book, Consumer Behavior

Consumer behavior: building marketing strategy, 10th,2007

Hawkins, Mothersbaugh

updated version: (11th, 2009), (12th, 2012), (13th, 2015)

content blocks:

1. introduction
2. external influences: cross-cultural variations, the changing American society(values, demographics and social stratification, subcultures, families and households, group influences)
3. internal influences: perception, learning, memory and product positioning, motivation, personality and Emotion, Attitudes and influencing attitudes, self-concept and lifestyle
4. consumer decision process: situational influences, problem recognition, information search, alternative evaluation and selection, outlet selection, postpurchase processes, customer satisfaction, customer commitment
5. organizations as consumers
6. marketing regulation

1 introduction

Modern human society is based on all kinds of exchanges. We are all consumers and already affected by various marketing strategies.

This textbook is to help student build careers in marketing management, sales, or advertising. Utilization of knowledge of consumer behavior in the development of marketing strategy is an art. it means the successful application of these scientific principles to particular situations requires human judgment that can’t be reduced to a fixed set of rules. Like masterpiece, great marketing strategies not only require knowledge and practice in general, but also require special talents, effort, timing and some degree of luck.

These products are targeting the same consumers with very similar products, yet they use 2 very difficult approaches. Why? They are based on different assumptions about consumer behavior and how to influence it.

All marketing decisions and regulations are based on assumptions and knowledge about consumer behavior. Decisions based on explicit assumptions and sound theory and research are more likely to be successful than are decisions based only on hunches or intuition.

consumer value

For example, owning a car can provide a number of benefits, depending on the person and the type of car, including flexible transportation, image, status, pleasure, comfort, and even companionship.

Providing superior customer value requires the organization to do a better job of anticipating and reacting to customer needs than the competition does.

Places like Starbucks and the Hard Rock Cafe are selling experiences more than food and beverages. An experience occurs when a company intentionally creates a memorable event for customers. Today, many firms are wrapping experiences around their traditional products and services in order to sell them better.

Failure to adequately understand one’s own strengths can cause serious problems. Like IBM’s first attempt to enter the home computer market beyond business customers.

evaluating all aspects of the firm:

1. financial condition
2. general managerial skills
3. production capabilities
4. research and development capabilities
5. technological sophistication
6. reputation
7. marketing skills: new-product development capabilities, channel strength, advertising abilities, service capabilities, marketing research abilities, market and consumer knowledge**

evaluate competitors:

1. If we are successful, which firms will be hurt( lose sales or opportunities)?
2. If they are injured, which has the capability (financial resources, marketing strengths) to respond? How are they likely to respond (reduce prices, increase advertising, introduce a new product)?
3. Is our strategy (planned action) robust enough to withstand the response of our competitors, or do we need additional contingency plans?

marketing communication

Many segments would not appreciate this ad, but it works with the targeted segment.

Marketing messages can range from purely factual statements to pure symbolism. The best approach depends on the situation at hand.

2. cross cultural variations in consumer behavior

Often these products are adapted to the local culture and assume meanings and use that greatly enrich the culture and the lives of its members. e.g. many American holiday traditions are spreading throughout the world.

On the other hand, some imports can be disruptive or controversial. e.g. Valentine’s day. Hindu and Indian beliefs generally restrict public displays of affections. American tobacco companies have aggressive marketing campaigns in most developing countries. In Japan, Western cigarette brands marketed as a kind of liberation tool.

Much of human behavior is learned rather than innate, culture does affect a wide array of behaviors. The nature of cultural influences is such that we are seldom aware of them. One behaves, thinks, and feels in a manner consistent with other members of the same culture because it seems “natural” or “right” to do so. We tend to obey cultural norm because the other way would seem unnatural.

For example, the topping of pizza is each country is quite different.

Cultures are not static and they evolve slowly over time. Marketing managers must understand both the existing cultural values and the emerging cultural values of the societies they serve.

There is a list of 18 values that are important in most cultures. Most of the values are shown as dichotomies but they are actually a continuum. e.g. 2 societies can each value tradition, but one may value it more than the other. For a society to place a low value on cleanliness does not imply that it places a high value on dirtiness.

In the US, the family is defined fairly narrowly. Strong obligations are felt only to immediate family members, and these diminish as family members establish new families.

In South American, Israel, and Asia, the role of the family is much stronger. Chinese have developed family-like links to a greater extent than almost any other culture. It stretches from close family, to slightly distant, to more distant, embracing people who are not really family but are connected to someone in one’s family and to all their families. So in the Chinese context, the family is really a system of contacts, rather than purely an emotional unit as in the west.

The roles of women are changing and expanding throughout much of the world. This is creating new opportunities as well as challenges for marketers. e.g. more Asian women who continue to work after the marriage has led to increased demand for time-saving products. Many Japanese women feel guilty preparing frozen vegetables in a microwave. Marketers would emphasize convenience and nutrition and position them as “modern up-to-date cooking”.

In mainland China, there are a traditionalist and modern segments. The challenge is to sort them out for marketing purposes.

Comparative ads are found to be distasteful in the collective culture. Such culture tends to place a strong value on uniformity and conformity.

US places a high value on cleanliness. Germ-fighting liquid soaps alone are a $16 billion market.

performance/status

power distance: the degree to which people accept inequality in power, authority, status, and wealth as natural or inherent in society.

high acceptance of power: India, China, Brazil, Mexico, France, Honking, Japan. In these countries, expert source has the greatest impact in an advertisement. Consumers are more likely to seek others’ opinions in making decisions.

low acceptance of power: Austria, Denmark, New Zealand, Sweden, US.

Western Europe and US tend to problem-solving, whereas Mexico and Middle-East countries all toward the fatalistic (belief what will happen has already been decided and can’t be changed). In some places, “no problem” actually means: there is a problem, but we don’t know what to do about it — so don’t worry!

sensual gratification (using sexy model) vs abstinence ( the practice of not doing or having something that is wanted or enjoyable)

work-life balance. hours work per week: Hong Kong (48.6), France(34.1).

nonverbal communications

Arbitrary meanings a culture assigns actions, events, and things other than words.

Two time perspectives

monochronic culture	polychronic culture
Do one thing at a time	many thing
concentrate on the job	highly distractible,subject to interrupt
take deadlines/schedule serious	secondary
committed to the job/task	committed to people and relationship
adhere to plan	change plans often and easily
emphasize promptness	promptness on the relationship
short-term relationship	prefer long-term relationship

Even within one culture, time perspectives can vary by age and by the situation. e.g. work is approached by monochromic, but leisure is by polychromic.

relationship

Americans, more so than most other cultures, form relationships and make friends quickly and easily and drop them easily also. This is partially due to their social and geographic mobility. People move every few years and must be able to form friendships in a short time period. In other parts of the world, relationships and friendships are formed slowly and carefully because they imply deep and lasting obligations.

To most Asians and Latin Americans, personal ties is more important than the written word. Good personal relationships and feelings are all that really matter in a long-term agreement. The social contacts developed between the parties are often far more significant than the technical specifications and the price. The major point of the negotiations is getting to know the people involved. Americans negotiate a contract; the Japanese negotiate a relationship. In many cultures, the written word is used simply to satisfy legalities. In their eyes, emotion and personal relations are more important than cold facts.

Chinese relationships are complex and described as guanxi:

• a continuing reciprocal relationship over an indefinite period of time
• favors are banked
• relationship network is built among individuals, not organizations
• status matter
• social relationship is prior to/a prerequisite to business relationship

Under the Chinese system, we would examine the character of a potential trading partner closely. The relationship is everything. The Chinese want to know and understand you before they buy from you.

American assume prices are uniform for all buyers. But in many Latin American, Asian, and Middle East countries, virtually all prices are negotiated prior to the sale, including industrial products.

Japenese seldom say no directly during negotiation, he might say “that will be very difficult” which would mean no. A responding “yes “ to a request often means I “understand” the request instead of “agree” to the request. Many Japanese find the Amercian tendency to look straight into another’s eyes when talking to be aggressive and rude.

American Value

10 motivation, personality, and emotion

Maslow’s hierarchy needs

McGuire’s Motivations: https://en.wikipedia.org/wiki/McGuire%27s_Motivations

1. cognitive/effective
2. preservation/growth
3. active/passive
4. internal/external

Consumers do not buy products; instead, they buy motive satisfaction or problem solutions.

Marketers don’t create needs, but they do create demand, the willingness to buy a particular product or service.

2 groups of motives:

1. manifest motives: conform to a society’s prevailing value system, freely admitted
2. reluctant to admit

Personality is an individual’s characteristic response tendencies across similar situations. It is behavioral tendencies. Most trait theories state that traits are inherited or formed at an early age and are relatively unchanging over the years. Differences between personality theories center on which traits or characteristics are the most important.

Brand personality

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