Lecture 7

Consumer behaviour

Page 1

Notes are taken from i)Consumer Behaviour , Blythe J, (1999), Prentice Hall

7. Introduction to Consumer Behaviour Relations.

7.1

Goals.

A goal is an external object to which a motive is directed. Goals differ from drives in that the
goal is external, and pulls the person in a given direction; whereas a drive is internal and
pushes the individual.
In this way a goal acts as an incentive to take a course of action (or refrain as the case may be).
When an individual has a drive which needs to be addressed, there may be a series of goals
which would satisfy the drive.
Thus if bored you might seek something to do to relieve the boredom: you might decide you
need entertainment. This leads to goal choice: play a computer game, ring a friend, watch a
video, channel hop or go shopping in a big department store.

7.2

Risk, uncertainty and heuristics

Surprisingly there is a risk associated with buying products. Some examples are:
Type of risk

Explanation

Examples

Physical risk

The fear of injury from the

product

Buying a car with defective brakes;

buying drugs with unpleasant side
effects.

Financial risk

Losing or wasting money

Buying a car that depreciates quickly;

buying a computer and finding the
price falls to half within three months.

Functional risk

Finding out the product will

not do the job you bought it
for

Buying a car that breaks down

constantly; buying a painkiller that
does not stop the pain; buying a
computer and having to replace the
falty hard drive every two months.

Pschosocial risk

The fear of looking foolish

Buying a suit that friends tnink looks

weird on you; buying a Robin Reliant.

To deal with these risks people learn heuristics. These are simple rules that seem to work
most of the time. Heuristics are subject to alteration in the light of new knowledge.
Heuristics can be used by the consumer to simplify decision making. They may be stored in
the consumers memory, or may be constructed on the spot based on the information received,
but either way they allow the consumer to reach rapid decisions without overstretching his or
her cognitive capacity.
Use of heuristics in the extreme leads to habitual behaviour. For example I go to the same
restaurant on the same night with the same bloke to eat the same meal and have a natter. I
cannot be bothered with scanning a huge menu and have to go through all that decision
making - I am usually too tired and simply want to enjoy the company.
Some customers may have less rigid heuristics but they may still be a barrier to purchasing. A
customer has the price of 1000 as the most he or she will pay for a computer. This may be so
strong that a good value for money machine at 1,200 will be spurned in order to buty one
which is only half as good for 800.
Notes are from The Essence of Consumer Behaviour, Blythe J , (1999), Prentice Hall
Morris

Brian

Lecture 7

7.3

Consumer behaviour

Page 2

Life as theatre

People create and project images of themselves to other people; these images are called roles.
The role may change according to the circumstances and environment which the individual is
in. Role playing behaviour is natural, and not consciously carried out. It is true that people
may unconsciously change their accents, movements and statements to fit in with the people
around them. Indeed behavour in groups if acceptable often results in the conferment of
status.
Erving Goffman developed a useful analogy for the role playing behaviour when he
developed his idea, or analogy, of life-as-theatre. This is illustrated by the table below.
Theatrical
terms

Explanation

Real-life example

Props

Items used to make gestures, or to

support and emphasis movement,
or to set a scene.

Cigarettes, walking-sticks,
furniture and ornaments.

Costume

Items of clothing which serve to

establish a role, or set a scene

Sportswear, business suits,

power dressing

Stage

The place where the performance

is held, and where the audience is
assembled.

Offices, living rooms, pubs,

churches.

Backstage

The place where the dressing

rooms are; where the actors
prepare for their performance, and
where they meet their friends and
intimates.

Where the individual lives or

is relaxed; home; where the
persons friends and intimates
can visit.

Make-up

The face the actor puts on to

emphasise the characterisation.

Cosmetics, perfumes,
aftershave, hairdressing.

Script

A pre-planned set of statements

intended to communicate the role
to the audience.

Jokes, sayings, conversational

styles, professional jargon.

Business

The movements actors make in the

course of playing the role.

Gestures, body language, facial

expressions used to convey
emotions and ideas.

Applause

Feedback from the audience;

confirmation that the role
projection has been effective.

Getting your way in business

negotiation, having friends
laugh at your jokes, having a
conversational response from a
friend.

However, Goffman goes to great lengths to emphasise that the role-playing is actually part of
the real everyday lives of real people, not the contrived parts played by actors.

7.4

Personality

Personality is the collection of individual characteristics that make a person unique, and
which control an individuals responses to and relationship with the external environment. It
is a composite of subordinate processes: e.g. attitude, motivation, perception. It is the whole
of the person and is the system that governs the behaviour rather than the behaviour itself.

Notes are from The Essence of Consumer Behaviour, Blythe J , (1999), Prentice Hall
Morris

Brian

Lecture 7

Consumer behaviour

Page 3

The elements that make up the behaviour are called traits. Considerable effort has gone into
identifying traits and relating them to consumer buying behaviour. The totality of the traits
(i.e. the personality ) dictates buying behaviour rather than any one trait.
Personality has the following features:

It is integrated: that is to say, all the factors making up the personality act on each
other to produce an integrated whole.

It is self-serving. The characteristics of personality facilitate the attainment of

needs and goals. In other words, the personality exists to meet its own needs.

Personal characteristics are individualistic and unique, in degree and intensity as

well as presence. The number of traits is large and the combinations of traits are
huge, thus making each person unique.

Personality is overt. External behaviour is affected by personality. In other words

by observing a persons behaviour, the personality can be deduced, albeit
indirectly.

Personality is consistent. Once a persons basic personality has been established,

it will change only slowly and with some difficulty. Thus we can assume an
individuals personality will remain constant throughout the buying process.

Because people are individuals it is difficult for marketers to take a standardised approach.
For this reason attempts have been made to identify groupings of personality types which can be
approached with a standardised offering.

7.5

Approaches to the study of personality

There are four basic approaches to the study of personality:

1. Pschoanalytic

The psychoanalytic approach emphasises psychanalysis. The focus is

individual. This approach is typified by Freudianism.

2. Typology

Here individuals are grouped according recognised types.

3. Trait & factor theories. Here the individual traits of the personality are examined as factors
making up the whole.
4. Psychographics

The consumers are measured using their behavioural tendencies in order

to infer personality traits.
7.5.1 The psychoanalytic or Freudian approach.
In this approach personality is understood in terms of the id, ego and superego.

Cons cious mind

- Day to day
operations

EGO

ID:
Basic drives

SUPEREGO:
Conscience

S ubcons cious
mind Blow conscious
level - dreams.

Notes are from The Essence of Consumer Behaviour, Blythe J , (1999), Prentice Hall
Morris

Brian

Lecture 7

Consumer behaviour

Page 4

According to Freud, the id is the underlying drive of the psyche. It is sometimes called the
psychic energy. It is the source of the most basic, elemental, instinctive forces. It largely
operates below the conscious level. The ego is the conscious self. It is the part of the mind
that makes the day-to-day decisions which lead to satisfaction of the id. The superego is an
internalised parent, the conscience that holds us back from selfish gratification of the ids
needs.
Thus the ego is constantly making compromises between the ids demands and the
superegos restraints.
The Freudian approach led to motivation research, which tried to explain the underlying
reasons for buying. However this became discredited because its claims were too fantastical.
However a current spin off from this approach is the focus group. In this a group of ten or so
people (called respondents) are interviewed together and asked to discuss their feelings and
motivations collectively. The advantage is that the respondents will stimulate each other and
there is less risk of the interviewer introducing bias.
Another spin off is the notion of hedonistic consumption. This appeals to the id : it purports to
satisfy animal needs. An example is the Club 18-30 holiday company.
7.5.2 Typology.
Followers of Freud had to adapt their thinking and a leader here was Jung. He classified
people into two groups (i) introverts (preoccupied with themselves and the internal world)
and (ii) extroverts (pre-occupied with others and the outside world). This was an early
attempt to classify people into broad types. The process was continued by the mother and
daughter team Kathryn Briggs and Isabel Myers. They developed the Myers-Briggs Type
Indicator with four personality dimensions:

Extrovert / introvert, Sensing / intuitive, Thinking / feeling, Judging /

perceptive

The combinations of these dimensions creates sixteen different types (2x2x2x2 = 16). An
example may be used to illustrate this: What is an ESFJ? An ESFJ person is warm hearted,
talkative and popular, and likes harmonious relationships. On the other hand an INTJ is likely
to be quiet, intelligent, cerebral and reclusive.
7.5.3 Trait & factor theories.
Personality is composed of traits or atoms of personality. Traits tend to endure over time.
Those that do change tend to change slowly. Those that do change with age are anxiety level
(which goes down as the the individual gets older), friendliness (which can go either way)
and eagerness for novelty (which tends to go down). Over 18,000 personality traits have been
identified. However this stidy has lead to few concrete results.
7.5.4 Psychographics.
Psycographics is sometimes known as life style studies, since it is concerned with peoples
values and approaches to life. It attempts to relate quantitatively a consumers lifestyle to a
consumers purchase behaviour. Thus an ecologist is more likely to buy a bike; a vegan is
unlikely to buy meat.
This approach combines the strengths of motivation research with those of trait and factor
theories.

Notes are from The Essence of Consumer Behaviour, Blythe J , (1999), Prentice Hall
Morris

Brian

Lecture 7

Consumer behaviour

Page 5

In the UK the Taylor Nelson category of seven lifestyle types is given blow:
Lifestyle type
Sustenance driven
groups; motivated by
the need for security

Belonger

Survivor

Aimless
Outer-directed group
Conspicuous
consumer
Inner directed
groups; motivated by
self-actualisation

Social resister

Experimentalist
s

Self-explorers

Characteristics
People who believe in the establishment,
traditional family values and patriotism.
Averse to change.
People who are fighting a holding action;
accepts authority, hard working, quiet
traditional. Strong class consciousness
Two main categories: the young unemployed
whose main motivation is short-term kicks,
and the very old whose motivation is simply
day-to-day existence.
Interested in material possessions, taking cues
from reference groups (friends, family).
Followers of fashion.
Caring group, motivated by ideals of fairness
and a good quality of life at the societal level.
Altruistic, concerned with social issues like
ecology and nuclear disarmament.
Materialistic and pro-technology,
individualistic and interested in novelty.
Motivated by self-expression and selfrealisation. Tolerant, able to think big and
look for global, holistic solutions.

Notes are from The Essence of Consumer Behaviour, Blythe J , (1999), Prentice Hall
Morris

% of
popn

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18

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Brian

Lecture 7

7.6

Consumer behaviour

Page 6

Concepts of self

Self-concept is the persons ideas and feelings about him or herself. It has an important role
to play in understanding consumer behaviour, since people buy products which contribute to
the self-concept.
Ofallthepersonalityconceptswhichhavebeenappliedto
marketing,selfconcepthasprobablyprovidedthemost
consistentresultsandthegreatestpromiseofapplication
totheneedsofbusinessfirms(GordonFoxall.)

An example: a woman thinks she is a femme fatal - as a consequence she chooses chic clothes to
enhance her image. Another example: a student thinks he is a looser - as a consequence he or
she rarely washes his tea shirts, wears old scruffy jeans and rarely buys anti-perspirants.
Thusinprojectinganimageapersoncanbecomeasuperworkofartexploitingallfivesenses:sight
(bydressingwell),hearing(byusingvoicewell),smell(bywearingscent),touch(bylookingafterthe
skin,bywearingclothesthatfeelgoodcashmere?)andeventaste(flavouredlipsticks,mouth
washes).Theextenttowhichpeoplewillwanttomakeagoodimpressiondependsonthefollowing
factors:

thedegreeofimportanceattachedtoimpressingtheotherperson

thedegreetowhichtheindividualanticipatesthatthetargetaudiencecanbe
impressed

thecostintimeandmoneyincreatingthedesiredimage.

Selfconceptisalearnedconstruct.Childrentendtolookforrolemodelstoimitate.Childrencanbe
crushedbyadenialoftherolebeingprojected:ifpeoplelaughwhileyouareexperimentingwiththe
coolduderoleyourfavouriteuncleadoptsitisdifficulttorecoverandtrythatroleagain.
Theselfconcepthasfourattributes:
1.
2.
3.

4.

7.7

itislearned,notinnate.
Itisstableandconsistent.Selfperceptionmaychange,selfconceptdoesnot.Thisaccountsfor
brandloyalty,sinceselfconceptinvolvesaviewofwhichproductsfittheimage.
Itispurposeful.Thereisareasonandapurposebehindit.Itistheretoenhanceapaersonsego.
Itisthereforeadvisabletonotattackapersonsbeliefsdirectly.Peoplegetangryoratleast
defensivewhenthishappens.
Theselfconceptisuniquetotheindividual,andpromotesindividualism.

Attitudes

Attitude can be defined as a learned tendency to respond to an object in a consistently

favourable or unfavourable way. Whwether a product will be bought or not depends to a
large extent on a on the consumers attitude towards it. Marketing effort may have to go into
breaking down customers attitudes to product offerings. An example: an anti-racist policy is
introduced in a country yet there is an attitude against it. The attitude must be changed,
slowly and carefully, until people wonder what the problem was.
An attitude is

learned, not instinctive

not behaviour; rather it is a predisposition towards a particuler behaviour

implies a relationship between a person and an object

fairly stable

either positive or negative - you are either for something (direction) with a certain
amount of feeling (intensity).

Notes are from The Essence of Consumer Behaviour, Blythe J , (1999), Prentice Hall
Morris

Brian

Lecture 7

7.8

Consumer behaviour

Page 7

Attitudes are not observable - they are predispositions. They are formed through the
result of ecxperience. For example: I have an attitude problem about the refectory at
Uxbridge. I find it too loud and moronic. The music is a pain. However, I make myself go
there to get a drink or a sandwich. I compare it unfavourably to the relative peace of the
refectory at Osterley. But I realise some students must think it is marvellous.

Culture

Culture is a set of beliefs and values that are shared by most people within a group. The
groupings are usually relatively large. Culture is passed from one group member to another
group member, and is usually passed down from one generation to another. Culture is
learned, subjective and arbitrary. Culture can be understood by looking at food and language.
For example in France cheese is regarded as a delicacy whereas in Japan it is regarded as
rotted milk. Also the French regard snails as a delicacy whereas in Britain it would be
regarded as an offensive meal to offer a guest.
Even when languages are shared there will be differences across a culture. Thus when an
American, speaking in English, talks about wearing pants he is actually taking about trousers.
This creates huge problems for an Englishman shopping for pants in New York.
Most cultures are ethnocentric. They believe their culture is the best culture.
Hofstede [Cultures consequences: International differences in Work-Related Values (sage, 1984)]
carried out a a transnational survey in 66 countries with over 6,000 respondents. He found
there were four dimensions to the national characteristics.
1.

Individualism versus collectivism. In the USA there is strong individualism. The frontier
mentality has taken a hold. Freedom of speech for the individual is enshrined in the first
ammendment. In Holland there are strong individualistic tendencies - it is a land that
tolerates a wide range of sexual orientations. It is on the increase in the UK particularly
with the Generation X (born between mid 1960s to early 1980s). In Japan and Taiwan
there is a strong collectivist culture in which service is appreciated..

2.

Uncertainty avoidance. This is the extent to which a culture will keep rigidly to the rules
and customs in order to reduce uncertainty. A high level of uncertainty avoidance is a
culture where tradition prevails and new ideas are not welcome.

3.

Power distance. This refers to the extent to which the culture favours the centralisation of
power.

4.

Masculinity-femininity. This is the extent to which the culture exhibits traditional male
characteristics of asseriveness, achievement and wealth acquisition over the traditional
feminine attributes of nurturing, concern for the environmentt and concern for the poor.
By this definition America is an example a masculine culture.

7.9

Family life cycle and gender roles

The family is a most powerful influence for decision making and purchasing. Reasons are:

For children the parental influence is the earliest and so colours their perception of all that
follows. Indeed, the super ego can be thought of as an internalised parent.

Parents desire to do the best they can for their children influences the decisions they make
about family purchases. Thus the purchase disposable nappies is an example of 'comfort
for the child'.

Siblings influence each other by the examples they set: the older sibling cares for and
looks after the younger sibling. There are also wider family influences - particularly in
extended families.

Notes are from The Essence of Consumer Behaviour, Blythe J , (1999), Prentice Hall
Morris

Brian

Lecture 7

Consumer behaviour

Page 8

From a marketing viewpoint, the level of demand for many products is dictated more by the
number of households than by the number of families. The relevance of families to marketing
is therefore much more about consumer behaviour than about consumer demand levels.
As a reference group the family is charcterised by these functional characteristics:
a) Face to face contact
Family members see each other every day and interact as advisers, information providers and
sometimes deciders. Other reference groups rarely have this level of contact.
b) Shared consumption
Durables such as fridges and furniture are shared, and despite a strong trend away from
eating together, in the case of food there is collective purchasing. Children even participate in
decision making for some major purchase items such as cars and holidays.
c) Subordination of individual needs
Because consumption is shared, some family members will finf the chosen solution does not
fully meet their needs. This effect of dissatisfaction is quite pronounced in families.
d) Purchasing agent
Because of the shared consumption there will be one family member who does most of the
shopping. Traditionally this is the mother, but increasing there has been the energence of
shopping roles. Teenage children will be given the job of buying staple items on a routine
fortnightly basis. Father may deal with Insurance and Mortgage matters. This is because the
traditional mother role is changing so more must be done by the other parties. This has
implications for marketers. The target for certain marketing communications has changed so
the advertising placements must change too.
The family has its own life cycle as shown in the table below:
Stage of life cycle

Explanation

Single stage

Single people have low earnings, but also have low outgoings so have
a high discretionary income. Tend to be more fashion and recreation
oriented spending money on music, clothes, holidays and eating out.

Newly married
couples

Without children they are often dual-income families and threfore

'well off'.

Full nest 1

When the first child arrives one parent normally stops working, so
income drops dramatically. The baby creates new needs: baby
furnishings, baby food, toys. Savings decline and families are
unhappy with their financial position.

Full nest 2

The youngest child is now over six. Both parents will work outside
the home, perhaps with some career progression. Some recovery in
parental income. Consumption patterns still affected by children:
bikes, piano lessons.

Full nest 3

The youngest child is over eleven. Children have some money e.g.
paper round, work in a shop on Saturday.Family purchase may be a
new car or replacement furniture. Luxury item: childrens private
education.

Empty nest 1

Children have grown up and left home. Couples are at the height of
their careers and earning powers. Low mortgage, luxury holidays.

Notes are from The Essence of Consumer Behaviour, Blythe J , (1999), Prentice Hall
Morris

Brian

Lecture 7

Consumer behaviour

Page 9

Empty nest 2

Main breadwinner has retired so a drop in income. Expenditure more

health oriented. Smaller house and apartment in Spain syndrome.
Chase the sun.

Solitary survivor

If still in the workforce widows and widowers enjoy a good income.

May spend more on holidays.

Retired solitary
survivor

Reduced income and consumption. Has special needs for love,

affection and security. May join clubs.

Gender Roles
There are more women in the population due to greater life expectancy and greater child
mortality among boys. Women's roles have changed greatly in the lastthirty years or so.
Women make most purchasing decisions, earn one third of the family income and make most
decisions regarding the home and children. Major decisions are likely to be made jointly,
with men participating in discussions concerning expenditure. Many males now shop for
food. Fifty years ago this would have been a rarity.
The change in in gender roles comes from the following:

Technology means that most jobs do not require physical strength, so more careers are
open to women.

Mass contraception has freed women from excessive childbearing.

A more oredered society has lead to greater physical security; there is less need for the
male defence role.

More widespread education means that women are not satisfied to stay at home and do
housework.

Marketers must shift their communications to address this changed situation. Thus the Oxo
family advertisement campaign is now no more. A decision was made not to aim at the family
meal table market, since people rarely eat together these days. (Personally, I think this is a
great shame, and is probably due to laziness. A shared mealtime is a great time to talk and
catch up with each other in a family.) Also the power between roles is reflected in the Nissan
series of ads in which a woman punishes a man for borrowing her car: 'Ask before you
borrow it.'
Eventually one might expect gender roles will not be an issue in advertising at all, but since
advertising in part reflects society, this may be some way off. The recent revelations
concerning Sheryl and Paul Gascoigne reveal how far simple gentlemany behaviour has still
to go to reach an acceptable level before the sexes treat each other with mutual respect.

7.10

Newproducts: the diffusion and adoption of innovation.

Products are constantly being superseded by newer, more effectiveproducts. For this reason,
firms seek to develop new products. Firms that do not innovate will , eventually, be only
producing products that are obsolescent.
The product life cycle can be explained in terms of consumer behaviour.

Notes are from The Essence of Consumer Behaviour, Blythe J , (1999), Prentice Hall
Morris

Brian

Lecture 7

Consumer behaviour

Page 10

SALES

Introduction

Growth

Maturity

Decline

Death

TIME
In the introduction and growth stages, the more innovative consumers are adopting the
product. In the maturity phase the more cautious are adopting the product, until finally
another product comes along which has more benefits or which does a better job, and the
consumers switch to the new product. The problem for marketers is knowing how long the
maturity phase will last; This makes it difficult to use the product life cycle as a predictor of of
product obsolescence It does tell us all products will fade away, and marketers sholud
therefore develop new products to repce the old ones as they fall out of favour with the
customer.
The ideal outcome is for the producer to develop products which are culturally anchored
that become part of modern life. Recent examples are the microwave, the video recorder and
the personal computer. None of these would have been in the typical house of twenty years
ago. Such breakthroughs are hard to achieve. Understandably firms have shown great
interest in the processes of innovation, diffusion and adoption.
Adoption
Everett M Rogers postulated that products would be adopted if they possessed most of the
attributes in the table below:
Attribute

Explanation

Examples

Relative
advantage

The product must have

some advantage over the
products already on the
market. It must offer the
consumer a better range of
benefits than the existing
solution.

Before the Sony Walkman was launched,

the only way to to listen to stereo-quality
music was to carry a 'ghetto blaster' on your
shoulder. The Walman replaced this
cumbersome and anti-social device within a
few years.

Compatibility

The product must fit in

with the consumers
lifestyle.

At one time the Welsh valleys had the

highest rate of VCR ownership in the world.
This was due to the high unemployment
and lack of entertainment facilities in the
area, making a video recorder a very
convenient way of providing entertainment.

Complexity

The product must not be

too complex for the
consumer to understand.

Apple Mac scored a great success with

user-frienly software with amusing and
entertaining add-ons. The company made
seriouss inroads into IBM's market, despite
being a smaller company

Notes are from The Essence of Consumer Behaviour, Blythe J , (1999), Prentice Hall
Morris

Brian

Lecture 7

Consumer behaviour

Page 11

Trialability

Products which can be

tried out are more likely to
succeed.

When Daewoo cars were launched in

Britain, several thousand customers wee
invited to test drive the car. Those who
took up the offer were given free videos as
an inducement.

Observability

The more observable the

product, the quicker the
diffusion process. If other
potential consumers are
able to see the product in
use, this is bound to raise
interes in it.

Part of the reason for the Walkman's

worldwide success is that it can clearly be
observed in use. Likewise, new fashion
ideas seem to catch on very quickly. This is
due to the high level of observability.

Adoption.
There have been several models of the adoption process. AIDA is the most famous. This is
given with a futher four (longer) models below.
Attention

Interest

Desire

Action

Evaluati
on

Trial

Adoption

Preferen
ce

Convictio

Legitmati

on

Trial

Adoption

Impleme
nt-ation

Confirma
t-ion

AIDA

Awareness

Interest

Adoption Process
Knowled
Awareness

ge

Liking

Adoption

Hierarchy of effects
Problem
recognition

Awarenes
s

Compreh
en-sion

Attitude

Dissonan
ce

Robertson

Knowledge

Persuasi
on

Decision

Rogers

7.11

Segmentation

Segmentation is concerned with grouping customers who have similar needs and producing
a product ior service that will meet those needs at a profit. It recognises that no single
product will appeal to all customers, consequently it attempts to identify products that will
suit a single segment.

Notes are from The Essence of Consumer Behaviour, Blythe J , (1999), Prentice Hall
Morris

Brian

Lecture 7

Consumer behaviour

Page 12

Before the advent of mass marketing, there was demand for simple basic products. This
meant manufacturers could use long production runs to keep costs down. In these
circumstances undifferentiated marketing was used. It worked well because a standard product
with little choice is better than no product at all. Mass production has great economies of
scale over hand production. A classic example is is clothing. Prior to the industrial revolution
most cloth was woven at home, made at home and people would have one or two changes of
clothing. Exceptionally a suit might be custom made by a tailor. With the advent of the steam
engine and steam-powered looms clothing could be mass produced, sold relatively cheaply
and provide customers with a relatively greater range of choices of style.
This production orientation success was guaranteed by keeping production costs (and hence
prices) low. This approach works well where there is relatively little competition - such as in
certain third world countries. But since the depression of the 1930s the world has slowly
changed as most countries have industrialised. There is now competition around the world.
The majority of clothes sold in the UK now are actually made abroad where production costs
are lower. Even Marks & Spencer has given up on its 'Buy British' policy.
Once people have their core benefits, the market must be segmented to find out how many
people have further needs which may be met by new products and services. Consider the
changes in transportation.
Product type

Core benefits

Other benefits and drawbacks

Horse & carriage

Basic transportation
for owner, passengers
and goods

Easy to maintain, but unreliable. Slow, not

suitable for long distance travel. Expensive. Only
the most prosperous people can buy one.

Model T Ford

Basic transportation
for owner, passengers
and goods

Faster, more reliable, expensive. Standard

engine. Standard seating. Standard colour. As a
consequence servicing is cheap.

Modern Ford
vehicle range

Basic transportation
for owner, passengers
and goods

Reliable, cheap to buy and run, easy to maintain,

fast and suitable for long distance travel.
Available in several different styles, colours and
and engine attributes. Coupled with this is a
wide range of financial services to facilitate
purchase. Optional extras exist e.g. air
conditioning.

Segments are the result of changes in producer/consumer behaviour.

Producers have realised they should produce cars as desirable as possible rather than as
cheaply as possible.
In turn, consumers behaviour is changing. Consumers are usually prepared to pay a premium
price for a product that fits their needs more closely.
By tailoring products more nearly to customers needs, manfacturers are able to charge a little
more. In this way they are able to offset thye extra costs of producing non-standardised
products, and increasing profits as well.
Segmentation.

Notes are from The Essence of Consumer Behaviour, Blythe J , (1999), Prentice Hall
Morris

Brian

Lecture 7

Consumer behaviour

Page 13

Segmentation is an essential precursor to most marketing activities. Identifying a target

group and knowing their needs allows us to position the product correctly in the target
group's minds, and to adopt appropriate promotional strategy, by designing ads that appeal to
the particular group.
The aim of segmentation is to form a mental picture of the organisation's ideal customer, and
to plan everything around that customer. An important step here is to assess the size of the
segment so as to form an opinion whether it is worthwhile producing a specialist product for
those people.
Segments vary ibn size according to the folllowing criteria:
Narrowness of definition of need
There may be a a segment who prefer the colour blue, but this can subdivide into light blue,
metallic blue, navy blue, etc. The narrowere the definition the smaller the segment.
Complexity of the product in terms of features available.
The more features a product has, the more segments it will appeal to and threfore the smaller
the individual segments.
Consumer involvement with the product category
If the product category attracts high-involvement consumers, the segments are likely to be
small and loyal.
With the rise of flexible manufacturing systems it is possible to consider a production run of
size one. Cars can be custom made quite cheaply. Computers can be custom made too. Dell
computers lead the way with their online 'order-and-build' systems. This guarantees every
product pleases everybody a win-win situation. Segmentation increases profitability when
the value to the consumer of the improvements is greater than the cost to the manufacturer of
providing them.
Markets may be segmented in various ways, great skill is required in assessing which method
is most appropriate. The ways are:
demographically -

according to income, age, family size, occupation etc.

psychographically

according to behaviour patterns, attitudes, expectations

geographically -

according to where people live - insurance premiums can reflect the

likelihood of risk in certain areas e.g. a house near the sea might be more
liable to wear and tear and therefore more expensive to insure

behaviourally -

according to patterns of behaviour e.g. do the customers have four

holidays a year if so they might be more intereseted in all year travel
insurance; are the customers in a segment all vegans? if so they might like
to have the special vegan catalogue from Harrods.
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Notes are from The Essence of Consumer Behaviour, Blythe J , (1999), Prentice Hall
Morris

Brian