Chapter 1 Understanding Consumer Behavior CHAPTER SUMMARY The goal of this chapter is to introduce students to the topic of consumer behavior. The chapter defines what consumer behavior is, what factors affect it, and why it should be studied. Consumer behavior is defined as involving (1) the set of decisions (whether, what, why, how, when, where, how much, how often, how long), (2) made about the acquisition, use, or disposition (3) of products, services, activities, ideas, people or time (4) made by one or more decision-making entities (5) over time. Consumers’ motivation, ability, and opportunity affect their decisions. These factors influence what consumers are exposed to, what they attend to and what they perceive, how they categorize or interpret information, how they form and change attitudes, and how they form and retrieve memories. Each of these aspects of the psychological core has a bearing on consumer decision making. Decision making itself is based on problem recognition and the search for information, involves some judgment and decision-making processes, and affects others’ decisions as well as one’s own post-decision satisfaction level. Furthermore, consumer decisions are affected by the consumer’s culture, defined as the myriad groups and social systems to which individuals belong, that influence the values and beliefs they hold and the symbols they use to communicate group membership. Factors associated with both the psychological core and culture can influence outcomes such as symbolic consumer behavior and the diffusion of new consumer behavior throughout a market. Studying consumer behavior can provide useful input to marketing strategies like market segmentation, target market selection, and positioning. It can also guide marketing tactics like product, pricing, distribution, and promotion decisions. Furthermore, the study of consumer behavior can be of interest to ethicists and consumer advocacy groups, and can be helpful in designing laws and regulations that protect consumers. Finally, it can help consumers to improve their own lives by making the environment more user friendly, safer, cleaner, and healthier. CHAPTER LEARNING OBJECTIVES After studying this chapter, students will be able to 1. Define consumer behavior and explain the components that make up the definition. 2. Identify the four domains of consumer behavior shown in Exhibit 1.6 that affect acquisition, usage, and disposition decisions. 3. Discuss the benefits of studying consumer behavior. 4. Explain how companies apply consumer behavior concepts when making marketing decisions. CHAPTER OUTLINE I. Defining Consumer Behavior A. Consumer Behavior Involves Products, Services, Activities and Ideas 1. In addition to products, services, activities, ideas, people and time are also the target of marketing efforts and studies in consumer behavior. 2. The term offering is used to encompass all entities that can be marketed. B. Consumer Behavior Involves More Than Buying 1. How consumers acquire, use, and dispose of products, services, activities, and ideas must be considered by marketing managers. C. Consumer Behavior Is a Dynamic Process 1. Consumers interact with the offerings they encounter in various environments over a period of time as they move through the process of acquisition, use, and disposition. D. Consumer Behavior Can Involve Many People 1. Many individuals may be involved in the acquisition, use, and disposal of an offering, each person holding one or more consumer roles in the process. E. Consumer Behavior Involves Many Decisions 1. Whether to Acquire/Use/Dispose of an Offering a) Is this an offering for me? 2. What Offering to Acquire/Use/Dispose a) Which category should I choose from? Which brand? 3. Why to Acquire/Use/Dispose of an Offering a) Is this offering compatible with my needs, values, and goals? Will it help me to fit in? 4. Why an Offering Is Not Acquired/Used/Disposed a) What keeps me from purchasing an item? 5. How to Acquire/Use/Dispose of an Offering a) Ways of Acquiring an Offering––Can I trade for this product? Rent or lease it. Should I give it as a gift? Can I barter for the item? b) Ways of Using an Offering––What are the appropriate uses for an item? Are there innovative uses of this product? How are consumers educated to use this product? c) Ways of Disposing of an Offering––What should I do when I am done with it. Should I find a new use? Get rid of it temporarily? Permanently? 6. When to Acquire/Use/Dispose of an Offering a) When is it “appropriate” to acquire or use an offering in a given situation. Special occasions? Every day? 24 hours a day? 7. Where to Acquire/Use/Dispose of an Offering a) In stores, by mail, by phone, or over Internet 8. How Much, How Often, and How Long to Acquire/Use/Dispose of an Offering a) Do I use this all the time? Infrequently? F. Consumer Behavior Involves Emotions and Coping 1. Emotions, both positive and negative, as well as specific emotions such as hope, fear, regret, guilt, embarrassment, and general moods can affect consumers’ behavior. 2. Consumers may have to cope with stress from consumption situations. 3. There is differing coping behavior among certain segments, such as low-literacy consumers. II. What Affects Consumer Behavior? A. The Psychological Core: Internal Consumer Processes 1. Motivation, Ability, and Opportunity a) Is the consumer motivated to focus on the decision? b) Will the consumer have the opportunity to make an informed choice? c) Does the consumer have the ability to distinguish one offering from another? 2. Exposure, Attention, Perception, and Comprehension a) Is the consumer exposed to information related to the choice? b) Is the consumer able to attend to and perceive the information that is available? 3. Memory and Knowledge a) Storage and recall in part depends on MAO. b) Choice is based on information retrieved, not stored. 4. Forming and Changing Attitudes a) Based on the information the consumer receives, what attitudes are formed? How do these evaluations change in the presence of new information? B. The Process of Making Decisions 1. Problem Recognition and the Search for Information a) Does the consumer recognize problems and search for necessary information? 2. Making Judgments and Decisions a) To what extent does the consumer expend time, and mental and emotional energy in making a decision? 3. Making Post decision Evaluations a) To what extent does the consumer’s post-decision evaluation provide feelings of satisfaction or dissatisfaction? C. The Consumer’s Culture: External Processes 1. Reference Groups and Other Social Influences a) What groups does the consumer perceive that he/she is a member of and how do these groups influence the consumer’s behavior? 2. Diversity Influences a) Ethnic or religious groups affect consumer decisions; these may be regional or broader. b) Diversity impacts one’s vacation choices, for example. 3. Household and Social Class Influences a) For example, the upper middle class and living with parents impact decisions. 4. Values, Personality, and Lifestyles a) To what extent do the consumer’s beliefs, personality, activities, interests, and opinions influence the consumer choices he/she makes? D. Consumer Behavior Outcomes and Issues 1. Consumer Behaviors Can Symbolize Who We Are a) How do consumers’ behaviors reflect and project “who they are”? 2. Consumer Behaviors Can Diffuse Through a Market a) How do the behaviors of certain individuals spread to others in the market? 3. Consumer Behavior, Ethics, and Social Responsibility a) Sometimes consumers face potentially conflicting priorities. b) Consumers and marketers can and do use marketing for constructive purposes. III. Who Benefits from the Study of Consumer Behavior? A. Marketing Managers 1. How do marketing managers use consumer behavior to develop marketing strategies and tactics? 2. How do they adapt to consumers’ different wants and needs? B. Ethicists and Advocacy Groups 1. To what extent is it appropriate to use knowledge of consumer behavior to promote certain types of products or services? C. Public Policy Makers and Regulators 1. To what extent is it appropriate to use knowledge of consumer behavior to influence laws and business rules? D. Academics 1. How do academics use consumer behavior concepts both in the classroom and when conducting research? E. Consumers and Society 1. To what extent does knowledge of consumer behavior make people better consumers? IV. Marketing Implications of Consumer Behavior A. Developing and Implementing Customer-Oriented Strategy 1. How is the market segmented? 2. How profitable is each segment? 3. What are the characteristics of consumers in each segment? 4. Are consumers satisfied with existing offerings? B. Selecting the Target Market 1. Which consumer groups are appropriate targets for a firm’s marketing efforts? C. Developing Products 1. What ideas do consumers have for new products? 2. What attributes can be added to or changed in an existing offering? 3. How should the offering be branded? 4. What should the package and logo look like? D. Positioning 1. How are competitive offerings positioned? 2. How should our offerings be positioned? 3. Should our offerings be repositioned? D. Making Promotion and Marketing Communications Decisions 1. What are our advertising objectives? 2. What should our advertising look like? 3. Where should advertising be placed? 4. When should we advertise? 5. Has our advertising been effective? 6. What about sales promotion objectives and tactics? 7. Have our sales promotions been effective? 8. How can salespeople best serve customers? E. Making Pricing Decisions 1. What price should be charged? 2. How sensitive are consumers to price and price changes? 3. When should certain pricing tactics be used? F. Making Distribution Decisions 1. Where and when are target consumers likely to shop? 2. What do customers want to see in stores? 3. How should stores be designed? QUESTIONS FOR REVIEW AND DISCUSSION Possible answers are as follows. 1. How is consumer behavior defined? Answer: Consumer behavior entails the acquisition of, use of, and disposition of goods. Note that disposition is often forgotten as an aspect of consumer behavior. 2. What is an offering? Answer: A product or service or activity or idea offered by a marketing organization to consumers. 3. What are some of the factors in the psychological core that affect consumer decisions and behavior? Answer: MAO: motivation, ability, opportunity Exposure, attention, perception, and comprehension Memory and knowledge Attitude formation and change 4. What aspects of the consumer’s culture influence decisions and behavior? Answer: Diversity influences Household and social class influences Values, personality, and lifestyles 5. How is marketing defined? Answer: A social and managerial process through which individuals and groups obtain what they need and want by creating and exchanging products and value with others. 6. How can public policy decision makers, advocacy groups, and marketing managers use consumer research? Answer: To understand what consumers and clients value. To help develop and understand what appropriate goods and services deem best for consumers. Policy makers use research to set law and policy in government, for instance a texting while driving law may be based on consumer research about safety and phone use while driving. Advocacy groups use research in the same way; yet, they focus on using research to advocate a point or view (e.g., Mothers Against Drunk Driving MADD). Marketing managers can help consumers by understanding consumer use and desires via research. 7. What kinds of marketing questions can companies use consumer behavior research to answer? Answer: How is the market segmented? How profitable is each segment? What are the characteristics of consumers in each segment? Are customers satisfied with existing offerings? How are competitive offerings positioned? How should our offerings be positioned? What ideas do consumers have for new products? What attributes can be added to or changed in an existing offering? What should our offerings be called? What should our package and logo look like? What are our advertising objectives? What should our advertising look like? Where should our advertising be placed? When should we advertise? Has our advertising/sales promotions been effective? When should sales promotions take place? When should certain price tactics take place? 8. How can you benefit from studying consumer behavior? Answer: Consumer behavior studies can help consumers in the marketplace to understand the market, and its role in business practice. CONSUMER BEHAVIOR CASE How Unilever’s Brands Connect with Consumers From soap to soup, Unilever markets a wide range of personal care products, foods, and household cleaners under popular brands like Dove, Bertolli, Lipton, Lux, Axe, Sun silk, Surf, and Omo. Two billion consumers buy its products every day, adding up to annual revenue of $62 billion. The Anglo-Dutch company constantly conducts research to learn more about what consumers want and need, identifying even seemingly small changes that can make a big difference in the daily lives of people worldwide. One of the company’s most memorable marketing initiatives has been Dove’s “Campaign for Real Beauty.” Based on extensive consumer research into women’s attitudes and emotions, the campaign uses ads, YouTube videos, special events, and other communications to counter beauty stereotypes and make the point that real beauty is more than skin deep. By linking its soap brand to messages reinforcing positive self-esteem for women of all ages, races, sizes, and shapes, Dove has won the admiration and loyalty of consumers in many countries. Unilever’s Ragú food brand has been courting parents with Facebook and YouTube communications that encourage ongoing conversations with marketers and among its brand fans. For example, marketers recently used the brand’s Facebook page (which has more than one million “likes”) to start a dialogue about getting children to eat. Its Facebook fans responded with dozens of additional ideas, which Ragú’s ad agency turned into helpful online videos that dish up tips with a sense of humor. Heavy use of social media is one way that Ragú aims to create an emotional connection with its customers and understand their ever-changing needs and interests. Campaigns combining Facebook, YouTube, Twitter, and special websites have helped Unilever market its food and personal care brands to highly targeted segments such as Latino families in the United States. Unilever’s www.vivemejor.com, the Spanish-language website, and Facebook page provide brand-oriented recipes, coupons, holiday ideas, household hints, and other information that Latino families can use. The company also holds Disfruita la Pasión de la Vida events outside supermarkets to attract and engage Latino consumers. In planning such events, the company turns to its Multicultural Consumer Marketing Insights research team for guidance. Unilever is looking beyond immediate acquisition behavior to encourage healthy, environmentally sustainable behavior all over the world. Through research, it has determined that the first step is to help consumers understand why they should do something (such as wash with soap to prevent the spread of disease). The next step is to show them how easy it is to take action (buy bars of soap and use them). Then, they must make the new behavior desirable (washing can keep the family safe from germs). Next, it is important to make consumers feel good about doing this action (for themselves, their family, and society). Finally, find a way to continue the behavior over time (ask children to wash before every meal). With these five steps, Unilever has convinced millions of consumers in developing countries to adopt the healthy habit of washing their hands—promoting the company’s Lifebuoy soap brand at the same time. Unilever also sells laundry products in developing nations where water is a scarce resource, yet consumers are accustomed to rinsing clothes several times to get them clean. To address both consumer needs and environmental issues, CEO Paul Polman explains “We’ve put products out in the market—fabric softeners—that only need one rinse.” Even then, “consumers were still doing two or three rinses, so we had to be very creative in educating them,” he says. Clearly, Unilever wants to build strong relationships with its customers by making sure its brands are down-to-earth and “real.” Case Questions 1. How is Unilever applying its understanding of internal consumer processes in the psychological core to market its products? Answer: Unilever understands there are many important psychological processes consumers must go through during the acquisition, use, and disposal of offerings. By using market research, the company taps into specific aspects based on the particular product’s target audience. For many products, such as Lifebouy soap, Unilever steps consumers through all of the psychological processes, from awareness to attitude change in order to acquire new customers and retain current users. 2. Which of the four external processes in the consumer’s culture do you think have been the most important to the success of Dove’s Campaign for Real Beauty? Why? Answer: Values, personality, and lifestyle: Dove's campaign is based on market research into women's attitudes and emotions, which are closely tied to their values. The campaign highlights the value that "real beauty" is more than skin deep; a sentiment women in their target audience value and believe is reflective of their personalities. Reference groups and other social influences: Dove uses "real" women versus models with whom their consumers can because they are members of their reference group. 3. Do you agree with Unilever’s decision to link its brands with efforts to encourage healthy and sustainable behaviors? Explain your answer. Answer: Linking brands to healthy and sustainable behaviors helps Unilever create an emotional connection with its customers because they perceive the company cares about more than just profit. IN CLASS EXERCISE Analyzing Consumer Generated Content Your task is to analyze consumer generated online postings—e.g., blog entries, pictures, and videos—for a product category or brand of your choice. The material should be generated by consumers (advertisements are usually created by firms and/or their advertising agencies and are not appropriate). You can, however, show ads to demonstrate how consumer generated material differs from firm generated advertisements. 1. Select some individuals with whom you will be comfortable working. Teams can be any size from one through the entire class. 2. Select (a) a product category (e.g., baseballs, tomatoes, aftershave); (b) a brand that may encompass several product categories; (c) a specific product category for a specific brand (e.g., Nike basketball shoes) of interest. 3. Find a number of online postings by consumers discussing or portraying their experience with the product or brand. You may want to consider: a. Blog entries (which can be searched through the Google Blog Search feature at http://blogsearch.google.com). b. Consumer product evaluations sites such as epions.com and evaluations on merchant sites such as Amazon.com. c. Photos (available from Flickr (http://www.flickr.com/), Web Shots (http://www.webshots.com/), Picasa Web (http://www.picasaweb.com), and any other photo share sites. You can also search using the Google Images search feature (http://images.google.com). d. Video recordings (available from YouTube and Google Video Search (http://video.google.com). e. Other online media. 4. Discuss the possible motives of the consumers generating the material in question (e.g., genuine desire to help others, wanting to look good, desire to promote a favorite brand, desire to present an alternative brand to the market leader, “blowing off steam,” show off creative talents more than dealing with substance per se, desire to entertain). 5. Identify the extent to which different people who create material on similar topics/brands either compete with each other or promote other people’s material. 6. Identify theme or issues identified. Note that photos and videos may be “staged” or sensationalized to some extent. Nevertheless, do these at least suggest certain underlying consumer motivations, emotions, and/or perceptions? 7. Identify implications for the marketing of the product or brand in question—e.g., a. Effective advertising messages (e.g., could a particular photo—with proper permissions—be used as an ad with a suitable caption?) b. Issues for product design and or content (e.g., are there aspects enjoyed or aspects causing frustration apparent?) c. Information that should be available for consumers on manufacturer web sites. 8. Prepare a brief report to the rest of the class (up to four minutes in length, including time spent on showing illustrations). Notes: • You may want to divide up between team members so that different people search different media. • If one or more group members speak any foreign languages, you may want to compare apparent differences between cultures. • To zero in on specific items, you may want to search using phrases put in quotes—e.g., “new cell phone,” “contract ran out,” “lost my phone,” “heel broke,” or “pink Blackberry.” “Unilever Ramps Up Hispanic Marketing,” Media Post, April 2, 2012, www.mediapost.com; Anna Maria Virzi, “How Unilever Connects with Hispanics on Facebook,” ClickZ, February 28, 2012, www.clickz.com; Louise Lucas, “Changing Lives,” Financial Times, March 20, 2012, www.ft.com; Louise Jack, “Unilever CEO Paul Polman on the Packaged Goods Giant’s Creative Shift,” Fast Company, January 12, 2012, www.fastcocreate.com; Ann-Christine Diaz, “Behind the work: Ragu and BFG9000’s Tips for Finicky Eaters,” Advertising Age, March 20, 2012, www.adage.com; and Ekaterina Walter, “Marketing to Women,” Fast Company, March 19, 2012, www.fastcompany.com. Solution Manual for Consumer Behavior Wayne D. Hoyer, Deborah J. MacInnis, Rik Pieters 9780357721292, 9781305507272, 9781133435211
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