Part 3 CUSTOMER BEHAVIOR AND E-MARKETING.

6: Consumer Buying Behavior 7: Business Markets and Buying Behavior 8: Reaching Global Markets 9: Digital Marketing and Social Networking

Chapter 6 Consumer Buying Behavior Professor Jason C. H. Chen, Ph.D. School of Business Administration Gonzaga University Spokane, WA 99258 chen@jepson.gonzaga.edu

Class Exercise Social Influences on Consumption

The objective of this class exercise is to help students understand how social influences affect their consumption behaviors.   Prompt for Students: Imagine that you are going out tonight. Which of the following social influences will determine what you wear, where you go, what you do, and what you will buy or consume? 1. Your role as a student, family member, employee, church member, or fraternity or sorority member. As fraternity or sorority members, students may be influenced to stay out late for social reasons, which may conflict with their roles as students, employees, and church members. The demands of a person’s many roles may be inconsistent and confusing. Some married students may describe joint decision-making situations and the influence of children. Other likely responses will relate to clothing, restaurant choice, and food or beverage consumption.

2. Membership in a subculture based on geography, age, or ethnic background. Students may be able to identify certain types of food (catfish in the South), clothing (surf wear in the West), vehicles (pickups in the Midwest and Southwest), or accessories (Gucci handbags in the East) that are associated with subcultures.

3. Knowing how these factors affect your consumption behavior, how can marketers adjust their marketing mixes to meet your needs? (Use vehicle (Car) as an example) Some possible examples include the following: Promotion show upper-class individuals in luxury car ads. Product design products (cars) that meet joint needs of family. Price offer price discounts to students with limited income. Distribution allocate more pickups to Midwest and Southwest.

Marketing Applications

4. Attitudes toward products or companies often affect consumer behavior. The three components of an attitude are cognitive, affective, and behavioral. Briefly describe how a beer company might alter the cognitive and affective components of consumer attitudes toward beer products and toward the company.   The cognitive component is the person’s knowledge and information about the object or idea, so a beer company may try to inform consumers about its special brewing process or about benefits like reduced calories. The affective component comprises the individual’s feelings and emotions toward the object or idea. Some beer companies will focus on local issues, social responsibility, or fun promotions as a way to influence the affective component.

Figure 6.2 - Maslow’s Hierarchy of Needs Self-actualization needs People’s needs to grow and develop Respect, recognition Esteem needs Social acceptance (love and affection) Social needs Safety needs Life insurance Basic level Requirements for survival such as food, water, clothing etc. Physiological needs

6. Select five brands of toothpaste and explain how the appeals used in advertising these brands relate to Maslow’s hierarchy of needs.  Responses should cover some basic ideas: Physiological needs not included (WHY?) (humans can survive without toothpaste) Safety needs fights decay and cavities Social needs fights bad breath Esteem needs whitening (may also be social needs) Self-actualization needs connect to career or relationship success (depends on advertising)

Internet Exercise Amazon   Some mass-market e-commerce sites, such as Amazon.com, have extended the concept of customization to their customer base. The company has created an affinity group by drawing on certain users’ likes and dislikes to make product recommendations to other users. Check out this pioneering online retailer at www.amazon.com.

1. What might motivate some consumers to read a “Top Selling” list?   Students’ responses will vary, but they should discuss ideas from their study of consumer behavior. Answers could include meeting social, esteem, and self-actualization needs, or using the list as a tool in an information search.

2. Is the consumer’s level of involvement with an online book purchase likely to be high or low?   Because books are low-priced and low-risk products, consumer involvement is likely to be low, especially because no one can see an individual’s purchase history. However, students could argue that the visibility of some books once they are purchased or the time commitment of reading could raise some consumers’ levels of involvement.

3. Discuss the consumer buying decision process as it relates to a decision to purchase from Amazon.   Students’ responses should cover the following general ideas: Problem recognition - consumers realize that they would like to purchase a product Information search - consumers search for information, which is easy to do directly on Amazon because of extensive product information and customer reviews Evaluation of alternatives - consumers consider all of the benefits of products; this may take place online, or they may go to other stores to actually touch and try out products Purchase - consumers purchase the product from Amazon, which is easy if the consumer has an account with the company because mailing and billing information is already stored (1-click shopping) Postpurchase evaluation - consumers evaluate products, potentially sharing their evaluations with others via Amazon

Video Case 6.1 Starbucks Refines the Customer Experience

Summary   Starbucks is popular in the United States thanks to its focus on the customer experience. While the company continues to improve its American stores through innovations such as mobile pay, Starbucks is also expanding globally, especially in Asian markets. It is also diversifying; Starbucks recently purchased premium-juice company Evolution Fresh and is adding the company’s nutritious blended drinks to the traditional Starbucks menu. Starbucks plans to open more Evolution Fresh stores as the demand for healthy foods increases. The company is also competing with energy drink companies after releasing its all-natural Starbucks Refreshers. Starbucks is also promoting its focus on social responsibility.

1. In terms of situational influences and level of involvement, what are the benefits of mobile pay?   Starbucks is working to keep customers involved by creating routinized response behavior. Mobile pay reduces search-and-decision effort, and the ease of payment and accumulation of Starbucks rewards makes it easy for their customers to prefer Starbucks as a brand. Starbucks is also taking advantage of customers’ momentary conditions to make sure they have an easy and fast way to pay.

2. With Evolution Fresh, which psychological influences on consumer buying decisions does Starbucks seem to be addressing?   Motives, attitudes, personalities, and lifestyles are all important to Starbucks. With Evolution Fresh, Starbucks is primarily addressing consumers’ attitudes, especially perceptions and interpretations of the company. By providing products such as smoothies, juices, salads, and wraps, Starbucks is creating the impression that it cares about consumers’ health and is working to fit into their healthy lifestyles.

3. Why would Starbucks want customers to know that it believes in social responsibility?   Starbucks wants to improve consumers’ perceptions and interpretations of the company and its actions. If consumers believe the company values ethical and socially responsible behavior, they will be more involved with the brand and more willing to purchase the company’s products.