Unit 1 – Understanding Consumption

What is Consumer Behaviour?

The study of the process involved when individuals or group select, purchase, use, or dispose of products,
services, ideas, or experiences to satisfy needs and desires.

Consumer behavior is the way people decide what to buy, use, and dispose of products or services. It includes how
people make choices based on their needs, wants, habits, and influences like advertising, social media, and
recommendations from others. Factors like price, quality, and convenience often guide consumer decisions.

Consumer Product Acquisition Process

1. Motive development (realising you want or need something)

2. Information Gathering (looking for information about the product or opinions)
3. Proposition Evaluation (looking at diferent options)
4. Proposition Selection (chose the one that seems best for you)
5. Acquisition/ Purchase (actual buying process)
6. Re-evaluation (after using the product, you evaluate again if ur happy)

Stages in the Consumption Process

Explain the process involved in human perception, learning, and memory in relation to customer choice

Perceptions and Selective Exposure

Perception:
This is how we understand and interpret the world based on our own beliefs, needs, and the situation we’re
in. It shapes how we react to things.

Selective Exposure:
We can’t pay attention to everything, so we focus on what we find important and ignore the rest. For example,
we choose which news sources or websites to follow based on what interests us.
Learning and Memory

Classical Conditioning: This is a way to learn that marketers use in these ways:

1. Catchy Songs: Ads use jingles like "mmm, Danone" to make you think their food is tasty.
2. Bakery Smells: Supermarkets have bread sections because the smell makes you want to buy more.
3. Free Samples: Perfume brands, like L’Oréal, give free samples in magazines. When you see an ad later, you
remember the smell and are more likely to buy it.

Operant Conditioning: This is learning by getting rewards or punishments. When a behavior gets a reward, we’re
more likely to do it again. For example, supermarkets use reward cards, like the Nectar card in Britain, to encourage
customers to buy more by giving them points.

Social Learning: We learn not just from our own actions but also by watching how others act, which is called
modeling. Companies understand this and often ask customers to leave product reviews, like their social media pages,
or share their posts to influence others.

The Memorization Process

Our memories store what we see, experience, and know, and this is a complex system. Several factors can influence
how we remember things

1. Recognition and Recall: How well we recognize or remember something.

2. Context: The situation in which we learn or remember things.
3. How Information is Stored: The way we put information into our memory.
4. Processing Load: How much mental effort we use.
5. Input Mode: How we receive information (like seeing or hearing).
6. Repetition: The effect of seeing or hearing something multiple times.

Importance of personality and motivation in consumer behaviour

Personality

Trait approach
- Sociable – timid
Categorizes people into different personality types or so-called traits. - Stable- nervous
Researchers characterize personalities according to bipolar scales à - Friendly – hostile
Self-concept approach

People buy goods and services from the brand they represent and its relation to the buyer’s perception of their own
self-concept or personality.

Consumer motivations: Maslow’s hierarchy of human needs: Want vs. Need

- Self-actualization needs (wanting to become the best version of ourselves)

- Esteem needs (need to feel good about us and feel respected)
- Belongingness needs (need for connection, like having friends)
- Safety needs (need for security and stability in our environment)
- Physiological needs (basic needs: food, water, oxygen)
Main Reasons for Purchase

(5 categories of reasons for purchasing)

1. Economic (buying based on cost, savings, and overall financial benefit)

2. Technical (buying because of specific features, quality, how well the product works)
3. Social (buying to fit in, follow trends, connect with others)
4. Legalistic (buying to meet legal requirements or official standards)
5. Adaptive (buying to keep up with the changes, new trends, or to stat updated)

Describe opinions, attitudes, and values; and how they relate to customer behaviour

Opinions, Attitudes and Values

• Opinions are quick reactions we give when asked about current issues or by friends. These responses usually
don’t come from deeply held beliefs, as we may not have fully thought through or formed a strong view on
the issue.

• Attitudes are stronger than opinions. They last longer, are more stable, and are based on more thought and
experience. Because of this, attitudes are more likely to impact our behaviour.

• Values are the strongest of the three. They are deeply rooted beliefs that shape both our attitudes and
behaviour, serving as a foundation for how we think and act.

Explain how reference groups influence consumer behaviour

Group Influence: Social Grading

Groups we admire or belong to have a big impact on what we buy. These groups create standards for what’s cool or
acceptable, and we often choose products that match those standards. For example, people buy things that help them
fit in or show a certain lifestyle or social status. This way, we feel accepted and valued by the people around us.

SUMMARY TOPIC 1

Consumer Behaviour: This is the study of how individuals or groups select, buy, use, and get rid of products and
services to meet their needs and desires. Different people may handle these tasks in various ways.

Market Segmentation: It’s important for marketers to understand the different wants and needs of consumer
groups. Consumers can be divided into segments based on factors like demographics (age, gender) and
psychographics (lifestyle and personality). New marketing strategies, such as relationship marketing and database
marketing, help companies better meet the needs of different groups.

Impact on Lives: Consumer choices are closely linked to broader life issues, influencing everything from public
policy to popular culture.

Consumer Motivation: People have complex reasons for their purchases. Marketers aim to meet these needs,
which can be rational (utilitarian) or emotional (hedonic).
Technology and Culture: The rise of the internet and social media has changed how consumers interact with
brands and each other, allowing access to a wider range of products and community feedback.

Interdisciplinary Study: Many specialists from various fields study consumer behaviour, focusing either on
individual behaviours (micro) or group and societal behaviours (macro).

Research Perspectives: There are two main views in consumer behaviour research: the positivist approach focuses
on objective data and rational decision-making, while the interpretivist perspective emphasizes individual
experiences and subjective meanings.

Review Questions

1. What is consumer behavior?

It studies how individuals or groups choose, buy, use, or dispose of products and services to satisfy their needs
and desires.

2. What are demographics?

Demographics are statistics about a population, such as age, gender, and income.

3. What is market segmentation?

Market segmentation involves targeting specific groups of consumers based on characteristics like usage,
demographics, and psychographics.

4. What is role theory?

Role theory suggests that consumer behavior resembles acting in a play, where people change their buying
decisions based on the roles they are playing.

5. What is an exchange?
An exchange is a transaction where two or more parties give and receive something of value.

6. Why learn about heavy users?

Heavy users contribute significantly to a company's revenue and are more likely to be loyal customers.

7. What is "Big Data"?

Big Data refers to analyzing large sets of information to make informed business decisions.

8. What is popular culture?

Popular culture includes the entertainment consumed by the mass market and influences both marketing and
consumer behavior.

9. What is global consumer culture?

It’s a culture where people worldwide share a common interest in brand-name products and celebrities.

10. Which disciplines study consumer behavior?

Psychology and sociology are two disciplines that study consumer behavior from different angles—mental
processes versus group behaviours.
Unit 2.1 – Buyer Behaviour - ETHICS

Ethical Business is good business

Marketing Ethics and Public Policy

Business ethics are rules of conduct that guide actions in the Marketplace
(Guidelines for what’s right and wrong when doing business)

There are cultural differences in what is considered ethical

(It means that what’s considered right or ethical can vary depending on the country or culture.

Purpose Driven Business

A purpose-driven business is a company that exists for more than just making money. It has a clear goal
to make a positive impact on society or the environment. This purpose guides its decisions and actions, like
improving people’s lives, supporting communities, or protecting the planet. The company still aims to be
profitable, but its main focus is doing good in a specific way.

Needs and Wants

Consumerspace: A marketplace where consumers tell companies what products they want and control how, when,
and where they receive information about them.

Materialism: The value people place on owning material goods.

Provenance: Shoppers are often willing to pay more if they know the origin of a product and trust it was carefully
chosen by real people.

Curation: Originally for museums, curation now applies to consumer goods like food, clothing, and travel, where
experts select items for quality and appeal.

Do Marketers Maniputale Consumers?

Marketers often try to influence consumers, but they don't have enough knowledge or control over people's
thoughts and behaviors to truly manipulate them. While they use strategies to attract attention and
persuade, ultimately, consumers make their own choices based on personal needs, experiences, and
preferences.

Do Marketers Create Artificial Needs?

Marketers don’t invent new needs; they just make us more aware of the needs we already have.

• A need is something basic we can’t live without, like food or shelter.

• A want is a specific way we choose to meet that need, influenced by what we see around us.

For example, we need food, but we might want a burger because ads made it look delicious. So, marketing helps
guide what we might want, but it doesn’t create the need itself.
Are advertising and Merketing Necessary?

Advertising doesn’t create a desire for more stuff; it just lets people know what products are available to meet
needs they already have. Products are made to solve real needs, and ads are there to spread the word about them.

Marketers have an obligation to provide safe and functional products as part of their business activities

When brands fail to satisfy, consumers have three options

Courses of Action refer to different ways people respond when they are unhappy with a product or service:

1. Voice Response: This means directly complaining to the company about the issue.

2. Private Response: This involves talking to friends or family about the dissatisfaction, sharing the
experience without going to the company.

3. Third-Party Response: This can include seeking help from outside organizations, like filing a complaint
with the Better Business Bureau or taking legal action to resolve the issue.

Social Marketing and Corporate Social Responsibility (CSR)

• Social Marketing aims to promote good behaviors and reduce harmful ones in society.

• Corporate Social Responsibility (CSR) involves companies taking steps to positively impact their
stakeholders, like employees, customers, and the community.

Consumer behaviour impacts directly on major public issues that confront our society

Sustainability and Environmental Stewardship (1 of 2)

Conscientious consumerism refers to a trend where consumers are increasingly aware of their personal health while
also considering the health of the planet. This means they choose products that are not only good for them but also
environmentally friendly and socially responsible.

Green Marketing and Greenwashing

Green marketing

Is a strategy where companies create and promote products that are good for the environment. They
highlight these eco-friendly features when communicating with customers to attract buyers who care about
sustainability.

Greenwashing

Happens when companies make misleading or exaggerated claims about how environmentally friendly
their products are. This is done to create a false impression of being eco-conscious without making
significant efforts to be sustainable.
Sportswashing

Is when a person, group, company, or country uses sports to make themselves look better and improve their
image. They might do this by hosting major sporting events, buying or sponsoring sports teams, or getting
involved in sports activities. The goal is to distract from negative issues or controversies and present a
more positive reputation to the public.

Consumer behaviour can be harmful to individuals and to society

Consumer Terrorism

Refers to actions taken by individuals or groups to harm a business or brand through threats, protests, or other
disruptive behaviours aimed at influencing consumer behaviour.

Cyberterrorism is the use of computers and technology for politically motivated attacks that create
significant disruption or fear in society.

Guerrilla Marketing is a creative and unconventional approach to marketing that uses low-cost tactics to
gain maximum attention and exposure for a product or brand.

Addictive Consumption

This occurs when individuals develop a strong dependence on certain products, feeling unable to live without them.

- Consumer Addiction: This is a specific type of addictive consumption where people become addicted to
buying or using products.

- Social Media Addiction: people use social media so much that it resembles a chemical dependency,
affecting their daily lives and mental health.

- Cyberbullying: This involves intentionally and repeatedly harming someone through electronic devices
like computers and cell phones.

- Phantom Vibration Syndrome: This is the habit of reaching for your phone because you think you feel it
vibrating, even when it’s not on or you’re not carrying it.

- Compulsive Consumption: This refers to excessive shopping or buying to cope with feelings of tension,
anxiety, depression, or boredom.

The dark side of Consumer Behaviour

- Consumed Consumers: This term describes people who are exploited for commercial gain, either willingly
or unwillingly. Examples include blood, organ, and hair donors, as well as surrogate mothers who are paid
to carry babies for others.
(Illegal Acquisition and Product Use & Consumer Theft and Fraud)

- Shrinkage: This is the term used in retail to describe losses in inventory and cash due to shoplifting and
employee theft.

- Serial Wardrobing: This is a practice where customers buy clothes, wear them once, and then return them.
It can also include changing price tags or using fake receipts to return items for a higher refund.
 - Counterfeiting: This involves selling fake versions of genuine products, tricking customers into thinking
they are buying the real thing.

- Anti-consumption: This behaviour includes intentionally damaging or defacing products and services as a
form of protest or rejection of consumer culture.

Unit 2.2 – Buyer Behaviour – and the decision-making process

Customer market and construct a simple model of consumer buyer behaviour

Consumer Markets and Buyer Behaviour

• Consumer buyer behavior refers to how individual consumers and households make decisions about
purchasing goods and services for their own use.

• Consumer markets consist of all these individuals and households that buy or obtain products and
services for personal consumption.

The Model of Buyer Behaviour

Four major factors that influence consumer buyer behaviour

Characteristics Affecting Consumer Behaviour

Cultural Factors:

o Culture: Is the collection of fundamental values, beliefs, desires, and behaviours that individuals
learn from their families and other important institutions in society.

o Subcultures are smaller groups within a larger culture that share their own unique values, beliefs,
and experiences based on similar life situations.

o Social classes are divisions in society that are relatively stable and organized, where members Interno

share similar values, interests,Characteristics

and behaviors. TheseBehavior
Affecting Consumer classes are typically measured using factors
like occupation, income, education, and wealth. – (Upper class, middle class..)
Social Factors
Groups and Social Networks

Membership Aspirational Reference

Groups Groups Groups

Social Factors: •Groups with

direct
•Groups an
individual
•Groups that
form a
influence wishes to comparison
and to which belong to or reference
a person in forming
o Groups and Social networks à belongs attitudes or
behavior

Discussion Question
o Family (is the most significant organizationWhatinfluencing consumer
groups are you a member buying
of and what are behavior
your aspirational indoes
groups? How society)
this influence you as a consumers?
Consumer behaviour
LATO LIGHT 7pt.
Mark Grimes

o Roles and Status (refer to a person's position within a group, which can shape their behavior and
decisions)

Personal Factors:

o Age and life-cycle stage Occupation (influences the types of goods and services that consumers
purchase, as different jobs often have varying income levels and lifestyle needs.)

o Economic Situation (factors such as spending, income, savings and interest rate)

o Lifestyle (the way a person lives, which is reflected in their interests, activities, opinions, and
values—collectively known as psychographics).

o Personality and self-concept (refer to the distinct psychological traits and qualities that
differentiate one individual or group from another). Sincerity, excitement, competence…

Each person’s distinct personality influences his or her buying behavior. Personality refers to the
unique psychological characteristics that distinguish a person or group. Personality can be useful
in analyzing consumer behavior for certain product or brand choices.

Psychological Factors:

o Motivation: strong need that compels a person to seek out ways to satisfy that need.

o Perception: select, organize, and interpret information to create a meaningful understanding of the
world

o Learning: change in a person's behavior from their experiences and happens through interaction

o Beliefs and attitudes: descriptive thought that someone holds about something based on
knowledge, opinion and faith. Attitude: how they feel about something, which can influence how
they think and act towards it
 Major types of buying decision behaviour

Complex buying behavior

Dissonance-reducing buying behavior

Habitual buying behavior

Variety-seeking buying behavior

Buying behavior differs greatly for a tube of toothpaste, a smartphone, financial services, and a new car. More
complex decisions usually involve more buying participants and more buyer deliberation.

The buying process starts long before the actual purchase and continues long after. In fact, it might result in a decision
not to buy. Therefore, marketers must focus on the entire buying process, not just the purchase decision:

o Need Recognition: first stage of the buyer decision process, in which the consumer recognizes a problem or need
triggered by: Internal stimuli & External stimuli

o Information Search: stage of the buyer decision process in which the consumer is motivated to search for more
information. (Sources of information: personal source, commercial sources …)

o Evaluation of Alternatives: stage in the buyer decision process where a consumer assesses different brands or
options using the information they have gathered.

o Purchase decision: buyer’s decision about which brand to purchase. The purchase intention may not be the
purchase decision due to attitudes of others or unexpected situational factors).

o Post-purchase behaviour: stage of the buyer decision process in which consumers take further action after
purchase, based on their satisfaction or dissatisfaction.

Adoption and diffusion process for new products

The buyer Decision process for New Products

The adoption process is the mental process an individual goes through from first learning about an innovation to
final regular use.

Consumers go through five stages in the process of adopting a new product:

• Awareness: The consumer becomes aware of the new product but lacks information about it.
• Interest: The consumer seeks information about the new product.
• Evaluation: The consumer considers whether trying the new product makes sense.
• Trial: The consumer tries the new product on a small scale to improve his or her estimate of its value.
• Adoption: The consumer decides to make full and regular use of the new product.
This model suggests that new-product marketers should think about how to help consumers move through these
stages. For example,

For example, if consumers are not buying a new product because they do not perceive a need for it, marketing
might launch advertising messages that trigger the need and show how the product solves customers’ problems.

If customers know about the product but are not buying because they hold unfavorable attitudes toward it,
marketers must find ways to change either the product or consumer perceptions.

Individual Differences in innovativeness:

• Innovators are venturesome—they try

new ideas at some risk.

• Early adopters are guided by respect—

they are opinion leaders in their
communities and adopt new ideas early
but carefully.

• The early mainstream is deliberate—although they rarely are leaders, they adopt new ideas before the
average person.

• The late mainstream is skeptical—they adopt an innovation only after a majority of people have tried it.

• Lagging adopters are tradition bound—they are suspicious of changes and adopt the innovation only when
it has become something of a tradition itself.

Analysing and Using Marketing Information

Five characteristics are especially important in influencing an innovation’s rate of adoption.

• Relative advantage is the degree to which the innovation appears superior to existing products.
• Compatibility is the degree to which the innovation fits the values and experiences of potential consumers.
• Complexity is the degree to which the innovation is difficult to understand or use.
• Divisibility is the degree to which the innovation may be tried on a limited basis.
• Communicability is the degree to which the results of using the innovation can be observed or described to
others.

Summary Topic 2

Ethical business is good business.

Business ethics are rules of conduct that guide actions in the marketplace; these are thestandards against which
most people in a culture judge what is right and what is wrong, good or bad.

Marketers must confront many ethical issues, especially ones that relate to how much they make consumers “want”
things they don’t need or are not good for them. A related issue is materialism, which refers to the importance
people attach to worldly possessions, and the role of business in encouraging this outlook.
Marketers have an obligation to provide safe and functional products as part of their business activities.

It is both ethically and financially smart to maximize customer satisfaction. In some cases, external bodies such as
the government or industry associations regulate businesses to ensure that their products and advertising are safe,
clear, and accurate. Consumer behavior researchers may play a role in this process and those who do transformative
consumer research (TCR) may even work to bring about social change. Companies also play a significant role in
addressing social conditions through their corporate social responsibility (CSR) practices and social marketing
campaigns that promote positive behaviors.

Consumer behavior impacts directly on major public policy issues that confront our society.

Our relationships with companies and other organizations are complex and many issues that impact quality-of-life
relate directly to marketing practices. These include the tradeoff between our privacy and the ability of companies
to tailor their offerings to our individual needs. Other issues revolve around market access as many people are
unable to navigate the marketplacedue to disabilities, illiteracy, or other conditions. In addition, our fragile
environment requires a commitment to sustainable business practices that attempt to maximize the triple bottom-
line that emphasizes financial, social, and environmental benefits.

Consumer behavior can be harmful to individuals and to society.

Although textbooks often paint a picture of the consumer as a rational, informed decision-maker, in reality many
consumer activities are harmful to individuals or to society. The “dark side” of consumer behavior includes
terrorism, addiction, the use of people as products (consumed consumers), and theft or vandalism
(anticonsumption).

Unit 3 – Perception and Processing of Information

Design of a product today is a key driver of its success or failure

The design of a product is often a key driver of its success or failure.

Sensations: vision, scent, sound, touch, taste, hedonic consumption, context effects.

Sensory marketing: companies think carefully about the impact of sensations on our product experiences.

Vision:

• Trade dress: refers to specific color combinations that become strongly linked to a brand. For example,
the unique colours of Ruggable's washable rugs are instantly recognizable as part of their brand.
Interno

• Color forecasts are predictions about which colors will be popular in the future. Manufacturers and
Vision
retailers use these forecasts to choose colors for(2 of 2)
their products so they can meet customer demand. An
example is the Color of the Year 2024 chosen by Pantone, Inc., which
• Table 3.1 Marketing Applications of Colors helps companies know what colors

to stock.
Color Associations Marketing Applications
Yellow Optimistic and youthful Used to grab window shoppers’ attention

• Marketing Applications of Colors à

Red Energy Often seen in clearance sales
Blue Trust and security Banks
Green Wealth Used to create relaxation in stores
Orange Aggressive Call to action: subscribe, buy or sell
Black Powerful and sleek Luxury products
Purple Soothing Beauty or anti-aging products

• Source: Adapted from Leo Widrich, “Why Is Facebook Blue? The Science Behind Colors in Marketing,”
Fast Company (May 6, 2013), fastcompany.com .

Consumer behaviour
Mark Grimes
Products and commercial messages often appeal to our senses, but because of the profusion of these messages
we don’t notice most of them

Key Concepts in the Use of Sound

- Audio watermarking (Adding a unique sound to audio content to identify and track it, similar to a visual
watermark.).
- Sound Symbolism (The idea that certain sounds can shape how we feel about a brand. For example, sharp
sounds may suggest strength).
- Phenomes (The basic sounds in a language, like vowels and consonants).
- Endowment Effect: (People value items more when they own them, which can apply to products that have
a distinctive sound, like a favourite song or ringtone).
- Haptic: (While primarily about touch, haptic feedback can also involve sound, as the sounds we hear can
enhance our tactile experience of a product (like the sound of a door closing).
- Kansei Engineering: (This design approach considers how sounds affect emotions and perceptions,
aiming to create products that not only look good but also sound appealing to enhance user satisfaction).

3 Stages of Perception that translates raw stimuli into meaning

3 Stages of Perception

1. Exposure
2. Attention
3. Interpretation

(1) Exposure: This is when you first come across something, like seeing an ad or a product.

Example: You walk by a store and see a colourful poster for a new drink.

Key Concepts in Exposure:

- Sensory threshold comes within the range of someone’s sensory receptors.

- Psychophysics focuses on how people integrate the physical environment into their personal worlds.
- Absolute threshold The absolute threshold refers to the minimum amount of stimulation a person can
detect on a given sensory channel. The absolute threshold means that the stimulation used by marketers
must be sufficient to register.
 (2) Attention: This is when you focus on something and really notice it.

Example: You stop to look closely at the poster because the bright colors catch your eye.

Attention is the extent to which processing activity is devoted to a particular stimulus.

Consumers experience sensory overload.
Marketers need to break through the clutter.

(3) Interpretation: This is how you understand and make sense of what you see.

Example: You read the poster and think, “This drink looks refreshing and healthy, so I want to try it.”

The field of semiotics helps us to understand how marketers use symbols too create meaning

Semiotics in Consumer Behavior

Semiotics is the study of signs and symbols and their meanings. In consumer behavior, it helps us understand how
people interpret brands and ads.

Example: the color green might make you think of nature and freshness. Marketers use these symbols to connect
with consumers based on their experiences and cultural meanings.

Summary Topic 3

Products and commercial messages often appeal to our senses, but because of the profusion of these messages
we don’t notice most of them.

Marketing stimuli have important sensory qualities. We rely on colors, odors, sounds, tastes, and even the “feel” of
products when we evaluate them. Not all sensations successfully make their way through the perceptual process.
Many stimuli compete for our attention, and we don’t notice or accurately interpret the majority of them.

Perception is a three-stage process that translates raw stimuli into meaning.

Perception is the process by which physical sensations, such as sights, sounds, and smells, are selected, organized,
and interpreted. The eventual interpretation of a stimulus allows it to be assigned meaning. A perceptual map is a
widely used marketing tool that evaluates the relative standing of competing brands along relevant dimensions.

The field of semiotics helps us to understand how marketers use symbols to create meaning.

Marketers try to communicate with consumers by creating relationships between their products or services and
desired attributes. A semiotic analysis involves the correspondence between stimuli and the meaning of signs. The
intended meaning may be literal (e.g., an icon such as a street sign with a picture of children playing). Or it may be
indexical if it relies on shared characteristics (e.g., the red in a stop sign means danger). Meaning also can be conveyed
by a symbol in which an image is given meaning by convention or by agreement of members of a society (e.g., stop
signs are octagonal, whereas yield signs are triangular). Marketer-created associations often take on lives of their
own as consumers begin to believe that hype is, in fact, real. We call this condition hyperreality.