Chapter 1: An Introduction to Consumer Behavior Consumer Behavior: A Framework John C. Mowen Michael S. Minor CONSUMER BEHAVIOR: A FRAMEWORK John C. Mowen & Michael S. Minor Chapter 1: An Introduction to Consumer Behavior Published by Prentice, Inc.

Concepts to Learn Definition of CB Theory and CB Consumer primacy Environmental analysis Positioning/differentiation Segmentation Theory and CB Research perspectives on consumer behavior Exchange processes Organizing model of consumer behavior

Consumer Behavior . . . . . . is defined as the study of the buying units and the exchange processes involved in acquiring, consuming, and disposing of goods, services, experiences, and ideas.

Why Study Consumer Behavior? Foundation of Marketing Management Public Policy and Consumer Behavior Altruistic Marketing Personal Value

Three Research Perspectives on Consumer Behavior The Decision-Making Perspective The Experiential Perspective The Behavioral Influence Perspective

The Decision-Making Perspective . . . . . . proposes that buying results from consumers perceiving that they have a problem and then they move through a series of rational steps to solve the problem Generic Decision Model Problem Recognition Search Alternative Evaluation Choice Postacquistion Evaluation

The Experiential Perspective. . . . proposes that in some instances buying results from the consumer’s need for fun, to create fantasies, obtain emotions, and feelings. Frequently uses interpretative research methods.

The Behavioral Influence Perspective . . . . . . assumes that strong environmental forces propel consumers to make purchases without necessarily first developing strong feelings or beliefs about the product.

Exchange Processes and Consumer Behavior Exchange is the process that involves the “transfer of something tangible or intangible, actual or symbolic, between two or more social actors.”

Prerequisites for Exchange: Two or more parties must be present Each party has something of value to the other Each party is capable of communication and delivery Each party must be free to accept or reject the other's offer Each party must believe that it is appropriate or desirable to deal with the other

Elements of Exchange Six Types of Resources Are Exchanged: Goods Service Money Information Status Feelings

Dimensions of Exchange Relations Four types of consumer exchange relations have been identified: Restricted versus Complex Exchanges Internal versus External Exchanges Formal versus Informal Exchanges Relational versus Discrete

Relational exchange Current hot topic in marketing Characteristics long term reciprocal obligations non-economic rewards: market embeddedness--social ties between buyer and seller increase perceived value of exchange. extensive formal and informal communications high interdependence planning Relational exchange practiced between members of marketing channel.

Market Embeddedness The social ties between buyer and seller increase the perceived value of the exchange. Examples, house parties of: Tupperware Mary Kay Cosmetics

Ethical Issues in Consumer Exchange Relations Ethics is the study of the normative judgments concerned with what is morally right and wrong, good and bad. Free riding: example of an unethical action.

Ethical judgments deal with serious human injuries and benefits may, or may not, be laid down by authority override self interest are based on impartial considerations Ethical dilemma: a decision that involves the trade-off between lowering one’s personal values in exchange for increased organizational or personal profits. Ethical exchange both parties know full nature of agreement nothing intentionally misrepresented or omitted no undue influence takes place via power.

Ethical rules of thumb Golden rule: act in a way that you would expect others to act toward you. professional ethic: take actions that would be viewed as proper by an unbiased panel of colleagues. TV test: Would I feel comfortable explaining my actions on national television? Kant’s categorical imperative: forego acts, that if used as a universal principle of behavior, would result in negative societal outcomes.

An Organizing Model of Consumer Behavior The model has five primary components: The Buying Unit The Exchange Process The Marketer’s Strategy The Individual Influencers The Environment

Marketer, who develops strategy Buying unit consumers, firms, government, non-profits, etc. Individual influencers information processing behavioral learning motivation and personality beliefs, attitudes and behaviors communications decision making Marketer, who develops strategy marketing mix segmentation and positioning employs marketing research to understand consumers

Environmental Analysis: the marketer assesses the impact of each of the below facets of the environment on the firm. situations groups and families culture subculture cross cultural issues regulatory environment

Managerial Applications Analysis (PERMS) Five factors to consider when using consumer behavior principles to develop managerial strategy are: positioning and differentiation environmental analysis marketing research marketing mix segmentation