Consumer Behavior MKT 351

Exam 1: Study Guide Chapters 1-5

Segmentation: Process of dividing a market into meaningful, relatively similar, and identifiable segments or groups

target market: A group of people or organizations for which an organization designs, implements, and maintains a marketing mix

Positioning: the place that a brand occupies in the mind of the customer and how it is distinguished from products from competitors

repositioning: Changing consumers' perceptions of a brand in relation to competing brands

marketing mix

• The 4 Ps:

  • Price

  • Place

  • Product

  • Promotion

Consumer behavior - the 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

External influences:

• Culture

• Subculture

• Demographics

• Social Status

• Reference Groups

• Family

• Marketing activities

Norms - Specify ranges of appropriate behavior

Values: Enduring beliefs upon which a person acts

Sanctions - Penalties for violating norms

Nonverbal communications

• Time:

  • Monochronic – linear and fixed

  • Polychronic – less discrete and subject to detailed scheduling

• Space: your personal space (and its size)

• Symbols: hand gestures, color meaning, beauty standards/expectations

• Relationships: power distance, norms

• Agreements: formality of contracts, expectations

• Things: gift giving, materialism

• Etiquette: what is rude vs not (such as Americans being very loud in public

Myths - stories that express a culture’s values. Myths have symbolic elements that represent the shared emotions/ideals of a culture + May or may not be true stories from history

Rituals - Symbolic behaviors that occur in a fixed sequence and tend to be repeated periodically

• Grooming

• Gift-giving

• Holidays

Cultural appropriation - the act of taking or using things from a culture that is not your own, especially without showing that you understand or respect this culture

Cultural shifts - significant changes in societal values, beliefs, norms, and practices

Differences (specifically the different perceptions of time):

• Time

  • Monochronic - linear and fixed

    • Time is set and you must follow it strictly, like due dates and meetings

  • Polychronic - less discrete and subject to detailed scheduling

    • time is flexible and not strict

The 3 value categories:

Other-oriented

• Individual/collective:

  • Do we value individualism, or do we prefer to stick with a group?

• Diversity/uniformity:

  • Do we want people to look different, or should you look like you belong?

• Limited/extended family:

  • Do we tend to live with our extended or limited family?

• Youth/age:

  • Do we tend to prefer youth or age and wisdom?

• Competition/cooperation:

  • Do we encourage working together, or standing out?

• Masculine/feminine:

  • Think stereotypically: Do we prefer masculine or feminine traits, especially in our leaders

Environment-oriented

• Cleanliness:

  • How much do we care about personal/space hygiene, compared to others?

• Tradition/change:

  • How much do we care about new things and value innovation?

• Risk taking/security:

  • How comfortable are we with financial risk/security?

• Problem solving/fatalistic:

  • Do we believe in fate, or do we prefer to think that we can change outcomes and circumstances?

• Admire/overcome nature:

  • Do we see nature as something we should try to control or take advantage of?

• Performance/status:

  • Do we care about brand names and status alone, or do we also expect performance?

Self-oriented

• Religious/secular:

  • Do religious groups lead education, government, politics?

• Sensual gratification/abstinence:

  • Do we want people to indulge, or abstain?

• Material/nonmaterial:

  • How much do we value material possessions?

• Hard work/leisure:

  • Do we use our vacation days?

• Active/passive:

  • Do we want people to exercise? Do we value fitness?

Cause-related marketing - ties a company and its products to an issue or cause with the goal of improving sales or corporate image while providing benefits to the cause

Fit - refers to how well the nonprofit and the for profit organizations go together, seem like the partnership makes sense, or "fit" together.

• So, Chevrolet and American Cancer Society has low fit or bad fit, Apple and (RED) has low/bad fit, but Home Depot and Habitat for Humanity have good or high fit.

Social marketing - is an approach that combines ideas from commercial marketing and the social sciences. It aims to influence behavior for the benefit of individuals and society as a whole. The primary goal is to achieve the "common good" by using marketing techniques to promote positive change

• EX: Evolve does ads like “If they find it, They’ll play with it” and the ad is little children playing with feminine products and sex toys

  • The purpose of their ad is for gun owners to lock up their guns by showing that no matter what the object is, kids will play with it

Things to consider when doing LGBTQ+ and gender-based marketing:

• LGBTQ+ cares about what the product/company supports

  • 65% of LGBTQ+ consumers buy from brands that support causes they care about

• Gender roles

• Ascribed role: little control over

• Achievement role: based on performance and individuals can control (somewhat)

  • Women are more likely to do the shopping for the home and everyone in the home

  • Women influence more than 85% of car purchases

  • And 62% of cars sold were bought by women

Demographics - “describe a population in terms of its size, distribution, and structure”

• Occupation

• Education

• Income

• Age

Cognitive age - changes in the ability to think, learn and remember that occur as individuals age

• EX:

  • A child learns to talk and read and think (they get smarter)

  • Old people think slower and forget things

Generations and cohort analysis:

• Pre-depression (greatest) generation

  • Born prior to 1930

  • Remember: WWII, and may have served

  • Aging and may have health problems

  • Should be segmented by gender, ethnicity, and social class

  • Products:

    • Health services, single-serving prepared foods

• Depression (silent) generation

  • Born 1930-1945

  • May be too young to remember WWII, but were impact by prosperity afterwards

  • Music: Elvis Presley

  • Most have retired

  • Many have accumulated wealth and are still healthy

  • Also sometimes called the Silent generation

  • Products:

    • Travel, active lifestyle products, financial services

• Baby boom generation

  • Born 1946-1964

  • Are result of men coming home after WWII, large increase in birth rates

  • Tech: color TVs

  • Remember: Vietnam war (but may have been too young to be drafted)

  • High education and high income; dual-earning households

  • Empty nesters

  • Products:

    • Gifts for grandkids, travel, school supplies, anti-aging products

• Generation X (forgotten)

  • Born 1965-1976

  • Have a broader view of family – higher divorce rates

  • Emphasize career and economic advancement

  • More entrepreneurial

  • Products:

    • Food at Home, Housing, Healthcare, Entertainment, Transportation

• Generation Y (Millennials)

  • Born 1977-1994

  • Quite diverse

  • Tech: can remember no cell phones/internet

  • Remember: 9/11, Great Recession, climate change

  • Emphasize independence and autonomy

  • Products:

    • Brand names, customizable products

    • Have started buying houses, building families

• Generation Z

  • Born 1995-2009

  • The “Digital Natives”: very comfortable with technology

  • Open to diversity

  • Products:

    • Want constantly updated offerings and variety

    • Omnichannel shoppers

• Generation Alpha

  • Born 2009 and on

  • Likely to be an only child to Millennial parents

  • Tech Savvy

  • Buying power of $18 billion

  • Will likely be very impacted by pandemic

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

• Upper-upper class

  • Old money – inherited wealth

  • Buy:

    • Luxury cars, original art, travel

• Lower-upper class

  • “Nouveaux-riche”

  • Conspicuous consumption

  • Buy:

    • Yachts, clothes, homes, automobiles

• Upper-middle class

  • Occupation and education is key identifier

  • Typically college grads

  • Buy:

    • Financial services, furniture, travel

• Middle class

  • White-collar and high-paid blue-collar workers

  • Sensitive to shifts in the economy

  • Buy:

    • Modest homes, DIY projects, retirement planning

• Working class

  • Skilled and semiskilled factory, service, and sales workers

  • Live in somewhat undesirable neighborhoods

  • Buy:

    • Fewer experiences (vacations, concert tickets) and more physical products (a nicer TV, products for hobbies or home improvement)

• Upper-lower class

  • Poorly educated and often have minimum-wage jobs

  • Buy:

    • What they need

    • Walmart and Dollar General

• Lower-lower class

  • Very low incomes, very little education

  • Buy:

    • Rent to own goods

    • Often taken advantage of: “sin” product marketing

Subcultures - a segment of a larger culture whose members share distinguishing values and patterns of behavior

• Ethnicity:

  • African Americans

    • In general:

      • Buying power is expected to increase

    • Products should consider their unique needs

    • Communication should target the sub-subculture and income level

    • Cultural shift:

      • Consumers are expecting more from brands that are targeting minority groups

    • Consumers expect brands to include other groups

  • Hispanics

    • In general:

      • Also have an expected growth in buying power that is greater than whites’

      • Are the fastest growing ethnic subculture in the US

    • Communication should include Spanish-language media

      • McDonald's Example

    • Consider level of acculturation

  • Asian Americans

    • In general:

      • Highest-educated and highest-income subculture

      • Also has higher expected growth than whites

    • Most diverse group

    • In-language communication is great – but be sure to choose the right language!

  • Native Americans

    • In general:

      • Also expected to have higher growth rate of buying power

      • Have been taking increasing pride in heritage and less tolerant of stereotypes

        • Land O’Lakes

    • Typically geographically concentrated

    • Marketing efforts should focus on long-run support and involvement

  • Asian-Indian Americans

    • In general:

      • Value education and financial security

    • Range of religious subcultures

      • Hinduism

      • Buddhism

      • Jainism

      • Sikhism

      • Islam

      • Judaism

      • Christianity

      • Zoroastrianism

  • Arab Americans

    • In general:

      • Most live in urban areas (LA, NYC, Detroit, Chicago, and DC)

      • Tend to be stereotyped

    • Religion:

      • 63% Christian

      • 24% Muslim

      • 13% other or no affiliation

• Religion:

  • Roman Catholic

  • Protestant

  • Born-Again Christian

  • Jewish

  • Muslim

  • Buddhist

Acculturation - the degree to which an immigrant has adapted to his or her new culture

Generational differences in ethnic subcultures:

• Income, education, language, and identification with the culture change over generations

• Japanese Americans:

  • Issei: first generation

  • Nisei: second generation

  • Sansei: third generation

Regional subcultures - variations in consumer preferences and behaviors based on geographic locations

• Example: Marketing strategies for products in Quebec may emphasize French language and culture, reflecting the distinct regional identity within Canada

• Chip flavors with lays will change, East cost will have lobster rolls where Chicago has deep dish pizza flavors, New Mexico has chili con caso

• Oklahoma and Texas has “Y’all” on billboards

Standardization - creating a uniform marketing approach across different markets

when you keep your product the same regardless of your target market

• EX: the iPhone itself and its features will be the same

• STANDARD