An Introduction to Consumer Behaviour Chapter 1 Copyright 2008 Pearson Education Canada

1-2 Factors in Consumer Behaviour The story of Gail in the marketplace… –Demographics –Psychographics –Opinions and behaviours of others Market segmentation –Targeting a brand only to specific groups of consumers rather than to everybody

Copyright 2008 Pearson Education Canada 1-3 What is Consumer Behaviour? 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

Copyright 2008 Pearson Education Canada 1-4 Consumer Behaviour is a “Process” Figure 1.1 (Abridged) CONSUMER’S PERSPECTIVE MARKETER’S PERSPECTIVE PREPURCHASE ISSUES How does a consumer decide about needing a product? How are consumer attitudes formed/changed? PURCHASE ISSUES Is product acquisition a stressful or pleasant experience? How do situational factors affect purchase decision? POSTPURCHASE ISSUES Does product provide pleasure or perform function? How is product disposed of? What determines customer satisfaction and repurchase?

Copyright 2008 Pearson Education Canada 1-5 Actors in Consumer Behaviour Consumer: A person who identifies a need or desire, makes a purchase, and then disposes of the product –Purchaser vs. user vs. influencer –Organization/group as consumer

Copyright 2008 Pearson Education Canada 1-6 Discussion People play different roles and their consumption behaviors may differ, depending on the particular role they are playing. State whether you agree or disagree with this perspective, giving examples from your personal life. –Try to construct a “stage set” for a role you play – specify the props, costumes, and script that you use to play a role (e.g., job interviewee, conscientious student, party animal)

Copyright 2008 Pearson Education Canada 1-7 Consumers’ Impact Understanding consumer behaviour 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

Copyright 2008 Pearson Education Canada 1-8 Segmenting Consumers Market Segmentation –Similar consumers Example: “Heavy Users” of fast-food industry or similar ethnic backgrounds

Copyright 2008 Pearson Education Canada 1-9 Segmenting Consumers: Demographics Age Gender Family Structure and Marital Status Social Class and Income Ethnicity Geography

Copyright 2008 Pearson Education Canada 1-10 Discussion Name some products or services that are widely used by your social group. –State whether you agree or disagree with the notion that these products help to form group bonds, supporting your argument with examples from your list of products used by the group.

Copyright 2008 Pearson Education Canada 1-11 Segmenting Consumers: Lifestyles Psychographics –The way we feel about ourselves –The things we value –The things we do in our spare time

Copyright 2008 Pearson Education Canada 1-12 Relationship Marketing Success = building lifetime relationships between brands and customers –Regular interaction with customers –Database Marketing

Copyright 2008 Pearson Education Canada 1-13 Marketing’s Impact on Consumers Marketers significantly influence the world and the information we learn! –Advertisements, stores, and products communicate and persuade TOYMUSEUM.COM

Copyright 2008 Pearson Education Canada 1-14 The Meaning of Consumption People often buy products not for what they do, but for what they mean –Brands… …convey image/personality …define our place in modern society …help us to form bonds with others who share similar preferences

Copyright 2008 Pearson Education Canada 1-15 Brand Relationship Types Self-Concept Attachment Nostalgic Attachment Interdependence Love

Copyright 2008 Pearson Education Canada 1-16 The Global Consumer Global Consumer Culture –People united by common devotion to: Brand name consumer goods Movie stars Celebrities Leisure activities –Pressure to understand similarities and differences of customers in various countries

Copyright 2008 Pearson Education Canada 1-17 Virtual Consumption Impact of the Web on consumer behaviour –24/7 shopping without leaving home –Instantaneous access to news –Handheld devices and wireless communications C2C e-commerce –Virtual brand communities. –Consumer chat rooms AMAZON.COM

Copyright 2008 Pearson Education Canada 1-18 Virtual Consumption (Cont’d) “Wired” Canadians spend… –…less time with friends/family –…less time shopping in stores –…more time working at home after hours But, many report that strengthens family ties

Copyright 2008 Pearson Education Canada 1-19 Marketing and Reality “Blurred boundaries” between marketing efforts and “the real world” –Popular culture shaped by marketers

Copyright 2008 Pearson Education Canada 1-20 Marketing Ethics and Public Policy Business Ethics: rules of conduct that guide actions in the marketplace –What is “Right vs. Wrong” Differs among people, organizations, and cultures

Copyright 2008 Pearson Education Canada 1-21 Discussion Coca-Cola’s 600 ml bottles are sold exclusively in vending machines at educational sites. Each bottle contains more than 15 tsp of sugar. –Knowing that over-consumption of sugar leads to poorer grades for students, obesity and diabetes, is Coca-Cola acting in the best interest of the child?

Copyright 2008 Pearson Education Canada 1-22 Marketing Ethics and Public Policy (cont’d) Consumers think better of products made by firms they feel behave ethically –Marketing “violators” Mislabeling package contents “Bait-and-switch” selling strategy Availability of ‘pour-your-own’ in lounges rather than promoting responsible drinking

Copyright 2008 Pearson Education Canada 1-23 Manipulating Needs and Wants Marketers tell people what they should want –Marketerspace vs. Consumerspace –Response: Marketers recommend ways to satisfy basic biological needs

Copyright 2008 Pearson Education Canada 1-24 Marketers foster materialism –Response: Products are designed to meet existing needs Economics of Information Perspective Discussion: do marketers have the ability to control our desires or the power to create needs? –Is this situation changing as the Internet creates new ways to interact with companies? If so, how? Are Advertising and Marketing Necessary?

Copyright 2008 Pearson Education Canada 1-25 Do Marketers Promise Miracles? Advertising promises “magical” products –Response: Advertisers simply do not know enough about people to manipulate them Failure rate for new products = 40% to 80%

Copyright 2008 Pearson Education Canada 1-26 Public Policy and Consumerism Consumer welfare is protected at the Federal, Provincial and Municipal levels Main area of focus: –Protection from unfair business practices –Protect broad interest of society Consumers depend on their government to regulate and police standards Supervision may depend on political climate in a country

Copyright 2008 Pearson Education Canada 1-27 Consumer Activism Adbusters –Non-Profit advocates “for the new social activist movement of the information age” –Buy Nothing Day and TV Turnoff Week Culture Jamming –Aims to disrupt corporate efforts to dominate our cultural landscape

Copyright 2008 Pearson Education Canada 1-28 What is Social Marketing? Focus that uses marketing techniques to encourage positive behaviours (increase literacy) and discourages negative activities (drunk driving). –United Way Campaigns

Copyright 2008 Pearson Education Canada 1-29 The Consumer “Dark Side” Addictive Consumption Compulsive Consumption Consumed Consumers Illegal Activities –Theft –Anti-consumption

Copyright 2008 Pearson Education Canada 1-30 Study of Consumer Behaviour Interdisciplinary Influences –Many different perspectives/fields Consumer Behaviour Employers –Universities, manufacturers, museums, advertising agencies, and governments

Copyright 2008 Pearson Education Canada 1-31 Macro (Social Focus) Pyramid of Consumer Behaviour Experimental Psychology Clinical Psychology Developmental Psychology Human Ecology Microeconomics Social Psychology Sociology Macroeconomics Semiotics/Literary Criticism Demography History Cultural Anthropology Micro (Individual-Focus) Figure 1-2

Copyright 2008 Pearson Education Canada 1-32 Strategic Focus The field of consumer behaviour… –…as an applied social science –…to understand consumption for its own sake

Copyright 2008 Pearson Education Canada 1-33 Perspectives on Consumer Research Positivism –Stress the function of objects/products –Celebrate technology, science –World as an objective, rational, ordered place Interpretivism –Stress importance of sympolism –We each construct our own meanings –Consumption of products = diverse experiences

Copyright 2008 Pearson Education Canada 1-34 Wheel of Consumer Behaviour Figure 1-3