Consumer behavior

Lecture notes are available at: http://Arashmanagement.blogspot.com

Arash

Consumer behavior (CB) Arash Najmaei

Arash.unity@gmail Arash.unity@yahoo.com H/P : 0172116875
Arash 2

Group communication social class stratification culture

Consumer behavior
Roger D. Blackwell Paul W. Miniard James F. Engel

Arash

Outline of this chapter.

Group influence and communication Verbal and non verbal communications Marketer-dominated stimuli Stratification and Culture Social Factor Culture & subculture Norms Values Religious groups Groups Reference groups

Group , communication
Belonging to groups, trying to fit in, and striving to please others, affects directly every stage in the decision process. Reference group: any person or group of people who significantly influences an individuals behavior May be individuals (celebrities, athletes, or political leaders) or groups of individuals with similarities (musical groups or sports teams)

Personal and Group Influence on Individuals

High Degree of Influence

Types of Personal Influence Influences: Normative Transmission Groups Value Expressive Individuals Informational

Lifestyles Behaviors Purchases Consumption

Low Degree of Influence

Types of Reference Groups

Primary Groups: a social aggregation that is sufficiently intimate to permit and facilitate unrestricted direct interaction (e.g., family)

Types of Reference Groups

Secondary Groups: also have direct interaction, but it is more sporadic, less comprehensive, and less influential in shaping thought and behavior (e.g., professional associations or community organizations)

Types of Reference Groups

Formal Groups: characterized by a defined structure (often written) and a known list of members and requirements for membership Informal Groups: have less structure than formal groups and are likely to be based on friendship or interests

Types of Reference Groups

Membership: when individuals are recognized as members of a group, they have achieved formal acceptance status in the group Aspirational Groups: exhibit a desire to adopt the norms, values, and behaviors of others with whom the individuals aspire to associate

Types of Reference Groups

Dissociative Groups: groups from which an individual tries to avoid association Virtual Groups: groups that are based on virtual communities rather than geographic ones

Types of Group Influence

Normative: when individuals alter their behaviors or beliefs to meet the expectations of a particular group Value-expressive: when a need for psychological association with a group causes acceptance of its norms, values, attitudes, or behaviors Informational: when people have difficulty assessing product or brand characteristics by their own observations or contact

How Reference Groups Influence Individuals

Socialization: permits an individual to know what behavior is likely to result in stability both for the individual and the group Company manual may explain the dress code in the workplace Informal groups may tell them what styles are most comfortable and easiest to maintain

How Reference Groups Influence Individuals

Self-concept: people protect and modify their self-concept by their interactions with group members People can maintain self-concept by conforming to learned roles Testimonial advertising is effective when the self projected in the ad is consistent with the idealized self of the target consumer

How Reference Groups Influence Individuals

Social comparison: individuals often evaluate themselves by comparing themselves to others Consumers often use reference groups as benchmarks to measure their own behaviors, opinions, abilities, and possessions Advertising or television can be sources of social comparison

How Reference Groups Influence Individuals

Conformity: a change in beliefs or actions based on real or perceived group pressures
Compliance: when an individual conforms to the wishes of the group without accepting all its beliefs or behaviors Acceptance: when an individual actually changes his or her beliefs and values to those of the group

How Reference Groups Influence Individuals

Factors affecting how likely people are to conform to group norms:
Desire for social acceptance Degree of experience in situation or with decision Conspicuousness Complex product or luxury item

Transmission of Influence Through Dyadic Exchanges

Exchange between two individuals that influence these individuals behaviors or beliefs Dyadic exchange requires the exchange of resources (opinions and comments)

Dyadic Exchanges

Word-of-mouth Communication Service Encounters Opinion Leadership

Opinion Leadership
Opinion leadership: the sender of information is often considered an opinion leadera person who influences the decisions of others Opinion leaders might be experts in one area but not in others The greater the perceived knowledge of a category, the more likely that persons opinions are to influence others decisions

Service Encounters
Customer intimacy: detailed understanding and focus on customers needs lifestyles and behaviors in an effort to create a deep cultural connections with the customers Reverse customer intimacy: how well marketers facilitate customers knowing the marketer

How Personal Influences Are Transmitted

Two-step Flow
Information Information and Influence

Mass Media

Opinion Leader

Opinion Seekers

How Personal Influences Are Transmitted

Multistep Flow

Mass Media

Opinion Leader

Opinion Seekers

Gatekeepers

WOM and Opinion Leaders in Advertising and Marketing Strategy

WOM and personal communication can have a more decisive role in influencing behavior than advertising and other marketerdominated sources Viewed as a more trustworthy and credible source of information than salespeople or paid advertising

WOM and Opinion Leaders in Advertising and Marketing Strategy

Advertising can provide information to consumers about products they might seek from other sources and which may be discussed in WOM However, consumers dont always trust that the advertiser has their best interests in mind

WOM and Opinion Leaders in Advertising and Marketing Strategy

Advertising influences the effectiveness of WOM and vice versa Advertising can provide information about products consumers might not seek from other sources Advertising can create WOM among consumers and peer groups

Primary Reliance on Word-Of-Mouth

For some occasions, companies rely on WOM as a substitute for advertising

Direct Response Advertising

Stimulating Word-Of-Mouth
Firms may stimulate WOM by giving away or loaning products to opinion leaders to display and use Organizations may induce opinion leaders to influence consumers

Creating Opinion Leaders

Curbing Negative WOM

When something goes terribly wrong, denying the problem is not the answer The best strategy is immediate acknowledgement by a credible company spokesperson as negative WOM rarely goes away by itself Make sure you have all your facts straight and tell the truth

The Diffusion Process

Diffusion: the process by which an innovation (new idea) is communicated through certain channels over time among the members of a social system Includes:
Diffusion of information and communication Consumer decision process Diffusion or demise of innovation

The Diffusion Process

Accept C o n s u m e r Reject Diffusion of Information and Communication Consumer decision process Diffusion of Innovation

Organization

Influencer

(X number of people)

Demise of Innovation

Factors Affecting Diffusion

Communication (how consumers learn about new products and communicate findings) Time (how long it takes for a person to move from product awareness to product purchase or rejection) Social system (groups or segments to which individuals belong affect adoption or rejection)

Rogers Model of Innovation Decision Process

Knowledge: begins when the consumer receives physical or social stimuli that gives exposure and attention to the new product and how it works How a person receives and interprets the knowledge is affected by their personal characteristics

Rogers Model of Innovation Decision Process

Persuasion: refers to the formation of favorable or unfavorable attitudes towards the innovation Persuasiveness is related to the perceived risks and consequences of adopting and using the new product

Rogers Model of Innovation Decision Process

Decision: involves a choice between adopting and rejecting the innovation Adoptors are people who have made a decision to use a new product whereas other are nonadoptors Rejection may be active or passive

Rogers Model of Innovation Decision Process

Implementation: occurs when the consumer puts an innovation to use The process has been a mental exercise until this point where it requires a behavioral change The strength of the marketing plan may be the critical determinant in a sale resulting

Rogers Model of Innovation Decision Process

Confirmation: during this stage, consumer seek reinforcement for their innovation decision Consumer may reverse previous decision due to conflicting messages resulting in dissonance Discontinuance is a serious concern to marketers who strive for continued acceptance

Rogers Model of Innovation Decision Process

Communication Channels

Knowledge

Persuasion Decision

ImplemenConfirmation tation

Adopter Classes

A= Innovators (2.5%) B= Early Adopters (13.5%) C= Early Majority (34%) D= Late Majority (34%) E= Laggards (16%)

Consumers Likely to Buy New Products

Innovators: the first consumer group to adopt products Early adopters: opinion leaders and role models for others, with good social skills and respect within larger social systems Early majority: consumers who deliberate extensively before buying new products, yet adopt them just before the average time it takes the target population as a whole

Consumers Likely to Buy New Products

Late majority: tends to be cautious when evaluating innovations, taking more time than average to adopt them, and often at the pressure of peers Laggards: the last groups that tend to be anchored in the past, are suspicious of the new, and exhibit the lowest level of innovativeness among adopters

Consumers Likely to Buy New Products Innovativeness: the degree to which an individual adopts an innovation earlier than other members of a social system
Cognitive innovators: have a strong preference for new mental experiences Sensory innovators: have a strong preference for new sensory experiences Advertising and other communications can be targeted accordingly

social class stratification culture

What Is Culture?
A set of values, ideas, artifacts, and other meaningful symbols that help individuals communicate, interpret, and evaluate as members of society Blueprint of human activity, determining coordinates of social action and productive activity A set of socially acquired behavior patterns transmitted symbolically through language and other means to the members of a particular society

Values and Norms

Norms: rules of behavior held by a majority or at least a consensus of a group about how individuals should behave Cultural (social) values: values shared broadly across groups of people Personal values: terminal (goals) or instrumental (behaviors) beliefs of individuals

Values and Norms

Values and norms represent the beliefs of various groups within a society Macroculture: values and symbols that apply to an entire society or most of its citizens Microculture: values and symbols of a restrictive group or segment of consumers, defined according to variables such as age, religion, ethnicity, or social class

Values and Norms

Socialization: the process by which people develop their values, motivations, and habitual activity The Values Transfusion Model shows how the values of a society are reflected in families, religious institutions, and schools, all of which expose and transmit values to individuals

Characteristics Influenced by Culture

Sense of self and space Communication and language Dress and appearance Food and feeding habits Time and time consciousness Relationships Values and norms Beliefs and attitudes Mental processes and learning Work habits and practices Used to define and differentiate cultures

Values and Norms

People adopt values that influence how they live, how they define right and wrong, how they shop, and what is important to them The values adopted by individuals today shape the values of society in the future

The Values Transfusion Model

Values of Society

Family

Religious Institutions

Educational Institutions

Early Lifetime Experiences

Peers

Individual Internalized Values Society of Future

Media

Changing Values
Societys values change continuously even though core values are relatively permanent

Changes in values may alter the response to advertising, service offerings, and retailing formats

Changing Values

Will people become more like their parents as they get older, or will they carry with them the values of their generation?

Depends on elements in the Cultural Transfusive Triad and early lifetime experiences

Changing Values
Life-cycle explanation: values change according to life-cycle (as individuals grow older, their values change) Theory of behavioral assimilation: Younger people grow into the values of their parents as they get older Generational change: gradual replacement of existing values by those of young people who form the leading generation in value terms

The Values Transfusion Model

Cultural Transfusive Triad

Family

Religious Institutions

Educational Institutions

Early Lifetime Experiences

How Culture Affects Consumer Behavior: Pre-purchase and Purchase Activities Consumption and Divestment Activities

Influence of Culture on Prepurchase and Purchase Activities

Culture affects what consumers think they need and what they perceive as frivolous Culture affects how consumers are likely to search for information Culture affects the importance placed on certain attributes of alternatives Culture affects the amount of price negotiation during the purchase process

Influence of Culture on Consumption and Divestment Activities

Culture affects how consumers use or consume products Consumers expectations about form and function vary between cultures Culture influences how individuals dispose of productsreselling products after use, giving them to others for use, or recycling them and their packaging when possible

Changing Family Influences

Less time for in-home or parentchild influence Increasing divorce rates Isolated nuclear family (geographic separation of generations)

Changing Religious Influences

Traditional churches and religions have seen a decline in loyalty Increase in non-Christian religions A shift from traditional religion to spirituality Women are more religious Religion and spirituality are big business and influence big business

Changing Educational Influences

Dramatic increase in formal education Teaching has evolved from memorization to questioning Digital learning has increased in popularity

Acculturation: measures the degree to which a consumer has learned the ways of a different culture compared to how they were raised Just as individuals adapt to cultural changes, so do companies

Advertisements Appealing to the Latin-American Market

Advertisements Appealing to the Latin-American Market

Social Class Microcultures

Social class: relatively permanent and homogeneous divisions in a society into which individuals or families sharing similar values, lifestyles, interests, wealth, status, education, economic positions, and behavior can be categorized

Social Class Microcultures

Concrete variables that define social classes include occupation, education, friendships, ways of speaking, and possessions Perceived variables that define social class include power, and prestige Social class, in part, determines the mix of goods consumers will buy

Social Class Microcultures

Status groups: reflect communitys expectations for style of life among each class as well as the positive or negative social estimation of honor given to each class

Social Class Microcultures

What determines social class? Economic Variables Interaction Variables Political Variables
Occupation Income Wealth

Personal Prestige Association Socialization

Power Class consciousness Mobility

Social Class Microcultures

Consumer analysts often focus on six variables which determine social class
Occupation Personal performance Interactions Possessions Value orientations Class consciousness

Social Class Microcultures

Occupation: best single indicator of social class Personal performance: a persons success relative to that of others (often in the same occupation) Interactions: the people with whom one associates and socializes Possessions: symbols of class membership

Social Class Microcultures

Value orientations: values are indicators of our social class In some countries, values are more important than possessions and social class is determined more by achievements than by possessions Class consciousness: the degree to which people in a social class are aware of themselves as a distinctive group

Social Class Microcultures

Social stratification: perceived hierarchies in which consumers rate others as higher or lower in social status Achieved status: earn a higher status due to work or study Ascribed status: lucky to be born wealthy or beautiful Status inconsistency: when a person rates high on one variable and low in another (some athletes or musicians)

Market Segmentation
Identification of social class usage of the product Comparison of social class variables for segmentation with other variables Description of social class characteristics identified in target markets Development of marketing program to maximize effectiveness of marketing mix based on consistency with social-class attributes

Positioning Based on Social Class

Understanding social class helps marketers create perceptions about products or organizations in consumers minds Appeal to those who are in a social class and those who aspire to be there

Positioning Based on Social Class

Brands such as Coach and Godiva are positioned to middle class consumers with simple, sleek ads Wanting it all is a hallmark of the middle class and buying the best on at least a few occasions sets them apart and bolsters their selfimage