LO1: Define consumer behavior
The ﬁeld of consumer behavior is the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.
LO2: Summarize the applications of consumer behavior
Consumer behavior can be applied in four areas, namely (a) marketing strategy, (b) regulatory policy, (c) social marketing, and (d) creating informed individuals. Developing marketing strategy involves setting levels of the marketing mix based on an understanding of the market and segments involved to create desirable outcomes. Developing regulatory guidelines involves developing policies, guidelines, and laws to protect and aid consumers. Social marketing is the application of marketing strategies and tactics to alter or create behaviors that have a positive effect on the targeted individuals or society as a whole. Creating more informed individuals involves educating consumers about their own consumption behaviors as well as marketers’ efforts to influence it in such a way as to create a more sound citizenship, effective purchasing behavior, and reasoned business ethics.
LO3: Explain how consumer behavior can be used to develop marketing strategy
The interplay between consumer behavior and marketing strategy involves five stages. First is market analysis which involves gathering data and tracking trends related to the company, competitors, conditions, and consumers. Second is market segmentation. A market segment is a portion of a larger market whose needs differ somewhat from the larger market. Firms segment their markets and choose a segment or segments that best fit their capabilities and market conditions. Third is marketing strategy which involves setting appropriate levels for the marketing mix as a function of the segments being targeted and the market conditions that exist. Fourth is the consumer decision process which is a series of steps starting with problem recognition and moving through information search, alternative evaluation, purchase, use, and post-purchase evaluation. Marketing efforts can be targeted to these different stages. Fifth is outcomes at the individual, firm, and societal level. And while profit maximization is often a goal at the firm level, possible adverse effects at the individual and societal level are of importance to firms, government organizations, and regulators. An understanding of consumer behavior theory and concepts is critical at each stage as marketers gather information, develop marketing strategies to influence consumer decisions, and evaluate the effects of their marketing efforts.
LO4: Explain the components that constitute a conceptual model of consumer behavior
The conceptual model of consumer behavior developed here can be broken into four interrelated parts. External and internal influences affect the consumer’s self-concept and lifestyle which, in turn, affects the decision process. External influences (Part 2 of the text) include culture, reference groups, demographics, and marketing activities. Internal influences (Part 3) include perception, emotions, attitudes, and personality. Self-concept is the totality of an individual’s thoughts and feelings about him- or herself. Lifestyle is, quite simply, how one lives, including the products one buys, how one uses them, what one thinks about them, and how one feels about them. External and internal factors operate to influence self-concept and lifestyle which, in turn, influences the decision process (Part 4). Overlaying these basic components is organizations (Part 5) and regulation (Part 6). Organizations or businesses can also be consumers as when Mercedes-Benz purchases dashboard sub-components from a supplier. This type of marketing is often termed business-to-business (B2B) marketing to differentiate it from business-to-consumer (B2C) marketing that is the focus of much of this text. The special nature of organizations and how they behave warrants special attention. Regulation is an aspect of consumer behavior that permeates marketer actions relating to all parts of our model and it warrants special attention as well.
LO5: Discuss issues involving consumption meanings and firm attempts to influence them
Consumption has meaning beyond the satisfaction of minimum or basic consumer needs. Thus, consumers might purchase Nike sneakers not only to satisfy the functional needs associated with safety and support, but also for symbolic needs associated with status, identity, and group acceptance. Some criticize marketers for their attempts to instill in, or amplify, consumer desires for products beyond minimum functional aspects. And while this criticism may hold true, it also seems likely that such desires and symbolic meanings are naturally assigned to objects even in the relative absence of marketing. Nonetheless, the ethical implications of marketers’ actions in this regard are important to consider.
LO1: Define the concept of culture
Culture is deﬁned as the complex whole that includes knowledge, beliefs, art, law, morals, customs, and any other capabilities acquired by humans as members of society. It includes almost everything that inﬂuences an individual’s thought processes and behaviors. Culture operates primarily by setting boundaries for individual behavior and by inﬂuencing the functioning of such institutions as the family and mass media. The boundaries, or norms, are derived from cultural values. Values are widely held beliefs that afﬁrm what is desirable.
LO2: Describe core values that vary across culture and influence behaviors
Cultural values are classiﬁed into three categories: other, environment, and self. Other-oriented values reﬂect a society’s view of the appropriate relationships between individuals and groups within that society. Relevant values of this nature include individual/collective, youth/age, extended/limited family, masculine/feminine, competitive/cooperative, and diversity/uniformity. Environment-oriented values prescribe a society’s relationships with its economic, technical, and physical environments. Examples of environment values are cleanliness, performance/status, tradition/change, risk taking/security, problem solving/fatalistic, and nature. Self-oriented values reﬂect the objectives and approaches to life that individual members of society ﬁnd desirable. These include active/passive, sensual gratiﬁcation/abstinence, material/nonmaterial, hard work/leisure, postponed gratiﬁcation/immediate gratiﬁcation, and religious/secular.
LO3: Understand cross-cultural variations in nonverbal communications
Nonverbal communication systems are the arbitrary meanings a culture assigns actions, events, and things other than words. Major examples of nonverbal communication variables that affect marketers are time, space, symbols, relationships, agreements, things, and etiquette.
LO4: Summarize key aspects of the global youth culture
There is evidence that urban youth around the world share at least some aspects of a common culture. This culture is driven by worldwide mass media and common music and sports stars. Emerging aspects include the importance of technology and the fact that U.S. teens and brands no longer leading the way.
LO5: Understand the role of global demographics
Demographics describe a population in terms of its size, structure, and distribution. Demographics differ widely across cultures and inﬂuence cultural values (and are inﬂuenced by them) as well as consumption patterns.
LO6: List the key dimensions in deciding to enter a foreign market
Seven questions are relevant for developing a cross-cultural marketing strategy: (1) Is the geographic area homogeneous or heterogeneous with respect to culture? (2) What needs can this product ﬁll in this culture? (3) Can enough people afford the product? (4) What values are relevant to the purchase and use of the product? (5) What are the distribution, political, and legal structures for the product? (6) How can we communicate about the product? (7) What are the ethical implications of marketing this product in this country?
LO1: Understand core American cultural values
Cultural values are widely held beliefs that afﬁrm what is desirable. Three categories of values that affect behaviors are those related to the self, others, and the environment. Sometimes numerous values are at work in affecting a given trend; such is the case with organic consumption which is affected by values relating to family and nature.
LO2: Summarize changes in self, environment, and other-oriented values
In terms of self-oriented values, we place somewhat less emphasis on hard work as an end in itself although we continue to work some of the longest hours among industrialized nations. We are trending toward greater emphasis on sensual gratification. And, while the recent recession may have tempered spending, there appears to be a move back toward greater emphasis on immediate gratification. Finally, while religion is important, America remains a relatively secular culture.
Values that affect our relationship to our environment have become somewhat more performance oriented and slightly less oriented toward change. There is a strong and growing value placed on protecting the natural environment, and we increasingly value risk taking.
In terms of those values that inﬂuence an individual’s relationship with others, Americans remain individualistic. We have substantially less of a masculine orientation now than in the past. We also place a greater value on older persons and diversity.
LO3: Discuss values as they relate to green marketing
Americans have shifted their view from one of overcoming nature to more of admiring nature. This translates into greater concerns regarding the protection of our environment and the emergence of green marketing. Green marketing involves (1) developing products whose production, use, or disposition is less harmful to the environment than the traditional versions of the product; (2) developing products that have a positive impact on the environment; or (3) tying the purchase of a product to an environmental organization or event.
LO4: Discuss values as they relate to cause-related marketing
Americans are high on the value of problem solving. This makes us prone to want to put efforts toward causes that are important to us in an attempt to fix or improve the situation. Cause-related marketing is marketing that ties a company and its products to an issue or cause with the goal of improving sales and corporate image while providing beneﬁts to the cause. Companies associate with causes to create long-term relationships with their customers, building corporate and brand equity that should eventually lead to increased sales.
LO5: Discuss values as they relate to marketing to gay and lesbian consumers
The value placed on diversity continues to increase, with more openness to alternative lifestyles and family structures including same-sex couples. The gay market is estimated at roughly 16 million people over the age of 18 with purchasing power between $750 and $900 billion. Many companies view the gay market as highly attractive and have committed considerable resources to targeting this market with speciﬁc products and promotional efforts. Supportive internal policies toward gay employees as well as support for important gay causes are among the critical factors in approaching this market.
LO6: Discuss values as they relate to gender-based marketing
The ongoing shift from a traditionally masculine view toward a balanced masculine-feminine view has resulted in changing gender roles. Gender roles have undergone radical changes in the past 30 years. A fundamental shift has been for the female role to become more like the traditional male role. Male roles are also evolving, with men beginning to take on what have traditionally been considered female tasks. Virtually all aspects of our society, including marketing activities, have been affected by these shifts.
LO1: Understand the critical role that demographics play in influencing consumer behavior
American society is described in part by its demographics, which include a population’s size, distribution, and structure. The structure of a population refers to its age, income, education, and occupation makeup. Demographics are not static. At present, the rate of population growth is moderate, average age is increasing, and southern and western regions are growing. In addition to actual measures of age and income, subjective measures can provide additional understanding of consumption in the form of cognitive age and subjective discretionary income.
LO2: Define the concept of generations and discuss the generations that exist in America
An age cohort or generation is a group of persons who have experienced a common social, political, historical, and economic environment. Cohort analysis is the process of describing and explaining the attitudes, values, and behaviors of an age group as well as predicting its future attitudes, values, and behaviors. There are six major generations functioning in America today— pre-Depression, Depression, baby boom, Generation X, Generation Y, and Generation Z.
LO3: Explain the concept of social stratification and the role that socioeconomic factors play
A social class system is deﬁned as the hierarchical division of a society into relatively permanent and homogeneous groups with respect to attitudes, values, and lifestyles. A tightly deﬁned social class system does not exist in the United States. What does seem to exist is a series of status continua that reﬂect various dimensions or factors that the overall society values. Education, occupation, income, and, to a lesser extent, type of residence are important status dimensions in this country. Status crystallization refers to the consistency of individuals and families on all relevant status dimensions (e.g., high income and high educational level).
LO4: Identify and discuss the major social classes in America
Although pure social classes do not exist in the United States, it is useful for marketing managers to know and understand the general characteristics of major social classes. Using Coleman and Rainwater’s system, we described American society in terms of seven major categories— upper-upper, lower-upper, upper-middle, middle, working class, upper-lower, and lower-lower.
LO5: Understand how social class is measured
There are two basic approaches to the measurement of social classes: (1) Use a combination of several dimensions, a multi-item index; or (2) use a single dimension, a single-item index. Multi-item indexes are designed to measure an individual’s overall rank or social position within the community.
LO6: Discuss the role of social class in developing marketing strategies
Although social class may not play a role in all products or brands, it is obviously relevant in many situations. Brands such as Levi’s appear to use social class in terms of segmentation and targeted messaging to appeal to specific social class segments with specific lines and sub-brands. Targeting those in lower social classes can have ethical implications and choices regarding what products to offer and what actions to take in this regard must be considered carefully.
LO1: Understand subcultures and their influence on unique market behaviors
The United States is becoming increasingly diverse. Much of this diversity is fueled by immigration and an increase in ethnic pride and by identiﬁcation with non-European heritages among numerous Americans. Most members of a culture share most of the core values, beliefs, and behaviors of that culture. However, most individuals also belong to several subcultures. A subculture is a segment of a larger culture whose members share distinguishing patterns of behavior. An array of ethnic, nationality, religious, and regional subcultures characterizes American society. The existence of these subcultures provides marketers with the opportunity to develop unique marketing programs to match the unique needs of each.
Ethnic subcultures are deﬁned broadly as those whose members’ unique shared behaviors are based on a common racial, language, or nationality background. Non-European ethnic groups constitute a signiﬁcant and growing part of the U.S. population, from 38 percent in 2010 to 47 percent by 2030.
LO2: Analyze the African American subculture and the unique marketing aspects it entails
African Americans represent a substantial non-European ethnic group at roughly 13 percent of the U.S. population. Although African Americans are younger and tend to have lower incomes than the general population, their rapidly growing education, income, purchasing power, and cultural inﬂuence continue to attract marketers to this large and diverse subculture.
LO3: Analyze the Hispanic subculture and the unique marketing aspects it entails
Hispanics represent the largest and fastest-growing ethnic subculture in the United States. Even though Hispanics have a variety of national backgrounds (Mexico, Puerto Rico, Cuba, and so on), the Spanish language, a common religion (Roman Catholicism), and national Spanish-language media and entertainment ﬁgures have created a somewhat homogeneous Hispanic subculture.
LO4: Analyze the Asian-American subculture and the unique marketing aspects it entails
Asian Americans are the most diverse of the major ethnic subcultures. They are characterized by a variety of nationalities, languages, and religions. From a marketing perspective, it is not appropriate to consider Asian Americans as a single group. Instead, Asian Americans are best approached as a number of nationality subcultures.
LO5: Analyze the Native American, Asian-Indian, Arab American subcultures and the unique marketing aspects they entail
Native Americans, Asian-Indian Americans, and Arab Americans are smaller but important subcultures. Each is diverse yet shares enough common values and behaviors to be approached as a single segment for at least some products. Geographic concentration and specialized media allow targeted marketing campaigns.
LO6: Describe the various religious subcultures and their implications for marketing
Although the United States is a relatively secular society, roughly 82 percent of American adults claim a religious afﬁliation and a majority state that religion is important in their lives. A majority of American adults identify themselves as Christian although the percentage has declined over time. And a variety of religious subcultures exist both within and across the Christian faiths and the Jewish, Muslim, and Buddhist faiths. Within each faith, the largest contrast is the degree of conservatism of the members.
LO7: Explain the role of geographic regions as subcultures
Regional subcultures arise as a result of climatic conditions, the natural environment and resources, the characteristics of the various immigrant groups that have settled in each region, and signiﬁcant social and political events. Regional subcultures affect all aspects of consumption behavior, and sophisticated marketers recognize that the United States is composed of numerous regional markets.
LO1: Explain the concept of household types of households and their influence on consumption
The household is the basic purchasing and consuming unit and is, therefore, of great importance to marketing managers of most products. The family household consists of two or more related persons living together in a dwelling unit. Nonfamily households are dwelling units occupied by one or more unrelated individuals. Family households are a primary mechanism whereby cultural and social-class values and behavior patterns are passed on to the next generation.
LO2: Summarize the household life cycle’s various stages and marketing implciations
The household life cycle is the classiﬁcation of the household into stages through which it passes over time based on the age and marital status of the adults and the presence and age of children. The household life cycle is a valuable marketing tool because members within each stage or category face similar consumption problems. Thus, they represent potential market segments.
The household life cycle/occupational category matrix is one useful way to use the HLC to develop marketing strategy. One axis is the stages in the HLC, which determine the problems the household will likely encounter; the other is a set of occupational categories, which provide a range of acceptable solutions. Each cell represents a market segment.
LO3: Understand the family decision process
Family decision making involves consideration of questions such as who buys, who decides, and who uses. Family decision making is complex and involves emotion and interpersonal relations as well as product evaluation and acquisition. Household member participation in the decision process varies by involvement with the speciﬁc product, role specialization, personal characteristics, and one’s culture and subculture. Participation also varies by stage in the decision process. Most decisions are reached by consensus. If not, a variety of conﬂict resolution strategies may be employed. Marketing managers must analyze the household decision process separately for each product category within each target market.
LO4: Describe the role that households play in child socialization
Consumer socialization deals with the processes by which young people (from birth until 18 years of age) learn how to become consumers. Children’s learning abilities are limited at birth, then slowly evolve with experience over time. Consumer socialization deals with the learning of consumer skills, consumption-related preferences, and consumption-related attitudes. Families inﬂuence consumer socialization through direct instrumental training, modeling, and mediation. Young consumers appear to go through ﬁve stages of learning how to shop. This learning takes place primarily in retail outlets in interaction with the parents.
LO5: Explain the sources of ethical concern associated with marketing to children
Marketing to children is fraught with ethical issues. The main source of ethical concern is the limited ability of children to process information and make sound purchase decisions or requests. There are also concerns about the role of advertising in forming children’s values, inﬂuencing their diets, and causing family conﬂict. However, ethical and effective marketing programs can be developed for children.
LO1: Explain reference groups and the criteria used to classify them.
A reference group is a group whose presumed perspectives or values are being used by an individual as the basis for his or her current behavior. Thus, a reference group is simply a group that an individual uses as a guide for behavior in a speciﬁc situation. Reference groups, as with groups in general, may be classiﬁed according to a number of variables including membership, strength of social tie, type of contact, and attraction.
LO2: Discuss consumption subcultures, including brand and online communities and their importance for marketing.
A consumption subculture is a group that self-selects on the basis of a shared commitment to a particular product or consumption activity. These subcultures also have (1) an identiﬁable, hierarchical social structure; (2) a set of shared beliefs or values; and (3) unique jargon, rituals, and modes of symbolic expression. A brand community is a nongeographically bound community, based on a structured set of social relationships among owners of a brand and the psychological relationship they have with the brand itself, the product in use, and the ﬁrm. Brand communities can add value to the ownership of the product and build intense loyalty. An online community is a community that interacts over time around a topic of interest on the Internet. Online communities have evolved over time to include online social network sites, which are Web-based services that allow individuals to (1) construct a public or semipublic proﬁle within a bounded system, (2) articulate a list of other users with whom they share a connection, and (3) view and traverse their list of connections and those made by others within the system.
LO3: Summarize the types and degree of reference group influence.
Informational inﬂuence occurs when an individual uses the behaviors and opinions of reference group members as potentially useful bits of information. Normative inﬂuence, sometimes referred to as utilitarian inﬂuence, occurs when an individual fulﬁlls group expectations to gain a direct reward or to avoid a sanction. Identiﬁcation inﬂuence, also called value-expressive inﬂuence, occurs when individuals have internalized the group’s values and norms.
The degree of conformity to a group is a function of (1) the visibility of the usage situation, (2) the level of commitment the individual feels to the group, (3) the relevance of the behavior to the functioning of the group, (4) the individual’s conﬁdence in his or her own judgment in the area, and (5) the level of necessity reﬂected by the nature of the product.
LO4: Discuss within-group communications and the importance of word-of-mouth communications to marketers.
Communication within groups is a major source of information about certain products. Information is communicated within groups either directly through word-of-mouth (WOM) communication or indirectly through observation. WOM via personal sources such as family and friends is trusted more than marketer-based messages and can therefore have a critical inﬂuence on consumer decisions and business success. Two-thirds of all consumer product decisions are thought to be inﬂuenced by WOM. Negative experiences are a strong driver of negative WOM for all consumers.
LO5: Understand opinion leaders (both online and offline) and their importance to marketers
Opinion leaders are highly knowledgeable about specific products or activities and are seen as the “go-to person” for speciﬁc types of information. These individuals actively ﬁlter, interpret, or provide product and brand- relevant information to their family, friends, and colleagues. A defining characteristic of opinion leaders is their enduring involvement with the product category which leads to their expertise and the trust people have in their opinions.
A special type of opinion leader is Market mavens. These are individuals who are general market inﬂuencers. They have information about many different kinds of products, places to shop, and other aspects of markets. Internet mavens describe their online counterparts.
Marketers attempt to identify opinion leaders primarily through their media habits and social activities. Identiﬁed opinion leaders then can be used in marketing research, product sampling, retailing/personal selling, advertising, and creating buzz. Various ofﬂine and online strategies exist for stimulating WOM, opinion leadership, and buzz. Online strategies include viral marketing, blogs, and Twitter.
LO6: Discuss innovation diffusion and use an innovation analysis to develop marketing strategy
Groups greatly affect the diffusion of innovations. Innovations vary in degree of behavioral change required and the rate at which they are diffused. The ﬁrst purchasers of an innovative product or service are termed innovators; those who follow over time are known as early adopters, early majority, late majority, and laggards. Each of these groups differs in personality, age, education, and reference group membership. These characteristics help marketers identify and appeal to different classes of adopters at different stages of an innovation’s diffusion.
The time it takes for an innovation to spread from innovators to laggards is affected by several factors: (1) nature of the group involved, (2) type of innovation decision required, (3) extent of marketing effort, (4) strength of felt need, (5) compatibility of the innovation with existing values, (6) relative advantage, (7) complexity of the innovation, (8) ease in observing usage of the innovation, (9) ease in trying the innovation, and (10) perceived risk in trying the innovation.