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Consumer Behavior: Buying, Having, and Being

Twelfth Edition

Chapter 1

Buying, Having, and Being: An Introduction to Consumer Behavior

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This chapter defines the scope of international business and introduces us to some of its most important topics.

Learning Objectives (1 of 2)

1.1 Consumer behavior is a process.

1.2 Marketers have to understand the wants and needs of different consumer segments.

1.3 Our choices as consumers relate in powerful ways to the rest of our lives.

1.4 Our motivations to consume are complex and varied.

1.5 Technology and culture create a new “always on” consumer.

1.6 Many different types of specialists study consumer behavior.

Learning Objective 1.1

Consumer behavior is a process.

In the early stages of development, researchers referred to the field as buyer behavior. Marketers now recognize that consumer behavior is an ongoing process, not merely what happens at one point in the transaction cycle. We call the transaction of value between two or more an exchange. It’s an integral part of marketing but consumer behavior recognizes that the entire consumption process is relevant for marketers. Figure 1.1 illustrates these issues.

Consumer behavior is the study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires. A consumer may purchase, use, and dispose of a product, but different people may perform these functions. In addition, we can think of consumers as role players who need different products to help them play their various parts.

What Is Consumer Behavior?

The study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires.

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Figure 1.1 Stages in the Consumption Process

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Learning Objective 1.2

Marketers have to understand the wants and needs of different consumer segments.

Markets & STP

Definitions

Market – people with means, authority, and desire to satisfy their needs and wants (MAD people)

Market segment – smaller markets with similarities on some dimension(s)

Market Opportunity Analysis

Identify segmentation bases (S)

Determine market segments (S)

Determine needs/wants of market segments (S/T)

Develop measures of segment attractiveness (T)

Select target segments (T)

Develop product position for each target (P)

Develop marketing mix for each target (P)

Market Opportunity Analysis

Market Segmentation

Definition

Process of identifying smaller markets that exist within a larger market

Why segment?

Ease to identify and satisfy needs and wants for segments (than all customers)

More efficient to “reach” a narrow segment than all consumers

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Segmenting Consumers: Demographics

Demographics:

Age

Gender

Family structure

Social class/income

Race/ethnicity

Geography

Market Opportunity Analysis

What is the segmentation criteria here?

Psychographic segmentation – targeting those who are “active”

Market Opportunity Analysis

Targeting

Definition – directing marketing efforts to meeting the needs of one or more market segments (i.e., target markets)

Market Opportunity Analysis

Market coverage options

Undifferentiated marketing – treat all segments the same

Differentiated marketing – different mixes offered to different segments

Market concentration – focus on one segment

Pre exercise for next session

Using VALS provides marketers with:

A fresh perspective by effectively "putting them inside the head" of their customers

Rich, customized, consumer profiles or personas

Distinctive communication styles of their best targets.

http://strategicbusinessinsights.com/vals/presurvey.shtml

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Good marketing is inspired by good insights. Good insights about customers come from more than just product or service category or brand behavior—and from more than just demographics.

Big Data

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The collection and analysis of extremely large datasets is called Big Data.

Database Marketing

Relationship Marketing

Learning Objective 1.3

Our choices as consumers relate in powerful ways to the rest of our lives.

Marketing influences popular culture and popular culture influences marketing.

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Popular Culture

Music

Movies

Sports

Books

Celebrities

Entertainment

Marketers influence preferences for movie and music heroes, fashions, food, and decorating choices.

Popular culture—the music, movies, sports, books, celebrities, and other forms of entertainment that the mass market produces and consumes—is both a product of and an inspiration for marketers.

Consumer-Brand Relationships

Self-concept attachment

Nostalgic attachment

Interdependence

Love

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We find that consumers may develop relationships with brands over time. The slide lists some of the types of relationships we may see between consumers and their brands.

Self-concept attachment means that the product helps to establish the user’s identity. This was one of our early points in this chapter.

Nostalgic attachment means the product serves as a link to the consumer’s past.

Interdependence means that the product is a part of the user’s daily routine.

Love means that the product elicits emotional bonds of warmth, passion, or other strong emotion.

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Learning Objective 1.4

Our motivations to consume are complex and varied.

Many products help to define our identities. Are you what you drive?

People often buy products not for what they do but for what they mean. Products play an extended role in our lives. Motivation refers to the processes that lead people to behave as they do. It occurs when a need is aroused that the consumer wishes to satisfy.

This fascination with a creepy little candy chick illustrates one of the fundamental premises of the modern field of consumer behavior: People often buy products not for what they do but for what they mean. This principle does not imply that a product’s basic function is unimportant, but rather that the roles products play in our lives extend well beyond the tasks they perform.

Peeps are marshmallow candies, sold in the United States and Canada, that are shaped into chicks, bunnies, and other animals. There are also different shapes used for various holidays. They have no nutritional value.

Motivation and Goals

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Motivation refers to the processes that lead people to behave as they do. It occurs when a need is aroused that the consumer wishes to satisfy.

Needs:

utilitarian (i.e., a desire to achieve some functional or practical benefit)

hedonic (i.e., an experiential need, involving emotional responses or fantasies).

Goal The desired end state is the consumer’s . Marketers try to create products and services to provide the desired benefits and help the consumer to reduce this tension.

Learning Objective 1.5

Technology and culture create a new “always on” consumer.

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Social Media facts

It took radio 38 years to reach 50 million listeners. TV took 13 years to reach 50 million users. The Internet took 4 years to reach 50 million people. In less than 9 months, Facebook added 100 million users.

About 70 percent of Facebook users are outside the United States.

Social networks have overtaken porn as the number-one online activity.

One out of eight couples that married last year met on a social media site.

80 percent of companies use LinkedIn as their primary recruiting tool.

25 percent of search results for the world’s top 10 brands are to user-generated content.

People share more than 1.5 billion pieces of content on Facebook—every day.

80 percent of Twitter usage is from mobile devices, and 17 percent of users have tweeted while on the toilet.

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Chapter Summary

Consumer behavior is a process.

Marketers have to understand the wants and needs of different consumer segments.

Our choices as consumers relate in powerful ways to the rest of our lives.

Our motivations to consume are complex and varied.

Technology and culture create a new “always on” consumer.

Many different types of specialists study consumer behavior.

There are differing perspectives regarding how and what we should understand about consumer behavior.