lhm ch05 62-81 - cengage

5C H A P T E R

ConsumerDecision Making

Learning OutcomesLO1 Explain why marketing managers should under-

stand consumer behavior

LO2 Analyze the components of the consumer decision-making process

LO3 Identify the types of consumer buying decisions anddiscuss the significance of consumer involvement

LO4 Identify and understand the cultural factors thataffect consumer buying decisions

LO5 Identify and understand the social factors thataffect consumer buying decisions

LO6 Identify and understand the individual factors thataffect consumer buying decisions

LO7 Identify and understand the psychological factorsthat affect consumer buying decisions

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CHAPTER 5 Consumer Decision Making 6 3

The Importance of UnderstandingConsumer BehaviorConsumers’ product and ser-vice preferences are constantlychanging. In order to addressthis constant state of flux andto create a proper marketingmix for a well-defined market,marketing managers must have a thorough knowledge of consumer behav-ior. Consumer behavior describes how consumers make purchase decisionsand how they use and dispose of the purchased goods or services. Thestudy of consumer behavior also includes an analysis of factors that influ-ence purchase decisions and product use.

Understanding how consumers make purchase decisions can help marketingmanagers in several ways. For example, if a manager knows through research thatgas mileage is the most important attribute for a certain target market, the manufac-turer can redesign the product to meet that criterion. If the firm cannot change thedesign in the short run, it can use promotion in an effort to change consumers’ deci-sion-making criteria. When Virgin Mobile realized that Gen Yers were looking formore flexibility and convenience and more value-added services than traditionalmobile phone plans offered, the company redesigned its marketing strategy to moreclosely matched targeted consumers’ needs, wants, and desires.

The Consumer Decision-Making ProcessWhen buying products, consumers generally follow theconsumer decision-making process shown in Exhibit 5.1:(1) need recognition, (2) information search, (3) evaluationof alternatives, (4) purchase, and (5) postpurchase behavior.These five steps represent a general process that can beused as a guide for studying how consumers make deci-sions. This guideline does not assume that consumers’decisions will proceed in order through all of the steps ofthe process. In fact, the consumer may end the process atany time or may not even make a purchase. The section onthe types of consumer buying decisions later in the chap-ter discusses why a consumer’s progression through thesesteps may vary. Before addressing this issue, however, we

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consumer behaviorprocesses a consumeruses to make purchasedecisions, as well as touse and dispose of pur-chased goods or ser-vices; also includesfactors that influencepurchase decisions andproduct use

consumer decision-making processa five-step process usedby consumers when buy-ing goods or services

Going shopping is a good way to feel better after a hard day.Strongly Disagree Strongly Agree1 2 3 4 5 6 7

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is about to run out of something that is generally kepton hand. Consumers may also recognize unfulfilledwants if they become aware of a product that seemssuperior to the one currently used. Aware of the pop-ularity of MP3s and consumers’ desire to take theirmusic with them, car stereo manufacturers such asSonicblue and Kenwood have added MP3 interfaces.

And as you read in Chapter 4, marketers sellingtheir products in global markets must carefullyobserve the needs and wants of consumers in variousregions.

Information SearchAfter recognizing a need or want, consumers search forinformation about the various alternatives available tosatisfy it. An information search can occur internally,externally, or both. In an internal information search,the person recalls information stored in the memory.This stored information stems largely from previousexperience with a product, for example, recallingwhether a hotel where you stayed earlier in the yearhad clean rooms and friendly service.

In contrast, an external informationsearch seeks information in the outsideenvironment. There are two basic types of external information sources: nonmarketing-controlled and marketing-controlled. A nonmarketing-controlledinformation source is not associated withmarketers promoting a product. Theseinformation sources include personal expe-riences (trying or observing a new product);personal sources (family, friends, acquain-tances, and coworkers who may recommenda product or service); and public sources, suchas Underwriters Laboratories, Consumer

will describe each step inthe process in greaterdetail.

Need RecognitionThe first stage in the consumerdecision-making process is needrecognition. Need recognitionoccurs when consumers arefaced with an imbalancebetween actual and desiredstates. Need recognition is trig-gered when a consumer isexposed to either an internal oran external stimulus. Internalstimuli are occurrences youexperience, such as hunger orthirst. External stimuli are influ-ences from an outside sourcesuch as someone’s recommen-dation of a new restaurant, thedesign of a package, or an adver-tisement on television or radio.

Marketing managers cancreate wants on the part of theconsumer. A want exists when

someone has an unfulfilled need and has determinedthat a particular good or service will satisfy it. A wantcan be for a specific product, or it can be for a certainattribute or feature of a product. For example, if yourcell phone runs through the washing machine in yourjeans pocket, you’ll need to buy a replacement and maywant one with bluetooth capabilities.

A marketing manager’s objective is to get con-sumers to recognize an imbalance between theirpresent status and their preferred state. Advertisingand sales promotion often provide this stimulus.Surveying buyer preferences provides marketers withinformation about consumer needs and wants thatcan be used to tailor products and services.

Another way marketers create new products andservices is by observing trends in the marketplace.IKEA, the home furnishing giant, realized thatGeneration Y consumers prefer furni-ture that is stylish, easy to clean, mul-tifunctional, and portable, so itcreated a line of products to meetthose preferences. One item inthe line is a space-saving, mul-tifunction desk that can be con-verted into a dining table; it haswheels so that it can be easilymoved.1

Consumers recognize unful-filled wants in various ways. Thetwo most common occur when acurrent product isn’t performingproperly and when the consumer

need recognitionresult of an imbalancebetween actual anddesired states

stimulusany unit of input affect-ing one or more of thefive senses: sight, smell,taste, touch, hearing

wantrecognition of an unful-filled need and a prod-uct that will satisfy it

internalinformation searchthe process of recallingpast information storedin the memory

externalinformation searchthe process of seekinginformation in the out-side environment

nonmarketing-controlledinformation sourcea product informationsource that is not asso-ciated with advertisingor promotion

6 4 PART 2 Analyzing Marketing Opportunities

Marketing managers cancreate wants

on the part of the consumer.

Cultural, social,

individual, andpsychological factors affect

all steps

Need recognition1

2

3

4

5

Information search

Evaluation of alternatives

Purchase

Postpurchase behavior

Exhibit 5.1Consumer Decision-Making Process

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Reports, and other rating organizations thatcomment on products and services. For exam-ple, if you feel like seeing a movie, you maysearch your memory for past experiences atvarious cinemas when determining which oneto go to (personal experience). To choosewhich movie to see, you may rely onthe recommendation of a friendor family member (personalsources), or you may read thecritical reviews in the newspa-per or online (public sources).Marketers gather informationon how these informationsources work and use it toattract customers.

On the other hand, amarketing-controlled informa-tion source is biased toward a specific product, because itoriginates with marketerspromoting that product. Marketing-controlled information sources in-clude mass-media advertising (radio,newspaper, television, and magazineadvertising), sales promotion (contests, displays, premi-ums, and so forth), salespeople, product labels andpackaging, and the Internet. Many consumers,however, are wary of the informationthey receive from marketing-controlled sources, believingthat most marketing cam-paigns stress the product’sattributes and ignore its faults.These sentiments tend to bestronger among better educated andhigher income consumers.

The extent to which an individual conducts anexternal search depends on his or her perceived risk,knowledge, prior experience, and level of interest inthe good or service. Generally, as the perceived risk ofthe purchase increases, the consumer enlarges thesearch and considers more alternative brands. Youwould probably spend more time researching thepurchase of a laptop or a car than an energy drink. Aconsumer’s knowledge about the product or servicewill also affect the extent of an external informationsearch. A consumers who is knowledgeable and wellinformed about a potential purchase is less likely tosearch for additional information and will conductthe search more efficiently, thereby requiring lesstime to search.

The extent of a consumer’s external search is alsoaffected by confidence in one’s decision-making ability.A confident consumer not only has sufficient storedinformation about the product but also feels self-assured about making the right decision. People lackingthis confidence will continue an information searcheven when they know a great deal about the product. Athird factor influencing the external information search

is product experience.Consumers who have hada positive prior experience

with a product are morelikely to limit their search to

items related to thepositive experi-ence. For exam-ple, when flying,consumers arelikely to choose

airlines withwhich they

have had positive experiences, suchas consistent on-time arrivals, andavoid airlines with which they had anegative experience, such as lostluggage.

Finally, the extent of the search ispositively related to the amount of

interest a consumer has in a product.A consumer who is more interested in a

product will spend more time searchingfor information and alternatives. A ded-icated runner searching for a new pair

of running shoes may enjoy reading about the newbrands available and spend more time and effort than

other buyers in deciding on the right shoe.The consumer’s informationsearch should yield a group of

brands, sometimes called thebuyer’s evoked set (orconsideration set), which are

the consumer’s most pre-ferred alternatives. From this

set, the buyer will further evaluatethe alternatives and make

a choice. Consumers do notconsider all brands available in aproduct category, but they doseriously consider a muchsmaller set. Having too manychoices can, in fact, confuseconsumers and cause them todelay the decision to buy or, in someinstances, cause them to not buy at all.

Evaluation of Alternatives and PurchaseAfter getting information and con-structing an evoked set of alternativeproducts, the consumer is ready tomake a decision. A consumer willuse the information stored inmemory and obtained fromoutside sources to develop a set of criteria. These

marketing-controlledinformation sourcea product informationsource that originateswith marketers promot-ing the product

evoked set(consideration set)a group of brands, result-ing from an informationsearch, from which abuyer can choose


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The extent of a consumer’s external search is also

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of spending $25,000 new, you may revise your criteriaand select the used car.

The goal of the marketing manager is to determinewhich attributes have the most influence on a con-sumer’s choice. Several attributes may collectively

affect a consumer’s evaluationof products. A single attribute,such as price, may not ade-quately explain how con-sumers form their evoked set.Moreover, attributes the mar-keter thinks are important

may not be very important to the consumer. A brandname can also have a significant impact on a con-sumer’s ultimate choice. By providing consumers witha certain set of promises, brands in essence simplifythe consumer decision-making process so consumersdo not have to rethink their options every time theyneed something.2

Following the evaluation of alternatives, the con-sumer decides which product to buy or decides not tobuy a product at all. If he or she decides to make a pur-chase, the next step in the process is an evaluation ofthe product after the purchase.

standards help the consumer evaluate and comparealternatives. One way to begin narrowing the number ofchoices in the evoked set is to pick a product attributeand then exclude all products in the set that don’t havethat attribute. For example, if you are buying a car andlive in the mountains, you willprobably exclude all cars with-out 4-wheel drive.

Another way to narrowthe number of choices is touse cutoffs. Cutoffs are eitherminimum or maximum levelsof an attribute that an alternative must pass to beconsidered. If your budget for that new car is $25,000,you will not consider any 4-wheel drive vehicle abovethat price point. A final way to narrow the choices isto rank the attributes under consideration in order ofimportance and evaluate the products based on howwell each performs on the most important attributes.

If new brands are added to an evoked set, the con-sumer’s evaluation of the existing brands in that setchanges. As a result, certain brands in the original setmay become more desirable. If you discover that youcan get the exact car you want for $18,000 used instead

Brands simplify the consumerdecision-making process.

Survey Says. . .

Households earning as much as $75,000 ayear have begun changing their spendinghabits in response to rising fuel prices andslow-downs in the housing market. Itemsmost likely to be thrown out of the evokedset: fashion accessories, clothing, homedécor, electronics, and entertain-ment. Middle-income shoppersare being more deliberateabout when—and howoften—to trade up to ahigh-end item.

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SOURCE: Justin Lahart and Amy Merrick, “Consumers Curb Upscale Buying

as Gasoline, Housing Bite,” Wall Street Journal, August 21, 2006, A1.

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Postpurchase BehaviorWhen buying products, consumers expect certainoutcomes from the purchase. How well these expecta-tions are met determines whether the consumer issatisfied or dissatisfied with the purchase. For themarketer, an important element of any postpurchaseevaluation is reducing any lingering doubts that thedecision was sound. This is particularly importantbecause 75 percent of all consumers say they had abad experience in the last year with a product or ser-vice they purchased.3

When people recognize inconsistency betweentheir values or opinions and their behavior, they tendto feel an inner tension called cognitive dissonance.For example, suppose a regular tanning bed customerdecides to try a new—but more expensive—airbrushtanning method, called mystic tanning. Prior topurchse, the person may feel tension or anxiety,which is a feeling of dissonance. In her mind, the dis-advantages (like higher costs) battle the advantages(being free of harmful ultraviolet rays).4

Consumers try to reduce dissonance by justifyingtheir decision. They may seek new information thatreinforces positive ideas about the purchase, avoidinformation that contradicts their decision, or revokethe original decision by returning the product. Insome instances, people deliberately seek contraryinformation in order to refute it and reduce disso-nance. Dissatisfied customers sometimes rely onword of mouth to reduce cognitive dissonance, by let-ting friends and family know they are displeased.

Marketing managers can help reduce dissonancethrough effective communication with purchasers.Postpurchase letters sent by manufacturers anddissonance-reducing statements in instruction book-lets may help customers feel at ease with theirpurchase. Advertising that displays the product’ssuperiority over competing brands or guarantees canalso help relieve the possible dissonance of someonewho has already bought the product. Ultimately, themarketers goal is to ensure that the outcome meets or exceeds the customer’s expectations rather thanbeing disappointing.5

Types ofConsumer BuyingDecisions andConsumerInvolvementAll consumer buying deci-sions generally fall along acontinuum of three broadcategories: routine response

behavior, limited decisionmaking, and extensive deci-sion making (see Exhibit5.2). Goods and services inthese three categories canbest be described in termsof five factors: level of con-sumer involvement, lengthof time to make a decision,cost of the good or service,degree of informationsearch, and the number ofalternatives considered. Thelevel of consumer involve-ment is perhaps the mostsignificant determinant inclassifying buying deci-sions. Involvement is theamount of time and effort abuyer invests in the search,evaluation, and decisionprocesses of consumerbehavior.

Frequently purchased, low-cost goods and services aregenerally associated with routine response behavior.These goods and services can also be called low-involvement products because consumers spend littletime on search and decision before making the pur-chase. Usually, buyers are familiar with several differ-ent brands in the product category but stick with onebrand. Consumers engaged in routine responsebehavior normally don’t experience need recognitionuntil they are exposed to advertising or see the prod-uct displayed on a store shelf. Consumers buy firstand evaluate later, whereas the reverse is true forextensive decision making.

Limited decision making typically occurs when aconsumer has previous product experience but isunfamiliar with the current brands available. Limited


LO 3

cognitivedissonanceinner tension that a con-sumer experiences afterrecognizing an inconsis-tency between behaviorand values or opinions

involvementthe amount of time andeffort a buyer invests inthe search, evaluation,and decision processesof consumer behavior

routine responsebehaviorthe type of decisionmaking exhibited byconsumers buying fre-quently purchased, low-cost goods and services;requires little search anddecision time

limited decision makingthe type of decisionmaking that requires amoderate amount oftime for gathering infor-mation and deliberatingabout an unfamiliarbrand in a familiar prod-uct category

Exhibit 5.2Continuum of Consumer Buying Decisions

Involvement

Time

Cost

Information Search

Number of Alternatives

Routine Limited Extensive

low low to moderate high

short short to moderate long

low low to moderate high

internal only mostly internal internal and external

one few many

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make quick choices. Because consumers are familiar with the

product and know whether it will satisfy their needs, they become

less involved in the purchase.

• Interest: Involvement is directly related to consumer interests,

as in cars, music, movies, bicycling, or electronics. Naturally, these

areas of interest vary from one individual to another. A person

highly involved in bike racing will be more interested in the type of

bike she owns that someone who rides a bike only for recreation.

• Perceived risk of negative consequences: As the per-

ceived risk in purchasing a product increases, so does a consumer’s

level of involvement. The types of risks that concern consumers

include financial risk, social risk, and psychological risk. First, finan-

cial risk is exposure to loss of wealth or purchasing power. Because

high risk is associated with high-priced purchases, consumers tend

to become extremely involved. Therefore, price and involvement are

usually directly related: As price increases, so does the level of

involvement. Second, consumers take social risks when they buy

products that can affect people’s social opinions of them (for exam-

ple, driving an old, beat-up car or wearing unstylish clothes). Third,

buyers undergo psychological risk if they feel that making the wrong

decision might cause some concern or anxiety. For example, some

consumers feel guilty about eating foods that are not healthy, such

as regular ice cream rather than fat-free frozen yogurt.

• Situation: The circumstances of a purchase may temporarily

transform a low-involvement decision into a high-involvement one.

High involvement comes into play when the consumer perceives

risk in a specific situation. For example, an individual might rou-

tinely buy canned fruit and vegetables, but for dinner parties shop

for high-quality fresh produce.

• Social visibility: Involvement also increases as the social visi-

bility of a product increases. Products often on social display

include clothing (especially designer labels), jewelry, cars, and fur-

niture. All these items make a statement about the purchaser and,

therefore, carry a social risk.

Marketing Implications of InvolvementMarketing strategy varies according to the level ofinvolvement associated with the product. For high-involvement product purchases, marketing managershave several responsibilities. First, promotion to thetarget market should be extensive and informative. Agood ad gives consumers the information they needfor making the purchase decision and specifies thebenefits and unique advantages of owning theproduct.

For low-involvement product purchases, con-sumers may not recognize their wants until they arein the store. Therefore, marketing managers focus onpackage design so the product will be eye-catchingand easily recognized on the shelf. In-store promo-tions and displays also stimulate sales of low-involvement products. A good display can explain theproduct’s purpose and prompt recognition of a want.Coupons, cents-off deals, and two-for-one offers alsoeffectively promote low-involvement items.

decision making is also associ-ated with lower levels ofinvolvement (although higherthan routine decisions) becauseconsumers expend only moder-ate effort in searching for infor-mation or in consideringvarious alternatives. If a con-sumer’s usual brand of some-thing is sold out, he or she willlikely evaluate several otherbrands before making a final

decision.Consumers practice extensive decision making

when buying an unfamiliar, expensive product or aninfrequently bought item. This process is the mostcomplex type of consumer buying decision and isassociated with high involvement on the part of theconsumer. This process resembles the model outlinedin Exhibit 5.1. These consumers want to make theright decision, so they want to know as much as theycan about the product category and available brands.People usually experience cognitive dissonance onlywhen buying high-involvement products. Buyers useseveral criteria for evaluating theiroptions and spend much time seek-ing information. Buying a home ora car, for example, requiresextensive decision making.

The type of decision mak-ing that consumers use topurchase a product does notnecessarily remain con-stant. If a routinely pur-chased product no longersatisfies, consumers maypractice limited or exten-sive decision making toswitch to another brand.And people who first useextensive decision mak-ing may then use limited orroutine decision making forfuture purchases. For exam-ple, a family may spend a lot oftime figuring out that their newpuppy prefers hard food to soft, but once they know,the purchase will become routine.

Factors Determining the Levelof Consumer InvolvementThe level of involvement in the purchase depends onthe following five factors:

• Previous experience: When consumers have had previous

experience with a good or service, the level of involvement typi-

cally decreases. After repeated product trials, consumers learn to


extensive decision makingthe most complex typeof consumer decisionmaking, used whenbuying an unfamiliar,expensive product or aninfrequently boughtitem; requires use ofseveral criteria for eval-uating options andmuch time for seekinginformation

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factors strongly influencethe decision process. Theyhave an effect from the timea consumer perceives astimulus through postpur-chase behavior. Culturalfactors, which include cul-ture and values, subculture,and social class, exert the broadest influenceover consumer decision making. Social factorssum up the social interactions between a con-sumer and influential groups of people, such asreference groups, opinion leaders, and familymembers. Individual factors, which include gen-der, age, family life-cycle stage, personality, self-concept, and lifestyle, are unique to eachindividual and play a major role in the type ofproducts and services consumers want.Psychological factors determine how consumers

perceive and interact with their environmentsand influence the ultimate decisions con-sumers make. They include perception, moti-vation, learning, beliefs, and attitudes. Exhibit5.3 summarizes these influences.

Cultural Influences onConsumer Buying DecisionsOf all the factors that affect consumer decisionmaking, cultural factors exert the broadest anddeepest influenc. Marketers must understandthe way people’s culture and its accompanyingvalues, as well as their subculture and socialclass, influence their buying behavior.

Culture and ValuesCulture is the essential character of a society thatdistinguishes it from other cultural groups. Theunderlying elements of every culture are the values,

Linking a product to a higher-involvement issue isanother tactic that marketing managers can use toincrease the sales of a low-involvement product.Although packaged food may normally be a low-involvement product, reference to health issues raisesthe involvement level. Makers of Silk soy milk andGardenburger meatless burgers, both of which containsoy protein, tout soy’s health benefits, such as reduc-ing the risk of coronary heart disease, preventingcertain cancers, and reducing the symptoms ofmenopause. Sales of soy-based products, longshunned in the United States for their taste, sky-rocketed as a result of these health claims.6

Factors Influencing Consumer Buying DecisionsThe consumer decision-making process doesnot occur in a vacuum. On the contrary, underly-ing cultural, social, individual, and psychological


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>>As the level of purchasing involvement increases, so does themarketing manager’s responsibility to provide extensive and informativepromotional materials to potential customers. This ad for Philips’s high-definition flat TV appeals to both men and women with detailed copythat is also a tool for reducing cognitive dissonance.

Some components of American culture:

Custom—Bathing daily

Ritual—Thanksgiving dinner

Value—Success through hard work

Myth—Santa Claus and Easter Bunny

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culturethe set of values, norms,attitudes, and othermeaningful symbols thatshape human behaviorand the artifacts, orproducts, of that behav-ior as they are transmit-ted from one generationto the next

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heightened public awareness of political and othernews events. Automation has increased the amountof leisure time we have and, in some ways, haschanged the traditional work ethic. Another factorthat contributes to cultural shifts in the United Statesis our rapidly increasing diversity, which influencesAmerican food, music, clothing, and entertainment.

The most defining element of a culture is itsvalues—the enduring beliefs shared by a society thata specific mode of conduct is personally or sociallypreferable to another mode of conduct. People’s valuesystems have a great effect on their consumer behav-ior. Consumers with similar value systems tend toreact alike to prices and other marketing-relatedinducements. Values also correspond to consumptionpatterns. For example, Americans place a high valueon convenience. This value has created lucrativemarkets for products such as breakfast bars, energybars, and nutrition bars that allow consumers to eaton the go.7 Core American values—those consideredcentral to the American way of life—include thingslike success, freedom, materialism, capitalism,progress, and youth.

The personal values of target consumers haveimportant implications for marketing managers. Whenmarketers understand the core values that underliethe attitudes that shape the buying patterns ofAmerica’s consumers and how these values weremolded by experiences, they can target their messagemore effectively. Values represent what is most impor-tant in people’s lives. Therefore, marketers watch care-fully for shifts in consumers’ values over time.

language, myths, customs, ritu-als, and laws that shape thebehavior of the culture, as wellas the material artifacts, orproducts, of that behavior asthey are transmitted from onegeneration to the next.

Culture is pervasive. What people eat, how theydress, what they think and feel, and what languagethey speak are all dimensions of culture. It encom-passes all the things consumers do without consciouschoice because their culture’s values, customs, andrituals are ingrained in their daily habits.

Culture is functional. Human interaction createsvalues and prescribes acceptable behavior for eachculture. By establishing common expectations, cul-ture gives order to society. Sometimes these expec-tations are enacted into laws, like drivers must stopat red lights. Other times these expectations aretaken for granted: grocery stores and hospitals areopen 24 hours whereas banks are open only 9 a.m.to 5 p.m.

Culture is learned. Consumers are not born know-ing the values and norms of their society. Instead, theymust learn what is acceptable from family and friends.Children learn the values that will govern their behav-ior from parents, teachers, and peers.

Culture is dynamic. It adapts to changing needsand an evolving environment. The rapid growth oftechnology in today’s world has accelerated the rateof cultural change. Television has changed entertain-ment patterns and family communication and has


valuethe enduring belief that aspecific mode of conductis personally or sociallypreferable to anothermode of conduct

Exhibit 5.3Factors that Affect the Consumer Decision-Making Process

Social Factors Reference groups

Opinion leaders

Family

Individual Factors

GenderAge and family life-cycle stagePersonality, self-concept, and lifestyle

Psychological Factors

PerceptionMotivationLearningBeliefs and attitudes

Cultural Factors

Culture and values Subculture

Social class

Consumer Decision-Making

Process

Buy? Don’tBuy?

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tomers to “Turn it loose,” butthe phrase in Spanish means“Suffer from diarrhea.”

Though marketers expand-ing into global markets gener-ally adapt their products andbusiness formats to the localculture, some fear that increas-ing globalization, as well as the proliferation of theInternet, will result in a homogeneous world culture ofthe future.

SubcultureA culture can be divided into subcultures on the basisof demographic characteristics, geographic regions,national and ethnic background, political beliefs, andreligious beliefs. A subculture is a homogeneous groupof people who share elements of the overall culture aswell as cultural elements unique to their own group.Within subcultures, people’s attitudes, values, and pur-chase decisions are even more similar than they arewithin the broader culture. Subcultural differencesmay result in considerable variation within a culture inwhat, how, when, and where people buy goods andservices.

In the United States alone, countless subcultures canbe identified. Many are concentrated geographically.People belonging to the Mormon religion, for example,

are clustered mainly in Utah; Cajuns arelocated in the bayou regions of southern

Louisiana. Many Hispanics live instates bordering Mexico, whereasthe majority of Chinese, Japanese,

and Korean Americans are found onthe West Coast.

Other subcultures are geo-graphically dispersed. For exam-ple, computer hackers, peoplewho are hearing or visuallyimpaired, Harley-Davidson bik-ers, military families, univer-sity professors, and gays maybe found throughout the coun-

try. Yet they have identifiableattitudes, values, and needs that

distinguish them from the largerculture.

Once marketers identify sub-cultures, they can design specialmarketing programs to serve theirneeds. In response to the growingHispanic market, companieshave been spending a larger per-

centage of their marketingbudgets advertising to thisgroup. Companies like Procter &Gamble, Anheuser-Busch,Hershey, and Chuck E. Cheese

Understanding Culture DifferencesUnderlying core values can vary acrosscultures. As more companies expandtheir operations globally, the need tounderstand the cultures of foreigncountries becomes more important. Afirm has little chance of selling prod-ucts in a culture that it does not under-stand. Like people, products havecultural values and rules that influencetheir perception and use. Culture,therefore, must be understood beforethe behavior of individuals within thecultural context can be understood. Colors,for example, may have different meaningsin global markets than they do at home. InChina, white is the color of mourning, andbrides wear red.

Language is another importantaspect of culture that global mar-keters must consider. When translat-ing product names, slogans, andpromotional messages into foreignlanguages they must be careful not toconvey the wrong message. Coorsencouraged its English-speaking cus-


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>>Modern Manners explores the ways in which new technologies,like cell phones, have changed American culture.

subculturea homogeneous groupof people who share ele-ments of the overall cul-ture as well as uniqueelements of their owngroup

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most likely occurs because working-class Americanstend to aspire to the middle-class lifestyle while someof those who do achieve affluence may downwardlyaspire to respectable middle-class status as a matterof principle.

The working class is a distinct subset of the middleclass. Interest in organized labor is one of the most com-mon attributes among the working class. This groupoften rates job security as the most important reasonfor taking a job. The working-class person dependsheavily on relatives and the community for economicand emotional support.

Lifestyle distinctions between the social classesare greater than the distinctions within a given class.

The most significant differencebetween the classes occursbetween the middle and lowerclasses, where there is a majorshift in lifestyles. Members ofthe lower class have incomes ator below the poverty level.

Social class is typicallymeasured as a combination ofoccupation, income, education,wealth, and other variables. Forinstance, affluent upper-classconsumers are more likely tobe salaried executives or self-employed professionals with atleast an undergraduate degree.Working-class or middle-classconsumers are more likely to behourly service workers or blue-collar employees with only ahigh school education.Educational attainment, how-ever, seems to be the most reli-able indicator of a person’ssocial and economic status.Those with college degrees orgraduate degrees are more

all have Hispanic mar-keting campaigns, as domajor league sports teamslike the Texas Rangers andthe Dallas Mavericks. Thecampaigns often feature bothEnglish and Spanish advertis-ing and appeal to culturalpride.8

Social ClassThe United States, like other societies, has a socialclass system. A social class is a group of people whoare considered nearly equal in status or communityesteem, who regularly socialize among themselvesboth formally and informally, and who share behav-ioral norms.

One view of contemporary U.S.status structure is shown in Exhibit5.4. The upper and upper middleclasses comprise the small segmentof affluent and wealthy Americanswho are more likely to own their ownhome and purchase new cars andtrucks and are less likely to smoke.The most affluent consumers are

more likely to attend art auctions and gal-leries, dance performances, operas, the

theater, museums, concerts, and sporting events.The majority of Americans today define them-

selves as middle class, regardless of their actualincome or educational attainment. This phenomenon

social classa group of people in asociety who are consid-ered nearly equal in sta-tus or communityesteem, who regularlysocialize among them-selves both formallyand informally, and whoshare behavioral norms

Median Educational Profile Household IncomeThose with less than a 9th grade education $ 17,261Those with a 9th–12th grade education (no diploma) $ 21,737High school graduates $ 35,744College graduates, B.A. $ 64,406College graduates, M.A. $ 74,476Professional degree holders $100,000

SOURCE: U.S. Census Bureau, 1999, accessed athttp://www.pbs.org/peoplelikeus/resources/stats.html, May 2006.

� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �

Social Class and EducationSocial Class

and Education

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Exhibit 5.4U.S. Social Classes

Upper Classes

Capitalist class 1% People whose investment decisions shape the national economy; incomemostly from assets, earned or inherited; university connections

Upper middle class 14% Upper-level managers, professionals, owners of medium-sized businesses;well-to-do, stay-at-home homemakers who decline occupational work bychoice; college-educated; family income well above national average

Middle Classes

Middle class 33% Middle-level white-collar, top-level blue-collar; education past high schooltypical; income somewhat above national average; loss of manufacturing jobshas reduced the population of this class

Working class 32% Middle-level blue-collar, lower-level white-collar; income below nationalaverage; largely working in skilled or semi-skilled service jobs

Lower Classes

Working poor 11–12% Low-paid service workers and operatives; some high school education; belowmainstream in living standard; crime and hunger are daily threats

Underclass 8–9% People who are not regularly employed and who depend primarily on the welfaresystem for sustenance; little schooling; living standard below poverty line

SOURCE: Adapted from Richard P. Coleman, “The Continuing Significance of Social Class to Marketing,” Journal of Consumer

Research, December 1983, 267; Dennis Gilbert and Joseph A. Kahl, The American Class Structure: A Synthesis (Homewood, IL:

Dorsey Press, 1982), ch. 11, http://en.wikipedia.org/wiki/social_structure_of_the_united_states, May 2006

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Opinion LeadersReference groups frequentlyinclude individuals known asgroup leaders, or opinion lead-ers—those who influence oth-ers. Obviously, it is importantfor marketing managers to per-suade such people to purchasetheir goods or services. Manyproducts and services that are integral parts ofAmericans’ lives today got their initial boost from opin-ion leaders. For example, DVDs and SUVs (sport-utilityvehicles) were purchased by opinion leaders wellahead of the general public.

Opinion leaders are often the first to try newproducts and services out of pure curiosity. They aretypically self-indulgent, making them more likely toexplore unproven but intriguing products and ser-vices. Technology companies have found thatteenagers, because of their willingness to experi-ment, are key opinion leaders for the success of newtechnologies. For example, text messaging becamepopular with teenagers before it gained widespreadappeal. As a result, many technology companiesinclude it in their marketing programs targeted to

likely to fall into the upper classes, while those peoplewith some college experience but fall closest to tradi-tional concepts of the middle class.

Marketers are interested in social class for twomain reasons. First, social class often indicates whichmedium to use for advertising. An insurance companywanting to sell its policies to middle-class familiesmight advertise during the local evening news becausemiddle-class families tend to watch more televisionthan other classes do, but if the company wanted tosell more policies to affluent individuals, it might placea print ad in a business publication like the Wall StreetJournal. Second, knowing what products appeal towhich social classes can help marketers determinewhere to best distribute their products.

Social Influences onConsumer Buying DecisionsMost consumers are likely to seek out the opin-ions of others to reduce their search and evalu-ation effort or uncertainty, especially as theperceived risk of the decision increases.Consumers may also seek out others’ opinionsfor guidance on new products or services, prod-ucts with image-related attributes, or productswhere attribute information is lacking or unin-formative. Specifically, consumers interactsocially with reference groups, opinion leaders,and family members to obtain product informa-tion and decision approval.

Reference GroupsAll the formal and informal groups that influence thebuying behavior of an individual are that person’sreference groups. Consumers may use products orbrands to identify with or become a member of agroup. They learn from observing how members oftheir reference groups consume, and they use thesame criteria to make their own consumer decisions.

The activities, values, and goals of reference groupsdirectly influence consumer behavior. For marketers,reference groups have three important implications:(1) they serve as information sources and influenceperceptions; (2) they affect an individual’s aspirationlevels; and (3) their norms either constrain or stimu-late consumer behavior. Understanding the effect ofreference groups on a product is important for mar-keters as they track the life cycle of their products.Retailer Abercrombie & Fitch noticed it was beginningto lose its target audience of college students when itsstores began attracting large numbers of high schoolstudents trying to be more like the college students. Tosolve the problem, A&F created its Hollister store chainspecifically for high school students.9

reference groupa group in society thatinfluences an individ-ual’s purchasingbehavior

opinion leaderan individual who influ-ences the opinions ofothers

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BMW is looking for opinion leaders in the “ideaclass,” a group comprised of roughly 1.5 mil-lion architects, professionals, innovators, andentrepreneurs who are more interested indesign, authenticity, and independent thinking.Over a five-year period, BMW has increasedU.S. sales by 62 percent, but still has less thana 2 percent share of the U.S. market.10

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any member of the family. For example, Sister mightinitiate the product search by asking for a new bicycleas a birthday present. Influencers are those members ofthe family whose opinions are valued. In our example,Mom might function as a price-range watchdog, aninfluencer whose main role is to veto or approve priceranges. Brother may give his opinion on certain makesof bicycles.The decision maker is the family member whoactually makes the decision to buy or not to buy. Forexample, Dad or Mom is likely to choose the final brandand model of bicycle to buy after seeking further infor-mation from Sister about cosmetic features such ascolor and imposing additional criteria of his or her own,such as durability and safety. The purchaser (probablyDad or Mom) is the one who actually exchanges moneyfor the product. Finally, the consumer is the actual user—Sister, in the case of the bicycle.

Marketers should consider family purchase situa-tions along with the distribution of consumer anddecision-maker roles among family members.Ordinary marketing views the individual as both deci-sion maker and consumer. Family marketing addsseveral other possibilities: Sometimes more than onefamily member or all family members are involved inthe decision; sometimes only children are involved in the decision; sometimes more than one consumeris involved; and sometimes the decision maker andthe consumer are different people.

Individual Influences onConsumer Buying DecisionsA person’s buying decisions are also influencedby personal characteristics that are unique toeach individual, such as gender; age and life-cycle stage; and personality, self-concept, andlifestyle. Individual characteristics are generallystable over the course of one’s life. For instance,most people do not change their gender, and theact of changing personality or lifestyle requiresa complete reorientation of one’s life. In the caseof age and life-cycle stage, these changes occurgradually over time.

GenderPhysiological differences between men and womenresult in different needs, such as health and beautyproducts. Just as important are the distinct cultural,social, and economic roles played by men and womenand the effects that these have on their decision-making processes. For example, many networks haveprogramming targeted to women, while Spike TV callsitself the “first network for men.” Two magazines aregeared to men who like to shop: Cargo is modeled

teens. By reaching opinionleaders, these companies hopeto start a trend that will carryinto the mass market.11

Opinion leadership is acasual, face-to-face phenome-

non and usually inconspicuous, so locating opinionleaders can be a challenge. Thus, marketers oftentry to create opinion leaders. They may use highschool cheerleaders to model new fall fashions orcivic leaders to promote insurance, new cars, andother merchandise. Revatex, the maker of JNCOjeans, sponsors extreme-sports athletes who appealto the teen market. It also gives free clothes totrendsetters among teens in the hopes they willinfluence others to purchase the brand. JNCO outfitsbig-name DJs in the rave scene, as well as membersof hip, alternative bands favored by the teen crowd.

How Blogs Are Defining Today’s Opinion Leaders

Increasingly, marketers are looking to Web logs, orblogs, as they’re commonly called, to find opinion lead-ers. In 2005, 10 percent of consumers read blogs, twiceas many as in the previous year. The problem, though,is that with over 25 million unique blogs and 70,000 newones coming online every day, it’s getting harder to sep-arate the true opinion leaders from intermediate Webusers who are just looking to share random thoughts orvacation photos with family and friends. The fashionindustry used to dismiss bloggers as snarky and smalltime, effectively limiting their access to hot events dur-ing semi-annual fashion week shows. Now, however,fashion bloggers have the attention of the fashionestablishment because many are claiming bigger fol-lowings than traditional media. Still, not all fashionblogs are equal. Bloggers from FashionTribes.com andBagtrends.com received tickets to some fall 2006 shows,but shopology.com and Coutorture.com were deniedaccess because their audiences were too small.12

FamilyThe family is the most important social institution formany consumers, strongly influencing values, attitudes,self-concept—and buying behavior. For example, a fam-ily that strongly values good health will have a grocerylist distinctly different from that of a family that viewsevery dinner as a gourmet event. Moreover, the family isresponsible for the socialization process, the passingdown of cultural values and norms to children. Childrenlearn by observing their parents’ consumption patterns,and so they will tend to shop in a similar pattern.

Decision-making roles among family members tendto vary significantly, depending on the type of item pur-chased. Family members assume a variety of roles inthe purchase process. Initiators suggest, initiate, or plantthe seed for the purchase process. The initiator can be

socializationprocesshow cultural values andnorms are passed downto children

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Age and FamilyLife-Cycle StageThe age and family life-cyclestage of a consumer can have asignificant impact on con-sumer behavior. How old a consumer is generally indi-cates what products he or she may be interested inpurchasing. Consumer tastes in food, clothing, cars,furniture, and recreation are often age related. Forexample, researchers from American Demographicsmagazine and theresearch firm Encinoexamined the corre-lation between tele-vision shows andthe age of viewers.As expected, thetarget audience ofmany TV showsdirectly coincidedwith the age of theirviewers.

Related to a person’s age ishis or her place in the family lifecycle. As Chapter 7 explains in more detail,the family life cycle is an orderly series of stagesthrough which consumers’ attitudes and behavioraltendencies evolve through maturity, experience, andchanging income and status. Marketers often definetheir target markets in terms of family life cycle, suchas “young singles,” “young married with children,” and“middle-aged married without children.” As you canimagine, the spending habits of young singles, youngparents, empty nesters are very different. For instance,the presence of children in the home is the most signif-icant determinant of the type of vehicle that’s drivenoff the new car lot. Parents are the ultimate need-driven car consumers, requiring larger cars and trucksto haul their children and all their belongings. It comesas no surprise then that for all households with chil-dren, SUVs rank either first or second among new-vehicle purchases followed by minivans.

Marketers should also be aware of the many non-traditional life-cycle paths that are common todayand provide insights into the needs and wants of suchconsumers as divorced parents, lifelong singles, andchildless couples.

Personality, Self-Concept, and LifestyleEach consumer has a unique personality. Personalityis a broad concept that can be thought of as a way oforganizing and grouping how an individual typicallyreacts to situations. Thus, personality combines psy-chological makeup and environmental forces. Itincludes people’s underlying dispositions, especiallytheir most dominant characteristics. Although

after Lucky, a women’s shopping magazine, and Vitals,a free magazine, is positioned as a “luxury shoppingmagazine” for men.13

Indeed, men and women do shop differently.Studies show that men and women share similarmotivations in terms of where to shop—that is, seek-ing reasonable prices, merchandise quality, and afriendly, low-pressure environment—but they don’tnecessarily feel the same about shopping in general.Most women enjoy shopping.Their male counterpartsclaim to dislike the experience and shop only out ofnecessity. Further, men desire simple shopping expe-riences, stores with less variety, and convenience.Stores that are easy to shop in, are near home oroffice, or have knowledgeable personnel appeal moreto men than to women.14 The Internet appeals tomen who find it an easy way to shop for clothing andgifts. Many Internet retailers are designing their sitesto attract male gift buyers.

Trends in gender marketing are influenced by thechanging roles of men and women in society.Companies that have traditionally targeted womenmust develop new strategies that reflect the changingroles of women at home and work. Many industries—like the video game industry and NASCAR—areattracting new customers by marketing to women.15

personalitya way of organizing andgrouping the consisten-cies of an individual’sreactions to situations

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describe and measure, lifestyle characteristics are use-ful in segmenting and targeting consumers. Lifestyleand psychographic analysis explicitly addresses theway consumers outwardly express their inner selves intheir social and cultural environment. Many companiesnow use psychographics to better understand theirmarket segments. Psychographics and lifestyle seg-mentation are discussed in more detail in Chapter 7.

Psychological Influenceson Consumer Buying DecisionsAn individual’s buying decisions are furtherinfluenced by psychological factors: perception,motivation, learning, and beliefs and attitudes.These factors are what consumers use to inter-act with their world. They are the tools con-sumers use to recognize their feelings, gatherand analyze information, formulate thoughtsand opinions, and take action. Unlike the otherthree influences on consumer behavior, psycho-logical influences can be affected by a person’senvironment because they are applied on spe-

personality is one of the leastuseful concepts in the study ofconsumer behavior, somemarketers believe that per-sonality influences the typesand brands of products pur-chased. For instance, the typeof car, clothes, or jewelry aconsumer buys may reflectone or more personality traits.

Self-concept, or self-perception, is how consumersperceive themselves. Self-concept includes attitudes,perceptions, beliefs, and self-evaluations. Although self-concept may change, thechange is often gradual.

Through self-concept, people define their identity,which in turn provides for consistent and coherentbehavior.

Self-concept combines the ideal self-image (the wayan individual would like to be) and the real self-image(how an individual actually perceives himself or herself).Generally, we try to raise our real self-image toward ourideal (or at least narrow the gap). Consumers seldombuy products that jeopardize their self-image. For exam-ple, someone who sees herself as a trendsetter wouldn’tbuy clothing that doesn’t project a contemporary image.

Human behavior depends largely on self-concept.Because consumers want to protect their identity asindividuals, the products they buy, the stores theypatronize, and the credit cards they carry support theirself-image. By influencing the degree to which con-sumers perceive a good or service to be self-relevant,marketers can affect consumers’ motivation to learnabout, shop for, and buy a certain brand. Marketers alsoconsider self-concept important because it helpsexplain the relationship between individuals’ percep-tions of themselves and their consumer behavior.

An important component of self-concept is bodyimage, the perception of the attractiveness of one’sown physical features. For example, a person’s per-ception of body image can be a stronger reason forweight loss than either good health or other socialfactors.16 With the median age of Americans rising,many companies are introducing products and ser-vices aimed at aging baby boomers who are concernedabout their age and physical appearance. Marketersare also seeing boomers respond to products aimed atyounger audiences. For instance, to the surprise ofcompany managers, Starwood’s “W” Hotels, designedand advertised to attract a young, hip crowd, areattracting large numbers of boomers as well.17

Personality and self-concept are reflected inlifestyle. A lifestyle is a mode of living, as identified by a person’s activities, interests, and opinions.Psychographics is the analytical technique used to exam-ine consumer lifestyles and to categorize consumers.Unlike personality characteristics, which are hard to

self-concepthow consumers per-ceive themselves interms of attitudes, per-ceptions, beliefs, andself-evaluations

ideal self-imagethe way an individualwould like to be

real self-imagethe way an individualactually perceives him-self or herself

lifestylea mode of living asidentified by a person’sactivities, interests, andopinions

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ronmental well-being andhealthy, low-fat foods, andblack, brown, and gold to con-vey the use of superior ingredi-ents.18 The shape and look of aproduct’s packaging can alsoinfluence perception.

What is perceived by con-sumers may also depend on thestimuli’s vividness or shockvalue. Graphic warnings of thehazards associated with a prod-uct’s use are perceived morereadily and remembered moreaccurately than less vivid warn-ings or warnings that are writ-ten in text. “Sexier” ads excel atattracting the attention ofyounger consumers. Companieslike Calvin Klein and Guess usesensuous ads to “cut throughthe clutter” of competing adsand other stimuli to capture the attention of the targetaudience.

Two other concepts closely related to selectiveexposure are selective distortion and selectiveretention. Selective distortion occurs whenconsumers change or distort information thatconflicts with their feelings or beliefs. Forexample, suppose you buy a Sonicblue Rio MP3

player. After the purchase, if you get new infor-mation about an alternative brand, such

as an Apple iPod, you may distortthe information to make it more

consistent with the priorview that the Sonicblue Riois just as good as the iPod,

if not better.Selective retention

is remembering onlyinformation that sup-

ports personal feelingsor beliefs. The consumerforgets all informationthat may be inconsistent.Consumers may see anews report on suspectedillegal practices by theirfavorite retail store, butsoon forget the reason thestore was featured on thenews.

Which stimuli will beperceived often depends onthe individual. People canbe exposed to the samestimuli under identical con-ditions but perceive themvery differently. For exam-ple, two people viewing a TV

cific occasions. For example, you will perceivedifferent stimuli and process these stimuli indifferent ways depending on whether you aresitting in class concentrating on the instructor,sitting outside of class talking to friends, or sit-ting in your dorm room watching television.

PerceptionThe world is full of stimuli. A stimulus is any unit ofinput affecting one or more of the five senses: sight,smell, taste, touch, hearing. The process by which weselect, organize, and interpret these stimuli into ameaningful and coherent picture is called perception.In essence, perception is how we see the worldaround us and how we recognize that we need somehelp in making a purchasing decision.

People cannot perceive every stimulus in theirenvironment.Therefore, they use selective exposure todecide which stimuli to notice and which to ignore.The familiarity of an object, contrast, movement,intensity (such as increased volume), and smell arecues that influence perception. Consumers use thesecues to identify and define products and brands.The shape of a product’s packaging, such asCoca-Cola’s signature contour bottle, forinstance, can influence perception. Color isanother cue, and it plays a key role in con-sumers’ perceptions. Packaged foods manufac-turers use color to trigger unconsciousassociations for grocery shoppers who typicallymake their shopping decisions in the blinkof an eye, like using green to signal envi-


perceptionthe process by whichpeople select, organize,and interpret stimuliinto a meaningful andcoherent picture

selective exposurethe process whereby aconsumer notices cer-tain stimuli and ignoresothers

selective distortiona process whereby aconsumer changes ordistorts information thatconflicts with his or herfeelings or beliefs

selective retentiona process whereby aconsumer remembersonly that informationthat supports his or herpersonal beliefs

Is SubliminalPerception Real?

In 1957, a researcher claimed to have

increased popcorn and Coca-Cola sales

at a movie theater after flashing “Eat

popcorn” and “Drink Coca-Cola” on the

screen every five seconds for 1/300th of

a second, although the audience did not

consciously recognize the messages.

Almost immediately consumer protection

groups became concerned that advertisers

were brainwashing consumers, and this

practice was pronounced illegal in California

and Canada. The researcher later admitted

to making up the data, and scientists have

been unable to replicate the study since.

Nonetheless, consumers are still wary of hid-

den messages that advertisers may be sending.

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even though they may not translate into anythingmeaningful. Many Japanese associate foreign wordson product labels with the exotic, the expensive, andhigh quality.

MotivationBy studying motivation, marketers can analyze themajor forces influencing consumers to buy or not buyproducts. When you buy a product, you usually do so tofulfill some kind of need. These needs become motiveswhen aroused sufficiently. For instance, you can bemotivated by hunger to stop at McDonald’s for, say, anEgg McMuffin before an early-morning class. Motivesare the driving forces that cause a person to take actionto satisfy specific needs.

Why are people driven by particular needs atparticular times? One popular theory is Maslow’s hier-

archy of needs, shown in Exhibit 5.5,which arranges needs in ascending

order of importance: physiological,safety, social, esteem, and self-actualization. As a person fulfills oneneed, a higher level need becomesmore important.

The most basic human needs arephysiological—that is the needs for food,

water, and shelter. Because they are essential to survival,these needs must be satisfied first. Safety needs includesecurity and freedom from pain and discomfort.Marketers sometimes appeal to consumers’ fears andanxieties about safety to sell their products. After physi-ological and safety needs have been fulfilled, socialneeds—especially love and a sense of belonging—become the focus. Love includes acceptance by one’speers, as well as sex and romantic love. Marketing man-agers probably appeal more to this need than to anyother.The need to belong is also a favorite of marketers,especially those marketing products to teens. Shoes andclothing brands such as Nike, adidas, Tommy Hilfiger,

commercial may have differentinterpretations of the advertis-ing message. One person maybe thoroughly engrossed by themessage and become highlymotivated to buy the product.Thirty seconds after the adends, the second person maynot be able to recall the contentof the message or even theproduct advertised.

Marketing Implicationsof Perception

Marketers must recognize the importance of cues, orsignals, in consumers’ perception of products.Marketing managers first identify the important attri-butes, such as price or quality, that the targeted con-sumers want in a product and thendesign signals—like price—to com-municate these attributes. GibsonGuitar Corporation briefly cut priceson many of its guitars to competewith Japanese rivals Yamaha andIbanez but found instead that it soldmore guitars when it charged more forthem. Consumers perceived that the higher price indi-cated a better quality instrument.19

Marketing managers are also interested in thethreshold level of perception: the minimum difference ina stimulus that the consumer will notice.This conceptis sometimes referred to as the “just-noticeable differ-ence.” For example, how much would Apple have todrop the price of its iPod Shuffle before consumersrecognized it as a bargain—$25? $50? or more? Onestudy found that the just-noticeable difference in astimulus is about a 20 percent change. That is, con-sumers will likely notice a 20 percent price decreasemore quickly than a 15 percent decrease.This market-ing principle can be applied to other marketing vari-ables as well, such as package size or loudness of abroadcast advertisement.20

Another study showed that the bargain-pricethreshold for a name brand is lower than that for astore brand. In other words, consumers perceive abargain more readily when stores offer a small dis-count on a name-brand item than when they offer thesame discount on a store brand; a larger discount isneeded to achieve a similar effect for a store brand.21

Researchers also found that for low-cost groceryitems, consumers typically do not see past the seconddigit in the price. For instance, consumers do not per-ceive any real difference between two comparablecans of tuna, one priced at $1.52 and the other at$1.59, because they ignore the last digit.22

Marketing managers who intend to do business inglobal markets should be aware of how foreign con-sumers perceive their products. For instance, in Japan,product labels are often written in English or French,

motivea driving force thatcauses a person to takeaction to satisfy specificneeds

Maslow’s hierarchyof needsa method of classifyinghuman needs and moti-vations into five cate-gories in ascendingorder of importance:physiological, safety,social, esteem, and self-actualization

Self-actualization needsSelf-development,

self-realization Esteem needsSelf-esteem,recognition,

status

Social needsSense of belonging, love

Safety needsSecurity, protection

Physiological needsHunger, thirst

Exhibit 5.5Maslow’s Hierarchy of Needs

Consumer Math$1.52 = $1.59

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conscious consumers that theirsales are generally unaffectedby economic downturns.

The highest human need isself-actualization. It refers tofinding self-fulfillment andself-expression, reaching thepoint in life at which “people are what they feel theyshould be.” Maslow felt that very few people everattain this level. Even so, advertisements may focus onthis type of need.

LearningAlmost all consumer behavior results from learning,which is the process that creates changes in behavior

through experience and practice. It isnot possible to observe learningdirectly, but we can infer when it hasoccurred by a person’s actions. Forexample, suppose you see an adver-tisement for a new and improvedcold medicine. If you go to the storethat day and buy that remedy, weinfer that you have learned some-thing about the cold medicine.

There are two types of learning:experiential and conceptual.Experiential learning occurs when anexperience changes your behavior.For example, if the new cold medi-cine does not relieve your symp-toms, you may not buy that brandagain. Conceptual learning, which isnot acquired through direct experi-ence, is the second type of learning.Assume, for example, that you are standing at a soft drinkmachine and notice a new diet flavorwith an artificial sweetener. Becausesomeone has told you that diet bev-erages leave an aftertaste, youchoose a different drink. You havelearned that you would not like thisnew diet drink without ever trying it.

Reinforcement and repetitionboost learning. Reinforcement can bepositive or negative. If you see a ven-dor selling frozen yogurt (stimulus),buy it (response), and find the yogurtto be quite refreshing (reward), yourbehavior has been positively rein-forced. On the other hand, if you buya new flavor of yogurt and it does nottaste good (negative reinforcement),you will not buy that flavor of yogurtagain (response). Without positive ornegative reinforcement, a person willnot be motivated to repeat the behav-ior pattern or to avoid it. Thus, if a

Gap, JNCO, and Abercrombie & Fitch score high withteenagers, who wear these labels to feel and look likethey belong to the in-crowd.

Whereas love is acceptance without regard to one’scontribution, esteem is acceptance based on one’s con-tribution to the group. Self-esteem needs include self-respect and a sense of accomplishment. Esteemneeds also include prestige, fame, and recognition ofone’s accomplishments. Asian consumers, in particular,are strongly motivated by status and appearance andare always conscious of their place in a group, institu-tion, or society as a whole. The importance of gainingsocial recognition motivates Asians to spend freely onpremium brands. Indeed, marketers of luxury productssuch as Gucci, Louis Vuitton, and Prada find thatdemand for their products is so strong among image-

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>>More than one motive may drive a consumer’s purchase. This Asics advertisementencourages consumers to buy sneakers by highlighting an unconventional benefit of running insteadof a more traditional one, like exercise.

learninga process that createschanges in behavior,immediate or expected,through experience andpractice

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attributes and then, through these beliefs, form a brandimage—a set of beliefs about a particular brand. In turn,the brand image shapes consumers’ attitudes towardthe product.

An attitude is a learned tendency to respond con-sistently toward a given object, such as a brand.Attitudes rest on an individual’s value system, whichrepresents personal standards of good and bad, rightand wrong, and so forth; therefore, attitudes tend to bemore enduring and complex than beliefs. For an exam-ple of the nature of attitudes, consider the differingattitudes of American and European consumers towardthe practice of purchasing on credit. Americans havelong been enthusiastic about charging goods and ser-vices and are willing to pay high interest rates for theprivilege of postponing payment. To many Europeanconsumers, doing what amounts to taking out a loan—even a small one—to pay for anything seems absurd.

Changing Beliefs

If a good or service is meeting its profit goals, positiveattitudes toward the product merely need to be rein-forced. If the brand is not succeeding, however, themarketing manager must strive to change target con-sumers’ attitudes toward it. This change can beaccomplished in three ways: changing beliefs aboutthe brand’s attributes, changing the relative impor-

new brand evokes neutral feelings, some marketingactivity, such as a price change or an increase in pro-motion, may be required to induce further consump-tion. Learning theory is helpful in remindingmarketers that concrete and timely actions are whatreinforce desired consumer behavior.

Repetition is a key strategy in promotional cam-paigns because it can lead to increased learning. Mostmarketers use repetitious advertising so that con-sumers will learn what their unique advantage is overthe competition. Generally, to heighten learning,advertising messages should be spread over timerather than clustered together.

Beliefs and AttitudesBeliefs and attitudes are closely linked to values. Abelief is an organized pattern of knowledge that an

individual holds as true abouthis or her world. A consumermay believe that Sony’s cam-corder makes the best homevideos, tolerates hard use, andis reasonably priced. Thesebeliefs may be based on knowl-edge, faith, or hearsay.Consumers tend to develop aset of beliefs about a product’s

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beliefan organized pattern ofknowledge that an indi-vidual holds as trueabout his or her world

attitudea learned tendency torespond consistentlytoward a given object

This ad is trying to change consumerbeliefs about alternative fuel vehicles.

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more difficult than getting them to change brands ofrazor blades. Image, which is also largely intangible,significantly determines service patronage. Servicemarketing is explored in detail in Chapter 11.

The second approach to modifying attitudes is tochange the relative importance of beliefs about anattribute. For years, Cole Haan used boats and cars inits ads for years to associate the brand with activelifestyles, an important attribute for men. Now that itis selling women’s products, its new ads use modelsand emphasize how the products look, an importantattribute for women.23 Marketers can also emphasizethe importance of some beliefs over others. The thirdapproach to transforming attitudes is to add newbeliefs, such as that breakfast cereal is also a greatafter-school snack.

tance of these beliefs, and adding new beliefs.Thefirst technique is to turn neutral or negative beliefsabout product attributes into positive ones. For exam-ple, many consumers believe that it is easier andcheaper to take traditional film to be developed thanit is to print their own digital photos. To change thisbelief, Kodak Corporation has set up kiosks in retailoutlets that let consumers print their digital photosand launched Ofoto.com, a Web site where consumerscan store digital photos and order prints of only theones they want. The kiosks and Ofoto.com eliminatethe need for consumers to purchase a special printerand photo-quality paper.

Changing beliefs about a service can be more dif-ficult because service attributes are intangible.Convincing consumers to switch hairstylists orlawyers or to go to a mall dental clinic can be much

Members of“idea class” > 1.5 million Median income of

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lhm ch05 62-81 - cengage

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