CONSUMER BEHAVIOR

The behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs.

TWO CONSUMER ENTITIES

Personal Consumer The individual who buys goods and services for his or her own use, for household use, for the use of a family member, or for a friend. Organizational Consumer A business, government agency, or other institution (profit or nonprofit) that buys the goods, services, and/or equipment necessary for the organization to function.

DEVELOPMENT OF THE MARKETING CONCEPT

Production Orientation

Sales Orientation

Marketing Concept

PRODUCTION ORIENTATION
From the 1850s to the late 1920s Companies focus on production capabilities Consumer demand exceeded supply

Production Orientation

Sales Orientation

Marketing Concept

SALES ORIENTATION
From the 1930s to the mid 1950s Focus on selling Supply exceeded customer demand

Production Orientation

Sales Orientation

Marketing Concept

MARKETING CONCEPT
1950s to current - Focus on the customer! Determine the needs and wants of specific target markets Deliver satisfaction better than competition

Production Orientation

Sales Orientation

Marketing Concept

SOCIETAL MARKETING CONCEPT

Considers consumers long-run best interest Good corporate citizenship

THE MARKETING CONCEPT

Embracing the Marketing Concept
Consumer Research Segmentation Market Targeting Positioning The process and tools used to study consumer behavior

THE MARKETING CONCEPT

Implementing the Marketing Concept
Consumer Research Segmentation Market Targeting Positioning Process of dividing the market into subsets of consumers with common needs or characteristics

THE MARKETING CONCEPT

Implementing the Marketing Concept
Consumer Research Segmentation Market Targeting Positioning The selection of one or more of the segments identified to pursue

THE MARKETING CONCEPT

Implementing the Marketing Concept
Consumer Research Segmentation Market Targeting Positioning
Developing a distinct image for the product in the mind of the consumer Successful positioning includes: Communicating the benefits of the product Communicating a unique selling proposition

THE MARKETING MIX

Product
Marketing Mix

Price

Place

Promotion

CUSTOMER VALUE, SATISFACTION, TRUST, AND RETENTION

Successful Relationships
Customer value High level of customer satisfaction Strong sense of customer trust Customer retention

SUCCESSFUL RELATIONSHIPS
Value, Satisfaction, Defined as the ratio between Trust, and Retention the customers perceived
Customer Value Customer Satisfaction Customer Trust Customer Retention benefits and the resources used to obtain those benefits

SUCCESSFUL RELATIONSHIPS
Value, Satisfaction, Trust, and Retention
Customer Value Customer Satisfaction Customer Trust Customer Retention The individual's perception of the performance of the product or service in relation to his or her expectations.

SUCCESSFUL RELATIONSHIPS
Value, Satisfaction, Trust, and Retention
Customer Value Customer Satisfaction Customer Trust Customer Retention

Establishing and maintaining trust is essential. Trust is the foundation for maintaining a longstanding relationship with customers.

SUCCESSFUL RELATIONSHIPS
Value, Satisfaction, Trust, and Retention
Customer Value Customer Satisfaction Customer Trust Customer Retention The objective of providing value is to retain highly satisfied customers. Loyal customers are key They buy more products They are less price sensitive Servicing them is cheaper They spread positive word of mouth

CONSUMER BEHAVIOR IS INTERDISCIPLINARY

Psychology

Economics

Sociology

Anthropology

Social psychology

STRUCTURE OF THE COURSE

Consumer psychology
Needs Motives Perception Learning Personality

STRUCTURE OF THE COURSE

Consumer social psychology
Communications Attitude formation Attitude change

STRUCTURE OF THE COURSE

Consumer sociology
Reference groups Group dynamics Social class

STRUCTURE OF THE COURSE

Consumer anthropology
Culture Subculture Ethnicity

STRUCTURE OF THE COURSE

Consumer economics
Decision making Perceive risk Innovation diffusion Adoption process

CONSUMER BEHAVIOR RESEARCH PROCESS

Why Do Marketers Regularly Test Print Ads Like This One Before They Are Placed in the Media?

To Test the Impact of the Message Before Spending Large Amounts of Money

THE IMPORTANCE OF THE CONSUMER RESEARCH PROCESS

Marketers must understand customers to design effective:
marketing strategies products promotional messages

THE CONSUMER RESEARCH PROCESS

THE CONSUMER RESEARCH PROCESS

Secondary research Primary research

Qualitative Quantitative

DEVELOPING RESEARCH OBJECTIVES

Defining purposes and objectives helps ensure an appropriate research design. A written statement of objectives helps to define the type and level of information needed.

SECONDARY DATA
Data that has been collected for reasons other than the specific research project at hand Includes internal and external data

TYPES OF SECONDARY DATA

Internal Data
Data generated in-house May include analysis of customer files Useful for calculating customer lifetime value

External Data
Data collected by an outside organization Includes federal government, periodicals, newspapers, books, search engines Commercial data is also available from market research firms

DESIGNING PRIMARY RESEARCH

Qualitative Research
Depth Interviews Focus Groups Projective Techniques

DESIGNING PRIMARY RESEARCH

Quantitative Research
Observation Experimentation Survey questionnaires

SAMPLING AND DATA COLLECTION

Samples are a subset of the population used to estimate characteristics of the entire population. A sampling plan addresses:
Whom to survey How many to survey How to select them

Researcher must choose probability or nonprobabililty sample.

DATA ANALYSIS AND REPORTING FINDINGS

Open-ended questions are coded and quantified. All responses are tabulated and analyzed. Final report includes executive summary, body, tables, and graphs.

MOTIVATION

MOTIVATION AS A PSYCHOLOGICAL FORCE

Motivation is the driving force within individuals that impels them to action. Needs are the essence of the marketing concept. Marketers do not create needs but can make consumers aware of needs.

MODEL OF THE MOTIVATION PROCESS

TYPES OF NEEDS
Innate Needs
Physiological (or biogenic) needs considered primary needs or motives that are

Acquired Needs
Learned in response to our culture or environment. Are generally psychological and considered secondary needs

GOALS
The sought-after results of motivated behavior Generic goals are general categories of goals that consumers see as a way to fulfill their needs Product-specific goals are specifically branded products or services that consumers select as their goals

HOW DOES THIS AD APPEAL TO ONES GOALS?

IT APPEALS TO SEVERAL PHYSICAL APPEARANCE-RELATED GOALS.

THE SELECTION OF GOALS

The goals selected by an individual depend on their:
Personal experiences Physical capacity Prevailing cultural norms and values

MOTIVATIONS AND GOALS

Positive Motivation A driving force toward some object or condition Approach Goal A positive goal toward which behavior is directed Negative Motivation A driving force away from some object or condition Avoidance Goal A negative goal from which behavior is directed away

RATIONAL VERSUS EMOTIONAL MOTIVES

Rationality implies that consumers select goals based on totally objective criteria, such as size, weight, price, or miles per gallon Emotional motives imply the selection of goals according to personal or subjective criteria

THE DYNAMICS OF MOTIVATION

Needs are never fully satisfied New needs emerge as old needs are satisfied People who achieve their goals set new and higher goals for themselves

SUBSTITUTE GOALS
Are used when a consumer cannot attain a specific goal he/she anticipates will satisfy a need The substitute goal will dispel tension Substitute goals may actually replace the primary goal over time

FRUSTRATION
Failure to achieve a goal may result in frustration. Some adapt; others adopt defense mechanisms to protect their ego.

AROUSAL OF MOTIVES
Physiological arousal Emotional arousal Cognitive arousal Environmental arousal

How Does This Ad Arouse Ones Needs?

The Ad Is Designed to Arouse Ones Yearning for an Adventurous Vacation by Appealing to the Sense of Touch

TYPES AND SYSTEMS OF NEEDS/ THEORIES OF MOTIVATION

Abraham Maslows hierarchy of needs A trio of needs by Mc Clelland

MASLOWS HIERARCHY OF NEEDS

To Which of Maslows Needs Does This Ad Appeal?

Both Physiological and Social Needs

To Which of Maslows Needs Does This Ad Appeal?

Egoistic Needs

To Which of Maslows Needs Does This Ad Appeal?

Self-Actualization

A TRIO OF NEEDS
Power
individuals desire to control environment

Affiliation
need for friendship, acceptance, and belonging

Achievement
need for personal accomplishment closely related to egoistic and self-actualization needs

To Which of the Trio of Needs Does This Ad Appeal?

The Affiliation Needs Of Young, Environmentally Concerned Adults

To Which of the Trio of Needs Does This Ad Appeal?

Affiliation Need

Power And Achievement Needs

MEASUREMENT OF MOTIVES
Researchers rely on a combination of techniques Qualitative research is widely used Projective techniques are often very successful in identifying motives.

MOTIVATIONAL RESEARCH
Term coined in the 1950s by Dr. Ernest Dichter Based on premise that consumers are not always aware of their motivations Identifies underlying feelings, attitudes, and emotions

PERSONALITY

What Is the Personality Trait Characterizing the Consumers to Whom This Ad Appeals?

Enthusiastic or Extremely Involved Collectors

Personality and The Nature of Personality

The inner psychological characteristics that both determine and reflect how a person responds to his or her environment The Nature of Personality:
Personality reflects individual differences Personality is consistent and enduring Personality can change

Theories of Personality
Freudian theory
Unconscious needs or drives are at the heart of human motivation

Neo-Freudian personality theory

Social relationships are fundamental to the formation and development of personality

Trait theory
Quantitative approach to personality as a set of psychological traits

Freudian Theory
Id
Warehouse of primitive or instinctual needs for which individual seeks immediate satisfaction

Superego
Individuals internal expression of societys moral and ethical codes of conduct

Ego
Individuals conscious control that balances the demands of the id and superego

How Does This Marketing Message Apply the Notion of the Id?

It Captures Some of the Mystery and The Excitement Associated With the Forces of Primitive Drives.

Neo-Freudian Personality Theory

Social relationships are fundamental to personality Alfred Adler:
Style of life Feelings of inferiority

Harry Stack Sullivan

We establish relationships with others to reduce tensions

Karen Horneys three personality groups

Compliant: move toward others Aggressive: move against others Detached: move away from others

Why Is Appealing to an Aggressive Consumer a Logical Position for This Product?

Because its Consumer Seeks to Excel and Achieve Recognition

Trait Theory
Focus on measurement of personality in terms of traits Trait - any distinguishing, relatively enduring way in which one individual differs from another Personality is linked to broad product categories and NOT specific brands

Soup and Soup Lovers Traits

Chicken Noodle Soup Lovers

Watch a lot of TV Are family oriented Have a great sense of humor Are outgoing and loyal Like daytime talk shows Most likely to go to church
Passionate about reading Love pets Like meeting people for coffee Arent usually the life of the party

Vegetable/Minestrone Soup Lovers

Enjoy the outdoors Usually game for trying new things Spend more money than any other group dining in fancy restaurants Likely to be physically fit Gardening is often a favorite hobby

Tomato Soup Lovers

Personality and Understanding Consumer Behavior

Consumer innovativeness Dogmatism Social character

Need for uniqueness

Optimum stimulation level Varietynovelty seeking

Sensation seeking

How Does This Ad Target the InnerDirected Outdoors Person?

A Sole Person is Experiencing the Joys and Adventure of the Wilderness

Consumer Innovativeness
Willingness to innovate Further broken down for hi-tech products
Global innovativeness Domain-specific innovativeness Innovative behavior

Dogmatism
A personality trait that reflects the degree of rigidity a person displays toward the unfamiliar and toward information that is contrary to his or her own established beliefs

Personality and Understanding Consumer Behavior

Ranges on a continuum for inner-directedness to other-directedness Inner-directedness
rely on own values when evaluating products Innovators

Other-directedness
look to others less likely to be innovators

Need for Uniqueness

Consumers who avoid conforming to expectations or standards of others

Optimum Stimulation Level

A personality trait that measures the level or amount of novelty or complexity that individuals seek in their personal experiences High OSL consumers tend to accept risky and novel products more readily than low OSL consumers.

Sensation Seeking
The need for varied, novel, and complex sensations and experience. And the willingness to take social and physical risks for the sensations.

Variety-Novelty Seeking
Measures a consumers degree of variety seeking Examples include:
Exploratory Purchase Behavior Use Innovativeness Vicarious Exploration

Cognitive Personality Factors

Need for cognition (NFC)
A persons craving for enjoyment of thinking Individual with high NFC more likely to respond to ads rich in product information

Cognitive Personality Factors

Visualizers Verbalizers

Why Is This Ad Particularly Appealing to Visualizers?

The Ad Stresses Strong Visual Dimensions

Why Is This Ad Particularly Appealing to Verbalizers?

It Features a Detailed Description

PERCEPTION

Perception
The process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world Elements of Perception
Sensation Absolute threshold Differential threshold Subliminal perception

Sensation
Sensation is the immediate and direct response of the sensory organs to stimuli
A stimulus is any unit of input to any of the senses.

The absolute threshold is the lowest level at which an individual can experience a sensation.

Differential Threshold (Just Noticeable Difference j.n.d.)

Minimal difference that can be detected between two similar stimuli Webers law
The j.n.d. between two stimuli is not an absolute amount but an amount relative to the intensity of the first stimulus The stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different.

Marketing Applications of the J.N.D.

Marketers need to determine the relevant j.n.d. for their products
so that negative changes are not readily discernible to the public so that product improvements are very apparent to consumers

Subliminal Perception
Stimuli that are too weak or too brief to be consciously seen or heard
They may be strong enough to be perceived by one or more receptor cells.

Is it effective?
Extensive research has shown no evidence that subliminal advertising can cause behavior changes Some evidence that subliminal stimuli may influence affective reactions

Aspects of Perception
Selection

Organization
Interpretation

Perceptual Selection
Selection Depends Upon:

Nature of the stimulus

Expectations

Includes the products physical attributes, package design, brand name, advertising and more

Based on familiarity, previous experience or expectations.

Motives

Needs or wants for a product or service.

Perceptual Selection Important Concepts

Selective Exposure
Consumers seek out messages which: Are pleasant They can sympathize Reassure them of good purchases

Selective Attention
Heightened awareness when stimuli meet their needs Consumers prefer different messages and medium

Perceptual Defense
Screening out of stimuli which are threatening

Perceptual Blocking
Consumers avoid being bombarded by: Tuning out TiVo

Organization
Principles
Figure and ground Grouping Closure

People tend to organize perceptions into figureand-ground relationships. The ground is usually hazy. Marketers usually design so the figure is the noticed stimuli.

Organization
Principles
Figure and ground Grouping Closure People group stimuli to form a unified impression or concept. Grouping helps memory and recall.

Organization
Principles
Figure and ground Grouping Closure

People have a need for closure and organize perceptions to form a complete picture. Will often fill in missing pieces Incomplete messages remembered more than complete

Interpretation
Stereotypes Stereotypes
Physical Appearances Physical Appearances Descriptive Terms Descriptive Terms First Impressions First Impressions Halo Effect Halo Effect People hold meanings related to stimuli

Interpretation
Stereotypes Stereotypes
Physical Appearances Physical Appearances Descriptive Terms Descriptive Terms First Impressions First Impressions Halo Effect Halo Effect

Positive attributes of people they know to those who resemble them Important for model selection

Interpretation
Stereotypes Physical Appearances Descriptive Terms First Impressions Halo Effect

Verbal messages reflect stereotypes

Interpretation
Stereotypes Stereotypes
Physical Appearances Physical Appearances Descriptive Terms Descriptive Terms First Impressions First Impressions Halo Effect Halo Effect

First impressions are lasting The perceiver is trying to determine which stimuli are relevant, important, or predictive

Interpretation
Stereotypes Stereotypes
Physical Appearances Physical Appearances Descriptive Terms Descriptive Terms First Impressions First Impressions Halo Effect Halo Effect

Consumers perceive and evaluate multiple objects based on just one dimension

Product Positioning
Establishing a specific image for a brand in the consumers mind in relation to competing brands Conveys the product in terms of how it fulfills a need Successful positioning creates a distinctive, positive brand image

Packaging as a Positioning Element

Packaging conveys the image that the brand communicates to the buyer. Color, weight, image, and shape are all important. Repositioning might be necessary because:
Increased competition Changing consumer tastes

Perceptual Mapping
An analytical technique that enables marketers to plot graphically consumers perceptions concerning product attributes of specific brands

Positioning of Services
Image is a key factor for services Services often want a differentiated positioning strategy to market several versions of their service to different markets.

Perceived Price and Perceived Quality

Reference prices used as a basis for comparison in judging another price
Internal External

Perceived Quality of Products

Intrinsic vs. Extrinsic Cues

Perceived Quality of Services

Difficult due to characteristics of services
Intangible Variable Perishable Simultaneously Produced and Consumed

SERVQUAL scale used to measure gap between customers expectation of service and perceptions of actual service

Price/Quality Relationship
The perception of price as an indicator of product quality (e.g., the higher the price, the higher the perceived quality of the product.)

Retail Store Image

Brands carried Store ambiance Prices Level of service Product assortment

Clientele

Discounts

Manufacturers Image
Favorable image tied to new product acceptance Companies sponsor community events to enhance images Product and institutional images

Perceived Risk
The degree of uncertainty perceived by the consumer as to the consequences (outcome) of a specific purchase decision Types
Functional Risk Physical Risk Financial Risk Social Risk Psychological Risk Time Risk

How Consumers Handle Risk

Seek Information Stay Brand Loyal Select by Brand Image Rely on Store Image Buy the Most Expensive Model Seek Reassurance

LEARNING

Learning
The process by which individuals acquire the purchase and consumption knowledge and experience that they apply to future related behavior

Elements of Learning Theories

Motivation Cues
Unfilled needs lead to motivation

Stimuli that direct motives

Response
Reinforcement

Consumer reaction to a drive or cue

Increases the likelihood that a response will occur in the future as a result of a cue

Two Major Learning Theories

Behavioral Learning Based on observable behaviors (responses) that occur as the result of exposure to stimuli Cognitive Learning Learning based on mental information processing Often in response to problem solving

Behavioral Learning

Classical Conditioning Instrumental (Operant) Conditioning

Classical Conditioning
A behavioral learning theory according to which a stimulus is paired with another stimulus that elicits a known response that serves to produce the same response when used alone.

Models of Classical Conditioning

Strategic Applications of Classical Conditioning

Basic Concepts
Repetition Stimulus generalization Stimulus discrimination Increases the association between the conditioned and unconditioned stimulus Slows the pace of forgetting Advertising wearout is a problem

Why Did Gillette Use Two Different Ads to Advertise the Same Product?

Repetition of the Message with Varied Ads Results in More Information Processing by the Consumer

Strategic Applications of Classical Conditioning

Basic Concepts
Repetition Stimulus generalization Stimulus discrimination

Having the same response to slightly different stimuli Helps me-too products to succeed Useful in:
product extensions family branding licensing

Which Concept of Behavioral Learning Applies to the Introduction of These Two Products?

Stimulus Generalization

What Is the Name of the Marketing Application Featured Here and Which Concept of Behavioral Learning Is It Based On?

Product Category Extension Stimulus Generalization

Strategic Applications of Classical Conditioning

Basic Concepts
Repetition Stimulus generalization Stimulus discrimination

Selection of a specific stimulus from similar stimuli Opposite of stimulus generalization This discrimination is the basis of positioning which looks for unique ways to fill needs

What Are the Names of the Marketing Application and the Behavioral Learning Concept Featured Here?

Stimulus Discrimination Product Differentiation

Instrumental (Operant) Conditioning

A behavioral theory of learning based on a trial-and-error process, with habits forced as the result of positive experiences (reinforcement) resulting from certain responses or behaviors.

A Model of Instrumental Conditioning

Reinforcement of Behavior

Positive Positive outcome Strengthen likelihood

Negative Negative outcome Encourages behavior

Reinforcement of Behavior
Extinction A learned response is no longer reinforced The link is eliminated between stimulus and reward Forgetting The reinforcement is forgotten

Strategic Applications of Instrumental Conditioning

Customer Satisfaction (Reinforcement) Reinforcement Schedules Shaping Massed versus Distributed Learning

Observational Learning (modeling or vicarious learning)

A process by which individuals learn behavior by observing the behavior of others and the consequences of such behavior

Information Processing and Cognitive Learning

Cognitive Learning
Learning involves complex mental processing of information Emphasizes the role of motivation

Information Processing and Memory Stores

Theoretical Models of Cognitive Learning

DecisionMaking Model Innovation Adoption Model Innovation Decision Process

Promotional Tricompetent Generic Model Model Framework

Knowledge
Evaluation Behavior

Attention Interest Desire Action

Cognitive Affective Conative

Awareness Knowledge

Awareness Knowledge

Interest Evaluation Evaluation Persuasion Purchase Trial Decision Postpurchase Adoption Confirmation Evaluation

Involvement and Passive Learning Topics

Definitions and Measures of Involvement Marketing Applications of Involvement Central and Peripheral Routes to Persuasion Hemispheral Lateralization and Passive Learning

Involvement
Degree of personal relevance that the product or purchase holds for that customer. High involvement purchases are very important to the consumer Low-involvement hold little relevance, have little perceived risk, and have limited information processing

Measuring Involvement with an Advertisement

Subjects respond to the following statements on a 7-point Likert scale ranging from Strongly Agree to Strongly Disagree. The message in the slogan was important to me The slogan didnt have anything to do with my needs The slogan made me think about joining the military The slogan made me want to join the military While reading the slogan, I thought about how the military might be useful for me The slogan did not show me anything that would make me join the military

I have a more favorable view of the military after seeing the slogan
The slogan showed me the military has certain advantages The slogan was meaningful to me The slogan was worth remembering

Marketing Applications of Involvement

Ads in video games Avatars Sensory appeals in ads to get more attention Forging bonds and relationships with consumers

Central and Peripheral Routes to Persuasion

Central route to persuasion
For high involvement purchases Requires cognitive processing

Peripheral route to persuasion

Low involvement Consumer less motivated to think Learning through repetition, visual cues, and holistic perception

Hemispheral Lateralization and Passive Learning

Hemispheral lateralization
Also called split-brain theory

Left Brain
Rational Active Realistic

Right Brain
Emotional Metaphoric Impulsive Intuitive

What Is the Name of the Learning Theory Concept Featured in This Ad and How Is It Applied to Air Travel?

Hemispheric Lateralization Both Sides of the Brain are Involved in Decision

How Is Passive Learning Applied to the Promotional Appeal Featured in This Ad?

The Ad is Targeted to the Right Brain

Measures of Consumer Learning Brand Loyalty

Recognition and Recall Measures Brand Loyalty

Measures of Consumer Learning Brand Loyalty

Three groups of factors

Personal degree of risk aversion or variety seeking The brands reputation and availability of substitutes Social group influences

Four types of loyalty

No loyalty Covetous loyalty Inertia loyalty Premium loyalty

Brand Equity the value inherent in a well-known brand name

CULTURE

To Which Cultural Value or Values Is This Products Advertising Appealing?

Convenience in Food Preparation

Culture

The sum total of learned beliefs, values, and customs that serve to regulate the consumer behavior of members of a particular society.

A Theoretical Model of Cultures Influence on Behavior

The Invisible Hand of Culture

Each individual perceives the world through his own cultural lens

Culture Satisfies Needs

Food and Clothing Needs vs. Luxury

In Terms of Culture, Do You Consider This Product to Be a Good Morning Beverage? Why or Why Not?

Many Will Say NO Due to Lack of Nutritional Value and Competing Products (Coffee).

Culture Is Learned
Issues
Enculturation and acculturation Language and symbols Ritual Sharing of culture Enculturation
The learning of ones own culture

Acculturation
The learning of a new or foreign culture

Culture Is Learned
Issues
Enculturation and acculturation Language and symbols Ritual Sharing of culture Without a common language ,shared meaning could not exist Marketers must choose appropriate symbols in advertising Marketers can use known symbols for associations

How Does a Symbol Convey the Products Advertised Benefits?

They Provide Additional Meaning to the Ad.

Culture Is Learned
Issues
Enculturation and acculturation Language and symbols Ritual Sharing of culture

A ritual is a type of symbolic activity consisting of a series of steps Rituals extend over the human life cycle Marketers realize that rituals often involve products (artifacts)

Selected Rituals and Associated Artifacts

SELECTED RITUALS TYPICAL ARTIFACTS

Wedding

White gown (something old, something new, something borrowed, something blue)
U.S. Savings Bond, silver baby spoon

Birth of child

Birthday 50th Wedding anniversary

Graduation Valentines Day New Years Eve

Card, present, cake with candles Catered party, card and gift, display of photos of the couples life together
Pen, U.S. Savings Bond, card, wristwatch Candy, card, flowers Champagne, party, fancy dress

Culture Is Learned
Issues
Enculturation and acculturation Language and symbols Ritual Sharing of Culture To be a cultural characteristic, a belief, value, or practice must be shared by a significant portion of the society Culture is transferred through family, schools, houses of worship, and media

Facial Beauty Ritual of a Young TV Advertising Sales Representative

1. I pull my hair back with a headband. 2. I take all of my makeup off with LOreal eye makeup remover. 3. Next, I use a Q-tip with some moisturizer around my eyes to make sure all eye makeup is removed. 4. I wash my face with Noxzema facial wash. 5. I apply Clinique Dramatically Different Lotion to my face, neck, and throat. 6. If I have a blemish, I apply Clearasil Treatment to the area to dry it out. 6. Twice weekly (or as necessary) I use Aapri Facial Scrub to remove dry and dead skin. 7. Once a week, I apply Clinique Clarifying Lotion 2 with a cotton ball to my face and throat to remove deep-down dirt and oils. 8. Once every three months, I get a professional salon facial to deep-clean my pores.

Culture is Dynamic
Evolves because it fills needs Certain factors change culture
Technology Population shifts Resource shortages Wars Changing values Customs from other countries

The Measurement of Culture

Content Analysis Consumer Fieldwork Value Measurement Instruments

Content Analysis

A method for systematically analyzing the content of verbal and/or pictorial communication. The method is frequently used to determine prevailing social values of a society.

Which Cultural Value Is Portrayed, and How So?

Progress The Fridge has Superior Design

Which Cultural Value Is This Ad Stressing, and How So?

Fitness and Health Low Calorie

Consumer Fieldwork
Field Observation
Natural setting Subject unaware Focus on observation of behavior

Participant Observation

Value Measurement Survey Instruments

Rokeach Value Survey (RVS) List of Values (LOV) Values and Lifestyles (VALS)

A self-administered inventory consisting of eighteen terminal values (i.e., personal goals) and eighteen instrumental values (i.e., ways of reaching personal goals)

A value measurement instrument that asks consumers to identify their two most important values from a ninevalue list that is based on the terminal values of the Rokeach Value Survey

A value measurement based on two categories: self-definition and resources

American Core Values Criteria for Value Selection

The value must be pervasive. The value must be enduring. The value must be consumer-related.

American Core Values

Achievement and success Material comfort Efficiency and practicality

Activity

Progress

Individualism

Freedom

External conformity Fitness and health

Humanitarianism

Youthfulness

American Core Values

Scale to Measure Attitude Toward Helping Others

Attitude toward helping others (AHO)
People should be willing to help others who are less fortunate Helping troubled people with their problems is very important to me People should be more charitable toward others in society People in need should receive support from others

Toward a Shopping Culture

Is shopping what we do to create value in our lives? The younger generation is shopping more This has an effect on credit card debt

Why Is State Farm Running Magazine Ads in Spanish? At Whom Are These Ads Directed?

To Build their Market by Reaching the Hispanic American Consumer

Subculture

A distinct cultural group that exists as an identifiable segment within a larger, more complex society.

Relationship Between Culture and Subculture

Examples of Major Subcultural Categories

CATEGORIES Nationality EXAMPLES Greek, Italian, Russian

Religion Geographic region Race

Age

Catholic, Hindu, Mormon Eastern, Southern, Southwestern African American, Asian, Caucasian
Teenagers, Xers, elderly

Gender Occupation
Social class

Female, male Bus driver, cook, scientist

Lower, middle, upper

Nationality Subculture - Hispanic

Stronger preference for well-established brands Prefer to shop at smaller stores Some are shifting food shopping to nonethnic American-style supermarkets Youths are more fashion conscious than non-Hispanic peers

Why Is Days Inn Running Ads in Spanish, and Who Are the Consumers Targeted by Such Ads?

Because Hispanic Americans who Speak Spanish as a First Language Tend to Prefer Spanish-Language Advertising

Nationality Subculture Hispanic U.S. Hispanic Population by Place of Origin

Segmenting the Hispanic Market

Religious Subcultures
200+ organized religious groups in the U.S. Primary organized faiths include:
Protestant denominations Roman Catholicism Islam Judaism

Consumer behavior symbolically and ritualistically associated with the celebration of religious holidays.

Regional Subcultures
Many regional differences exist in consumption behavior
Westerners have a mug of black coffee Easterners have a cup of coffee with milk and sugar White bread is preferred in the South and Midwest Rye and whole wheat are preferred on the East and West coasts

Major Racial Subcultures African American

The African American Consumer

13 percent of the U.S. population Purchasing power estimated at $845 billion

What Are the Strategic Goals of This Ad?

This Ad is Placed in Black Media which is Very Important to Many African Americans.

Major Racial Subcultures African American

Prefer leading brands over private-label brands Brand loyal Higher than average trips to grocery store and higher spending Spend more then other segments on telephone services

Major Racial Subcultures Asian American

Fastest growing racial segment Diverse group including 6 major ethnicities:
Chinese, Filipino, Indian, Vietnamese, Korean, and Japanese

95% live in metropolitan areas and business ownership is high

Region of Residence for Selected Subcultural Groups

Major Racial Subcultures Asian American

Increasing buying power Diverse so few trends Many prefer ads in English as language is self reported as well spoken

Major Age Subcultures

Generation Y

Generation X

Baby Boomers

Seniors

Generation Y
According to sources, born 1977-1994 OR 1982-2000 Three groups
Gen Y Adults 19-28 Gen Y Teens 13-18 Gen Y Tweens 8-12

Twixters 21-29 and live with parents

Generation X
Born between 1965 and 1979 Also referred to as Xers, busters, or slackers Do not like labels, are cynical, and do not want to be marketed to

Baby Boomers
Born between 1946 1964 More than 40 percent of the adult population Motivated consumers Not anxious to retire and handle it as:
Opportunity for a new start A continuation of preretirement life Unwelcome disruption Transition to old age

Older Consumers
Roughly 65 years and older Growing segment due to better medical care, declining birthrate and the aging of the large baby boomer segment Three segments by age
The Young-Old (65-74) The Old (75-84) The Old-Old (85 and older)

Older Consumers
Segmentation can also be done on motivations and quality-of-life orientation Cyberseniors

How Seniors Use the Internet

Issues in Understanding Gender as a Subculture

Sex Roles and Consumer Behavior
Masculine vs. Feminine Traits

Consumer Products and Sex Roles Women as depicted in Media

Working Women
Segments of ALL women
Stay-at-home Plan-to-work Just-a-job working Career-oriented working

Consumer Electronics Products Women Are Most Interested in Buying

Subcultural Interaction

Marketers should strive to understand how multiple subcultural memberships jointly influence consumers behavior

Under What Circumstances Would This English-Language Ad Attract Affluent Consumers from Largely Non-English Speaking Countries?

If They Frequently Visit the United States and Regularly Read American Upscale Magazines

The Imperative to Be Multinational

Global Trade Agreements
EU NAFTA

Winning Emerging Markets Acquiring Exposure to Other Cultures Country-of-origin Effects

The Best Global Brands

1. Coca-Cola 2. IBM 3. Microsoft 4. GE 5. Nokia 6. Toyota 7. Intel 8. McDonalds 9. Disney 10.Google

Country of Origin Effects: Positive

Many consumers may take into consideration the country of origin of a product. Country-of-origin commonly:
France = wine, fashion, perfume Italy = pasta, designer clothing, furniture, shoes, and sports cars Japan = cameras and consumer electronics Germany = cars, tools, and machinery

Country of Origin Effects: Negative

Some consumers have animosity toward a country
Peoples Republic of China has some animosity to Japan Jewish consumers avoid German products New Zealand and Australian consumers boycott French products

Why Do Most Global Airlines Stress Pampering Business Travelers in Their Ads?

Upscale International Business Travelers Share Much in Common.

Other Country-of-Origin Effects

Mexican study uncovered:
Country-of-design (COD) Country-of-assembly (COA) Country-of-parts (COP)

Conceptual Model of COD and COM

Cross-Cultural Consumer Analysis

The effort to determine to what extent the consumers of two or more nations are similar or different.

Cross-Cultural Consumer Analysis

Issues
Similarities and differences among people The growing global middle class The global teen market Acculturation The greater the similarity between nations, the more feasible to use relatively similar marketing strategies Marketers often speak to the same types of consumers globally

Comparisons of Chinese and American Cultural Traits

Chinese Cultural Traits Centered on Confucian doctrine Submissive to authority Ancestor worship Values a persons duty to family and state American Cultural Traits Individual centered Emphasis on selfreliance Primary faith in rationalism Values individual personality

Cross-Cultural Consumer Analysis

Issues
Similarities and differences among people The growing global middle class The global teen market Acculturation Growing in Asia, South America, and Eastern Europe Marketers should focus on these markets

Cross-Cultural Consumer Analysis

Issues
Similarities and differences among people The growing global middle class The global teen market Acculturation
There has been growth in an affluent global teenage and young adult market. They appear to have similar interests, desires, and consumption behavior no matter where they live.

Cross-Cultural Consumer Analysis

Issues
Similarities and differences among people The growing global middle class The global teen market Acculturation Marketers must learn everything that is relevant about the usage of their product and product categories in foreign countries

Research Issues in Cross-Cultural Analysis

FACTORS Differences in language and meaning EXAMPLES Words or concepts may not mean the same in two different countries.

Differences in market segmentation opportunities

The income, social class, age, and sex of target customers may differ dramatically in two different countries.
Two countries may differ substantially in the level of consumption or use of products or services. Two nations may use or consume the same product in very different ways.

Differences in consumption patterns

Differences in the perceived benefits of products and services

(continued)
FACTORS Differences in the criteria for evaluating products and services EXAMPLES The benefits sought from a service may differ from country to country.

Differences in economic and social conditions and family structure Differences in marketing research and conditions Differences in marketing research possibilities

The style of family decision making may vary significantly from country to country. The types and quality of retail outlets and direct-mail lists may vary greatly among countries. The availability of professional consumer researchers may vary considerably from country to country.

Alternative Multinational Strategies: Global Versus Local

Favoring a World Brand Are Global Brands Different? Multinational Reactions to Brand Extensions Adaptive Global Marketing Frameworks for Assessing Multinational Strategies

World Brands

Products that are manufactured, packaged, and positioned the same way regardless of the country in which they are sold.

Why Does One of the Worlds Most Highly Regarded Wristwatch Brands Use a Single Global Advertising Strategy (Only Varying the Language)?

They Speak to Them in Their Own Language to Maximize their Comfort Zone.

Cross-Border Diffusion of Popular Culture

Are Global Brands Different?

According to a survey yes Global brands have:
Quality signal Global myth Social responsibility

Multinational Reactions to Brand Extensions

A global brand does not always have success with brand extensions Example Coke brand extension Coke popcorn
Eastern culture saw fit and accepted the brand extension Western culture did not see fit

Adaptive Global Marketing

Adaptation of advertising message to specific values of particular cultures McDonalds uses localization
Example Ronald McDonald is Donald McDonald in Japan Japanese menu includes corn soup and green tea milkshakes

Often best to combine global and local marketing strategies

Framework for Assessing Multinational Strategies

Global Local Mixed

A Framework for Alternative Global Marketing Strategies

COMMUNICATON STRATEGY PRODUCT STRATEGY STANDARDIZED PRODUCT STANDARDIZED COMMUNICATIONS Global strategy: Uniform Product/ Uniform Message Mixed strategy: Customized Product/ Uniform Message LOCALIZED COMMUNICATIONS Mixed Strategy: Uniform Product/ Customized Message Local Strategy: Customized Product/ Customized Message

LOCALIZED PRODUCT

Cross-Cultural Psychographic Segmentation

The only ultimate truth possible is that humans are both deeply the same and obviously different.

Six Global Consumer Segments

Strivers Altruists Fun Seekers

Devouts
Intimates Creatives

As You See It, What Is the Main Family Message of This Ad?

It Reminds Parents of the Importance of Creating Quality Time.

The Changing U.S. Family

Types of families
Nuclear Extended Single-parent

Changes in household spending patterns

Evidence of the Dynamic Nature of U.S. Households

Consumer Socialization

The process by which children acquire the skills, knowledge, and attitudes necessary to function as consumers.

What Is the Name and Definition of the Process Depicted in This Ad?

Consumer Socialization - the Process by Which Children Acquire the Skills, Knowledge, Attitudes, and Experiences Necessary to Function as Consumers

A Simple Model of the Socialization Process

Other Functions of the Family

Economic well-being Emotional support Suitable family lifestyles

Family Decision Making

Dynamics of Husband-Wife Decision Making
Husband-Dominated Wife-Dominated

Expanding Role of Children In Family Decision Making

Choosing restaurants and items in supermarkets Teen Internet mavens Pester power

Framework of 10-year-old Influencer

The Family Life Cycle

Traditional Family Life Cycle
Stage I: Bachelorhood Stage II: Honeymooners Stage III: Parenthood Stage IV: Postparenthood Stage V: Dissolution

Modifications - the Nontraditional FLC

To Which Stage of the Family Life Cycle Does This Ad Apply, and Why?

Bachelorhood The Target Consumer Is Not Yet Married

Which Subgroup of Empty Nesters Does This Ad Most Likely Target?

The ones who are would like to pursue new interests and fulfill unsatisfied needs

Nontraditional FLC Family Stages

Alternative FLC Stage Childless couples Definition/Commentary Increasingly acceptable with more careeroriented married women and delayed marriages Likely to have fewer or no children

Couples who marry later in life

Couples with first child in late 30s or later

Single parents I Single parents II Single parents III Extended family

Likely to have fewer children. Want the best and live quality lifestyle
High divorce rate - about 50% lead to this Child out of wedlock Single person who adopts Adult children return home. Divorced adult returns home. Elderly move in with children. Newlyweds live with in-laws.

Dual Spouse Work Involvement (DSWI)

Social Class

The division of members of a society into a hierarchy of distinct status classes, so that members of each class have either higher or lower status than members of other classes.

Social Class Measure and Distribution

SOCIAL CLASSES and PERCENTAGE Upper Upper-middle Middle Working 4.3% 13.8% 32.8% 32.3%

Lower

16.8%

Social Class Measurement

Subjective Measures
individuals are asked to estimate their own socialclass positions

Objective Measures
individuals answer specific socioeconomic questions and then are categorized according to answers

Objective Measures
Single-variable indexes
Occupation Education Income

Compositevariable indexes
Index of Status Characteristics Socioeconomic Status Score

Social Class Mobility

Upward mobility Downward mobility Rags to riches?

Geodemographic Clusters

A composite segmentation strategy that uses both geographic variables (zip codes, neighborhoods) and demographic variables (e.g., income, occupation) to identify target markets.

Prizm Clusters

The Affluent Consumer

Growing number of households can be classified as mass affluent with incomes of at least $75,000 Some researchers are defining affluent to include lifestyle and psychographic factors in addition to income

What Is the Name of the Segment Targeted by This Ad, and Why Is the Appeal Shown Here Used?

This Ad was Used Because it is Effective for the Affluent Consumer.

What Is the Middle Class?

The middle 50 percent of household incomes - households earning between $25,000 and $85,000 The emerging Chinese middle class Moving up to more near luxuries

The Working Class?

Households earning $40,000 or less control more than 30 percent of the total income in the U.S. These consumers tend to be more brand loyal than wealthier consumers.

The Techno Class

Having competency with technology Those without are referred to as technologically underclassed Parents are seeking computer exposure for their children Geeks now viewed as friendly and fun

In What Ways Have the Prestige and Status of Geeks Been Changing?

The Change is Due to the Importance of Computers.

Consumer Behavior and Social Class

Clothing, Fashion, and Shopping The Pursuit of Leisure Saving, Spending, and Credit Social Class and Communication