consumer behavior 6th section

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Consumer behavior Lecture notes are available at: http://Arash-management.blogspot.com 1 Arash

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Page 1: Consumer behavior 6th section

Consumer behavior

Lecture notes are available at:http://Arash-management.blogspot.com

1Arash

Page 2: Consumer behavior 6th section

Consumer behavior (CB)

Arash Najmaei

[email protected]@yahoo.com

H/P : 0172116875

2Arash

Page 3: Consumer behavior 6th section

Groupcommunication

social classstratification

culture

3Arash

Consumer behaviorRoger D. Blackwell

Paul W. Miniard James F. Engel

Page 4: Consumer behavior 6th section

Outline of this chapter….

Group influence and communication

Verbal and non verbal communications

Marketer-dominated stimuli

Stratification and Culture

Social Factor– Culture & subculture– Norms– Values– Religious groups– Groups• Reference groups

Page 5: Consumer behavior 6th section

Group , communication

• Belonging to groups, trying to “fit in,” and striving to please others, affects directly every stage in the decision process.

• Reference group: any person or group of people who significantly influences an individual’s behavior

• May be individuals (celebrities, athletes, or political leaders) or groups of individuals with similarities (musical groups or sports teams)

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Types of Types of InfluenceInfluenceNormativeNormative

Value ExpressiveValue ExpressiveInformationalInformational

TransmissionTransmission

Personal Personal Influences: Influences: ••Groups Groups

••IndividualsIndividuals

Lifestyles Behaviors Purchases

Consumption

Low Degree of Influence

High Degree of InfluencePersonal and Group Influence on

Individuals

Page 7: Consumer behavior 6th section

Types of Reference Groups

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

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Types of Reference Groups

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

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Types of Reference Groups

Formal Groups: characterized by a defined structure (often written) and a known list of members and requirements for membership

Informal Groups: have less structure than formal groups and are likely to be based on friendship or interests

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Types of Reference Groups

Membership: when individuals are recognized as members of a group, they have achieved formal acceptance status in the group

Aspirational Groups: exhibit a desire to adopt the norms, values, and behaviors of others with whom the individuals aspire to associate

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Types of Reference Groups

Dissociative Groups: groups from which an individual tries to avoid association

Virtual Groups: groups that are based on virtual communities rather than geographic ones

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Types of Group InfluenceNormative: when individuals alter their behaviors or beliefs to meet the expectations of a particular group

Value-expressive: when a need for psychological association with a group causes acceptance of its norms, values, attitudes, or behaviors

Informational: when people have difficulty assessing product or brand characteristics by their own observations or contact

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How Reference Groups Influence Individuals

Socialization: permits an individual to know what behavior is likely to result in stability both for the individual and the group

Company manual may explain the dress code in the workplace

Informal groups may tell them what styles are most comfortable and easiest to maintain

Page 14: Consumer behavior 6th section

How Reference Groups Influence Individuals

Self-concept: people protect and modify their self-concept by their interactions with group members

People can maintain self-concept by conforming to learned roles

Testimonial advertising is effective when the self projected in the ad is consistent with the idealized self of the target consumer

Page 15: Consumer behavior 6th section

How Reference Groups Influence Individuals

Social comparison: individuals often evaluate themselves by comparing themselves to others

Consumers often use reference groups as benchmarks to measure their own behaviors, opinions, abilities, and possessions

Advertising or television can be sources of social comparison

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How Reference Groups Influence Individuals

Conformity: a change in beliefs or actions based on real or perceived group pressures

Compliance: when an individual conforms to the wishes of the group without accepting all its beliefs or behaviors

Acceptance: when an individual actually changes his or her beliefs and values to those of the group

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How Reference Groups Influence Individuals

Factors affecting how likely people are to conform to group norms:

Desire for social acceptance

Degree of experience in situation or with decision

Conspicuousness

Complex product or luxury item

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Transmission of Influence Through Dyadic Exchanges

Exchange between two individuals that influence these individual’s behaviors or beliefs

Dyadic exchange requires the exchange of resources (opinions and comments)

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Dyadic Exchanges

Word-of-mouth Communication

Service Encounters

Opinion Leadership

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Opinion Leadership

Opinion leadership: the sender of information is often considered an opinion leader—a person who influences the decisions of others

Opinion leaders might be experts in one area but not in others

The greater the perceived knowledge of a category, the more likely that person’s opinions are to influence others’ decisions

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Service Encounters

Customer intimacy: detailed understanding and focus on customers’ needs lifestyles and behaviors in an effort to create a deep cultural connections with the customers

Reverse customer intimacy: how well marketers facilitate customers knowing the marketer

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Two-step Flow

Opinion Opinion LeaderLeader

Opinion Opinion SeekersSeekers

Mass Mass MediaMedia

Information and InfluenceInformation

How Personal Influences Are Transmitted

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Multistep Flow

Opinion Opinion LeaderLeader

Opinion Opinion SeekersSeekers

Mass Mass MediaMedia

How Personal Influences Are Transmitted

Gatekeepers

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WOM and Opinion Leaders in Advertising and Marketing Strategy

WOM and personal communication can have a more decisive role in influencing behavior than advertising and other marketer-dominated sources

Viewed as a more trustworthy and credible source of information than salespeople or paid advertising

Page 25: Consumer behavior 6th section

WOM and Opinion Leaders in Advertising and Marketing Strategy

Advertising can provide information to consumers about products they might seek from other sources and which may be discussed in WOM

However, consumers don’t always trust that the advertiser has their best interests in mind

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WOM and Opinion Leaders in Advertising and Marketing Strategy

Advertising influences the effectiveness of WOM and vice versa

Advertising can provide information about products consumers might not seek from other sources

Advertising can create WOM among consumers and peer groups

Page 27: Consumer behavior 6th section

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

Direct Response Advertising

Primary Reliance on Word-Of-Mouth

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Stimulating Word-Of-Mouth

Firms may stimulate WOM by giving away or loaning products to opinion leaders to display and use

Organizations may induce opinion leaders to influence consumers

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Creating Opinion Leaders

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Curbing Negative WOM

When something goes terribly wrong, denying the problem is not the answer

The best strategy is immediate acknowledgement by a credible company spokesperson as negative WOM rarely goes away by itself

Make sure you have all your facts straight and tell the truth

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The Diffusion ProcessDiffusion: the process by which an innovation (new idea) is communicated through certain channels over time among the members of a social system

Includes:Diffusion of information and communication

Consumer decision process

Diffusion or demise of innovation

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The Diffusion Process

InfluencerInfluencer

CCoonnssuumme e rr

Organi-Organi-zationzation

RejectReject

AcceptAccept

Demise Demise of of

InnovationInnovation

Diffusion Diffusion of of

InnovationInnovation

Consumer decision process

Diffusion of Information and Communication

(X number of people)

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Factors Affecting Diffusion

Communication (how consumers learn about new products and communicate findings)

Time (how long it takes for a person to move from product awareness to product purchase or rejection)

Social system (groups or segments to which individuals belong affect adoption or rejection)

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Knowledge: begins when the consumer receives physical or social stimuli that gives exposure and attention to the new product and how it works

How a person receives and interprets the knowledge is affected by their personal characteristics

Rogers Model of Innovation Decision Process

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Rogers Model of Innovation Decision Process

Persuasion: refers to the formation of favorable or unfavorable attitudes towards the innovation

Persuasiveness is related to the perceived risks and consequences of adopting and using the new product

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Rogers Model of Innovation Decision Process

Decision: involves a choice between adopting and rejecting the innovation

Adoptors are people who have made a decision to use a new product whereas other are nonadoptors

Rejection may be active or passive

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Rogers Model of Innovation Decision Process

Implementation: occurs when the consumer puts an innovation to use

The process has been a mental exercise until this point where it requires a behavioral change

The strength of the marketing plan may be the critical determinant in a sale resulting

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Rogers Model of Innovation Decision Process

Confirmation: during this stage, consumer seek reinforcement for their innovation decision

Consumer may reverse previous decision due to conflicting messages resulting in dissonance

Discontinuance is a serious concern to marketers who strive for continued acceptance

Page 39: Consumer behavior 6th section

Rogers Model of Innovation Decision Process

Implemen-Implemen-tationtation DecisionDecisionKnowledgeKnowledge ConfirmationConfirmation PersuasionPersuasion

Communication Channels

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A B C D E

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

Adopter Classes

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Consumers Likely to Buy New Products

Innovators: the first consumer group to adopt products

Early adopters: opinion leaders and role models for others, with good social skills and respect within larger social systems

Early majority: consumers who deliberate extensively before buying new products, yet adopt them just before the average time it takes the target population as a whole

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Consumers Likely to Buy New Products

Late majority: tends to be cautious when evaluating innovations, taking more time than average to adopt them, and often at the pressure of peers

Laggards: the last groups that tend to be anchored in the past, are suspicious of the new, and exhibit the lowest level of innovativeness among adopters

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Consumers Likely to Buy New Products

Innovativeness: the degree to which an individual adopts an innovation earlier than other members of a social system

Cognitive innovators: have a strong preference for new mental experiences

Sensory innovators: have a strong preference for new sensory experiences

Advertising and other communications can be targeted accordingly

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social classstratification

culture

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What Is Culture?

A set of values, ideas, artifacts, and other meaningful symbols that help individuals communicate, interpret, and evaluate as members of society

Blueprint of human activity, determining coordinates of social action and productive activity

A set of socially acquired behavior patterns transmitted symbolically through language and other means to the members of a particular society

Page 46: Consumer behavior 6th section

Values and Norms

Norms: rules of behavior held by a majority or at least a consensus of a group about how individuals should behave

Cultural (social) values: values shared broadly across groups of people

Personal values: terminal (goals) or instrumental (behaviors) beliefs of individuals

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Values and Norms

Values and norms represent the beliefs of various groups within a society

Macroculture: values and symbols that apply to an entire society or most of its citizens

Microculture: values and symbols of a restrictive group or segment of consumers, defined according to variables such as age, religion, ethnicity, or social class

Page 48: Consumer behavior 6th section

Values and Norms

Socialization: the process by which people develop their values, motivations, and habitual activity

The Values Transfusion Model shows how the values of a society are reflected in families, religious institutions, and schools, all of which expose and transmit values to individuals

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Characteristics Influenced by Culture

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

Used to define and differentiate cultures

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Values and Norms

People adopt values that influence how they live, how they define right and wrong, how they shop, and what is important to them

The values adopted by individuals today shape the values of society in the future

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Values of SocietyValues of Society

Religious Religious InstitutionsInstitutions

Early Early Lifetime Lifetime

ExperiencesExperiences

FamilyFamilyEducational Educational InstitutionsInstitutions

Society of Society of FutureFuture

Individual Individual Internalized Internalized

ValuesValuesPeersPeers MediaMedia

The Values Transfusion Model

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Changing Values

Society’s values change continuously even though core values are relatively permanent

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

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Changing Values

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

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

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Changing Values

Life-cycle explanation: values change according to life-cycle (as individuals grow older, their values change)

Theory of behavioral assimilation: Younger people grow into the values of their parents as they get older

Generational change: gradual replacement of existing values by those of young people who form the leading generation in value terms

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Religious Religious InstitutionsInstitutionsFamilyFamily

Educational Educational InstitutionsInstitutions

The Values Transfusion Model

Cultural Transfusive Triad

Early Early Lifetime Lifetime

ExperiencesExperiences

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How Culture Affects Consumer Behavior:

Pre-purchase and Purchase Activities

Consumption and Divestment Activities

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Influence of Culture on Pre-purchase and Purchase Activities

Culture affects what consumers think they need and what they perceive as frivolous

Culture affects how consumers are likely to search for information

Culture affects the importance placed on certain attributes of alternatives

Culture affects the amount of price negotiation during the purchase process

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Culture affects how consumers use or consume products

Consumers’ expectations about form and function vary between cultures

Culture influences how individuals dispose of products—reselling products after use, giving them to others for use, or recycling them and their packaging when possible

Influence of Culture on Consumption and Divestment Activities

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Changing Family Influences

Less time for in-home or parent-child influence

Increasing divorce rates

Isolated nuclear family (geographic separation of generations)

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Changing Religious Influences

Traditional churches and religions have seen a decline in loyalty

Increase in non-Christian religions

A shift from traditional religion to spirituality

Women are more religious

Religion and spirituality are big business and influence big business

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Changing Educational Influences

Dramatic increase in formal education

Teaching has evolved from memorization to questioning

Digital learning has increased in popularity

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Acculturation: measures the degree to which a consumer has learned the ways of a different culture compared to how they were raised

Just as individuals adapt to cultural changes, so do

companies

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Advertisements Appealing to

the Latin-American Market

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Advertisements Appealing to the Latin-American Market

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Social Class Microcultures

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

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Social Class Microcultures

Concrete variables that define social classes include occupation, education, friendships, ways of speaking, and possessions

Perceived variables that define social class include power, and prestige

Social class, in part, determines the mix of goods consumers will buy

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Social Class Microcultures

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

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Social Class Microcultures

What determines social class?

Economic Variables

Interaction Variables

Political Variables

Personal Prestige Personal Prestige Association SocializationAssociation Socialization

Power Class Power Class consciousness Mobilityconsciousness Mobility

Occupation Income Occupation Income Wealth Wealth

Page 69: Consumer behavior 6th section

Social Class Microcultures

Consumer analysts often focus on six variables which determine social class

Occupation

Personal performance

Interactions

Possessions

Value orientations

Class consciousness

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Social Class Microcultures

Occupation: best single indicator of social class

Personal performance: a person’s success relative to that of others (often in the same occupation)

Interactions: the people with whom one associates and socializes

Possessions: symbols of class membership

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Social Class Microcultures

Value orientations: values are indicators of our social class

In some countries, values are more important than possessions and social class is determined more by achievements than by possessions

Class consciousness: the degree to which people in a social class are aware of themselves as a distinctive group

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Social Class Microcultures

Social stratification: perceived hierarchies in which consumers rate others as higher or lower in social status

Achieved status: earn a higher status due to work or study

Ascribed status: lucky to be born wealthy or beautiful

Status inconsistency: when a person rates high on one variable and low in another (some athletes or musicians)

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Market Segmentation

Identification of social class usage of the product

Comparison of social class variables for segmentation with other variables

Description of social class characteristics identified in target markets

Development of marketing program to maximize effectiveness of marketing mix based on consistency with social-class attributes

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Positioning Based on Social Class

Understanding social class helps marketers create perceptions about products or organizations in consumers’ minds

Appeal to those who are in a social class and those who aspire to be there

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Positioning Based on Social Class

Brands such as Coach and Godiva are positioned to middle class consumers with simple, sleek ads

Wanting it all is a hallmark of the middle class and buying the best on at least a few occasions sets them apart and bolsters their self-image