Course Aims

Chapter 1
Course Aims
Examine how and why consumers behave the
way they do, how environmental impacts shape
how we behave, and the practical marketing
implications of that behavior.
This course aims to
Explore how companies influence the
individual in different situations and through
different types of media.
Analyze the current trends in consumer behavior
and apply them to the marketing of an actual
product or service.
Course Intended Learning Outcomes
Develop a deeper
understanding of consumer
behavior by learning about
relevant psychological and
sociological theories.
Identify how those theories can
be used to impact real-world
marketing strategies and
decisions.
Demonstrate awareness of
applying consumer behavior
knowledge to make better
purchase decision.
Develop critical attitudes and

open-mindedness, which are
necessary for “life-long
learning”.
Communicate effectively in
written and oral formats.
Teaching and Learning Activities
Seminar
• Classes may involve lectures, videos, small exercises,
discussions, and presentations. Students are expected to
attend class, participate and contribute to discussions, and
keep up with marketing news.
Readings
• Students are required to pre-read the assigned chapters
and also other relevant materials provided by the lecturer
before coming to classes.
Group Presentations
• Presentations by individual groups to the class on various
consumer behavior topics. Other students are encouraged
to raise questions for the presenting groups.
Assessment Tasks/Activities
Class Participation (30%)
Students are required to attend all class
sessions.
Students are expected to actively participate
in the class discussion. Students’ contribution
to the class discussion will significantly
influence their class participation grade.
Case Study and Exam (50%)
Group Presentation (20%)

Presentation (20%)
Mid-term case study (20%)
Final Exam (30%)
Recommended Text
• Consumer Behavior:
Building Marketing Strategy
(Fourteenth Edition)
• Authors:
David Mothersbaugh,
Delbert Hawkins,
Susan Bardi Kleiser
• Publisher: McGraw-Hill
Education
• Year: 2019
Why consumer
behavior is
important?
11
12
Video “Why Consumer Behavior is Vital for Success in Marketing” link:
https://www.youtube.com/watch?v=PSLpdM6EYTQ
Companies want people to buy products or services
Understanding the behavior of your customer can help you
to better show them what it is they are buying, why they
are buying it, and what it will do to improve their lives
There are four key factors influencing consumer
behavior: opinions of consumers, economic situations,
advertising, purchasing power

• iPhone 15 will be released this month, will you
buy it or not?
14
• What are the influencing
factors of your purchase
decision?
Consumer vs. Business
Markets and Buyer Behavior
in
Principles of Marketing
Two Consumer Entities
Personal Consumer
• The individual who
buys goods and
services for his or her
own use, for
household use, for
the use of a family
member, or for a
friend.
Organizational
Consumer
• A business,
government agency,
or other institution
(profit or nonprofit)
that buys the goods,
services, and/or
equipment necessary
for the organization to
function.
Consumer Markets and Buyer Behavior
Consumer buyer behavior is the buying
behavior of final consumers—individuals
and households that buy goods and
services for personal consumption.
Consumer markets are made up of all the
individuals and households that buy or
acquire goods and services for personal
consumption.
Model of Consumer Behavior
Figure 5.1 The Model of Buyer Behavior
Characteristics Affecting Consumer Behavior
Factors Influencing Consumer Behavior
The Buyer Decision Process
FIGURE | 5.6 Buyer Decision Process
Customer Analysis
• Boeing customers range from various companies from the
aviation industry, governments of various countries, space
& research institutions who have differentiated needs.
• The products offered to the customers are MTO (make to
order) products which are customized as per the
requirement of the customers.
Business Markets and Business
Buyer Behavior
Business buyer behavior refers to the buying behavior of the
organizations that buy goods and services for use in the production
of other products and services that are sold, rented, or supplied to

others.
The business buying process is the process where business buyers
determine which products and services are needed to purchase,
and then find, evaluate, and choose among alternative brands.
Source: Principles of Marketing (Fifteenth Edition) by Philip Kotler and Gary Armstrong
Business Buyer Behavior
Figure 6.1 A Model of Business Buyer Behavior
The Business Buying Process
FIGURE | 6.3 Stages of Business Buying Behavior
Business Markets
Nature of the Buying Unit
Business buyers usually face more complex buying
decisions than do consumer buyers. Compared with
consumer purchases, a business purchase usually
involves:
• More decision participants
• More professional purchasing effort
• More buyer and seller interaction
Participants in the Business Buying Process
• Users are those that will use the product or service.
• Influencers help define specifications and provide information
for evaluating alternatives.
• Buyers have formal authority to select the supplier and arrange
terms of purchase.
• Deciders have formal or informal power to select and approve
final suppliers.
• Gatekeepers control the flow of information.

Major Influences on Business Buyers
FIGURE | 6.2 Major Influences on Business Buying Behavior
Introduction of Consumer
Behavior
Learning Objectives
1. Define consumer behavior.
2. Summarize the applications of consumer behavior.
3. Explain how consumer behavior can be used to develop
marketing strategy.
4. Explain the components that constitute a conceptual model of
consumer behavior.
5. Discuss issues involving consumption meanings and firm
attempts to influence them.
China‘s top liquor maker Kweichow Moutai and domestic coffee chain Luckin Coffee
have got a hit on their hands, with a new baijiu-flavored latte released on Sep. 04.
Opening Case
Understanding and Appealing
Consumers:
How China's Largest Coffee
Chain Surpassed Starbucks
37
Video “How China's Largest Coffee Chain Surpassed Starbucks”
link: https://www.youtube.com/watch?v=2S3H0DKntNw
• What are the key factors contributing to
Luckin’s success?
• Between Starbucks and Luckin, which one do
you prefer? Why?

Discussion
§ Cost reduction
§ Product innovation
§ Marketing strategy:
ü performance ad → brand ad
ü Professionalism, youth, fashion
and wellness
§ Franchising business model
Key Factors of Luckin’s Success
The Differences between Luckin vs. Starbucks
LO1: Definitions of Consumer
Behavior
Consumer Behavior: Definitions
• The behavior that consumers display in searching for,
purchasing, using, evaluating, and disposing of products and
services that they expect will satisfy their needs (Schiffman,
Kanuk, and Wisenblit, 2010).
• The field of consumer behavior is the study of individuals,
groups, or organizations and the processes they use to select,
secure, use, and dispose of products, services, experiences, or
ideas to satisfy needs and the impacts that these processes
have on the consumer and society.
Consumer Behavior: Definitions
• Four key aspects regarding consumer behavior are highlighted:
1. Consumer behavior is a complex, multidimensional process.
2. Successful marketing decisions by firms, nonprofit organizations, and
regulatory agencies require an understanding of the processes
underlying consumer behavior.
3. Successful marketing decisions require organizations to collect

information about the specific consumers involved in the marketing
decision at hand.
4. Marketing practices designed to influence consumer behavior involve
ethical issues that affect the firm, the individual, and society.
LO2: Applications of Consumer
Behavior
Applications of Consumer Behavior
Marketing Strategy
Regulatory Policy
Social Marketing
Informed Individuals
For Marketers: Marketing Strategy
• Marketing decisions based on explicit consumer behavior theory,
assumptions, and research are more likely to be successful than those
based on hunches or intuition, and thus create a competitive advantage.
• An accurate understanding of consumer
behavior can greatly reduce the odds of
failures.
• Learning consumer behavior can help you
obtain a usable managerial understanding
of consumer behavior to help you become
a more effective marketing manager.
49
Video “The 5 BEST Marketing Strategies For 2023 (NEW TACTICS)” link:
https://www.youtube.com/watch?v=ZSNjaXPQEzg&t=667s
For Administration: Regulatory Policy
• Various regulatory bodies exist to develop,
interpret, and/or implement policies designed
to protect and aid consumers.

• For example, the Food and Drug Administration
(FDA) administers the Nutrition Labeling and
Education Act (NLEA).
• Clearly, effective regulation of many marketing
practices requires an extensive knowledge of
consumer behavior.
For Society: Social Marketing
• Social marketing is the application of marketing strategies and tactics to
alter or create behaviors that have a positive effect on the targeted
individuals or society as a whole.
• Social marketing has been used in attempts to reduce smoking, to increase
the percentage of children receiving their vaccinations in a timely manner,
to encourage environmentally sound behaviors such as recycling, to reduce
behaviors potentially leading to AIDS, to enhance support of charities, to
reduce drug use, and to support many other important causes.
• Just as for commercial marketing strategy, successful social marketing
strategy requires a sound understanding of consumer behavior.
For Consumers: Informed Individuals
• Marketers spend billions to influence consumer decisions. These attempts
occur in ads, in websites, on packages, as product features, in sales pitches,
and in store environments.
• They also occur in the content of many TV shows, in the brands that are
used in movies, and in the materials presented to children in schools
(product/brand placement).
• It is important that consumers accurately understand the strategies and
tactics being used so they can be more effective consumers.
• An understanding of consumer behavior can establish a foundation for

reasoned business ethics.
LO3: Marketing Strategy and
Consumer Behavior
Market Analysis Components
Market Segmentation Steps
Marketing Mix
Consumer Decision Process
Outcomes for Three Levels
1. The Consumers
2. The Company
3. The Competitors
4. The Conditions
Market Analysis Components
• Market segmentation is a portion of a larger market whose needs
differ from the larger market.
• Market Segmentation Involves Four Steps:
1. Identifying Product-Related Need Sets: the need/value/benefit
sets that the firm’s current or potential product might satisfy
2. Grouping Customers with Similar Need Sets
3. Describing Each Group: in terms of demographics, lifestyles,
and media usage
4. Selecting an Attractive Segment(s) to Serve
Market Segmentation
"Today, segmentation is no longer a simple, or
static, marketing technique; it is core to the way
successful companies run their business.”
- IBM Institute for Business Value
Market Segmentation
Geographic
segmentation
Demographic
segmentation
Psychographic
segmentation
Behavioral
segmentation
Segmenting Consumer Markets
61
Video “Segmentation, Targeting and Positioning - Learn Customer
Analytics” link:
https://www.youtube.com/watch?v=Fij1aBcl_Ts&t=122s
Market Segmentation
Marketing Strategy
ØMarketing Strategy is the answer to
the question: How will we provide
superior customer value to our target
market?
ü Customer value is the difference
between all the benefits derived
from a total product and all the costs
of acquiring those benefits. It is
critical that a firm consider value
from the customer’s perspective.
Marketing Strategy
ØThis requires the formulation of a consistent marketing mix, which
includes the
1.Product
2.Communications
3.Price
4.Distribution, and
5.Services
• The consumer decision process intervenes between the marketing
strategy, as implemented in the marketing mix, and the outcomes.
• The firm can succeed only if consumers see a need that its product
can solve, become aware of the product and its capabilities, decide
that it is the best available solution, proceed to buy it, and become
satisfied with the result of the purchase.
Consumer Decisions
Outcomes
1. Firm Outcomes: product/brand position; Sales
and profit; Customer satisfaction
2. Individual Outcomes: need satisfaction;
Injurious consumption
3. Society Outcomes: economic outcomes,
environment outcome, social welfare
Creating Satisfied Customers
Outcomes
LO4: The Nature of Consumer
Behavior
Overall Conceptual Model of Consumer Behavior
The Nature of Consumer Behavior
External Influences
• Culture
• Demographics and social stratification
• Ethnic, religious, and regional subcultures
• Families and households
• Groups
Internal Influences
• Perception
• Learning
• Memory
• Motives
• Personality
• Emotions
• Attitudes
Self-Concept and Lifestyle
• Self-concept is the totality of
an individual’s thoughts and
feelings about oneself.
• Lifestyle is how one lives,
including the products one
buys, how one uses them,
what one thinks about
them, and how one feels
about them.
Situations and Consumer Decisions
Consumer decisions result
from perceived problems
and opportunities.
Consumer problems arise
in specific situations and
the nature of the situation
influences the resulting
consumer behavior.
LO5: The Meaning of
Consumption
The Meaning of Consumption
ØConsumption has meaning
beyond satisfaction of minimum

or basic consumer needs
ØSymbolic needs
ØStatus
ØIdentity
ØGroup acceptance
77
Video “Why Supreme Is So Expensive | So Expensive” link:
https://www.youtube.com/watch?v=0O0yi8YgYbs
§ The recognizability is the key to Supreme’s power as a brand.
§ The items are also purposefully difficult to get hold of, and their
products are kept in high demand by very limited releases.
§ Make people feel like they are part of something exclusive.
§ “The more we make a consumer work for their particular access to a
product, the more alluring the services and products are becoming.
§ Brand collaboration
§ Sell unique and exclusive products.
§ Manage to keep their cool, alternative, and exclusive image despite
their expansion and has still maintained its skater credentials.

CHAPTER 2
Cross-Cultural Variations in
Consumer Behavior
Learning Objectives
1. Define the concept of culture
2. Describe core values that vary across culture and influence
behaviors.
3. Understand cross-cultural variations in nonverbal communications
4. Summarize key aspects of the global youth culture.
5. Understand the role of global demographics.
6. List the key dimensions in deciding to enter a foreign market.
Opening Case!
List of countries with McDonald's restaurants
10
Video “What McDonald’s Menu Items Look Like Around The World” link:
https://www.youtube.com/watch?v=JJPmoHR7DlU
• What are key factors of McDonald’s global
success?
• Discuss with your group members the
similarities and differences of McDonald’s
menu in your countries.
Group Discussion
§ McDonald’s is the world’s largest fast food restaurant chain,
serving over 69 million customers daily in over 100 countries in
more than 40,000 outlets as of 2021.
§ McDonald’s global success can be attributed to many reasons with
one, in particular, being the organization’s ability to adapt to
different cultures and innovate across different countries.

§ McDonald’s strategic aim to support cultural diversity and adjust
their offerings to local markets underscores its effective geographic
segmentation which in return allows them to obtain a wider reach
than its competitors.
What We Can Learn From this Case
§ The company credits its global success to its ability to segment its
target audience and exercise cultural awareness.
§ Overall, in order to be a successful global brand, organizations
need to cater to the unique cultures they are targeting while
retaining their brand integrity.
§ Despite McDonald’s global brand recognition and cross-cultural
marketing strategies, McDonald's has continued to provide its
consumers with the same experience wherever they are in the
world.
§ Starbucks’ CEO offers this
cautionary note for American
businesses going global: “The
biggest lesson is not to assume
that the market or the
consumers are just like
Americans, even if they speak
English or otherwise behave as
if they were.”
The Background
Marketing Across Cultural Boundaries is a
Difficult and Challenging Task
Marketing Across Cultural Boundaries is a
Difficult and Challenging Task

Globalization
• Globalization changing from
ØOne-way influence from U.S. to other countries to…
ØMutual influence
• Four major world citizens
ØGlobal citizens: Positive toward international brands, view them as a signal of
higher quality, most concerned about corporate responsibility to the local
country
ØGlobal dreamers: Positive toward international brands, and buy into their
positive symbolic aspects, less concerned about corporate responsibility to the
local country
ØAntiglobals: Negative toward international brands, don’t like brands that
preach American values, don’t trust multinationals.
ØGlobal agnostics: Don’t base decisions on global brand name, evaluate as they
would local brands, don’t see global brands as special.
LO1: The Concept of Culture
The Concept of Culture
• Culture is the complex whole that includes knowledge, belief, art, law,
morals, customs, and any other capabilities and habits acquired by humans
as members of society.
• Several aspects of culture require elaboration.
üFirst, culture is a comprehensive concept. It includes almost everything
that influences an individual’s thought processes and behaviors.
üSecond, culture is acquired. It does not include inherited responses and
predispositions.
üThird, the complexity of modern societies is such that culture seldom
provides detailed prescriptions for appropriate behavior.
üFinally, the nature of cultural influences is such that we are seldom
aware of them.

• The boundaries that culture sets on
behavior are called norms, which are
simply rules that specify or prohibit
certain behaviors in specific situations.
• Norms are derived from cultural
values, or widely held beliefs that
affirm what is desirable.
• Violation of cultural norms results in
sanctions, or penalties ranging from
mild social disapproval to banishment
from the group.
Cultural values give rise to norms and associated
sanctions, which in turn influence consumption
patterns.
Cultures are not static. They typically evolve and change slowly over time.
26
Video “Me or We? Cultural Difference between East and West”
link: https://www.youtube.com/watch?v=78haKZhEqcg
LO2: Variations in Cultural
Values
Variations in Cultural Values
• Cultural values are widely held beliefs that affirm what is desirable.
These values affect behavior through norms, which specify an
acceptable range of responses to specific situations.
• A useful approach to understanding cultural variations in behavior
is to understand the values embraced by different cultures.
• Numerous values vary across cultures and affect consumption. We
will present a classification scheme consisting of three broad forms

of cultural values: other-oriented, environment-oriented, and selforiented.
• The numerous values that differ across
cultures and affect consumption include:
ØOther-Oriented Values: reflect a society’s
view of the appropriate relationships between
individuals and groups within that society.
ØEnvironment-Oriented Values: prescribe a
society’s relationship to its economic and
technical as well as its physical environment.
ØSelf-Oriented Values: reflect the objectives
and approaches to life that the individual
members of society find desirable.
Other-Oriented Values: individual ↔ group
ØIndividual/Collective
ØYouth/Age
ØExtended/Limited Family
ØMasculine/Feminine
ØCompetitive/Cooperative
ØDiversity/Uniformity
Individual/
Collective
Are individual activity and initiative valued more highly than
collective activity and conformity?
Youth/Age
Is family life organized to meet the needs of the children or the
adults?
Are younger or older people viewed as leaders and role models?
Extended/
Limited Family
To what extent does one have a lifelong obligation to numerous
family members?
Masculine/Feminine To what extent does social power automatically go to males?
Competitive/
Cooperative
Does one obtain success by excelling over others or by cooperating
with them?
Diversity/Uniformity
Does the culture embrace variation in religious belief, ethnic
background, political views, and other important behaviors and
attitudes?
Environment-Oriented Values: society ↔ economic,
technical, and physical environment
ØCleanliness
ØPerformance/Status
ØTradition/Change
ØRisk taking/Security
ØProblem solving/Fatalistic
ØNature
Cleanliness To what extent is cleanliness pursued beyond the minimum needed for
health?
Performance/Status Is the culture’s reward system based on performance or on
inherited factors such as family or class?
Tradition/Change Are existing patterns of behavior considered to be inherently
superior to new patterns of behavior?
Risk taking/Security
Are those who risk their established positions to overcome
obstacles or achieve high goals admired more than those who do
not?
Problem
solving/Fatalistic
Are people encouraged to overcome all problems, or do they take
a “what will be, will be” attitude?
Nature Is nature regarded as something to be admired or overcome?
Self-Oriented Values
ØActive/Passive
ØSensual gratification/Abstinence
ØMaterial/Nonmaterial
ØHard work/Leisure
ØPostponed gratification/Immediate
gratification
ØReligious/Secular
Active/Passive Is a physically active approach to life valued more highly than a less active
orientation?
Sensual gratification
/Abstinence
To what extent is it acceptable to enjoy sensual pleasures such as
food, drink, and sex?
Material/Nonmaterial How much importance is attached to the acquisition of material
wealth?
Hard work/Leisure Is a person who works harder than economically necessary admired
more than one who does not?
Postponed
/Immediate
gratification
Are people encouraged to “save for a rainy day” or to “live for
today”?
• Religious/Secular To what extent are behaviors and attitudes based on the rules
specified by a religious doctrine?
Applications in Consumer Behavior

Source: The Procter & Gamble Company
Will this ad be
popular in
your culture?
Why?
Source: The Procter & Gamble Company
Cultures differ in their
acceptance of sensual
gratification. This ad
for Pantene would
work well in some
cultures but would
not be appropriate in
cultures that place a
high value on
abstinence.
LO3: Cultural Variations in
Nonverbal Communications
Cultural Variations in Nonverbal Communications
Time
• Time perspective
• Time Interpretations
The meaning of time varies
between cultures in two
major ways:
Time Perspective
• Monochronic time perspective
Ø Most Americans, Canadians, Western Europeans, and Australians

tend to view time as inescapable, linear, and fixed in nature.
Ø It is a road reaching into the future with distinct, separate sections
(hours, days, weeks, and so on). Time is seen almost as a physical
object; we can schedule it, waste it, lose it, and so forth.
Ø Believing that a person does one thing at a time, we have a strong
orientation toward the present and the short-term future.
Time Perspective
• Polychronic time perspective
Ø Most Latin Americans, Asians, and Indians tend to view time as
being less discrete and less subject to scheduling.
Ø They view simultaneous involvement in many activities as natural.
Ø People and relationships take priority over schedules, and
activities occur at their own pace rather than according to a
predetermined timetable.
Ø Such cultures have an orientation toward the present and the past.
Some important differences between individuals with a monochronic
perspective and those with a polychronic perspective are listed below.
Space
Overall use and meanings
assigned to space vary
widely among different
cultures
Symbols
• Colors, animals, shapes,
numbers, and music
have varying meanings
across cultures.
• Failure to recognize the

meaning assigned to a
symbol can cause
serious problems!
Relationships
• Americans tend to form
relationships and friends
quickly and easily.
• Chinese relationships are
much more complex and
characterized by guanxi.
The rights and obligations
imposed by relationships.
Agreements
• How does a culture ensure
business obligations are
honored? How are
disagreements resolved?
• Some cultures rely on a
legal system; others rely on
relationships, friendships,
etc.
Things
• The cultural meaning of
things leads to purchase
patterns that one would not
otherwise predict.
• The differing meanings that

cultures attach to things,
including products, make gift
giving a particularly difficult
task.
Etiquette
• The generally accepted ways of
behaving in social situations.
• Behaviors considered rude or
obnoxious/offensive in one
culture may be quite acceptable
in another!
• Normal voice tone, pitch, and
speed of speech differ between
cultures and languages, as do
the use of gestures.
LO4: A Global Youth Culture
Global Cultures
• An important issue facing marketers is the extent to which one or
more global consumer cultures or segments are emerging.
• Such a culture would have a shared set of consumption-related
symbols with common meaning and desirability among members.
• One such proposed global culture is that portion of local cultures that
view itself as cosmopolitan, knowledgeable, and modern.
• Such individuals share many values and consumption-related
behaviors with similar individuals across a range of national cultures.
• Such cultures are being created by the globalization of mass media,
work, education, and travel.
• Disney creates
a culture with a
sense of belonging,
devotion, and
employees who
want exceed
customer
expectations.
• Disney’s dream
culture are popular
all around the
world.
This map portrays where each Disney movie is based, and
where it’s supposed to be from.
A Global Youth Culture?
• Mass media and the Internet have had an impact of uniformity
among teens around the world.
• They tend to watch many of the same shows, movies and videos,
listen to the same music, and dress alike.
• Technology is important factor but U.S. youth and brands no longer
lead the way.
Similarities and convergence of lifestyles, values, and purchases make this global
youth market compelling for companies, particularly given its large size. For
example, a survey of global youth (age 14–29) across six countries found that 86
percent believe that products help to define and communicate their personality. It
also found compelling similarities in the top three spending categories, as follows:
This outdoor signage
for 7-Up in China
demonstrates the
youth trend that is
emerging in Asian
cultures, which
historically have been

quite traditional with
a high value placed on
age and wisdom

Chapter 3
Group Influences on
Consumer Behavior
Learning Objectives
1. Explain reference groups and the criteria used to classify them
2. Discuss consumption subcultures, including brand and online
communities and their importance for marketing
3. Summarize the types and degree of reference group influence
4. Discuss within-group communications and the importance of wordof-mouth communications to

marketers
5. Understand opinion leaders (both online and offline) and their
importance to markets
6. Discuss innovation diffusion and use an innovation analysis to
develop marketing strategy
Opening Case!
Nike: The Power of Community
10
Video “GumboFit | Bridging Communities Through Sport | Nike”
link: https://www.youtube.com/watch?v=4gyBt_UUwPo
• Would you like to join Nike Community Club?
• Why or why not?
Discussion
• Smart community segmentation
Nike adapts their content offering to key subcommunities for
higher engagement
• Leveraging community events
Nike organizes global meetups to strengthen brand engagement
• Using UGC to power every marketing channel
Nike generates social proof at scale and maximizes UGC impact on
its online store
5 Ways Nike Wins With Community Marketing
• Community feedback and co-creation at scale
Nike stay on top of customer trends and demands through
personalization and contests
• Beyond socials, community spaces they own
Nike has more control and increased engagement through an
owned community app
5 Ways Nike Wins With Community Marketing
§ The result of a short online survey shows:
Ø “It’s difficult to find someone to exercise with!”
Ø ”It’s not easy and time-consuming to find out sports events”
§ The key findings of an interview of Nike’s Community Activity Mobile
App users:
Ø People value exercising in groups
Ø People struggle to fulfill their exercise aspirations
Ø Social Media brings fitness communities together
Understand your Consumers
§ Nike doesn’t try to sell products, it sells aspirations, dreams and stories,
not only for famous athletes, but for all individuals who face adversity in
their loves and sporting journeys.
§ Nike has made itself into a magic mirror, where it projects an image of
strength, passion, and determination onto everyone it engages with.
§ The content of Nike Community is created by the members themselves
through sharing and interacting on the platform and on diverse social

media channels.
§ Nike motivates community members to actively connect with each
other, which further leads to strengthening the connection between the
brand and its users.
§ Motivation factors to participate in an online brand community include,
as stated by Wirtz et al (2013):
ü members’ interests and passion for a brand
ü social relationships with others
ü receive of direct user-information
ü entertainment and
ü intention to improve skills
§ Brand stories created and shared by users through social media
influence not only existing brand community members but also new
ones, who might get confirmed in their brand expectations and gain
more trust towards the brand (Singh & Sonnenburg, 2012).
LO1: Types of Groups
Reference Group Influence
• A group is defined as two or more
individuals who share a set of norms,
values, or beliefs and have certain
implicitly or explicitly defined
relationships to one another such that
their behaviors are interdependent.
• A reference group is a group whose
presumed perspectives or values are
being used by an individual as the
basis for his/her current behavior.

• Four criteria that are particularly useful in classifying groups:
ØMembership: whether one is a member of a particular group or not.
ØStrength of Social Tie: to the closeness and intimacy of the group linkages.
– Primary groups vs. Secondary groups
ØType of Contact: whether the interaction is direct (e.g., face-to-face) or
indirect (e.g., Internet).
ØAttraction: the desirability that membership in a given group has for the
individual.
– Dissociative reference groups vs. Aspiration reference groups
Strength of Social Tie
Type of Contact
• Influence of Group
Types of Groups
• A consumption subculture is a distinctive subgroup of society that
self-selects on the basis of a shared commitment to a particular
product class, brand, or consumption activity.
• These groups have
ü(1) an identifiable, hierarchical social structure;
ü(2) a set of shared beliefs or values; and
ü(3) unique jargon, rituals, and modes of symbolic expression.
• They are reference groups for their members as well as those who
aspire to join or avoid them.
LO2: Consumption Subcultures
Types of Groups
• Consumption subcultures focus on the interactions of individuals
around an activity, product category, or occasionally a brand.
• A brand community is a nongeographically bound community,
based on a structured set of social relationships among owners of
a brand and the psychological relationship they have with the
brand itself, the product in use, and the firm.

• A community is characterized by consciousness of kind, shared
rituals and traditions, and a sense of moral responsibility.
Brand Communities
Types of Groups
• Brand communities can add value
to the ownership of the product
and build intense loyalty.
• When a consumer becomes part
of a brand community, remaining
generally requires continuing to
own and use the brand.
• This can create intense brand
loyalty!
Brand Communities
32
Video “MINI Clubs Worldwide: How to Find an Exciting MINI
Community Near You” link:
https://www.youtube.com/watch?v=1CLrk5yX4AQ
• “Owning a Mini, we sometimes say, it’s
the only car brand that comes standard
with friends.”
• “We really felt as though, friendship and
community are as important now as ever,
as people are in isolation. That’s where
Mini Canada is stepping in, to provide
this series of community events for
family, friends and fans of the brand.”
--- Adam Wexler, national manager,
Mini brand communications

Types of Groups
• An online community is a community that interacts over time around a
topic of interest on the Internet.
• An online social network site is a web-based service that allows individuals
to (1) construct a public or semipublic profile within a bounded system, (2)
articulate a list of other users with whom they share a connection, and (3)
view and traverse their list of connections and those made by others within
the system.
ØOnline social network sites take many forms, including friendship (Facebook
and Instagram), media sharing (Vimeo and YouTube), corporate or brand
(LEGO Ideas), business networking (LinkedIn), and micro-blogging (Twitter).
Online Communities and Social Networks
Types of Groups
• Online communities and social networks are attractive for a number of
reasons, including
üConsumer use is high and rising
üA majority of consumers who use social network sites use them to
share information, including information about brands and products.
üCustomer acquisition potential seems high, with 51 percent of firms on
Twitter and 68 percent of firms on Facebook indicating they have
acquired a customer through these channels.
üRoughly two-thirds of consumers who interact with a brand via social
media are more likely to recall the brand, share information about the
brand with others, feel connected to the brand, and purchase the brand.
Types of Groups
• When Using Social Media in
Marketing
ØBe transparent
ØBe part of the community
ØTake advantage of the unique
capabilities of each venue
40
Video “Social Media Trends 2023” link:
https://www.youtube.com/watch?v=JhX
-rqohkPM
Please
summarize the
Social Media
Trends in 2023
41
9 points in total,
points per student
1. Blending Sponsored Posts with Organic Content
2. Using Social Platform for Search
3. Quality Remains King
4. Social Audio to Take Off
5. AI Enters the Mainstream
6. Social Customer Support
7. Short-Form Video Continues To Dominate (Again!)
8. Brands Turn Their Attention To Social Listening
9. Gaming Platforms Open New Opportunities for Brands
Social Media Trends 2023
Is there any other
Social Media
Trends you
recommend?
43
LO3: Reference Group
Influence on the Consumption
Process
Ø Types of Reference Group
Influence
Ø Situational Determinants of
Ø Brand vs. Product Class
Influence
Ø Marketing Strategy and
Reference Groups
Reference Group Influence on the Consumption Process
Contents
• Reference group influence can take three forms:
• Informational Influence occurs when an individual uses the behaviors
and opinions of reference group members as potentially useful bits
of information.
• Normative Influence (a.k.a. utilitarian influence), occurs when an
individual fulfills group expectations to gain a direct reward or to
avoid a sanction.
Types of Reference Group Influence
• Identification Influence (a.k.a.
value expressive), occurs
when individuals have
internalized the group’s
values and norms.
• Informational Influence. This influence is based on either the
similarity of the group’s members to the individual or the expertise
of the influencing group member.

• Normative Influence is strongest when individuals have strong ties
to the group and the product involved is socially conspicuous.
• Identification Influence guide the individuals’ behaviors without any
thought of reference group sanctions or rewards. The individual has
accepted the group’s values as his or her own.
• Conformity, the process whereby
people change their beliefs, attitudes,
actions, or perceptions to more
closely match those held by groups to
which they belong or want to belong or
by groups whose approval they desire.
• There are lots of reasons why people
conform, including the desire/need to
fit in or be accepted by others and
maintaining order in one’s life.
A Related Concept: Conformity
• Reference groups may have no influence in a given situation, or
they may influence usage of the product category, the type of
product used, or the brand used.
• The consumption situation characteristics—necessity/nonnecessity
and visible/private consumption—combine to affect the degree of
reference group influence likely to operate in a specific situation.
• Group influence is strongest when the use of product or brand is
visible to the group.

• Reference group influence is higher the less of a necessity an item is.
Degree of Reference Group Influence
• Three additional determinants of reference group influence include
1. In general, the more commitment an individual feels to a group,
the more the individual will conform to the group norms.
2. The more relevant a particular activity is to the group’s
functioning, the stronger the pressure to conform to the group
norms concerning that activity.
3. The individual’s confidence in the purchase situation matters.
Individual personality traits can influence confidence and thus be
susceptible to reference group influence.
Degree of Reference Group Influence
56
Video “Peer Pressure
” link:
https://www.youtube.com/watch?v=EpGkCStiFmo
Do you have any
suggestions to
get rid of peer
pressure
57
LO4 & 5: Communications
within Groups and Opinion
Leadership
Ø WOM
Ø Opinion Leaders
(special topic:
Influencer Marketing)
Ø Market Mavens,
Influentials, and efluentials
Ø Marketing and Online
Strategies
Communications within Groups and Opinion Leadership
Contents
• WOM involves individuals sharing information with other
individuals in a verbal form, including face-to-face, on the phone,
and over the Internet.
• Social media and the Internet continue to transform interpersonal
communications and WOM.
• Consumers generally trust the opinions of people (family, friends,
acquaintances) more than marketing communications.
• As a consequence, WOM can have a critical influence on consumer
decisions and business success.
Word-of-Mouth (WOM) Communications
WOM Versus Advertising
(% who put people vs. advertising as best source)
• An opinion leader is the “go to person” for specific types of
information. This person filters, interprets, and passes along
information.
• These individuals actively filter, interpret, or provide product- and
brand-relevant information to their family, friends, and colleagues.
• Opinion leaders possess enduring involvement for specific product
categories. This leads to greater knowledge and expertise.
• Opinion leadership is category specific – an opinion leader in one
product category is often an opinion seeker in others.
Opinion Leaders
Mass Communication Information Flows
Two-Step Flow of Communication Multistep Flow of Communication
Influencer
Marketing
Case Study
Pet Influencers Cast As
Dyson’s Instagram
Influencer
68
Video “Here’s How Much Animal Influencers Can Make” link:
https://www.youtube.com/watch?v=z9lmTbXyzIg
§ Brands far and wide, from Google to 20th Century Fox, have been
partnering with pet influencers to take advantage of the undeniable
influence of beloved pets.
§ Universally loved and unlikely to cause trouble with unfiltered opinions, pet
influencers present a unique opportunity for a diverse set of companies
looking to resonate with audiences endeared by pets.
§ Dyson branding has used dog influencers, predominantly featuring a playful
tone that is typically a hallmark of these influencer campaigns.
§ Pets make a natural fit for Dyson, a brand who features landing
pages directly speaking to pet owners.
Dyson’s Pet Influencer Campaign: Overview
§ Dyson markets its products as vacuums capable of heavy-duty chores,
including the cleanup of the inevitable pet fur and other messes.
§ Dyson recruited a set of influencers of varying popularity, including micro-
(10K-50K followers) and mid-tier influencers (50K-500K followers), to
harness the power of lesser-known but still valuable social media
personalities.
§ The campaign almost exclusively utilized dog influencers and centered
around Dyson’s effectiveness in cleaning up after house pets.
§ The sponsored posts typically had an upbeat or comedic tone, and
influencers expressed their satisfaction with Dyson’s product.
§ Objectives
✧ Raise awareness of Dyson as a provider of products suitable for pet
owners.
✧ Create and improve brand affinity between Dyson and pet owners.
✧ Provide positive social media engagement among Instagram audience.
§ Approach
§ Channel: Instagram
§ Influencers: Pets and pet owners
§ Little Leo The Morkie – 159K followers
§ Aqua The Corgi – 141K followers
§ Izzy The Frenchie – 125K followers
§ Forrest and Jameson – 70.6K followers
§ Fish & Chips – 59.6K followers
Dyson’s Pet Influencer Campaign:
Preview of Dyson Pet Influencer
§ The tags #DysonPets and #DysonV10 were consistently used throughout
the campaign in posts, with influencers expressing creative freedom by
depicting their cleaning chores and writing individualized descriptions.
§ Combined results from 25 analyzed posts:
Ø Social Reach
✩ Instagram followers targeted: 1,278,630
Ø Engagement
✩ Likes: 115,176
✩ Comments: 1,935
✩ Average engagement rate: 10.78%
Dyson’s Pet Influencer Campaign: Results
• Do you trust social media influencers’
recommendation? Why?
• What can we learn from Dyson’s Pet Influencer
Campaign?
Discussion
§ Dyson branding leveraged a range of influencer tiers, including nano-,
micro- and mid-tier influencers.
§ Influencers incorporated personal messages in their posts,
highlighting their individual creativity and appeal.
§ Instagram dogs were the primary influencers targeted by Dyson, in an
effort to create positive engagement with other dog and pet owners.
§ Light and comedic tones were common themes in most posts, while
brand tags used by influencers were consistent.
Dyson’s Pet Influencer Campaign: Takeaways
Endorsement (Sponsorship) in Marketing, defined as
• …an agreement between an individual who enjoys public
recognition (e.g., a celebrity, a influencer, a KOL) and an entity
(e.g., a brand) to leverage the individual's power for the purpose
of promoting the entity.
--Bergkvist and Zhou (2016)
Underlying Psychological Mechanisms for Endorsement
• Elaborative Likelihood Model!peripheral processing > e.g.,
endorser looks pretty > clothing label must be fashionable
• Evaluative conditioning!If a well-liked spokesperson is paired
with the brand in contiguity (time and space wise) , then the
brand should be viewed in a positive manner
Research on the effectiveness of sponsorship –

Where does the power of persuasion come from?
• Source effect — about the endorser
• Expertise – more important for informational messages
• Trustworthiness (mixed findings)
• Attractiveness – more important for transformational messages
Sponsorship Research Findings: the Fit Factor
• Fit can influence sponsorship effectiveness directly (or
indirectly as moderator for source effect): recall, image transfer,
likability, credibility, choice etc
• What if the sponsor-product has low fit? Doomed to fail?
§ A social media influencer is someone who has
built a sizable following across one or more
social media channels (YouTube, Facebook,
Instagram, Snapchat, Twitch, blogs, etc.).
§ They drive conversation and engagement
around a particular topic, discussion, or niche
area.
§ Digital influencers share valuable, usergenerated content.
§ They are the trendsetters of the digital age.
What Is A Social Media Influencer?
§ Influencers have their fingers on the digital
pulse of a highly-engaged and loyal audience.
§ An influencer’s audience consumes their
content as a source of entertainment,
information, and inspiration.
§ Some influencers invite their fans into their
personal interests, travels, discoveries,
struggles, and everyday lives. This breeds a
deep level of intimacy with their followers.
What Is A Social Media Influencer?

§ Influencer marketing is the practice of partnering with people
who have influence with your potential customers.
§ These influencers have built a loyal following on social media
through online content creation, and will collaborate with
brands to help them generate awareness about their product or
service.
§ Over the last several years, influencer marketing has evolved
from an ancillary marketing tactic to a multi-billion dollar
industry.
What is Influencer Marketing?
The Rise of Influencer Marketing
§ Influencer marketing works because influencers have built
loyalty and trust with their audience. They act as ambassadors
to a particular group of people, and help brands connect with
audiences in a more authentic way.
§ Creative sourced from influencers outperform brand images, as
UGC is presented as an organic post.
§ Consumers are more likely to trust recommendations from
peers over brand recommendations
§ Influencer marketing allows brands to tap into the natural
engagement of the influencer’s follower base.
Why Does It Work?
The Typical Social
Media Platforms of
Influencer
Marketing
JACK MORRIS
Travel & Adventure
2.8M Followers
KC STAUFFER
Family
4M Followers
EMILYSKYE
Fitness & Health
2.4M Followers
Learn MoreAbout Instagram
Video:
• Is Instagram the New Youtube?
• 9 Instagram Stories Stats You Can't Ignore
INSTAGRAM
§ Instagram has exploded in growth in the last few years, and in June 2018 they
exceeded 1 billion users. This information was announced in tandem with the
launch of IGTV (Instagram TV), which along with Instagram Stories represents a
concerted push into the video space.
§ Collaborating with top Instagram influencers is a great way to position your
product or service in a visually-striking or highly personalized way. Instagram has a
high concentration of Millennial users, and strong usage among Gen Z and Gen X
age groups. It attracts influencers in fashion and beauty, travel and hospitality,
lifestyle, design, fitness, food, and more.
AUSTIN EVANS
Technology
3.4M Subscribers
ALPHAM
Men & Lifestyle
4.5M Subscribers
Video Streaming
Competitors:
• Twitch vs. YouTube: Behind YouTube’s Plan to Win Over
• Instgrammers vs. YouTubers: Which is Best for Your Brand?
RCL BEAUTY101
Beauty & Comedy
13.7M Subscribers
YOUTUBE
§ YouTube was one of the earliest influencer channels, with YouTubers
(“Creators”) drawing attention from brands as early as 2006.
§ YouTube is the largest video platform is the world, and offers lot of creative
freedom to showcase products, services, and experiences in a long-form video
format. YouTube is used by a wide range of audiences, especially people aged
18-34.
§ That, coupled with the ability to easily embed links makes YouTube influencer
marketing campaigns effective for both branding and direct response
campaigns. That said, the video medium is no longer unique to YouTube,
which is facing growing competition from both Twitch and Instagram.
LAURACLERY
Comedy
3.8M Followers
JON PAUL PIQUES
Comedy & Gaming
9M Followers
FACEBOOK
§ With over 2.2 billion users and 8 billion daily video views, Facebook has the
largest global reach of any channel. Traditionally, Facebook fell behind other
social networks in fostering an influencer community. More recently,
however, Facebook doubled down with a Creator App for influencers and a
proprietary Brand Collab Manager for companies who want to partner with
creators.
§ Facebook Live videos, watched 3x longer than standard videos, are used by
top influencers and brands to reach Facebook’s global audience. While many
influencers use Facebook as a secondary channel for livestreaming to their
fans, others have built their primary following on Facebook.
FacebookVideo Case
Studies:
• How Top Brands Use Facebook Video & Livestreaming
• How JC Penney, Best Fiends & Saks Use Facebook Live Influencers
HOLDERNESS FAMILY
Family
1.6M Followers
CUP OFJO
Lifestyle & Family
1.3M monthly visits
SKINNYTASTE
Food & Recipes
3.7M monthly visits
• A Comprehensive Guide to Blogger Outreach
• Crafting the Perfect Influencer Agreement
ABEAUTIFUL MESS
Design & DIY
906,600 monthly visits
BLOGS
§ Blogs became the very first influencer marketing channel when food,
lifestyle, and mommy bloggers began to parter with brands in the early
2000s. Blogs generally provide access to an older demographic (25-49 year
olds) and allow for more in-depth, personalized storytelling.
§ For brands, partnering with bloggers can drive brand awareness, sign-ups,
website traffic, promotions, and other direct-response KPIs. Successful
sponsored blogs also have the unique advantage of building organic traffic
over time, meaning a single blog post could lead to ongoing returns over
several years.
Outreach Tactics:
TWITCH
§ Twitch launched as a livestreaming platform in 2011, and has gained rapid
traction amongst gamers. The majority of their over 15 million viewers are aged
18-34, and spend an average of 95 minutes per day on Twitch — over double
the time spent on any other social channel.
§ A slew of brands have begun experimenting with Twitch sponsorships, hoping to
tap into this engagement. Influencer sponsorships have largely been led by
gaming companies, but brands like Coca-Cola, Old Spice, South Park Studios and
KFC have started experimenting with Twitch as well. Twitch is emerging very
quickly, and represents a powerful new channel for brands to reach highly
engaged audiences in innovative ways.
Video Streaming Competitors:
• Twitch vs. YouTube: Which Is Best for Influencer Marketing?
• Caffeine TV vs. Twitch: Video Livestream Showdown
KITTYPLAYS
956,000 followers
DRDISRESPECT
2.9M followers
NINJA
11.9M followers
SNAPCHAT
§ Snapchat influencers first arose with the release of Snapchat Stories in 2013.
Marketers started working with top Snapchat influencers on takeovers,
product placements, and other creative sponsorships to reach teen
audiences.
§ More recently, however, Snapchat has struggled amidst competitors,
stagnated user growth, and nervous investors. While its future remains in
the balance, Snapchat may offer some brands a channel to diversify
campaigns, but is likely not the ideal medium to plan a long-term influencer
marketing strategy.
Understanding Snapchat’s Struggles:
• Snapchat vs. Instagram Stories: Who Wins? [Infographic]
• Is Snapchat Dead as an Influencer Channel?
FROM HEAD TO TOE

Beauty & Fashion
CYRENE Q
Visual Artist
TURBANCHINO
Art & Comedy
Brand should check the following aspects of an influencer to
gauge its credibility and trustworthiness (Scrunch)
• Is every post sponsored by a different brand?
• Is their content style blatant product shots or styled photography
shoots?
• Is there a creative element in their content?
• Do they have qualifications that support their content category?
• Are their metrics as a whole, consistently good? (holistic)
• The exchange of advice and
information between group
members can occur directly
via WOM in the following
situations:
1. Individual seeks information
from another, or
2. Individual volunteers
information
LO5: Situations in Which WOM and Opinion Leadership Occur
• The term crowd refers to a large group of people such as a group of
consumers, employees of a corporation, or members of a social network
who offer expertise.
• Crowdsourcing utilizes crowds to collectively execute tasks such as solving
problems, innovating, or getting large projects completed by dividing the
work among many people.

Crowdsourcing
• Goes well beyond consumer-generated ads.
• Can involve setting up a forum in which
customers help other customers.
• Can include input into product and service
design.
• A market maven/expert is a generalized market influencer who
provides significant amounts of information about various products,
places to shop, and so on.
• Roper Starch identifies a group similar to market mavens called
influentials. Influentials are 10% of population but use broad social
networks to influence the other 90%!
• Roper Starch identifies a group similar to Internet market mavens
called e-fluentials. They wield/exercise significant online and
offline influence.
Mavens, Influentials, and e-fluentials
• Key Opinion Consumer (KOC) are regular consumers who love to share
their true product reviews on popular social media.
• KOC is the latest form of influencers in China, who are experts in testing
and reviewing products.
• As everyday shoppers themselves, they are more relatable to their
followers and generally seen as more trusted due to their authentic and
reliable content.
• They play an important role in the decision-making process of their readers,
regardless of the relatively small audience size.
• The main differences with celebrity influencers – KOCs typically have no
more than a few hundred fans on their social media accounts.
Key Opinion Consumers (KOC)

• Strategies designed to generate WOM and encourage opinion leadership
include:
1. Advertising can stimulate and simulate WOM and opinion leadership.
Ø Native advertising, also called sponsored content, is a type of
advertising that matches the form and function of the platform upon
which it appears. In many cases it functions like an advertorial, and
manifests as a video, article or editorial.
Ø The word native refers to this coherence of the content with the other
media that appear on the platform.
Ø These ads reduce a consumers' ad recognition by blending the ad into
the native content of the platform.
Marketing Strategy, WOM, and Opinion Leadership
• Strategies designed to generate WOM and encourage opinion
leadership include:
2. Product Sampling: sometimes called “seeding,” involves getting a
sample of a product into the hands of a group of potential consumers
who likely to be opinion leaders and serve as brand ambassadors.
Examples: Lululemon, Beats.
3. Retailing/Personal Selling: encourage their current customers to pass
along information to potential new customers. it is called a referral
reward program. Examples: United Airlines, automobile salesperson or the
dealership.
4. Creating Buzz
ØBuzz can be defined as the exponential expansion of WOM. It
happens when “word spreads like wildfire” with no or limited
mass media advertising supporting it.
ØCreating buzz is a key aspect of guerrilla marketing—marketing

with a limited budget using nonconventional communications
strategies. Guerrilla marketing is about making an “intense
connection with individuals and speeding up the natural word-ofmouth process.
Video “47 Creative Marketing and Guerilla Marketing Ideas Slideshow” link:
https://www.youtube.com/watch?v=k8Z2B6bH6Kc
ØViral marketing is an online “pass-it-along” strategy, utilizing
electronic communication to trigger brand messages (often via
email) throughout a widespread network of buyers.”
ØBlogs are personalized journals where people and organizations
can keep a running dialogue.
ØTwitter is a micro-blogging tool that has evolved quickly into one of
the largest social media outlets.
Online Strategies to Leverage Buzz and WOM
LO6: Diffusion of Innovations
• An innovation is an idea, practice, or
product perceived to be new by the
relevant individual or group.
• The manner by which a new product
spreads through a market is basically a
group phenomenon.
• New products can be placed on a
continuum from no change to radical
change, depending on the market’s
perception.
Diffusion Innovations
Ø Categories of Innovation
Ø Adoption Process
Ø Diffusion Rate
Ø Adopter Categories
Ø Marketing Strategies and
the Diffusion Process
Contents
• Continuous Innovation
ØAdoption of this type of innovation requires relatively minor changes
in behavior(s) that are unimportant to the consumer.
• Dynamically Continuous Innovation
ØAdoption of this type of innovation requires a moderate change in an
important behavior or a major change in a behavior of low or
moderate importance to the individual.
• Discontinuous Innovation
ØAdoption of this type of innovation requires major changes in
behavior of significant importance to the individual or group.
Categories of Innovations
Adoption Process and Extended Decision Making
Diffusion Rates for Popular Consumer Electronics (Cumulative)
S-curve describing the development of performance
and value over time
Video “S-curves in Innovation” link:
https://www.youtube.com/watch?v=Rm1v7ll2iMk
1. Type of Group
2. Type of Decision
3. Marketing Effort
4. Fulfillment of Felt Need
5. Compatibility
6. Relative Advantage
7. Complexity
8. Observability
9. Trialability
10. Perceived Risk
Factors Affecting the Spread of Innovations
Innovation
Analysis and
Diffusion
Enhancement
Strategies
Adopter Categories
Ø Innovators are venturesome risk takers. They are capable of absorbing the financial
and social costs of adopting an unsuccessful product.
Ø Early Adopters tend to be opinion leaders, like market mavens, in local reference
groups. They are successful, well educated, and somewhat younger than their peers.
Ø Early Majority consumers tend to be cautious about innovations. They are socially
active but seldom leaders. They tend to be somewhat older, less well educated, and
less socially mobile than the early adopters.
Ø Late Majority members are skeptical about innovations. They often adopt more in
response to social pressures or a decreased availability of the previous product than
because of a positive evaluation of the innovation.
Ø Laggards are locally oriented and engage in limited social interaction. They tend to
be relatively dogmatic and oriented toward the past.
Adoptions of an Innovation over Time

Chapter 4
PART III: INTERNAL INFLUENCES
Perception
Learning Objectives
1. Describe the nature of perception and its relationship to consumer
memory and decisions
2. Explain exposure, the types of exposure, and the resulting
marketing implications
3. Explain attention, the factors that affect it, and the resulting
4. Explain interpretation, the factors that affect it, and the resulting
5. Discuss how perception can enhance strategies for retailing,
branding, advertising, and packaging
Opening Case!
How Brands Trigger You to Buy
More Stuff
Video “15 of the Most Powerful Psychological Tricks in Sales”link:
https://www.youtube.com/watch?v=hYZG8qnS2T4&t=108s
Please
summarize the
Psychological
Tricks in Sales
10
15 points in total,
points per student
1. The sale is all about the buyer!
2. Understand that marketing and psychology go together.
3. Mirroring
4. Colour influences buying tendencies
5. Provide Social Proof
6. Scarcity Sells
7. Draw strength from your setbacks
8. Empathy
Psychological Tricks in Sales
9. Provide products with high prices along with low priced items
10. Fear of Missing Out (FOMO)
11. The Curiosity Gap
12. Consumers want ethical choices
13. Showing pricing in smaller increments
14. Get a foot in the door (FITD)
15. Reciprocity
Psychological Tricks in Sales
• As a consumer, how to react to brands’
manipulation of our perception?
Discussion
§ Perception is a process that begins with consumer exposure and
attention to marketing stimuli and ends with consumer interpretation.
§ Exposure and attention are highly selective—meaning that consumers

process only a small fraction of the available information.
§ And as we will see, interpretation can be a highly subjective process.
Thus, reality and consumer perceptions of that reality are often quite
different.
§ Marketers wishing to communicate their brand message effectively to
consumers must understand the nature of perception and the many
factors influencing it.
LO1: The Nature of
Perception
The Nature of Perception
§ Information processing is a series
of activities by which stimuli are
perceived, transformed into
information, and stored.
§ Figure 1 illustrates a useful
information-processing model
having four major steps or stages:
exposure, attention, interpretation,
and memory.
§ The first three of these constitute
perception.
§ Exposure occurs when a stimulus such as a
banner ad comes within range of a
person’s sensory receptor nerves—vision,
in this example.
§ Attention occurs when the stimulus
(banner ad) is “seen” (the receptor nerves
pass the sensations on to the brain for
processing).
§ Interpretation is the assignment of
meaning to the received sensations.
§ Memory is the short-term use of the
meaning for immediate decision making or
the longer-term retention of the meaning.
§ This figure suggest a linear flow
from exposure to memory.
However, these processes occur
virtually simultaneously and are
clearly interactive.
§ Both perception and memory are
extremely selective.
§ This selectivity, sometimes referred
to as perceptual defenses, means
that individuals are not passive
recipients of marketing messages.
§ Of the massive amount of information
available, individuals can be exposed
and attend to only a limited amount.
§ The meaning assigned to a stimulus is
as much or more a function of the
individual as it is the stimulus itself.
§ Consumers largely determine the
messages they will encounter and
notice as well as the meaning they
will assign them.
LO2: Exposure
Exposure
• Exposure occurs when a stimulus is placed within a person’s relevant

environment and comes within range of his or her sensory receptor nerves.
• Exposure provides consumers with the opportunity to pay attention to
available information but in no way guarantees it.
• Most of the stimuli to which individuals are exposed are “self-selected.”
That is, people deliberately seek out exposure to certain stimuli and avoid
others.
• Generally, people seek information that they think will help them achieve
their goals.
• An individual’s goals and the types of information needed to achieve those
goals are a function of that person’s existing and desired lifestyle and such
short-term motives as hunger or curiosity.
Exposure
1. Selective Exposure
ØThe highly selective nature of consumer exposure is a major concern
for marketers, since failure to gain exposure results in lost
communication and sales opportunities.
2. Voluntary Exposure
ØAlthough consumers often avoid commercials and other marketing
stimuli, sometimes they actively seek them out for various reasons
including purchase goals, entertainment, and information.
Types of Exposure
Exposure
ØConsumers are highly selective in the way they shop once they enter a
store. One study found that only 21 percent of U.S. shoppers visited each
aisle in the store.
ØMedia exposure is also of great concern to marketers. The impact of the
active, self-selecting nature of media exposure can be seen in the zipping,
zapping, and muting of television commercials.
- Zipping occurs when one fast-forwards through a commercial on a
prerecorded program.
- Zapping involves switching channels when a commercial appears.

- Muting is turning the sound off during commercial breaks.
Types of Exposure-Selective Exposure
Exposure
ØZipping, zapping, and muting are simply mechanical ways for consumers
to selectively avoid exposure to advertising messages, often referred to as
ad avoidance.
ØAvoidance of commercials is a global phenomenon that extends beyond
TV to include radio, the Internet, magazines, and newspapers.
ØAd avoidance depends on numerous psychological and demographic
factors. A study by Initiative examined ad avoidance globally and across
various media. The study found that ad avoidance is increased by lifestyle
(busy and hectic lifestyle), social class (higher social class), and
demographics (men and younger consumers).
Exposure
• In response to ad avoidance
ØIn online settings, marketers have devised “pop-up” ads that are difficult or
impossible for viewers to eliminate.
ØAt the extreme, movie theaters air ads prior to the movie.
ØMarketers increasingly seek to gain exposure by placing their brands within
entertainment media, such as in movies and television programs, in exchange
for payment or promotional or other consideration (Product Placement).
ØMarketers increasingly seek exposure by placing their messages in ever more
unique media, such as on the side of trucks and taxis, in airplanes, at events,
and in video games.
28
Video “Top 9 Advergames in 2020
- By Gamify” link:
https://www.youtube.com/watch?v=pcSrT94Ufhk
Exposure
ØMany viewers look forward to the commercials developed for the Super Bowl.
ØConsumers have positive response to infomercials—program-length television
commercials with a toll-free number and/or web address through which to order
or request additional information.
ØIt also highlights the role that information and relevance play in driving voluntary
exposure to marketing messages.
ØExposure to banner ads and pop-ups is generally involuntary, as consumers
encounter them while seeking other information or entertainment.
ØConsumers also voluntarily expose themselves to marketing messages by
deliberately visiting firms’ homepages and other marketer sites.
Types of Exposure - Voluntary Exposure
Exposure
ØConsumers also might register online to receive coupons or regular updates or
newsletters about a company’s products and services.
ØThe voluntary and self-selected nature of such online offerings, where
consumers “opt in” to receive e-mail-based promotions, is often referred to as
permission-based marketing.
ØConsumers control the messages they are exposed to and, consequently, are
more receptive and responsive to those messages.
ØPermission-based marketing concepts also are being used to enhance the
effectiveness of mobile marketing on cell phones.
ØFinally, note that online viral and buzz marketing (Chapter 3) rely heavily on
consumer voluntary exposure and distribution of marketing messages.
Types of Exposure - Voluntary Exposure
LO3: Attention
Attention
• Attention occurs when the stimulus activates one or more sensory receptor
nerves, and the resulting sensations go to the brain for processing.

• Attention requires consumers to allocate limited mental resources toward
the processing of incoming stimuli, such as packages seen on store shelves
or banner ads on the web.
• The marketing environment is highly cluttered and consumers are
constantly bombarded by thousands of times more stimuli than they can
process. Therefore, consumer attention is selective.
Attention
Attention is determined by three factors:
1. Stimulus Factors
• Are physical characteristics of the stimulus itself
2. Individual Factors
• Are characteristics which distinguish one
individual from another
3. Situational Factors
• Include stimuli in the environment other than
the focal stimulus and temporary
characteristics of the individual that are
induced by the environment
1. Size
2. Intensity
3. Attractive Visuals
4. Color and Movement
5. Position
6. Isolation
7. Format
8. Contrast and Expectations
9. Interestingness
10. Information Quantity
Attention
Stimulus Factors
Attention
Stimulus Factors: A Closer Look
Size
• Larger stimuli are more likely to be
noticed than smaller ones.
• This is certainly the case on store shelves
where shelf space is at a premium and
more shelf space can translate into
greater attention and sales.
• consumer-products companies often pay
what are called slotting allowances to
retailers to secure shelf space.
• Size also affects attention to advertising.
Attention
Intensity
• The intensity (e.g., loudness, brightness, length) of a stimulus can increase attention.
For instance, the longer a scene in an advertisement is held on-screen, the more
likely it is to be noticed and recalled.
• In online contexts, one aspect
of intensity is intrusiveness,
or the degree to which one is
forced to see or interact with
a banner ad or pop-up in
order to see the desired
content.
• Repetition is related to
intensity.
Attention
Attractive Visuals
• Individuals tend to be attracted to pleasant stimuli and

repelled by unpleasant stimuli.
• An ad’s visual or pictorial component can have a strong
influence on attention independent of other characteristics.
• One study found that greater graphics content directed
consumers’ attention and increased how much time they
spent on an online retailer’s website.
• This picture superiority effect on attention demonstrates
the importance of an ad’s visual component and suggests
why the heavy use of pictures in contemporary print
advertising may be justified.
Attention
Color and Movement
• Color and movement attract
attention.
• A brightly colored package or
display is more likely to
received attention.
• Color and movement are also
important in ads.
In this case, the color Konica ad had a noted score of 62 percent, compared
with 44 percent for the identical Konica black-and-white ad.
Color can attract
attention to an ad
Attention
Position
• Position is the placement of an
object in physical space or time.
• In retail stores, items that are easy
to find or stand out are more likely

to attract attention, such as endcaps and kiosks.
• High impact zones in print ads in
the U.S. tend to be toward the top
left portion of the ad.
End-caps provide a way to
capture the shopper’s attention
Attention
Isolation
• Isolation is separating a stimulus
object from other objects.
Ø In-store, the use of stand-alone kiosks
is based on this principle.
Ø In advertising, the use of “white space”
(placing a brief message in the center
of an otherwise blank or white
advertisement) is based on this
principle. This M&M’s print ad makes effective use of
isolation to capture and hold attention.
Attention
Format
• Format refers to the manner in which the
message is presented.
• In general, simple, straightforward
presentations receive more attention than
complex presentations.
• Elements in the message that increase the
effort required to process the message tend to
decrease attention.
• Advertisements that lack a clear visual point of

reference or have inappropriate movement (too
fast, slow, or “jumpy”) increase the processing
effort and decrease attention.
Attention
Contrast and Expectations
• Consumers pay more attention to
stimuli that contrast with their
background.
• Expectations drive perceptions of
contrast. Ads that differ from
expectations for a product category
often motivate more attention.
• Adaptation level theory suggests that
if a stimulus doesn’t change over time
we habituate to it and begin to notice
it less.
This iPod ad provides contrast
for enhanced attention.
Attention
Interestingness
• What one is interested in is generally an individual
characteristic.
• However, there are characteristics of the message,
store, and in-store display themselves that cause them
to be of interest to a large percentage of the population.
• In advertising, factors that increase curiosity, such as a
plot, the possibility of a surprise ending, and
uncertainty as to the point of the message until the end,
can increase interest and the attention paid to the ad.

• Consumers were more likely to continue watching TV
ads that were highly entertaining.
Attention
Information Quantity
• Information quantity represents the number of
cues in the stimulus field.
• Cues can relate to the features of the brand
itself, typical users of the brand, typical usage
situations, and so on.
• This information can be provided on packaging,
in displays, on websites, and in ads.
• Information helps consumers make decisions.
• Information overload occurs when consumers
are confronted with so much information that
they cannot or will not attend to all of it.
Attention
Individual Factors
ØMotivation
ØAbility
Situational Factors
ØClutter
ØProgram Involvement
Attention
Individual Factors: Motivation
• Motivation is a drive state created by consumer interests and needs.
• Interests are a reflection of overall lifestyle as well as a result of goals (e.g.,
becoming an accomplished guitar player) and needs (e.g., hunger).
• Product involvement indicates motivation or interest in a specific product
category. It can be temporary or enduring.
• Study found that consumers were more likely to click on banners for products
they were involved with.
• Smart banners are banner ads that are
activated based on terms used in search engines.
• Attention was higher for these targeted ads, as
was brand and message recall and trust.
Attention
Individual Factors: Ability
• Ability refers to the capacity of individuals to
attend to and process information.
• Ability is related to knowledge and familiarity with
the product, brand, or promotion.
• Experts can attend to more information, more
quickly and more effectively, than novices can and
tend to be less plagued by information overload.
• Brand familiarity is an ability factor related to
attention. Those with high brand familiarity may
require less attention to the brand’s ads because
of their high existing knowledge.
Attention
Situational Factors: A Closer Look
Clutter
• Clutter represents the density of stimuli
in the environment.
• In-store research suggests that cluttering
the environment with too many point-ofpurchase displays decreases the
attention consumers pay to a given
display.
• In advertising, consumers pay less
attention to a commercial in a large
cluster of commercials than they do to

one in a smaller set.
Attention
Situational Factors: A Closer Look
Program Involvement
• Program involvement refers
to interest in the program or
editorial content
surrounding the ads.
• Program involvement has a
positive influence on
attention (see graph).
Attention
Nonfocused Attention
• Stimuli may be attended to without deliberate or conscious
focusing of attention.
• A classic example is the cocktail party effect, whereby an individual
engaged in a conversation with a friend isn’t consciously aware of
other conversations at a crowded party until someone in another
group says something relevant such as mentioning her name.
• This example suggests we are processing a host of stimuli at a
subconscious level, and mechanisms in our brain evaluate this
information to decide what warrants deliberate and conscious
attention.
Attention
ØHemispheric lateralization
ü The idea behind
hemispheric lateralization
is that different parts of
our brain are better suited

for focused versus nonfocused attention.
ØSubliminal Stimuli
Attention
• Hemispheric Lateralization refers to activities that take place on
each side of the brain.
The left side of the
brain controls
activities related to
rational thought.
The right side
of the brain
deals with
images and
impressions.
Attention
Subliminal Stimuli
A message presented so fast, softly or masked by other
messages that one is not aware of seeing or hearing it is call
a subliminal stimulus.
A subliminal ad “hides” key persuasive information within
the ad by making it so weak that it is difficult or impossible
for someone to physically detect.
Subliminal advertising has been the focus of intense study
and public concern.
59
Video “What is Subliminal message | Explained in 2 min” link:
https://www.youtube.com/watch?v=CCU9GAexvAA
LO4: Interpretation
Interpretation
• Interpretation is the assignment of meaning to sensations.
• Interpretation is related to how we comprehend and make sense of
incoming information based on characteristics of the stimulus, the
individual, and the situation.
• Three aspects of interpretation:
1. It is generally a relative process rather than absolute, referred to as
perceptual relativity.
2. It tends to be subjective and open to a host of psychological biases.
3. It can be a cognitive “thinking” process or an affective “emotional”
process.
Interpretation
• An episode of QVC Network’s Extreme Shopping program offers
ØMuhammad Ali’s boxing robe (priced at over $12,000),
Øfollowed by Jane Mansfield’s former mansion (almost $3.5 million),
Øand a Volkswagen Beetle painted by Peter Max ($100,000).
ØThen, signed and personalized Peter Max prints were offered for
about $200.
• In line with the notion of relativity,
consumers interpreted the print price
as lower when it followed the higherpriced items.
Interpretation
• Cognitive interpretation is
a process whereby stimuli
are placed into existing
categories of meaning.
• Affective interpretation is
the emotional or feeling
response triggered by a
stimulus such as an ad.
Consumers have
emotional responses to
or interpretations of ads
as well as cognitive ones.
This Go RVing ad is likely
to produce an emotional
or feeling response in
many members of its
target audience.
Interpretation
Interpretation is determined by three Characteristics:
1.Individual Characteristics
2.Situational Characteristics
3.Stimulus Characteristics
Interpretation
Individual Characteristics
ØTraits
ØLearning and Knowledge
ØExpectations
Interpretation
Traits
Physiological and psychological
traits drive our needs and desires.
These traits influence how a
stimulus is interpreted.
Physiologically
Consumers differ in their sensitivity
to stimuli, e.g., taste.
Psychologically
Consumers have natural cognitive,
emotional, and behavioral
predispositions, e.g., affect

intensity.
Interpretation
Learning and Knowledge
• The meanings attached to such
“natural” things as time, space,
relationships, and colors are
learned and vary widely across
cultures.
• Consumers also learn about
marketer-created stimuli like
brands and promotions through
their experiences with them.
Colors often have learned associations that are used
in ads, such as those used in this Pepsi ad, to convey
product characteristics and meanings.
Interpretation
Expectations
Interpretations tend to be
consistent with expectations,
an effect referred to as the
expectation bias.
Consumers often evaluate the
performance of a well-known
brand as higher than that of an
identical product with an
unknown brand name. Brands create expectations
and can thus bias perceptions.
Interpretation
Situational Characteristics
• The situation provides a context within which the focal stimulus is
interpreted.
• The contextual cues present in the situation play a role in consumer
interpretation independent of the actual stimulus. Examples:
ØColor. Certain color characteristics were found to elicit feelings of
relaxation (blue was more relaxing than red).
ØThe nature of the programming surrounding a brand’s advertisements.
Both Coca-Cola and General Foods in the past have refused to advertise
some products during news broadcasts because they believe that “bad”
news might affect the interpretation of their products.
Interpretation
Stimulus Characteristics
Ø Traits: Specific traits of the stimulus, such as size, shape, and
color, affect interpretation.
• The meaning of many stimulus traits is learned.
• Another general trait is the extent to which the stimulus is
unexpected, a trait sometimes referred to as incongruity.
• Rhetorical figures involve the use of an unexpected twist or
artful deviation in how a message is communicated either
visually in the ad’s picture or verbally in the ad’s text or headline.
Stimulus Characteristics: Traits
This McDonald’s
billboard is designed
like a clock and is
“interpreted” as
telling consumers
when it is “time” for
various McDonald’s
products.
Interpretation
Ø Organization: Stimulus organization refers to the physical
arrangement of the stimulus objects.
Ø Proximity refers to the fact that stimuli positioned close together are
perceived as belonging to the same category. Ambush marketing involves any
communication or activity that implies, or from which one could reasonably
infer, that an organization is associated with an event, when in fact it is not.
Ø Closure involves presenting an incomplete stimulus with the goal of getting
consumers to complete it and thus become more engaged and involved.
Ø Figure-Ground involves presenting the stimulus in such a way that it is
perceived as the focal object to be attended to and all other stimuli are
perceived as the background.
Stimulus Characteristics: Organization
This Puma Body Train
ad draws on figure–
ground to make the
focal image stand out
from the background.
Interpretation
Ø Changes
• To interpret stimulus change, consumers must be able to
categorize and interpret the new stimulus relative to the old.
• Interpreting change requires the ability to both detect change
and then assign meaning to that change.
Ø Sensory Discrimination: the physiological ability of an individual
to distinguish between similar stimuli.
Ø Just Noticeable Difference (j.n.d.) : The minimum amount that
one brand can differ from another (or from its previous version)
with the difference still being noticed.

Stimulus Characteristics: Changes
Blue Bell promotes
that its ice cream
is “still a 1⁄2 gallon”
to counter its
competitors’ practice
of weighting out.
Stimulus Characteristics: Changes
• Marketers can provide a reference
in the form of manufacturer’s
suggested retail price (MSRP).
• Consumers then are more likely
to interpret the sale price with
respect to the MSRP, which, if
favorable, should increase
perceived value of the offer and
likelihood of purchase.
Interpretation
Consumer Inferences
• An inference goes beyond what is
directly stated or presented.
• Consumers use available data and
their own ideas to draw conclusions
about information that is not
provided.
ØQuality Signals: Price-perceived
quality, Advertising intensity,
Warranties
ØInterpreting Images: visual images

This Hyundai ad shows how pictures and
imagery do more than merely represent reality.
They convey feelings and meanings that often
cannot be expressed in words.
Interpretation
Consumer Inferences
ØMissing Information and Ethical Concerns: consumers may assign
missing information a value based on a presumed relationship
between that attribute and one for which data are available.
nClaim-belief discrepancies, whereby a communication leads consumers
to believe something about the product that is not true even though it
doesn’t present a direct false claim.
n Kraft Cheese Singles’ ads claimed that each slice was made
from five ounces of milk. Reasonable consumers would
infer that Kraft Cheese Singles contained the same amount
of calcium as five ounces of milk even though this was not
directly stated in their ads. This inference is wrong because
processing milk into cheese reduces calcium content.
LO5: Perception and
Marketing Strategy
80
Video “Sensory Marketing | How to Utilized Sensory Marketing?”
link: https://www.youtube.com/watch?v=pGe-xLlykxQ
Perception and Marketing Strategy
ØRetail Strategy: use exposure effectively.
üStore interiors are designed with frequently purchased items
üHigh-margin items often are placed in high-traffic areas to capitalize on
increased exposure.
üPoint-of-purchase displays also attract attention and boost sales.
üAmbient scent. Pleasant smells in a retail store can increase product
evaluations by boosting emotions.

üCross-promotions, whereby signage in
one area of the store promotes
complementary products in another (milk
signage in the cookie aisle), also can be
effective.
ØBrand Name and Logo Development: the name sets up an
expectation that, in turn, biases people’s perceptions of the
actual experience.
• Linguistic Consideration
• Branding Strategies:
üBrand extension, where an existing brand extends to a new
category with the same name such as Levi Strauss putting its Levi
name on a line of upscale men’s suits.
üCo-branding, an alliance in which two brands are put together on a
single product. An example is “Intel Inside” Compaq computers.
• Logo Design and Typographics
ØMedia Strategy
• The exposure process is often selective rather than random is the
underlying basis for effective media strategies.
• Firms must determine to which media the consumers in the target market
are most frequently exposed and place ad messages in those media.
• Consumer involvement can drive media exposure and strategy.
ØAdvertisements: capture attention and convey meaning.
ØPackage Design and Labeling: attract attention and convey information
• various aspects from color to shape to typography can interact in complex
ways in affecting consumer perceptions.
• Packaging has functional and perceptual components.
• product information and warnings.

• Package options such as an
elongated bottle can influence
perceived consumption in ways
that reduce product sales and
revenues.
• Look at Illustration of two Diet
Coke cans. Which appears to
contain more?
• If you said the one on the right,
you were influenced by the
elongation bias (they both contain
exactly the same amount of liquid:
12 ounces).
Chapter5
PART III: INTERNAL INFLUENCES
Self-Concept and
Lifestyle
Learning Objectives
1. Describe self-concept, how it is measured, and how it is used to
position products
2. Define lifestyle and its relationship to the self-concept and to
psychographics
3. Explain specific lifestyle typologies and summarize those for
luxury sports cars and technology
4. Explain general lifestyle typologies
5. Discuss international lifestyles and one existing segmentation
scheme
Maslow’s Hierarchy of Needs
Opening Case!
Why People Purchase Luxury
Goods
Video “The Psychology Behind Why We Buy Luxury Goods” link:
https://www.youtube.com/watch?v=LAOHL5b6dyI
• Why People Purchase Luxury Goods?
• What kind of people are more likely to
buy luxury goods?
Discussion
§ Status and Prestige
§ Quality and Craftsmanship
§ Self-Expression and Individuality
§ Emotional Appeal
§ Investment and Resale Value
§ Experiential Value
§ Social Comparison and Conformity
§ Symbol of Achievement
Reasons Why People Purchase Luxury Goods
§ High Disposable Income
§ Status and Prestige Seekers
§ Fashion Enthusiasts
§ Collectors and Connoisseurs
§ Business Executives and Professionals
§ Gift Buyers
§ Cultural and Social Influences
§ Symbol of Achievement
§ Intention to show off
People who are more likely to buy Luxury Goods
LO1: Self-Concept
The Definition and Dimensions of Self-Concepts
§ Self-concept is defined as the totality of the individual’s thoughts
and feelings having reference to himself or herself as an object.
§ It is an individual’s perception of and feelings toward him- or
herself.
§ The self-concept can be divided into four basic parts, as shown in
below Table: actual versus ideal, and private versus social.
The skincare products usually take advantage of comparison
pictures to arouse consumers ideal self-concept.
Video “Your Ideal self vs Your Actual Self (Self Concept)” link:
https://www.youtube.com/watch?v=Od79cTHXNE8
The Types of Self-Concepts
independent and interdependent, also referred to as one’s
separateness and connectedness.
§ The independent self-concept

ü emphasizes personal goals, characteristics, achievements, and
desires.
ü Individuals with an independent self-concept tend to be
individualistic, egocentric, autonomous, self-reliant, and selfcontained.
ü They define themselves in terms of what they have done, what
they have, and their personal characteristics.
The Types of Self-Concepts
§ The interdependent self-concept
ü emphasizes family, cultural, professional, and social relationships.
ü Individuals with an interdependent self-concept tend to be
obedient, sociocentric, holistic, connected, and relation oriented.
ü They define themselves in terms of social roles, family
relationships, and commonalities with other members of their
groups.
Independent and interdependent self-concepts are not discrete
categories, it’s a continuum.
Possessions and the Extended Self
§ The extended self consists of the self plus possessions.
§ People tend to define themselves in part by their possessions.
§ These key possessions might be
major items, such as one’s home
or automobile, they are equally
likely to be smaller items with
unique meanings, such as a
souvenir, a photograph, a pet, or
a favorite cooking pan.
§ Some products become embedded with meaning, memories, and
value as they are used over time
§ At other times, a single peak experience with a product such as a
mountain bike can propel the product into the extended self.
§ A peak experience is an
experience that surpasses the
usual level of intensity,
meaningfulness and richness
and produces feelings of joy
and self-fulfillment.
§ Owning a product affects a person even if it does not become an
important part of the person’s extended self.
Ø The mere ownership effect, or the endowment effect, is the
tendency of an owner to evaluate an object more favorably than
a nonowner.
§ The extent to which brands become part of the extended self
appears to be affected by individual differences in brand
engagement.
Ø Brand engagement refers to the extent to which an individual
includes important brands as part of his or her self-concept.
Measuring Self-Concept
Using Self-Concept to Position Products
§ In general, consumers prefer brands that match their self-concepts.
§ Marketers should strive to develop product images that are
consistent with the self-concepts of their target markets
The Relationship Between Self-Concept and Brand Image Influence
LO2: The Nature of
Lifestyle
The Nature of Lifestyle
§ Lifestyle is basically how a person lives. It is how one enacts his or
her self-concept.
§ One’s lifestyle influences all aspects of one’s consumption behavior.
§ Is determined by the person’s past experiences, innate

characteristics, and current situation.
Ø Independents were more likely to seek adventure and excitement through
travel, sports, and entertainment; to be opinion leaders; and to prefer
magazines over TV.
Ø Interdependents were more likely to engage in home and domestic-related
activities and entertainment, including cooking at home and from scratch, as
well as in social activities revolving around family and the community.
• Marketers can use lifestyle to
segment and target specific
markets.
• Those who live the extreme
sports lifestyle have a specific
pattern of attitudes, behaviors,
and purchase patterns that
marketers must be aware of
and adapt to.
• This Reebok ad targets the
lifestyle of extreme sports
enthusiasts.
Measurement of Lifestyle
§ Attempts to develop quantitative measures of lifestyle were
initially referred to as psychographics. Measures include:
Attitudes Evaluative statements about other people, places, ideas,
products, etc.
Values Widely held beliefs about what is acceptable or desirable
Activities and
Interests
Nonoccupational behaviors to which consumers devote time
and effort, such as hobbies, sports, public service, and church
Demographics Age, education, income, occupation, family structure, ethnic

background
Media patterns The specific media the consumer utilize
Usage rates
Measurements of consumption within a specified product
category; often consumers are categorized as heavy, medium,
light, or nonusers
LO3 & 4: General versus
Specific Lifestyle Schemes
General versus Specific Lifestyle Schemes
§ Lifestyle measurements can be constructed with varying degrees of
specificity.
Ø At one extreme, marketers can study the general lifestyle patterns of a
population. These general lifestyle approaches are not specific to any one
product or activity, so they have broad applicability in developing
marketing strategies for a wide range of products and brands. General
approaches include VALSTM and PRIZM®
Ø At the other extreme, firms can conduct very specific lifestyle studies
focused on those aspects of individual or household lifestyles most
relevant to their product or service. For these studies, lifestyle
measurement is product or activity specific.
The Specific Lifestyle Schemes
Luxury Sports Cars
Top Guns (27%) Ambitious and driven, this group values power and
control and expects to be noticed.
Elitists (24%)
These old-family-money “blue-bloods” don’t see a car as
an extension of their personality. Cars are cars no matter
what the price tag.
Proud Patrons
(23%)
This group purchases a car to satisfy themselves, not to

impress others. A car is a reward for their hard work.
Bon Vivants (17%) These thrill seekers and “jet-setters” see cars as
enhancing their already existing lives.
Fantasists (9%)
This group uses their car as an escape, not as a means to
impress others. In fact, they feel a bit of guilt for owning
a Porsche.
Porsche Consumer Segments
The Specific Lifestyle Schemes
Technology
Technology Segments
Technology Segments
Wizards 31%
Journeymen 13%
Apprentices 31%
Novices 25%
§ While specific lifestyle studies are useful, many firms have found
general lifestyle studies to be of great value also.
§ Three general lifestyle schemes:
1. The VALSTM System
2. The PRIZM® System
3. Roper Starch Global Lifestyles
The General Lifestyle Schemes
§ The most popular application of psychographic research by marketing
managers is Strategic Business Insights’ (SBI) VALSTM program.
§ VALS provides a systematic classification of U.S. adults into eight distinct
consumer segments.
§ VALS is based on enduring psychological characteristics that correlate
with purchase patterns.
§ Three Primary Consumer Motivations:
1. Ideals Motivation
2. Achievement Motivation
3. Self-Expression Motivation
The VALSTM System
The VALSTM System
• Innovators are successful, sophisticated,
take-charge people with high self-esteem.
• Thinkers are mature, satisfied, comfortable,
and reflective.
• Believers are strongly traditional and
respect rules and authority.
• Achievers have goal-oriented lifestyles that
center on family and career.
• Strivers are trendy and fun loving.
• Experiencers appreciate the unconventional.
• Makers value practicality and selfsufficiency.
• Survivors lead narrowly focused lives.
This BMW ad is targeted to
Innovators who want to own all of
the right tools for their world of
spirited competitiveness.
This Vikings Ram ad would
appeal to the Makers.
This Movado ad
is targeted to
Achievers; the watch
is designed for
youngish, somewhat
casual but classic
customer.
Experiencers are
impulsive and social.

They like places
where they can be
independent and
experience new
challenges such as
this terrain in Utah.
§ PRIZM® is a state-of-the-art geo-demographic classification system from
Claritas that merges U.S. Census data with extensive data on product
consumption and media usage patterns.
§ The output is a set of 68 lifestyle segments. Each household in the
United States can be profiled in terms of these lifestyle groups.
§ The underlying logic:
Ø People with similar cultural backgrounds, means and perspectives naturally
gravitate toward one another.
Ø They choose to live amongst their peers in neighborhoods
offering …compatible lifestyles.
Ø They exhibit shared patterns of consumer behavior toward products, services,
media and promotions.
Geo-Lifestyle Analysis (PRIZM®)
§ PRIZM organizes its 66 individual segments into social and lifestage
groups.
§ Four social groupings are based on “urbaniticity.”
PRIZM Social and Lifestage Groups
Urban Major cities with high population density
Suburban Moderately dens “suburban” areas
surrounding metropolitan area
Second City Smaller, less densely populated cities or
satellites to major cities
Town & Rural Low-density towns and rural communities

§ The lifestage groups are based on age and the presence of children.
§ The three major lifestage groups are:
PRIZM Social and Lifestage Groups
Younger Years
Singles and couples under 35 years of age
with no children, or middle aged without
children at home
Family Life Households with children living at home
Mature Years Singles and couples; age 55 yrs and older, or
45-64 without children at home
ØYoung Digerati
ØBlue Blood Estates
ØBig Fish, Small Pond
ØPools and Patios
ØYoung & Rustic
ØGolden Ponds
Sample PRIZM Segments
LO5: International Lifestyles
§ The VALS and PRIZM systems are oriented to the United States.
§ Although language and other differences would exist, individuals pursuing
similar lifestyles in different cultures should be responsive to similar
product features and communication themes.
§ Experian Information Services’ MosaicTM Global evaluated roughly 380
million households across 25 countries in Asia, Europe, and North America.
Its goal was a global segmentation scheme based on core underlying
similarities in demographics, lifestyles, and behavior regardless of where
the households are located in the world.
§ Their analysis uncovered 10 global lifestyle segments along dimensions of
affluence, or wealth, and where they live, from urban to rural.

Chapter 6
PART IV: CONSUMER DECISION PROCESS
Consumer Decision
Process
Learning Objectives
1. Describe the impact of purchase involvement on the decision process
2. Describe the five stages in consumer decision process
3. Explain problem recognition and summarize the uncontrollable
determinants of it.
4. Discuss the definition, types, and available sources of information search
5. Explain the types of choice processes and evaluative criteria and their
measurement in alternative evaluation
6. Summarize the five decision rules for attribute-based choice in selection
and purchase.
7. Describe the various postpurchase processes and postpurchase
dissonance.
Opening Case!
Consumer Buying Process
Video “MBA 101: Marketing: Consumer Buying Process” link:

https://www.youtube.com/watch?v=Afl1vmcFVD8&t=91s
• What is your decision process when you
want to buy a new smartphone?
Discussion
LO1 & 2: Consumer Decision
The Types of Consumer Decisions
§ Purchase involvement is
ü the level of concern for, or interest in, the
purchase process,
ü triggered by need to consider a particular
purchase, and so
ü it is a temporary state influenced by the
interaction of individual, product, and
situational characteristics.
The Types of Decision Making
1.Nominal Decision Making
Ø Brand Loyal Purchases
Ø Repeat Purchases
2.Limited Decision Making
3.Extended Decision Making
• Nominal decision making, a.k.a.,
habitual decision making, in
effect involves no decision per se.
• Nominal decisions occur when
there is very low involvement
with the purchase.
• A completely nominal decision
does not even include

consideration of the “do not
purchase” alternative.
Nominal Decision Making
Consumer buys Campbell’s
without considering other
brands, its price, etc.
• Limited decision making involves internal
and limited external search, few
alternatives, simple decision rules on a
few attributes, and little postpurchase
evaluation.
• Middle ground between nominal and
extended decision making.
• Involves recognizing a problem for which
there are several possible solutions.
Limited Decision Making
Decision based only on
buying the cheapest rolls.
• Extended decision making involves
extensive internal and external search
followed by a complex evaluation of
multiple alternatives.
• It is a response to the high level of
purchase involvement.
• During postpurchase evaluation, doubts
are likely and a thorough evaluation takes
place.
Extended Decision Making
Emotional decisions may involve

substantial cognitive effort.
LO3: Problem Recognition
The Process of Problem Recognition
The Process of Problem Recognition
Types of Consumer Problems
Active Problem
An active problem is one the
consumer is aware of or will
become aware of in normal
course of events.
Marketing strategy:
Only require marketer to
convince consumers that its
brand is the superior solution.
Inactive Problem
An inactive problem is one of
which the consumer is not
aware.
Marketing strategy:
Marketer must convince
consumers that they have the
problem AND that their brand
is a superior solution.
Uncontrollable Determinants of Problem Recognition
Nonmarketing Factors Affecting Problem Recognition
Marketing Strategy and Problem Recognition
1.Discovering Consumer Problems
2.Responding to Consumer Problems
3.Helping Consumers Recognize Problems

4.Suppressing Problem Recognition
• Identifying Consumer Problems Using
Online and Social Media
• Monitoring and tracking is not enough
• Problems need to be solved in a timely
and appropriate manner
Discovering Consumer Problems
Surveys and focus groups use one of the following
approaches to problem identification:
1. Activity Analysis Focuses on a particular activity to determine
what problems consumers encounter during the
performance of the activity.
2. Product Analysis Examines the purchase or use of a particular
product or brand. Consumers may be asked
about problems associated with using a product
or brand.
3. Problem Analysis Starts with a problem and asks which activities,
products, or brand are associated with (or
perhaps could eliminate) those problems.
Human Factors Research
Human factors research attempts to determine human capabilities in
areas such as vision, strength, response time, flexibility, and fatigue and
the effect on these capabilities of lighting, temperature, and sound.
Ø Observational techniques such as slow-motion and time-lapse
photography, video recording, and event recorders are
particularly useful methods.

Ø This type of research can sometimes identify functional problems
that consumers are unaware of.
Emotion Research
Marketers are increasingly conducting research on the role of
emotions in problem recognition and resolution.
Ø Common approaches are surveys, focus group research and
personal interviews that examine the emotions associate with
certain problems.
Ø Critical in helping marketers anticipate consumer reaction to
problems and train customer service personnel to respond
appropriately.
Responding to Consumer Problems
Once a consumer problem is identified, the manager may
structure the marketing mix to solve the problem.
This can involve:
Ø Developing a new product or altering an existing one
Ø Modifying channels of distribution
Ø Changing pricing policy, or
Ø Revising advertising strategy
Generic Problem Recognition
• Involves a discrepancy that a
variety of brands within a
product category can reduce
• Increasing generic problem
recognition generally results in
an expansion of the total
market
Selective Problem Recognition

• Involves a discrepancy only one
brand can solve
• Firms attempt to cause selective
problem recognition to gain or
maintain market share
Generic versus Selective Problem Recognition
Helping Consumers Recognize Problems
Suppressing Problem Recognition
Helping Consumers Recognize Problems
Occasionally information is introduced in the market place that
triggers problem recognition that some marketers prefer to avoid.
Ø Obviously marketers do not want their current customers to
recognize problems with their brands.
Ø Effective quality control and distribution (limited out-of-stock
situations) are important in this effort.
Ø Packages and package inserts that assure the consumer of the
wisdom of their purchase are also common.
LO4: Information Search
The Nature of Information Search
Consumers continually recognize problems and opportunities, so
internal and external searches for information to solve these
problems are ongoing processes.
Internal Search
Search of long-term memory to
determine if
1. a satisfactory solution is known
2. what are types of potential
solutions, and
3. ways to compare the possible

solutions.
External Search
• If a resolution is not reached
through internal search, then the
search process is focused on
relevant external information.
• Ongoing search is done to
acquire information and because
the process is pleasurable.
The Types of Information Sought
Consumer decisions require information about:
Ø Appropriate evaluative criteria
Ø The existence of various alternatives
Ø Performance of each alternative on each
evaluative criterion
Information Search
Example of Decision Alternatives for Laptop Computers
Sources of Information
Five primary sources of information available to consumers:
Ø Memory of past searches, personal experiences, and lowinvolvement learning
Ø Personal sources, such as friends, family, and others.
Ø Independent sources, such as magazines, consumer groups, and
government agencies
Ø Marketing sources, such as sales personnel, websites, and
advertising
Ø Experiential sources, such as inspection or product trial
Source: World Internet Usage Statistics News and World Population Stats (Bogota, Colombia:
Miniwatts Marketing Group, March 2011.
• Online information is
expected.
• Online information boosts
offline sales.
• Online sources are viewed
as valuable.
• Online sources reduce
salesperson’s role.
Internet is a Major Search Avenue
Internet Search Activities
The Nature of Search Using Online Search Engines
Information Search on the Internet
• Economic considerations are a major motivator of online search.
• Information overload is a challenge.
• Comparison shopping sites use Bots or shopping bots, to help
consumers in their search and decision making.
• Three major strategic issues marketers face regarding the Internet’s
role in information search and decision making:
1. How can they drive their information to consumers?
2. How can they drive consumers to their information?
3. How (if at all) can online selling be utilized or integrated with existing
channels?
Driving Information to Consumers
ØBanner ads
ØPermission-based e-mail
ØSocial media
Driving Consumers to a Firm’s Information
• Offline Media such as print and TV.
• Behavioral targeting involves tracking consumer click patterns on
a website and using that information to decide on banner ad
placement.
• Search engine optimization (SEO) - techniques to ensure that a
company's web pages are accessible to search engines and
improving the chances they are found.
• Website design is also critical. Ongoing and repeat traffic requires
relevant and frequently updated content.
Mobile Search
Experian
Mobile Phone
Segments
Mobirati
19%
Mobile
Professionals
17%
Social
Connectors
22%
Pragmatic
Adopters
22%
Basic
Planners
20%
Mobile Search and Marketing Strategy
Amount of External Information Search
Ø External information search is skewed toward limited search, with
the greatest proportion of consumers performing little external
search immediately prior to purchase.
• Various measures of external information search:
1. Number of stores visited
2. Number of alternatives considered
3. Number of personal sources used, and
4. Overall or combination measures
Costs vs. Benefits of External Search
ØMarket Characteristics
ØProduct Characteristics
ØConsumer Characteristics
ØSituation Characteristics
Costs vs. Benefits of External Search
Marketing Strategies Based on Information Search Patterns
• Sound marketing strategies take into account the nature of
information search prior to purchase.
• Two dimensions of search are particularly appropriate:
1. The type of decision influences the level of search, and
2. The nature of the evoked set influences the direction of
the search
Marketing Strategies Based on Information Search Patterns
LO5 & 6: Alternative
Evaluation and Selection
Consumer Choice and Types of Choice Processes
An Examination of Rational Choice Theory
1. Assumption: Consumers seek one optimal solution to a
problem and choose on that basis

• Reality: Consumers have all sorts of “metagoals” that are
different from this
2. Assumption: Consumers have the skill and motivation to find
the optimal solution
• Reality: Consumers often lack both the skill or motivation
to do so
3. Assumption: The optimal solution does not change as a
function of situational factors such as time pressure, task
definition, or competitive context
• Reality: Context effects are common
Three types of consumer choice processes:
1.Affective Choice
2.Attitude-Based Choice
3.Attribute-Based Choice
Affective Choice
Affective choices tend to be more
holistic. Brand not decomposed
into distinct components for
separate evaluation.
Evaluations generally focus on how
they will make the user feel as they
are used.
Choices are often based primarily
on the immediate emotional
response to the product or service.
Attitude- versus Attribute-Based Choice Processes
Attitude-Based Choice
Involves the use of general

attitudes, summary impressions,
intuitions, or heuristics; no
attribute-by-attribute
comparisons are made at the
time of choice.
Attribute-Based Choice
Requires the knowledge of
specific attributes at the time
the choice is made, and it
involves attribute-by-attribute
comparisons across brands.
Evaluative criteria are typically
associated with desired benefits
and can differ in
Ø type
Ø number, and
Ø importance
Evaluative Criteria
Nature of Evaluative Criteria
Consumers are generally
interested in product
features only in relation to
the benefits those
features provide.
This James Trussart ad
emphasizes core benefits
(custom guitars) rather
than the technical
characteristics that
generate those benefits.
Involves a determination of:

Ø The Evaluative Criteria Used
Ø Judgments of Brand Performance on Specific
Criteria
Ø The Relative Importance of Evaluative
Criteria
Evaluative Criteria
Measurement of Evaluative Criteria
Evaluative Criteria
Determination of Which Evaluative Criteria Are Used
1. Direct methods include asking consumers what criteria
they use in a particular purchase.
2. Indirect techniques assume consumers will not or
cannot state their evaluative criteria.
• Projective techniques - allow the respondent to
indicate the criteria someone else might use.
• Perceptual mapping - researcher uses judgment to
determine dimensions underlying consumer
evaluations of brand similarity.
Perceptual Mapping of Beer Brand Perception
Evaluative Criteria
Evaluative Criteria
Determination of Consumers’ Judgments of Brand
Performance on Specific Evaluative Criteria
Measuring consumer judgments of brand
performance on specific attributes can include:
Ø Rank ordering scales
Ø Semantic Differential Scales
Ø Likert Scales
Evaluative Criteria
Determination of the Relative Importance of
Evaluative Criteria
The importance assigned to evaluative criteria can be
measured either by direct or by indirect methods.
Ø The constant sum scale is the most common
direct method.
Ø Conjoint Analysis is the most common indirect
method.
Individual Judgment and Evaluative Criteria
Ø Accuracy of Individual Judgments
Ø Use of Surrogate Indicators
Ø The Relative Importance and Influence of
Evaluative Criteria
Ø Evaluative Criteria, Individual Judgments, and
Marketing Strategy
Decision Rules for Attribute-Based Choices
Ø Conjunctive Rule
Ø Disjunctive Rule
Ø Elimination-by-Aspects Rule
Ø Lexicographic Rule
Ø Compensatory Rule
Non-compensatory
• Conjunctive Rule:
• Establishes minimum
required performance for
each evaluative criterion.
• Selects the first (or all)
brand(s) that meet or exceed
these minimum standards. If
minimum performance was:
Price 3
Weight 4
Processor 3
Battery life 1
After-sale support 2
Display quality 3
Conjunctive Rule
Conjunctive Rule
Lenovo, Acer, Dell, and Toshiba are eliminated because
they fail to meet all the minimum standards.
Minimum
This Zero Vitamin
Water ad tries to
assure consumers that
its brand has every
feature they might
need. This is consistent
with consumers using
a conjunctive decision
rule.
Disjunctive Rule
Disjunctive Rule:
Establishes a minimum required
performance for each important
attribute (often a high level).

All brands that meet or exceed the
performance level for any key
attribute are acceptable. If
minimum performance was:
Price 5
Weight 5
Processor Not critical
Battery life Not critical
After-sale
support
Not critical
Display quality 5
Disjunctive Rule
Acer, Compaq, and Dell meet minimum for at least one
important criterion and thus are acceptable.
Minimum
The disjunctive decision
rule selects products
that meet or exceed
high standards on any
important attribute, as
highlighted by this
Escort Redline Ex.

Elimination-by-Aspects Rule
• First, evaluative criteria ranked in
terms of importance
• Second, cutoff point for each
criterion is established.
• Finally (in order of attribute
importance) brands are eliminated
if they fail to meet or exceed the
cutoff. If rank and cutoff were:
Rank Cutoff
Price 1 3
Weight 2 4
Display
quality
34
Processor 4 3
After-sale
support
53
Battery life 6 3
Elimination-by-Aspects Rule
Step 1: Price eliminates Lenovo and Toshiba
Step 2: Weight eliminates Acer
Step 3: Of remaining brands (HP, Compaq, Dell), only Dell meets or
exceeds display quality minimum.
Minimum
3
3
Elimination-by-aspects
choices seek a brand
that has a high level of
an attribute that other
brands do not have, as
shown in this Domenica
Fiore ad.
Lexicographic Decision Rule
• Consumer ranks the criteria in order of importance.
• Then selects brand that performs best on the most important
attribute.
• If two or more brands tie, they are evaluated on the second
most important attribute. This continues through the
attributes until one brand outperforms the others.
• Acer would be chosen because it performs best on Price, our
consumer’s most important attribute.
Consumers using
a lexicographic decision
rule select the brand or
service that performs
best on their most
important attribute.
The Stouffer’s ad
emphasizes it is made
with fresh cheese.
Compensatory Decision Rule
The compensatory decision rule states that the brand that

rates highest on the sum of the consumer’s judgments of the
relevant evaluative criteria will be chosen.
Compensatory Decision Rule
• Assume the following
importance weights:
• Using this rule, Dell has the
highest preference and
would be chosen.
• The calculation for Dell is:
Summary of Resulting Choices from Different
Decision Rules
Situational Influences on Consumer Choice
Ø Choices are not independent of the competitive situation, an
effect sometimes called context effects
Ø One such effect is when an additional competitor makes an
existing competitor appear to be the “compromise” option
Ø Choice of the compromise brand increases even though:
a) Consumers are still using the same decision rule
(compensatory)
b) The compromise brand’s attribute levels have not
changed
Situational Influences on Consumer Choice
Compromise Effect
LO7: Postpurchase
Processes
Postpurchase Consumer Behavior
Postpurchase Dissonance
Postpurchase Dissonance occurs when a consumer has
doubts or anxiety regarding the wisdom of a purchase

made and is a function of the following:
• The degree of commitment or irrevocability of the decision
• The importance of the decision to the consumer
• The difficulty of choosing among the alternatives
• The individual’s tendency to experience anxiety
After the purchase is made, the consumer may utilize
one or more of the following to reduce dissonance:
Ø Increase the desirability of the brand purchased
Ø Decrease the desirability of rejected alternatives
Ø Decrease the importance of the purchase decision
Ø Reverse the purchase decision (return before use)
Consumption guilt - when
guilt feelings are aroused by
the product/service use.
Marketers need to focus on
validating the consumption
for “high guilt” products.
Indulging in chocolate for some
can cause consumption guilt
Product Use and Nonuse
Product Use
Retailers can frequently take advantage of the fact that the
use of one product may require or suggest the use of other
products, e.g., dresses and shoes.
Retailers can promote such items
• jointly
• display them together, or
• train sales personnel to make
relevant complementary sales Displaying complementary

products together
Product Use and Nonuse
Product Use
Stringent product liability laws have made firms responsible for
harm caused by products not only
Ø when the product is used as specified by the
manufacturer, but
Ø in any reasonably foreseeable use of the products.
When marketers discover confusion about proper use, they
should engage in communications to increase the chances of
proper use.
Disposition
Disposition
• Marketers must be aware of the disposition factors
that ultimately affect consumer purchase decisions.
• Helping consumers with the disposition of a used
product can help the consumer through this process
(e.g., developing products, packages and programs
that encourage proper disposition).
Product Disposition and Marketing Strategy
Purchase Evaluation and Customer Satisfaction
The Evaluation Process
Purchase Evaluation and Customer Satisfaction
The Evaluation Process
Determinants of Satisfaction and Dissatisfaction
Ø Instrumental performance relates to the physical
functioning of the product.
Ø Symbolic performance relates to aesthetic or imageenhancement performance.
Ø Affective performance is the emotional response that
owning or using the product or outlet provides
Dissatisfaction Process
Dissatisfaction Responses
Marketing Strategy and Dissatisfied Consumers
Firms need to satisfy consumer expectations by
1. Creating reasonable expectations through
promotional efforts, and
2. Maintaining consistent quality so the
reasonable expectations are fulfilled.
Dissatisfaction Responses
Marketing Strategy and Dissatisfied Consumers
• When a consumer is dissatisfied, the most favorable
consequence is for the person to communicate this
dissatisfaction to the firm but to no one else.
• Unfortunately, many individuals do not communicate
their dissatisfaction to the firm involved.
• Companies often make it difficult to complain or are
unresponsive to complaints.
Customer Satisfaction, Repeat Purchases, and
Customer Commitment
Creating Committed Customers
Is Increasingly the Focus of Marketing Strategy
Customer Commitment
• Repeat purchasers continue to buy the same brand
though they do not have an emotional attachment to it.
• Switching costs are the costs of finding, evaluating, and
adopting another solution.
• Brand loyalty involves commitment to the brand – it is a
biased behavioral response expressed over time.
Customer Commitment
Do you know your Net Promoter Score?

Net Promoter Score (NPS) is an indirect word-of-mouth
(WOM) measure of true attitudinal loyalty.
There are three categories of consumers:
1.Promoters
2.Passively satisfied
3.Detractors
NPS = Promoters minus Detractors
Customer Commitment
Repeat Purchasers, Committed Customers, and Profits
• A churn is a turnover in a firm’s customer base.
• Reducing churn is a major objective of many firms today.
• It typically costs more to obtain a new customer than to
retain an existing one, and new customers generally are
not as profitable as longer-term customers!
Customer Commitment
Sources of Increased Customer Profitability over Time
Customer Commitment
Repeat Purchasers, Committed Customers, and
Marketing Strategy
Developing a marketing strategy for a particular segment
includes identifying specific objectives to be pursued, such as
1. Attracting new users to the product category
2. Capturing competitors’ current customers
3. Encouraging current customers to use more
4. Encouraging current customers to become repeat purchasers
5. Encouraging current customers to become committed
customers

Customer Commitment
Customer Satisfaction Outcomes
Customer Commitment
Relationship Marketing
Five key elements to Relationship marketing:
1. Developing a core service or product around which to build a
customer relationship
2. Customizing the relationship to the individual customer
3. Augmenting the core service or product with extra benefits
4. Pricing in a manner to encourage loyalty
5. Marketing to employees so that they will perform well for
customers

Course Aims

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Chapter 1

Examine how and why consumers behave the

way they do, how environmental impacts shape

how we behave, and the practical marketing

implications of that behavior.

This course aims to

Explore how companies influence the

individual in different situations and through

different types of media.

Analyze the current trends in consumer behavior

and apply them to the marketing of an actual

Course Intended Learning Outcomes

behavior by learning about

relevant psychological and

Identify how those theories can

be used to impact real-world

marketing strategies and

applying consumer behavior

knowledge to make better

Develop critical attitudes and

necessary for “life-long

written and oral formats.

Teaching and Learning Activities

• Classes may involve lectures, videos, small exercises,

discussions, and presentations. Students are expected to

attend class, participate and contribute to discussions, and

keep up with marketing news.

• Students are required to pre-read the assigned chapters

and also other relevant materials provided by the lecturer

before coming to classes.

• Presentations by individual groups to the class on various

consumer behavior topics. Other students are encouraged

to raise questions for the presenting groups.

Class Participation (30%)

Students are required to attend all class

Students are expected to actively participate

in the class discussion. Students’ contribution

to the class discussion will significantly

influence their class participation grade.

Case Study and Exam (50%)

Group Presentation (20%)

Mid-term case study (20%)

Final Exam (30%)

Building Marketing Strategy

Susan Bardi Kleiser

Video “Why Consumer Behavior is Vital for Success in Marketing” link:

Companies want people to buy products or services

Understanding the behavior of your customer can help you

to better show them what it is they are buying, why they

are buying it, and what it will do to improve their lives

There are four key factors influencing consumer

behavior: opinions of consumers, economic situations,

advertising, purchasing power

• What are the influencing

factors of your purchase

Consumer vs. Business

Markets and Buyer Behavior

Two Consumer Entities

• The individual who

buys goods and

services for his or her

own use, for

household use, for