CHP 1 & 2

Introduction & Culture

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.
Market segmentation is a portion of a larger market whose needs differ from the larger
market.
Market Segmentation Involves Four Steps:
1. Identifying Product-Related Need Sets
2. Grouping Customers with Similar Need Sets
3. Describing Each Group
4. Selecting an Attractive Segment(s) to Serve
The consumer decision process intervenes between the marketing strategy, as implemented in
the marketing mix, and the outcomes.
The firm can succeed only if consumers
-

see a need that its product can solve,

become aware of the product and its capabilities,
decide that it is the best available solution,
proceed to buy it,
Become satisfied with the result of the purchase.

External Influences
The following are the major external influences:
-

Culture
Demographics and social stratification
Ethnic, religious, and regional subcultures
Families and households
Groups

Internal Influences
Internal influences include:
-

Perception
Learning
Memory
Motives
Personality
Emotions
Attitudes

Self-Concept and Lifestyle

Self-concept is the totality of an individuals thoughts and feelings about oneself.
Lifestyle is how one lives, including the products one buys, how one uses them, what one
thinks about them, and how one feels about them.
Situations and Consumer Decisions
Consumer decisions result from perceived problems and opportunities. Consumer problems
arise in specific situations and the nature of the situation influences the resulting consumer
behavior.
-Culture is the complex whole that includes knowledge, beliefs, art, law, morals, customs,
and any other capabilities acquired by humans as members of society.
-Culture is the collective programming of the mind that distinguishes the members of one
category of people from those of another
Culture includes almost everything that influences an individuals thought processes and
behaviors.
Factors influencing nonverbal communications
-

Time
Space
Symbols
Relationship
Agreements
Things
Etiquette

Cultural values are widely held beliefs that affirm what is desirable. These values affect
behavior through norms.
Hofstedes Cultural
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Power Distance Social Status

Individualism / Collectivism In-group favorism
Masculinity/Femininity roles of men and women
Uncertainty Avoidance no tolerance to ambiguity
Long-term Orientation care long-term rewards
Indulgence vs. Restraint have fun or not

Consumption Purchase Communications

-

Other oriented values

(society view of relationship between people)
Environment oriented values (society view of relationship with environment)
Self-oriented values
(objectives/approaches to life society find desirable)

Subculture
A segment of a larger culture whose members share distinguishing patterns of behavior. The
existence of these subcultures provides marketers with the opportunity to develop unique
marketing programs to match the unique needs of each.

Nationalities
Religions
Racial groups
Geographic regions
Special interest

CHP 3 The influence of demographics, households and reference groups

Basic criteria
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Age
Gender
Education

Social Stratification
- Occupation
- Income

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.
Ten social classes in China
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High position civil servants

Business managers
Entrepreneurs
Professionals
Clerks
Merchants
Employee in retailing and wholesaling
Industrial workers
Peasants
Unemployed

Family
Family households (married, nuclear and extended)
Non-family households (unmarried, friends and boarders)
Household
-

Consists of all the people who occupy a housing unit (a house,apartment, group of
rooms, or single room designed to be occupied as a separate living quarters).

Family Household
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One having at least two members related by birth, marriage, or adoption, one of
whom is the householder (householder owns or rents the residence).

Nonfamily Household
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A householder living alone or exclusively with others to whom he or she is not

related.

The household is the basic purchasing and consuming unit and is, therefore, of great
importance to marketing managers of most products.
Family households also are the primary mechanism whereby cultural and social-class
values and behavior patterns are passed on to the next generation.
Marketing Strategy
Structure of household unit
Stage of the household life cycle - Household purchase & consumption behavior
Household decision process

Household life cycle (HLC)

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People married by their early 20s

Couple had several children
Their children grew up and started their own families
The original couple retired
The male would eventually died
The female would died

Each HLC stage presents unique needs and wants as well as financial conditions and
experiences, and each stage posing unique problems and opportunities. HLC can be an
important segmentation variable.
Factors such as income, occupation, and education heavily influence how an individual meets
his/her needs, and it makes sense to combine stage in the HLC with one of these variables to
aid in market segmentation and strategy formulation (e.g. social class, occupation, etc.).
The typical households
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Canada : nuclear family

Thailand : extended family
USA : not married, blended family

Family decision making is the process by which decisions that directly or indirectly involve
two or more family members are made.
CHP 4 Perception, Learning & Memory
Information process a series of activities by which stimuli are perceived, transformed into
information and stored.
Exposure + attention + interpretation + memory
Quality signals tend to operate more strongly when consumers lack the expertise,
involvement in the decision is low and when other quality-related information is lacking.
Perception The process, by which an individual selects, organizes and interprets stimuli into
a meaningful and coherent picture of the worlds.
Exposure It occurs when a stimulus comes within range of one of our primary sensory
receptors.

Attention occurs when the stimulus activates one or more of the sensory receptors and the
resulting sensations go into the brain for processing.
Interpretation it is the assignment of meaning to stimuli that have been attended to.
Brand names can influence anything from food taste to color preference. It is complex to
create an appropriate name in global marketing.
Learning is defined as any change in
memory and or behavior resulting
-

Semantic memory: basic

individual has about
Episode memory:
events in

also

the content or organization of long-term

from information processing.
knowledge and feelings an
a concept.
memory of a sequence of
which a person
participated.
Schematic memory:
called a knowledge

structure, is a complex web of associations.

CHP 5 Attitude, Self-Concept

Attitude components consists of affective, cognitive and behavioral components
TRA theory of reasoned action
-

The individuals attitude toward performing the behavior and the subjective norm
about performing the behavior are assumed to influence behavioral intention.
Fishbein & Ajzen, 1975.

TPB Theory of planned behavior

The more resources and opportunities individuals think they possess, the greater
should be their perceived behavioral control over the behavior.

Multiattribute Attitude Model

Ab = WiXib
Attitude toward a particular brand b = imporatance attached to attribute i, belief about brand
bs performance on attribute i.
Attitude Change Strategies cognitive component
-

Change belief
Shift importance
Add beliefs
Change ideal

Attitude change strategies affective components

-

Classical conditioning
Affect toward the ad or website
Mere exposure

Change the behavioral component

Purchase or use behavior may precede the development of cognition and affect. It is based on
operant conditioning and the key is inducing product trial while ensuring the trial will be
rewarding.
-

Coupons
Free sample
Point of purchase displays
Tie in purchase
Price reductions

Core Tenants of ELM:

Compared to attitudes formed under the peripheral route,attitudes formed under the central
route tend to be
-

Stronger
more resistant to counter-persuasion attempts
more accessible from memory
more predictive of behaviors

Cue Relevance : Central Cues ( CC) vs. Peripheral Cues (PC)

-

An attractive model (and her hair) may be decision irrelevant (PC) in an ad for a car,
but decision relevant (CC) in an ad for shampoo. In this case, the attractive model
would influence persuasion under high involvement for shampoos but not for cars.

Competitive Situation - PCs can influence persuasion under HI INVOLVEMENT in

competitive situations when:

 Central cues neutralize due to homogeneity across competing brands (PC then becomes tie
breaker).
Attribute tradeoffs across central cues engenders decision difficulty which PCs help to
alleviate.
Individuals involvement situational factors + communication strategies = persuasion
effectiveness ( individual, situational and communication)
Communication characteristics that influence attitude formation and change
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Source characteristics
Appeal characteristics
Message structure characteristics

Functional theories of attitude

Psychological functions
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Knowledge
Utilitarian
Ego defensive

Social functions
- self - expressive
- social - adjustive

When consumers hold a value-expressive attitude towards a product, they are motivated to
consume it as a form of self-expression
When consumers have a social-adjustive attitude towards a product, they are motivated to
consume it to gain approval in social situations (self-presentation).
-

Consumers likelihood of purchasing counterfeit luxury brands will be greater when

their attitudes towards luxury brands serve a social-adjustive function than when their
attitudes serve a value-expressive function.

Exposure to a counterfeit brand will have a more negative effect on consumers

preferences for the real brand when their luxury brand attitudes serve a socialadjustive function than when the attitudes serve a value-expressive function.

Self concept: the totality of the individuals thoughts and feelings about himself / herself.
Interdependent self-concept : Asian cultural belief.
Dependent self-concept

: Western cultural belief

CHP 6 lifestyle
Lifestyle is basically how a person lives. It is how one enacts his or her self-concept. It
influences all aspects of ones consumption behavior and is determined by the persons
-

Past experiences
Innate characteristics
Current situation

Lifestyle segmentation

Activities, interest and opinion + demographics

Two dimension of VALS system
Dimension 1 - Primary Consumer Motivations
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Ideals Motivation
Achievement Motivation
Self Expression Motivation

Dimension 2 Resources
-

Psychological
Physical
Demographic
Material

Three Primary Consumer Motivations:

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Ideals Motivation: guided in their choices by their beliefs and principles rather than
by feelings or desire for social approval. They purchase functionality and reliability.
Achievement Motivation: Consumers who strive for a clear social position and are
strongly influenced by the actions, approval, and opinions of others. They purchase
status symbols.
Self-Expression Motivation: Action-oriented consumers who strive to express their
individuality through their choices. They purchase experiences.

CHP 7 Costumer Decision Process

Involvement is a motivational state caused by consumer perceptions that a product, brand or

advertisement is relevant or interesting. Purchase involvement is the level of concern for, or
interest in, the purchase process triggered by the need to consider a particular purchase.
Being involved
-

pay more attention to relevant marketing messages

Engage in analytical reasoning to process and learn new information
Seek out information from numerous sources prior to a decision
Many attributes are used in the decision
Act as opinion leader

Process of problem recognition

Non-marketing factors affecting problem recognition

Buying an new cell phone

-

More features and better performances

Self-expression; quality and value seeking
Fit in with a social group

utilitarian need
expressive need
affiliation need

Information Search

Categories of Decision Alternatives

Successive Sets of Purchase

Total
Set

Awareness
Set
Consideration Set Choice Set Decision
Consideration set = evoked set

Information sources

Factors affecting external Search

i.

ii.

Market characteristics
a. Number of alternatives
b. Price range
c. Store concentration
d. Information availability
i. Advertising
ii. Point of purchase
iii. Sales personnel
iv. Packaging
v. Experienced consumers
vi. Independent sources
Product characteristics
i. Price
ii. Differentiation
iii. Positive Products

Increase
Increase
Increase
Increase

Increase
Increase
Increase

How consumers make choice

Why not attribute based choice?

Attribute-based

Choice

CHP 8 Situational Factors

Unplanned Purchase and Impulsive Purchase
Situational influence all the factors particular to a time and place that do not follow
from a knowledge of the stable attributes of the consumer and the stimulus and that have
an effect on current behavior.
Factors influence
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Physical surroundings
(atmosphere)
o Color
o Aromas
o Music
o Crowding
Social surroundings
(with whom)
o Embarrassment (negative influence)
Temporal perspective
(time)
Task definition
(gift vs personal use)
o Reason the consumption activity is occuring
Antecedent states
(mood)
o Moods
Moods tend to be less intense than emotions and may operate without the
individuals awareness.

Although moods may affect all aspects of a persons behavior, they generally do not
completely interrupt ongoing behavior as an emotion might.
Consumers actively manager their mood states,often seeking situations, activities, or
objects that will alleviate negative moods or enhance positive ones.

o Momentary conditions ( tired, extra money, feeling broke)

As with moods, individuals attempt to manage their momentary conditions, often
through the purchase or consumption of products and services. Thus, a great deal of
marketing activity is directed toward momentary conditions.