Summary Consumer Psychology - part 2

Deze samenvatting is gebaseerd op het studiejaar 2013-2014.


I. The decision making process based on the peripheral route

Low-effort judgment process

When consumers make a lot of effort, they can process complex information. When MAO is low, they try to simplify the decision process by using heuristics. Two types are:

Representativeness heuristic = making a judgment by simply comparing a stimulus with the category prototype. Marketers often position new products close to the category leader because of this.

Availability heuristic = basing judgments on events that are easier to recall, like vivid and accessible experiences. Such judgments are biased because consumers tend to ignore base-rate information = how often an event really occurs on average. Law of small numbers = the expectation that information obtained from a small number of people represents the larger population. Marketers try to motivate consumers to imagine certain situations, and provide them with base-rate information to overcome bias.

Low-effort decision-making processes

Because most purchases are not very important in consumers’ lives, they don’t want to spend a lot of effort in cognitively processing the possible purchases. In low-effort situations, they may make decisions unconsciously and spontaneously. Such decisions are often influenced by environmental cues. Another way of making decisions is consciously, through the traditional hierarchy of effects = sequential steps used in decision making involving thinking, then feeling, then behavior.

The low-effort hierarchy of effects = a sequence of think-do-feel. The existing beliefs of the consumer serve as the foundation for his behavior. After purchase and during use, the consumer evaluates the brand and may form an attitude about it.

In low-effort situations there still is some kind of decision process, but it is simpler, involves less effort, and is qualitatively different from high MAO processes. Two other factors influence the low-MAO decision process:

The goal is not necessarily to find the best possible brand (optimizing). Instead, consumers are willing to satisfice = finding a brand that satisfies a need even if it may not be the best brand.

In low-elaboration decisions, consumers may rely on previous information and judgments from (dis)satisfaction from past consumption. In repeat-purchase situations, they develop choice tactics = simple rules of thumb used to make low-effort decisions. Example: price tactics: “I bought it because it was the cheapest”.

Learning choice tactics

Operant conditioning = the view that behavior is a function of reinforcements and punishments received in the past. E.g., when you have previously received compliments for cleaning up your room, you may have learned that cleaning your room is a good thing, and you will be likely to do it again.

Reinforcement often comes from satisfaction that occurs as a person’s needs have been sufficiently met. This reinforcement increases the chance that he will buy the brand again. When a consumer has a bad experience with a product, he will consider this punishment. He will then choose to buy another brand next time.

Low-effort thought-based decision making

Strategies consumers use for making low-effort decisions can be divided into two categories: thought-based and feeling-based decision making. Cognitive-based decision making includes performance-related tactics, habit, brand loyalty, price-related tactics, and normative influences.

Performance as a simplifying strategy

Performance-related tactics = tactics based on benefits, features, or evaluations of the brand. Consumers use these to make their choices (e.g., buying a certain toothpaste because it promises you the ‘whitest teeth’).

Habit as a simplifying strategy

Habit = doing the same thing time after time, thereby making life less complex and easier to manage. It requires little to no information seeking, and little or no evaluation of alternatives. Also, it reduces risk, because consumers already know what to expect from a certain purchase.

Consumers who buy out of habit, are not brand loyal. Shaping = leading consumers through a series of steps to create a desired response.

This can be used to (re)shape repeat-purchasing. Also, sales promotions can be used to break the consumer’s habits and make him switch to another brand. This can also be done by offering new and unique benefits.

By making sure that the product is never out of stock and by keeping the brand top of mind by advertising frequently, marketers can keep consumers buying their brand out of habit from switching to another brand.

Brand loyalty as a simplifying strategy

Brand loyalty = buying the same brand repeatedly because of a strong preference for it. This is a result from very positive reinforcement of a performance-related choice tactic. When a consumer gets experienced with using a complex product, he might be loyal because of cognitive lock-in (he doesn’t want to spend effort in learning how another product works). Brand loyalty results in low-effort decisions because the consumer simply buys the same brand all the time. However, there is a high involvement with the brand.

Multibrand loyalty = buying two or more brands repeatedly because of a strong preference for them (e.g. buying Fanta & Pepsi).

When measuring brand loyalty, marketers should look at both purchase patterns and preference, because brand loyalty includes both repeat purchases and commitment.

Consumers may become more loyal to brands that offer special benefits or exquisite quality. Frequent-buyer programs are a way of motivating consumers to become loyal. It is very hard to make loyal customers switch to another brand.

Price as a simplifying strategy

Price-related tactics = simplifying decision heuristics that are based on price. When consumers perceive little differences between products, they will base their decisions on price comparisons. Zone of acceptance = the acceptable range of prices for any purchase decision. As long as a brand falls in this range, it may be considered for purchase.

Deal-prone consumer = a consumer who is more likely to be influenced by price.

Consumers often look for special deals online, but are also willing to pay extra if they believe a product provides a certain benefit. They tend to be more price-conscious in bad economic times.

Sometimes, consumers’ purchases are influenced by others. Normative choice tactics = low-elaboration decision making that is based on others’ opinions (e.g., a daughter buying the same detergents as her mother). These are especially common among consumers with a low level of knowledge and experience and can result from:

Direct influence = when other try to manipulate you;

Vicarious observation = when we observe others to guide our behavior;

Indirect influence = when we are concerned about others’ opinions.

Low-effort feeling-based decision making

Strategies that cover feeling-based decisions are affective tactics, brand familiarity, variety seeking, and impulse purchasing.

Feelings as a simplifying strategy (affective tactics)

Affect = low-level feelings: consumers buying a brand because they like it, even if they don’t know why they like it. Affect does not necessarily result from conscious recognition of need satisfaction. It is often part of the decision making process when the product is hedonic in nature, and when other factors are not in operation.

Affect-based tactics = tactics based on feelings. Affect referral = a simple type of affective tactic whereby we simply remember our feelings for the product or service. Example: feeling happy when thinking of McDonald’s and deciding to go eat there based on that happiness. By creating positive affect, marketers can increase the chance that their brand is chosen from a variety of similar offers.

Brand familiarity

Brand familiarity = easy recognition of a well-known brand. Co-branding = an arrangement by which two brands form a partnership to benefit from the power of both (e.g. McFlurry KitKat).

Decision making based on variety-seeking needs

Variety seeking = trying something different. Consumers seek variety because of boredom and satiation/saturation. This is most likely to occur in low-involvement situations, when products are quite similar, and hedonic in nature.

 

Optimal stimulation level (OSL) = an internal ideal level of stimulation. Repeat-buying eventually leads the internal level of stimulation below the OSL, motivating the consumer to make a change. Sensation seekers = consumers who actively look for variety. Vicarious exploration = seeking information simply for stimulation. Marketers adjust to this for example by offering different tastes or colors (e.g. Coca Cola light, cherry, etc.).

Buying on impulse

Impulse purchase = an unplanned purchase based on a strong feeling. Characterized by:

An intense feeling of having to buy a product immediately;

A disregard for possible negative consequences;

Feelings of excitement;

A conflict between control and indulgence.

It is often triggered by external stimuli, and depends on the consumer’s personal level of self-control.

 

J. Satisfaction

 

 

Post-decision dissonance = anxiety whether the right decision was made, most likely to occur when more than 1 alternative is attractive and the decision is important.

 

Post-decision regret = feeling that one should have purchased another option, as consumer sees an unfavourable comparison between the performance of the chosen en alternative option. Regret goes away over time. Switching to the alternative gives less regret, because the consumer wants to believe this was the better choice. Breaking a major decision into smaller parts reduces the regret overall.

 

Model of learning from experience = (prior beliefs à) hypothesis generation à exposure to evidence à encoding evidence à integration evidence and previous beliefs (à revised beliefs). Using feedback from repeated hypothesis tests, the agent/site learns what the consumer likes and can propose suggestions. The hypothesis and experience of brand personality can also influence learning, vb if a ‘sincere’ brand has a crisis, it may be more difficult to reconnect with the consumer than if it was a ‘exciting’ brand.

 

Learning is affected by:

  1. Motivation= when motivation is high, people will generate more hypothesis
  2. Prior knowledge/ability = when knowledge is high, consumer has more well-defined beliefs and expectations, therefore unlikely to generate new hypotheses. This inhibits learning. Moderately knowledgeable consumers are the most likely to generate hypotheses and learn from it.
  3. Ambiguity of information environment / lack of opportunity = ambiguity when there is not enough info to confirm or disprove the hypothesis. This can affect the learning from experience. When consumers have difficulty determining the quality of the product, they tend to support their hypothesis with advertisements or word of mouth. And because they cannot disprove their hypothesis, they assume the product is consistent with previous expectations. But when the product is good/bad, consumers can change their perceptions on actual experience.
  4.  Processing biases = confirmation bias and overconfidence inhibit learning, especially when the evidence is ambiguous. These biases avoid learning negative and highly diagnostic information.

Top dog strategy = market leader or brand with a large market share. Limitations on learning are advantageous for the top dog. Highly motivated consumers can switch to another brand, but this can be avoided by blocking exposure to evidence (encourage consumers not to acquire new info) or explaining the evidence (if product is unambiguous, the consumer needs reinforcement of why the brand is good).

 

Underdog strategy = lower-share brand want to encourage consumers to learn, because they might switch brands. If the consumer is not motivated, use comparison of their brand with the top dog, with a strong and distinct advantage.

Or create expectations and use promotions for actual experiences, if the evidence is ambiguous is it unlikely to disconfirm hypotheses. Also facilitating a product trial is usefull when motivation is low and evidence is ambiguous.

 

Satisfaction = feeling when consumers have made a positive evaluation or feel happy with their decision. Most research has focused on utilitarian and hedonic dimensions. All aspects of an experience (sensory, affective, behavioural, cognitive) can influence satisfaction and loyalty. Satisfaction also differs in consumer involvement, consumer characteristics and time. When consumers make their own choice in hedonic products, they are more satisfied when there is a small delay. If someone else makes this choice, satisfaction will decrease with delay. Higher involvement is more satisfaction at first, but lower involvement has higher satisfaction later on. The ACSI (American Consumer Satisfaction Index) measures customer satisfaction across a variety of different industries. Also important to understand the roots of dissatisfaction.

 

Thought-based judgements of (dis)satisfaction = relate to whether consumers thoughts and expectations about the offering are confirmed or disconfirmed by its actual performance, thoughts about causality and blame, and thoughts about fairness and equity.

 

Disconfirmation paradigm = disconfirmation is the discrepancy between expectations and performance. The disconfirmation paradigm combines expectations and performance to disconfirmation. If this is positive, it will lead to satisfaction, and if it is negative, it will lead to dissatisfaction. The (dis)satisfaction is also influenced by feelings. Better-than-expected leads to positive disconfirmation and to satisfaction. If performance is as good as expected, its a simple confirmation and also to satisfaction. Negative disconfirmation leads to dissatisfaction.

Consumers who focus on the service provider’s obligation are more dissatisfied with service failure if they are on friendly terms with the provider, but they are less dissatisfied if they focus on their own obligations. Difference between the disconfirmation paradigm and learning process, is that (dis)satisfaction are based on formal evaluation, whereas learning is not. Also satisfaction is subject to change, due to social influence. Distrust has a spill-over effect on other products of the brand. Also if the customer paid the discount price, they feel less benefit from the product than when paying the full price, affecting the price-quality relationship and thus their experience of the product performance. Performance, expectations and feelings can affect satisfaction independent of disconfirmation. Raising consumers expectations can increase rating of product performance, but this can also lead to a negative disconfirmation and dissatisfaction. Guarantees can create a positive expectations leading to satisfaction, or offering test rides.

 

Attribution theory = how individuals explain events. Explanation based on 3 factors, namely stability (event permanent or temporary), focus (problem consumer or marketer related) and controllability (under customers or marketers control). More dissatisfied if event is permanent, marketer related and not under consumers control.

 

Equity theory = focus on the fairness of exchange between individual.

 

Fairness in exchange = perception that input is equal to output in an exchange. Exchange is seen as more equitable when they have high expectation or when the performance exceeds their normative expectations. The equity theory complements the disconfirmation paradigm by specifying another way for dissatisfaction. However the paradigm focuses more on expectations and performance, while the equity theory looks at general interpersonal norms governing right/wrong, considering both outcomes.

 

Experienced emotions and coping = post-decision feelings help to explain satisfaction judgement (independent of disconfirmation). Consumers who are dissatisfied need to cope with the stress. How they cope depends on feeling threatened/challenged, motivation, ability and opportunity. 3 sorts of coping: active coping, expressive support seeking and avoidance. Satisfaction evaluation is often tied to specific situations, usage at a current time. Thus satisfaction differs from attitude, which is more enduring. Feelings have more influence at the beginning, thoughts more later on.

Affective forecasting = prediction on how we think a product will make us feel. This leads to dissatisfaction if the product fails to perform as thought. We are very wary of anticipated regret.

 

Responses to dissatisfaction = consumers can undertake 4 actions: 1. No action, 2. Discontinue purchasing the product/service, 3. Complain to the company or third party, 4. Engage in negative word of mouth communication. 3 and 4 are interesting for research.

 

Complaints = the majority of consumers do not complain, but those that do might indicate a marketing-related problem. Marketers need to focus on all locations the consumer might complain (retailer, websites, media, etc). High motivation, ability, opportunity and inequity lead to complaints, but also perceived effect, time and effort of complaining. More likely to complain when they perceive the cause as permanent, marketer related and volitional, and when the consumer feels like taking ‘revenge’. There are 4 types of complain consumers: 1. Passives (least likely to complain), 2. Voicers (complain directly to retailer), 3. Irates (angry consumer who engage in negative word of mouth, stop buying and complain to the provider), 4. Activists (engage heavily in all types of complaining, including to a third party).

Consumer characteristics can give insight in how to handle a complain. 1. Perception of the problem (how severe is it), 2. Customer-company relationship (how often and how long has the consumer bought this brand), 3. Customer psychographics (Aggression, self-confidence and experience), 4. Personal characteristics (age customer, gender). Consumer more concerned with fairness of resolution of the complaint than the procedure of handling the complaint of fairness interactions with representatives.

 

Responding to service recovery = consumer reaction depends on their expectations. For example, when the consumer expects to maintain a good relationship, the company should apologize and promise to prevent any mishaps.

 

Negative word of mouth communication = consumers saying negative things about a product/service to other consumers. More likely when the problem is severe, unhappy with company’s responsiveness and perceived as companies fault. Troublesome because it is highly persuasive, very vivid (easily remembered) and has great influence on decisions. Word of mouth can go global very quickly, thus try to rectify of eliminate the problem at the beginning.

Customer retention = practice of keeping customers by building long-term relationships, by continuously pay attention to all aspects of the customer interaction. Thus satisfaction alone is not enough to keep customers loyal. It is costly to acquire new customers, so keep in mind: care about customers, remember customers between sales, build trusting relationships, monitor the service-delivery process (vb with mystery shoppers) and provide extra effort.

 

Dispostion = throwing away meaningless or used-up items without giving the action thought, it can be temporary or involuntary, and personal, interpersonal or societal focus (see page 285). Consumers often have a logical and reasonable motive for disposition. Often seen as physical detachment, but it can also be an emotional detachment with a more painful, longing process. The disposition of shared possession (during divorce) has 2 types: 1. Disposition to break free (free onself from former relationship), 2. Disposition to hold on (cling to possession in the hope to restore the relationship). Disposition decisions can influence later acquisition decisions. Also marketers are more interested in the trade, sell or give away items for secondhand purchases, with consumers search for bargains and social opportunity. Product disposition can also have a general influence on society (vb recycling). And studying disposition patterns, marketers can get insight in clusters.

 

Recycling = more consumers are recycling than ever before, partly because they are more informed, and partly because it gives them a good feeling. More likely to recycle when benefits outweigh the costs (money, time, effort for immediate/long term goals). Consumers also need the ability and opportunity to recycle. Recycling can be facilitated by increasing the consumers MAO for recycling. Also, you can make marketing products more environmentally friendly and promote the benefits (convenience of not having to recycle).

 

K. Influences on behavior

 

Social influence = information by and implicit or explicit pressures from individuals, groups, and the mass media that affects how a person behaves.

Source of influence

Consumers can be influenced through mass media or other consumers, and this influence can come from marketing and non-marketing sources:

Marketing sources via mass media = influence delivered by a marketing agent, e.g. through advertising or personal selling.

Marketing sources delivered personally: salespeople and service representatives can personally provide information to consumers and assist them in making the right purchase decisions.

Non-marketing sources via mass media = influence by an entity outside a marketing organization, e.g. by friends, family, or media. Non-marketing mass media include news items, blogs, communities, etc.

Non-marketing sources delivered personally: word of mouth = influence delivered verbally from one person to another person/group of people.

(Non-)marketing sources delivered via social media: social media have a large reach, but a personal feel.

Mass media sources like TV and internet have the largest reach, but personal influence sources allow for a two-way flow of information, thereby making them valuable as well. Because personal sources are more interactive and vivid, they tend to be more persuasive. Non-commercial sources are perceived as more credible, and less biased and manipulative than commercial sources. Marketers should therefore try to use non-marketing sources and personal sources to influence consumers to a greater extent. Because the impact of non-marketing and marketing sources differ, it is best to use a mix to enhance impact.

Opinion leader = an individual who acts as an information broker between the mass media and the opinions and behaviors of an individual or group. He/she often has important knowledge, is a first mover, or heavy user of mass media, and is regarded a credible, non-marketing source.

Gatekeeper = a source that controls the flow of information; he has a special influence in deciding if a product/information will be spread to a market. Market maven = a consumer on whom others rely for information about the marketplace in general: he knows all about the best products and stores for example.

Reference groups as sources of influence

Reference group = a set of people with whom individuals compare themselves for guidance in developing their attitudes, knowledge, and/or behaviors.

Aspirational reference group = a group individuals admire and desire to be like.

Associative reference group = the group an individual currently belongs to.

Brand community = a specialized consumer group with a structured set of relationships involving a particular brand, fellow, committed customers of that brand, and the product in use (e.g. the Harley Owners Group).

Dissociative reference group = the group we do not want to belong to and which we disapprove of (e.g. neo-Nazis).

Marketers use their knowledge of consumers’ reference groups in various ways. They use representative consumers which are easy to relate to (associative reference group) and celebrities (aspirational reference group) in their advertisements. Also, they create dedicated websites and communities in order to facilitate brand communities. Besides that, they try to refrain from dissociative reference groups, for example by firing celebrity endorsers that behave inappropriately.

Reference groups vary in:

Degree of contact: consumers have direct and extensive contact with their primary reference group, often their immediate circle of friends and family. Secondary reference group = the group with whom they do not have direct contact (e.g., other members of a fan club).

Formality: sports teams are, for example, more bound to rules than groups of friends.

Homophily = the overall similarity among members in the social system. Influence of the reference group is strong, since members are similar and strongly tied.

Group attractiveness: when group members are perceived as attractive, more consumers will want to conform to the group.

Density: the more group members know one another, the less opportunity they have to influence each other.

Degree of identification: the more a group member can identify with the group, the more his behavior is influenced by other group members.

Tie strength = the extent to which a close, intimate relationship connects people. Strong ties have close relationships and are likely to influence each other, while the reverse is true for weak ties.

When a marketer wants a message to be transmitted quickly, he should focus on individuals in dense groups that contact their strong ties frequently. Because weak ties often serve as bridges between several strong networks, they are very valuable. Word of mouth even spreads more quickly through weak ties than through strong ones.

Embedded market = market in which the social relationships among buyers and sellers change the way the market operates. Example: you are more willing to buy cookies from your niece than from a random girl scout you have never met before.

Consumer socialization = the process by which consumers learn to become consumers and come to know the value of money, the appropriateness of saving versus spending, and how, when, and where products should be bought/used. Consumers can thus learn consumption values and gain knowledge and consumption skills through socialization.

Socialization occurs in various ways. Reference groups like parents may teach children how to behave by teaching and observing them (intergenerational influence). Parents’ influence on their children decreases as the children age. The media act as socializing agents as well. Boys are, for example, more depicted as tough and active than girls, resulting in them playing with different kinds of toys. Charities can use media to convince consumers that donating money is the right thing to do.

Normative influence

Normative influence = social pressure designed to encourage conformity to the expectations of others. Norm = collective decision about what appropriate behavior should be. Normative influence can have various effects on consumption behavior:

Brand-choice congruence = the purchase of the same brand as members of a group. A consumer may have the same clothing style as his friends for example. 

Conformity = the tendency to behave in an expected way, e.g., buying a certain brand because your friends use it too.

Compliance = doing what the group or social influencer asks, e.g,. purchasing products sold at a Tupperware party. Reactance = doing the opposite of what the group wants you to do. This can happen if a person experiences too much group pressure.

Social-relational theory: consumers conduct their social interactions according to:

the rights and responsibilities of their relationships with group members;

a balance of reciprocal (two-way) interactions with group members;

their relative status/authority;

the value placed on different objects/activities.

Normative influence varies in strength. This strength depends on:

Product characteristics: if we buy a product within a  certain category, and what brand we buy. Both these decisions are influenced by reference groups. This influence will be stronger with publicly consumed products that are luxury goods. If a product plays a significant role in group membership, normative influence is strong.

Consumer characteristics: consumers who are susceptible to interpersonal influence try to enhance their self-image by buying products they think others will approve of. When ties are strong and individuals strongly identify with the group, normative influence is high.

Group characteristics: coercive power = the extent to which the group has the capacity to deliver rewards and sanctions. Example: the chance that your best friend has an influence on your clothing style is higher than the chance that your uncle does. The more cohesive, collective and similar the group, the higher normative influence.

Marketers can take various actions based on normative influence. They can show ads with social settings wherein groups of friends, for example, drink a certain brand of beer; facilitate group discussions; encourage referrals; or strongly link their brand to a certain group, so it becomes a group symbol. Another way of profiting from normative influence can be the use of compliance techniques:

Foot-in-the-door technique = designed to induce compliance by getting an individual to agree first to a small favor, then to a larger one, and then to an even larger one.

Door-in-the-face technique = first asking a person to comply with a very large and outrageous request, followed by a smaller, more reasonable request.

Even-a-penny-will-help technique = asking individuals to do a very small favor that is so small that it almost does not qualify as a favor.

Also, when motivating consumers to predict their behavior, they are more likely to really act the way they predicted. Lastly, consumers should be provided with sufficient choice options and are more likely to comply when salespersons have similar attitudes and are perceived as experts.

Informational influence

Informational influence = the extent to which sources influence consumers simply by providing information. Example: a travel site providing useful tips for travelers. Various factors influence the strength of informational influence:

Product characteristics: when products are complicated and their use is risky, or when consumers cannot tell the difference between brands themselves, they are more susceptible to informational influence.

Consumer and influencer characteristics: when the information source is considered an expert or a strong tie, consumers are more susceptible to his informational influence.

Group characteristics: cohesive group members are more likely to be motivated to share information, and are more likely to be susceptible to informational influence.

Informational influence can be applied by marketers in various ways. They can use experts to communicate marketing messages and create environments in which consumers can interact like forums or social media platforms.

Marketers’ efforts are most successful when both normative and informational influence are applied. In order to do this, marketers should use sources that are similar to the target group, and use clues to imply scarcity (people will want to buy the product before it is out of stock because if they don’t get it, they will be left out of the group).

 

Information can be described in two ways:

Valence = whether the information is positive or negative. Dissatisfied consumers talk more about products than satisfied ones. Also, consumers are more likely to react on negative reviews, and consider them more important than positive ones. A reason for this may be that there is already an overload of positive information: negative information thus receives more attention because it is surprising and different.

Modality = whether the information is verbal or non-verbal (observation).

Word of mouth information is considered more credible and trustworthy than marketer-initiated messages, and therefore it is more persuasive. Positive reviews motivate consumers more to try new things more than commercial messages do. Online, word of mouth occurs through review websites, blogs, social media, etc.

Viral marketing = rapid spread of brand/product information among a population of people stimulated by brands.

Marketers can try to increase positive word of mouth by targeting opinion leaders and by making use of networking opportunities. The higher the consumer’s product familiarity, the more likely he is to be influenced by positive WOM, and vice versa. The higher the originality and usefulness of the product, the more likely it is to be talked about. When receiving a bad review, marketers should empathize with consumers and look for solutions to their problems.

Various ways of reacting to scandals are:

Do nothing: by not reacting to complaints, companies can avoid increased attention for the problem. This strategy can, however, also backfire (then the company gets accused of being negligent for example).

Do something locally: e.g., only reacting to the people who actually called customer service with a complaint.

Do something discreetly: e.g., using PR to emphasize the social responsibilities of a company when it is accused of harming the environment, without mentioning the actual accusation.

Do something big: use advertising to respond to the scandal, hire opinion leaders to provide information, conduct media interviews, etc.

 

L. Cultural influence on consumer behaviour

 

 

Age segments = four major groups are targeted. 1. Teens and millennials (generation Y), 2. Generation X, 3. Baby boomers, 4. Seniors. 76% of the Americans is olders than 18, and the median is 37 years.

 

Teens en millennials = teens have a good deal of financial independence. Also they have a lot of friends, including social media, which can influence. It is important not to forget the localized culture next to the common teen ‘culture’. Millennial is born between 1980 and 1994, also known as generation Y. They are media and tech heavy. For economic reasons, these consumers have been delaying or boomeranging their independence. Boomerangers settle down later and have more discretionary income to spend on entertainment (their parents pay the basics). People develop brand loyalty in their teens, so it is important to create brand awareness early on. Also positioning is very important if you’re selling to teens, as they are trendsetting, rebelling and wanting to be accepted by peers. Also use both traditional and social media to reach them. Other marketing activities can be used, such as through recreation or special events (think Red Bull).

 

Generation X = born between 1965 and 1979. Gen Xers who did not pass or equal their parents level of success feel a bit disillusioned and less materialistic than other age groups. But Gen Xers are doing well at balancing work and personal lives. This markets represents more than $120 billion in spending power. This groups takes its time to research to personal needs and tastes. Gen Xers tend to be cynical about obvious marketing techniques, but do react positive when messages clever tune in with their values, attitudes and interests. They can be reached through media vehicles, such as popular/alternative music radio stations or TV (they watch less tv than the other groups).

 

Boomers = born between 1946 and 1964. Are a large and influential buying group. They grew up with TV and increasingly spend time on the internet and social media. There are subgroups in the boomers, but boomers around the world share certain attitudes and values. Boomer parents and children share some common characteristics, such as shopping at the same store.

 

Seniors = 65+. In the ‘gray market’ women outnumber men. As their information-processing skills and memory deteriorate, they do more simple and schematic processing (making them susceptible for the truth effect). Younger seniors tend to be healthier and more active than the previous generation. Seniors are a critical an growing market for health-related products and retirement communities. They are brand loyal and less motivated to deal with new brands. They can by reached by media geared to this groups interest. Seniors should be used more in ads, showing an active lifestyle. Retailers can design their outlets to be more age-friendly (wider aisles, well-lit)

 

Sex roles = traditionally men had agentic goals (stresses mastery, self assertiveness, self-efficacy, strength and no emotions) and women had communcal goals (stress affiliation, fostering harmonious relationships, submissiveness, emotional and home orientation). However female and male roles have been changing, however the stereotype is still prevalent in many ads. Men and women still have differences in their consumption behaviour. Women are likely to have high motivation, ability and opportunity (MAO) in decision making, while men have low MAO. Men are likely to use specific hemispheres, while women tend to use both. Some products are becoming less sex-typed. Women tend to be more loyal to individuals, and men tend to be more loyal to groups. Women tend to be more influenced by online reviews. Marketers often target a particular gender. Studies show than men and women react differently on emotional advertising, in which both traditional roles and non-traditional roles influence the reaction. There is also a difference on where to reach men/women, vb via tv shows or social media.

 

Sexual orientation =. can influence consumer preferences and behaviour. Gay and lesbian consumers tend to dislike and distrust ad messages more than heterosexuals, but are likely to response to sexual orientations symbols and ads that ‘reflect their lives and culture’.

 

Regional influences = regions with distinctive identities apart from the overall (American) culture. Clustering is grouping of consumers according to common characteristics used in statistical techniques. Systems such as Mozaic and PRIZM group areas and neighbourhoods into more precise clusters based in similarities on demographics and consumption. Marketers can develop offering/communication that appeals to different regions. Also with clustering the marketer can find new customers and learn what they like.

 

Regions across the world = such as ‘the western world’ or ‘muslim countries’. The way cultures differ can affect how consumers think and behave. This can be divided into 3 groups. 1. Individualism vs collectivism, 2. Horizontal (equality) vs vertical (hierarchical) orientation, 3. Masculine vs feminine. It is important to understand and adjust to global differences.

 

Ethnic groups = subculture with a similar heritage and values. These groups are bound together by cultural ties. Through acculturation members of a subculture must learn the host culture. Acculturation is strongly influenced by the social environment and media. Multicultural marketing uses strategies that simultaneously appeal to several cultures. In the US the biggest ethnic group are the Hispanics. They are in 3 groups, 1. Acculturated (speaks mostly English, high assimilation), 2. Bicultural (both Spanish and English), 3. Traditional (mostly Spanish). The intensity of ethnic identification is how strongly people identify with their ethnic group.  Strong identifiers are more likely to be influenced by family, radio ads and billboards, and less likely than weak identifiers to use coupons. More marketers are tailoring distribution to the Hispanic Americans. As they tend to live in certain areas and share a common language, they can be targeted with Spanish-language media. Advertising is important in this segment as many Hispanics prefer prestigious or nationally advertised brands.

Ethnic spokespersons are seen as more trustworthy, leading to more positive attitudes towards the brand. Most effective in regions were the ethnicity is more salient. Accomodation theory stated that the more effort one puts in trying to communicate with an ethnic group, the more positive the reaction. However, using only Spanish messages can lead to negative ad perception. Most influential is using both English and Spanish.

            African American consumers are also a large and diverse group. They have a strong desire to keep their culture. Consumption patterns are related to desires to be recognized and show status. Some marketers that are designing for the general US public also design product especially for African Americans. African Americans have more positive attitudes towards ads than Anglo consumers. Also here, more positive attitudes if the source is the same as the ethnic group.

            Asian American consumers are the third group, coming from 29 countries. The common denominator is the strong emphasis on family, tradition and cooperation. They want brand names and are willing to spend, but also react positively to bargains. They also tend to save money, higher education, higher computer literacy and higher percentage professional jobs than the general population. 

            Next to ethnic backgrounds, religious beliefs also influence the consumer. They are clearly present all over the world. Marketers should show understanding and respect for the targeted groups beliefs and customs.

 

M. Influence based on type of household and social class

 

Households are often seen as the most important unit of analysis for consumer behavior since households buy more than individuals do.

Household = a single person living alone or a group of individuals who live together in a common residence, regardless of whether they are related.

Nuclear family = father, mother, and children.

Extended family = nuclear family plus grandparents, aunts, uncles, and cousins.

The family life cycle includes different stages of family life, depending on the age of the parents and how many children live at home. Marketers must take this variation in households into account.

Campaigns should also adapt to trends, because they are changing the basic structure of households. In Western countries, many people delay their marriage or don’t get married at all. Single people have different spending patterns than married people or people that are living together. Dual-career families are an interesting type of household since they spend more on childcare, housekeeping, etc., and have less time to shop. When people divorce, they change their consumption patterns, and of course also their household structure changes. Overall, households are getting smaller. Also, the number of same-sex couples increases.

Roles that household members play

Household roles = roles that different members play in a household decision. In a household, more than one person is involved in decision making, and thus in purchase and consumption. Various roles are:

Gatekeeper = collects and controls information important to the decision.

Influencer = tries to express his opinion and influence the decision.

Decider = actually determines which product/service will be chosen.

Buyer = physically acquires the product/service.

User = consumes the product.

 

Various persons within a household can have the same role and have multiple roles. Instrumental roles relate to tasks affecting the buying decision, while expressive roles involve an indication of family norms. Role conflicts can occur when there is disagreement about the reasons for buying, who should make the decision, which option to choose, and who gets to consume the product.

In a relationship, the spouse that brings the most money into the household, often has the most influence. Also demographic factors like family income and education play a role. Roles can be divided as follows:

Husband- (wife-)dominant decision = made primarily by the male (female) head-of-household;

Autonomic decision = equally likely to be made by husband or wife, but not by both;

Syncratic decision = made jointly by husband and wife (mostly important decisions).

The more involved parents are, the less influence children have on household decisions. When parents face time pressure, they are more likely to give in to their children. As children age, their influence increases. Also, their influence is strongest at the beginning of the decision-making process.

Social class

Social class hierarchy = the grouping of members of society according to status, high to low. Members of the same class often share values and behave in the same way. Most societies have three classes (upper, middle, and low). Upper classes from various cultures share many characteristics, while there are large cultural differences in lower classes. Families with incomes higher than the average of their social class are over privileged. Those with an average income are class average, while those with an income below average are considered underprivileged.

People are more likely to be influenced by members of their own social class. Trickle-down effect = when a trend starts in upper classes and is then copied by lower ones. The reverse is called status float.

It is hard to classify individuals into social classes. Income levels, for example, can overlap social classes. Dual-career families may earn more money than other families, but this does not necessarily give them a higher status. Social class is a better predictor of consumer behavior than income, because it often can explain how income is used.

However, both are needed to predict behavior. Social class helps to understand how consumers behave, and it is determined by various factors, including income.

Some occupations have a higher status than others (e.g. surgeons vs. nurses). People with the same occupation tend to share the same lifestyles and habits. Well-educated consumers often earn more, spend more, travel more, are healthier, and more receptive to innovations.

Also the neighborhood you live in or the family you are part of can have an influence on social status. Inherited status = derived from the parents at birth, while earned status = acquired later in life through achievements.

Status crystallization = when consumers are consistent across indicators of social class income, education, occupation, etc. Individuals may be low on certain factors but high on others.

How social class changes over time

Social class structures may change because of three factors:

Upward mobility = raising one’s status level, often by educational/occupational achievements. This is often not possible for consumers in lower classes because they don’t have the resources to become well-educated or to get a good job.

Downward mobility = losing your social standing because it is difficult to maintain your lifestyle. Many children are not able to reproduce their parents’ lifestyle for themselves.

Social class fragmentation = the disappearance of class distinctions. This may be caused by upward and downward mobility. Also, since consumers are provided with many norms and behaviors through mass media, they may adopt some elements of another class. Since it is nowadays very easy to communicate with others, there is increased interaction between various classes.

How does social class affect consumption?

Conspicuous consumption = the acquisition and display of goods and services to show off your status. Conspicuous waste = visibly buying products that you never use (e.g., a wealthy person buying a car he never drives). Voluntary simplicity = when consumers consciously limit their acquisition and consumption and choose to live a less material lifestyle.

Status symbol = product/service that tells others something about a person’s social class standing. Consumers buy such products because they believe they are judged by others based on what they have. Parody display = status symbols that start in the lower-social classes and move upward. When many people acquire a status symbol, it may lose its status and become fraudulent.

Compensatory consumption = the consumer behavior of buying products/services to offset frustrations in life.

Money is not only seen as a utilitarian product, but as something that brings happiness, fulfillment, and status. It can be seen as useful to improve a consumer’s life and those of others, but possession can also lead to greed, dishonesty, and harmful practices like gambling.

The consumption patterns of specific social classes

The upper class consists of people that inherited wealth, the social elite, and upper-middle class professionals. It is a small group that often finds quality more important than price. Most of them are intellectual, political, and socially conscious, and thus like to spend money on activities like visiting theaters and investing in art. They like to express themselves through buying prestige brands.

The middle class consists of white-collar workers. They look at the upper class for guidance of their behavior.

The working class depends heavily on family members for support. They have a local orientation and spend more than they save. Also, they judge products based on price.

The homeless are struggling for survival and have a hard time acquiring daily necessities. They try to find used goods that others have discarded in order to survive (scavenging).

Some marketers develop several product lines in order to be appealing to various classes. Message content can be changed to address different classes.

Different media and channels are used to reach different classes (e.g., selling a product in luxury boutiques in order to reach the upper class).

 

N. Psychographics

 

Psychographics = a description of consumers based on their psychological and behavioral characteristics. Basic components are values, personality, and lifestyles. Also behaviors like emotions, usage patterns, and attitudes can be used to gain understanding of consumer behavior.

Values = abstract, enduring beliefs about what is right/wrong, important, or good/bad. Values may determine your behavior. Example: when you value the environment, you will behave in an environmentally conscious way. Value system = the total set of values and their relative importance. Value conflict = when a person does something that is consistent with one value but inconsistent with an equally important value.

Values are learned through exposure to socialization through reference groups and other influence sources. Acculturation = the process by which individuals learn the values and behaviors of a new culture (e.g. in case of immigration).

Global values = a person’s most enduring, strongly held, and abstract values that hold in many situations. E.g., valuing your freedom to speak, to go where you want, etc. Seven main categories are:

Maturity;

Security;

Pro-social behavior (doing nice things for others);

Restrictive conformity (being responsible, polite, clean, etc.);

Enjoyment;

Achievement;

Self-direction (independent, intellectual, logical, self-respect, etc.).

Two types of global values are:

Terminal values = highly desired end states such as social recognition and pleasure. Examples: wisdom, freedom, self-respect, pleasure, comfortable life, equality.

Instrumental values = the values needed to achieve the desired end states such as ambition and cheerfulness. Examples: courageous, imaginative, logical, ambitious, capable, responsible, helpful, cheerful.

Domain-specific values = values that may only apply to a particular area of activities, like religion, family, or consumption.

Various values are important in Western cultures:

Materialism = placing importance on money and material goods. People believe they will be happier when they acquire more/better things. Because of the recession, many people have shifted their interests towards experiences instead of objects.

Home: the home must be as attractive and comfortable as possible, serving as a ‘safe haven’ from the increasingly complex outside world.

Work and play: work is seen as a tool for achieving other values. Leisure time is more valued because people work more.

Individualism: individual’s needs are perceived as more important than group’s needs and rights. Allocentric consumers prefer interdependence and social relationships, while idiocentric ones focus on individual freedom and assertiveness.

Family and children: education of children is seen as utterly important and people are receptive to child-related products.

Health: people want to have a high self-esteem and live long, and in order to reach those goals, they need to stay healthy. The more important a consumer finds his health, the less price-conscious he will be.

Hedonism = the principle of pleasure seeking. Consumers increasingly search for ways to feel good, which can be the purchase of products, but also pleasure seeking.

Youth: people want to stay young, and therefore buy many products that promise to make them look youthful.

Authenticity: original products are preferred above cheap knockoffs. Sipping coffee in a real Italian coffee bar is more valued than in the Starbucks, for example.

The environment: consumers are becoming more environmentally conscious.

Technology: people are interested in technological products like smart phones and tablets. They especially value technological products that can make their lives easier.

Values can vary across different consumer groups. Hofstede proposed four dimensions on which cultures can vary:

Individualism versus collectivism = the extent to which a culture focuses on the individual rather than the group;

Uncertainty avoidance = the degree to which structured situations are preferred to unstructured ones;

Masculinity versus femininity = the extent to which masculine values (like assertiveness and competition) are stressed over feminine values like caring.

Power distance = the degree to which society members are equal in terms of status.

Ethnic groups within a society can have different values from the larger part of the population. There are also differences between social classes. Lastly, values differ between various age groups.

Consumers behave according to their values. Therefore it is useful for marketers to know these values. Value segmentation = the grouping of consumers by common values. Values can often be related to certain product attributes. Consumers who value luxury, may be likely to buy high-quality products.

Also, consumers that like new things, might be more receptive to innovations. The better the fit between the consumers’ values and the values communicated in an ad, the more likely it is that the consumer will buy the advertised product. When there are inconsistencies, consumers may boycott the product.

It is hard to measure values, since people often do not think about them and thus cannot explicitly say what they are. However, values can be inferred from the cultural milieu or by looking at product names (e.g. Obsession perfume – hedonic versus Grand Hyatt – materialism). When looking at the milieu, it is not clear whether culture reflects values or if it creates them.

Means-end chain analysis = a technique that can help explain how values link to attributes in products and services. Value laddering = determining the root values related to product attributes that are important to consumers. Example: a consumer drinks cola light à because of less calories (attribute) à because he doesn’t want to become fat (benefit) à because he wants to be healthy (instrumental value) à because he wants to feel good about himself (the terminal value).

Values can also be addressed by specialized questionnaires:

Rokeach Value Survey (RVS) = a survey that measures instrumental and terminal values by asking respondents how important certain values are.

List of Values (LOV) = a survey that measures nine principal values in consumer behavior: self-respect, warm relationships with others, sense of accomplishment, self-fulfillment, fun and enjoyment in life, excitement, sense of belonging, being well respected, and security.

Personality

Personality = an internal characteristic that determines how individuals behave in various situations. Various approaches are used to study personality:

Psychoanalytic approach = personality arises from a set of dynamic, unconscious internal struggles within the mind. According to Freud, a person’s personality is formed in three stages:

Oral stage: a child is entirely dependent on others for need satisfaction and receives oral gratification from sucking, eating, and biting.

Anal stage: the child is confronted with the problem of toilet training.

Phallic stage: he becomes aware of his genitals and must deal with desires for the opposite-sex.

Trait theory = personality is composed of characteristics that describe and differentiate individuals. Carl Jung: individuals can be segmented according to their levels of introversion and extroversion. Five personality traits account for the most differences in personality: agreeableness, conscientiousness, emotional stability, openness, and extraversion.

Phenomenological approach = personality is largely shaped by an individual’s interpretations of life events. Locus of control = people’s interpretations of why certain things occur. People with an internal locus of control blame themselves, while those with an external locus of control blame others.

Socio-psychological theory = proposes that individuals act in social situations to meet their needs. Karen Horney: behavior can be characterized by three orientations:

Compliant individuals are dependent on others and are humble and trusting;

Aggressive individuals move away from others and are outgoing and self-confident;

Detached individuals are independent and self-sufficient but suspicious and introverted.

State-oriented people rely on subjective norms, while action-oriented ones base their behavior on their own attitudes.

Behavioral approach: differences in personality are a function of how individuals have been rewarded/punished in the past.

Personality is not always a good predictor of behavior and may be a better predictor for some types of behavior than for others. Some types of personality traits may be more related to behavior than others:

Optimal stimulation level: people prefer things that are moderately arousing, but differ in the level of arousal they regard as moderate. The lower a person’s optimal stimulation level, the less he prefers arousing activities. Persons with a high OSL are more likely to buy innovative products.

Dogmatism = a tendency to be resistant to change or new ideas.

Need for uniqueness (NFU) = the desire for novelty through the purchase, use, and disposition of products and services. This covers:

Creative choice counterconformity = the person’s choice reflects social distinctiveness yet is one that others will approve of.

Unpopular choice counterconformity = choice of products that do not conform to establish distinctiveness despite of social disapproval.

Avoidance of similarity = losing interest in possessions that become commonplace to avoid the norm and thus reestablish distinctiveness.

Creativity = a departure from conventional consumption practice in a novel and functional way.

Need for cognition (NFC) = a trait that describes how much people like to think. People with a high NFC like searching for and discovering new product features and like long, elaborative messages.

Susceptibility to influence: people with lower social and information processing confidence are more affected by ads than those with higher self-confidence.

Frugality = the degree to which consumers take a disciplined approach to short-term acquisitions and are resourceful in using products and services to achieve longer-term goals. People who are high on frugality are less materialistic, less susceptible to influence of others, and more price-conscious.

Self-monitoring behavior = the degree to which a person looks to others for cues on how to behave. High self-monitors are likely to be influenced by others, while low self-monitors rely more on their selves.

National character = the personality of a country. Germans are, for example, perceived as ‘tighter’ than Dutch people.

Competitiveness = the desire to outdo others through conspicuous consumption of material items.

Lifestyles

Lifestyles = people’s behavioral patterns. Activities, interests, and opinions (AIOs) = the three components of lifestyles.

Voluntary simplicity = consciously limiting acquisition and consumption for a less materialistic, more eco-friendly lifestyle. Voluntary simplicity is a lifestyle choice, while frugality is a personality trait reflecting disciplined spending and consumption.

Marketers can use lifestyles to identify consumer segments for their offerings, but also to identify new opportunities. They can use various ads and promotions to appeal to consumers with various lifestyles.

Psychographics: combining values, personality, and lifestyles

People that are motivated by ideals are guided by intellectual aspects. Those who are motivated by achievement, base their view on others’ actions and opinions. People who are motivated by self-expression desire social/physical action, variety, and personal challenge. According to the VALS tool, there are eight consumer segments:

Survivors: lowest incomes, focus on meeting needs.

Believers: conservative and motivated by ideals, do not switch brands easily. Are ideal motivated.

Thinkers: mature and well educated. Actively search for information when considering a purchase. Have more resources than believers. Are ideal motivated.

Strivers: have limited income yet strive to pursue more successful people. Are achievement motivated.

Achievers: higher resources, focused on work and families, prefer status symbols. Are achievement motivated.

Makers: value self-sufficiency, buy basic products, focused on family, work, and constructive activities. Are self-expression motivated.

Experiencers: have more resources than makers, are active, seek stimulation and novelty, spend money on entertainment. Are self-expression motivated.

Innovators: have most resources, self-confidence, high income and education. Like upscale offerings.

 

O. Innovation

 

 

Innovation = offering that is perceived as by customers within a market segment and that has effect on the existing consumption patterns. Marketers classify innovation in 3 ways, 1. Innovations type, 2. Type of benefits it offers, 3. Its breadth. In addition, there is more and more co-creation.

 

Degree of novelty (1) = 3 patterns, 1. Continuous innovation (has a limited effect on existing consumption patterns, used in the same way as the previous), 2. Dynamically continuous innovation (pronounced effect on consumption practices, often involves a new technology), 3. Discontinuous innovation (so new that we have never known anything like it before).

 

Benefits offered (2) = 3 types, 1. Functional innovation, 2. Hedonic or aesthetic innovation, 3. Symbolic innovation

 

By breadth (3) = range of new and different use for a particular product, such as baking soda.

 

Co-creation (4) = internet and social media have accelerated co creation. Potential benefits from co-creation are: innovation is likely to fit the consumers needs, its relatively fast and inexpensive using social media, it strengthen the relationship with the company, and consumer who are involved exhibit higher demand in the product (feel ‘ownership’).

 

Adoption = purchase of innovation by individual consumer or household. Resistance can be high if consumer feels that new product involves some risk. Consumers have 8 paradoxes in technical products. If the negative is more salient, consumer will resist the innovation. The way consumer adopt an innovation can vary in high or low effort. High-effort hierarchy of effects is when a purchase of innovation is based on high decision making effort. MAO determines whether high effort processing will occur. When the risk is low and fewer people are part of the buying process, low processing is used. Trials can be very effective for low-effort decision making, as trials raise the chances of adoption. If it is high-effort, the marketer should make the risk look as low as possible.

 

There are 5 adopter groups, namly innovators (venturesome), early adopters (respectable), early majority (deliberate), late majority (traditional) and laggards (sceptical). The early adopters are visionaries in the product category, and are interested in the features and abilities to create a break through. They are also called ‘technologically advanced families’. The early majority are pragmatists, they care for the brand of the innovation, as they do not like risks. The late majority relies on tradition and is fearful of new high-tech products. However, there might be more or less adoption-groups depending on the product, also it might not be in a perfect bell-shape. It can be useful to examine how the market is for your product. Adoption is also linked to cultural influences.

 

Diffusion = % of population that has adopted the innovation at a certain time point, thus it reflects the behaviour as a group instead of individual. Marketers have to understand 2 important issues: 1. How an offering diffuses through the market, 2. How quickly it does so.

 

S-shaped diffusion curve (1) = characterized by slow initial growth followed by a rapid increase. The exponential diffusion curve = starts out quicker, with a larger % adopting as soon as possible. Many factors influence the curve of diffusion. When innovation involves low risk and low costs, beliefs and values are the same and/or when people often talk about the product (quickly disseminated knowledge via social system), the product is more likely to be exponential.

 

Product life cycle (2) = suggests that product go through an initial introductory period, followed by growth, maturity and decline. Diffusion and life cycle are linked, but are different: product diffusion is the percentage of the market that adopted, and the life cycle deals with sales of the product over time.

 

Fads = successful innovation with a very short life cycle

 

Fashion = successful innovation with moderately long and potential cyclical life cycle

 

Classic = successful innovation with a lengthy life cycle.

 

Innovation characteristics = can affect resistence, adoption and diffusion. High perceived valued products might be earlier adopted. Relative advantage is the benefits in an innovation that are superior to the existing products.

It is something the product does for the consumer, not something that exists in the product. If there is no relative advantage, there will be resistance. Consumers who are able to visual and see the benefits as more valuable is more likely to adopt. Use innovativeness is finding a use for a product that differs from the products original intended usage. Perceived costs (time, money and effort) are also influential. Switching costs (the costs of changing to a new product) are also costs. Thus promote the relative advantage, reduce the perceived costs and provide incentives for switching.

 

Uncertainty = Aspects of uncertainty are: 1. Doubt about what will become the standard, 2. Uncertainty about the relative advantage (especially when it involves a significant behavioural change), 3. Length of the product life cycle (more likely to resist buying fad than fashion or classic), 4. More concerned with switching costs in near future, compared to distant future. Thus to make consumers adopt sooner, show how adaptable the product is and therefore how long the life cycle is.

 

Consumer learning requirements:

Compatibility (1)= extent to which innovation is consistent with needs, values, norms or behaviours. The more compatible is the less resistance and greater product diffusion. Companies can use promotions to show the compatibility. Also the marketer can use change agents, who are influential and highly respected people who are confinced and spread positive word of mouth.

Some marketers address incompatibility by designing the innovation to fit with a system of existing products (offer as complementary product). Sometimes innovation can be the industries standard, by working the regulators (government).

 

Trialability (2)= extent to which innovation can be tried on limited basis before its adopted.  Often important for innovators and early adopters who have little else to base their value of innovation on. Use promotions to enhance trialability. 

 

Complexity (3)= extent to which innovation is complicated and difficult to understand/use. Too much features can lead to cognitive overload, and lead to a lower evaluation of the product.  Live demonstrations can reduce the fear of complexity and simultaneously show compatibility.

 

Social relevance = extent to which innovation can be observed or to which having others observe it has social cachet (socially desirable).

The more consumers can observe others, the more likely they will adopt. Thus diffusion is also affected by public or private nature of the products use.

 

Legitimacy = extent to which innovation follows established guideline for what seems appropriate in this category. Innovations that are too radical or do not derive from a legitimate precursor lacks legitimacy. Demonstrate by showing how the innovation came to being or market appropriately to the product category.

 

Adaptability = potential to fit with existing products, also affects adoption and diffusion.  Show the uses beyond the original function.

 

Characteristics of the social system: 1. Modernity is extent to which consumers have positive attitudes to change in the social circle, 2. Physical distance, diffusion is quicker when members of the social environment are close, 3. Homophily, diffusion is faster when consumers are similar in education, values, needs, income, etc. 4. Opinion leadership/experts, which are people with credibility.

 

Nonadopters = 3 types, 1. Passive consumers, 2. Active rejection, 3. Potential adopters.

 

P. Symbols

 

 

Cultural categories = natural grouping of object that reflect culture, such as time, space and occasions.

 

Cultural principles = ideas/values that specify how aspects of our culture are organized and/or how they should be perceived/evaluated. Have principles associated with work time, social status, gender, age, ethnicity, etc. Many agents can play a role in these associations. Journalist can also shape these principles with their associations.

 

Emblematic function = use of products to symbolize membership of a social group. Can be geographic, ethnic (this can also be food), social class, gender (vb ‘man’ foods) and reference group (vb clothing). Marketers can play different roles, 1. Symbol development (linking a product to culture), 2. Symbol communication (advertising), 3. Symbol reinforcement (vb pricing, product strategy), 4. Symbol removal (helping consumers remove symbols associated with a certain group they don’t want to belong to anymore).

 

Role acquisition function = products a symbols to help us feel more comfortable in a new role. There are 3 fases, first separation (from your old role), second transition and thirdly incorporation. There are several transitions, for instance marital (from single to married, or from married to divorced), cultural (moving to a new culture, abandoning the old customs), social status (shows the importance of social feedback). Consumers in transition form an important target market for many firms and can be used to target the consumer for developing inventory or product promotion.

 

Connectedness function = products as symbols of personal connection to significant people, events or experiences, thus expresses our group membership. Each family maintains its own traditions that foster connectedness. Marketers can use this by evoking nostalgia and connecting it to their product.

 

Expressiveness function = symbols that demonstrate our uniqueness.

 

Actual identity schema = set of multiple salient identities that reflect our self-concept. Identities may be driven by the roles that we fulfil. Our actual identity schema is driven by our ideal identity schema = set of ideas about the ideal form of identity.

Posession help to shape our identity, which can explain why people feel identity loss after losing possessions after natural disasters. Products define who we are, and we also buy products that are consistent with our identity image. Products are most successful when they fit the consumers self concept. Self-images are multifaced, thus marketers have to consider that one part might be consistent with the consumers self concept while other parts are not.

 

Frame switching = frame to activate the self concept that relates to that cultural background.

 

Special brands = sometimes consumer emotionally attached. If emotional connection is strengthened, the brand will be bought over and over again. There are 4 types of special possession: 1. Pets, 2. Memory-laden objects (evoke memories), 3. Achievement symbols, 4. Collections (felt as extension of themselves, urge to complete the collection)

 

Characteristics of special possession = 1. Possession have few or no substitutes according to their owner, 2. Consumer will not sell at market prices, thus have an unusually low price elasticity, 3. Experience reluctance to discard the possessions, even when it loses its functional value (however some possessions are not used for their original purpose), 4. Consumers frequently personalize possessions. There are 3 reasons why products can be special: 1. Symbolic value, .2. mood-altering properties, 3. Instrumental importance. The consumer characteristics affect what is special: 1. Social class, 2. Gender, 3. Age.

 

Possession ritual = ritual engaged in to help make a product ‘ ours’, including whipping away traces of former owners.

 

Grooming ritual = ritual to bring out the best/maintain the best in special products.

 

Divestment ritual = enacted at the disposition stage that is designed to wipe away all traces of our personal meaning in a products.

 

Sacred entities = people, things, and places that are set apart, revered, worshiped and treated with great respect. In contrast, profane things = ordinary things, no special power. The sacred entities can evoke a feeling of power, emotion, fascination and feeling of mystery or connection to a certain time or event.

Sacred object possess a strong approach-avoidance characteristic, creating an overwhelming feeling of power and fascination. Sacredness can be maintened by scarcity and exclusivity. Marketers can use a famous movie star and highten is sacred status, or maintain sacredness (high prices, scarce). Sometimes marketers unintentially profance sacred objects by commercializing.

 

Three stages of gift timing. Gifts are culturally prescribed, but also individual:

(1) Gestation stage = first stage of gift giving, considering what to give someone, with motives and emotions (sometimes compensatory), nature (appropriateness depending on the relationship and situation) and value (influenced by culture) of the gift and search time (symbolises nature and intensity of relationship). .

(2) Presentation stage = second, actually giving the gift. Ritual/ceremonial aspects important, with timing and surprise, attention to recipient and recipient reaction.

(3) reformulation stage= final stage, reevaluate the relationship based on the gift-giving experience. Important is the relationship bonding/connection (strengthen, affirmation, negligible effect, negative confirmation, weakening or severing) and  reciprocation (sometimes recipient exempt from reciprocation, and expectation of reciprocation depends on culture).

Marketers can use gift giving to market their product as gifts. Technology already had a major influence in gift giving process with online shopping.

Also sometimes charities use alternatives to traditional gifts, for example give gifts to families in need around Christmas.

 

Q. The link between marketing and social responsibility

 

Social dilemma = deciding whether to put self-interest or the interests of others first. Temporal dilemma = deciding whether to put immediate interests or long-term interests first.

Me versus we: when a person focuses concretely on people close to him.

Me versus them: when a person focuses more on strangers or society at large.

Companies often strive for long-term profitability, better balance, and a broad focus on ‘we’ to achieve sustainable results for people and the planet. Although this costs money, such aims can shape positive brand attitudes, strengthen brand loyalty, reduce costs, and lead to higher profits and new customers. Also, it is good for the reputation of the company.

Marketing ethics, consumer ethics, and deviant consumer behavior

Marketing ethics = rules of acceptable conduct that guide individuals and organizations in making honest, fair, and respectful decisions about marketing activities. These ethics apply to all stakeholders.

Consumer ethics = rules of acceptable conduct that apply to the range of consumer behaviors.

Deviant consumer behavior = behavior is regarded as deviant if it is unexpected or not sanctioned by society members.

Several key controversies in terms of acquisition are:

Materialistic behavior: consumers may buy products they don’t even need, want, or can afford.

Addictive and compulsive behavior: addiction = excessive behavior typically brought on by a chemical dependency. It often involves repeated acquisition/use of a product, even if this is dangerous. Compulsive behavior = an irresistible urge to perform an irrational act. Compulsive buyers often have low self-esteem and believe they feel better if they make a purchase. This can have serious financial, emotional, and interpersonal consequences.

 

Consumer theft = a desire to steal things. This can be explained by the temptation to steal (arises when consumers want something they cannot afford, because they are too ashamed to buy it, or because they cannot legally acquire it (e.g. underage alcohol buyers)) and the ability to rationalize theft behavior.

Black markets = illegal markets in which consumers pay often exorbitant amounts for items not readily available.

Targeting vulnerable segments: seniors have a hard time processing some messages and consumers in developing markets tend to believe everything marketers say. The same counts for children.

There are various ethical controversies when it comes to consumption:

Underage drinking and smoking

Idealized self-images: ads often make use of models with bodies that many people do not and will never have. This can result in eating disorders, consumer dissatisfaction, and low self-esteem. Social comparison theory = proposes that individuals have a drive to compare themselves with others.

Compulsive gambling

Overeating and obesity

Privacy controversies: many people believe  that companies gather too much of their personal information, which is a threat to their privacy.

The more frequent young people are confronted with alcohol ads or alcohol use in movies, the more likely they will turn into drinking it. The same amounts for tobacco ads. Marketers are becoming more aware of the effects of advertising on consumers’ self-image. An example of this in practice is the use of plus size models. Various governments fund consumer education and treatment concerning gambling. Besides that, the number of restrictions placed on unhealthy food is increasing, and marketing is used to encourage healthy behavior. Online privacy is a big issue that gains attention. Many companies try to make their customers aware of the need for their personal data, but also of the risks associated with it.

Besides consumption controversies, there are several conflicts regarding the disposal of products:

Disposal of products that still function: although there often is the possibility of recycling, many consumers just throw their still functioning products away, which has harmful consequences for the environment.

Disposal of broken products: products with defects can be disposed of in a proper way (e.g., throwing plastic in a plastic container or selling the product because some parts are still useful), but often consumers are too lazy to do this the right way.

Various companies ask consumers to hand in their used products (e.g. batteries at the supermarket or clothes at H&M). Also, many are trying to use less packaging materials for their products and/or build environmentally friendly packages.

Social responsibility issues in marketing

Nowadays, most business are pursuing the goals of making profit and being environmentally conscious in parallel. Social responsibility is often an important part of their overall strategy. Three CSR issues relate to marketing:

Environmentally conscious behavior:

Conservation behavior = limiting the use of scarce natural resources for the purposes of environmental preservation. When consumers are aware that a resource is scarce, they are often willing to do something about it.

Conservation programs aim to make them aware, and to motivate them to act (e.g., by telling them they should better cut their electrical usage, because that will benefit the environment). Such programs are most successful when consumers believe that there behavior will really make a difference.

Also, normative influence plays an important role. Example: people are more willing to use less towels if a hotel states that “other guests often use their towels twice” then when it is just stated that it would be better for the environment to use towels several times. Besides that, informing consumers well about why they should behave in an environmentally conscious way, and giving them incentives if they do so, are good ways to induce conservation behavior.

Greenwashing = the misleading use of environmental claims for marketing purposes. Some companies claim that they are operating in a socially responsible way, just to boost their image. To avoid this, there are many certificates that may only be used after several demands are met.

Charitable behavior:

Charitable behavior can be induced by the foot-in-the-door technique (leading to self-depletion and thus less resistance), but also by simply asking people to volunteer time à leading to an emotional, positive reaction à leading to more money contribution. This type of behavior varies per culture.

Community involvement:

Many companies have policies that encourage their employees to get involved in the community company is situated. This can increase employee satisfaction, goodwill, and word-of-mouth.

How consumers can resist marketing practices

Unsatisfied consumers can decide to spread negative word-of-mouth, boycott the company, or complain to the marketer. Sometimes, consumers even form groups against certain companies. Boycott = an organized activity in which consumers avoid purchasing products/services from a company whose policies or practices are seen as unfair.

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