Consumer Behaviour Final Exam

Consumer behaviour is the study of

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

Consumer behaviour theory

used by marketers and advertisers to gain an insight into both commercial and social interactions that evolve from consumers’ everyday decisions and lifestyle practices.

Market segmentation

the process of dividing a large, heterogeneous market into smaller, more homogeneous groups based on shared characteristics, needs, or behaviors.

What does it mean when we say consumer behaviour is an interdisciplinary field?

It means that the field includes researchers from many different disciplines who are interested in how people interact with the marketplace.

What are the two main levels of focus within consumer behaviour disciplines?

Micro (the individual consumer) and Macro (the consumer as a member of groups or of larger society).

What are business ethics?

Rules of conduct that guide actions in the marketplace. They represent the standards by which people judge what is right or wrong, good or bad.

Why is unethical marketing considered foolish and wasteful?

Because it can damage trust, harm brand reputation, and lead to long-term negative consequences for businesses.

How do consumers generally feel about products and brands from ethical companies?

Consumers think more positively of products and brands created by companies they believe are ethical and have moral values.

What is good marketing and advertising practice based on?

It is based on understanding how benefits are shared between companies and their customers, creating mutual value.

What happens when marketers gain benefits at the customer’s expense?

Such gains are short-lived and will eventually lead to losses that outweigh any initial benefits.

Corporate Social Responsibility (CSR)

refers to a company's commitment to operating ethically, contributing positively to society, and addressing environmental concerns, in addition to its profit-making goals. It's a business model that considers the impact of a company's actions on stakeholders like employees, customers, communities, and the environment. 

Perception

is the process by which physical sensations such as sights, sounds and smells are selected, organised and interpreted. The eventual interpretation of a stimulus allows it to be assigned meaning.

What sensory qualities do marketing stimuli rely on?

Colours, smell, sounds, tastes, and the feel of products.

Do all marketing stimuli reach consumer awareness? Why or why not?

No, because many stimuli compete for attention, and most are not noticed or accurately understood.

What is required for a stimulus to be detected by the senses?

It must be presented at a certain level of intensity to exceed the individual’s perceptual threshold.

The differential threshold

refers to the smallest amount of change in a stimulus that a consumer can detect. In marketing, this is crucial because it determines whether consumers will notice changes in packaging, product size, or price, among other things.

How do marketers try to communicate with consumers?

By creating relationships between their products or services and desired attributes.

Semiotic analysis

decoding the implicit messages of a brand, its packaging, and even its shelf placement to understand consumer perceptions and behaviors.

In semiotics, a literal meaning, often referred to as denotation, refers to

the most basic and straightforward meaning of a sign, typically found in a dictionary or the most commonly understood definition.

In semiotics, an indexical sign (or indexicality) refers to

a sign that has a causal or factual relationship with what it represents.

In semiotics, a symbolic meaning (also called an arbitrary meaning)

exists when the relationship between a signifier (the thing or object that represents something) and its signified (the thing or object it represents) is conventional, culturally determined, and not based on any natural resemblance or physical connection.

Learning

a change in behaviour caused by experience.

can occur through simple associations between a stimulus and a response or via a complex series of cognitive activities

Stimulus generalisation

occurs when a response that has been associated with one stimulus occurs for another stimulus that is similar is some way.

Stimulus discrimination

the ability to distinguish between different stimuli and respond differently to each.

Operant or Instrumental conditioning

Occurs as a person learns to perform behaviours that produce positive outcomes and avoid those that result in negative outcomes.

Classical conditioning (also known as associative learning)

is a type of learning where an automatic, conditioned response becomes associated with a specific stimulus.

Cognitive learning

a learning approach that focuses on developing an individual's ability to think, reason, and understand, emphasizing understanding underlying concepts and processes rather than rote memorization.

Observational learning

is the process of acquiring new behaviors by watching and imitating others.

The concept of personality

refers to a person’s unique psychological make-up and how it consistently influences the way they respond to their environment.

Due to a desire for congruence

consumers seek products and brands that are consistent with their personality.

Situation-specific traits

the idea that an individual's personality and behavior can vary depending on the context or situation they are in.

Utilitarian motives in a consumer context refer to

actions driven by a desire for the functional and economic benefits of a product or service.

Hedonic motivation

the drive to engage in behaviors that enhance positive experiences (pleasure, enjoyment) and reduce negative experiences (pain, discomfort).

Motivational conflict arises when

consumers have competing motives and this conflict needs to be resolved

What are the two types of motivation?

Intrinsic and Extrinsic

Intrinsic motivation

Driven by internal factors like enjoyment, interest, or the satisfaction of a task itself.

Extrinsic motivation

Driven by external factors like rewards, punishments, or recognition.

Maslows hierarchy of needs

1. Physiological

2. Safety

3. Love & Belonging

4. Esteem

5. Self-actualization

Product involvement

the degree of importance a consumer attributes to a specific product category or brand, influencing their purchase decisions and behavior.

Materialism

the importance people attach to worldly possessions and is a common motivation for consumer behaviour in cultures that value possessions as indicators of success.

Consumer

a person who identifies a need or desire, makes a purchase, and then disposes of a product.

Functional Attributes

These focus on the tangible benefits and features of a product, such as performance, durability, or ease of use.

Symbolic Attributes

These relate to the emotional and psychological associations a brand creates, like brand personality, values, and the brand's position in the market.

Experiential Attributes

These focus on the sensory and emotional experiences associated with a product, like the pleasure of tasting a beverage or the satisfaction of using a luxurious product.

An attitude

is a predisposition to evaluate an object or a product positively or negatively and influence purchasing decisions.

Attitude formation

the process by which individuals develop their opinions and evaluations towards a particular subject or object. It involves a combination of cognitive, emotional, and behavioral factors. Attitudes are not static; they can change over time based on new information, experiences, and social influences.

Cognitive dissonance

the psychological discomfort a person experiences when holding two or more conflicting beliefs, attitudes, or values simultaneously.

Perspectives on decision making range from being

emotion-based, problem-based, or habit based.

Consumer Decision-Making Process

1. Problem recognition

2. information search

3. alternatives evaluation

4. purchase decision

5. post-purchase evaluation

Problem Recognition

The consumer realizes they have a need or problem that requires a solution. This can be triggered by internal (e.g., hunger, thirst) or external (e.g., advertising) stimuli.

Information Search

The consumer gathers information to find products or services that can meet their need. This search can be internal (relying on memory and past experiences) or external (seeking information from friends, reviews, or online sources).

Evaluation of Alternatives

The consumer compares different products or services to find the best fit for their needs. This involves weighing options based on factors like price, features, and brand reputation.

Purchase Decision

The consumer decides which product or service to buy. This decision can be influenced by various factors, including price, availability, and perceived value.

Post-Purchase Evaluation 

The consumer reflects on their purchase and the satisfaction they derived from the product or service. This stage can influence future buying decisions and lead to either positive word-of-mouth or negative feedback.

The five classes of contextual factors are

social surroundings, physical surroundings, antecedent states, temporal factors, and task definition.

Social surroundings

This encompasses the presence or absence of others during the decision-making process and the potential for social interaction.

Physical surroundings

This refers to the geographical and institutional locations where the choice occurs, including variables like store environment, weather, and crowding.

Antecedent states

These are temporary conditions, such as physical or mental states, mood, fatigue, and illness, that can affect a consumer's decision-making.

Temporal factors

This includes time of day, urgency of purchase, product availability, and time pressures.

Task definition

This relates to the cognitive and motivational elements of the situation, such as whether a consumer is shopping for personal use or buying a gift.

Point-of-purchase (POP)

[…] stimuli are very important sales tools. They include product samples, elaborate package displays, place-based media and in-store promotional materials such as ‘shelf talkers’. […] stimuli are particularly useful in stimulating impulse buying where a consumer yields to a sudden urge for a product.

Customer satisfaction

how happy customers are with a company's products or services, measuring the extent to which their expectations have been met.

Consumer value

the subjective assessment a consumer makes regarding the benefits and costs associated with a product or service.

Brand loyalty

when consumers consistently choose a particular brand over competitors, even if alternatives are cheaper or more convenient. This loyalty is often built through positive experiences, trust, and an emotional connection with the brand.

Product disposal

the process of safely and responsibly getting rid of products that are no longer needed or usable. Recycling and upcycling are two options that will grow as consumers’ environmental awareness grows.

How do social groups influence consumer purchase decisions?

Consumers often belong to or admire various groups and are influenced by a desire to be accepted by others, which can affect what they choose to buy.

Types of social power

legitimate, reward, expert, referent, and coercive

Legitimate Power

This derives from a person's formal position or authority within an organization or social structure. It stems from the belief that someone has the right to make demands or requests.

Reward Power

This is based on the ability to provide rewards, such as bonuses, promotions, or positive feedback, to others who comply with one's requests.

Expert Power

This power comes from having specialized knowledge, skills, or expertise that others value. Individuals with this type of power can influence others through their ability to offer guidance and insights.

Referent Power

This is based on charisma, attractiveness, and the ability to attract others. Individuals with this type of power can influence others through their personal appeal and ability to build relationships.

Formal groups

are deliberately created by management or organizations to achieve specific goals, often with a hierarchical structure and defined rules and regulations

Informal groups

form spontaneously based on shared interests, friendships, or proximity, lacking formal structure and often with personal relationships as the foundation.

Reference groups

membership/non-membership, aspirational, associative, or avoidance.

Membership Groups

These are groups you are an actual member of, like your family, friends, classmates, or colleagues.

Non-Membership Groups

These are groups you aspire to belong to or want to emulate, such as a celebrity, a sports team, or a high-status social club.

Aspirational Groups

These are groups you admire and want to be like, either in terms of their achievements, lifestyle, or values. You might try to imitate their behavior or adopt their beliefs.

Associative Groups

These are groups that include people who are similar to you in terms of status, interests, or social circles. You might compare your behavior to theirs and feel a sense of belonging.

Avoidance Groups

These are groups you consciously distance yourself from, either because you disagree with their values, behavior, or lifestyle. You might try to avoid association with these groups to maintain your own sense of identity.

word-of-mouth marketing (WOM)

a marketing strategy that relies on customers sharing their positive experiences with a product or service with their peers.

Normative values

are established standards or guidelines for behavior within a group or society

comparative values

involve using groups or individuals as a reference point for self-evaluation or comparison.

How can social class influence consumer purchase decisions?

Consumers may try to "buy up" to a higher social class or engage in conspicuous consumption to flaunt status through the non-constructive use of valuable resources.

How are products used in relation to social class?

Products often serve as status symbols to communicate actual or desired social class.

Standard learning theory hierarchy

1. Cognition

2. Affect

3. Behaviour

Sensory inputs from the external environment

These are stimuli that come from outside the body, detected through the five senses (sight, hearing, smell, taste, touch).

Such as: Seeing a colourful poster, Hearing crunching leaves, Smelling coffee

Sensory inputs from the internal environment

These are sensations that originate within the body, often related to physiological states or internal cues.

Such as: Hunger pangs, A racing heart, Feeling tired or thirsty

Emotional triggers

These are events or stimuli that provoke an emotional response, such as happiness, fear, nostalgia, or excitement.

Such as: Seeing a childhood toy and feeling nostalgic, Hearing a sad song and feeling sorrow

Behaviour driven by habitual routines

This refers to actions that are performed regularly and often automatically, based on habit rather than conscious decision-making.

Such as: Taking the same route to work every day, Brushing your teeth before bed

Group unanimity

When the entire group shares the same opinion or decision, individuals are more likely to conform to avoid standing out.

Cultural pressure

The influence of societal or cultural norms that shape behaviour, often unconsciously.

Fear of deviance

When someone conforms because they don’t want to be seen as different or wrong.

This is similar to group unanimity but focuses more on the emotional discomfort or social consequences of not fitting in.

Principle of least interest

suggests that in romantic relationships, the person who is less emotionally involved has more power and control. This is because they are less dependent on the relationship and therefore have less to lose if it ends.

Social exchange theory

a sociological perspective that views social relationships as a process of exchange, where individuals weigh the costs and benefits of their actions in social situations.

Roy Morgan’s Value segment

1. Socially Aware

2. Visible Achievement

3. Young Optimism

4. Real Conservatism

5. Look at Me

6. Conventional Family Life

7. Traditional Family Life

8. A Fairer Deal

9. Something Better

10. Basic Needs

Socially Aware

Progressive, ethical, and informed

Concerned about social issues, sustainability, the environment, and equality

Often well-educated and engaged in activism or volunteerism

Visible Achievement

Career-driven, confident, and success-oriented

Seek status, recognition, and material symbols of success

Typically high-income earners who value personal achievement

Young Optimism

Energetic, enthusiastic, and positive about the future

Open to new experiences and technology

Often younger consumers with aspirational goals

Real Conservatism

Value tradition, family, and stability

Risk-averse and often skeptical of change

Prefer familiar routines and traditional social roles

Look at Me

Seek fun, freedom, and attention

Driven by a desire to stand out and be part of the "in crowd"

Reject family expectations in favour of peer influence and trends