Part A: Consumers in the Marketplace

Part A: consumers in the marketplace.

An introduction to consumer behavior

Consumer behaviour : focuses on totality of consumer’sdecisions with respect to theacquisition, consumption, anddisposition of goods, services,time, and ideas by humandecision making units over time

Demographics: descriptive characteristics of a population: age, gender, income, occupation

Psychographics: a persons’ lifestyle and personality

Subcultures: smaller groups within a culture, vb. Teens, ethnic groups

Market segmentation strategies: targeting a brand only to specitic groups of consumers

Valid segmentation process:

Consumers within the segment are similar to one another in terms of product needs, and these needs are different from consumers in other segments.
Important differences among segments can be identified
The segment is large enough to be profitable.
The consumers in the segment will respond in the desired way to the marketing mix designed for them.

Database marketing: tracking consumers’ buying habits by computer and crafting products and information tailored precisely to people’s wants and needs.

Marketing’s impact on consumers

U-commerce: The use of ubiquitous networks. Via bv smartphone.=> je passeert aan een Mcdonalds en krijgt een mail met de promoties van de dag.

Digital native: sinds 2001 : consumer grew up ‘wired’ in a highly networked, always-on world where digital technology has always existed.

Web 2.0: the rebirth of the internet as a social, interactive medium from its original roots as a form of oneway transmiddian from producers to consumers.

Horizontal revolution: information flows across people (social media)

Biat-and –switch selling strategy: consumers are lured into the store with promises of inexpensive products with the sole intention of getting them to switch to higher-priced goods.

Do marketers manipulate consumers

Marketers do not create artificial needs, but they do contribure heavily to the socialization of people in contemporary society and thus to the establishment of the social system of needs.

Economics of information (outdated): advertising is an important source of consumer information. (economic cost of the time spend searching for products.

Paradigm: the fundamental assumptions researchers make about what they are studying and how to study it.

Consumer behaviour is in the middle of a paradigm shift.

Current: positivism : - emphasizez that human reason is supreme and that there is a single, objective truth that

can be discovered by science

-Encourage us to stress the function of objects, to celebrate technology and to regard the world as a rational, ordered place with a clearly defined past, present and future.

New: interpretivism : - stress the importance of symbolic, subjective experience, ande the idea that meaning is

in the mind. There are no single right or wrong references.

Assumptions / Positivist approach / Interpretivist approach
Nature of reality / Objective, tangible single / Socially constructed, multiple
Goal / Prediction / understanding
Knowledge generated / Time-free, context independent / Time-bound, context-dependant
View of causality / Existence of real causes / Multiple, simultaneous shaping events
Research relationship / Separation between researcher and subject / Interactive, co-operative, with researcher being part of phenomenom under study

Consumer culture theory (CCT):

2. a consumer society

People often buy products not for what they do, but for what they mean. A person will choose the brand that has an image consistent with their underlying ideas
Cultural symbolism of product meanings influence physiological processes such as taste.
Four distinct types of consumption activities
Consuming as experience :
Consuming as integration :
Consuming as classification:
Consuming a play:
Relationships a person may have with a brand:
Self-concept attachment: The product helps to establish the users’ s identity
Nostalgic attachment : The product serves as a link with a past self
Interdependence : The product is a part of the user’s daily routine.
Love: The product elicits bonds of warmth, passion or other strong emotion.
Brand communities :vb. MG-owners in USA, nutella
Experience economy: vroeger bakte men zelf een verjaardagstaart, nu is alles geregeld in bobbo’s land.

Als je gaat praten met de bank over een lening voor een huis => alles in een doos in de vorm van een baksteen.

Postmodernism: we live in a period where the modern order, with its shared beliefs in certain central

values of modernism and industrialism, is breaking up. Postmodernism quentions the search for universal truths and values and the existence of objective knowledge.

Pluralism: co-existence of various thruths, styles and fashion

Six key features:

Fragmentation: splitting up of what used to be simpler and more mass

orientated

De-differentiation: blurring of distinction vb. Politics and show business.
Hyperreality: making real what was just fantasy. (red apples sigarettes kill bill)
Chronology: consumers nostalgic search for the authentic and a preoccupation with the past. Retro brands revived.
Pastiche (nabootsing). Vb the marketing code i.p.v. the da vinci code.
Anti- foundationalism : ‘anti-campain campain’

Global consumer culture

Etic perspective: focus on commonalities across cultures: universal messages will be appreciated by people in many countries
Emic perspective : attempts to explain a culture based on the cultural categories and experiences of the insiders
4 groups of customers who evaluate global brands in the same way:

Global citizens (55%) : see the global success of a company as a signal of quality and innovation

Are concerned about responsibility on workers rights, consumer health.

Global dreamers (23%) : see global brands as qualtity products.

Not as concerned with social responsibility as are the global citizens

Antiglobals (13%) : skeptical that transnational companies deliver higher-quality goods

Dislike brands that preach American values + do not trust global companies to behave responsibly

Global agnostics (9%) : evaluate a global product by the same criteria as local brands.

Globalization = glocalization: all global phenomena exist and become meaningful in a local context.

Vb 4 types of food consumption :

Global food: fast food, burgers en pizza, instant coffee, found everywhere and belong nowhere
Expatriate food: authentic meals and products from other cultures
Nostalgia food: search for local authenticity
Creolization of food: blending various traditions in new ones.

Politics of consumption

Compulsive buying: the act of shopping itself is an addictive experience for some customers; customers in newly marketized economies are even more vulnerable.
Overconsumption is a structural problem that has evolved in our affluent, consumer society.
Affluenza: negative sides of a society over-focused on its consumption
Ethical customer : use their buying pattern as a weapon against companies they don’t like and in support of the companies that reflect values similar to their own.
Consumer boycotts: 4 factor predict boycott participation:

The desire to make a difference
The scope for self-enhancement.
Counterarguments that inhibit boycotting
The cost to the boycotter of constrained consumption.

Corporate social responsibility

Motivation, value and lifestyle

Motivation: the process that cause people to behave as they do. From a psychological perspective motivation occurs when a need is aroused that the consumer wishes to satisfy.

Utilitarian: a desire to achieve some functional or practical benefit

Hedonic: an experiental need, involving emotional responses or fantasies

Motivational strength

Drive theory: focusses on the biological needs that produce unpleasant states of arousal. We are motivated to reduce the tension caused by this arousal. => goal orientated behaviour => return to homeostasis (balanced state.

=> runs into difficulties when it tries to explain some facets of the human behaviour that run counter to its predictions

Expectancy theory: behaviour is largely pulled by expectations of achieving desirable outcomes

Motivational direction

Biogenic need: need for certain elements necessary to maintain life: food, water, air & shelter

Psychogenic need: reflect the priorities of a culture, need for status, power, affiliation,…

Productivity orientation: continual striving to use time constructively.

Motivation is largely driven by affect (raw emotion)

Sentiment analysis: a process that scours the social media universe to collect and analyse the words people use when they describe a specific product or company.

Motivational conflict

A goal has valence: can be positive or negative. Reaching a goal  avoiding negative outcome

Approach-approach conflict: person must choose between 2 desirable alternatives. Hamburger of braadworst?
Theory of cognitive dissonance : a state of dissonance occurs when there is a psychological inconsistency between 2 or more beliefs (or products)
Approach – avoidance conflict: when we desire a goal but wish to avoid it at the same time . We willen ijs maar geen dikke poep. We willen een bontmantel, maar geen dode dieren.
Avoidance – avoidance conflict: choice between 2 undesirable alternatives.

How can we classify consumer needs?

Need for achievement: personal accomplishment
Need for affiliation: to be in company of other people
Need for power: to control one’s environment.
Need for uniqueness:
Maslow’s hierarchy of needs: a hierarchy of biogenic ens psychogenic needs that specifies certain leverls of motives. The order of development is fixed: we must attain a certain level before we activate a need for the next higher one.

Maslow’s hierarchy is only helpful to marketers in so far as it reminds us that consumers may have different need priorities in differenti consumption situation,…

4C’s of social media: connect, create, consume and control.

Hidden motives: The psychoanalytical perspective on personality

Freudian theory: much of the human behaviour stems from a fundamental conflict between a persons’ desire to gratify their physical needs and te necessity to function as a responsible member of society.
The id: is selfish and illogical. Pleasure principle: behaviour is guided by the primary desire to maximize pleasure and avoid pain.
The superego: counterweight to the id. The conscience: It internalizes society’s rules and works to prevent the id fromm deeking selfisch gratification.
The ego: system that mediates between id en superego. Tries to balance these two opposing forces according to the reality principle.
Motivational research: (based on Freudian interpretations): socially unacceptable needs are channeled into acceptable outlets. Product use or avoidance is motivated by unconscious forces wich are often determined in childhood. Ernest dichter. In depth interviews
Neo-freudian theories: an individual’s personality is more influenced by how he handles relationships with others than by how he resolves sexual conflicts. Vb. Alfred adles, harry stack Sullivan, carl jung.
Trait theory: focuses on the quantitative measurement of personality traits
Innovativeness
Materialism
Self-consciousness
Need for cognition
Frugality: this personality type tends to favour cost-saving measures such as timing showers & eating leftovers.
Marketing researchers have not been able to predict consumer’s behaviour on the basis of measured personality traits:
Many of the scales are not sufficiently valid or reliable
Personality tests are typically developed for specific populations (vB; mentally ill) => no relevance to a more general population
Often marketers don’t administer the tests under the appropriate conditions.
Ad hoc changes dilute the validity of the measures
Trait scales measure gros, overall tendencies

Brand personality

= the set of traits people attribute to a product as if it were a person.

Dopplegänger brand image: looks like the original, but it is in fact a critique of it.
Brand equity: refers to the extent to wich a consumer holds strong, favourable and unique associations with a brand in memory

Consumer involvement

= a person’s perceived relevance of the object (product, brand, advertisement, purchase decision) based on their inherent needs, values and interests.

Can be viewed as the motivation to process information.

Levels of involvement:

Inertia: absolute lack of interest in a marketing stimulus
Passion; when consumers are truly involved with a product, they enter a flow state

Product involvement: consumers’ level of interest in a particular product.

Mass customization => personalization of products and services for individual customers at a mass-production price

Message-response involvement: refers to the consumer’s interest in processing marketing communications. (television : low-involvement medium, print : high –involvement.)
Trategies to increase involvement:
Appeal to the consumers’ hedonic needs
Use novel stimuli, such as cinematography, sudden silences, unexpected movements in commercials
Use prominent stimuli (loud music and fast action) to capture attention in commercials
Incluse celebrity endorsers to generate higher interest in commercials
Provide value that customers appreciate
Let customers make the messages . consumer generated content.

Values

= a believe about some desirable end-state that transcends specific situations and guides selection of behaviour

A person’s set of values plays a very important role in their consumption activities
Core values: every culture has a set of core values that it imparts to its members. Vb. Italiaanse vrouwen kuisen 20u /week, amerikaanse 4U/week.
Value systems: every culture is characterized by it’s members’ endorsement of a value system, it is usually possible to identify a general set of core values which uniquely define a culture
Enculturation: the process of learning the beliefs and behaviours endorsed by one’s own culture
Acculturation: learning the value system and behaviours of another culture.
Socialization agents : parents, friends, teachers, media
In many cases, values are universal. What sets cultures apart is the relative importance, or ranking of these universal values;
Cultural values (security, happiness), consumption specific values (convenient shopping) , product-specific values (ease of use, durability)
Consumer value: value for a consumer is the consumer’s evaluation of a consumer object in terms of wich general benefit the consumer might get from consuming it.
Efficiency
Excellence
Status
(self-) esteem
Play
Aesthetics7ethics
Spirituality
The Rokeach value survey:
A set of terminal values + instrumental values (actions needed to achieve the terminal values)

Not widely used.

List of values (LOV) list of 9 consumer values which can be related to differences in consumer behaviour
Schwartz value survey: 56 different values organized in 10 motivational domains

More cross-culturally valid.

The means-end chain model

This approach assumes that people link very specific product attributes to terminal values: We choose amiong alternative means to attain some end state that we value.

Materialism: another perspective on the ‘why’ of consumption

Refers to the importace people attach to wordly possessions products valued by high materialists are more likely to be publicly consumed and to be more expensive.
Materialism increases from middle childhood to early adolescence and decreased from early adolescence onwards. => linked with self-esteem.
Materialism is not directly linked to affluence
Materialism is a consequence of several factors
2 ways of dealing with materialism : justifiying & excusing oneself
People are happier when they spend money on experiences instead of material objects.
The only consumption category that was positively related to happiness involved leisure: vacation, entertainment….
Hedonic adaptation: consumers get more ‘bang for their buck’ when they buy a bunch of smaller things over time, rather than blowing it all on one big purchase. . Over time the rush of a major purchase will dissipate and w’re back to where we started;
Cosmopolitanism is related to materialism

Sustainability: a new core value?

= conscientious consumerism

Carbon footprint
Virtual water footprint: represents how much water is required to produce a produc.
Greenwashing

Lifestyles and consumption choices

Lifestyle refers to a pattern of consumption that reflects a person’s choices about how they spend time and money, but in many cases it also refers to the attitudes and values attached to these behavioural patterns.
Lifestyles may be considered as group identities

Psychographics

= use of psychological, sociological and anthropological factors to determine how the market is segmented by the propensity of groups within the market – and their reasons – to make a particular decision about a product, person, ideology, or otherwise hold an attitude or use a medium/

Lifestyle profile : looks for items that differentiate between users and non-users of a product.
Product specific profile: identifies a target group and then profiles these consumers on product-revelant dimensions
A general lifestyle segmentation: places a large sample of respondents into homogeneous groups based on similarities of their overall preferences.
A product specific segmentation: tailors questions to a product category

Mostcontemporary psychographic research attempts to group consumers according to some combination of 3 categories of variabels: Activities, Interests & Opinions. (AIOs) + ook nog demographics.
1st step in a psychographic analysis is to determine which lifestyle segments are producing the bulk of customers for a particular product. 80/20 rule (20% consumes 80% volume
Who uses the brand => isolate heavy, moderate and light users.

Marketers use data from psychographic surveys

To define target market
To create a new view of the market
To position the product
To better communicate product attributes
To develop product strategy
To market social and political issues.

Lifestyle marketing

A lifestyle marketing perspective recognizes that people sort themselves into groups on the basis of the things they like to do, how they like to spend their leisure time and how they choose to spend their disposable income.

Psychographic segmentation typologies:

Break the population up in 5 to 10 segments, each cluster is given a descriptive name and a profile of the ‘typical’ member is provided to the client. Vb. Avant-gardians, pontificators, , chameleons, …
2 european examples : RISK & CCA
RISK: reseach institute on social change
Asks a battery of questions to identify people’s values and attitudes about a wide range of issues
Each individual is located in a virtual space described by three axes, representing the three most discriminating dimensions in the data material
Exploration/stability: vertical axis
Social/individual : horizontal axis
Global/local

CCA socio-styles: centre de communication avance
Questionnaires are not attitude-based but a variety of question formats & projective techniques
16 lifestyles, grouped in 6 ‘mentalities’

Are exiting because they seek to provide a sort of complete sociological view of the market