MKTG 4120: Mid-Term

Consumer Behavior

study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society

Key Aspects of Consumer Behavior

Complex, Strategic, Context-Specific, Ethical

Successful marketing decisions require: (Consumer Behavior)

1. an understanding of the processes underlying consumer behavior

2. organizations to collect information about the specific consumers involved in the marketing decision at hand.

Customer Value

the difference between all the benefits derived from a total product and all the costs of acquiring those benefits. It is critical that a firm consider value from the customer’s perspective.

Benefits Received - Costs Incurred = Customer Value

Total Product Equation

Product + Communication + Service + Distribution + Experience = Total Product

Product

anything a consumer acquires or might acquire to meet a perceived need.

• Generally buying need satisfaction, no physical product attributes

Marketing Communications

anything a consumer acquires or might acquire to meet a perceived need.

Questions focus on:

• Who do we want to communicate with?

• What effect do we want to have on target audience?

• What message will achieve the desired effect on our audience?

Price

the amount of money one must pay to obtain the right to use the product.

Consumer cost

everything the consumer must surrender in order to receive the benefits of owning/using the product.

Distribution

having the product available where target customers can buy it, is essential to success

Market Analysis Points

• Consumers (Needs)

• Company (Potential Action)

• Competitors (Other’s Actions)

• Conditions (What’s happening around us?)

Market Segment

a portion of a larger market whose needs differ somewhat from the larger market.

• Because a market segment has unique needs, a firm that develops a total product focused solely on the needs of that segment will be able to meet the segment’s desires better than a firm whose product or service attempts to meet the needs of multiple segments.

• must be large enough to be served profitably

Behavioral targeting

consumers’ online activity is tracked and specific banner or display ads are delivered based on that activity

4 Steps of Market Segmentation

1. Identify Need Sets

2. Group Similar Consumers

3. Describe Each Group

4. Select Target Segment(s)

Firm outcomes revolve around:

• Product Position

• Sales and Profits

• Customer Satisfaction

Individual outcomes revolve around:

• Need satisfaction

• Injurious Consumption

Society outcomes revolve around:

• Economic Outcomes

• Physical Environment

• Social Welfare

The Nature of Consumer Behavior Model

T/F: Cultures are static and rarely change.

FALSE: Cultures are not static; they typically evolve and change slowly over time.

_______ are rules that specify or prohibit certain behaviors in specific situations.

Answer: Norms

Which of the following statements is true regarding culture?

Culture is a relatively simple concept.

Culture is acquired.

Culture often provides detailed prescriptions for appropriate behavior.

The nature of cultural influences is such that we are consciously aware of them.

All of the choices are correct.

Culture is acquired; it does not include inherited responses and predispositions.

Which of the following is NOT a broad form of cultural values?

other-oriented

environment-oriented

self-oriented

object-oriented

All of the choices are correct.

object-oriented

"In the U.S., appeals such as 'be yourself' and 'stand out' are often effective, but they are generally less effective in Japan, Korea, and China.” Which category of cultural values does this represent (orientations)?

other-oriented: The “be yourself” and “stand out” example reflects the Individual / Collective dimension, which is part of Other-Oriented Values.

Juanita has learned that the U.S. and Western Europe lean more toward problem-solving, while Mexico and many Middle Eastern countries are described as relatively more fatalistic. Which category of cultural values does this represent (orientations)?

enviorment-orientated: Problem Solving / Fatalistic is an Environment-Oriented Value dimension. Environment-Oriented Values concern how a society relates to its economic, technological, and physical environment

In which country is the concept of guanxi, which involves personal relationships, an important consideration?

China

T/F: The color blue connotes femininity in Holland but masculinity in Sweden and the United States.

TRUE: Symbols have varying meanings across cultures.

What are the two major ways time varies between cultures?

perspective and interpretation

Nicholas is examining how people in India perceive time, space, symbols, relationships, agreements, things, and etiquette. He is interested in these factors because they influence…

nonverbal communications

Culture

the complex whole that includes knowledge, belief, art, law, morals, customs, and any other capabilities and habits acquired by humans as members of society.

Aspects of Culture

• Comprehensive Concept

• Acquired

• Provides detailed prescriptions for appropriate behavior

• the nature of cultural influences is such that we are seldom aware of them

• Not static- evolves; changes slowly over time

norms

rules that specify or prohibit certain behaviors in specific situations. Norms are derived from cultural values, or widely held beliefs that affirm what is desirable.

Violation of cultural norms results in…

sanctions or penalties ranging from mild social disapproval to banishment from the group.

Culture Shapes Consumption Rule

cultural values give rise to norms and associated sanctions, which in turn influence consumption patterns.

Other-oriented values

reflect a society's view of the appropriate relationships between individuals and groups within that society.

Environment-oriented values

prescribe a society's relationship to its economic and technical as well as its physical environment.

Self-oriented values

reflect the objectives and approaches to life that the individual members of society find desirable.

Other-Oriented Values Examples

Individual / Collective

Youth / Age

Extended / Limited Family

Masculine / Feminine

Competitive / Cooperative

Diversity / Uniformity

enviorment-oriented values examples

Cleanliness

Performance / Status

Tradition / Change

Risk Taking / Security

Problem Solving / Fatalistic

Nature

self-oriented values examples

Active / Passive

Sensual Gratification / Abstinence

Material / Nonmaterial

Hard Work / Leisure

Postponed / Immediate Gratification

Religious / Secular

Nonverbal communication

systems are the arbitrary meanings a culture assigns to actions, events, and things other than words

• NOT UNIVERSAL

Factors Influencing Nonverbal Communications

• Time

• Space

• Symbols

• Relationships

• Agreements

• Things

• Etiquette

monochronic time perspective.

Time is seen almost as a physical object; it can be scheduled, wasted, lost and so forth. Believing that a person does one thing at a time, people with this perspective have a strong orientation toward the present and the short-term future.

• US, Canada, West Europe, Australia

The meaning of time varies between cultures in two major ways:

1. time perspective

2. time interpretations

polychronic time perspective

They view simultaneous involvement in many activities as natural. People and relationships take priority over schedules, and activities occur at their own pace rather than according to a predetermined timetable. Such cultures have an orientation toward the present and the past.

• Latin Americans, Asia (including Indians)

personal space.

It is the nearest that others can come to you in various situations without your feeling uncomfortable.

Space often communicates…

rank and prestige- ex: US large offices often signal high status

Symbols

Colors, animals, shapes, numbers, gestures, and music can have different meanings across cultures.

Relationship

Cultures differ in how quickly relationships form and how much obligation those relationships carry.

guanxi

used in China to categorize their complex relationships- Long-run success in many cultures involves more than just “getting to know” someone in the Western sense of the expression

Agreements

Cultures differ in how business obligations are established and enforced.

Things

The cultural meaning of objects and products can influence purchase behavior and gift-giving

Etiquette

The generally accepted ways of behaving in social situations.

• Behaviors considered rude or obnoxious in one culture may be quite acceptable in another.

• Normal voice tone, pitch, and speed of speech differ between cultures and languages, as do the use of gestures.

American Self-Oriented Values Changes

• Abstinence to Sensual Gratification

• Postponed to Immediate Gratification

• Material to Nonmaterial

• Hard Work to Leisure

American Enviornment-Oriented Value Changes

• Cleanliness to Messiness

• Security to Risk Taking

• Overcome Nature to Admire

• Status to Performance

Other-Oriented Values Changes

• Uniformity to Diversity

• Youth to Age (Older Recognition)

• Masculine to Feminine (Less Trad Gender Roles)

Green Marketing

Developing and promoting products in ways that:

• Reduce environmental harm

• Create positive environmental impact

• Link purchases to environmental causes (orgs/events)

Green Marketing Challenge

Consumer Say: Will change purchase habits, pay more for sustainable brands, and environmental responsibility matters

Consumers Also Worry: May be too expensive, lower quality, claims not be trustworthy

Cause Related Marketing (CRM)

Ties a company and its products to an issue or cause with the goal of:

• Benefiting the cause

• Improving corporate image

• Supporting sales

Social Marketing (DIFF then CRM)

marketing done to enhance the welfare of individuals or society without direct benefit to a firm

CRM Challenger: Skeptic

Doubts the sincerity or effectiveness of CRM

• Needs: Proof, transparency, and evidence of real impact

CRM Challenger: Balancer

Believes in CRM but may not act on those beliefs

• Needs: Convenience and easy participation

CRM Challenger: Attribution-Orientated

Questions the firm’s motives behind CRM

• Needs: Strong cause–brand fit and authenticity

CRM Challenger: Social Concerned

Focuses primarily on helping the cause

• Needs: Clear social impact and meaningful action

CRM results can be improved if consumers see a…

“fit” between the company and the cause

Gender roles in the United States are changing: (gender based marketing)

• Women are taking on roles and making purchase decisions once viewed as traditionally male

• Men are taking on roles and responsibilities once viewed as traditionally female

Vehicle Women Stat (Gender Based Marketing)

Today, women influence 85 percent of all vehicles sold, make over 60 percent of all new vehicle purchases (up from 20 percent in 1984), and purchase over 40 percent of all SUVs.

Gender roles

the behaviors considered appropriate for males and females in a given society.  Gender roles are ascribed roles

Ascribed roles

based on an attribute over which the individual has little or no control.

Achievement Role

based on performance criteria over which the individual has some degree of control.

traditional gender orientation example

A marriage in which the husband assumes the responsibility for providing for the family and the wife runs the house and takes care of the children

modern gender orientation example

A marriage in which husband and wife share responsibilities. Both work, and they share homemaking and childcare responsibilities.

Product Strategy with Gender Roles

• Products are becoming less traditionally gender-typed

• Categories once viewed as “male” are increasingly designed and marketed for women- ex: G*ns, cars, motorcycles, computer games and equipment, golf equipment, financial services, and many other once-masculine products

Marketing Communication with Gender Roles

• Advertising is adapting to changing gender roles

• Brands are moving beyond traditional portrayals of men and women

Demographics

describe a population in terms of its size, distribution, and structure. Demographics influence consumption behaviors both directly and by affecting other attributes of individuals, such as their personal values and decision styles.

• ex: size, occupation, education, income, age

Fast Growing Areas Pop.

TX • FL • UT • CO • NV

Slow/Declining Growing Area Pop.

WV • IL • VT • CT

The overall US popualtion is.. (pop size.)

still growing, but more slowly

Why do marketers care about population size?

• Where consumers live affects store locations, planning, and distribution

• Population aging changes which categories grow, and which may shrink.

• Regional growth creates different opportunities across the United States

Occupation shapes…

social status, values, income, lifestyles and consumption process

Education influences consumption by

Shaping income and occupation.

• More low-education, high-paying manufacturing jobs are disappearing

• Education in technical skills, abstract reasoning, etc. matter

Purchasing Power

A household's income level combined with its accumulated wealth

Subjective discretionary income (SDI)

an estimate by the consumer of how much money he or she has available to spend on nonessentials. 

Age shapes consumption in many ways

• Self-concept and Lifestyle

• Media Use and Shopping Patterns

• Product Usage

• Responses to Marketing Activities

Child Product Positioning

Moderate growth in demand for toys, diapers, and clothing

Teen market Product Pos.

Minimal growth expected

Ages 30–39 Product Pos.

Growth opportunities in homes, childcare, family cars, and insurance

Ages 50–59 Product Pos.

Declining population may reduce demand for products targeting this group

Age 70+ Product pos.

Largest growth segment, creating opportunities in health care and retirement services

Generation/Age Cohort

a group of persons who have experienced a common social, political, historical, and economic environment.

Cohort Analysis

process of describing and explaining the attitudes, values, and behaviors of an age group as well as predicting its future attitudes, values, and behaviors.

The Mature Market: Healthy indulgers

Healthy, active, independent, and focused on enjoying life

The Mature Market: Ailing Outgoers

Health limitations, but positive and socially active within constraints

The Mature Market: Healthy Hermits

Physically healthy but more withdrawn after major life events

The Mature market: Frail Recluses

Reduced physical capabilities and more limited social roles

Gen Y Values

• Assertive/Self-Reliance

• Skeptical of Marketing hype (Truthful/Less Exaggeration)

• More responsive to social issues

• More technological immersed

Gen Z Values

• Safety/Privacy

• Authenticity

• Quick Access to Information

• Less Attention Span

Generation Alpha Values (Characteristics)

• Instant Gratification

• More Diverse

• High-Educated

• Technology Integrated

social class system

a hierarchical division of a society into relatively distinct and homogeneous groups with respect to attitudes, values, and lifestyles

Social Stratification

Social class is a result of characteristics we possess that others in society desire and hold in high esteem

Upper-Upper Class

Established social elite; heritage, civic leadership, philanthropy- ex: Kennedy family