Professional Documents
Culture Documents
1. The Marketing Concept :Marketing and consumer behavior stem from the marketing concept,
which maintains that the essence of marketing consists of satisfying consumers’ needs, creating
value, and retaining customers.
2. The production concept focused on cheap, efficient production and intensive distribution.
a) It assumes consumers are mostly interested in product availability at low prices.
b) It works if consumers are more interested in obtaining the product than in getting the
features they really want.
3. The product concept assumes consumers will buy the product that offers the highest quality, the
best performance and the most features.
a) A product orientation leads companies to focus on quality and add features if feasible (vs. if
desired by the end consumer).
b) A product orientation may lead to marketing myopia, or a nearsighted focus on the product
and its direct competitors vs. the market’s needs.
4. The selling concept maintains that marketers should sell the products they have decided to
produce.
Consumer Research
1. Consumers are highly complex individuals, subject to a variety of psychological and social needs
quite apart from their basic functional needs.
a) The needs and priorities of different consumer segments differ dramatically.
b) The objectives of a company should be to target different products and services to different
market segments in order to better satisfy different needs.
c) In order to design new products and marketing strategies that would fulfill consumer needs,
they had to study consumers and their consumption behavior in depth.
2. The term consumer research represents the process and tools used to study consumer behavior.
1. The marketing mix consists of a company’s service and/or product offerings to consumers and
the methods and tools it selects to accomplish the exchange.
2. Four basic elements (known as the four Ps) include:
a) The product or service —features, designs, brands, packaging, post-purchase benefits, etc.
b) The price—list price (including discounts, allowances, and payment methods).
c) The place—distribution of the product or service.
d) Promotion—advertising, sales promotion, public relations, and sales efforts designed to
build awareness of and demand for the product or service.
3. Socially responsible marketing suggests marketers would be better off if they integrated social
responsibility into their marketing strategies because companies prosper when society prospers.
a) The societal marketing concept requires marketers to fulfill the needs of the target audience
in ways that improve, preserve and enhance society’s well-being while simultaneously
meeting their business objectives.
b) Some marketers ignore laws and market potentially harmful products (e.g. Monster
Beverage Corp.)
c) Some companies incorporated social goals into their mission statements because they
believe it is important for organizational effectiveness.
d) Non-profit organizations also advance causes they believe are ethically and morally right.
Customer value is defined as the ratio between the customer’s perceived benefits
(economic, functional, and psychological) and the resources (monetary, time, effort,
psychological) used to obtain those benefits.
1. Customer satisfaction is the individual’s perception of the performance of the product or service
in relation to his or her expectations.
2. The overall objective of providing value to customers continuously and more effectively than the
competition is to have and to retain highly satisfied customers. This strategy of customer
retention makes it in the best interest of customers to stay with the company rather than switch
to another company.
3. is more expensive to win new customers than to retain existing ones for several reasons:
a) Loyal customers buy more products and constitute a ready-made market for new models of
existing products as well as new ones, and also represent an opportunity for cross-selling.
b) Long-term customers who are thoroughly familiar with the company’s products are an
important asset when new products and services are developed and tested.
c) Loyal customers are less price-sensitive and pay less attention to competitors’ advertising.
Thus, they make it harder for competitors to enter markets.
d) Servicing existing customers, who are familiar with the firm’s offerings and processes, is
cheaper. It is expensive to “train” new customers and get them acquainted with a seller’s
processes and policies. The cost of acquisition occurs only at the beginning of a relationship,
so the longer the relationship, the lower the amortized cost.
e) Loyal customers spread positive word-of-mouth and refer other customers.
f) Marketing efforts aimed at attracting new customers are expensive; indeed, in saturated
markets, it may be impossible to find new customers. Low customer turnover is correlated
with higher profits.
g) Increased customer retention and loyalty make the employees’ jobs easier and more
satisfying. In turn, happy employees feed back into higher customer satisfaction by providing
good service and customer support systems.
4. Technologies often enhance customer relationships and retention by engaging consumers with
brands.
a) Emotional bonds represent a customer’s high level of personal commitment and
attachment to the company.
b) Transactional bonds are the mechanics and structures that facilitate exchanges between
consumers and sellers.
c) Social media include means of interaction among people in which they create, share and
exchange information and ideas in virtual communities and networks.
5. Emotional and transactional motives should be discerned to understand drivers of customer
satisfaction, which leads to retention and long-term relationships.
a) Determinants of customer satisfaction online include adaptation, interactivity, nurturing,
commitment, network, assortment, transaction ease, engagement, loyalty, inertia and trust.
b) Table 1.1 applies a four-way categorization of transaction-based and emotional bond-based
customer relationships with marketers to Amazon’s customers.
6. Customers who are highly satisfied or delighted keep purchasing the same products and brands,
provide positive and encouraging word-of-mouth to others, and often become life-long
customers.
7. With respect to customer satisfaction there might be several types of customers:
a) Loyalists—completely satisfied customers who keep purchasing.
b) Apostles—those whose experiences exceed their expectations and who provide very
positive word of mouth about the company to others.
c) Defectors—those who feel neutral or merely satisfied and are likely to stop doing business
with the company.
d) Terrorists—those who have had negative experiences with the company and who spread
negative word of mouth.
e) Hostages—unhappy customers who stay with the company because of no choice (or other
reasons).
f) Mercenaries—very satisfied customers but who have no real loyalty to the company and
may defect.
8. Companies must develop measures to assess customer retention strategies, which may include:
a) Customer Valuation
b) Retention Rates
c) Analyzing Defections
Chapter 2
Segmentation, Targeting, and Positioning
INTRODUCTION
1. Market segmentation is the process of dividing a market into distinct subsets with common needs
and characteristics that are different from those shared by other groups.
2. Targeting consists of selecting the segments that the company views as prospective customers
and pursuing them.
3. Positioning is the process by which a company creates a distinct image and identity for its
products, services and brands in consumers’ minds.
1. Segmentation and targeting enable producers to avoid head-on competition in the marketplace
by differentiating their offerings on the basis of such features as price, styling, packaging,
promotional appeal, method of distribution, and level of service.
2. This approach is generally more profitable.
3. Services also segment their markets and target different offerings to different market segments.
4. Marketers use segmentation research to identify the most appropriate media in which to place
advertisements.
5. Criteria for Effective Targeting: To be an effective target, a market segment should be: identifiable,
sizeable, stable or growing, accessible, and congruent with the marketer’s objectives and
resources.
a) Identifiable: If segments are separated by common or shared needs or characteristics that
are relevant to the product or service, a marketer must be able to identify these
characteristics. Some segmentation variables such as demographics are easy to identify,
while others such as benefits sought, more difficult.
b) Sizeable: In order to be a viable market, a segment must consist of enough consumers to
make targeting it profitable.
c) Stable and Growing: Marketers prefer segments that are stable in terms of lifestyles and
consumption patterns and that are likely to grown larger and more viable in the future.
d) Reachable: To be targeted, a segment must be accessible, which means that marketers must
be able to reach that market segment in an economical way.
e) Congruent with the Company’s Objectives and Resources: Not every company is interested
or has the means to reach every market segment, even if that segment meets the four
preceding criteria.
6. Applying the Criteria: Perry & Swift, and investment management firm, used 2011 P$YCLE
Segments.
1. Characteristics used for segmentation can generally be classified into two types: behavioral and
cognitive.
a. Behavioral data is evidence-based and can be determined from direct questioning.
i. Consumer-intrinsic factors include age, gender, marital status, income and
education
ii. Consumption-based factors include quantity of product purchased, frequency of
leisure activities, or frequency of buying a given product
b. Cognitive factors are abstracts reside in the consumer’s mind, do not have universal
definitions, and can only be determined via psychological and attitudinal questioning.
i. Consumer-intrinsic factors include personality traits, cultural values, and attitudes
towards politics and social issues
ii. Consumption-based factors include attitudes and preferences, such as benefits
sought from products and attitudes regarding shopping
2. Demographic segmentation divides consumers according to age, gender, ethnicity, income and
wealth, occupation, marital status, household type and size, and geographic location.
a. The core of almost all segmentations is demographics because:
i. Demographics are the easiest and most logical way to classify people and can be
measured more precisely than other segmentation bases.
ii. Demographics offer the most cost-effective way to locate and reach specific
segments because most of the secondary data compiled about any population
stems from demographics.
iii. Demographics enable marketers to identify business opportunities in the form of
shifts in age, income distribution, and populations of various regions.
iv. Many consumption behaviors, attitudes, and media exposure patterns are
directly related to demographics.
b. Age: product needs often vary with consumers’ age, and marketers commonly target age
groups.
c. Gender is a factual distinguishing segmentation variable, and many products and services
are inherently designed for either males or females. However, sex roles have become
blurred.
d. Families and Households: segmentation is based on the premise that many families pass
through similar phases in their formation, growth, and final dissolution. At each phase,
the family unit needs different products and services.
i. Family life cycle is a classification stemming from factual variables including
marital status, employment status, and the presence or absence of children in the
household.
ii. Each stage in the traditional family life cycle represents an important target
segment to many marketers.
e. Social class can indicate an ability or inability to pay for a product model or brand, and
consumers of different social classes vary in terms of values, product preferences and
buying habits.
i. Income is combined with other demographic variables to define target markets.
ii. Income, education, and occupation tend to be closely correlated.
iii. Social class can be measured as a weighted index of education, occupation and
income
f. Ethnicity: Marketers segment some populations on the basis of cultural heritage and
ethnicity due to shared values, beliefs, and customs. African Americans, Hispanic
Americans and Asian Americans are important subcultural market segments in the U.S.
6. Lifestyles, also known as psychographics, consist of activities, interests, and opinions (AIOS).
a. The interests and opinions portions are cognitive constructs, which can be measured via
surveys but are not evidence-based.
b. Because of their versatility, psychographics are widely used in segmentation and are part
of almost any hybrid segmentation framework.
c. VALS (an acronym for “values and lifestyles”) is the most popular segmentation system
combining lifestyles and values.
d. VALS focuses explicitly on explaining consumer purchasing behavior.
i. VALS includes three primary motivations: ideals motivated, achievement
motivated and self-expression motivated.
ii. VALS also reflects a continuum in terms of resources and innovativeness (Figure
2.7)
7. Benefit segmentation is based on the benefits consumers seek from products and services.
a. Many believe benefits sought are the core of all segmentation strategies.
b. Sought benefits represent unfilled consumer needs whereas buyers’ perceptions that a
given brand delivers a unique and prominent benefit result in loyalty to the brand.
8. Media-based segmentation considers the benefits consumers seek from adopting communication
tools.
9. Usage rate segmentation stems from differences among heavy, medium and light users, and
nonusers of a specific product, service, or brand.
a. Marketers have found that within some product categories that a relatively small group
of heavy users account for a disproportionately large percentage of total product usage.
b. Targeting heavy users is a common marketing strategy, and it can be more profitable than
targeting other user categories.
c. However, since all competitors are likely to target the same heavy users, trying to attract
these buyers requires a lot of expensive advertising.
d. Some marketers prefer to target light and medium users with products that are distinct
from those preferred by heavy users.
e. A sophisticated approach to usage rate involves identifying the factors that directly impact
the usage behavior.
f. Understanding nonusers is essential.
g. Consumers can also be segmented in terms of their awareness status and also level of
involvement.
h. Product involvement is also a segmentation factor.
10. The occasion or situation often determines what consumers will purchase or consume, so
marketers sometimes use usage situation segmentation. Many products are promoted for special
usage occasions.
Behavioral Targeting
1. Behavioral targeting consists of sending consumers personalized and prompt offers and
promotional messages designed to reach the right consumers and deliver to them highly relevant
messages at the right time and more accurately than when using conventional segmentation
techniques.
a. Tracking Online Navigation Includes:
i. Recording the websites that consumers visit.
ii. Measuring consumers’ levels of engagement with the sites (i.e., which pages
they look at, the length of their visits, and how often they return).
iii. Recording the visitors’ lifestyles and personalities (derived from the contents
of consumers’ blogs, tweets, and Facebook profiles).
iv. Keeping track of consumer’ purchases, almost purchases (i.e., abandoned
shopping carts), and returns or exchanges.
b. Geographic location and mobile targeting have been used effectively due to the
prevalence of smartphones and GPS devices.
2. Marketers are using predictive analytics: measures that predict consumers’ future purchases on
the bases of past buying information and other data, and also evaluate the impact of personalized
promotions stemming from the predictions.
1. Positioning is the process by which a company creates a distinct image for its products, services
or brands in consumers’ minds.
2. Marketers have to persuade their target audiences to choose their products vs. competitive
products.
3. The positioning process includes the following steps:
a. Defining the market in which the product or brand competes, who the relevant
buyers are, and the offering’s competition.
b. Identifying the product’s key attributes and researching consumers’ perception
regarding each of the relevant attributes.
c. Researching how consumers perceive the competing offerings on the relevant
attributes.
d. Determining the target market’s preferred combination of attributes.
e. Developing a distinctive, differentiating, and value-based positioning concept that
communicates the applicable attributes as benefits.
f. Creating a positioning statement focused on the benefits and value that the product
provides and using it to communicate with the target audiences.
4. Positioning is especially difficult among commodities, where the physical characteristics of all
the brands are identical, such as water. Nevertheless, marketers offer many brands of mineral
water that range in price and are positioned differently. Table 2.8 describes the positioning
claims, unique benefits, and prices of several brands of bottled water.
5. Umbrella positioning is a statement or slogan that describes the universal benefit of the
company’s offering. At times, this statement does not refer to specific products. (Figure 2.11)
6. Premier positioning focuses on the brand’s exclusivity.
7. Positioning against the competition acknowledges competing brands. (Figure 2.12)
8. Key attribute positioning is based on a brand’s superiority on relevant attributes. (Figure 2.13)
9. Un-owned positioning is when a position is not associated with a product from the category.
(Figure 2.14)
10. Repositioning is the process by which a company strategically changes the distinct image and
identity that its product or brand occupies in consumers’ minds.
a. Companies do so when consumers get used to the original positioning and it no longer
stands out in their minds.
b. Similarly, when consumers begin to view the old positioning as dull, marketers must
freshen up their brands’ identities.
11. Perceptual mapping is constructing a map-like diagram representing consumers’ perceptions of
competing brands along relevant product attributes. Perceptual maps show marketers:
a. How consumers perceive their brand in relation to competition
b. How to determine the direction for altering undesirable consumer perceptions of
their brands
c. Gaps in the form or un-owned perceptual positions that offer opportunities for
developing new brands or products
Chapter 3
Consumer Motivation & Personality
INTRODUCTION
1. Motivation is the driving force that impels people to act/represents the reasons one has for acting
or behaving in a particular way.
2. Needs are circumstances or things that are wanted or required, and they direct motivational
forces.
3. Physiological needs are biogenic needs; fulfilling them sustains physical existence.
4. After people satisfy physiological needs, they become driven by safety and security needs
(physical safety, order, stability, routine and control over one’s life and environment).
5. Personality consists of the inner psychological characteristics that both determine and reflect how
we think and act.
6. Brand personification occurs when consumers attribute human traits or characteristics to a
brand.
7. Anthropomorphism refers to attributing human characteristics to something that is not human.
1. Motivation is a driving force produced by a state of tension, which exists as the result of an unfilled
need.
a) Individuals strive both consciously and subconsciously to reduce this tension through
selecting goals and subsequent behavior that they anticipate will fulfill their needs and thus
relieve them of the tension they feel.
b) Whether gratification is actually achieved depends on the course of action pursued.
2. The foundation of marketing is identifying and satisfying needs.
a) Marketers do not create needs, but strive to make consumers more keenly aware of unfelt
or dormant needs.
b) A corporate focus on developing products that will satisfy consumers’ needs ensures that
the company stays in the forefront of the search for new and effective solutions.
c) Companies that define themselves in terms of products they make may go out of business
when products are replaced by competitive offerings that better satisfy consumers’ needs.
3. There are two types of human needs: physiological needs and psychological needs.
a) Physiological needs are innate (biogenic, primary) and include the need for food, water, air,
protection from the outside environment, and sex; they sustain biological existence.
b) Psychological needs are learned from our parents, social environment and interactions with
others (e.g. self-esteem, prestige, affection, power, learning and achievement).
4. Goals are the sought-after results of motivated behavior, and all human behavior is goal oriented.
There are two types of goals:
a) Generic goals are outcomes that consumers seek in order to satisfy physiological and
psychological needs. (e.g. I want a pair of pants.)
b) Product-specific goals are outcomes that consumers seek by using a given product or
service. (e.g. I want a pair of Calvin Klein jeans.)
5. Marketers try to understand the motivations for social media use because consumers are
spending time on social media and they listen to other consumers.
a) The value of bloggers to marketers is undeniable – they post their experiences and
exposures to brands online where many other users or potential users can hear more about
the brands. Blogging motivations include:
i) Self-expression
ii) Documenting one’s life (i.e., keeping a diary)
iii) Identifying other influential bloggers
b) Facebook motivations include:
i) Information sharing
ii) Convenience and entertainment
iii) Passing time
iv) Interpersonal utility
v) Control
vi) Promoting work
6. Need arousal may be caused by internal stimuli, emotional or cognitive processes, or stimuli in the
outside environment.
7. Consumers set purchase-related goals that satisfy more than one need; people with different
needs may select the same goal; and people with the same needs may seek fulfillment via different
goals.
a) The motivation to select goals can be positive or negative.
b) We may feel a driving force toward or away from an object or condition.
i) Positive outcomes are called approach objects
ii) Negative outcomes are call avoidance objects
8. Needs and goals are interdependent.
a) Neither exists without the other
b) People are less aware of their needs than they are of their goals.
9. Needs are never fully satisfied
a) Needs and goals are constantly growing and changing.
b) As individuals attain their goals, they develop new ones.
c) If they do not attain their goals, they continue to strive for old goals or they develop
substitute goals.
d) People who achieve their goals set new and higher goals for themselves.
10. Frustration is the feeling that results from failure to achieve a goal, and defense mechanisms are
cognitive and behavioral ways to handle frustration. Defense mechanisms include:
a) Aggression
b) Rationalization
c) Regression
d) Withdrawal
e) Projection
f) Daydreaming
g) Identification
h) Repression (Table 3.2)
Systems of Needs
1. Although there is little disagreement about specific physiological needs, there is considerable
disagreement about specific psychological (i.e., psychogenic) needs.
a) In 1938, the psychologist Henry Murray prepared a detailed list of 28 psychogenic needs that
have served as the basic constructs for a number of widely used personality tests and were
organized into five groups:
i) Ambition
ii) Materialistic
iii) Power
iv) Affection
v) Information
b) Allen Edwards developed a self-administered personality inventory.
c) Dr. Abraham Maslow formulated a widely accepted theory of human motivation. Maslow's
theory identifies five basic levels of human needs, which rank in order of importance from
low-level (biogenic) needs to higher-level (psychogenic) needs. Maslow’s hierarchy of needs
theory suggests that individuals seek to satisfy lower-level needs before higher-level needs
emerge.
i) Physiological needs are the first and most basic level of human needs.
a) Physiological needs are those things that are required to sustain biological life:
food, water, air, shelter, clothing, and sex.
b) Physiological needs are dominant when chronically unsatisfied.
ii) Safety and security needs become the driving force behind consumer behavior after
physiological needs have been satisfied.
a) Safety needs include order, stability, routine, familiarity, control over one’s life
and environment.
b) Health and the availability of health care are important safety concerns.
iii) Social needs relate to such things as love, affection, belonging, and acceptance.
iv) Egoistic needs can take an inward or outward orientation, or both.
a) Inwardly-directed ego needs reflect an individual’s need for self-acceptance,
for self-esteem, for success, for independence, and for personal satisfaction
with a job well done.
b) Outwardly-directed ego needs include the needs for prestige, for reputation,
for status, and for recognition from others.
v) Need for self-actualization refers to an individual’s desire to fulfill his or her potential
to become everything he or she is capable of becoming.
d) The major problem with Maslow’s theory is that it cannot be tested empirically; there is no
easy way to measure precisely how satisfied one need is before the next higher need
becomes operative.
e) Maslow’s hierarchy offers a useful, comprehensive framework for marketers trying to
develop appropriate advertising appeals for their products.
i) The hierarchy enables marketers to focus their advertising appeals on a need level that
is likely to be shared by a large segment of the prospective audience.
ii) The hierarchy facilitates product positioning or repositioning because different appeals
for the same product can be based on different needs included in this framework.
2. Another framework is the trio of basic needs: the needs for power, for affiliation, and for
achievement.
a) The power need relates to an individual’s desire to control his or her environment.
i) It includes the need to control other persons and various objects.
ii) This need appears to be closely related to the ego need.
b) The affiliation need suggests that behavior is highly influenced by the desire for friendship,
for acceptance, and for belonging.
i) People with high affiliation needs tend to be socially dependent on others.
ii) They often select goods they feel with meet with the approval of friends.
c) Individuals with a strong achievement need often regard personal accomplishment as an
end in itself.
i) The achievement need is closely related to both the egoistic need and the self-
actualization need.
ii) People with a high need for achievement tend to be more self-confident, enjoy taking
calculated risks, actively research their environments, and value feedback.
iii) Monetary rewards provide an important type of feedback as to how they are doing.
iv) People with high achievement needs prefer situations in which they can take personal
responsibility for finding solutions.
v) Portraying achievement is a useful promotional strategy for many products and services
targeted to educated and affluent consumers.
1. Motives are hypothetical constructs — they cannot be seen or touched, handled, smelled, or
otherwise tangibly observed — so no single measurement method can be considered a reliable
index.
a. Because respondents are often unaware of their motives or are unwilling to reveal them
when asked directly, researchers use qualitative research to delve into consumer’s
unconscious or hidden motivations. (Methods in Table 3.4)
b. Many qualitative methods also are termed projective techniques because they require
respondents to interpret stimuli that do not have clear meanings, with the assumption that
the subjects will reveal or “project” their subconscious, hidden motives into the ambiguous
stimuli.
2. Motivational research, which should logically include all types of research into human motives,
has become a “term of art.”
a. It was first used by Dr. Ernest Dichter.to uncover consumers’ subconscious or hidden
motives.
b. Based on the premise that consumers are not always aware of the reasons for their actions,
motivational research attempts to discover underlying feelings, attitudes, and emotions
concerning product, service, or brand use.
c. Building on the contributions of Dr. Dichter and other earlier motivational researchers,
qualitative consumer research expanded from its focus on Freudian and neo-Freudian
concepts to a broader perspective that embraced not only other schools of psychology, but
included methodologies and concepts borrowed from sociology and anthropology.
1. Personality is defined as those inner psychological characteristics that both determine and reflect
how a person responds to his or her environment.
a) The emphasis in this definition is on inner characteristics—those specific qualities,
attributes, traits, factors, and mannerisms that distinguish one individual from other
individuals.
b) The identification of specific personality characteristics associated with consumer behavior
has proven to be highly useful in the development of a firm’s market segmentation
strategies.
2. The facets of personality: heredity, early childhood experiences, and broader social and
environment influences are thought to influence personality development.
3. In the study of personality, three distinct properties are of central importance:
a) Personality reflects individual differences.
b) Personality is consistent and enduring.
c) Personality can change.
1. Brand personification recasts consumers’ perception of the attributes of a product or service into
the form of a “human-like character.”
a) It appears that consumers tend to ascribe various descriptive “personality-like” traits or
characteristics—the ingredients of brand personalities—to different brands in a wide variety
of product categories.
b) A brand personality provides an emotional identity for a brand, and encourages consumers
to respond with feelings and emotions toward the brand.
c) A brand’s personality can either be functional (“dependable and rugged”) or symbolic (“the
athlete in all of us”).
d) Research studies have found that a strong, positive brand personality leads to more
favorable attitudes toward the brand, brand preference, higher purchase intentions, and
brand loyalty, and is a way for consumers to differentiate among competing brands
2. Anthropomorphism is loosely defined as attributing human characteristics to something that is
not human.
a) A recent study found that the ease with which consumers could anthropomorphize an
offering was a function of how the product was presented to the public and the inclusion or
absence of human-like product features.
b) Products presented as human but which lack human features tend to be evaluated less
favorably by consumers than products that are presented as human and have human-like
attributes.
3. There are five defining dimensions of a brand’s personality and fifteen facets of personality that
flow out of these five dimensions (e.g., “down-to-earth,” “daring,” “reliable,” “upper class,” and
“outdoors”):
a) Sincerity
b) Excitement
c) Competence
d) Sophistication
e) Ruggedness
4. Consumers sometimes develop a relationship with a brand that is similar to the relationships they
have with other humans.
5. A product personality, or persona, frequently means that the product or brand has a “gender.”
6. Consumers associate some brands with geographic locations.
7. Websites have been characterized with four personality traits
a) Intelligent
b) Fun
c) Organized
d) Sincere
Introduction
1. Perception is the process by which individuals select, organize and interpret stimuli into a
meaningful and coherent picture of the world.
2. Two individuals may be exposed to the same stimuli, but each person recognizes, selects,
organizes and interprets the stimuli based on their own needs, values and expectations.
3. Individuals act and react on the basis of their perceptions, not on the basis of objective reality.
a) Reality is a totally personal phenomenon, based on that person’s needs, wants, values, and
personal experiences.
b) Therefore, consumers’ perceptions are more important to a marketer than their knowledge
of objective reality because people make decisions based on their perceptions.
1. Perception is all about consumers’ subjective understandings and not objective realities.
2. Changing a brand’s image, or repositioning, is sometimes necessary when consumers’ subjective
understandings, or perceptions, do not match objective realities or indicate the products meet
the consumers’ needs.
3. Raw sensory input does not produce or explain the coherent picture of the world that most adults
possess.
a) We subconsciously add to or subtract from sensory inputs to produce our own private
picture of the world.
b) Intensive stimulation bounces off most individuals.
c) Physical stimuli from the outside environment are one type of input into perceptions.
d) People’s motives, expectations, and what they learned from previous experiences are the
other type of input.
4. Sensation is the immediate and direct response of the sensory organs to stimuli.
a) A stimulus is any unit of input to any of the senses (e.g. products, packaging, brand names,
advertisements, commercials).
b) Sensory receptors are human organs that receive sensory inputs.
c) Human sensory sensitivity refers to the experience of sensation.
d) Sensation itself depends on energy change, or the differentiation of input.
e) As sensory input decreases, the ability to detect changes increases.
5. The lowest level at which an individual can experience a sensation is called the absolute threshold.
a) The point at which a person can detect the difference between “something” and “nothing”
is that person’s absolute threshold for the stimulus.
b) For example, the distance at which a driver can note a specific billboard on a highway is that
individual’s absolute threshold.
c) Under conditions of constant stimulation, such as driving through a “corridor” of billboards,
the absolute threshold increases (that is, the senses tend to become increasingly dulled).
6. Sensory adaptation refers specifically to “getting used to” certain sensations, or becoming
accustomed to a certain level of stimulation. Sensory adaptation is a problem that causes many
advertisers to change their advertising campaigns regularly.
7. Ambush marketing consists of placing ads in places where consumers do not expect to see them
and cannot readily avoid them.
8. Experiential marketing allows customers to engage and interact with brands, products and
services in sensory ways to create emotional bonds between consumers and marketing offerings.
9. The minimal difference that can be detected between two stimuli is called the differential
threshold or the JND (just noticeable difference).
a) A nineteenth-century German scientist named Ernst Weber discovered that the JND
between two stimuli was not an absolute amount, but an amount relative to the intensity of
the first stimulus.
b) Weber’s law states that the stronger the initial stimulus, the greater the additional intensity
needed for the second stimulus to be perceived as different.
c) Manufacturers and marketers endeavor to determine the relevant JND for their products so
that negative changes—reductions or increases in product size, or reduced quality—are not
readily discernible to the public, so that product improvements are readily discernible to the
consumer without being wastefully extravagant.
d) Marketers use the JND to determine the amount of change or updating they should make in
their products to avoid losing the readily recognized aspects of their products.
e) Marketers want to meet or exceed the consumers’ differential threshold so that they readily
perceive the improvements made in the original product.
i) Less than the JND is wasted effort because the improvement will not be perceived.
ii) More than the JND is wasteful because it reduces the level of repeat sales.
10. People are also stimulated below their level of conscious awareness—they can perceive stimuli
without being consciously aware of it via a process called subliminal perception (because the
stimulus is beneath the threshold, or “limen,” of conscious awareness, though obviously not
beneath the absolute threshold of the receptors involved).
a) Over the years, there have been sporadic reports of marketers using subliminal messages in
their efforts to influence consumption behavior.
b) There is no evidence that subliminal advertising persuades people to buy goods or services.
c) As for sexual embeds, most researchers are of the opinion that “What you see is what you
get.”
Perceptual Selection
5. The consumer’s “selection” of stimuli (selective perception) from the environment is based on
the interaction of expectations and motives with the stimulus itself. These factors give rise to four
important concepts concerning perception.
a) Selective exposure—consumers actively seek out messages they find pleasant or with which
they are sympathetic and actively avoid painful or threatening messages.
b) Selective attention—consumers have a heightened awareness of the stimuli that meet their
needs or interests and minimal interest in stimuli irrelevant to their needs.
c) Perceptual defense—threatening or otherwise damaging stimuli are less likely to be
perceived than are neutral stimuli. Individuals unconsciously may distort information that is
not consistent with their needs, values, and beliefs.
d) Perceptual blocking—consumers screen out enormous amounts of advertising by simply
“tuning out.”
Perceptual Organization
1. People do not experience the numerous stimuli they select from the environment as separate and
discrete sensations; they tend to organize stimuli into groups and perceive them as unified wholes.
2. Gestalt psychology (Gestalt, in German, means pattern or configuration) is the name of the school
of psychology that first developed the basic principles of perceptual organization.
3. Three of the most basic principles of perceptual organization are figure and ground, grouping,
and closure.
a) Stimuli that contrast with their environment are more likely to be noticed; an example is the
contrast between a figure and the ground on which it is placed.
i) The figure is usually perceived clearly.
ii) The ground is usually perceived as indefinite, hazy, and continuous.
iii) The figure is more clearly perceived because it appears to be dominant—the ground
appears to be subordinate and less important.
iv) Advertisers have to plan their advertisements carefully to make sure that the stimulus
they want noted is seen as figure and not as ground.
v) A marketing technique experience growth and stems from the figure-and-ground
concepts is product placement (or “branded entertainment”).
b) Grouping, or a tendency to group stimuli into chunks, can be used advantageously by
marketers to imply certain desired meanings in connection with their products.
i) Consumers naturally chunk social security numbers, phone numbers and zip codes
ii) Grouping has implications for product placement within retailers
c) Closure is people’s instinct to organize pieces of sensory input into a complete image or
feeling.
i) Promotional messages that require consumers to fill in information gain higher
involvement from consumers.
ii) Consumers who hear the soundtrack from a television commercial on the radio play
back the visual content from memory to “complete” the ad.
Consumer Imagery
1. Consumer imagery is consumers’ perceptions of all the components of products, services and
brands and how consumers evaluate the quality of marketers’ offerings.
a) Products and brands have symbolic value for individuals who evaluate them on the basis of
their consistency with their personal pictures of themselves.
b) Imagery affects perceptions of products, brands, services, prices, product quality, retail
stores, and manufacturers.
2. Positioning is the distinct image that a product has in the mind of the consumer.
a) How a product is positioned in the mind of the consumer is more important to the product’s
success than are the product’s actual characteristics.
b) Marketers try to differentiate their products by stressing benefits that their brand provides
rather than their products’ physical features.
c) Brand images may be updated to create emotional bonds between brands and consumers
or to help differentiate the product in an increasingly competitive market.
3. Packaging must convey the image that the brand communicates to buyers.
4. Compared with manufacturing firms, service marketers face several unique problems in
positioning and promoting their offerings.
a) Services are intangible, so image becomes a key factor in differentiating a service from its
competition.
b) The marketing objective is to enable the consumer to link a specific image with a specific
brand name (using painted delivery vehicles, restaurant matchbooks, packaged hotel soaps
and shampoos, and a variety of other specialty items).
c) Sometimes companies market several versions of their service to different market segments
by using a differentiated positioning strategy.
d) The design of the service environment is an important aspect of service positioning strategy
and sharply influences consumer impressions.
e) The arousal level within the store environment must match the expectations of the
shopppers in order to avoid perceived over- or understimulation.
5. Perceived price is the customer’s view of the value that the customer receives from the purchase.
a) How a consumer perceives a price —as high, as low, as fair—has a strong influence on both
purchase intentions and purchase satisfaction.
b) Perception of price unfairness—customers pay attention to the prices paid by other
customers (e.g., senior citizens, frequent fliers, affinity club members) – affect customer
satisfaction, perceptions of product value and willingness to patronize a store or service.
c. A reference price is any price that a consumer uses as a basis for comparison in judging
another price.
a. An advertiser generally uses a higher external reference price (“sold elsewhere
at...”) in an ad in which a lower sales price is being offered to persuade the
consumer that the product advertised is a really good buy.
b. Internal reference prices are those prices (or price ranges) retrieved by the
consumer from memory.
c. Internal reference prices are thought to play a major role in consumers’
evaluations and perceptions of value of an advertised (i.e., external) price deal, as
well as in the believability of any advertised reference price.
d. Consumers’ internal reference prices change.
e. When an advertised reference price is within a given consumer’s acceptable price
range, it is considered plausible and credible.
f. If the advertised reference point is outside the range of acceptable prices (i.e.,
implausible), it will be contrasted and thus will not be perceived as a valid
reference point.
6. Consumers often judge the quality of a product (perceived quality) on the basis of a variety of
intrinsic and extrinsic informational cues.
a) Intrinsic cues are concerned with physical characteristics of the product itself: size, color,
flavor or aroma.
i) Consumers like to think they base quality evaluations on intrinsic cues because that
enables them to justify their product decisions as being “rational” or “objective.”
ii) More often than not, however, they use extrinsic characteristics to judge quality.
iii) In the absence of actual experience with a product, consumers often evaluate quality
on the basis of extrinsic cues, price, brand image, store image, etc.
b) Extrinsic cues are characteristics that are not inherent to the product.
7. It is more difficult for consumers to evaluate the quality of services than the quality of products.
a) Service characteristics include—intangibility, variability, perishability, simultaneously
produced and consumed.
b) Consumers are unable to compare services side-by-side as they do products, so consumers
rely on surrogate or extrinsic cues when purchasing services.
c) Marketers try to standardize their services in order to provide consistency of quality.
d) Researchers have concluded that the service quality that a customer perceives is a function
of the magnitude and direction of the gap between expected service and the customer’s
assessment of the service actually delivered.
e) The expectations of a given service vary widely among different consumers of the same
service.
f) SERVQUAL, measures the gap between customers’ expectations of services and their
perceptions of the actual service.
i) These perceptions are based on the dimensions of tangibles, reliability, responsiveness,
assurance, and empathy and tangibility.
ii) Two dimensions used to measure service quality are outcome dimensions—the reliable
delivery of the core service—and process dimensions—how the core service is
delivered.
8. A price/quality relationship forms when consumers rely on price as an indicator of product
quality.
a) Because price is so often considered to be an indicator of quality, some products deliberately
emphasize a high price to underscore their claims of quality.
b) Consumers also use cues such as the brand and the store in which the product is bought to
evaluate quality.
c) Consumers rely on the price and brand name when evaluating the product’s prestige and
symbolic value and use more concrete attributes of a product, such as performance and
durability, to judge its overall performance.
d) Marketers must understand all the attributes that customers use to evaluate a given product
and include all applicable information in order to counter any perceptions of negative quality
associated with a lower price.
e) Consumers use price as a surrogate indicator of quality if they have little information or little
confidence in their ability to make a choice.
9. Retail stores have images of their own that serve to influence the perceived quality of products
they carry and the decisions of consumers as to where to shop.
a) These images stem from the merchandise they carry, the brands sold and their prices, the
level of service, the store’s physical environment and ambiance, and its typical clientele.
b) The width and type of product assortment affects retail store image.
c) The unique benefit that a store provides is more important than the number of items it
carries in forming a favorable store image in consumers’ minds.
d) Customers often use brand, store image, and price together as a product’s quality indicators.
e) When brand and retailer images become associated, the less favorable image becomes
enhanced at the expense of the more favorable image.
f) Pricing discounts impact retail store image.Stores that offer frequent, small discounts on
large numbers of items are more likely to be perceived as “discount stores” and less
prestigious than stores offering larger discounts on a smaller number of products.
10. Manufacturers who enjoy a favorable image generally find that their new products are accepted
more readily than those of manufacturers who have a less favorable or even a “neutral” image.
a) Consumers generally have favorable perceptions of brands that are the first in a product
category and are more likely to purchase.
b) Today, companies are using institutional advertising, exhibits, and sponsorship of
community events to enhance their images.
Perceived Risk
1. Perceived risk is the uncertainty that consumers face when they cannot foresee the consequences
of their purchase decision.
a) The degree of risk that consumers perceive and their own tolerance for risk taking are factors
that influence their purchase strategies.
b) Consumers are influenced by risks that they perceive, whether or not such risks actually
exist. Risk that is not perceived will not influence consumer behavior.
c) Types of risk include: functional risk, physical risk, financial risk, social risk, psychological
risk, and time risk.
2. The amount of risk perceived depends on the specific consumer, the product, the situation, and
the culture.
a) High-risk perceivers are narrow categorizers because they limit their choices.
b) Low-risk perceivers are broad categorizers because they make their choice from a wide
range of alternatives.
3. Consumers characteristically develop their own strategies for reducing perceived risk.
a) These risk-reduction strategies enable them to act with increased confidence when making
product decisions, even though the consequences of such decisions remain somewhat
uncertain.
i) Seek information
ii) Remain brand loyal
iii) Rely on brand image
iv) Rely on store image
v) Buy the most expensive model or brand
b) Marketers need to provide consumers with persuasive risk-reduction strategies such as:
i) A well-known brand name
ii) Distribution through reputable retail outlets
iii) Informative advertising
iv) Publicity
v) Impartial test results
vi) Free samples
vii) Money-back guarantees
Chapter 5
Consumer Learning
INTRODUCTION
1. Learning is applying one’s past knowledge and experience to present circumstances and behavior.
2. Repeating advertising messages about brands and their benefits, rewarding people for purchase
behavior be selling products that provide superior benefits, getting consumers to make
associations among different offerings under the same brand name, and developing brand loyalty
are all elements of consumer learning.
3. Marketers are concerned with how individuals learn because they want to teach them, in their
roles as consumers, about products, product attributes, and potential consumer benefits; about
where to buy their products, how to use them, how to maintain them, even how to dispose of
them.
1. Consumer learning is a process; that continually evolves and changes as a result of newly acquired
knowledge or from actual experience.
a) Both newly acquired knowledge and personal experience serve as feedback to the individual
and provide the basis for future behavior in similar situations.
b) The role of experience in learning does not mean that all learning is deliberately sought. A
great deal of learning is also incidental, acquired by accident or without much effort.
c) Despite their different viewpoints, learning theorists in general agree that in order for learning
to occur, certain basic elements must be present—motivation, cues, response, and
reinforcement.
2. Unfulfilled needs lead to motivation, which spurs learning. The degree of relevance of the goal is
critical to how motivated the consumer is to search for knowledge or information about a product
or service.
3. If motives serve to stimulate learning, cues (price, styling, packaging, advertising, and store
displays) are the stimuli that give direction to the motives.
4. How individuals react to a cue—how they behave—constitutes their response.
a) A response is not tied to a need in a one-to-one fashion.
b) A need or motive may evoke a whole variety of responses.
c) The response a consumer makes depends heavily on previous learning that, in turn, depends
on how related responses were reinforced previously.
5. Reinforcement, the reward (pleasure, enjoyment and benefits) that the consumer receives after
buying and using a product or service, increases the likelihood that a specific response (e.g. loyal
repurchase behavior) will occur in the future as the result of particular cues or stimuli.
Classical Conditioning
Instrumental Conditioning
1. Instrumental conditioning is based on the notion that learning occurs through trial-and-error, and
the stimulus that results in the most satisfactory response is the one that is learned.
a) According to American psychologist B. F. Skinner, most individual learning occurs in a
controlled environment in which individuals are “rewarded” for choosing an appropriate
behavior.
b) A favorable experience is instrumental in teaching the individual to repeat a specific
behavior.
2. Skinner distinguished two types of reinforcement (or reward) influence, which provided that the
likelihood for a response would be repeated.
a) The first type, positive reinforcement, consists of events that strengthen the likelihood of a
specific response.
b) Negative reinforcement is an unpleasant or negative outcome that also serves to encourage
a specific behavior.
c) Either positive or negative reinforcement can be used to elicit a desired response.
d) Negative reinforcement should not be confused with punishment, which is designed to
discourage behavior.
3. When a learned response is no longer reinforced, it diminishes to the point of extinction; that is,
to the point at which the link between the stimulus and the expected reward is eliminated.
a) Forgetting is often related to the passage of time; this is known as the process of decay.
b) Marketers can overcome forgetting through repetition and can combat extinction through
the deliberate enhancement of consumer satisfaction.
4. The objective of all marketing efforts should be to maximize customer satisfaction.
a) Aside from the experience of using the product itself, consumers can receive reinforcement
from other elements in the purchase situation, such as the environment in which the
transaction or service takes place, the attention and service provided by employees, and the
amenities provided.
b) Some hotels provide reinforcement to guests in the form of small amenities.
c) Companies that create personal connections with customers and offer diverse product lines
and competitive prices are the ones providing the best reinforcement, resulting in
satisfaction and repeat patronage.
d) Most frequent shopper programs are based on enhancing positive reinforcement and
encouraging continued patronage.
e) Marketers have found that product quality must be consistently high and provide customer
satisfaction with each use for desired consumer behavior to continue.
5. Marketers have identified three types of reinforcement schedules: continuous reinforcement,
fixed ratio reinforcement, and variable ratio reinforcement.
a) Continuous reinforcement offers a reward after each transaction.
b) Fixed ratio reinforcement provides a reward every nth time the product or service is
purchased.
c) Variable ratios reward consumers on a random basis and tend to engender high rates of
desired behavior and are somewhat resistant to extinction.
6. The reinforcement of behaviors that must be performed by consumers before the desired
behavior can be performed is called shaping, which increases the probability that desired
consumer behavior will occur.
7. Timing has an important influence on consumer learning.
a) Question—should a learning schedule be spread out over a period of time (distributed
learning), or should it be “bunched up” all at once (massed learning)?
i) Massed advertising produces more initial learning
ii) A distributed schedule usually results in learning that persists longer
b) When advertisers want an immediate impact (e.g., to introduce a new product or to counter
a competitors blitz campaign), they generally use a massed schedule to hasten consumer
learning.
c) A distributed scheduler with ads repeated on a regular basis usually results in more long-
term learning and is relatively immune to extinction.
Observational Learning
1. Observational learning (also called modeling) is the process through which individuals learn
behavior by observing the behavior of others and the consequences of such behavior.
2. Their role models are usually people they admire because of such traits as appearance,
accomplishment, skill, and even social class.
3. Children learn much of their social behavior and consumer behavior by observing their older
siblings or their parents.
Information Processing
1. Cognitive learning is based on mental activity; it consists of mental processing of data rather than
instinctive responses to stimuli.
a) Cognitive learning theory holds that the kind of learning most characteristic of human beings
is problem solving, and it gives some control over their environment.
b) The human mind processes the information it receives.
c) Consumers process product information by attributes, brands, comparisons between
brands, or a combination of these factors.
d) Consumers with higher cognitive ability generally acquire more product information and
consider more product attributes and alternatives that consumer with lesser abilities.
e) The more experience a consumer has with a product category, the greater his or her ability
to make use of product information.
2. The components of information processing are storing, retaining and retrieving information; this
takes place in process that uses a sensory store, a short-term store, and a long-term store.
a) Sensory store—all data comes to us through our senses, however, our senses do not
transmit information as whole images.
i) The separate pieces of information are synchronized as a single image.
ii) This sensory store holds the image of a sensory input for just a second or two.
iii) This suggests that it’s easy for marketers to get information into the consumer’s sensory
store, but hard to make a lasting impression.
b) Short-term store—if the data survives the sensory store, it is moved to the short-term store.
i) This is our working memory.
ii) If rehearsal—the silent, mental repetition of material—takes place, then the data is
transferred to the long-term store.
iii) If data is not rehearsed and transferred, it is lost in a few seconds.
c) Long-term store—once data is transferred to the long-term store it can last for days, weeks,
or even years.
d) Encoding is the process by which we select and assign a word or visual image to represent a
perceived object.
e) Information overload takes place when the consumer is presented with too much
information and leads to frustration, confusion, and poor purchase decisions.
3. Retention—information is constantly organized and reorganized as new links between chunks of
information are forged.
a) Studies show that a brand’s sound symbolism and the brand’s linguistic characteristics
impacted the encoding and retention of the brand name.
b) Consumers recode what they have already encoded to include larger amounts of
information (chunking).
c) The degree of prior knowledge is an important consideration.
d) Knowledgeable consumers can take in more complex chunks of information than those who
are less knowledgeable in the product category.
4. Retrieval is the process by which we recover information from long-term storage.
Cognitive Learning
1. Cognitive learning is the systematic evaluation of information and alternatives needed to solve a
recognized but unfulfilled need or unsolved problem.
a. It occurs when a person has a goal and must search for and process data in order to make
a decision or solve a problem.
b. The tricomponent attitude model consists of three stages:
i. The cognitive stage – the person’s knowledge and beliefs about a product
ii. The affective stage – the person’s feeling toward and evaluations of a product as
“favorable” or “unfavorable”; and
iii. The conative stage – the person’s level of intention to buy the product.
c. For a long time, consumer researchers believed that the complex processing of
information by consumers depicted in the cognitive learning model was applicable to all
purchase decisions.
d. Some theorists began to realize that there were some purchase situations that simply did
not call for extensive information processing and evaluation.
e. Purchases of minimal personal importance were called low-involvement purchases, and
complex, search-oriented purchases were considered high-involvement purchases.
1. Consumer involvement is focused on the degree of personal relevance that the product or
purchase hold for that consumer.
a) High-involvement purchases are those that are very important to the consumer and thus
provoke extensive problem solving and information processing.
b) Low-involvement purchases are purchases that are not very important to the consumer,
hold little relevance, and have little perceived risk, and thus, provoke very limited
information processing.
c) Involvement has been conceptualized and measured in a variety of ways, including product
involvement, brand involvement, and advertising involvement.
d) The most sensible approach to measuring involvement is using self-administered surveys
that assess the consumer’s cognitions or behaviors regarding a particular product or product
category, and where involvement is measured on a continuum (using semantic differential
scales) rather than as a dichotomy consisting of two mutually exclusive categories of “high”
and “low” involvement.
2. A marketer aspires to have consumers who are involved with the purchase also view its brand
as unique.
a) Many studies showed that high purchase involvement coupled with perceived brand
differences lead to a high favorable attitude toward the brand, which in turn leads to less
variety seeking and brand switching and to strong brand loyalty.
b) Online, many advertisers use avatars – animated, virtual reality graphical figures
representing people – in their Web sites to increase involvement.
i) Attractive avatar sales agents were effective in selling to consumers with moderate
product involvement
ii) Expert avatars were more effective sales agents for products with high involvement
levels.
3. Hemispheric lateralization or split-brain theory, originated in the 1960’s.
a) The premise is that the right and left hemispheres of the brain specialize in the kinds of
information they process.
i) The left hemisphere is the center of human language; it is the linear side of the brain
and primarily responsible for reading, speaking, and attributional information
processing.
ii) The right hemisphere of the brain is the home of spatial perception and nonverbal
concepts; it is nonlinear and the source of imagination and pleasure.
b) The left side of the brain is rational, active, and realistic.
c) The right side is emotional, metaphoric, impulsive, and intuitive.
4. Passive learning is thought to occur through repeated exposures to low-involvement
information processing.
a) Right-brain theory is consistent with classical conditioning and stresses the importance of
the visual component of advertising, so it affects processing of TV commercials
b) Printed information is verbal information and is processed on the brain’s left side.
c) Recent research suggests that pictorial cues help recall and familiarity, although verbal cues
trigger cognitive functions, encouraging evaluation.
1. Market share and the number of brand-loyal consumers are the interdependent goals of
consumer learning, so it is important for marketers to measure how effectively consumers have
learned its message.
2. Recognition and recall tests are conducted to determine whether consumers remember seeing
an ad, the extent to which they have read it or seen it and can recall its content, their resulting
attitudes toward the product and the brand, and their purchase intentions.
a) Recognition tests are based on aided recall and recall tests use unaided recall.
b) In recognition tests, the consumer is shown an ad and asked whether he or she remembers
seeing it and can remember any of its salient points.
c) In recall tests, the consumer is asked whether he or she has read a specific magazine or
watched a specific television show, and if so, can recall any ads or commercials seen, the
product advertised, the brand, and any salient points about the product.
d) Starch Readership Ad Studies evaluate the effectiveness of magazine advertisements based
on three criteria:
i) Noticing the ad
ii) Associating the ad with advertised brand
iii) Involvement with the ad (reading most ad text)
3. Brand loyalty is the ultimate desired outcome of consumer learning, and measures purchase
frequency, brand switching, and commitment to buy the brand.
a) Attitudinal measures are concerned with consumers’ overall feelings (i.e., evaluation) about
the product and the brand, and their purchase intentions.
b) Behavioral measures are based on observable responses to promotional stimuli—purchase
behavior, rather than attitude toward the product or brand.
4. A basic issue among researchers is whether to define brand loyalty in terms of consumer behavior
or consumer attitudes.
a) Behavioral scientists who favor the theory of instrumental conditioning believe that brand
loyalty results from an initial product trial that is reinforced through satisfaction, leading to
repeat purchase.
b) Cognitive researchers, on the other hand, emphasize the role of mental processes in building
brand loyalty. They believe that consumers engage in extensive problem-solving behavior
involving brand and attribute comparisons, leading to a strong brand preference and repeat
purchase behavior.
c) To cognitive learning theorists, behavioral definitions (e.g., frequency of purchase or
proportion of total purchases) lack precision, because they do not distinguish the “real”
brand-loyal buyer.
5. An integrated conceptual framework views consumer loyalty as the function of three groups of
influences: (1) personal degree of risk aversion or variety seeing; (2) the brand’s reputation and
availability of substitute brands; and (3) social group influences and peers’ recommendations.
6. Their influences produce three types of loyalty: (1) covetous loyalty, (2) inertia loyalty, and (3)
premium loyalty.
7. Brand equity refers to the value inherent in a well-known brand name.
a) This value stems from the consumer’s perception of the brand’s superiority, the social
esteem that using it provides, and the customer’s trust and identification with the brand.
b) For many companies, their most valuable assets are their brand names.
c) Brand equity enables companies to charge a price premium—an additional amount over and
above the price of an identical store brand.
Chapter 6
Consumer Attitude Formation & Change
Introduction
1. Psychologists have sought to construct models that capture the underlying dimensions of an
attitude. The focus has been on specifying the composition of an attitude to better explain or
predict behavior.
2. According to the tri-component attitude model, attitudes consist of three major components: the
cognitive component, the affective component and the conative component.
a) Cognitions are knowledge and perceptions that are acquired by a combination of direct
experience with the attitude object and related information from various sources.
i) This previous knowledge and perceptions commonly take the form of beliefs
ii) The consumer believes that the attitude object possesses various attributes and that
specific behavior will lead to specific outcomes.
b) The affective component of an attitude consists of the consumer’s emotions or feelings
which are considered evaluations.
i) Affect-laden experiences manifest themselves as emotionally charged states (such as
happiness or sadness).
ii) These states may enhance positive or negative experiences (and recollections of those
experiences) for the consumer.
iii) A semantic differential scale, which has bi-polar adjectives as anchors and asks the
respondent to rate on a continuum, is often used to measure affect.
c) Conation, the final component of the tri-component attitude model, is concerned with the
likelihood or tendency that an individual will undertake a specific action or behave in a
particular way with regard to the attitude object.
i) The conative component may include the actual behavior itself.
ii) In marketing and consumer research, the conative component is frequently treated as
an expression of the consumer’s intention to buy.
iii) Intention to buy scales are used to assess the likelihood of a consumer purchasing a
product or behaving in a certain way.
3. Altering consumer attitudes is an important marketing strategy.
a) In these market situations, marketers have an opportunity to persuade consumer’s to
“crossover,” or to shift their favorable attitude toward another version of the product.
b) Changing beliefs about products is the most common form of advertising appeal.
i) Advertisers constantly remind us that their product has “more,” or is “better,” or “best”
in terms of some important product attribute.
ii) Information suggesting a change in attitude needs to be compelling and repeated
enough to overcome the natural resistance to letting go of established attitudes.
c) Changing brand image attempts to alter consumers’ overall assessment of the brand.
d) Changing consumer beliefs about competitive brands or product categories is another
attitude-change strategy.
i) One tool is comparative advertising.
ii) Another tool is a two-sided message.
1. Multi-attribute attitude models portray consumers’ attitudes with regard to an attitude object as
a function of consumers’ perception and assessment of the key attributes or beliefs held with
regard to the particular attitude object.
2. There are many variations of the attitude model, five to consider are: attitude-toward-object
model, attitude-toward-behavior model, the theory-of-reasoned-action model, the theory of
trying-to-consume, and the attitude-toward-the-ad-model.
a) According to the attitude-toward-object model, the consumer’s attitude toward a product
or specific brands of a product is a function of
i) the presence (or absence) and evaluation of certain product-specific beliefs and/or
attributes.
ii) The importance of each of these attributes
b) Attitudes can be changed by
i) Adding a previously ignored attribute or adding an attribute that reflects an actual
product or technological innovation.
a) Adding an attribute reflects an actual product change or technological
innovation is easier to accomplish than stressing a previously ignored attribute.
b) Sometimes eliminating a characteristic or feature has the same enhancing
outcome as adding a characteristic or attribute.
ii) Changing the perceived importance of attributes
iii) Developing new products
c) The attitude-toward-behavior model is designed to capture the individual’s attitude toward
behaving or acting with respect to an object, rather than the attitude toward the object itself
(so attitudes correspond somewhat more closely to actual behavior than the attitude-
toward-object model).
d) The theory-of-reasoned-action incorporates a cognitive component, an affective
component, and a conative component arranged in a pattern different from that of the tri-
component model.
i) It includes subjective norms that influence an individual’s intention to act before
measuring intentions.
ii) Subjective norms are based on normative beliefs and motivation to comply with the
preferences of relevant others.
e) The theory of trying-to-consume is designed to account for the cases where the action or
outcome is not certain but reflects the consumer’s efforts to consume. Sometimes personal
impediments or environmental impediments prevent the desired outcome.
f) As the attitude-toward-the-ad model depicts, the consumer forms various feelings as the
result of exposure to an ad that impact attitudes towards the brands advertised.
1. An effective strategy for changing consumer attitudes toward a product or brand is to make
particular needs prominent.
2. One method for doing this is called the functional approach and suggests attitudes can be
classified into four functions: the utilitarian function, the ego-defensive function, the value-
expressive function, and the knowledge function.
a) The utilitarian function stems from the belief that consumers’ attitudes reflect the utilities
that brands provide.
i) When a product has been useful or helped us n the past, our attitude toward it tends
to be favorable.
ii) One way of changing attitudes in favor of a product is by showing people that it can
serve a utilitarian purpose they may not have considered.
b) The ego-defensive function maintains that people want to protect their self-images from
inner feelings of doubt – they want to replace their uncertainty with a sense of security and
personal confidence.
c) The value-expressive function suggests attitudes are an expression or reflection of the
consumer’s values and beliefs.
d) The knowledge function holds that individuals generally have a strong need to know and
understand the people and things they encounter.
3. It is possible to alter attitudes toward products by pointing out their relationships to worthy
objects or causes.
1. The elaboration likelihood model (ELM) involves a more global view that two different persuasive
routes change attitudes.
a) The central route to persuasion is particularly relevant to attitude change when a
consumer’s motivation or ability to assess the attitude object is high; that is, attitude change
occurs because the consumer actively seeks out information relevant to the attitude object
itself.
b) When consumers are willing to exert the effort to comprehend, learn, or evaluate the
available information about the attitude object, learning and attitude change occur via the
central route.
c) In contrast, when a consumer’s motivation or assessment skills are low (e.g., low-
involvement), learning and attitude change tend to occur via the peripheral route to
persuasion, without the consumer focusing on information relevant to the attitude object
itself.
d) In such cases, attitude change often is an outcome of secondary inducements (e.g., cents-
off coupons, free samples, beautiful background scenery, great package, or the
encouragement of a celebrity endorsement).
2. Research indicates that even in low-involvement conditions (e.g., like exposure to most
advertising), where both central and secondary inducements are initially equal in their ability to
evoke similar attitudes, it is the central inducement that has the greatest “staying power”—that
is, over time it is more persistent.
1. Attribution theory attempts to explain how people assign causality to events on the basis of either
their own behavior or the behavior of others.
2. Self-perception attribution addresses individuals’ inferences or judgments as to the cause of their
own behavior.
a) Attitudes develop as consumers look at and make judgments about their own behavior.
b) These judgments can be divided into internal, external, and defensive attributions.
c) Internal attribution—giving yourself credit for the outcomes—your ability, your skill, or your
effort.
d) External attribution—the purchase was good because of factors beyond your control—luck,
etc.
e) Defensive attribution—consumers are likely to accept credit personally for success, and to
credit failure to others or to outside events.
3. Foot-in-the-door technique—the foot-in-the-door technique is based on the premise that
individuals look at their prior behaviors (e.g., compliance with a minor request) and conclude that
they are the kind of person who says “Yes” to such requests (i.e., an internal attribution).
a) Such self-attribution serves to increase the likelihood that they will agree to a similar, more
substantial request.
b) Research into the foot-in-the-door technique has concentrated on understanding how
specific incentives (e.g., cents-off coupons of varying amounts) ultimately influence
consumer attitudes and subsequent purchase behavior.
c) It appears that different size incentives create different degrees of internal attribution that,
in turn, lead to different amounts of attitude change.
i) It is not the biggest incentive that is most likely to lead to positive attitude change.
ii) What seems most effective is a moderate incentive, one that is just big enough to
stimulate initial purchase of the brand but still small enough to encourage consumers
to internalize their positive usage experience and allow a positive attitude change to
occur.
4. In contrast with the foot-in-the-door technique is the door-in-the-face technique, in which a large,
costly first request that is probably refused is followed by a second, more realistic, less costly
request.
5. Every time a person asks “Why?” about a statement or action of another or “others”—a family
member, a friend, a salesperson, a direct marketer, a shipping company— attributions toward
others theory is relevant.
6. It is in the area of judging product performance that consumers are most likely to form product
attributions toward objects.
a) Specifically, they want to find out why a product meets or fails to meet their expectations.
a) In this regard, they could attribute the product’s successful performance (or failure) to the
product itself, to themselves, to other people or situations, or to some combination of these
factors.
7. Individuals acquire conviction about attributions by collecting additional information in an
attempt to confirm (or disconfirm) prior inferences.
Chapter 7
Resuading Consumers
INTRODUCTION
1. Communication is the transmission of a message from a sender to a receiver via a medium of
transmission.
2. The five basic components of communications are: sender, receiver, medium, message and
feedback.
a) Senders encode their messages using words, pictures, symbols, spokespersons and
persuasive appeals.
b) Receivers decode the messages; to be persuasive, the messages must be decoded as the
senders intended.
c) Advertising appeals are the encoding used by marketers, and include humor, fear, sex, and
comparative appeals.
1. The term traditional media is synonymous with broadcast media (or mass media) and consists of
channels where all receivers receive the same one-way messages from marketers (i.e., they
cannot send direct responses to the message sources).
2. New media are channels of narrowcasting, defined as means that permit marketers to send
messages that are:
a) Addressable and directed to specific persons rather than groups of consumers.
b) Customized, and based on data gathered from tracing consumers’ surfing and clicks online,
in combination with other information, to either small groups or individual consumers.
c) Interactive because, in most narrowcasts, an action by the consumer—in the form of a click
on a link or banner—triggers the transmission of a message.
d) More response-measurable than traditional broadcasted ads because communication
feedback is more accurate and received sooner.
3. Addressable advertising consists of customized messages sent to particular consumers.
a) These messages are based mostly on the consumers’ prior shopping behavior, which
marketers have observed and analyzed.
b) Some of this data comes from data aggregators that use data from users’ browsers,
Google, Yahoo!, and Facebook to build models that marketers in turn use to design the
different ads customers see, which are also a function of the viewers’ demographics and
past advertising exposure.
1. The message (thought, idea, attitude, image, or other information that the sender wishes to
convey to the intended audience) can be verbal, (spoken or written) or nonverbal (a photograph,
an illustration, or a symbol), or a combination of the two.
2. The sponsor, who may be an individual or an organization, must first establish the objectives of
the message, select an appropriate medium for sending it, and design (encode) the message in a
manner that is appropriate to each medium and to each audience.
a) The objectives of a persuasive message include creating awareness of a service, promoting
sales of a product, encouraging (or discouraging) certain practices, attracting retail
patronage, reducing post-purchase dissonance, creating goodwill or a favorable image, or
any combination of these and other communications objectives.
b) Marketers encode messages by using words, pictures, symbols, spokespersons, and special
channels.
c) The message receivers decode the messages they receive on the basis of their personal
experiences, characteristics, and motives.
d) Cognitive learning models suggest message exposure leads to interest, desire and buying
behavior.
3. Some of the decisions that marketers must make in designing the message include selecting
images, creating ad copy, positive or negative message framing, one-sided or two-sided messages,
and the order of presentation.
a) Messages that depict images are often more effective that those with text only.
Advertisements are visually complex when they contain dense perceptual features and/or
when they have elaborate creative designs.
i) A study found that feature complexity hurts attention to the brand and attitude toward
the ad, whereas design complexity enhances paying attention to the ad, raises its
comprehensibility, and improves attitude toward the ad
ii) The study demonstrated that marketers must assess the visual complexity of
advertisements and use their findings to enhance their ads’ “stopping power.”
b) Message framing: whether a marketer should stress the benefits to be gained by using a
specific product (positive message framing), or the benefits to be lost by not using the
product (negative message framing) depends on the consumer’s attitudes and
characteristics as well as the product itself.
c) One-sided messages tell consumers only the good points (benefits).
i) This is most effectively used if the audience is friendly, if it initially favors the
communicator’s position, or if it is not likely to hear an opposing argument.
ii) Two-sided messages tell consumers both good (benefits) and bad (disadvantages)
points of the product.
iii) These are most effectively used when the target audience is critical or unfriendly, if it
is well educated, or if it is likely to hear opposing claims.
d) Order Effects—communications researchers have found that the order in which a message
is presented affects audience receptivity.
i) The television commercials shown first are recalled best, those in the middle the least.
ii) Magazine publishers recognize the impact of order effects by charging more for ads on
the front, back, and inside covers of magazines than for the inside magazine pages,
because of their greater visibility and recall.
iii) Order is also important in listing product benefits within an ad.
iv) If audience interest is low, the most important point should be made first to attract
attention (primacy effect).
v) If interest is high, however, it is not necessary to pique curiosity, and so product benefits
can be arranged in ascending order, with the most important point mentioned last
(recency effect).
e) When both favorable information and unfavorable information are to be presented (e.g., in
an annual stockholders’ report), placing the favorable material first often produces greater
tolerance for the unfavorable news.
f) It also produces greater acceptance and better understanding of the total message.
Introduction
1. Reference groups are groups that serve as sources of comparison, influence and norms for
peoples’ opinion, values and behaviors.
a. People are strongly influenced by what others think and how they behave.
b. The most important reference group is the family because it provides children with
the skills, knowledge, attitudes, and experiences necessary to function as consumers, a
process called consumer socialization.
1. Reference groups, particularly informal ones, have a high degree of source credibility,
defined as a source’s persuasive impact, stemming from its perceived expertise,
trustworthiness, and believability.
2. When the source of communications about a product is well respected and highly thought
of by the intended audience, the message is much more likely to be believed.
a. A formal source is either a person or medium providing consumption-related
information and hired and paid by an organization.
b. An informal source is a person whom the message receiver knows personally,
such as a parent or friend who gives product information or advice, or an
individual met and respected online.
3. Source credibility: A source’s persuasive impact, stemming from its perceived expertise,
trustworthiness, and believability.
4. Reference groups are groups that serve as frames of reference for individuals in their
consumption decisions because they are perceived as credible sources
a. Reference groups influencing broadly defined values or behavior are called
normative reference groups.
b. Reference groups serving as benchmarks for specific or narrowly defined attitudes or
behavior are called comparative reference groups.
c. A group to which a person either belongs or would qualify for membership is called a
membership group.
d. There are groups in which an individual is not likely to receive membership, despite
acting like a member by adopting the group’s values, attitudes, and behavior. This is
called a symbolic group.
5. The consumption-related groups that influence consumers’ attitudes and behavior include
friendship groups, shopping groups, virtual communities, and advocacy groups.
a. Friends fulfill a wide range of needs: They provide companionship, security, and
opportunities to discuss problems that an individual may be reluctant to discuss with
family members.
i. They may be a credible source of information about purchases.
ii. People may shop together just to enjoy shopping or to reduce their perceived
risk; that is, they may bring someone along whose expertise regarding a
particular product category will reduce their chances of making incorrect
purchases.
iii. Referral programs are an important element of shopping groups.
iv. Another example of a shopping group is the shared experience of waiting in
line. Retail experts say that by standing in a crowd, shoppers see themselves as
making the right buying decision—a concept known as “social proof.”
v. Many websites encourage consumers to leave comments and have others
respond to them.
vi. Most young adults have extensive “buddy lists” and regularly communicate
with people whom they have met online but never in person.
vii. The fact that people can share their interests, hobbies, and opinions with
thousands of peers online has benefited marketers.
b. There are two types of advocacy groups: entities organized to correct a specific
consumer abuse and then disband, and groups whose purpose is to address broader,
more pervasive problem areas and operate over an extended period of time.
c. The degree of influence that a reference group exerts on an individual’s behavior
depends on the individual, product, and social factors.
d. These factors include conformity, the group’s power and expertise, the individual’s
experience and personality, and the conspicuousness of the product.
e. To influence its members, a reference group must:
i. Inform or make members aware that the brand or product exists.
ii. Provide the individual with the opportunity to compare his or her own thinking
with the attitudes and behavior of the group.
iii. Influence the individual to adopt attitudes and behavior that are consistent
with the group’s norms.
iv. Legitimize the member’s decision to use the same products as other members.
6. Different reference groups may influence the beliefs, attitudes, and behaviors of
individuals at different times or under different circumstances.
7. Consumers who are primarily concerned with approval from others usually adopt the
same products and brands as those group members who have status.
a. When consumers are preoccupied with the power that a person or group can exert
over them, they often adopt products that conform to the norms of that person or
group in order to be complimented on their choices.
b. Unlike reference groups that are not power based, “power groups” may bring about
behaviors, but not changes in attitudes.
8. People who are compliant, have a tendency to conform and a high need for affiliation,
need to be liked by others, and are other-directed are more receptive to group influences.
9. Competitive people who desire to control other people and events and are inner-directed
are less likely to look for guidance from reference groups.
1. Socialization refers to the process of making people behave in a way that is acceptable to their
society
a) In the case of young children, this process includes imparting to children the basic values
and modes of behavior consistent with the culture (moral principles, interpersonal skills,
dress and grooming standards, appropriate manners and speech, and the selection of
suitable educational and occupational or career goals).
b) Parental socialization responsibility seems to be constantly expanding.
2. The aspect of childhood socialization that is particularly relevant to the study of consumer
behavior is consumer socialization, which is defined as the process by which children acquire the
skills, knowledge, and attitudes and experiences necessary to function as consumers.
a) Many preadolescent children acquire their consumer behavior norms through observation
of their parents and older siblings who function as role models and sources of cues for basic
consumption learning.
b) In contrast, adolescents and teenagers are likely to look to their friends for models of
acceptable consumption behavior.
c) Shared shopping experiences (i.e., co-shopping is when mother and child shop together) also
gives children the opportunity to acquire in-store shopping skills.
3. A socialization agent is a person or organization involved in the socialization process “because of
frequency of contact with the individual and control over the rewards and punishments given to
the individual. “
a) Mothers are generally considered to be stronger consumer socialization agents than their
husbands, because they tend to be more involved with their children, and are more likely to
mediate their children’s exposure to commercial messages.
B) Consumer socialization of children does not function identically in all families.
4. Parental styles influence children’s development and consumer socialization.
a) Parental styles are classified along two dimensions:
i) permissive vs restrictive.
ii) very nurturing vs. non-nurturing.
b) Four parental styles include:
i) Indulgent parents
ii) Neglecting parents
iii) Authoritative parents
iv) Authoritarian parents
5. Consumer socialization is learning.
a) Materialism increases from middle childhood to early adolescence then declines from early
to late adolescence.
b) There is an inverse relationship between self-esteem and materialism in children and
adolescents.
6. Socialization begins in early childhood and extends throughout a person’s life.
a) Adolescents may become skeptical about marketing.
b) Life changes (marriages, births, pet adoptions) also affect socialization.
7. Product preferences and brand loyalties are often transferred from one generation to another,
which is known as intergenerational brand transfer.
8. Families have supportive functions: economic well-being, emotional support, and suitable family
lifestyles.
a) Economic well-being: Providing financial means to its dependents is unquestionably a basic
family function.
b) Emotional support: The provision of emotional nourishment (including love, affection, and
intimacy) to its members is an important core function of the contemporary family.
c) Suitable Family Lifestyles: Another important family function in terms of consumer behavior
is the establishment of a suitable lifestyle for the family
1. The family life cycle (FLC) is a progression of stages through which many families pass.
a) FLC analysis enables marketers to segment families in terms of a series of stages spanning the
life course of a family unit.
b) The FLC is a composite variable created by systematically combining such commonly used
demographic variables as marital status, size of family, age of family members (focusing on
the age of the oldest or youngest child), and employment status of the head of household.
2. The model has five basic stages.
a) Bachelorhood. Young single adult living apart from parents.
b) Honeymooners. Young married couple.
c) Parenthood. Married couple with at least one child living at home.
d) Post-parenthood. An older married couple with no children living at home.
e) Dissolution. One surviving spouse.
1. Marketers distinguish between two type of families or households that are not typical.
a) Nontraditional families do not readily fit into the family life cycle
b) Non-family households are not legally defined as families
2. When households undergo status changes, they become attractive targets for many marketers.
3. Marketers have to be careful not to alienate conservative members of traditional families as they
try to target nontraditional households.
4. Dual spousal work involvement is a composite index that uses occupational status and the career
commitment of both spouses as a basis for segmentation. The result is an eight-category schema:
a. Retired couples
b. Nonworking wife, low husband-occupation status couples
c. Nonworking wife, high husband-occupation status couples
d. Dual low occupation status, blue-collar husband couples
e. Dual low occupation status, low white-collar husband couples
f. High husband, low wife-occupation status couples
g. Medium-high wife-occupation status couples
h. Dual-very high occupation status career couples
2. Empirical research has shown that this model can explain both attitudes/motivations and
consumer spending.
1. Social class is the division of members of a society into a hierarchy of distinct status classes, so
that members of each class have relatively the same status and members of all other classes have
either more or less status.
a. Some form of class structure or social stratification has existed in all societies throughout
the history of human existence.
b. Social class can be thought of as a continuum – a range of social positions on which each
member of society can be placed – researchers have preferred to divide the continuum
into a small number of specific social classes, or stratum.
2. Researchers define each social class by the amount of social status or prestige the members of
that class have in comparison to members of other social classes. Status is composed of:
a. Wealth (economic assets)
b. Power (degree of influence over others)
c. Esteem
3. To secure an understanding of how status operates within the minds of consumers, researchers
have explored the idea of social comparison theory: individuals quite normally compare their own
material possessions with those owned by others in order to determine their relative social
standing.
4. There is no general agreement as to how to measure social class.
a. The choice of how many separate classes to use depends on the amount of detail that the
researcher believes is necessary to explain adequately the attitudes or behavior under
study.
b. The result is a wide variety of measurement techniques, which may be classified into
subjective measures and objective measures of social class.
i. In the subjective approach to measuring social class, individuals are asked to
estimate their own social class positions.
1. The resulting classification of social class membership is based on the
participants’ self-perceptions or self-images.
2. Social class is treated as a “personal” phenomenon, one that reflects an
individual’s sense of belonging or identification with others.
3. This feeling of social-group membership is often referred to as class
consciousness.
4. Subjective measures of social class membership tend to produce an
overabundance of people who classify themselves as middle class.
ii. Objective measures consist of selected demographic or socioeconomic variables
concerning the individual(s) under study.
1. These are measured through questionnaires of factual questions.
2. The most frequently used questions are about occupation, amount of
income, and education.
3. Sometimes geo-demographic data in the form of zip codes and residence-
neighborhood information is added.
4. Occupation is a widely accepted and probably the best documented
measure of social class, because it reflects occupational prestige.
5. The level of a person’s formal education is another commonly accepted
approximation of social class standing (the more education a person has,
the more likely it is that the person is well paid).
6. Researchers who favor income as a measure of social class use either
amount or source of income.
a. A recent effort to differentiate between “income” and “wealth,”
points that wealth, not income, is the primary driver to financial
freedom.
b. Wealth and money are not the same; for wealth you need to
network and build personal alliances.
7. You need to find ways to minimize your taxes because taxes reduce your
ability to create wealth.
5. A multivariable index systematically combine a number of socioeconomic variables to form one
overall measure of social-class standing.
a. They seem to better reflect social class complexity than single element indicators.
b. Two of the more important composite indexes are:
i. Index of Status Characteristics—the Warner Index of Status Characteristics
(ISC)—is a classic composite measure of social class that weighs occupation,
source of income, house type, and dwelling area equality of neighborhood.
ii. Socioeconomic Status Scores—the United States Bureau of Census developed the
Socioeconomic Status Score (SES) that combines the socioeconomic variables of
occupation, family income, and educational attainment.
1. Lifestyle factors (shared beliefs, attitudes, activities, and behaviors) distinguish members of a
social class from members of other social classes.
2. Individuals can move either up or down in social class standing from the class position held by
their parents.
3. Most Americans think of upward mobility.
a) This results in the upper classes being the reference group for many ambitious men and
women in America.
b) Recognizing these aspirations, marketers frequently incorporate higher-class symbols into
their advertising.
4. Social class mobility also contributes to products and services filtering down from a higher level
to a lower one (trickle-down effect).
5. Affluent households are attractive target segments because its members have incomes that
provide them with a disproportionately larger share of all discretionary income, making them a
lucrative market for luxury goods.
a) For over 30 years, Ipsos Mendelsohn (formerly Mendelsohn Media Research) has conducted
an annual study of the affluent market—currently defined in terms of three affluent
segments:
i) Those with household incomes of $100,000 to $149,000 per year—the “least affluent.”
ii) Those with incomes of $150,000 to $249,000 per year—the “medium affluent.”
iii) Those with incomes of $250,000 or more per year—the “most affluent.”
b) Although the affluent market consists of only 20 percent of all households, this upscale
market accounted for over half of all U.S. household income.
6. Affluent customers have different media habits and characteristics, and have been segmented as
follows:
a) Well-feathered nests—households that have at least one high-income earner and children
present. (37.3 percent of the Upper Deck).
b) No strings attached—households that have at least one high-income earner and no children.
(35.1 percent of the Upper Deck).
c) Nanny’s in charge—households that have two or more earners, neither earning high
incomes, and children present. (8.3 percent of the Upper Deck).
d) Two careers—households that have two or more earners, neither earning high incomes and
no children present. (9.4 percent of the Upper Deck).
e) The good life—households that have a high degree of affluence with no person employed,
or with the head-of-household not employed. (10.0 percent of the Upper Deck)
7. It is not easy to define the borders of what is meant by “middle class.”
a) Middle market has been defined as the “middle” 50 percent of household incomes –
that is about 57 million households earning between $25,000 and $85,000.
b) The dynamic nature of social class in the United States has been working against the
middle class.
c) There is mounting evidence that the “middle class” is shrinking in America.
8. Lower-income, or downscale consumers are households earning $35,000 or less.
a) Downscale consumers are more brand loyal than wealthier consumers because they can not
afford to make mistakes in switching to unfamiliar brands.
b) Marketers need to be sensitive to the reality that downscale consumers often spend a higher
percentage of their available incomes on food than do their middle-class counterparts.
c) Food is an important purchase area for low-income consumers because it represent an area
of “indulgence.”
9. Most people dress to fit their self-images, which include their perceptions of their own social class
membership.
a) Lower middle-class consumers have a strong preference for T-shirts, caps, and other clothing
that offer an external point of identification.
b) Upper-class consumers are likely to buy clothing that is free from such supporting
associations; they seek clothing with a more subtle look.
c) Social class is also an important variable in determining where a consumer shops.
10. Saving, spending, and credit card usage all seem to be related to social class standing.
a) Upper-class consumers are more future-oriented and confident of their financial acumen;
they are more willing to invest in insurance, stocks, and real estate.
b) In comparison, lower-class consumers are generally more concerned with immediate
gratification; when they do save, they are primarily interested in safety and security.
11. Social class groupings differ in terms of how they transmit and receive communications.
a) When it comes to describing their world, lower-class consumers tend to portray it in rather
personal and concrete terms, although middle-class consumers are able to describe their
experiences from a number of different perspectives.
b) Such variations in response indicate that middle-class consumers have a broader or more
general view of the world, although lower-class consumers tend to have a narrow or
personal view, seeing the world through their own immediate experiences.
12. Downward mobility, defined as moving down, rather than up the social ladder, is taking place
with today’s second youngest generation; they will experience lower living standards than their
parents.
1. Culture is the collective values, customs, norms, arts, social institutions and intellectual
achievements of a particular society.
a) Cultural values express the collective principles, standards and priorities of a community.
b) Promotional messages often reflect the target audiences’ cultural values.
2. The study of culture is a challenging undertaking because its primary focus is on the broadest
component of social behavior in an entire society.
1. Culture, the sum total of learned beliefs, values, and customs that serve to direct the consumer
behavior of members of a particular society, is often referred to as an “invisible hand” that guides
the actions of people of a particular society.
2. There are three “levels” of cultural norms:
a) Supranational level – reflects the underlying dimensions of culture that impact multiple
cultures or different societies. A lifestyle matrix for four segments of global youth (14-24)
includes:
i) In-crowd – privileged and seeking approval from others
ii) Pop mavericks – word-of-mouth spreads rapidly; passion, individuality, instant
gratification and personalization important
iii) Networked intelligentsia – hub of online social networks; revolution, creativity,
deconstruction
iv) Thrill renegades – infamy, adrenaline, anarchy
b) National level factors – such as shared core values, customs, personalities, and
predispositional factors that tend to capture the essence of the “national character” of the
citizens of a particular country.
c) Group Level factors – are concerned with various subdivisions of a country or society. They
might include subcultures’ difference, and membership and reference group differences.
3. Marketers should periodically reconsider why consumers are doing what they do, who are the
purchasers and users, when they shop, how and where they can be reached by the media, and
what new product and service needs are emerging.
4. Culture expresses and satisfies the needs of societies.
a) It offers order, direction and guidance for problem solving by providing methods of satisfying
physiological, personal, and social needs.
b) Culture determines whether a product is a necessity or discretionary luxury.
c) Culture dictates which clothes are suitable for different occasions.
d) When a specific standard no longer satisfies the members of a society or reflects its needs,
it is modified or replaced.
1. Culture is a series of norms that guide personal and group conduct and link individuals into a
largely cohesive group.
2. There are three distinct forms of learning:
a. Formal learning—adults and older siblings teach a young family member “how to
behave.”
b. Informal learning—a child learns primarily by imitating the behavior of selected others.
c. Technical learning—teachers instruct the child in an educational environment as to what,
how, and why it should be done.
3. The learning of one’s own culture is known as enculturation.
a. Key components of one’s enculturation are the family and consumer socialization.
b. Educational institutions teach arts, sciences, civics and skills.
c. Religious institutions provide spiritual and moral guidance and values.
4. The learning of a new or foreign culture is known as acculturation.
5. A consumer can be a “foreigner” in his or her own country.
6. Promotional messages are powerful vehicles for imparting cultural values.
7. Products can become cultural icons and help provide a cultural identity.
8. Social media conveys and shapes cultural values; influential people communicate.
9. A symbol is used to convey desired product images or characteristics; it is anything that stands
for something else.
a) Symbols can be verbal or nonverbal.
b) Symbols may have several, even contradictory, meanings.
c) Marketers use symbols to convey desired product images or characteristics.
d) Price and channels of distribution (including the type of store where the product is sold) are
symbols of the marketer and the marketer’s product.
10. A ritual is a type of symbolic activity consisting of a series of steps occurring in a fixed sequence
and repeated over time.
a. They can be public or private, elaborate, religious, or civil ceremonies, or they can be
mundane.
b. Rituals tend to include ritual artifacts (products) that are associated with, or somehow
enhance, performance of the ritual.
c. Ritualistic behavior is any behavior that is made into a ritual.
1. There are a variety of measures of culture, including: content analysis, consumer field observation,
and value measurement instruments.
2. Content analysis focuses on the content of verbal, written, and pictorial communications. It can
be used to:
a) Identify the intentions, focus, or communication trends of an individual, group or institution.
b) Describe attitudinal and behavioral responses to communications.
c) Determine psychological or emotional state of persons or groups.
3. When examining a specific society, anthropologists frequently study cultures through field
observation, which consists of observing the daily behavior or selected members of a society and
has the following characteristics:
a) It takes place within a natural environment.
b) It is performed sometimes without the subjects’ awareness.
c) It focuses on observation of behavior.
d) Instead of just observing behavior, researchers sometimes become participant-observers,
or active members of the environment they are studying.
4. In addition to fieldwork methods, depth interviews and focus groups are also quite often
employed by marketers to study social and cultural changes.
5. Recently there has been a gradual shift away from inferring characteristics about culture via
observation to directly measuring values by means of survey research.
a) Value instruments ask people how they feel about such basic personal and social concepts
as freedom, comfort, national security, and peace.
b) The Rokeach Value Survey is a self-administered value inventory, which is divided into two
parts.
i) Part one consists of 18 terminal value items, designed to measure the relative
importance of end-states of existence (personal goals).
ii) Part two consists of 18 instrumental value items, designed to measure the basic
approaches an individual might take to reach end-state values.
c) Gordon’s Surveys of Personal and Interpersonal Values measures values that determine
how people cope with their daily lives.
i) One survey is for personal values.
ii) One survey is for interpersonal values. Both achievement and success influence
consumption. They often serve as social and moral justification for the acquisition of
goods and services and the conspicuous consumption of symbols of personal
accomplishments.
a) Time and Activity
i) Americans consider time valuable and feel it is important to be active and involved.
ii) The premium on time affects consumption of convenience goods, including fast food.
b) Efficiency and Practicality
i) In terms of efficiency, Americans admire anything that saves time and effort.
ii) In terms of practicality, Americans are generally receptive to any new product that
makes tasks easier and can help solve problems.
c) Progress is linked to the values reviewed earlier and the central belief that people can always
improve themselves and change should be accepted, including new products or services
designed to fulfill previously under- or unsatisfied needs.
d) Materialism (comfort and pleasure) leads to the perception that material comfort and
possessions signify attainment of “the good life”