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Consumers Rule

By Michael R. Solomon

Consumer BehaviorBuying, Having, and Being

Sixth Edition

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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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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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• What kind of statement does the Nike Swoosh make?

Discussion Question

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Marketing’s Impact on Consumers: The Meaning of Consumption (cont.)

• Consumption includes intangible experiences, ideas and services in addition to tangible objects.

• Four types of Consumption Activities:– Consuming as experience– Consuming as integration– Consuming as classification– Consuming as play

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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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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

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

• 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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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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The Dark Side of Consumer Behavior (cont.)

• Consumed Consumers:– People who are used or exploited, willingly or not, for

commercial gain in the marketplace

• Illegal Activities:– Consumer Theft:

• Shrinkage: The industry term for inventory and cash losses from shoplifting and employee theft

– Anticonsumption:• Events in which products and services are

deliberately defaced or mutilated

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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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The Pyramid of Consumer Behavior

Figure 1.2

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Consumer Behavior Disciplines

• The Issue of Strategic Focus– Should CB have a strategic focus or be studied as a

pure social science?• The Issue of Two Perspectives on

Consumer Research– Positivism (modernism):

• Paradigm that emphasizes the supremacy of human reason and the objective search for truth through science

– Interpretivism (postmodernism):• Paradigm that emphasizes the importance of

symbolic, subjective experience and meaning is in the mind of the person

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Positivist vs. Interpretivist Approaches to CB

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The Wheel of Consumer Behavior

Figure 1.3