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Chapter 1

Consumers Rule

By Michael R. Solomon

Consumer BehaviorBuying, Having, and Being

Sixth Edition

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MTVCognitive Component (Measuring Beliefs about Specific Attributes Using

the Semantic Differential Scale)

Diet CokeGood music —— —— —— —— —— —— —— Bad music

Interesting —— —— —— —— —— —— —— Not interesting

Fun shows —— —— —— —— —— —— —— Boring shows

Sucks —— —— —— —— —— —— —— Doesn’t suck

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Thought listing (cognitive response)

• We would now like for you to list your thoughts that come to mind as you view the product. Next to the first number write the first thought that comes to your mind regarding the product shown, next to the second number write the second thought that comes to your mind regarding the product shown, etc.

Please put only one thought next to each number.

1.

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Sentence Completion and In-Depth Response

• Please complete the following question:• People who watch MTV:

_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

• Please describe what MTV means to you.

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What is Marketing myopia?

What companies have fallen prey to this?

Saturation + Myopia = Failure

What companies have fallen prey to this?

Saturation + Consumer Identification, Need matching, and Relationship maintenance = Long term stability.

Success stories?

Why study Buyer Behavior?

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Who are your customers?

• End-use consumer• Employees• Shareholders• Members of supply chain• Society (including critics): Treat them as

disgruntled customers (Holt et. al 2004).

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What is Consumer Behavior?

• Consumer Behavior:– 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

• Role Theory:– Identifies consumers as actors on the marketplace stage

• Consumer Behavior is a Process:– Exchange: A transaction in which two or more

organizations give and receive something of value

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Some Issues That Arise During Stages in the Consumption Process

Figure 1.1

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Consumer Behavior InvolvesMany Different Actors

• Consumer:– A person who identifies a need or desire, makes a

purchase, and then disposes of the product• Many people may be involved in this sequence of

events.– Purchaser / User / Influencer

• Consumers may take the form of organizations or groups.

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Consumers’ Impact onMarketing Strategy

• Market Segmentation:– Identifies groups of consumers who are similar to

one another in one or more ways and then devises marketing strategies that appeal to one or more groups

• Demographics:– Statistics that measure observable aspects of a

population• Ex.: Age, Gender, Family Structure, Social Class

and Income, Race and Ethnicity, Lifestyle, and Geography

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A Lesson Learned

• Nike was forced to pull this advertisement for a running shoe after disabilities rights groups claimed the ads were offensive.

• How could Nike have done a better job of getting its message across without offending a powerful demographic?

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Market Segmentation

Finely-tuned marketing

segmentation strategies

allow marketers to

reach only those

consumers likely to be

interested in buying

their products.

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Marketing Strategy and Consumer Behavior

Marketing Strategy and Consumer Behavior

OutcomesIndividual

FirmSociety

Consumer decision processProblem RecognitionInformation Search

Alternative EvaluationPurchase

UseEvaluation

Marketing strategyProduct, Price, Distribution,

Promotion, Service

Marketing segmentationIdentify product-related need sets

Group Customers with similar need setsDescribe each group

Select attractive segment(s) to target

Marketing analysisCompany

CompetitorsConditionsConsumers

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Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.

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Consumers’ Impact onMarketing Strategy (cont.)

• Relationship Marketing: Building Bonds with Consumers– Relationship marketing:

• The strategic perspective that stresses the long-term, human side of buyer-seller interactions

– Database marketing:• Tracking consumers’ buying habits very closely, and

then crafting products and messages tailored precisely to people’s wants and needs based on this information

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Marketing’s Impact on Consumers

• Marketing and Culture:– Popular Culture:

• Music, movies, sports, books, celebrities, and other forms of entertainment consumed by the mass market.

– Marketers play a significant role in our view of the world and how we live in it.

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Popular Culture

Companies often create product icons to develop anidentity for their products. Many made-up creatures andpersonalities, such as Mr. Clean, the Michelin tire man andthe Pillsbury Doughboy, are widely recognized figures inpopular culture.

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Marketing’s Impact on Consumers: The Meaning of Consumption

• The Meaning of Consumption:– People often buy products not for what they do,

but for what they mean.– Types of relationships a person may have with a

product:• Self-concept attachment

• Nostalgic attachment

• Interdependence

• Love

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Marketing’s Impact on Consumers: The Global Consumer

• By 2006, the majority of people on earth will live in urban centers.

• Sophisticated marketing strategies contribute to a global consumer culture.

• Even smaller companies look to expand overseas.

• Globalization has resulted in varied perceptions of the United States (both positive and negative).

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The Global Consumer

American products like Levi jeans are indemand around the world.

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Marketing’s Impact on Consumers: Virtual Consumption

• The Digital Revolution is one of the most significant influences on consumer behavior.

• Electronic marketing increases convenience by breaking down the barriers of time and location.

• U-commerce:– The use of ubiquitous networks that will slowly but surely

become part of us (i.e., wearable computers, customized advertisements beamed to cell phones, etc.)

• Cyberspace has created a revolution in C2C (consumer-to-consumer) activity.

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Blurred BoundariesMarketing and Reality

• Marketers and consumers coexist in a complicated two-way relationship.

• It’s increasingly difficult for consumers to discern the boundary between the fabricated world and reality.

• Marketing influences both popular culture and consumer perceptions of reality.

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Marketing Ethics and Public Policy

• Business Ethics:– Rules of conduct that guide actions in the

marketplace– The standards against which most people in the

culture judge what is right and what is wrong, good or bad

• Notions of right and wrong differ among people, organizations, and cultures.

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Needs and Wants:Do Marketers Manipulate Consumers?

• Consumerspace• Do marketers create artificial needs?

– Need: A basic biological motive– Want: One way that society has taught us that need can be

satisfied

• Are advertising and marketing necessary?– Economics of information perspective: Advertising is an

important source of consumer information.

• Do marketers promise miracles?– Advertisers simply don’t know enough to manipulate

people.

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• This ad was created by the American Association of Advertising Agencies to counter charges that ads create artificial needs.

• Do you agree with the premise of the ad? Why or why not?

Discussion Question

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Public Policy and Consumerism

• Consumer efforts in the U.S. have contributed to the establishment of federal agencies to oversee consumer-related activities.– Department of Agriculture– Federal Trade Commission– Food and Drug Administration– Securities and Exchange Commission– Environmental Protection Agency

• Culture Jamming:– A strategy to disrupt efforts by the corporate world to

dominate our cultural landscape

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Culture Jamming

• Adbusters Quarterly is a Canadian magazine devoted to culture jamming. This mock ad skewers Benetton.

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Consumerism and Consumer Research

• Green Marketing:– When a firm chooses to protect or enhance the

natural environment as it goes about its activities• Reducing wasteful packaging• Donations to charity

• Social Marketing:– Using marketing techniques to encourage positive

activities (e.g. literacy) and to discourage negative activities (e.g. drunk driving)

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Kennedy’s “Declaration of Consumer Rights” (1962)

• The right to the satisfaction of basic needs. • The right to be protected against hazardous products

and processes. • The right to have the facts needed to make an

informed choice. • The right to choose between a variety of products and

services. • The right to be heard in the making and execution of

government policy. • The right to a fair settlement of just claims. • The right to acquire the skills and knowledge to be an

informed and responsible consumer. • The right to live in a healthy and sustainable

environment.

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Consumer Related Issues

• UNICEF sponsored this advertising campaign against child labor. The field of consumer behavior plays a role in addressing important consumer issues such as child exploitation.

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The Dark Side of Consumer Behavior

• Consumer Terrorism:– An example: Susceptibility of the nation’s food

supply to bioterrorism

• Addictive Consumption:– Consumer addiction:

• A physiological and/or psychological dependency on products or services

• Compulsive Consumption:– Repetitive shopping as an antidote to tension,

anxiety, depression, or boredom

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Positivist vs. Interpretivist Approaches to CB

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Consumer BehaviorAs a Field of Study

• Consumer behavior only recently a formal field of study

• Interdisciplinary influences on the study of consumer behavior– Consumer behavior studied by researchers from

diverse backgrounds– Consumer phenomena can be studied in different

ways and on different levels

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Journal of Consumer Research

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The Pyramid of Consumer Behavior

Figure 1.2

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The Wheel of Consumer Behavior

Figure 1.3