spare time

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Relationship Marketing

• Success = building lifetime relationships between brands and customers– Regular interaction with customers– Database Marketing

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Marketing’s Impact on Consumers

• Marketers significantly influence the world and the information we learn!– Advertisements, stores, and products

communicate and persuade

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The Meaningof Consumption

• People often buy products not for what they do, but for what they mean– Brands…

• …Convey image/personality• …Define our place in modern society• …Help us to form bonds with others who share

similar preferences

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Brand Relationship Types

• Self-Concept Attachment

• Nostalgic Attachment

• Interdependence

• Love

CLICK ON LOGO TO SEE VIDEO ABOUT

CONSUMERS’ LOVE OF HARLEY DAVIDSON

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The Global Consumer• Global Consumer

Culture– People united by common

devotion to:• Brand name consumer

goods• Movie stars• Celebrities• Leisure activities

– Pressure to understand similarities and differences of customers in various countries

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Virtual Consumption

• Impact of the Web on consumer behavior– 24/7 shopping without leaving home– Instantaneous access to news– Handheld devices & wireless communications

• C2C e-commerce– Virtual brand communities.– Consumer chat rooms

AMAZON.COM

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Virtual Consumption (Cont’d)

• “Wired” Americans spend…– …Less time with friends/family– …Less time shopping in stores– …More time working at home after hours

• But, many report that e-mail strengthens family ties

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Marketing and Reality

• “Blurred boundaries” between marketing efforts and “the real world”– Popular culture shaped by marketers

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Marketing Ethics and Public Policy

• Business Ethics: rules of conduct that guide actions in the marketplace– What is “Right vs. Wrong”

• Differs among people, organizations, and cultures

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Discussion

• There is a computer game called JFK Reloaded that lets players reenact President Kennedy’s assassination.– Have the game’s developers

gone too far, or is any historical event “fair game” to be adapted into an entertainment vehicle?

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Marketing Ethicsand Public Policy (cont’d)

• Consumers think better of products made by firms they feel behave ethically– Marketing “violators”

• Mislabeling package contents• “Bait-and-switch” selling strategy• Alcohol/tobacco billboards in low-income

neighborhoods

RJRT.COM

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Needs and Wants:Do Marketers Manipulate Consumers?

• Consumerspace• Do marketers create artificial needs?

– Need: A basic biological motive– Want: One way that society has taught us that need

can be satisfied

• Are advertising and marketing necessary?– Economics of information perspective: Advertising is

an important source of consumer information.

• Do marketers promise miracles?– Advertisers simply don’t know enough to manipulate

people.

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Manipulating Needs & Wants

• Marketers tell people what they should want– Marketerspace vs.

Consumerspace– Response:

Marketers recommend ways to satisfy basic biological needs

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Public Policy & Consumerism

• Concern for the welfare of consumers– Department of Agriculture– Federal Trade Commission– Food and Drug Administration– Securities and Exchange Commission– Environmental Protection Agency

CPSC.GOV

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Consumer Activism

• Adbusters: America = Corporate Brand– Buy Nothing Day & TV Turnoff Week

• Culture Jamming– Disrupt corporate efforts in cultural landscape

1-26ADBUSTERS.ORG

Adbusters’ Blackspot sneakers in response to Nike’s unfair labor practices

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Consumer Related Issues

• UNICEF sponsored this advertising campaign against child labor. The field of consumer behavior plays a role in addressing important consumer issues such as child exploitation.

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The Dark Side of Consumer Behavior

• Consumer Terrorism:– An example: Susceptibility of the nation’s food

supply to bioterrorism

• Addictive Consumption:– Consumer addiction:

• A physiological and/or psychological dependency on products or services

• Compulsive Consumption:– Repetitive shopping as an antidote to tension,

anxiety, depression, or boredom

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The Dark Side of Consumer Behavior (cont.)

• Consumed Consumers:– People who are used or exploited, willingly or not, for

commercial gain in the marketplace

• Illegal Activities:– Consumer Theft:

• Shrinkage: The industry term for inventory and cash losses from shoplifting and employee theft

– Anticonsumption:• Events in which products and services are

deliberately defaced or mutilated

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Study of Consumer Behavior

• Interdisciplinary Influences– Many different perspectives/fields

• Consumer Behavior Employers– Universities, manufacturers, museums,

advertising agencies, and governments

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Figure 1.2 (Abridged)

Exp Psych

Clinic Psych

Develop Psych

Human Ecology

Microeconomics

Social Psych

Sociology

Macroeconomics

Semiotics/Literary Criticism

Demography

History

Cultural Anthropology

MICRO CONSUMER BEHAVIOR(INDIVIDUAL FOCUS)

MACRO CONS BEHAV(SOCIAL FOCUS)

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Journal of Consumer Research

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Wheel of Consumer Behavior

Figure 1.3