Chapter 1

Consumers Rule

CONSUMER BEHAVIOR, 9e
Michael R. Solomon

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Chapter Objectives
When you finish this chapter, you should understand why:

Consumers use products to help them define

their identities in different settings.

Consumer behavior is a process. Marketers need to understand the wants and

needs of different consumer segments.

The Web is changing consumer behavior.

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Chapter Objectives (continued)

Consumer behavior relates to other issues in

our lives.

Consumer activities can be harmful to

individuals and to society.

Many different types of specialists study

consumer behavior.

There are two major perspectives that seek

to understand and study consumer behavior.

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Aspects of Consumer Behavior

Segmented by marketers by
demographics

Influenced by peer groups Exposed to competing

brands seeking her loyalty

Evaluates products by the

appearance, taste, texture, smell

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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.
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Figure 1.1 Stages in the Consumption Process

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Actors in Consumer Behavior

A consumer is a person who identifies a need or desire, makes a purchase, and then disposes of the product.

Purchaser versus user

versus influencer

Organization/group as
consumer
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Consumers Impact on Marketing

Understanding consumer behavior is good business

Understanding people/organizations to
satisfy consumers needs

Knowledge and data about customers: Help to define the market Identify threats/opportunities to a brand

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Segmenting Consumers: Demographics

Demographics: statistics that measure observable aspects of a population, such as Age Gender Family structure Social class/income Race/ethnicity Geography
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Redneck Bank Targets by Social Class

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Discussion
What are some products or services that are widely used by your social group?

Do these products or services help you form

bonds with your group? If yes, give examples.

Are there any product or services you would

avoid because of the social group you belong to?

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Segmenting Consumers: Lifestyles

Psychographics

The way we feel

about ourselves

The things we
value

The things we do
in our spare time

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Tapping into Consumer Lifestyles

Relationship marketing: interact with

customers regularly; give them reasons to maintain a bond with the company

Database marketing: tracking specific

consumers buying habits and crafting products and messages tailored precisely to peoples wants

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Popular Culture

Music Movies Sports Books Celebrities Entertainment

Marketers influence preferences for movie and music heroes, fashions, food, and decorating choices.

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Consumer-Generated Content

When everyday
people voice their opinions about products, brands, and companies on blogs, podcasts, and social networking sites such as Facebook

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The Meaning of Consumption

People often buy products not for what they

do, but for what they mean

Consumers can develop relationships with

brands:
Product serves as a link with a past self Product establish users identity

Self-Concept Attachment

Nostalgic Attachment

Interdependence
Product is a part of the users daily 4/11/2012 Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall routine

Love
Product elicits emotional bonds of warmth,passion,or other strong emotion

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The Global Consumer

The global consumer

culture is one that unites people with a common devotion to Brand name consumer goods Movie stars Celebrities Leisure activities

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Virtual Brand Communities

C2C e-commerce in addition to B2B and

B2C

Wired Americans spend Less time with friends/family Less time shopping in stores More time working at home after hours

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Marketing Ethics and Public Policy

Business ethics: rules of conduct that guide

actions in the marketplace

Cultural differences in ethics: Codes of ethics less formal in Mexico U.S. Foreign Corrupt Practices Act
prohibits use of bribery by U.S. businesspeopleno matter where theyre doing business Bribery commonly practiced in other countries
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Sample of Federal Legislation Intended to Enhance Consumers Welfare

Year 1951 Act Fur Product Labeling Act Year 1968 Act Truth-in-Lending Act

1953 1958
1958 1966 1966 1967

Flammable Fabrics Act National Traffic and Safety Act

Automobile Information Disclosure Act Fair Packaging and Labeling Act Child Protection Act Federal Cigarette Labeling and Advertising Act

1969
1972 1975

National Environmental Policy Act

Consumer Products Safety Act Consumer Goods Pricing Act

1975
1990 1998

Magnuson-Moss WarrantyImprovement Act

Nutrition Labeling and Education Act Internet Tax Freedom Act

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Do Marketers Create Artificial Needs?

Objective of marketing: create awareness that needs exist, not to create needs Need: a basic
biological motive

versus

Want: one way that

society has taught us that the need can be satisfied

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Are Advertising & Marketing Necessary?

Does advertising foster materialism?

Products are designed to meet existing

needs;

Advertising only helps to communicate their

availability

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Do Marketers Promise Miracles?

Advertisers simply
do not know enough about people to manipulate them

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Discussion
Advertisers are often blamed for promoting a materialistic society by making their products as desirable as possible.

Do you agree with this? If yes, is materialism a bad thing? If no, what are your reasons?

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Public Policy & Consumerism

Concern for the welfare of consumers
Department of Agriculture Federal Trade Commission

Food and Drug Administration

Securities and Exchange Commission

Environmental Protection Agency

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Consumer Activism

Culture jamming is a strategy to disrupt

efforts by the corporate world to dominate our cultural landscape. Believes that it will change the way info flows, the way institution wield power, and the way industry set their agendas.

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Consumerism & Consumer Research

JFKs Declaration of
Consumer Rights (1962) The right to safety The right to be informed The right to redress The right to choice

Social Marketing Green Marketing

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The Consumer Dark Side

Consumer terrorism

Addictive consumption

Compulsive consumption

Consumed consumers Illegal activities

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Interdisciplinary Research Issues in Consumer Behavior

Disciplinary Focus Experimental Psychology Clinical Psychology Microeconomics/Human Ecology Product Role Perception, learning, and memory processes Psychological adjustment Allocation of individual or family resources

Social Psychology
Sociology Macroeconomics Semiotics/Literary Criticism Demography History Cultural Anthropology

Behavior of individuals as members of social groups

Social institutions and group relationships Consumers relations with the marketplace Verbal and visual communication of meaning Measurable characteristics of a population Societal changes over time Societys beliefs and practices

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Figure 1.2 Disciplines in Consumer Research

MICRO CONSUMER BEHAVIOR (INDIVIDUAL FOCUS)

Consumer behavior involves many different disciplines

Experimental Psych Clinical Psychology Developmental Psych Human Ecology Microeconomics Social Psychology Sociology Macroeconomics Semiotics/Literary Criticism Demography History Cultural Anthropology

MACRO CONSUMER BEHAVIOR (SOCIAL FOCUS)

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Table 1.3 Positivist versus Interpretivist Approaches

Assumptions Nature of reality Goal Positivist Approach (modernism) Objective, tangible Single Prediction Interpretivist Approach (postmodernism) Socially constructed Multiple Understanding

Knowledge generated
View of causality Research relationship

Time free Context-independent

Existence of real causes

Time-bound Contest dependent

Multiple, simultaneous shaping events Interactive, cooperative with researcher being part of phenomenon under study
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Separation between researcher and subject

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Figure 1.3 Wheel of Consumer Behavior

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Chapter Summary Consumer behavior is a process. Consumer use products and brands to define
their identity to others.

Consumers from different segments have

different needs and wants.

Consumer activities can be harmful. Consumer behavior benefits from several

fields.

There are two major perspectives guiding our

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study of consumer behavior.

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Understanding the Marketplace and Customer Needs

Customer Needs, Wants, and Demands

Needs are states of deprivation

Physicalfood, clothing, warmth, safety Socialbelonging and affection Individualknowledge and self-expression

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Understanding the Marketplace and Customer Needs

Customer Needs, Wants, and Demands Wants are the needs that are shaped by culture and individual personality - Ex: Need: Food, Want: McDonald Burger Demands are wants backed by buying power whether customers can afford to fulfill his/her wants or not

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Market Segmentation Segmenting Consumer Markets

Geographic Demographic Psychographic

Behavioral

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Market Segmentation Segmenting Consumer Markets Geographic segmentation divides the market into different geographical units such as nations, regions, states, counties, or cities

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Market Segmentation Segmenting Consumer Markets Demographic segmentation divides the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality

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Market Segmentation Segmenting Consumer Markets Demographic segmentation is the most popular segmentation method because consumer needs, wants, and usage often vary closely with demographic variables and are easier to measure than other types of variables

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Market Segmentation Segmenting Consumer Markets

Age and life-cycle stage segmentation is the process of offering different products or using different marketing approaches for different age and life-cycle groups Gender segmentation divides the market based on sex (male or female)

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Market Segmentation

Segmenting Consumer Markets

Income segmentation divides the market into affluent or low-income consumers

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Market Segmentation

Segmenting Consumer Markets

Psychographic segmentation divides buyers into different groups based on social class, lifestyle, or personality traits

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Market Segmentation Segmenting Consumer Markets

Behavioral segmentation divides buyers into groups based on their knowledge, attitudes, uses, or responses to a product Occasion Benefits sought User status Usage rate Loyalty status

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Market Segmentation Segmenting Consumer Markets

Occasion segmentation divides buyers into groups according to occasions when they get the idea to buy, actually make purchases, or respond to a product
Benefit segmentation requires finding the major benefits people look for in the product class, the kinds of people who look for each benefit, and the major brands that deliver each benefit

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Market Segmentation Segmenting Consumer Markets

User status divides buyers into ex-users, potential users, firsttime users, and regular users of a product
Usage rate divides buyers into light, medium, and heavy product users Loyalty status divides buyers into groups according to their degree of loyalty

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Market Segmentation

Segmenting Consumer Markets

Loyalty status divides buyers into groups according to their degree of loyalty

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Market Segmentation Using Multiple Segmentation Bases

Multiple segmentation is used to identify smaller, better-defined target groups

Geodemographic segmentation is an example of multivariable segmentation that divides groups into consumer lifestyle patterns

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