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1Introduction to Consumer Behavior4

Joy A. Guevara
Consumer Behavior

Edited May 31, 2007

Introduction to Consumer Behavior


WE ARE ALL CONSUMERS
Consumer Behavior: marketing aspect wherein marketers attempt
understand, to predict, and to satisfy the needs (for food; for water;
for clothing, etc.) and wants (Japanese vs. Filipino food; mineral vs.
tap. vs. Evian water; Lee vs. Humanity jeans; Nike vs. Evans sports
shoes, UK vs. couture) of consumers.
• Study of processes involved when individuals or groups select,
purchase, use, or dispose of products, services, ideas, or
experiences to satisfy needs and desires; presumes CHOICES
(both ways).
• But diversity does not exist only in consumers, but also amongst
marketers (mass marketers, retailers, direct marketers,
television shopping, cyber marketers)

How do marketers know which people to target, where and how to


locate them, and what message would be most effective?
• Consumer research: identifying the similarities or the constants
of the peoples of the world
o Needs are with us from when we are born, but wants are
developed by the environment, by culture, by our
education, by our experiences
o Wants are equivalent to acquired needs
o And because of shared environment, shared culture, shared
experiences, consumers acquire commonalities of needs or
interest, and this becomes a market segment.
o Market segmentation: allows the marketer or supplier to
vary the features or image of its product, and also each
market segment perceives a particular product as better
fulfilling of their specific needs that other available or
competing products.
• Constant: Again, WE ARE ALL CONSUMERS.
o Personal (end-user, ultimate) consumers or organizational
(profit, non-profit, government, institutions (schools,
hospitals, prisons, etc.) consumers
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2Introduction to Consumer Behavior4
Joy A. Guevara
Consumer Behavior

Study of consumer behavior: became important when marketers


realized that consumers do not always react or act as market
theorists say they should; not a “me-too” concept
• Consumers preferred differentiated products that they felt
reflected their own special needs, personalities, and lifestyles.
• Accelerated rate of product development, consumer movements,
public policy concerns, environmental concerns, global markets.
• Marketing concept: producers often found it easier to sell
products that consumers or the market wanted rather than the
products or services the producers had (selling concept)
o Marketing concept: focuses on needs of buyer while selling
concept focuses on needs of seller

Focus of consumer behavior: how individuals make decisions to spend


their available resources (time, money, effort) on consumption-
related items.
• What they buy, why they buy it, when they buy it, where they
buy it, and how often they use it, how often they buy it
• Ball point pens: features, benefits, types of uses, when do
consumers buy, how often do they buy?
o The answers to the above will determine product
scheduling, design modifications, and promo strategies
The Meaning of consumption:
• People often buy products not for what they just do, but for
what they mean.
• Not that function is unimportant, but rather that the roles that
these products play in our lives extend well beyond the tasks
that they perform.
• Implications of brand choices, brand loyalty, acceptance or
rejection of new products, etc.

Roots of Consumer Behavior: psychology, sociology, social


psychology, anthropology, economics
Why do we study consumer behavior: to understand why and how
consumers make their purchase decisions (assumes CHOICES!!!!)

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3Introduction to Consumer Behavior4
Joy A. Guevara
Consumer Behavior
Global marketplace: assimilation (adopting customs, practices, and
language of one culture) vs. transnationalism (continue to observe
one’s native customs, practices, and language within the context of a
larger, newer society); Rex Navarrete, the Fil-Can kid with Filipino
eating habits)
Global consumer culture: people around the world are united by their
common devotion to brand name consumer goods, services, ideas,
and even personalities.
Multiculturalism: age, gender, education, occupation, marital status,
living arrangements, activities and interests, preferences and opinions

Ethics in Marketing:
• Teleology: deals with the moral worth of a behavior as
determined by its consequences; to be ethical, a decision is
based on what is best for everyone involved.
o Utilitarianism: greatest good for the greatest number (a
diet drug is manufactured and sold, and harmful side
effects that may affect only a few people are kept
concealed, because of the greater number of people who
will benefit); cost-benefit
• Deontology: focuses on results on a particular action, and
more value is placed on personal or social values rather than
on economic values; reverse of the Golden Rule (do not do
unto others what you do not want done unto you)

Do Marketers Manipulate Consumers?


1. Do marketers create artificial needs?
• A need is a basic biological motive, a want represents one way that
society has taught us how the need can be satisfied; i.e., thirsty?
∴ water or goat’s milk or Coke?
2. Are advertising and marketing necessary?
• Products are designed to meet existing needs, advertising and
marketing only communicates the availability of their availability,
and in fact, cuts back on the consumer’s time searching for such
products.
3. Do marketers promise miracles?

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4Introduction to Consumer Behavior4
Joy A. Guevara
Consumer Behavior

• Failure rate for new products is 40-80%. Thus, it is the consumer


who decides whether the products are good or not, and if products
fail, the firm and the marketers fail.

The Dark Side of Consumer Behavior:

Whereas people are always pictured to be rational and sane people,


there are instance (many) that the consumers become their own
downfall, thus resulting in decisions or actions extremely harmful to
themselves and their families and communities.
1. Consumer Terrorism: “mad cow” disease, bird flu, 1982 Tylenol,
1992 Diet Pepsi (syringes), Jollibee worms
2. Addictive consumption: psychological and physiological
dependency on products or services; drugs, alcohol, cigarettes;
extreme reliance
3. Compulsive consumption: repetitive shopping, often excessive, as
an antidote to tension, anxiety, depression, or boredom.
4. Consumed consumers: people who are used or exploited, willingly
or not, for commercial gain in the marketplace; people themselves
become commodities; prostitutes, organ donors, freak show “stars,”
babies
5. Illegal activities: theft (shoplifting, shrinkage from both
consumers and store employees, pilferage); anticonsumerism
(products and services are deliberately defaced or mutilated;
pranks???)