Chapter 1 Consumers Rule By Michael R Solomon

Chapter 1 Consumers Rule By Michael R. Solomon Consumer Behavior Buying, Having, and Being Sixth Edition 1 -1

What is Consumer Behavior? • Consumer Behavior: – The study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services ideas, or experiences to satisfy needs and desires • Role Theory: – Identifies consumers as actors on the marketplace stage • Consumer Behavior is a Process: – Exchange: A transaction in which two or more organizations give and receive something of value 1 -2

Some Issues That Arise During Stages in the Consumption Process Figure 1. 1 1 -3

Consumer Behavior Involves Many Different Actors • Consumer: – A person who identifies a need or desire, makes a purchase, and then disposes of the product • Many people may be involved in this sequence of events. – Purchaser / User / Influencer • Consumers may take the form of organizations or groups. 1 -4

Consumers’ Impact on Marketing Strategy • Market Segmentation: – Identifies groups of consumers who are similar to one another in one or more ways and then devises marketing strategies that appeal to one or more groups • Demographics: – Statistics that measure observable aspects of a population • Ex. : Age, Gender, Family Structure, Social Class and Income, Race and Ethnicity, Lifestyle, and Geography 1 -5

A Lesson Learned • Nike was forced to pull this advertisement for a running shoe after disabilities rights groups claimed the ads were offensive. • How could Nike have done a better job of getting its message across without offending a powerful demographic? 1 -6

Market Segmentation Finely-tuned marketing segmentation strategies allow marketers to reach only those consumers likely to be interested in buying their products. 1 -7

Consumers’ Impact on Marketing Strategy (cont. ) • Relationship Marketing: Building Bonds with Consumers – Relationship marketing: • The strategic perspective that stresses the long-term, human side of buyer-seller interactions – Database marketing: • Tracking consumers’ buying habits very closely, and then crafting products and messages tailored precisely to people’s wants and needs based on this information 1 -8

Marketing’s Impact on Consumers • Marketing and Culture: – Popular Culture: • Music, movies, sports, books, celebrities, and other forms of entertainment consumed by the mass market. – Marketers play a significant role in our view of the world and how we live in it. 1 -9

Popular Culture Companies often create product icons to develop an identity for their products. Many made-up creatures and personalities, such as Mr. Clean, the Michelin tire man and the Pillsbury Doughboy, are widely recognized figures in popular culture. 1 - 10

Marketing’s Impact on Consumers: The Meaning of Consumption • The Meaning of Consumption: – People often buy products not for what they do, but for what they mean. – Types of relationships a person may have with a product: • • Self-concept attachment Nostalgic attachment Interdependence Love 1 - 11

Examples of Nostalgic Ads 1 - 12

Marketing’s Impact on Consumers: The Meaning of Consumption (cont. ) • Consumption includes intangible experiences, ideas and services in addition to tangible objects. • Four types of Consumption Activities: – Consuming as experience – Consuming as integration – Consuming as classification – Consuming as play 1 - 13

Marketing’s Impact on Consumers: The Global Consumer • By 2006, the majority of people on earth will live in urban centers. • Sophisticated marketing strategies contribute to a global consumer culture. • Even smaller companies look to expand overseas. • Globalization has resulted in varied perceptions of the United States (both positive and negative). 1 - 14

The Global Consumer American products like Levi jeans are in demand around the world. 1 - 15

Marketing’s Impact on Consumers: Virtual Consumption • The Digital Revolution is one of the most significant influences on consumer behavior. • Electronic marketing increases convenience by breaking down the barriers of time and location. • U-commerce: – The use of ubiquitous networks that will slowly but surely become part of us (i. e. , wearable computers, customized advertisements beamed to cell phones, etc. ) • Cyberspace has created a revolution in C 2 C (consumer-to-consumer) activity. 1 - 16

Marketing Ethics and Public Policy • Business Ethics: – Rules of conduct that guide actions in the marketplace – The standards against which most people in the culture judge what is right and what is wrong, good or bad • Notions of right and wrong differ among people, organizations, and cultures. 1 - 17

Needs and Wants: Do Marketers Manipulate Consumers? • Consumerspace • Do marketers create artificial needs? – Need: A basic biological motive – Want: One way that society has taught us that need can be satisfied • Are advertising and marketing necessary? – Economics of information perspective: Advertising is an important source of consumer information. • Do marketers promise miracles? – Advertisers simply don’t know enough to manipulate people. 1 - 18

Discussion Question • This ad was created by the American Association of Advertising Agencies to counter charges that ads create artificial needs. • Do you agree with the premise of the ad? Why or why not? 1 - 19

Public Policy and Consumerism • Consumer efforts in the U. S. have contributed to the establishment of federal agencies to oversee consumer-related activities. – – – Department of Agriculture Federal Trade Commission Food and Drug Administration Securities and Exchange Commission Environmental Protection Agency • Culture Jamming: – A strategy to disrupt efforts by the corporate world to dominate our cultural landscape 1 - 20

Culture Jamming • Adbusters Quarterly is a Canadian magazine devoted to culture jamming. This mock ad skewers Benetton. 1 - 21

Consumerism and Consumer Research • Kennedy’s “Declaration of Consumer Rights” (1962) • Green Marketing: – When a firm chooses to protect or enhance the natural environment as it goes about its activities • Reducing wasteful packaging • Donations to charity • Social Marketing: – Using marketing techniques to encourage positive activities (e. g. literacy) and to discourage negative activities (e. g. drunk driving) 1 - 22

Examples of Green Ads 1 - 23

Examples of Green Ads 1 - 24

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Consumer Related Issues • UNICEF sponsored this advertising campaign against child labor. The field of consumer behavior plays a role in addressing important consumer issues such as child exploitation. 1 - 27

The Dark Side of Consumer Behavior • Consumer Terrorism: – An example: Susceptibility of the nation’s food supply to bioterrorism • Addictive Consumption: – Consumer addiction: • A physiological and/or psychological dependency on products or services • Compulsive Consumption: – Repetitive shopping as an antidote to tension, anxiety, depression, or boredom 1 - 28

The Dark Side of Consumer Behavior (cont. ) • Consumed Consumers: – People who are used or exploited, willingly or not, for commercial gain in the marketplace • Illegal Activities: – Consumer Theft: • Shrinkage: The industry term for inventory and cash losses from shoplifting and employee theft – Anticonsumption: • Events in which products and services are deliberately defaced or mutilated 1 - 29

Consumer Behavior As a Field of Study • Consumer behavior only recently a formal field of study • Interdisciplinary influences on the study of consumer behavior – Consumer behavior studied by researchers from diverse backgrounds – Consumer phenomena can be studied in different ways and on different levels 1 - 30

Journal of Consumer Research 1 - 31

The Pyramid of Consumer Behavior Figure 1. 2 1 - 32

Consumer Behavior Disciplines • The Issue of Strategic Focus – Should CB have a strategic focus or be studied as a pure social science? • The Issue of Two Perspectives on Consumer Research – Positivism (modernism): • Paradigm that emphasizes the supremacy of human reason and the objective search for truth through science – Interpretivism (postmodernism): • Paradigm that emphasizes the importance of symbolic, subjective experience and meaning is in the mind of the person 1 - 33

Positivist vs. Interpretivist Approaches to CB 1 - 34

Taking it From Here: The Plan of the Book • • • Section I – Consumer Behavior Section II – Consumers as Individuals Section III – Consumers as Decision Makers Section IV – Consumers and Subcultures Section V – Consumers and Culture 1 - 35

The Wheel of Consumer Behavior Figure 1. 3 1 - 36