MKF1120 W4 Reading Consumer Behaviour

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Course of Study:
(MKF1120) Marketing theory and practice
Title of work:
Marketing; real people, real choices, 3. (2014)
Section:
Consumer behaviour: how and why we buy pp. 150--185
Author/editor of work:
Solomon, Michael R.; Hughes, Andrew; Chitty, Bill; Marshall, Greg W.; Stuart,
Elnora W.
Author of section:
Michael R. Solomon; Andrew Hughes; Bill Chitty; Greg W. Marshall; Elnora W.
Stuart
Name of Publisher:
Pearson Australia
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MARKETING
3
SOLOMON HUGHES CHITTY MARSHALL STUART
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Authorised adaptation from the United States edition entitled Marketing: Real People, Real Choices, 7th edition,
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Title: Marketing: real people, real choices/Michael R. Solomon ... [et al.].
Edition: 3rd ed.
ISBN: 9781442561526 (pbk)
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ALWAYS LEARNING PEARS{)f

CHAPTER 5
CONSUMER BEHAVIOUR:
HOW ANDWHYWE BUY
REAL Dr Anthony Perrone

PEOPLE,
Formerly a decision maker
REAL at Arriba
CHOICES
Arriba is a brand of frozen Mexican food sold through supermarkets and various other outlets.
Originally launched in Australia in 1993, the brand quickly established itself when its frozen
burritos range won the award for Best New Wholesale Product at the Sydney International
Food Show in that year. This was followed up in 1994 when the burritos range won the Best
Retail Product and was a runner-up for its packaging at the Brisbane International Food Show.
The packaging was both promotional and practical, being colourful and featuring a friendly
and cheerful mouse as its logo, and able to accommodate various cooking/heating methods.
Dr Anthony Perrone was the director of marketing for Arriba Frozen Mexican Food at the time
of the launch and commercialisation of the brand. His role primarily entailed instituting a
strategy for marketing Arriba Burritos, initially targeting the 15- to 30-year age market.
Using Anthony's strategy, Arriba was able to develop an identity for the product (and the logo,
to a lesser degree) and to establish a strong ongoing sales record in a reasonably short period
of time.
Anthony has had an interesting marketing career and has worked for some of the best retailers
in the wtrld, including Neiman Marcus and Fred Hayman Beverly Hills in the United States
and Davjcl Jones in Australia. During his time at Neiman Marcus, he ran the operations for a
US$40 million store employing 300 staff; and while at David Jones he was responsible for a
store with a $120 million turnover and 500 staff. He was also the vice-president for probably
the greatest retail entrepreneur ever-Fred Hayman, who is credited with establishing
Los Angeles's Rodeo Drive as a mecca for up-scale retail shopping.
In addition to his retailing success, Anthony is proud of his achievements with the Arriba brand,
bringing Mexican food to Australia (within a 12-month project period) and seeing it become a
regular item on Australian dinner tables.
Anthony initially studied psychology and business administration at Westfield State College
in the US, before studying marketing at Central Queensland University, where he obtained his
doctorate.
Decision time at Arriba

Arriba Burritos quickly became a fashion statement and a must-have food product when the
company launched its television campaign with the then up-and-coming star Simon Baker
Denny (now well known as Simon Baker, the Golden Globe nominee for his role in the US
. . . ...... . ................. •''

weekly television drama The Mentalist) who had just recently won (in 1993) the Logie Award
for Most Popular New Talent in the hit television show E Street.
Arriba's uplifting TV commercial depicted a group of 20-something friends having fun at a
party in a seaside house when one of the character actors bites into an Arriba Burrito (the
'Hot One') and then quickly jumps off the balcony into a pool below to cool off.
The TV advertisement appealed directly to the teen target market who aspired to the lifestyle
depicted (and probably the 30-plus group, who wanted to maintain that younger fun and
fashionable lifestyle). It was an effective pitch, as many young adults want to be 'cool' and eat
the same foods as their TV stars. So, if Simon Baker is eating an Arriba Burrito, then fans think:
'/ will eat them too .. .'This is what Arriba was counting on, and it worked out to be a marketing
success story.
However, while sales in the first 12 months in Australia topped $2 million, with Arriba Burritos
quickly becoming a household name, the owner's directors felt that they were missing out on
a significant portion of the population by targeting a relatively small percentage of people.
Therefore, the challenge became to broaden the brand's appeal, particularly considering
various lifestyle factors such as opinion leaders, lifestyles, household influence and attitudes.
OPTION I: Arriba could This option was attractive because it The overall goal of this option was to get
increase in-store displays and enabled the firm to target the homemaker as many people to taste an Arriba Burrito
mainly responsible for family food as possible and within a 12- to 15-month
promotions. purchases, with fairly direct promotional period. From there it was hoped that
This option directly targeted the main tactics designed to get them to taste the these people would act as opinion leaders
grocery buyer in the supermarkets, thus product as well as provide information to or family influencers and ultimately drive
ensuring exposure to a much broader help them cook and serve Arriba Burritos increased sales. The main concern with
target market. With this option, Arriba with side and accompanying dishes. this approach was that it would be a less
would produce miniature Mexican So, this option fit well with the firm's need direct promotion that relied on word-of
cookbooks (which would be attractive to reach first-time customers and change mouth to be effective.
to an older market) that would be attitudes and lifestyles.
strategically placed in the frozen food OPTION 3: Arriba
The clear downside of this approach is
sections of grocery stores alongside its that it is fairly labour-intensive and can could utilise sponsorship
products. only reach a certain number of potential opportunities to build a
Part of this target market campaign customers at a time. So, while it can be a broader profile.
would also include in-store tastings of very effective method, it is also generally The final option considered was to
four different-flavoured burritos. Because slow and expensive. promote the brand primarily through
Mexican food was new to the Australian sponsoring activities and events put on
market in the mid-1990s, it was important OPTION 2: Arriba could by other organisations. This approach
that potential purchasers at least taste broaden its offering into should significantly expand the name
and trial the product. This would be seen 'ready-to-eat' markets, such recognition of Arriba among the
as a first step in changing any negative as football games. attendees and supporters of the event
attitudes and becoming accepted as part or activity.
An alternative approach to in-store
of the consumer's lifestyle.
supermarket promotion was to appeal to The sponsorship campaign would initially
The cookbooks would also be available at end-consumers by implementing tastings aim for the brand and logo to be easily
the tasting station in the store, ensuring at key sporting events, such as the AFL recognisable and therefore help trigger
that interested people got a copy. The Grand Final at the MCG in Melbourne, purchases of the product in grocery
main purpose of the cookbooks was to where over 100000 people would be stores or at sporting events. The longer
reduce the 'unknown factor' regarding in attendance. While not necessarily term goal would be to have some of the
Mexican food and allow homemakers to targeting the main grocery buyer, this positive goodwill (that is, brand equity) of
become more comfortable with buying, option would provide access to a large the sponsored event 'rub off' on the brand
preparing and serving their families a number of people, many of whom would so that Arriba is seen as likeable and
Mexican meal. be decision makers and influencers in supportive of the community.
One of the benefits highlighted on the their families and households. Sponsorships are obviously widely utilised
packaging and at the in-store tastings The good news was that wholesale and have many benefits; however, they
would be the innovative packaging that distributors appeared very supportive of are a more subtle form of promotion and
could accommodate various cooking this strategy, as it would be quite helpful are more likely to help build and maintain
methods, which would help reduce for them in promoting and selling a new overall brand values over the long term,
the perceived risk associated with the food item that should be attractive to the rather than contributing to short-term
purchase. standard pie, pastie and sausage roll crowd. sales performance.
••••••• ••••••••••••••••• •• ••••

Now, put yourself in Anthony's shoes: which option would you choose/and why?
152
UNDER'STAND, f:XPLAIN AND· APPLY

After reading this chapter you should understand, and be able to explain and apply, how and why people and
organisations buy.
I. Define consumer behaviour, and explain the reasons why consumers buy what they buy.
2. Explain the prepurchase, purchase and postpurchase activities that consumers engage in when making decisions.
3. Explain how internal factors influence consumers' decision-making processes, and apply these factors to the
purchase of a product.
4. Understand how situational factors at the time and place of purchase influence consumer behaviour.
s. Explain how consumers' relationships with other people influence their decision-making processes.
6. Explain how the internet offers consumers opportunities to participate in consumer-to-consumer marketing .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... .
. . ... . . . . . . ... . . . . . . . . . .. . . . . . . . . . . . '
CONSUMER BEHAVIOUR:
HOW AND WHY PEOPLE BUY
Consumers: Who are they, where can you find
them, and what is meant by 'consumer behaviour'?
Decisions, decisions. As consumers we make countless decisions every year. Some are made in
seconds, while others can take hours, days or even months to make. Understanding why this
happens-that is, why we behave as we do as consumers-is an important part of being successful
in modern-day marketing. After all, if a company can understand why consumers behave the way
they do, then they are likely to better meet the needs and wants of those consumers through better
product design and more efficient and effective marketing techniques. However, before we examine
in any detail the consumer decision-making process that all of us go through as consumers when we
buy a product, it is first necessary to understand what is meant by three important terms:
• consumer
• consumer markets, and
.'
• consumer/behaviour.
consumer A consur,'..er is defined as the ultimate user or consumer of goods, ideas and services. However,
The ultimate user of goods,
ideas and services. However,
the term is also used to imply the buyer or decision maker, as well as the ultimate user. A mother
the term is also used to buying cereal for consumption by a small child is often called the consumer, although she may not
imply the buyer or decision
maker, as well as the ultimate
be the ultimate user. What you need to note from this definition is that a consumer uses not just
consumer. goods or services, but ideas as well, which are concerned with political and social marketing. At this
stage we are not concerned with organisational buying behaviour: this will be examined in detail
towards the end of this chapter. And you thought you got out of that easily!
consumer market A consumer market is a market that consists of all the individuals and households who buy or
A market that consists
of all the individuals and
acquire goods and services for personal consumption. Consumer markets are very dynamic and
households who buy or can change their entire composition and size within just a few years. There are several reasons for
acquire goods and services for
personal consumption.
this, including migration from one country to another. This is one factor that has influenced the
consumer behaviour
composition of the Australian and New Zealand consumer markets, which we will look at in more
The dynamic interaction detail shortly.
of affect and cognition,
behaviour and the
Consumer behaviour is the dynamic interaction of affect and cognition, behaviour and the
environment, by which human environment, by which human beings conduct the exchange aspects of their lives-basically,
beings conduct the exchange
aspects of their lives.
the overt behaviour of a consumer. From this definition we can see that there are many internal
and external influences on consumer behaviour. Internal influences are mainly concerned with
CHAPTER 5 CONSUMER BEHAVIOUR 153
psychological and personal influences on consumer decision making. External influences are mainly
concer ned with social and cultural influences on decision-making processes. The importance that
each has for a consumer's decision-making process will depend upon several factors, which we will
examine in more detail over the coming pages.
Now that you know and understand what is meant by these terms, we will examine the consumer
decision-making process in more detail. Remember, as we go through this process, to apply it to
yourself-after all, you are your own best example of this theory in practice.
T�E CONSUMER DECISION-MAKING

PROCESS
The consumer decision-making process is the process by which individuals select from several
choices, products, brands or ideas. The decision process may involve complex cognitive or mental consumer decision
activity, a simple learned response, or an uninvolved and uninformed choice that may even appear
making process
The process of selecting from
to be sto chastic or probabilistic (that is, occurring by chance). several choices, products,
What we are trying to understand, then, is how and why a person buys a certain type of car brands or ideas. The decision
process may involve complex
or a certain soft drink, and even why you decided to learn more about marketing! Traditionally, cognitive or mental activity, a
researchers tried to understand how consumers made decisions by assuming that each consumer simple learned response, or an
uninvolved and uninformed
carefully collected information about competing products, determined which products possessed choice that may even
the characteristics or product attributes important to his or her needs, weighed the pluses and appear to be stochastic or
probabilistic (that is, occurring
minuses of each alternative, and arrived at a satisfactory decision. But how accurate is this picture of by chance).
the decision-making process? Is this what really happens? Does this describe the process you went
through when buying your last product?
Researchers now realise that decision makers actually possess a set of approaches ranging from
painstaking analysis to pure whim, depending on the importance of what is being bought and how
much effort the person is willing to put into the decision. 1 As we have already learned, consumers
are also influenced by both internal and external influences when they buy a product.
Consumer decision-making models

Of course, being able to predict consumer behaviour or to understand what external or internal
influences can affect consumer behaviour the most in certain situations has led to a large amount
of research on the consumer decision-making process, with the result being that there are now
many different models of consumer decision making that try to explain how consumers may
behave in certain situations. The most common model used for individual consumers is the Engel
Kollat-Blackwell (EKB) model (see Figure 5.1). The Sheth model is used to explain how families
may purchase goods, and the Bettman model assumes that consumers have a limited capacity
for processing information. As a consumer yourself, you probably already know that you don't
go through such a lengthy process to purchase every product. For example, it takes only seconds
for you to decide what soft drink to buy at a convenience store. Does theory explain why this is?
Let's find out.
Consumer involvement theory and the elaboration involvement

likelihood model The relative importance of
perceived consequences of the
Bow much effort do consumer put into their buying deci ions? The answer depends on their level purchase to consumers.
of involvement-the importance of the perceived consequences of the purchase to the person. perceived risk
The belief that choice of
A.s a rule, we are more involved in the decision-making process for products that we think are risky a product has potentially
in some way. Perceived risk may be present if the product is expensive or complex and hard_ to · negative consequences, either
financial, physical or social.
understand, such as a new computer or a sports car.
IS4 PART 2 UNDERSTAND CONSUMERS' VALUE NEEDS
FIGURE s.1 The Engel-Kollat-Blackwell model of consumer behaviour
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SOURCE: RD. Blackwell, P.W Miniard and J.F. Engel, Consumer Behavior, International edition, 1st ed. © 2006 South-Western, a part of Cengage Leaming, Inc.
Reproduced by permission. <www.cengage.com/permissions>.
CHAPTER 5 CONSUMER BEHAVIOUR ISS
Perceived risk can also be a factor in product choice if

ch sing the wrong product results in embarrassment or
oo
social rejection. For example, wearing a cool tie or top to
an inter view for an advertising job could result in an offer
of employment, as it shows you are creative; however, it
could also result in rejection, as it may demonstrate that
you are perhaps too individualistic and not a team player.
When perceived risk is low, as in buying a packet of
cereal, the consumer feels low involvement in the decision
making process-he or she isn't overly concerned
about which option is chosen because it's not especially
important or risky. In low-involvement situations, the
consumer's decision is often a response to environmental
cues, such as when a person decides to try a new type • For most people, cereal is a low-involvement purchase that they
of cereal because it is prominently displayed at the end make in seconds.
of the supermarket aisle. Under these circumstances,
managers must concentrate on how products are displayed at the time of purchase to influence
the decision maker. For example, a cereal marketer may decide to spend extra money to be sure its
cereal stands out in a store display or to change the packaging so that consumers notice it.
For high-involvement purchases, such as buying a house or a car, the consumer is likely to
carefully process all the available information and to have thought about the decision well before
going to buy the item. The consequences of the purchase are important and risky, especially because
a bad decision may result in significant financial losses, aggravation or embarrassment. Most of us
wouldn't just walk into a real estate agent's office at lunchtime and casually put down the deposit
on a new house. For high-involvement products, managers must start to reduce perceived risk by
educating the consumer about why their product is the best choice well in advance of the time that
the consumer is ready to make a decision.
The elaboration likelihood model (ELM) helps to explain the decision-making process chosen
by consumers in situations of high and low involvement. The theory states that consumers will go
through a central route, or extended decision-making process, when they are highly involved with
a product. However, if they have only a limited involvement with the product, they will go around
the periphery of the decision-making model and spend less time on the purchase. Therefore,
researchers have found it convenient to think in terms of an 'effort' continuum that is anchored on
one end by habitual decision making (such as deciding to purchase a packet of cereal) and at the
other end by extendedproblem solving (such as deciding to purchase a new car).
When consumers make very important decisions-such as buying a new house or a car-they
engage in extended problem solving and carefully go through the steps outlined in Figure 5.2-
problem recognition, information search, evaluation of alternatives, product choice and post
purchase evaluation.
With habitual decision making, however, consumers make little or no conscious effort. They
don't search for information, and they don't compare alternatives. Rather, they make purchases
automatically. You may, for example, simply throw the same brand of cereal into your shopping
trolley week after week without thinking about it. Table 5.1 provides a summary of the differences
between extended problem solving and habitual decision making.
Many decisions fall somewhere in the middle and are characterised by limited problem solving,
which means that consumers do some work to make a decision, but not a great deal. This is probably
how you decide on a new pair of running shoes or what movie you want to see. We often rely on simple ..
'rules of thumb' instead of painstakingly learning all the ins and outs of every product alternative.···
156 PART 2 UNDERSTAND CONSUMERS' VALUE NEEDS
FIGURE 5.2 The consumer decision-making process TJ.,e coMumer deci5ion-makin9 proceH involve5 a 5erie, of ,tep51
a5 5ummari5ed /.,ere.
l 1, Problem recognition
Brendan is fed up
with driving his
old clunker.
I 2. Information search
I
Brendan talks to friends,
visits car showrooms
and does research on the
internet to get an idea
of the new cars in which
he might be interested.
I 3. Evaluation of alternatives
J
Brendan narrows down
his choices to three car
models and thinks about
the good and bad
features of each option.
I 4. Product choice
I
Brendan chooses one car
because it has a feature
that really appeals to him
'
. and he likes the image
it projects.
5. Postpurchase evaluation
Brendan drives his new

car and decides he is
happy with his choice.
Illustration of the decision-making process

To understand each of the steps in the decision-making process, in this section we will follow the
fortunes of a consumer named Brendan who, as shown in Figure 5.2, is in the market for a new
problem recognition car-a highly involving purchase decision, to say the least.
The process that occurs
whenever the consumer sees a
significant difference between Step I: Problem recognition
his or her current state of Problem recognition occurs whenever a consumer sees a significant difference between his or her
affairs and some desired or
ideal state; this recognition current state of affairs and some desired or ideal state. The consumer needs to solve a problem, which
initiates the decision-making may be small or large, simple or complex. Problem recognition may occur because the consumer
process.
has a certain need, such as the need to quench his or her thirst, or marketing may highlight to the
Extended problem solving Habitual decision making

TABLE 5.1
Extended
Product New car Box of cereal problem solving
versus habitual
Level of involvement High Low decision making
(important decision) (unimportant decision)
Perceived risk High Low
(expensive, complex product) (simple, low-cost product)
Information Careful processing of information Respond to environmental cues (store
processing (search advertising, magazines, car signage or displays)
dealers, websites)
Learning model Cognitive learning (use insight and Behavioural learning (ad shows product
creativity to use information found in in beautiful setting creating positive
environment) attitude)
Required marketing Provide information via advertising, Provide environmental cues at point of
action salespeople, brochures, websites. Educate purchase, such as product display
consumers about product benefits, risks of
wrong decisions, etc.
............................................................................................ ....................................
E 1' H I C $ A N D S W S.T A I N .A! B I L 111 Y
........ ...•. . ......................................................... ........................ ...........•••••• • • • ••.•••• • •••
Consumer behaviour is one of the most sensitive areas of marketing for many people as marketers have
a lot of power over many consumers, not just through controlling all the elements of the marketing mix
but also by being able to influence people through their knowledge of consumer behaviour. However,
if an organisation wants to be truly sustainable it must also act in a way that doesn't exploit this position,
otherwise it will damage its brand name to such an extent that consumers may not want to deal with
it anymore. A good example of this recently was Vodafone, which couldn't meet the demands placed
on it when it acquired millions of new consumers through a successful campaign, and then lost nearly
800 000 of them within 12 months to rivals-something that will take many years to fix.
Brands are also learning that, when it comes to the environment, they can't just state that they are being
environmentally aware; they need to show that they are. The global environmental group Greenpeace
has targeted brands such as Nestle's Kit Kat in online campaigns that have attracted several hundred
thousand views on YouTube. Many seafood companies have also found out the hard way that adhering
to 'dolphin-safe' fishing practices is no longer good enough; they need to follow practices that are safe
for all forms of sea life that may be accidentally caught up in their fishing nets, such as the rare albatross.
The lesson? Learn from the mistakes of others and ensure that your business is ethical not just in word,
A
but also in practice, in order to remain sustainable for the long term. W
••••• ••••••••••• • • ••••••• •••• •••••• • •••••• • • • •••• •• • • ••••••• • • •• • •••••••••• • • • • • •••••
consumer a latent need for a product, such as the need to buy a new car. Brendan falls into the latter
category-his old car runs okay, but he wants to sport some wheels that will get him admiring stares
instead of laughs. Or as they say in some parts of Australia, Brendan wants to be seen as fully sick!
Do marketing decisions have a role in consumers' problem recognition? Although most problem
recognition o ccurs spontaneously or when a true need arises, marketers can develop creative
advertising messages that stimulate consumers to recognise that their current state-that 9ld car-
just doesn't equal theiydesired state-a shiny new car parked in the driveway that makes them the
envy of their friends. Table 5.2 provides examples of marketers' responses to consumers' problem
recognition and the other steps in the consumer decision-making process.
Step 2: Information search

Once Brendan recognises his problem (that he wants a newer car), he needs adequate information
information search to resolve it. Information search is the step in the decision-making process when the consumer
The process whereby a
consumer searches for
checks his or her memory and surveys the environment to identify what options are out there
appropriate information in that might solve the problem. Advertisements in newspapers, on TV or the radio, or even in the
order to make a reasonable
Yellow Pages or on the internet, often provide valuable guidance during this step. Brendan might
decision.
rely on TV commercials about different cars, recommendations from his friends, and additional
information he finds in magazines such as Cars or Wheels, on websites such as <www.drive.com.
au>, from brochures he gets when he visits car dealerships and on manufacturers' websites.
Increasingly, consumers are using internet search engines to find information. Search engines
such as Google ( <www.google.com.au>) help consumers to locate useful information by searching
millions of web pages for key words and returning a list of sites that contain those key words.
As so many of us now use the internet to search for product information by using key words,
organisations have started to turn to search engine optimisation (SEO) to maximise their placing at
the top oflists or pages on sites such as Google. This involves altering the key words found on a web
page to match those of the most common search terms for that product category, therefore pushing
your website up the list or page and increasing the likelihood that a consumer will look at your page.
Companies are also starting to change their websites so that they use behavioural technology. This is
a strategy that presents advertisements or product options based on past history on the net or with
that website. Perhaps you may have noticed this with Facebook or YouTube, where if you change
TABLE 5.2 Stage in the

Marketers' decision process Marketing strategy Example
responses to
decision process 1. Problem Encourage consumers to see that existing TV commercials showing the excitement
stages recognitior state doesn't equal desired state of owning a new car
2. lnformati6n Provide information when and where Targeted advertising on TV programs
search consumers are likely to search with high target market viewership
Sales training that ensures
knowledgeable salespeople
Make new car brochures available in
dealer showrooms
Design exciting, easy-to-navigate and
informative websites
3. Evaluation of Understand the criteria consumers use in Conduct research to identify most
alternatives comparing brands and communicate own important evaluative criteria
brand superiority Create advertising that includes
reliable data on superiority of a brand
(e.g. kilometres per litre, safety, comfort)
4. Product Understand choice heuristics used by Advertise 'Made in Australia' (country of
choice consumers and provide communication origin)
that encourages brand decision Stress long history of the brand (brand
loyalty)
5. Postpurchase Encourage accurate consumer Provide honest advertising and sales
evaluation expectations presentation
your status or look for a certain video, then the advertisements on the site will change to brands
that are associated with that status or search. For some people, thi development has raised ethical
concer ns about how much information is too much information when it comes to the amount of
information companies have about us based on our online search history.
Nevertheless, this technology is here to stay, as it is a cost-effective way to market products,
provide product information and target consumers' brand preferences. This is because the role of
marketers during the information search step of the consumer decision-making process is to make
the information that consumers want and need about their product easily accessible. For example,
marketers for car companies ensure that information about their newest models is available on
the web, is advertised frequently in magazines, and on radio and TV, and, of course, is available in
dealer showrooms.
Step 3: Evaluation of alternatives

Once Brendan has identified his options, it is time to decide on a few true contenders. There are
two components of this stage of the decision-making process. First, the consumer, armed with
information, identifies a small number of products in which he or she is interested. The consumer
then narrows down the choices by deciding which of all the possibilities are feasible, and by
comparing the pros and cons of each remaining option.
Brendan has always wanted a red Ferrari, but after allowing himself to daydream for a few
minutes, he returns to reality and reluctantly admits that an Italian sports car is probably not on the
cards for him right now. As he looks around, he thinks about what cars he likes that are in his price
range and match his other criteria. He narrows down his options by considering only affordable
cars that come to mind or that his mates suggest, illustrating the influence of internal and external
characteristics on his decision-making process. He finds three possible models: Toyota Corolla,
Ford Festiva and Mitsubishi Lancer.
• Sports cars such as Ferrari appeal to their target

markets in many ways, colour and shape being just
two factors, but all are designed to influence the
consumer's behaviour.
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• Volvo emphasises the safety of its cars to

consumers, as the company knows this is an
important criterion in the evaluative stage of the
consumer decision-making process.
Now Brendan has to choose. It is time for him to look more systematically at each of the
evaluative criteria three possibilities and identify the important characteristics, or evaluative criteria, he will use to
The dimensions used by
consumers to compare
decide among them. The criteria may be power, comfort, price, the style of the car, or even safety
competing product features. Keep in mind that marketers often play a role in educating consumers about which product
alternatives,
characteristics they should use as evaluative criteria-usually, they will emphasise the dimensions
in which their product excels. An example of a car company that uses safety as a key aspect in the
marketing of its products is Volvo, which is proud of this reputation.
Many car manufacturers highlight certain product features in their ads, such as fuel economy
or a lengthy warranty, to help persuade the consumer to purchase their product. To ensure that
customers such as Brendan come to the 'right' conclusions in their evaluation of the alternatives,
marketers must understand what criteria consumers use and which are more, or less, important.
With this information, sales and advertising professionals can point out a brand's superiority on the
most important, criteria as they have defined them.
Step 4: Pr:bduct choice

After Brendan has examined his alternatives and gone on a few test drives, it is time to 'put the pedal
to the metal'. Deciding on one product and acting on this choice is the next step in the decision
making process. After agonising over his choice, Brendan decides to get a Toyota Corolla, as the
car matches his criteria for reliability, price and performance. After all the thinking and visits to car
yards, Brendan is relieved to have made his decision to buy the Corolla. He can now get on with his
life, not to mention take his mates for a drive in his brand-new purchase.
How do consumers decide? Choices such as Brendan's often are complicated because it is hard to
juggle all the product characteristics in your head. One car may offer better fuel economy, another
heuristics may be $2000 cheaper, while another may boast a better safety record. How do we make sense of all
A mental rule of thumb that
leads to a speedy decision by these characteristics and arrive at a decision?
simplifying the process. Consumers often rely on decision guidelines when weighing the claims that companies make.
brand loyalty
These heuristics, or rules, help to simplify the decision-making process. One such heuristic is
A pattern of repeat product
purchases, accompanied 'price = quality; so many people will willingly buy the more expensive brand because they assume
by an underlying positive that if it costs more, it must be better.
attitude towards the brand,
that is based on the belief that Perhaps the most common heuristic is brand loyalty, which assumes that people buy from the
the brand makes products same company over and over because they believe that the company makes superior products.
superior to its competition.
Consumers who have brand loyalties feel that it's not worth the effort to consider competing
p
Consumer behaviour is one of the most important areas for marketers. As such, there are some
important metrics that you need to be aware of that are used in the industry.
An important metric is customer lifetime value (CLV). CLV is determined by considering how
much the customer is worth to a company-in both monetary and non-monetary value
terms-over their lifetime. For example, some consumers may have a higher non-monetary
than monetary value, as they may be a rich source of information for a brand.
Another important consumer behaviour metric is consumer loyalty. This is usually measured
by the likelihood that a consumer will buy your brand next time they need that product.
Reducing dissonance should increase loyalty and repurchase intent. Toyota focused on exactly
this by improving its reliability, resulting in 75 per cent consumer loyalty and a similar figure
for repurchase intent.
Knowing the heuristics for consumers for a product is also an important metric. This is where
consumers rank in order what they consider to be the most important attributes they are
seeking from a product. Companies that know consumers' heuristics can target them more
effectively at the evaluation of alternatives stage of the consumer decision-making process.
Other metrics in consumer behaviour can relate more to psychographic and behavioural
segmentation variables. For example, the date when people start buying Christmas decorations
or presents is important information for marketers, who want to plan their campaigns to
capitalise on consumers' Christmas buying spree. Metrics on this type of consumer behaviour
are linked into visits to websites, and reactions to sales promotions or increased sales.
options. The creation of brand loyalty is a prized goal for marketers. People form preferences for
a favourite brand and then may never change their minds in the course of a lifetime, making it
extremely difficult for rivals to persuade them to switch. That explains why
many companies are working harder to woo consumers early on-even
when they are still toddlers. Disney has been working extremely hard on
research and development of new characters, such as those featured in The
Incredibles, Toy Story and Cars-characters it hopes its consumers will grow
up on and then bring their children up on, a process that has created strong
brand loyalty among older consumers for characters such as Mickey Mouse
and Donald Duck.
Still another heuristic is based on country of origin. We assume that a
product has certain characteristics if it comes from a certain country.
Our evaluations of cars are often strongly influenced by their countries of
origin. In the past, consumers associated low quality with any product made
in China; now this association is linked to products made in Cambodia or
Nigeria.
Sometimes a marketer wants to encourage a country association, even
when none exists. For example, Holden has successfully linked its products
with Australian culture, even though the company is a wholly owned
subsidiary of General Motors Corporation, a US company.
What you need to remember about this stage of the decision-making
process is that the consumer may not actually have taken possession of the
product yet, which can have a big influence on the level of postpurchase • Fruit stores such as this one in Thailand are
designed to assist consumers as they evaluate
evaluation he or she experiences. For example, Brendan may have exchanged
alternatives. Doesn't it·make that decision just
money for the car with the dealer, but he may have to wait several weeks for a little easier?
it to be delivered or configured to meet his special needs. If you have ever bought anything on eBay,
it's the same thing: you may have made a purchase, but the time it takes for the product to arrive can
influence how you evaluate it. Let us look at this theory in more detail.
Step 5: Postpurchase evaluation

In the last step of the decision-making process, the consumer evaluates just how good a choice
it was. Everyone has experienced regret after making a purchase ('What was I thinking?'), and
(hopefully) we have all been pleased with something we have bought. The evaluation of the product
consumer results in a level of consumer satisfaction/dissatisfaction, which is determined by the overall
satisfaction/ feelings, or attitude, a person has about a product after purchasing it.
dissatisfaction
The overall feelings or attitude Just how do consumers decide whether they are satisfied with their purchases? One answer would
a person has about a product be: 'That's easy. The product is either wonderful or it isn't: However, it's a little more complicated than
after purchasing it.
that. When we buy a product, we have some expectations of product quality. How well a product
or service meets or exceeds these expectations determines customer satisfaction. In other words,
consumers assess product quality by comparing what they have bought to a performance standard
created by a mixture of information from marketing communications, informal information
sources such as friends and family, and their own experience with the product category. That is why
it is very important that marketers create accurate expectations of their product in advertising and
other communications.
But even when a product does perform to expectations, consumers may experience anxiety or
cognitive dissonance regret, also known as cognitive dissonance. When we reject product alternatives with attractive
The anxiety or regret a
consumer may feel after
features, we may second-guess our decision. For example, Brendan might begin to think, 'Perhaps
choosing from among several a Prius would have been just as good-and cheaper to run: To generate satisfied consumers and
similar attractive choices.
remove dissonance, marketers often seek to reinforce purchases through direct mail or other
personalised contacts after the sale.
Even though Brendan's new Corolla isn't exactly as powerful as a Ferrari or as cheap as a Prius,
he is still happy with his choice of car because he never really expected a fun little car to eat up
the highway like a high-performance sports car costing ten times as much, and he could only
• Tourism Australia targets consumers

undertaking an external searchfor information
on holidays with some tempting experiences
such as snorkelling on the Great Barrier Reef
Chocolate obsession? ••
•• RIPPED
consumer behaviour theory is one of the most fascinating aspects of marketing theory. More and more
organisations are applying consumer behaviour theory to help create value with their consumers.
•• FROM
••• THE
one such organisation is Cadbury. For all the chocolate lovers out there, and yes there are many, Cadbury
• HEADLINES
is usually the product of choice. Why? Let's look at it from a consumer behaviour perspective. •••
First, there is the packaging. In late 2009 Cadbury changed the packaging from paper to cardboard. •
Why? Cardboard is a heavier material than paper so that helped disguise the fact that Cadbury changed ••
the size of its standard take-home chocolate blocks from 250 grams to 220 grams. Cadbury has claimed
that it actually did this to help preserve the product, which is
-
also likely given that not many people want to buy soft, squishy
chocolate on a hot day. , '
Next, there is the colour. Cadbury chocolate blocks and purple
packaging are nearly synonymous. Cadbury in fact fought a long
legal battle with then competitor Darrell Lea to try to stop it from
using the colour purple, which for many consumers of chocolate
means Cadbury's.
Finally, the wide range of products also assists Cadbury, as it is
able to target a range of tastes and segments with its offering.
And remember that all of this is only one aspect of consumer ••
behaviour!
Next time you buy some chocolate, stop, slow down and
.•
••
consider why it is that you have just got yourself another block
••
••
of Cadbury.
ever dream of owning a Ferrari. Brendan has 'survived' the consumer decision-making process by
recognising a problem, conducting an information search to resolve it, identifying the (feasible)
alternatives available, making a product choice, and then evaluating the quality of his decision and
dismissing any cognitive dissonance that might arise from his purchase decision.
Apart from understanding the mechanics of the consumer decision-making process, marketers
also try to ascertain what influences in consumers' lives affect this process. There are three main
categories: internal, situational and social influences. In Brendan's case, for example, the evaluative
criteria he used to compare cars and his feelings about each car were influenced by internal factors
such as the connection he learned to make between a name like Mitsubishi and an image of 'slightly
hip, yet safe and solid: situational factors such as the way he was treated by the Ford salesperson,
and social influences such as his prediction that his friends would be impressed when they saw him
cruising down the road in his new wheels.
Figure 5.3 shows the influences in the decision-making process and emphasises that all these
factors work together to affect the ultimate choice each person makes. Let us consider how each of
these three types of influences work, starting with internal factors.
f�TERNAL INFLUENCES ON CONSUMER

DECISIONS
If you look around the room you are in right now, you will notice that no one is wearing the same
thing. We all dress differently, even if we all belong to the same segment, or have similar incomes ..
So, why are we all so different?
FIGURE SJ Influences on consumer decision making A ,,umber of differe,,tfactors ;,, COr\Sumers' lives ;,,ffuence the
consumer decision-makin9 proceH. Marketers need to understa,,d
these inffuences, and Which ones are important in the purchase
proceH, if they are to make effective marketin9 decifions.
Internal influences
• Perception
• Motivation
• Learning
• Attitudes
• Personality Situational influences
•Age groups , Physical environment
• Lifestyle •Time
Social influences
• Culture
, Subculture PURCHASE
• Social class
, Group memberships
Much of the cause of such differences can be attributed to the internal influences on consumer
behaviour-those things that cause each of us to interpret information about the outside world,
including what car is the best, differently from one another. Let's see how internal factors relating to
the way people absorb and interpret information influence the decision-making process.
Perception
perception Perception is tl;ie process by which people select, organise and interpret information from the
The process by which people
select, organise and interpret
outside world ..iWe receive information in the form of sensations, the immediate response of our
information from the outside sensory recepiors-eyes, ears, nose, mouth and fingers-to such basic stimuli as light, colour and
world.
sound. Our impressions about products often are based on their physical qualities.
We try to make sense of the sensations we receive by interpreting them in the light of our past
experiences. For example, people associate the textures of fabrics and other surfaces with product
qualities, and marketers are even exploring how touch can be used in packaging to arouse consumer
interest. Some new plastic containers for household beauty items incorporate 'soft-touch' resins
that provide a soft, friction-like resistance when held. Focus group members who tested one such
package for Clairol's new Daily Defence shampoo described the sensations as 'almost sexy' and were
actually reluctant to let go of the containers! 2
Consumers are bombarded with information on products-thousands of ads, in-store displays,
special offers, the opinions of their friends, and on and on. The perception process has implications
for marketers because, as consumers absorb and make sense of the vast quantities of information
competing for their attention, the odds are that any single message will get lost in the clutter. And, if
consumers do notice it, there is no guarantee that the meaning they give it will be the same one
the marketer intended. The issues that marketers need to understand during this process include
exposure, attention and interpretation.
• Exposure. The stimulus must be within range of people's sensory receptors to be noticed.
For example, the lettering on a highway billboard must be big enough for a passing motorist
to read it easily, or the message will be lost.

Many people believe that even messages
they cannot see will persuade them to
buy advertised products. Claims about
subliminal advertising of messages hidden
in ice cubes (among other places) have
been surfacing since the 1950s. A survey
of American consumers found that almost
two-thirds believe in the existence of
subliminal advertising, and over half are
convinced that this technique can get them
to buy things they don't really want. 3
• Attention. As you drive down the highway,
you pass hundreds of other cars. But to how
many do you pay attention? Attention is the
extent to which mental processing activity is
devoted to a particular stimulus. Consumers
are more likely to pay attention to messages
that speak to their current needs. For
example, you are far more likely to notice
• Target's support for Collette Dinnigan and the Australian Ballet is popular
an ad for a fast-food restaurant when you with consumers. What does this say about the effect of internal influences on
are hungry, while smokers are more likely consumers?
than non-smokers to block out messages
about the health hazards of smoking. Characteristics of the stimulus also make a difference.
For example, a TV commercial that is unexpected or different from the norm is likely to attract
viewers' attention. Yes, that is why advertisers create such crazy ads.
• Interpretation. Consumers assign meaning to the stimulus. This meaning is influenced by
prior associations they have learned and assumptions they make. Dr Pepper, one of America's
most popular soft drinks, failed in Australia, where consumers associated the name 'Pepper'
with 'hot and spicy' -not exactly enticing on a hot summer's day. If we don't interpret the
product the way it was intended because of prior experiences, the best marketing ideas will
be wasted.
It is also important for you to realise that just because markets around the world are becoming
more standardised in their offerings, that doesn't mean we as consumers are. Australian and
New Zealand consumers differ greatly from each other in terms of the internal influences on their
consumer decisions. The University of Otago is currently developing psychographic profiles of
New Zealand consumers, and in Australia marketing research organisations such as Roy Morgan
are constantly working on psychographic profiles of Australian consumers. As you work through
the rest of this chapter, remember to apply these principles to where you live and see how different
you are from other consumers even in your own country, let alone in other countries.
Motivation
Motivation is an internal state that drives us to satisfy our needs. Once we activate a need, a state of motivation
tension exists that drives the consumer towards some goal that will reduce this tension by eliminating An internal state that drives us
to satisfy needs by activating
the need. For example, think about Brendan and his old car. Brendan began to experience a gap goal-oriented behaviour.
between his present state ( owning an old car) and a desired state (having a car that gets him noticed
and is fun to drive). The need for a new car is activated, motivating Brendan to test different models,
to talk with friends about different makes, and finally to buy a new car.
'
• I
THE CUTTING EDGE ,-
Bringing that brochure to life

In the future, consumers will be confronted by technology that will make
it harder and harder for them to resist the lure of one brand over another.
Portable devices such as tablets and iPads are bringing brochures to life in
new, interactive ways-something Ford first did in 2010 for the launch of
the 2011 Ford Fiesta. Today, consumers can change the colour of a potential
new car and see how it looks on the road. Or they can change the colour
of an item of clothing, or the type of accessories paired with an outfit, to
see which suits them better, and can even share the results on social media
to get feedback from friends and family before purchasing the product,
using Microsoft's new Kinect technology. Before booking a holiday, you
can see exactly what those views look like, and check out reviews from
other consumers. The list goes on ... One thing is for sure, though: as fast
as technology evolves, it will be adapted by brands to influence consumer
behaviour to purchase their products.
Psychologist Abraham Maslow developed an influential approach to motivation. 4 He formulated

hierarchy of needs a hierarchy of needs that categorises motives according to five levels of importance, the more basic
An approach that categorises
motives according to five
needs being on the bottom of the hierarchy and the higher needs at the top. The hierarchy suggests
levels of importance, the that before a person can meet needs in a given level, they must first meet the lower level's needs
more basic needs being on the
bottom of the hierarchy and
somehow those hot new Diesel jeans don't seem so enticing when you don't have enough money to
the higher needs at the top. buy food.
learning As illustrated in Figure 5.4, people start at the lowest level with basic needs for food and sleep
A relatively permanent
change in behaviour caused
and then progres,s to higher levels to satisfy more complex needs, such as the need to be accepted
by acquired information or by others or to feel good about themselves. Ultimately, people can reach the highest-level needs,
experience.
and they will He motivated to attain such goals as spiritual fulfilment. As the figure shows, if
marketers und�rstand the level of needs relevant to consumers in their target market, they can
tailor their products and messages to them. For
example, Volvo markets to consumers based on
safety needs. Banks market gold or platinum
credit cards based on ego needs. You should
remember, though, that Maslow's theory isn't
able to explain a consumer's motivation for
every purchase. There are many reasons why
we as consumers behave the way we do, and
therefore many theories on how this behaviour
can be influenced.
Learning
Learning is a change in behaviour caused by
• BP has a historical connection with the colour green, which it uses globally information or experience. Learning about pro
to create brand consistency. Can you think of other products that use colour ducts can occur deliberately, as when we set out to
in the same way? gather information about different MP3 players
FIGURE 5.4 Maslow's hierarchy of needs and related products Abral,am Marlow propofed a 1,ierarcl,y of need, tl,at
cate9ori,ef motiVef. Savvy marketerf know tl,ey need to
vnderftand tl,e level of needf tl,at motivate, a cori,vmer
to bvy a particvlar prod vet or brand.
,.d.
Higher-level needs
Self-fulfilment, enriching experiences

(hobbies, travel, education)
Prestige, status, accomplishment (cars, furniture, credit

cards, stores, exclusive club memberships, fine wines) Ego needs
Love, friendship, acceptance by others

(clothing, grooming products, clubs, drinks) Belongingness
Security, shelter, protection (insurance, alarm

Safety
systems, retirement investments)
Water, sleep, food (medicines,
staple items, generics) Physiological
Lower-level needs
before buying one brand. We also learn even when we are not trying to. Consumers recognise many
brand names and can hum many product jingles, for example, even for products they don't use.
l
Psychologists who study learning have advanced several theories to explain the learning process,
and these perspectives are important because a major goal for marketers is to 'teach' consumers to behavioural learning
prefer their products. Let's briefly review the most important perspectives on how people learn. theories
Theories of learning that focus
on how consumer behaviour
BEHAVIOURAL LEARNING is changed by external events
or stimuli.
Behavioural learning theories assume that learning takes place as the result of connections that
classical \
form between events that we perceive. In one type of behavioural learning, classical conditioning, condition in�
a person perceives two stimuli at about the same time. After a while, the person transfers his or The learning that occurs
when a stimulus eliciting
her response from one stimulus to the other. For example, an ad might show a product and a a response is paired with
breathtakingly beautiful scene, in the hope that you will transfer the positive feelings you get from another stimulus that initially
doesn't elicit a response on its
looking at the scene to the advertised product. own but will cause a similar
Another common form of behavioural learning is called operant conditioning, which occurs response over time because
of its association with the first
when people learn that their actions result in rewards or punishments. This feedback influences
stimulus.
how they will respond in similar situations in the future. Just as a rat in a maze learns the route to a operant
piece of cheese, consumers who receive a reward, such as a prize in the bottom of a packet of cereal, conditioning
will be more likely to buy that brand again. We don't like to think that marketers can train us like Learning that occurs as
the result of rewards or
lab mice, but that kind of feedback does reward us for the behaviour. punishments.
These learned associations in classical and operant conditioning also have a tendency to transfer stimulus
to other similar things in a process called stimulus generalisation. This means that the good or bad generalisation
Behaviour caused by a
feelings associated with a product will 'rub off' on other products that resemble it. For example, some reaction to one stimulus
marketers create product line extensions in which new products share the name of an establish,ed occurs in the presence of
other, similar stimuli.
brand so that people's good feelings about the current product will transfer to the new one,
Cognitive learning
cognitive learning In contrast to behavioural theories of learning, cognitive learning theory views people as
theory problem solvers who do more than passively react to associations between stimuli. Supporters
Theory of learning that
stresses the importance of of this viewpoint stress the role of creativity and insight during the learning process. Cognitive
internal mental processes and learning occurs when consumers make a connection between ideas or by observing things in their
that views people as problem
solvers who actively use environment. Observational learning occurs when people watch the actions of others and note what
information from the world happens to them as a result. They store these observations in memory, and at some later point, use
around them to master their
environment. the information to guide their own behaviour. Marketers often use this process to create advertising
and other messages that allow consumers to observe the benefits of using their products. Health
clubs and manufacturers of exercise equipment feature well-muscled men and women using their
products, while mouthwash makers show that fresh breath is the key to romance.
Now we have discus ed how the three internal processes of perception, motivation and learning
influence how con ·umers absorb and interpret information. But the results of these processes-the
interpretation the consumer gives to a marketing message-differ depending on unique consumer
characteristics. Let's talk next about some of these characteristics: existing consumer attitudes, the
personality of the consumer, consumer age groups, and lifestyles.
Attitudes
attitude An attitude is a lasting evaluation of a person, an object or an issue. 5 Consumers have attitudes
A learned predisposition
to respond favourably or
towards brands, such as whether McDonald's or Hungry Jack's has the best hamburgers, as well
unfavourably to stimuli on the as towards more general consumption-related behaviours, such as whether hamburgers and other
basis of relatively enduring
evaluations of people, objects
high-fat foods have a place in a healthy diet.
and issues. A person's attitude has three components: affect, cognition and behaviour.
• Affect is the feeling component of attitudes. 'Affect' refers to the
overall emotional response a person has to a product. Affect
(feeling) is usually dominant for expressive products such as
perfume, where whether or not, and how much, we like the
product determines our attitude towards it.
• Cognition, the knowing component, is the beliefs or
knowledge a person has about a product and its important
characteristics. You may believe that Apple's smart phones
have the better apps but that Samsung phones have better
features. Cognition is important for complex products such
as computers, where we may develop beliefs on the basis of
technical information.
• Behaviour, the doing component, involves a consumer's
intention to do something, such as the intention to purchase or
use a certain product. For products such as cereal, consumers
act (purchase and try the product) on the basis of limited
information and then form an evaluation of the product simply
on the basis of how it tastes or performs.
Depending on the nature of the product, one of these three
components-feeling, knowing or doing-will be the dominant
influence in creating an attitude towards the product. Marketers
• Tourism New Zealand uses classical conditioning
often need to decide which part of an attitude is the most important
in its advertising campaigns, linking images to positive driver of consumers' preferences. For example, in recent years the
feelings in consumers. Coca-Cola Company's advertising has expanded its focus from an
emotional emphasis on jingles, special effects and outdoor adventure, to an attempt to offer rational
reasons to drink its range of beverages.
Personality
Personality is the set of unique psychological characteristics that consistently influences the way a personality
The psychological
person responds to situations in the environment. One adventure-seeking consumer may always characteristics that
be on the lookout for new experiences and cutting-edge products, while another is happiest in consistently influence the
way a person responds
familiar surroundings, using the same brands over and over again. Adventure-style holidays, which to situations in his or her
are growing in popularity, are aimed at the first type of consumer. environment.
Personality traits
For marketers, these differences in personality traits underscore the potential value of considering
personality when they are crafting their marketing strategies. The following are some specific
personality traits relevant to marketing strategies.
• Innovativeness: the degree to which a person likes to try new things. Cutting-edge products
such as radical new fashions might appeal to innovative women and men.
• Materialism: the amount of emphasis placed on owning products. Materialistic consumers
focus on owning products simply for the sake of ownership.
• Self-confidence: the degree to which a person has a positive evaluation of his or her abilities,
including the ability to make good decisions. People who don't have much self-confidence are
good candidates for services such as image consultants, who can help clients to look their best
for a job interview, for example.
• Sociability: the degree to which a person enjoys social interaction. Sociable people might
respond to entertainment-related products that claim to bring people together or to make
occasions more enjoyable.
• Need for cognition: the degree to which a person likes to think about things and is willing to
make an effort to process brand information. 6
The self: Are you what you buy?

It makes sense to assume that consumers buy products that are extensions of their personalities.
That is why marketers try to create brand personalities that will appeal to different types of people.
For example, consider the different 'personalities' invented by fragrance marketers. Fragrances with
a floral personality, such as Juicy Couture's 'Couture Couture', may appeal to a different type of
woman than an oriental fragrance such as 'Ralph Hot', by Ralph Lauren for Women. The celebrities
used to endorse these different products help to express their different brand 'personalities'.
A person's self-concept is their attitude towards the self. The self-concept is composed of a self-concept
mixture of beliefs about one's abilities, and observations of one's own behaviour and feelings An individual's self-image,
which is composed of
(both positive and negative) about one's personal attributes, such as body type or facial features. The a mixture of beliefs,
extent to which a person's self-concept is positive or negative can influence the products he or she observations and feelings
about personal attributes.
buys, and even the extent to which the person fantasises about changing his or her life.
Self-esteem advertising attempts to stimulate positive feelings about the self.? For example, this
technique is used in ads for Clairol ('Nice 'n Easy'), Carlton Draught ('The Big Ad') and tOn�al
('Because you're worth it').
Age group
A person's age is another internal influence on purchasing behaviour. Many of us feel we have more ..
in common with those of our own age because we share a common set of experiences and memories
.....
about cultural events, whether these involve the 'free love' era of the 1960s-70s, the September 11
attacks in 2001, or the Harry Potter series of books and films of the mid- to late 2000s. Indeed,
marketers of products from biscuits to cars are banking on nostalgia to draw in customers, as people
are attracted to products that remind them of past experiences.
Goods and services often appeal to a specific age group. Although there are exceptions, it is
safe to assume that most buyers of Rihanna CDs are younger than those who buy Michael Buble
CDs. Thus, many marketing strategies appeal to the needs of such different age groups as children,
teenagers, the middle-aged and the elderly. Australian Pensioners Insurance Agency only offers
products and services to consumers aged over 55 who are no longer working full-time.
Young people are among the most enthusiastic users of the internet. What do teens do online?
Approximately three out of four do research and social networking, and nearly two out of three
use it for email, while far fewer use the internet for finding or buying products. For marketers, this
means that the internet may be a great way to get information about their goods and services to
teens but isn't so good for sales.
Marketers know that the process of change continues throughout consumers' lives. Interest
ingly, the purchase of goods and services may depend more on consumers' current positions in
family life cycle the family life cycle-the stages through which family members pass as they grow older-than
A means of characterising
consumers within a family
on chronological age. Singles (of any age) are more likely to spend money on expensive cars,
structure on the basis of the entertainment and recreation. Couples with small children purchase baby furniture, insurance and
different stages through
which people pass as they
a larger house, while older couples whose children have 'left the nest' are more likely to buy a
grow older. retirement home on the coast.
Lifestyles
lifestyle A lifestyle is a pattern of living that determines how people choose to spend their time, money and
The pattern of living that
determines how people
energy, and that reflects their values, tastes and preferences. Lifestyles are expressed in a person's
preferences for activities such as sports, interests such as music, and opinions on politics and
choose to spend their time,
money and energy, and that
religion. Consumers often choose goods, services and activities that are associated with a certain
refiects their values, tastes
and preferences. lifestyle. Brendan, whom we met earlier, may drive a Toyota Corolla, hang out in internet cafes
and go extreme skiing in New Zealand, because
he views these choices as part of a cool university
student lifestyle.
Marketers often develop marketing strategies
that recognise that people can be grouped into
market segments based on similarities in lifestyle
preferences. 8 For example, a growing emphasis on
dieting and thinness is fuelling a lifestyle craze:
low-carb mania. Food industry analysts say that
a great number of people are now 'carb aware:
even carb-phobic, cutting out high-carb foods
as a way to try and lose weight. Some marketers
who have capitalised on the fad for low-carb
products include Carlton & United Breweries,
which has introduced a low-carb beer called Pure
Blonde, and Peter's Ice Cream with its Carb Smart
• Some marketers believe we choose products that express our personalities Ice Cream. McDonald's has also got on the cafe
or self-concepts. For example, older individuals who consider themselves
to be 'down-to-earth Australians' may choose R.M. Williams clothing, and lifestyle bandwagon with its McCafes.
young people who see themselves as '/aid-back' might prefer casual-wear If lifestyles are so important, how do
brands such as Billabong and Rip Curl. marketers identify them so that they can reach
consumers who share preferences for products they associate with a certain lifestyle? Demographic
characteristics, such as age and income, tell marketers what products people buy, but they don't
reveal why. Two consumers can share the same demographic characteristics and yet have very
different needs-no two 20-year-old male university students are identical in their consumption
patterns. This is why it is important for marketers to further profile consumers in terms of their
passions and how they spend their leisure time.
To breathe life into demographic analyses, marketers turn to psychographics, which groups psychographics
The use of psychological,
consumers according to psychological and behavioural similarities. One way to do this is to describe sociological and
people in terms of their activities, interests and opinions (known as AIOs). These AIOs are based anthropological factors to
construct market segments.
on preferences for holid ay destinations, club memberships, hobbies, political and social attitudes,
tastes in food and fashion, and so on. Using data from large samples, marketers create profiles of
customers who resemble each other in terms of their activities and patterns of product use. 9
A tool that is used by many marketers around the world to help define an individual's self-concept
according to his or her values, attitudes and lifestyle is called VALS™ (Value and Attitude Lifestyle
Survey, <www.sric-bi.com/VALS/> ). Combining segmentation and VALS™ gives marketers a more
complete picture of a consumer than is possible using just one of these approaches. This means
marketing programs can be more effectively designed to achieve their objectives.
:r�ITUATIONAL INFLUENCES ON
J[ONSUMER DECISIONS
We have seen that internal factors such as how people perceive marketing messages, their motivation
to acquire products, and their unique personalities influence the decisions they make. In addition,
when, where and how consumers shop-what we call situational influences-shape their purchase
choices. Some important situational cues are our physical surroundings and time pressures.
Marketers know that dimensions of the physical environment, including such factors as decor,
smells, lighting, music and even temperature, can significantly influence consumption. Think about
the last time you had a coffee in a cafe. How long did you stay there, and why? If you stayed for
longer than you did at another cafe, then it may well be because the cafe environment was designed
especially to make you feel comfortable and want to linger. Let us see how situational factors
influence the consumer decision-making process.
The physical environment

It is no secret that people's moods and behaviours are strongly influenced by their physical
surroundings. Despite all their efforts to pre-sell consumers through advertising, marketers know
that the store environment influences many purchases. For example, consumers decide on about
two out of every three of their supermarket product purchases in the aisles (so always eat before you
go to the supermarket). The messages they receive at the time, and their feelings about being in the
store, influence their decisions. 10
Two dimensions, arousal and pleasure, determine whether a shopper will react positively or
negatively to a store environment. In other words, the person can perceive his or her surroundings
as dull or exciting (arousing), pleasant or unpleasant. Just because the environment is arousing
doesn't mean it will be pleasant-we have all been in crowded, loud, stuffy stores that are anything
but pleasant. Maintaining an upbeat feeling in a pleasant context is one factor behind the success
of theme parks such as Dreamworld, which try to provide consistent doses of carefully calculated
stimulation to visitors. 11
The importance of the physical environment explains why many retailers focus on packing as __
much entertainment as possible into their stores. For example, Jetty Surf, a clothing store that sells
mainly surfwear, is designed to resemble a surf

shack down at the beach, and plays surfing videos
and music to get consumers in the mood. Gloria
Jean's coffee outlets have only round tables, which
have been found to encourage people to stay
longer and to feel a stronger sense of community.
In-store displays are a marketing communi
cation tool that attracts attention. Although most
displays consist of simple racks that dispense the
product or related coupons, some marketers use
elaborate performances and scenery to display
their products. And advertisers also are being
more aggressive about hitting consumers with
their messages, wherever they may be. Place
• As consumers are exposed to more and more advertising, advertisers
based media is a growing way to target consumers
must work harder than ever to get their attention. Place-based media, in
this case a message strategically placed on a freeway wall, offers a way to in non-traditional places. Today, messages can
reach consumers when they are a 'captive audience'. pop up in airports, doctors' offices, university
cafeterias and health clubs. Ads are often shown
during the breaks at major sporting stadiums, and in Melbourne the Sky Bus that ferries passengers
between the airport and the city plays a IS-minute tourism infomercial, which regular commuters
may find a little annoying.
Time
In addition to the physical environment, time is another situational factor. Marketers know that the
time of day, the season of the year, and how much time one has available to make a purchase affect
decision making. Time is one of a consumer's most limited resources. We talk about 'making time'
or 'spending time' -and of course, in the business world, 'time is money'.
Indeed, many consumers believe that they are more pressed for time than ever before. 12 This
sense of time poyerty makes consumers responsive to marketing innovations that allow them to
save time, including such services as one-hour digital photo processing, drive-through lanes at
fast-food restaJrants and ordering products on the web. 13 A number of websites, including Apple's
I
iTunes, now offer consumers the speed and convenience of downloading music. These sites allow
consumers to browse through thousands of titles, listen to selections, and order and pay for them
all without setting foot inside a store. This saves the customer time, plus the 'store' is always open.
SOCIAL INFLUENCES ON CONSUMER

DECISIONS
Our discussion of consumer behaviour so far has focused on factors that influence us as individuals,
such as the way we learn about products. Although we are all individuals, we are also members of
many groups that influence our buying decisions. Families, friends and classmates often influence
our decisions, as do larger groups with which we identify, such as ethnic groups and political parties.
Now let us consider how social influences such as culture, social class, and influential friends and
acquaintances affect the consumer decision-making process.
culture
The values, beliefs, customs
Culture
and tastes valued by a group Think of culture as a society's personality. It is the values, beliefs, customs and tastes produced or
of people.
practised by a group of people. Although we often assume that what people in one culture think
CHAPTER S CONSUMER BEHAVIOUR 173
is desirable or appropriate will be appreciated in other cultures as well, that is far from the truth.
The producers of the Middle Eastern version of the hit reality TV show Big Brother found that
out when a male character kissed a female character on the cheek in the first few minutes of one
episode. In conservative Bahrain, the Persian Gulf island where the show was filmed, a social kiss
between a young man and a young woman meeting for the first time suggested rampant moral
depravity. In the wake of street protests, the show was pulled from the air.
14
Thus, a consumer's culture influences his or her buying decisions. Cultures have their own
rit s, such as weddings and funerals, which have specific activities and products associated with
ual
them. For example, when it comes to weddings and honeymoons, most people in Australia and
New Zealand will spend more money on the wedding day than on the honeymoon, whereas in
Japan the opposite is true. In Australia and New Zealand it is also rare to marry on any other day
than a Saturday, whereas this isn't so in other countries. Very often these cultural expectations are so
deeply ingrained that we don't realise how much they affect our consumer behaviour. For example,
AFL, although only an Australian sport, influences much of life in Melbourne. The city has ten AFL
clubs, with a combined membership of more than 400 000 people.
As we saw in Chapter 3, cultural values are deeply held beliefs about right and wrong ways
to live. 15 For example, one culture might feel that being a unique individual is preferable to
subordinating one's identity to a group, whereas another culture may emphasise the importance of
the group over individuality. Marketers who understand a culture's values can tailor their product
offerings accordingly. For example, the Holden brand is marketed to, and perceived by, Australians
as a car for Australians, despite now being American-owned. Qantas is proud to market itself as
the only Australian international airline, and its major advertising campaigns have been designed
around this image.
Subcultures
A subculture is a group coexisting with other groups in a larger culture whose members share a subculture
A group within a society
distinctive set of beliefs or characteristics. Each of us belongs to many subcultures. These subcultures whose members share a
could be religious groups, ethnic groups or regional groups, as well as those that form around bands distinctive set of beliefs,
characteristics or common
such as Mumford and Sons or Gotye, popular TV shows such as Survivor, or leisure activities such
experiences.
as extreme sports. The hip-hop subculture has had an enormous influence on the youth market,
with American artists such as Jay-Z or Beyonce now as likely to release a new clothing range as a
new record.
For marketers, some of the most important subcultures are racial and ethnic groups, as many
consumers identify strongly with their cultural heritage and are influenced by products that appeal
to this aspect of their identity. Some racial differences in consumption preferences can be subtle
but important. Some companies have recognised the importance of the growing Asian segment in
Australia by employing more staff who speak both English and an Asian language, or by stocking
more Asian products. For example, Westpac has Chinese customer service staff at its branch in
Sydney's Chinatown, and the Asian Hub Supermarket is growing as a retail franchise in Australia
catering mainly to the Asian market.
Social class
Social class is the overall rank of people in a society. People who are within the same class work social class
The overall rank or social
in similar occupations, have similar income levels, and usually share tastes in clothing, decorating standing of groups of people
styles and leisure activities. These people also share many political and religious beliefs, as well as within a society according to
the value assigned to such
ideas regarding valued activities and goals. factors as family background,
Many products and stores are designed to appeal to people in a specific social class. 16 Working-. education, occupation and
income.
class consumers tend to evaluate products in more utilitarian terms, such as sturdiness or comfort,
• M·usic crossovers
such as Yothu Yindi give
mainstream music an
Indigenous flavour.
rather than style or fashion. They are less likely to experiment with new products or styles, such
as modern furniture or coloured appliances, because they tend to prefer predictability to novelty. 17
Marketers need to understand these differences and develop product and communication strategies
that appeal to the different groups.
Luxury goods often serve as status symbols, visible markers that provide a way for people
to flaunt their membership in higher social classes ( or at least to make others believe they are
members). Marketers of high-end products often seek out rich people (or those who want others
to think they are) to buy their brands. For example, many fashion companies use celebrities, such
as supermodel Liu Wen for Estee Lauder and Ed Viesturs (a climber who has ascended all of the
world's peaks over 8000 metres without supplemental oxygen) for Rolex, to help create demand
among their target markets for their products.
However, it is important to note that over time the importance of status symbols rises and
falls. The Holden Statesman was once the ultimate status symbol car in Australia. Today, wealthy
consumers who �ant to let the world know of their success are far more likely to choose a Mercedes
Benz or a BMvV, although the Statesman is still the preferred car of many state premiers and even
the prime mini'ster. The 'in' car five years from now is anyone's guess.
Group memberships
Anyone who has ever 'gone along with the crowd' knows that people act differently in groups than
they do on their own. There are several reasons for this phenomenon. With more people in a group,
it becomes less likely that any one member will be singled out for attention, and normal restraints
on behaviour may be reduced. (Think about the last wild party you attended!) In many cases, group
members show a greater willingness to consider riskier alternatives than they would if each member
made the decision alone. 18
Since many of the things we buy are consumed in the presence of others, group behaviours are
important to marketers. Sometimes group activities create new business opportunities.
reference group A reference group is a set of people a consumer wants to please or imitate. Consumers 'refer to'
An actual or imaginary
individual or group that
these groups in evaluating their behaviour-what they wear, where they go, what brands they buy,
has a significant effect on and so on. Unlike a larger culture, the 'group' can be composed of one person, such as your partner
an individual's evaluations,
aspirations or behaviour.
or spouse, or someone you have never met, such as a politician like Malcolm Turnbull, a movie star
like Cate Blanchett, or a sophisticated man of the world like Borat. The group can be small, such as
your immediate family, or it could be a large organisation, such as the RSPCA.
Consumers often change their behaviour to gain acceptance into a particular reference group.
conformity is at work when a person changes as a reaction to real or imagined group pressure. conformity
A change in beliefs or actions
for example, supporters of a sporting team like the AFL team the Brisbane Lions will dress in team
as a reaction to real or
colours; and the famous Barmy Army, who follow the English Cricket Team around the world, imagined group pressure.
usually wear the English colours to matches.
Home shopping parties, as epitomised by the Tupperware party, capitalise on group pressures to
boost sales. A company representative makes a sales presentation to a group of people who have
gathered in the home of a friend or an acquaintance. Participants model the behaviour of others
who can provide them with information about how to use certain products, especially because the
home party is likely to be attended by a relatively homogeneous group (for example, neighbourhood
homemakers). Pressures to conform may be particularly intense and may escalate as more group
members begin to 'cave in'. (This process is sometimes termed the bandwagon effect.) Even though
Tupperware has moved into new sales venues, including a website ( <www.tupperware.com.au> ),
pay TV and shopping centre stalls, it hopes the venerable shopping party remains a popular means
of generating sales. 19
Opinion leaders
If, like Brendan, you are in the market for a new car, is there someone you know you would seek
out for advice? Some individuals are particularly likely to influence others' product decisions.
An opinion leader is a person who influences others' attitudes or behaviours because others opinion leader
A person who is frequently
perceive him or her as possessing expertise about the product. 20 0pinion leaders usually exhibit high able to influence others'
levels of interest in the product category and may continuously update their knowledge by reading, attitudes or behaviours by
virtue of his or her active
talking with salespeople, and so on. Because of this involvement, opinion leaders are valuable
interest and expertise in one
information sources and, unlike commercial endorsers who are paid to represent the interests of or more product categories.
just one company, they have no axe to grind and can impart both positive and negative information
about the product. In addition, opinion leaders often are among the first to buy new products, so
they absorb much of the risk, reducing uncertainty for others who are not as courageous.
Today, many shrewd marketers appreciate the value of coaxing opinion leaders-and especially
celebrities-to be seen using or wearing their products so that others will follow suit. For example,
many companies will engage celebrities to use their products in public places, so that they are seen
to be using the product in a natural way; and, of course, at many red carpet events such as the
Australian Logies or Hollywood's Oscars, fashion houses will dress celebrities for free in the hope of
obtaining favourable publicity and even sales!
Gender roles
Some of the strongest pressures to conform come from our gender roles, society's expectations gender roles
Society's expectations
regarding the appropriate attitudes, behaviours and appearance for men and women. These regarding the appropriate
assumptions about the proper roles of men and women, flattering or not, are deeply ingrained in attitudes, behaviours and
appearance for men and
marketing communications. For example, Coke Zero has used the colour black extensively in the
women.
marketing of its product, as research found that many men weren't drinking Coca-Cola's other
calorie-free product, Diet Coke, because of its supposed feminine image.
Many products take on masculine or feminine attributes, and consumers often associate them
with one gender or another. 21 For example, some women downplay their femininity at work by
wearing masculine-style clothing such as tailored pants and a jacket. These women believe that
feminine dress in the workplace hurts their chances of being promoted-that the corporate world
still rewards men more than women. Trouser suits, in this case, take on a masculine attribute.
Marketers play a part in teaching us how society expects us to act as men and women. As
consumers, we see women and men portrayed differently in marketing communications and in
• Gillette is increasing its presence in the feminine

market with its Venus range ofproducts.
For the goddess who wants i •

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products promoted to the two groups. And these influences teach us what the role of women or
men is and, in addition, which products are appropriate for each gender. Some of these sex-typed
products have come under fire from social groups. For example, feminists have criticised the Barbie
doll for reinforcing unrealistic ideas about what women's bodies should look like-even though
a newer version of the doll isn't quite as skinny and buxom. Other Barbie protests erupted when
Mattel introduced a shopping-themed version called Cool Shoppin' Barbie. The doll comes with
all the equipment children need in order to pretend Barbie is shopping-including a Barbie-size
MasterCard. When the card is pressed into the card scanner, her voice says, 'Credit approved!'
Although Mattel include a warning about ticking to a budget, some critics fear the doll sends the
wrong me sage,1to girls about the desirability of shopping. 22
CONSUMER-TO-CONSUMER E-COMMERCE
Of course, not all consumer behaviour is related to marketers offering goods and services to
consumers. Consumer-to-consumer (C2C) e-commerce refers to online communications and
consumer-to purchases that occur among individuals without directly involving the manufacturer or retailer.
consumer (Cl() eBay, the most famous of such sites, provides an opportunity for consumers (and an increasing
e-commerce
Communications and number of small businesses) to sell everything from collectible comic books to a vintage trombone.
purchases that occur among In September 2011, eBay had a registered user base of 100 million, who sold on average US$2100 in
individuals without directly
involving the manufacturer goods every second of that year-a total of US$68.6 billion in sales. 23
or retailer. Much of C2C e-commerce is far less sensational. It is more about groups of 'netizens' around
the world with similar interests becoming united through the internet by a shared passion. These
virtual communities meet online and share their enthusiasm for a product, recording artist, art
form, celebrity, and so on. 24
Companies such as Warner Bros. are also actively promoting virtual communities related to
their products. Warner Bros. noticed that many fans of Bugs Bunny, Batman and the Tasmanian
Devil were including images and sound clips on their personal web pages and then selling ad space
- CHAPTER 5 CONSUMER BEHAVIOUR 177
on those pages. Instead of suing its fans, Warner created an online community called ACME City
that builds home pages for registered members. 25
Let's look at some specific types of virtual communities that are shaking up the ways businesses
operate.
• Multi-user dungeons. Originally, these communities were environments where pl ayers of
fantasy games met. Now they refer to any cyber environment in which people socially interact
through role- and game playing. Realising that the average online player logs 17 hours per
week, companies such as Sony, Microsoft and Sega are building virtual worlds to get a piece of
the action. Of course, the world's biggest virtual community, Facebook (with over 800 million
users), has many multi-player game applications such as Cafe World that are very popular with
their users, making it the biggest gaming website in the world. 26 These virtual communities
provide a communications medium with many possibilities for marketers, since participants
often render judgements on a variety oftopics, such as hot new bands or movies, that can
influence the opinions of other participants.
• Chat rooms, rings and lists. These virtual communities include internet relay chat, otherwise
known as chat rooms. Rings are organisations of related home pages, and lists are groups of
people on a single email list who share information. For example, ICQ maintains rings devoted
to many topics, such as music, electronics, genealogy, and so on.
• Boards. Boards are online communities organised around interest-specific electronic bulletin
boards. Active members read and post messages sorted by date and subject. There are
boards devoted to musical groups, movies, wine, cigars, cars, comic strips and even fast-food
-- � I
restaurants.
• Biogs. One of the older forms of
online community is the weblog
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no 'one size fits all' way for marketers to create a web page for all to see, corporations have difficulty controlling the content
make use of these virtual communities, ···
of these sites.
clever marketers can look for opportunities to communicate with consumers online through these
sites. Virtual communities are unique in that, unlike traditional marketing communications venues,
they provide opportunities for willing and eager consumers to talk about a particular product.
In addition, monitoring such sites will provide marketers with an important source of information
about their companies' products, about consumer tastes and about the competition. In the global
marketplace, many people around the world use these methods to communicate with friends and
family by virtual word of mouth, which is the most effective communication method but one that
is hard to control and manage. If organisations can master this virtual environment, then they can
very quickly build up a global brand.
Jiere'r my cJioice
REAL PEOPLE } REAL CHOICES
How it Worked out at Arriba
In the end, Arriba implemented all three options. This is because, as a start-up company,
it didn't want to rely on any one single demographic or approach to sustain the company's
revenues. The various options considered had a synergetic effect when combined, as they
simultaneously build brand equity, while targeting both the main grocery buyer and the
opinion leaders and household influencers.
In summary, Arriba Burritos instituted a marketing strategy initially targeting the 15- to
30-year-old market and then further expanded its customer base by implementing a broad
based campaign targeting homemakers as well as event goers. By utilising this multilevel
strategy, Arriba was able to develop a brand identity and establish strong sales records very
quickly.
The success of Arriba has, in part, contributed to a lifestyle change in Australian eating, with
Mexican food now appearing as a regular menu item on Australian dinner tables.
Nearly two decades after being launchfd in Australia, Arriba Burritos are still available in supermarkets nationwide and enjoy
a loyal and dedicated following. AlthoCJgh the company has changed hands, the true mark of its success is its longevity in the
marketplace, which is based on the initial steps of the company's strategic marketing plan, outlined below:
I. Develop a product for the Australian market that was already popular in mainly the western and southwestern United States.
2. Ensure the product was healthy and would appeal to various tastes and diets.
3. Ensure the product was priced right and would be competitive when pitted against the market for pies, pasties and sausage
rolls.
4. Ensure the packaging was colourful, had a friendly, cheerful character as its logo, and could be subjected to various cooking
methods such as tabletop ovens, conventional ovens and microwaves.
5. Place the product in all food wholesale and retail outlets throughout Australia, ensuring it was easily accessible.
6. Produce a television commercial featuring a young, popular, up-and-coming Australian celebrity having a party with other
20-something friends.
7. Expand the market base to other demographics.
---
HAPTER SUMMARY
1. Define consumer behaviour, and explain the reasons why consumers buy what
they buy, Consumer behaviour is the dynamic interaction of affect and cognition, behaviour
and the environment, by which human beings conduct the exchange aspects of their lives.
Consumer decisions differ greatly, ranging from habitual, repeat (low-involvement) purchases to
complex, extended problem-solving activities for important, risky (high-involvement) purchases.
2. Explain the prepurchase, purchase and postpurchase activities that consumers
engage in when making decisions. When consumers make important purchasing decisions,
they go through a set of five steps. First, they recognise there is a problem to be solved and then
search for information in order to make the best decision. Next, they evaluate a set of alternatives
and judge them on the basis of various evaluative criteria. At this point, they are ready to make
their purchasing decision. Following the purchase, consumers decide whether it matched their
expectations.
3. Explain how internal factors influence consumers' decision-making processes,
and apply these factors to the purchase of a product. Several internal factors
influence consumer decisions. Perception is how consumers select, organise and interpret
stimuli. Motivation is an internal state that drives consumers to satisfy needs. Learning is a
change in behaviour that results from information or experience. Behavioural learning results
from external events, while cognitive learning refers to internal mental activity. An attitude is
a lasting evaluation of a person, an object or an issue, and includes three components: affect,
cognition and behaviour. Personality traits such as innovativeness, materialism, self-confidence,
sociability and the need for cognition may be used to develop market segments. Marketers seek
to understand a consumer's self-concept in order to develop product attributes that match some
aspect of the consumer's self-concept.
The age of consumers and their lifestyles are also strongly related to consumption preferences.
Marketers may use psychographics to group people according to activities, interests and
opinions, which may explain their reasons for purchasing certain products.
4, Understand how situational factors at the time and place of purchase influence
consumer behaviour. Situational influences include our physical surroundings and time
pressures. Dimensions of the physical environment, including decor, smells, lighting, music and
even temperature, can influence consumption. The time of day, the season of the year, and how
much time one has to make a purchase also affect decision making.
5. Explain how consumers' relationships with other people influence their decision
making processes. Consumers' overall preferences for products are determined by the culture
in which they live and their membership of different subcultures. Social class, group memberships
and opinion leaders are other types of social influences that affect consumer choices. A reference
group is a set of people a consumer wants to please or imitate, and this affects the consumer's
purchasing decisions. Purchases also often result from conformity to real or imagined group
pressures. Another way social influence is felt is in the expectations of society regarding the
proper roles for men and women. Such expectations have led to many sex-typed products.
6. Understand how the internet offers consumers opportunities to participate in
consumer-to-consumer marketing. Consumer-to-consumer (C2C) e-commerce includes
marketing communications and purchases between individuals. C2C activities include virtual
communities that allow consumers to do such things as share their enthusi.asm or dislike for a
product or company. Virtual communities and other C2C e-commerce activities provide both a
source of information about the market and about competitors for marketers and an opportunity
to communicate effectively with consumers.
EY TERMS
attitude, 168 consumer-to-consumer (C2C) operant conditioning, 167
behavioural learning theories, 167 e-commerce, 176 opinion leader, 175
brand loyalty, 160 culture, 172 perceived risk, 153
classical conditioning, 167 evaluative criteria, 160 perception, 164
cognitive dissonance, 162 family life cycle, 170 personality, 169
cognitive learning theory, 168 gender roles, 175 problem recognition, 156
conformity, 175 heuristics, 160 psychographics, 171
consumer, 152 hierarchy of needs, 166 reference group, 174
consumer behaviour, 152 information search, 158 self-concept, 169
consumer decision-making involvement, 153 social class, 173
process, 153 learning, 166 stimulus generalisation, 167
consumer market, 152 lifestyle, 170 subculture, 173
consumer satisfaction/ motivation, 165
dissatisfaction, 162
C -APTER REVIEW
MARKETING CONCEPTS: TESTING YOUR KNOWLEDGE
I. Is consumer behaviour still relevant in the Internet Age? Does the internet provide all the sources
of information the consumer needs to move on to the next step in the decision-making process?
I
2. What makes it so important for marketers to understand consumer behaviour?
3. Explain, using practical examples, habitual decision making, limited problem solving and
extended problem solving. What is the role of perceived risk in the decision process?
4. What is easier to change: perception or attitude? If you were marketing a new brand of energy
drinks, which one would you aim to change in the consumer's mind? Why?
S. What is behavioural learning?What is cognitive learning? How is an understanding of behavioural
and cognitive learning useful to marketers?
6. Why do business-to-business markets differ from consumer markets? Do these differences affect
marketing strategies, or can marketers just use the same ones with slight modifications?
7. Involvement levels are important in consumer behaviour theory, but do you think that industry
feels the same way? Explain by using the example of the fast-food or fashion industry.
MARKETING CONCEPTS: DISCUSSING CHOICE AND ETHICAL ISSUES

I. What is so wrong with companies targeting children? After all, as children are important
influencers in the family life cycle concept, shouldn't they be targeted?
....
2. What would make you buy an 'Australian-made' product? Do you think promoting products
based on place of origin is creating divisions of wealth in the world?
3. Do you think companies should sponsor celebrities or sports stars who have been found guilty
of indiscretions, such as Robert Downey Jr or Tiger Woods, to sell their products to consumers?
Shouldn't companies be seeking other opinion leaders who are more honest and open?
4. Do you think that physical environment influences, such as odour, lighting and store layout,
should be regulated due to how effectively these variables can influence consumer purchasing
behaviour, or is this just a case of consumer activists going too far?
MARKETING PRACTICE: APPLYING WHAT YOU HAVE LEARNED

I. As chief marketing consultant for Optus you have been asked by the chief marketing officer
to describe what you think would be the best stage in the business buying decision process to
target for sales of mobile phones to small businesses. What would you say, and why?
2. Write down your last three purchases. Describe the decision-making process you went through
for each one.
3. Explain why it is that colour is so influential to some consumers, yet to others means nothing at
all. Or do colours mean something to everyone? Apply in the context of a professional sporting
team or a tub of margarine.
4. Write down three products that you use regularly. How have the companies that sell you these
products educated you about their features and benefits? What learning and conditioning theory
or theories is this an example of?
MARKETING MINI-PROJECT: LEARNING BY DOING

The purpose of this mini-project is to increase your understanding of the roles of personal, social and
situational factors in consumer behaviour.
I. With several other members of your class, select one of the following product categories (or
some other product of your choice):
• Recreational bicycles
• Large appliances such as refrigerators or washing machines
• Women's formal dinner clothing
• Tennis court hire
• Luxury fashion
2. Visit three stores or locations where the product may be purchased. (Try to select three that are
very different from each other.) Observe and make notes on all the elements of the physical retail
environment.
3. At each of the three locations, observe, if possible, people purchasing the product. Make notes
about their characteristics (age, race, gender, and so on), their social class, and their actions in the
store in relation to the product.
4. Prepare a report for your class describing the situational variables and individual consumer
differences between the three stores and how they relate to the purchase of the product.
5. Present your findings to your class.
..
REAL PEOPLE, REAL SURFERS: EXPLORING THE WEB

Congratulations! You have just won a small-business start-up grant of $10 000 from the government. You decide to
set up a website selling coffee products and associated merchandise such as coffee cups. As part of this process you
need to find companies that specialise in the following products to help you:
• business banking
• coffee bean supplies
• merchandise
• secure online transactions and data storage.
Using only the internet in your search, find three companies that specialise in each product that could sell to you
where you are. Then answer the following questions:
I. How easy was it to find the three companies in each category? What role did internal and external sources of
information play in your search?
2. In each category, which website did you feel you learned something from after visiting the site? What role, if any,
did heuristics have in your evaluation of each website?
3. Which is your preferred supplier? Describe the reason behind your decision from a business buyer perspective.
When developing a marketing plan, attention must be paid to consumer behaviour-especially

MARKETING
PLAN EXERCISE what motivates consumers to buy. This is because, based on the marketing plan, a substantial
investment will be made in various approaches to influence consumers to purchase a company's
products over those of its competitors.
I. How do consumers' levels of involvement with a product affect the way the marketing plan
supports that product?
2. Why is brand personality such a strong influence on consumer behaviour? Or is it? Explain.
3. What do/1ou think is more influential on consumer behaviour-the price of the product, or its
value? E'Xplain.
ENDNOTES
1. James R. Bettman (1990), 'The decision maker who came in from the cold; presidential address, in Leigh
McAllister and Michael Rothschild (eds), Advances in Consumer Research, vol. 20, Association for Consumer
Research, Provo, UT; John W. Payne, James R. Bettman and Eric J. Johnson (1992), 'Behavioral decision
research: A constructive processing perspective; Annual Review of Psychology, vol. 4, pp. 87-131. For
an overview of recent developments in individual choice models, see Robert J. Meyer and Barbara E.
Kahn (1991), 'Probabilistic models of consumer choice behavior; in Thomas S. Robertson and Harold H.
Kassarjian (eds), Handbook of Consumer Behavior, Prentice Hall, Englewood Cliffs, NJ, pp. 85-123.
2. 'Touch looms large as a sense that drives sales; Brand Packaging, May/June 1999, pp. 39-40.
3, Michael Lev (1991), 'No hidden meaning here: Survey sees subliminal ads; New York Times, 3 May, p. D7.
4. Abraham H. Maslow (1970), Motivation and Personality (2nd ed.), Harper & Row, New York.
5. Robert A. Baron and Donn Byrne (1987), Social Psychology: Understanding Human Interaction (5th ed.),
Allyn & Bacon, Boston.
6. Richard E. Petty and John T. Cacioppo (1992), 'Need for cognition and advertising: Understanding the role
of personality variables in consumer behavior; Journal of Consumer Psychology, vol. 1, no. 3, pp. 239-60.
7. Jeffrey F. Durgee (1986), 'Self-esteem advertising; Journal of Advertising, vol. 14, pp. 4-21.
8. Benjamin D. Zabolocki and Rosabeth Moss Kanter (1976), 'The differentiation of lifestyles; Annual Review of
Sociology, pp. 269-97.
p
9. Alfred S. Boote (1980), 'Psychographics: Mind over matter; American Demographics, April, pp. 26-29; William
D. Wells (1975), 'Psychographics: A critical review; Journal ofMarketing Research, vol. 12, May, pp. 196-213.
10. Marianne Meyer (1988), 'Attention shoppers!; Marketing and Media Decisions, vol. 23, May, p. 67.
11. See Eben Shapiro (1991 ), 'Need a little fantasy? A bevy of new companies can help; New York Times,
10 March, p. F4.
12. John P. Robinson (1990), 'Time squeeze; Advertising Age, February, pp. 30-33.
13. Leonard L. Berry (1990), 'Market to the perception; American Demographics, February, p. 23.
14. Neil MacFarquhar (2004), 'A kiss is not just a kiss to an angry Arab TV audience; New York Times, 5 March.
15. Richard W. Pollay (1983), 'Measuring the cultural values manifest in advertising; Current Issues and Research
in Advertising, pp. 71-92.
16. J. Michael Munson and W. Austin Spivey (1981), 'Product and brand-user stereotypes among social classes:
Implications for advertising strategy; Journal of Advertising Research, vol. 21, August, pp. 37-45.
17. Stuart U. Rich and Subhash C. Jain (1968), 'Social class and life cycle as predictors of shopping behavior;
Journal of Marketing Research, vol. 5, February, pp. 41-49.
18. Nathan Kogan and Michael A. Wallach (1967), 'Risky shift phenomenon in small decision-making groups:
A test of the information exchange hypothesis; Journal of Experimental Social Psychology, vol. 3, pp. 75-84;
Arch G. Woodside and M. Wayne Delozier (1976), 'Effects of word-of-mouth advertising on consumer risk
taking; Journal of Advertising, Fall, pp. 12-19.
19. Jack Neff (1999), 'Door-to-door sellers join the party online; Advertising Age, 27 September.
20. Everett M. Rogers (1983), Diffusion of Innovations (3rd ed.), The Free Press, New York.
21. K. Debevec and E. Iyer (1986), 'Sex roles and consumer perceptions of promotions, products, and self;
in R.J. Lutz (ed.), Advances in Consumer Research, vol. 13, Association for Consumer Research, Provo,
UT; Deborah E.S. Frable (1989), 'Sex typing and gender ideology: Two facets of the individual's gender
psychology that go together; Journal of Personality and Social Psychology, vol. 56, pp. 95-108; L.J. Jaffe and
P.D. Berger (1988), 'Impact on purchase intent of sex-role identity and product positioning; Psychology and
Marketing, vol. 5, no. 3, pp. 259-71; Keren A. Johnson, Mary R. Zimmer and Linda L. Golden (1986), 'Object
relations theory: Male and female differences in visual information processing; in Melanie Wallendorf and
Paul Anderson (eds), Advances in Consumer Research, vol. 14, Association for Consumer Research, Provo, UT,
pp. 83-87; Leila T. Worth, Jeanne Smith and Diane M. Mackie (1992), 'Gender schematicity and preference
for gender-typed products; Psychology & Marketing, vol. 9, January, pp. 17-30.
22. Kara K. Choquette (1998), 'Not all approve Barbie's MasterCard; USA Today, 30 March, p. 68.
23. D. Kucera (2012), 'Ebay revenue beats estimates after increase in US sales: bloomberg.com, 20 July.
24. This section adapted from Michael R. Solomon (2001), Consumer Behavior: Buying, Having and Being
(5th ed.), Prentice Hall, Upper Saddle River, NJ.
25. Robert V. Kozinets (1999), 'E-tribalized marketing? The strategic implications of virtual communities of
consumption; European Management Journal, vol. 17, no. 3, June, pp. 252-64.
26. M. Zuckerberg (2009), 'An open letter from Facebook founder Mark Zuckerberg; <http://blog.facebook.
com/blog.php?post=l 90423927130>, accessed 5 February 2010.
MARKETING IN ACTION CASE
Superb cuisine at Jaaning Tree Restaurant

Jaaning Tree is an Aboriginal-owned tourism-focused restaurant in the Nambucca Valley,
New South Wales. It offers a contemporary menu blending Asian and Indigenous flavours
with fresh local produce, excellent friendly service, and fine wines from across Australia.
It has also recently established a catering menu to expand the business and offers cooking
classes on a monthly basis.
Jaaning Tree Restaurant is the lifelong ambition of owner and head chef Clayton Donovan.
Clayton was born in Macksville and began his apprenticeship in the Nambucca Valley. He
then travelled to Sydney to complete his apprenticeship at Watermark Restaurant at Balmoral
Beach before heading overseas to gain international experience in some of England's finest
a,r..�- -=- -- - . 1 - ----· ,-.-__ - - -. ·�- --· ,;
hotels and restaurants. While in England he

married Jane and they returned to Australia to
open up Jaaning Tree Restaurant.
Bringing the dream to fruition
On their return to Australia, Clayton and Jane
contacted Indigenous Business Australia
(IBA) for mentor support and also received
assistance from Bush Sensations (Regional
Development Australia). Together they
created a business plan and started to look
for a site for the proposed restaurant. At the
same time, Clayton joined the New Enterprise
Incentive Scheme (NEIS) through Centrelink
and undertook studies in preparation for running a business.
They found the perfect site for the restaurant and then spent the next few months pre
paring the building, redecorating, and sourcing the finest local produce for the unique
menu. Jane had their second child, and they opened their doors just five weeks later.
It was a busy and challenging time, which required commitment and long hours to make
it happen.
The inspiration for the name
The name'Jaaning' (pronounced'jaa-nee') is Gumbaynggirfor the Acacia irrorata, or wattle
tree. For centuries this tree has been a unique source of food for the local Indigenous
people. The new tree stems are rolled in the thick sweet sap that oozes from the bark,
known as 'Jaaning; to make 'bush lollies'. The tree is also unique in its ability to flower
when all other wattles have finished. Clayton has fond memories of collecting the sap in
his youth while growing up in the area.
Their distinctive ffifference
As a Koori, Clayton has a fascination with blending Asian cuisine with the local Indigenous
flavours and produce. His dishes are infused with local flavours, including the Davidson
plum, wattle seed, lemon myrtle, lllawarra plum, finger limes and riberry. The restaurant's
menu reflects this unique fusion, offering dishes such as citrus-cured crocodile carpaccio
and kangaroo loin smoked in lemon myrtle.
The restaurant is perched on the banks of the Nambucca River and has fabulous views,
bringing a relaxed, friendly feel to the restaurant, combined with excellent service.
Outcomes for Aboriginal people
Clayton is currently training an Indigenous apprentice chef. He is focused on growing the
business to provide employment and training opportunities for Indigenous people.
The restaurant's interior features stunning artwork from leading local Koori Aboriginal
artists Lee Freestone and Danielle Burford, and it actively promotes the sale of these works.
Clayton is a positive role model for the youth of Nambucca Valley. He is conscious of
growing the reputation of Aboriginal people through competing successfully in the
hospitality and tourism industry. He is part of the AIME mentoring scheme in the area
CHAPTER 5 CONSUMER BEHAVIOUR 18S
·.rr.--------· 11)'iJ"- -.·\tt. - ----_-:;.. --
and will soon be starting a training program with Nortec Employment and Training in
hospitality for local Indigenous and non-Indigenous clients.
Clayton and Jane are encouraging local school children and their families to visit the
restaurant to discover and taste some of the dishes on offer and develop a greater
awareness of the local cultural foods. They also visit local markets and food festivals
to expand awareness and appreciation of their bush herbs.
The keys to success
Jaaning Tree is a family-run business, and the owners work determinedly together to
achieve their goals, which include raising the profile of Koori cuisine in New South Wales.
Clayton and Jane are also focused on building Jaaning Tree into a successful business.
They have a lot of support from their extended family and the wider community, and they
credit this as being a major factor in achieving their goals.
The challenges
According to Clayton and Jane:
• 'The biggest challenge has been the steep learning curve of starting and running a
business and balancing this with having a newborn baby!'
• 'We have overcome these challenges with assistance from IBA and Bush Sensations,
and with the support of our family and the whole community of the valley:
Things to think about

I. How does the level of involvement for Jaaning Tree help or hinder the business's future
growth plans?
2. How do learning, perception and motivation influence each other, and ultimately the
consumer?
3. Restaurant meals are rarely enjoyed by one person, usually being a social occasion
enjoyed by two or more people. How might Jaaning Tree reduce the influence of
reference groups on its target market? What consumer behaviour strategies might
help Jaaning Tree lessen any negative influence from reference groups?
4. Many restaurants, including Jaaning Tree, are big believers in the influence of situational
factors on consumers. From the case study, what are two situational factors that may
affect consumers of Jaaning Tree in such a way? What other examples, apart from the
case study, can you think of where situational factors are important influencers on
consumer behaviour?
SOURCE: <www.indigenousrourism.australia.com/casestudies.asp?sub=OBB9#>, accessed 16 April 2010. Reproduced
with permission of Tourism Australia and Jaaning Tree.
PHOTO CREDITS
155 Getty Images Australia Pty Ltd; 159 Ferrari S.p.A., registered address via Emilia Est 1163, Modena (Italy), share capital
Euro 20.260.000, VAT no. 00159560366 enrolled in the register of companies of Modena under no. 00159560366, © 2009.
All rights reserved; 160 Image courtesy of Volvo Car Australia Pty Limited; 161 © Chinaleilei/Dreamstime.com; 162 © 2010
Tourism Australia; 163 macka/Shutterstock; 165 © Target Australia Pty Ltd 2010. All rights reserved; 166 © Reproduced
by permission ofBP Australia Pty Ltd. All rights reserved; 168 © 1999-2009 Tourism New Zealand, the official website of
the New Zealand Tourism Board. www.tourismnewzealand.com; 170 Courtesy of R.M. Williams; 172 © Webjet Limited;
174 Image courtesy ofYothu Yindi Music Pty Ltd. www.yothuyindi.com; 176 © 2010 Procter & Gamble. All rights reserved;
177 We want to thank LiveJournal for taking us on a fantastic journey covering 10 years _of global journaling and
communities.© 1999-201O LiveJournal, Inc. All rights reserved; 184 © iStockphoto.com/ Alain Couillaud.

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COMMONWEALTH OF AUSTRALIA

This material has been reproduced and communicated to you by or on behalf of

Do not remove this notice

Acquisitions Editor: Michael Porteous

Printed in China (CTPS/01)

1234 518 17161514

National Library of Australia

ALWAYS LEARNING PEARS{)f

REAL Dr Anthony Perrone

Decision time at Arriba

. . . ...... . ................. •''

••••••• ••••••••••••••••• •• ••••

UNDER'STAND, f:XPLAIN AND· APPLY

T�E CONSUMER DECISION-MAKING

Consumer decision-making models

Consumer involvement theory and the elaboration involvement

FIGURE s.1 The Engel-Kollat-Blackwell model of consumer behaviour

Perceived risk can also be a factor in product choice if

Brendan drives his new

Illustration of the decision-making process

Extended problem solving Habitual decision making

Step 2: Information search

TABLE 5.2 Stage in the

Step 3: Evaluation of alternatives

• Sports cars such as Ferrari appeal to their target

UPLOAt CAOSSOVEAS WAGONS SEDANS COUPES SALES&

• Volvo emphasises the safety of its cars to

Step 4: Pr:bduct choice

Step 5: Postpurchase evaluation

• Tourism Australia targets consumers

f�TERNAL INFLUENCES ON CONSUMER

to read it easily, or the message will be lost.

THE CUTTING EDGE ,-

Bringing that brochure to life

Psychologist Abraham Maslow developed an influential approach to motivation. 4 He formulated

Self-fulfilment, enriching experiences

Prestige, status, accomplishment (cars, furniture, credit

Love, friendship, acceptance by others

Security, shelter, protection (insurance, alarm

The self: Are you what you buy?

The physical environment

mainly surfwear, is designed to resemble a surf

SOCIAL INFLUENCES ON CONSUMER

• Gillette is increasing its presence in the feminine

For the goddess who wants i •

written. Biogs offer consumers

without going to the trouble of

updating a traditional web page.

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marketers of all these different types

MARKETING CONCEPTS: DISCUSSING CHOICE AND ETHICAL ISSUES

MARKETING PRACTICE: APPLYING WHAT YOU HAVE LEARNED

MARKETING MINI-PROJECT: LEARNING BY DOING

REAL PEOPLE, REAL SURFERS: EXPLORING THE WEB

When developing a marketing plan, attention must be paid to consumer behaviour-especially

MARKETING IN ACTION CASE

Superb cuisine at Jaaning Tree Restaurant

a,r..�- -=- -- - . 1 - ----· ,-.-__ - - -. ·�- --· ,;

hotels and restaurants. While in England he

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Things to think about

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