Chapter 1 Read pages 4 – 6 and 22 for digital revolution Consumer behaviour is defined as the behaviour that consumers undertake in seeking, purchasing, using, evaluating and disposing of products and services that they expect will satisfy their personal needs. Personal and organisational consumers (page 9) The personal consumer buys good and services for his or her own use, for use by the whole household, for another member of the household or as a gift for a friend.
In all these contexts, the goods are bought for final use by individuals, who are referred to as ‘end users’ or ‘ultimate consumers’. The organisational consumer includes profit and non-profit businesses, public sector agencies and institutions, all of which buy products, equipment and services in order to run their organisations. All organisations must purchase materials as direct and indirect inputs to their offerings and to support their markets. Buyers and users (consumers) Consumer – the person who consumes or uses the product or service.
Buyer – the person who undertakes the activities to procure or obtain the product or service. Payer – the person who provides the money or other object of value to obtain the product or service. The interdisciplinary nature of consumer behaviour research (page 12) Psychology – the study of the individual. It includes the study of motivation, perception, attitudes, personality and learning patterns. Sociology – the study of groups. Group behaviour describes the actions of individuals in groups, which often differ from the actions of individuals operating on their own.
Social psychology – the study of how an individual operates in a group. The study of how individuals are influenced in their personal consumption behaviour by those whose opinions they respect, such as peers, reference groups, family and opinion leaders. Cultural anthropology – the study of human beings in society. It traces the development of the core beliefs, values and customs that are passed down to individuals from their parents and grandparents and influence their purchase and consumption behaviour.
It also includes the study of subcultures, which is the comparison of consumers of different nationalities with diverse cultures and customs. Economics – the study of consumers; how they spend their funds, how they evaluate alternatives, and how they make decisions to maximise satisfaction. This theory postulates that individuals act rationally to maximise their utilities in the purchase of goods and services. More recent studies have indicated that individuals often acts less than rationally (i. e. emotionally) to fulfil their psychological needs.
Consumer decision making (page 14) Input stage – influences the consumer’s recognition of a product need and consists of two external influences: firm’s marketing efforts – product, promotion, pricing, channels of distribution and marketing segmentation. Sociocultural environment – communication and reference groups, family, social class, culture and subculture, opinion leadership and diffusion of innovation, public policy and consumer protection. Process stage – focuses on how consumers make decisions.
Need recognition pre-purchase search Evaluation of alternatives. The consumers’ experience with a product exploration happens in the process stage. Output stage – purchase: trial and repeat purchase post-purchase evaluation Why marketers study consumer behaviour (page 16 or 18) * Shorter product life cycles * Environmental concerns * Consumer protection and public policy concerns * Growth of services marketing * Not-for-profit/social marketing * Growth of global marketing Societal marketing concept (page 20)
Marketers adhering to principles of social responsibility in the marketing of their goods and services; that is, they must endeavour to satisfy the needs and wants of their target markets in ways that preserve and enhance the well-being and consumers and society as a whole. Segmentation, targeting and positioning (page 21) Market segmentation is the process of dividing a market into subsets of consumers with common needs or characteristics. Targeting is selecting one or more of the segments identified for the company to pursue.
Positioning is developing a distinct image for the product or service in the mind of the consumer, an image that will differentiate the offering from competing ones and squarely communicate to consumers that the particular product or service will fulfil their needs better than competing brands. Chapter 2 Mass marketing is offering the same product and marketing mix to all consumers. Repositioning is accomplished by changing the promotional appeal, the distribution strategy or the price, based on the characteristics of a new segment or changing characteristics of the existing segment.
Bases for segmentation page 35 onwards The first step in developing a segmentation strategy is to select the most appropriate base(s) on which to segment the market. Geographic segmentation – the market is divided by location (state, region, location, housing density, and climate). Demographic segmentation – refers to the identifiable and measureable statistics of a population (age, sex, marital status, income, occupation and education). Demographic information is often the most accessible and cost-effective way of identifying a target market.
Demographic doesn’t define why. Psychological segmentation – focuses on the inner or psychological characteristics of consumers. It refers to intrinsic qualities of the individual consumer, and such consumer segmentation strategies are often based on specific psychological variables (motivations, personality, perceptions, learning, risk perception and level of involvement or attitudes). Psychographic segmentation (lifestyle analysis) – designed to identify relevant aspects of a consumer’s personality, buying motives, interests, attitudes, beliefs and values.
The psychographic profile of a consumer segment can be thought of as a composite of a consumer’s measured activities, interests and opinions (often referred to as AIOs). Sociocultural segmentation – provides further bases for market segmentation (culture, subculture, religion, race/ethnicity, social class and family life cycle). User-related segmentation – is a popular and effective form of segmentation that categorises consumers in terms of product, brand or service usage characteristics (rate of usage, awareness level and degree of brand loyalty).
User-situation segmentation – recognises the occasion or situation often determines what consumers will purchase or consume (time, objective, location and person). Benefit segmentation (needs-based) – requires finding the major benefits people look for in the product class, the kinds of people who look for each benefit and the brands that deliver each benefit (convenience, social acceptance, long-lasting, prestige, economy and value-for-money). Hybrid segmentation (read pages 55 – 59) – combining several segmentation variables, rather than relying on a single segmentation method.
There are three hybrid segmentation approaches; demographic/psychographic, geodemographics, and values and lifestyles. Criteria for effective targeting of market segments (page 62) * Identification * Sufficiency * Stability * Accessibility Implementing segmentation strategies Differentiated marketing – targeting several segments using individual marketing mixes Concentrated marketing – targeting just one segment with a unique marketing mix. Countersegmentation – a strategy in which a company recombines two or more segments into a single segment to be targeted with an individually tailored product or promotional campaign.
Undifferentiated – mass marketing Chapter 3 Motivation (page 72) – the driving force within individuals that impels them to action. This driving force is produced by a state of tension that exists as the result of an unfulfilled need. The specific courses of action that consumers pursue, and their specific goals, are selected on the basis of their thinking processes (cognition) and previous learning (experiences). Marketers attempt to influence consumers’ cognitive processes (problem solving). Needs – refers to any human requirement.
Innate needs are biogenic needs as they are primary needs or motives because they are needed to sustain biological life. Acquired needs are needs that we learn in response to our culture or environment. They may include the need for self-esteem, prestige, affection, power or learning. They are considered secondary needs or motives. A need becomes a motive when it is aroused to a sufficient level of intensity. Goals are the sought-after results of motivated behaviour and are technically defined as internal representations of desired states.
Product specific goals are the specifically branded or labelled products they select to fulfil their needs. generic goals are the general classes or categories of goals that consumers select to fulfil their needs. Substitute goals may be sufficient to dispel uncomfortable tension. Continued deprivation of a primary goal may result in a substitute goal assuming primary-goal status. Positive and negative motivation (page 78) Approach object is a behaviour directed towards a positive goal (positive motivation). Avoidance object is a behaviour directed towards a negative goal (negative motivation).
Psychological reactance is the motivational state that is aroused by a threat to, or elimination of, a behavioural freedom. Frustration Defence mechanisms (page 81) * Aggression * Rationalisation * Regression * Withdrawal * Projection * Escapism * Identification * Repression Arousal of motives Maslow’s hierarchy of needs (page 88 – 90) Chapter 4 Sigmund Freud’s psychoanalytic theory of personality holds that unconscious needs or drives, especially sexual and other biological drives, can determine human personality and behaviour.
Freud proposed human personality consists of three interacting systems – the id, superego and the ego. Id – the part of the personality that consists of primitive and impulsive drives – basic physiological needs such as thirst hunger and sex – that the individual seeks immediate satisfaction without concern for the specific means of satisfaction. The id operates on the pleasure principle; it acts to avoid pain and maximise immediate pleasure. Superego – the individual’s internal expression of society’s moral and ethical codes of conduct.
The superego defines what is right and good by internalising the values of society. The superego’s role is to see that the individual satisfies needs in a socially acceptable fashion. Thus, the superego is a kind of ‘brake’ that restrains or inhibits the impulsive forces of the id. Ego – the individual’s conscious control. It functions as an internal monitor that attempts to balance the impulsive demands of the id and sociocultural constraints of the superego. Through learning and experience, the ego develops the individual’s capabilities of realistic thinking.
There are situations where the ego is not able to resolve the conflict between the id and the superego. In these cases, a defence mechanism is used to reduce the tension brought on by the lack of compromise. Stages of personality development (page 107) * Oral stage * Anal stage * Phallic stage * Latency stage * Genital stage Neo-Freudian personality theory It stresses the fundamental role of social relationships in the formation and development of personality. Three personality groups: * Compliant individuals are those who move towards others (they desire to be loved, wanted and appreciated). Aggressive individuals are those who move against others (they desire to excel and win admiration). * Detached individuals are those who move away from others (they desire independence, self-reliance, self-sufficiency, and individualism or freedom from obligations). Trait theory A trait is defined as ‘any distinguishing, relatively enduring way in which one individual differs from another. Trait theory is primarily quantitative or empirical, focusing on the identification and measurement of personality in terms of specific psychological characteristics.
Freudian and neo-Freudian are qualitative approaches that rely on personal observation, self-reported experiences, dream analysis and projective techniques. ‘Big five’ model of trait theories (page 110) * Neuroticism – the tendency to experience negative effects * Extroversion – the tendency to interact with the world * Openness to experience – the tendency to seek a variety of experiences * Agreeableness – the tendency to move towards people and act kindly towards them * Conscientiousness – the tendency to control impulses and pursue goals Personality and consumer behaviour
Consumer dogmatism (page 112) Dogmatism is a personality trait the measures the degree of rigidity people display towards the unfamiliar or towards information that is contrary to their established beliefs. Consumers who are low in dogmatism (open-minded) are more likely to prefer innovative products. Highly dogmatic (closed-minded) consumers are more likely to choose established products. Consumer social character (page 113) Inner-directed consumers tend to rely on their own inner values or standards in evaluating new products and are likely to be consumer innovators.
Other-directed consumers tend to look to others for direction on what is ‘right’ or ‘wrong’; thus, they are less likely to be consumer innovators. Consumer susceptibility to interpersonal influence (page 114) CSII is defined as the need to identify with or enhance one’s image in the opinion of others, or seeking information from others. Optimum stimulation level (page 114) High optimum stimulation levels are more willingness to take risks, to try new products, to be innovative, to seek purchase-related information and to accept new retail facilities. Variety seeking * Exploratory purchase behaviour (e. . switching brands to experience new and possibly better alternatives) * Vicarious exploration (e. g. where the consumer secures information about a new or different alternative, and then contemplates or even day dreams about the option) * Use-innovativeness (e. g. where the consumer uses an already adopted product in a new or novel way) Cognitive personality factors Visualisers are consumers who prefer information and products that stress the visual, such as membership in a video club. Verbalisers are consumers who prefer verbal information and products, such as membership in CD or book clubs.
Need for cognition measures a person’s craving for or enjoyment of thinking. Locus of control proposes that some individuals believe they can control outcomes by their own actions and personal abilities, whereas others feel that external forces such as fate, luck or chance control their destiny. Consumer ethnocentrism It is the suspicion of brands from other countries unrelated to characteristics of the product. Highly ethnocentric consumers feel it is inappropriate or wrong to purchase foreign-made products because of the economic impact on the domestic economy.
Non-ethnocentric consumers tend to evaluate foreign-made products more objectively for their extrinsic characteristics. The make-up of the self-image (page 124) * Actual self-image (how consumers see themselves) * Ideal self-image (how consumers would like to see themselves) * Social self-image (how consumers feel others see them) * Ideal social self-image (how consumers would like others to see them) Chapter 5 Perception is defined as the process by which an individual receives, selects and interprets stimuli to form a meaningful and coherent picture of the world.
A stimulus is any unit of input to any of the senses. Sensation Sensation is the immediate and direct response of the sensory organs to simple stimuli (an advertisement, a package, a brand name). Sensory receptors are the human organs (eyes, ears, nose, mouth and skin) that receive sensory inputs. Their sensory functions are to see, hear, smell, taste and feel movement. Examples of stimuli (sensory input) include products, packages, jingles, scent strips, brand names, advertisements and commercials. Absolute threshold The lowest level at which we can experience a sensation is called the absolute threshold.
The point at which we can detect a difference between ‘something’ and ‘nothing’ is our absolute threshold for that stimulus. Adaption refers specifically to ‘getting used to’ certain sensations, becoming accommodated to a certain level of stimulation. Marketers attempting to overcome consumer adaptation most often attempt to increase sensory inputs. The differential threshold The minimal difference that can be detected between two stimuli is called the differential threshold, or the just noticeable difference (j. n. d. ). Important selective perception concepts (page 184) Selective exposure – consumers actively seek out messages they find pleasant or are in sympathy with, and actively avoid painful or threatening ones. Consumers also selectively expose themselves to advertisements that reassure them of the wisdom of their purchase decisions. * Selective attention – consumers exercise a great deal of selectivity in terms of the attention they give to commercial stimuli. They have a heightened awareness of stimuli that meet their needs or interests and a lower awareness of stimuli irrelevant to their needs. Perceptual defence – the process of subconsciously ‘screening out’ stimuli to render them less threatening or inconsistent with one’s needs, values, beliefs or attitudes. * Perceptual blocking – consumers protect themselves from being bombarded with stimuli by ‘tuning out’, blocking such stimuli from conscious awareness. Subliminal perception (page 142) Subliminal perception is perception of very weak or rapid stimuli received below the level of conscious awareness. Supraliminal perception is perception of stimuli at or above the level of conscious awareness.
Perceptual organisation (page 148) Figure and ground focuses on contrast. Figure is usually perceived clearly because, in contrast to (back) ground, it appears to be well-defined, solid and in the forefront, while the ground is usually perceived as indefinite, hazy and continuous. Music can be figure or (back) ground. Closure stresses the individual’s need for completion. This need is reflected in the individual’s subconscious reorganisation and perception of incomplete stimuli as complete or whole pictures.
Grouping is a Gestalt principle by which people organise stimuli into groups such as grouping of mobile phone numbers. Distorting influences (perceptual distortion) (page 153) * Physical appearance * Stereotypes * Irrelevant cues * Jumping to conclusions * Halo effect Chapter 6 What is learning? (Page 185) Learning is the process by which individuals acquire the purchase and consumption knowledge and experience they apply to future related behaviour. Principle elements of learning * Motivation – based on needs and goals and it in effect acts as a catalyst for learning, with needs and goals serving as a stimuli. Cues – if motives serve to stimulate learning, cues are the stimuli that give direction to those motives. Price, styling, packaging, advertising and store displays all serve as cues to help customers fulfil their needs in product-specific ways. * Response – how individuals react to a drive or cue, how they behave, constitutes their response. Learning can occur even if responses are not overt. * Reinforcement – reinforcement increases the likelihood that a specific response will occur in the future as the result of particular cues or stimuli.
Behavioural learning theories Classical conditioning (page 187 – 188) Classical conditioning refers to being taught certain behaviours through repetition. Conditioned learning results when a stimulus that does not initially evoke a response is paired with another stimulus that elicits a known response until, eventually, it serves to produce the same response when used alone. Conditioned stimuli (CS) consist of consumption objects such as brands, products and retail stores. Conditioned response would be purchases or store patronage.
Unconditioned stimuli might consist of celebrity endorsers, sports figures and well-known consumption symbols. Repetition increases the strength of association between a conditioned stimulus and an unconditioned stimulus and by slowing the process of forgetting. Family branding is the practice of marketing a whole line of company products under the same brand name that capitalises on the consumer’s ability to generalise favourable brand associations from one product to the next. Instrumental conditioning (page 192)
In Instrumental (operant) conditioning, the stimulus that provides an optimal response is learned. Instrumental learning occurs through a trial-and-error process, with habits formed as a result of rewards received for certain responses or behaviours. While classical conditioning is useful in explaining how consumers learn very simple kinds or behaviours through repetition, instrumental conditioning is more helpful in explaining complex, goal-directed activities through reinforcements (rewards). Positive reinforcements consist of events that strengthen the likelihood of a specific response.
Negative reinforcements are unpleasant or negative outcomes that also serves to encourage a specific behaviour. Strategic applications of instrumental conditioning (page 194) * Customer satisfaction (reinforcement) * Relationship marketing * Reinforcement schedules * Shaping Massed or distributed learning Massed learning bunched up all at once which produces more initial learning used frequently in new products to hasten consumer learning. Distributed learning spreads of a period of time used when the goal is long-lasting repeat buying on a regular basis. Cognitive learning theory
Learning based on mental activity is called cognitive learning. Cognitive learning theory holds that the kind of learning most characteristics of human beings is problem solving, which enables us to gain some control over our environment. Unlike behavioural theory, cognitive theory holds that learning involves complex mental processing of information. Instead of stressing the importance of repetition or the association of rewards with a specific response, cognitive theorists emphasise the role of motivation and mental processes in producing a desired response. Information processing
Information processing is related to both the consumer’s cognitive ability and the complexity of the information to be processed. The structure of memory (page 197 – 198) * Sensory store – all data come to us through our senses; however, the image of a sensory input lasts for just a second or two in the mind’s sensory store. * Short-term store – the short term store is the stage of real memory in which information is processed and held for just a brief period. If information in the short term store undergoes the process known as rehearsal, it is then transferred to the long-term store.
The transfer process takes 2-10 seconds. If information is not rehearsed and transferred, it is lost in about 30 seconds or less. The amount of information that can be held in short-term storage is limited to four or five items. Through chunking of information, we can easily store more items such as phone numbers. * Long-term store – the long term store retains information for relatively extended periods of time. Information is stored in long-term memory in two ways: episodically by the order it was acquired, and semantically according to significant concepts.
Rehearsal and encoding The purpose of rehearsal is to hold information in short-term storage long enough for encoding to take place. Encoding is the process by which a word or visual image is selected and assigned to represent a perceived object. Brand loyalty (page 212) It is the consistent preference and/or purchase of one brand in a specific product or service category. Research on brand loyalty suggests that the greater the involvement level the greater the brand loyalty. Chapter 7 Attitudes
An attitude is a learned predisposition to behave in a consistently favourable or unfavourable way with respect to a given object. Structural models of attitudes Tricomponent attitude model * The cognitive component – consists of a person’s cognition; the knowledge and perceptions that are acquired by a combination of direct experience with the attitude object and related information from various sources. * The affective component – a consumer’s emotions or feelings about a product or brand constitute the affective component of an attitude. The conative component – conation is concerned with the likelihood or tendency that an individual will undertake a specific action or behaves in a particular way with regard to the attitude object. It is the action a person wants to take toward an object. Multi-attribute attitude models (page 232) It portrays consumer’s attitudes with regard to an attitude object as a function of consumers’ perception and assessment of the key attributes or beliefs held with regard to the particular attitude object. * The attitude-towards-object model – especially suitable for measuring attitudes towards a product (or service) category or specific brands.
According to this model, the consumer’s attitude towards a product or specific brands of a product is a function of the presence (or absence) and evaluation of certain product-specific beliefs and/or attributes. * The attitude-towards-behaviour model – designed to capture the individual’s attitude towards behaving or acting with respect to an object rather than the attitude towards the object itself. * Theory-of-reasoned-action model – a comprehensive theory of the interrelationships among attitudes, intentions and behaviour. Theory of trying-to-consume model
The theory of trying to consume is designed to account for the many cases in which the action or outcome is not certain but instead reflects the consumer’s attempts to consume. The key point is the outcome (e. g. purchase, possession, use or action) is not and cannot be assumed to be certain. Attitude-towards-the-ad models Consumer’s cognitive and affective evaluation of advertising. Consumer’s form various feelings and judgements as a result of exposure to an ad. The consumer’s attitude towards the ad and beliefs about the brand influence his or her attitude towards the brand.
Strategies of attitude change (page 240) * Changing the consumer’s basic motivational function * The utilitarian function * The ego-defensive function * The value-expressive function * The knowledge function * Combining several functions * Associating the product with an admired group or event * Resolving two conflicting attitudes * Altering components of the multi-attribute model * Changing the relative evaluation of attributes – when a product category is divided according to distinct product features or benefits that appeal to a particular segment, marketers can persuade them to ‘cross over’. Changing brand beliefs * Adding an attribute – adding an attribute that has previously been ignored such as potassium in yoghurt, adding an attribute that reflects an actual product change or technological innovation or eliminating a characteristic. * Changing the overall brand rating – alter consumers’ overall assessment of the brand directly, without attempting to improve or change their evaluation of any single brand attribute such as, ‘best-selling brand’. Chapter 8 Communication via the media Communication is the transmission of a message from a sender to a receiver via a medium of some sort.
The sender The sender initiates the communication. Using appropriate words, images and symbols, the sender encodes the message. As a formal source, the sender is likely to be either a for-profit (commercial) organisation or a non-profit organisation; an informal source can be a parent or a friend who gives a product information or advice. Informal word-of-mouth communication tends be highly persuasive because the sender has nothing to gain from it. The message Message can be verbal (spoken or written) or non-verbal (a photograph) or a combination of the two.
A verbal message usually contains more specific product information than does a non-verbal message. Non-verbal information takes the form of symbolic communication, such as a logo or a symbol. Persuasive message strategies Persuasive messages should begin with an appeal to the needs and interests of the audience, and end with an appeal relevant to the marketers’ own needs. Advertisements that do not conclude with an action closing tend to provoke much less response from the consumer than those that do.
Involvement theory (chapter 6) suggests that individuals are more likely to devote active cognitive effort to evaluating pros and cons of a product in a high-involvement purchase situation, and are more likely to focus on peripheral message cues in a low-involvement situation. Central route to persuasion is used for presenting advertising with strong, well-documented, issue-relevant arguments that encourage cognitive processing. When involvement is low, peripheral route to persuasion should be used by emphasising non-content message elements such as background scenery, music or celebrity spokespeople.
Message framing Positively framed messages are more persuasive in low-involvement situations where there is little emphasis on detailed cognitive processing, and negatively framed messages are more persuasive in situations encouraging detailed information processing. One-sided versus two-sided messages Claim credibility can sometimes be enhanced by actually disclaiming the superiority of some product features. Two-sided messages containing both positive and negative arguments about the brand serve to inoculate consumers against arguments that may be raised by competitors.
One-sided messages stress only favourable information. Comparative advertising Comparative advertising is a widely-used marketing strategy in which a marketer claims product superiority over one or more explicitly named (or implicitly identified) competitors either on an overall basis or on selected product attributes. Order effects The commercials shown first are recalled best, those in the middle the least, and the ones at the end slightly better than those in the middle. Emotional advertising appeals (page 266 onwards) * Fear appeals * Humour in advertising Humour attracts attention * Humour does not harm comprehension (in some cases it may even aid it) * Humour is not more effective at increasing persuasion * Humour does not enhance source credibility * Humour enhances ‘liking’ * Humour that is relevant to the product is superior to humour unrelated to the product. * Demographic factors affect the response to humorous advertising appeals. * The nature of the product affects the appropriateness of the humorous treatment. * Humour is more effective with existing products than with new products. Humour is more appropriate for low-involvement products and ‘feeling-oriented’ products than for high-involvement products. * Agony advertising * Abrasive advertising * Sex in advertising The receiver The receiver is likely to be a targeted prospect or a customer. Intermediary audiences are wholesalers, distributors and retailers, who are sent trade advertising designed to persuade them to order and stock merchandises. Unintended audiences often include stakeholders, such as employees, shareholders, creditors, suppliers, bankers and the local community.
Reference groups Reference groups are a collection of social role models who affect consumer behaviour. They serve as frames of reference for individuals in their purchase or consumption decisions. Normative reference groups influence general or broadly defined values or behaviour. Comparative reference groups serve as benchmarks for specific attitudes or behaviours. Normative reference groups influence the development of a basic code of behaviour, while comparative reference groups influence the expression of specific consumer attitudes and behaviour.