CHAPTER 1
AN INTRODUCTION TO CONSUMER BEHAVIOR
CHAPTER SUMMARY
As students will soon see, the field of consumer behavior covers a lot of ground. The formal definition used in the text is “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.”
Consumers can be seen as actors on the marketplace stage. As in a play, each consumer has lines, props, and costumes that are necessary to put in a good performance. The roles that consumers perform are among the most important elements to be studied in consumer behavior. Consumer is also an economic process where exchanges take place. These exchanges involve many players. The decisions made by the consumer and these other players are critical to the exchange being carried out successfully to the benefit of all concerned parties.
Market segmentation is an important aspect of consumer behavior. Consumers can be segmented along many dimensions, including demographics (the objective aspects of a population, such as age and sex), and psychographics (psychological and lifestyle characteristics). One of the important reasons for segmenting markets is to be able to build lasting relationships (relationship marketing) with the customers. Marketers are currently implementing many practices that seek to aid in forming a lasting bond with the often fickle consumer.
For better or for worse, we all live in a world that is significantly influenced by the actions of marketers. Much of what we learn is filtered by marketers. Therefore, consumer behavior is affected by the actions of marketers. Culture and domestic and global consumption practices will be examined in this chapter with an eye toward the role of the marketer.
The field of consumer behavior and its application is not without its critics. Ethical practices toward the consumer are often difficult to achieve. “Do marketers manipulate consumers?” is a serious question. Perhaps the answer may be found by examining several secondary questions such as: Do marketers create artificial needs? Are advertising and marketing necessary? Do marketers promise miracles? The responses to these questions are formulated in this chapter.
As there was a “Dark Force” in the Star Wars trilogy, consumer behavior may also have a dark side. Excesses, illegal activities, and even theft are not uncommon. However, ethical practice offers a positive solution to most of these problems.
The chapter concludes by providing a glimpse of consumer behavior as a field of study and provides a plan for study of the field. Simple decisions (buying a carton of milk) versus complex decisions (selection of complex networked computer system) can all be explained if consumer behavior is studied carefully and creatively. Strategic focus and sound consumer research seem to be among several tools that can provide the guiding light that is probably necessary in our complex and ever-changing world.
Lecture Suggestions: (a) The outline below closely follows the outline in the text. (b) In regular italics you will find questions that should help get a discussion started. (c) In bold italics on the left side of your page (preceded by *****), you will find reference notations to the Key Terms, Consumer Behavior Challenge questions and transparencies that correspond with the Lecture Notes. (d) You will find special boxed inserts that refer to interesting consumer behavior facts that might be used to make or enhance a point (End Notes are provided at the end of each chapter in the Instructor’s Resource Manual). Since it is virtually impossible to do everything that is included here in your course, a good way to use this Chapter Outline and Lecture Notes is to highlight with a magic marker the portions of the outline or notes you would like to use in class, the questions you would like to pose and the transparencies you will need. This helps to make a class flow more smoothly.
CHAPTER OUTLINE
1. Chapter Behavior: People in the Marketplace
a. The average consumer can be classified and characterized on the basis of:
1). Demographics--age, sex, income, or occupation.
2). Psychograpics--refers to a person’s lifestyle and personality.
b. The average consumer’s purchase decisions are heavily influenced by the opinions
and behaviors of their family, peers, and acquaintances.
c. As a member of large society, U.S. consumers share certain cultural values or
strongly held beliefs about the way the world should be structured.
1). Some of the values are based on subcultures (such as Hispanics or teens).
2). Some of the values are those of reference groups.
d. Brands often have clearly defined images or “personalities” created by product
advertising, packaging, branding, and other marketing strategies that focus on
positioning a product in a certain way.
e. When a product succeeds in satisfying a consumer’s specific needs or desires, it
may be rewarded with many years of brand loyalty.
1). This bond is often difficult for competitors to break.
2). However, a change in one’s life situation or self-concept can weaken the
bond.
f. Consumers’ evaluations of products are affected by their appearance, taste, texture,
or smell.
g. In a modern sense, an international image has an appeal to many consumers.
This might be labeled the “country-of-origin” effect. Increasingly, consumers
opinions and desires are shaped by input from around the world.
What is Consumer Behavior?
h. Consumer behavior is the study of the processes involved when individuals or
groups select, purchase, use, or dispose of products, services, ideas, or experiences
satisfy needs and desires.
1). Consumers are actors on the marketplace stage.
a). The perspective of role theory takes the view that much of consumer
behavior resembles actions in a play.
*****Use Key Terms consumer behavior and role theory Here; Use PowerPoint Slide 1-2 Here*****
Discussion Topic: What are some of the roles you play in life? What kinds of “costumes” do you have in closet?
b). People act out many roles and sometimes consumption decisions are
affected.
2). Consumer behavior is a process.
a). Most marketers recognize that consumer behavior is an ongoing process,
not merely what happens at the moment a consumer hands over money or
a credit card and in turn receives some good or service
b). The exchange, in which two or more organizations or people give and
receive something of value, is an integral part of marketing.
1]. The expanded view emphasizes the entire consumption process.
2]. This view would include issues that influence the consumer before,
during, and after a purchase.
*****Use Figure 1-1 Here; Use Consumer Behavior Challenge #5 Here*****
3). Consumer behavior involves many different actors.
a). The consumer is generally thought as a person who identifies a need or
desire, makes a purchase, and then disposes of the product during the
three stages in the consumption process.
b). The purchaser and user of a product might not be the same person.
c). A separate person might be an influencer.
d). Consumers may be organizations or groups (in which one person may
make the decision for the group).
*****Use PowerPoint Slide 1-2 Here; Use Consumer Behavior Challenge #1 Here*****
2. Consumer’s Impact on Marketing Strategy
a. Understanding consumer behavior is good business. A basic marketing concept
states that firms exist to satisfy consumers’ needs.
1). Consumer response is the ultimate test of whether or not a marketing strategy
will succeed.
2). Data about consumers helps organizations to define the market and to identify
threats and opportunities in their own and different countries.
Segmenting Consumers
b. The process of marketing segmentation identifies groups of consumers who are
similar to one another in one or more ways, and then devising strategies that
appeal to one or more groups.
1). Demographics are statistics that measure observable aspects of a population,
such as birth rate, age distribution, and income.
*****Use Table 1-1 Here; Use PowerPoint Slide 1-3 Here*****
2). Important demographic variables include:
a). Age.
b). Gender.
c). Family structure.
d). Social Class and Income.
e). Race and ethnicity.
f). Geography.
*****Use PowerPoint Slide 1-4 Here*****
Discussion Topic: How would you describe yourself demographically? What bearing would this have on your purchase patterns? How could a marketer find out about you in a demographic sense?
Relationship Marketing: Building Bonds with Consumers
c. Relationship marketing occurs when a company makes an effort to interact with
customers on a regular basis, and giving them reasons to maintain a bond with the
company over time.
*****Use Key Term relationship marketing Here; Use Consumer Behavior
Challenge #3 Here; Use PowerPoint Slide 1-5 Here*****
Discussion Topic: What types of organizations can make best use of relationship marketing?
d. Database marketing involves tracking consumers’ buying habits very closely, and
crafting products and messages tailored precisely to people’s wants and needs
based on this information. Examples include:
1). Gambling casinos.
2). Music groups and music companies.
3). Levi Strauss.
4). Johnson and Johnson.
*****Use Key Term database marketing Here; Use Consumer Behavior Challenge
#4 Here; Use PowerPoint Slide 1-5 Here*****
Discussion Topic: How can database marketing help an organization improve its relationship marketing?
Kraft General Foods sends nutrition and exercise tips to a list of more than 30 million consumers based on information they've provided when they send in coupons or respond to other promotions. Philip Morris has built a 26 million-name database that it uses for both direct marketing and for rallying customers to the cause of smokers' rights.1
3. Marketing’s Impact on Consumers
a. For better or worse, we all live in a world that is significantly influenced by the
actions of marketers.
Marketing and Culture
b. Popular culture consists of the music, movies, sports, books, celebrities, and
other forms of entertainment consumed by the mass market, is both a product of
and an inspiration for marketers.
1). The meaning of consumption--a fundamental premise of consumer behavior is
that people often buy products not for what they do, but for what they mean.
2). People, in general, will choose the brand that has an image (or even a
personality) that is consistent with his or her underlying needs.
*****Use Key Term popular culture Here *****
Discussion Topic: Can you give an illustration of some product you purchase just for its image?
3). People may have various relationships with a product:
a). Self-concept attachment--the product helps to establish the user’s identity.
b). Nostalgic attachment--the product serves as a link with a past self.
c). Interdependence--the product is a part of the user’s daily routine.
d). Love--the product elicits emotional bonds of warmth, passion, or other
strong emotion.
*****Use PowerPoint Slide 1-6 Here*****
Discussion Topic: Give an illustration of product that you have a strong attachment for and explain the relationship.
4). A consumption typology is a way products have different meanings for
people. Examples of different consumption activities are:
a). Consuming as an experience--an emotional or aesthetic reaction to
consumption objects.
b). Consuming as integration--learning and manipulating consumption
objects to express aspects of the self or society.
c). Consuming as classification--the activities that consumers engage in to
communicate their association with objects, both to self and to others.
d). Consuming as play--consumers use objects to participate in a mutual
experience and merge their identities with that of a group.
5). For assistance in understanding how consumers interpret the meanings of
symbols, some marketers are turning to a field of study known as semiotics,
which examines the correspondence between signs and symbols and their role
in the assignment of meaning. Semiotics is important to the understanding
of consumer behavior since consumers use products to express their social
identities. Marketing messages have three basic components:
a). The object that is the focus of the message.
b). The sign is the sensory imagery that represents the intended meanings of
the object.
c). The interpretant is the meaning derived.
*****Use Key Term semiotics Here; Use Figure 1-2 Here; Use Consumer Behavior
Challenge #10 Here; Use PowerPoint Slides 1-7 and 1-8 Here*****
6). One highly visible--and controversial--by-product of sophisticated marketing
strategies is the movement toward a global consumer culture, where people
around the world are united by their common devotion to brand name
consumer goods, movie stars, and musical celebrities.
Blurred Boundaries: Marketing and Reality
c. Marketers and consumers co-exist in a complicated, two-way relationship. There
is often a “blurring” between the two.
4. Marketing Ethics and Public Policy
Business Ethics
a. Business ethics essentially are rules of conduct that guide actions in the market-
place--the standards against which most people in a culture judge what is right and
what is wrong, good or bad. Universal values include:
1). Honesty.
2). Trustworthiness.
3). Fairness.
4). Respect.
5). Justice.
6). Integrity.
7). Concern for others.
8). Accountability.
9). Loyalty.
*****Use Key Term business ethics Here; Use PowerPoint Slide 1-9 Here*****
Discussion Topic: What other values do you think might affect consumption?
Needs and Wants: Do Marketers Manipulate Consumers?
b. One of the most stinging criticisms of marketing is that marketing (especially
advertising) is responsible for convincing consumers that they “need” many
material things that they honestly do not need.
1). Some believe that marketing creates demand that only its products can satisfy.
2). A response to this belief is that marketing attempts to create awareness that
these needs do exist, rather than to create them.
Discussion Topic: What needs do you think marketing creates in you?
3). Are advertising and marketing really necessary? Yes, if approached from an
information dissemination perspective.
4). Do marketers promise miracles? Not it if they are honest. They do not have
the power to create miracles.
*****Use PowerPoint Slide 1-10 Here*****
Public Policy and Consumerism
c. Consumerism and consumer research. Famous consumer essays and governmental
publications include:
1). The Jungle by Upton Sinclair (1905).
2). Declaration of Consumer Rights (1962).
3). Silent Spring by Rachel Carson (1962).
4). Unsafe at Any Speed by Ralph Nader (1965).
*****Use Table 1-2 Here*****
Discussion Topic: What do you think is the worst “anti-consumer” practice used by business? What would you do about it?
The Home Depot chain of home improvement centers demands that its 300 foreign suppliers reveal if their factories employ any children or prison convicts before they sign a contract. H.J. Heinz, after being barraged by mail from children demanding that it stop buying tuna from suppliers that kill dolphins, now certifies that its Star-Kist brand only buys from approved suppliers. 2
5. The Dark Side of Consumer Behavior
a. Despite the best efforts of researchers, government regulators, and concerned
industry people, sometimes consumers’ worst enemies are themselves. Examples
are:
1). Compulsive consumption.
2). Negative or destructive consumer behavior. Three aspects are:
a). The behavior is not done by choice.
b). The gratification derived from the behavior is short-lived.
c). The person experiences strong feelings of regret or guilt afterwards.
3). Consumer addiction (such as gambling).
*****Use Key Term compulsive consumption and consumer addiction Here; Use
Consumer Behavior Challenge #9 Here; Use PowerPoint Slide 1-11 Here*****
Discussion Topic: Besides gambling, what other compulsions or addictions can you name that demonstrate excesses in consumer behavior. Who has the responsibility for taking corrective action to curb these excesses?
Consumed Consumers
b. People who are used or exploited, whether willingly or not, for commercial gain
in the marketplace can be thought of as consumed consumers. Examples include:
1). Prostitutes.
2). Organ, blood, and hair donors.
3). Babies for sale.
Illegal Activities
c. Consumer activities that are illegal are exemplified by:
1). Consumer theft--shrinkage is an industry term for inventory and cash losses
due to shoplifting and employee theft.
Discussion topic: How does shoplifting add to the cost of your products?
2). Some types of destructive consumer behavior can be thought of as
anticonsumption whereby products and services are deliberately defaced or
mutilated.
3). Destructive political protest (called culture jamming) occurs.
4). In cultural resistance consumers who are alienated from mainstream society
(such as juvenile delinquents) single out objects that represent values of the
larger group and modify them as an act of rebellion or self-expression.
*****Use Key Terms consumed consumers, shrinkage, anticonsumption, and
cultural resistance Here; Use Consumer Behavior Challenge #8 Here; Use PowerPoint Slide 1-11 Here *****
Discussion Topic: Has cultural resistance (or any of its forms) ever affected you and your consumption behavior? Any of your friends? If so, why do you think the behavior occurred?
6. Consumer Behavior as a Field of Study
a. It is a rather recent that consumers have become the objects of formal study.
Interdisciplinary Influences on the Study of Consumer Behavior
b. Consumer behavior may be studied from many points of view--such as psychology,
sociology, social psychology, cultural anthropology, economics, et cetera.
*****Use Figure 1-3 Here; Use Table 1-3 Here; Use Consumer Behavior Challenge
#2 Here; Use PowerPoint Slide 1-12 Here*****
The Issue of Strategic Focus
c. Many regard the field of consumer behavior as an applied social science.
Accordingly, the value of the knowledge generated should be evaluated in terms
of its ability to improve the effectiveness of marketing practice.
The Issue of Two Perspectives on Consumer Research
d. One general way to classify consumer research is in terms of the fundamental
assumptions the researchers make about what they are studying and how to study
it. This set of beliefs is known as a paradigm.
1). The dominant paradigm currently is called positivism (or sometimes called
modernism). It emphasizes that human reason is supreme, and that there is a
single, objective truth that can be discovered by science. Positivism
encourages us to stress the function of objects, to celebrate technology, and to