Consumer behaviour
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53
demographic segmentation
Types of market segmentation
Product lifecycle
school of research
Denition of consumer behaviour
Positivist approach assumptions
Interpretivist approach assumptions
Dierence between consumer and customer
age sex socio-economic status (SES) geodemographic segmentation
geographic demographic psychological segmentation by usage seg
mentation by benet
introduction growth maturity saturation decline
positivist interpretivist
The mental, emotional and physical activities that people engage in
when selecting, purchasing, using, and disposing of products and se
rvices so as to satisfy needs and desires.
All behaviour has objectively identiable causes and eects, which
can be isolated, studied and measured. When faced with a proble
m or a decision people process all the relevant information availabl
e to deal with it. After processing this information people make a r
ational decision about the best choice to take or decision to make.
Cause and eect cannot be isolated because there is no single obje
ctive reality everyone can agree on; Reality is an individuals subj
ective experience of it, so each consumers experience is unique;
People are not simply, or always, rational information processors o
r decision makers, because this view takes no account of an individ
uals emotional life (what has been called fantasies, feelings and fu
n).
The term customer usually implies a relationship over time between
the buyer and a particular brand or retail outlet.
 Consumer behaviour
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Demographic trends
Geodemographic segmentation denition
Psychological segmentation areas of behaviour
What did the marketing concept do
Market conditions for segmentation to work
Product characteristics which determine customer response
Levitts Total Product Concept
Areas of risk
The population is ageing. Members of the postwar baby boom are n
ow middleaged. The proportion of young people in the population, e
specially between 1520 years, is declining. Average household si
zes have declined, with a great increase in oneperson households.
Women are having fewer children and giving birth later in life.
Geodemographic implies, this segment is based on the idea that pe
ople who live in the same neighbourhood will tend to be of the sam
e Socioeconomic Status, and where each of the three SES factors of
income, education and occupation will also be similar.
Activities How do people spend their time? (for example, work, ente
rtainment, shopping) Interests What are people most interested in?
(for example, family, job, recreation, food) Opinions How do people
view themselves and their world? (for example, politics, business, e
ducation, the future).
marketing concept did was to provide a focus for a changing produc
er orientation from one of unthinking control and dominance of the
producerconsumer relationship to one of greater sophistication.
identity access size
Relative advantage Compatibility Complexity Trialability Obs
ervability
Generic product. Expected product. Augmented product. Potential p
roduct.
1. Performance will it do what it is supposed to? 2. Financial will
it be worth the money? 3. Physical will it be safe? 4. Time Will it
be time-consuming to return? 5. Social Even if she likes the suit,
will the oce? 6. Psychological Is it me?
 Consumer behaviour
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Actual self image: the traditional concept of how people actually se

e themselves Ideal self image: how people would like to see themse
Types of self image
lves Social self image: how people think others see them Ideal soci
al self image: how people would like others to see them

Personality theories Freudian Neo-freudian Self Trait Brand

Learning is the relatively permanent process by which changes in b

Denition of learning ehaviour, knowledge, feelings or attitudes occur as the result of pri
or experience.

Learning approaches Behaviourist approach Cognitive approach

Types of conditioning Classical (Pavlov) Operant (Skinner)

Component of the socioeconomic status SES education income occupation

Component of psychological segmentation Activities Interests Opinions

Components of segmentation by usage Volume of purchase Frequency of purchase Occasion

 Consumer behaviour
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the process by which an innovation . . . is communicated through c

Denition of Diusion of new products
ertain channels over time among the members of a social system.

distribution of adoption Innovators early adopters early majority late majority laggards

Components of the individual perspective perception personality learning, memory and thinking motivation

People are inherently lazy so they must be motivated by external i

ncentives They will pursue their own goals, which run counter to t
hose of the organisation, so they need extra controls to keep them
Theory X
in line They are quite irrational and incapable of selfdiscipline or s
elfcontrol The rare individuals who are rational, controlled and sel
fmotivated will therefore have to manage others.

People seek meaning and a sense of accomplishment and to exerci

se autonomy and be independent in their work As they are basica
Theory Y lly controlled and selfmotivated they will nd external controls and i
ncentives demeaning If they are only given the chance to do so th
ey will come to regard the organisations goals as their own.

A general term for any part of the hypothetical psychological proce

Denition of motivation ss which involves the experiencing of needs and drives and the beh
aviour that leads to the goal which satises them.

Buying behaviour = Ability + Opportunity + Motivation BB = f(A,O, M)

self-actualisation needs self-esteem needs social needs safety need

Maslow hierarchy of needs
s Physiological needs
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Types of conict approach - approach avoidance - avoidance approach - avoidance

Types of needs achievement aliation power

Instituations that have the most inuence on our socialization family school nation-state

Roles in family purchasing decision iinitiator inuencer decision-maker buyer user gatekeeper

strategies for family conict resolution coercion persuasion bargaining manipulation

Bachelor unmarried person under 35 Newly married under 35, n

o children Full nest I married, youngest child under 6 Full nest II
married, youngest child 612 Full nest III married, youngest child i
Consumer life-cycles stages n teens Empty nest I married, children left home Empty nest II
married, child left home, retired Solitary survivor widow(er), child
ren left home, still working Retired solitary survivor As above but
retired

Sensory Motor Stage (birth to two years) Preoperational Stage (two

Stages of development (Piaget) to seven years) Concrete Operations Stage (seven to eleven years)
Formal Operations Stage (11 years on)

children assimilate new information about the world into their cogni
Denition of assimilation
tive system, their existing way of thinking.
 Consumer behaviour
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childrens existing way of thinking is not suciently complex to let

Denition of adaptation
them make sense of some new information.

threephase model of development I. pre-economic II. micro-economic III. macro-economic

External Inuences on Consumer Socialisation parent school social norms marketing and advertising

Primary and Secondary Groups Formal and Informal Groups Membe

Types of groups
rship and Reference Groups

Exclusivity only a few people should be eligible to acquire it It s

hould be relatively expensive It should be of good quality It sho
Factors inuencing the eectiveness of status symbols
uld be of limited supply It should be used by honoured and respec
ted people

Methods for measuring social class objective subjective reputational

individualism equality humanitarianism youthfulness social conformi

Social values - Ideal factors
ty

materialism progress, achievement and success eciency and prac

Social values - actualities
ticality activity mastery of environment
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attitude components cognitive aective conative

sources of attitudes family peers direct experience

changing Attitudes Mere exposure Persuasive communication. Cognitive dissonance.

parts of the process of communication source of the communication the communication itself the audience

the representative heuristic, the attitude heuristic the availability he

Heuristics used in decision-making
uristic.

Recognising problem Internal information search External informati

Consumer Decision Process
on search Evaluating alternatives Purchase processes

major factors that inuence their choice of store location, layout, merchandising service.

1 Safety. 2 Be informed. 3 Choose. 4 Be heard. 5 A clean environm

Consumer rights
ent. 6 Privacy.
 Consumer behaviour
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Information Gathering Relying on brand loyalty Some ocial seal of

Coping with risks
approval The image of a major new brand The image of the store

Changing circumstances Depleted stock Dissatisfaction with stock M

antecedants causing a consumer to act on a problem
arketing inuences Product add-ons

Absolute threshold, marks the dierence between sensing and not s

Threshold of awareness denition
ensing

Just noticeable dierence Minimum amount of dierence one can detect

price just noticeable threshold 15 to 20%

Common properties of the sense Threshold of awareness Sensory adaptation

Illusions Figure and ground Grouping Closure

Gestalt psychology Whole is more than the parts, we search for meaning, patterns
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Perceptual constancy Our perception of things remain constant.

pick out something familiar in a new object and then equate its simi
The Representative Heuristic
larity with one we know.

Starting o with liking or disliking a product then believing what we

The Attitude Heuristic
would want to be true about it,

estimating the likelihood of something occurring using the availabilit

Availability Heuristic
y of relevant data from our memory.

the way we perceive things against a background; the way we need

Illusion - gure and ground
a background before we can pick out an object in the environment.

Illusion - grouping we structure our perceptions is by grouping things into patterns.

If certain things are familiar to us our perceptual process will close

Illusion - closure the gaps in the picture, thereby providing the necessary contour lin
es for us to perceive it as a distinct object.

Because of this need to complete an incomplete picture, things that

Zeigarnik Eect we cannot complete tend to bother us, and therefore stick in the m
emory.
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All human behavior can be reduced to consumerism, such as a doct

Reductionist Approach: or-patient relationship. What is missing is the psychological content
of the relationship.

Uses 40 categories to divide up Americas zip code districts From the

PRIZM
Blue Blood estates to Public assistance to Grain Belt.

ACORN Devides Britain into 38 types of Neighborhoods.

Traditionalists, devoted to husband children and home is a churchgo

Thelma:
er has no higher education and watches a lot of TV. 25%

Chic suburbanite, Highly educated and sophisticated reads and watc

Candice:
hes little TV. 20%

Militant mother, Maried young and has children. Husband has insec
Mildred: ure job, not happy with her lot, listens to rock and watches a lot of
TV. 20%

Contented housewife, a younger version of Thelma but without the

Cathy: religion avoids news and looks for wholesome family entertainment.
18%

Elegant socialite, Big city version of Candice through career rather

Eleanor:
than community. 17%
 Consumer behaviour
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(Values and Lifestyles) The most elaborate psychological segmentat

ion classication. Was carried out in the 70s and classied America
VALS:
ns into 9 categories such as Survivor, sustainer, believer, belonger,
struggler. Updated in the 80s VALS-2 reduced to 8 categories.

Pressures that lead companies to the development of new products 1. Declining birth rates. 2. Technological innovation the shortening o
: f PLCs. 3. Pressure of organizational change and renewal.

The most potent secret lies in changing some aspect, however sma
Successful Innovation ll, of the way society is organized, which results in satisfying a dem
and that consumers were perhaps unaware that hey had.

1. Continuous: Modications to existing products, new models and

3 main types of Innovation
avors. New model car, a new avor of yougurt. 2. Dynamically Con
tinuous: Requires more change in consumer behavior. Can be the
modication of an existing product or the creation of a new one. Co
mpact disks, new foods. 3. Discontinuous: Requires a new form of c
onsumer behavior. The rarest innovations but th ones with the grea
test social impact. Telephone, Radio, TV.

The human personality is made up of the id, ego and superego. a. I

d raw impulses of sex and aggression. Unconscious. b. Ego ratio
1. Freudian Psychoanalysis nal conscious thinking part of our personality. c. Superego Uncons
cious, deals with morality our conscience. Responsible for our feelin
gs of guilt.

a. Oral Stage Lack of Satisfaction produces a hostile sarcastic per

sonality and to much satisfaction a dependant gullible personality. b
. Anal Stage Strictness leads to an anal personality and laxness le
Freuds Developmental Stages
ads to disorder and messiness. c. Phallic Stage is crucial to deter
mining ones attitudes towards people of the opposite sex and positi
ons of authority.

Felt that Freud gave to much importance to biological drives. Neo-Fr

eudians tend to de-emphasize the id in favor of the Ego. Karen Hor
1. Neo- Freudian Psychoanalysis ney states that people can be classied according to their relations
hips with others: 1. Compliant 2. Aggressive 3. Detached This is me
asured on a CAD personality scale.

Centered on the work of Carl Rogers. People try to live up to their

potential. The fact that their potential so often remains unfullled is
due to the oppressive eects of family school and other social instit
1. Self Theory
utions that shape the lives of the subjects. Rogers believes that pe
ople are basically rational and are motivated to be the best that the
y can be.
 Consumer behaviour
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The leading theorist is Raymond Cattell. He states that we all have
characteristics called traits that are shared but we all dier on the s
trengths of various traits. Cattel eventually came up with a list of 1
1. Trait Theory: 6 dierent factors on which he bases personality proles. His perso
nality test known as the 16PF is now widely used in job selection an
d vocational guidance. Cattell suggests that there are 3 important s
ources of personality data: Life data, self-report questionnaire data,
and objective data from personality tests.

A more modest and attainable approach in marketing is the develo

Brand Personality pment of a brand personality. To give a product characteristics such
as old fashioned, elegant rugged or masculine.

The dog would salivate not only at the usual bell but also at other b
Stimulus Generalization
ells with a similar sound.

The dog can be trained not to salivate at certain bells and salivat
Stimulus Discrimination
e at the sound o others.

Training using conditional techniques. Positive Reinforcement Pr

ess the bar to get a reward. Extinction Remove the reward to sto
Operant Conditioning
p the behavior. Negative reinforcement Press the bar to avoid pai
n. Punishment Giving pain after an undesirable action.

It is important at all cost that consumers are not punished (get a b

ad product) after a purchase. There is no cheaper form of positive r
Consumer Applications of Operant Conditioning
einforcement than saying thank you or following up with a thank yo
u note.

Was founded By Wolfgang Kohler. The cognitive school emphasizes

the importance of knowledge and insight. The greatest advantage o
f an insightful solution is that unlike trial and error learning it can b
The Cognitive Approach
e applied to new situations. There is a link between the psychology
of perception and the psychology of learning, the concept of memo
ry.

1. You register a stimuli. Less than a second. 2. Short term memory

The process of committing to memory seems to involve 3 distinct s . Decide whether you want to remember the stimuli. Up to 30 secon
tages. ds. 3. Long term memory. The information is processed, repeated o
r rehearsed so that it sticks.
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Making Learning Meaningful
Repetition has diminishing returns. May be very eective when ther
e is little competition but may cancel each other out when there is
a lot of competition. Visuals are very eective. That is why symbol
s are used to represent brands. Self-referencing The act of relatin
g information to ones own life. Mnemonics Breaking information d
own into groups and associating each group of information to a trig
ger. Meaningfulness We learn things by linking them to thing that
we already know. We organize our memories into packages called s
chemas. Modeling Seeing other people doing something and using
them as models for our own behavior.

There is no evidence that needs can be created, however existing n

Creating Needs
eeds can be stimulated.

The use of symbols to represent products. Symbols are much more

powerful than words. It is hard to tell what a symbol means to a pa
Semiotics
rticular individual. Even Freud said sometimes a cigar is just a cigar.
Remember the prunes example and what they represent.

A group of two or more people living together who may be related

What is a Family?
by blood, marriage or adoption.

Nuclear Family Immediate Family.

Extended Family Grandparents cousins and the list goes on.

The extended family is now pretty rare in western countries. It is no

Changes in Family w also pretty rare for the man to be the sole bread winner. The rate
of divorce has also increased.

Households are based on where people live together rather than wi

Households th whom. People living together in institutions are not considered h
ouseholds. People who live alone are considered a household.
 Consumer behaviour
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Parents do not give specic training in this area they act as role mo
dels. Co-shopping usually is a mother child thing and it is a useful w
ay to spend time together in todays busy world. On these trips chil
Consumer Socialization dren learn about budgeting, choosing between products, brands an
d quality. Co-shopping once again is a two way process. Children m
ay become role models for their parents when shopping for such st
u as VCRs and CDs.

Primary groups are small face to face groups, typically around 4 to

Primary groups 8 people. Most of us belong to several such groups as these at any
given time.

Secondary groups are to large to be considered primary usually ab

Secondary groups ove 20 people. Members of a dental association or of religions are
examples.

Unintended group inuence Couples tend to have similar patterns o

f consumer behavior to each other, patterns that are systematically
Properties of Group Life
dierent fromother couples who met in dierent kinds of neighborh
oods. This is an extension of Geodemographic segmentation.

1. There is an ongoing personal relationship. 2. The other person is

an expert or knowledgeable in the eld. 3. You do not personally ha
Conditions Necessary for someone to exert consumer inuence:
ve the information to evaluate the product. 4. You do not trust the
vendors sale pitch.

1. Most of us feel uncomfortable if our buying behavior is out of st

Conformity and consumer Norms
ep with the people around us for example not owning a TV. 2. Peopl
e who do not mind such conformity are likely to be opinion leaders.
Especially of new products and innovations. 3. It might just take the
support of one other person to make conformity resistable. 4. Most
of us accept some silly opinions if they seem to be the norm of our
group. For example Bermuda shorts are attractive. The whole fashi
on industry is based on this.

The buying of products for what they stand for so as to claim status
. Having a carpet in your oce or the key to the executive lavatory
can be a matter of great importance to people. It is also a cheap w
Conspicuous Consumption
ay for companies to reward employees. People settle for symbols o
f status. For example organized crime gives to charity in order to g
et respect.

1. Stable once formed will keep that form. 2. Long Lasting will b
e stable over years. 3. Learned we are not born with it. 4. Predisp
Attitude
osition to respond links to the actual behavior. 5. In a certain way
emphasizes consistency.
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1. Classical conditioning 2. Stimulus generalization Heinz 57 variet

Forming Attitudes ies. 3. Stimulus discrimination To negate the eects of me to prod
ucts. 4. Operant conditioning or reinforcement 5. Cognitive learning

Low consumer involvement use an advertising blitz or conditionin

g. Increasing involvement - Try to increase the consumers involvem
ent by associating the product with a political cause or health conce
Strategies for changing attitude rn. Involvement Use the multi-attribute model a. Change beliefs
anything that claims to last the longest, be the most reliable or giv
e the best value for the money. b. Changing Evaluations Changing
the way a consumer evaluates a product. For example baked beans
have always been cheap and convenient but when consumers disco
vered
1. that they
Credibility were
The high in ber should
communicator and healthy the way as
be perceived they
an were e
expert
valuated
and changed.
trustworthy. c. Changing
Arguing againstbeliefs and interests
ones own evaluations Removing
is especially e
or adding
ective! Fastattributes. Addingseem
smooth talkers ber to
tobe
bread or removing
perceived as more caeine fro
credible.
The two most important factors in changing peoples attitudes are: m coee. Adding vitamins to milk and removing its fat
Sleeper eect a not so credible spokesperson gives a message. A content.
fter time the sender is forgotten but the message remembered. 2.
Attractiveness Using celebrities. It is said that this technique work
s only up to a point on trivial issues.

1. Reason or Emotion Modern research looks more into the eects

of dierent levels of emotion rather than the distinction between th
e two. It seems to be the combination of high emotional arousal plu
key questions are considered in evaluating the eectiveness of the s specic instructions on what to do that is most eective. 2. Image
message: s or Statistics Apparently the vividness of an individual picture is
much more persuasive than words. All the cracks adding up to the s
ize of a basketball. 3. One sided or two sided argument - For uninfo
rmed people or people that share the same opinion the one sided a
rgument approach
1. Self-Esteem It is morethat
seems eective.
peopleFor well
with lowinformed people
self-esteem are or
mucpe
ople
h that
more dont share
susceptible to the same opinion
persuasion. the twotosided
This seems concurapproach is m
with Milgam
ore
s eective.
and 4. Primacy
Aschs studies. or Recency
2. Social approvaleect There
Allied is an obvious
to self-esteem re
is n
Factors which eect the way the audience will perceive a message levance
ding to the
people whotiming
have of adds onfelt
a deeply radio
needandforTV with approval.
social relation to3.the ti
Prio
and how they will respond to it: me of the purchasing
r Experience The most decision. 5. Size
important of attitude
factor discrepancy
in audience attitude chan
It is
much easier to and
ge. Inoculation change the attitudes
forewarning. of thecommitment
4. Public target audience when
When peoth
ple make a public ere is only a small
commitment discrepancy.
that jives with group norms rather t
han a private commitment they are more likely to change their beh
avior. Examples are, Kurt Lewins Oal studies. Tupperware parties.
5. Mood a. Content The add should be upbeat and happy. b. Con
Totext
getout
Theofadd
theshould
house.be placed
To in aon
get info program
what is that is upbeat.
available. To m
Why do people go shopping? eet friends. To break up routine. Exercise To feel important as
a household provider.

1. Chooser The most prevalent image. 2. Communicator The ac

ts of buying are nonverbal communication. 3. Explorer Hunting fo
r bargains, exploring. 4. Identity-Seeker Dening who one is throu
9 Images of the consumer:
gh purchases. 5. Hedonist 6. Victim Overcharging manipulation ca
rtels. 7. Rebel Younger people, Tearing jeans. 8. Activist Greens
and boycotts 9. Citizen - Political linked to a community

Family Inuences Social and Developmental Inuences The Inuence

Components of the social perspective of Small Groups The Inuence of Social Class Cultural Inuences Att
itudes
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Exam question: Advertising
1. Model of communication - Encoding - Transmission via medium -
Decoding -feedback 2. Factors aecting persuasiveness of message
- Credibility a. expert b. trustworthy -attractiveness 3. Nature of co
mmunication - approval to reason or emotion - images or stats ar e
more convincing? -message one-sided or two-sided -primacy or rec
ency eect -size of discrepancy in attitude being adressed 4. Natur
e of the audience -self-esteem -need for social approval -previous e
xposure -mood 5. cultural factors - humour or ser 6. perception

Compensatory Non-compensationary Conjunctive Disjunctive Lexico

Decision rules
graphic Elimination