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Consumer Behavior and Analysis: Final Essays, Exams of Advanced Education

University of WitwatersrandAdvanced Education

Key concepts in consumer behavior, including environmental factors, consumer situations, and cultural influences. It provides examples and explanations of each concept, making it a valuable resource for understanding consumer decision-making processes. The document also discusses the application of these concepts in marketing strategies, particularly in the context of international marketing.

Typology: Exams

2024/2025

Available from 12/15/2024

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CONSUMER BEHAVIOR AND ANALYSIS
FINAL ESSAYS
Discuss the two levels and the two dimensions of the environment. Provide examples of
each. - 2 Levels:
1) Macro: large-scale, environmental factors
-economic conditions
- politics
-landscape
2) Micro: social aspects and immediate surroundings.
-people in your family
- a particular salesperson
- a clean store
2 Dimensions
1) Social Environment: social interactions
-two types of social interaction:
-direct social interaction: someone talking to a sales-representative about which shirt
they like better.
-vicarious social interaction: observing what shirts other customers are buying.
2) Physical Environment: non-human, physical aspects where human behavior occurs.
3 major environment factors
1) Time
-Consumer behavior is often influence by time. For example, a consumer may not
purchase anything before 8 if their favorite stores don't open before that time.
2) Weather
-A consumer may be less likely to go out and shop if the weather is too hot or too cold
3) Lighting
- can change a consumers mood, behavior, or anxiety level.
Discuss the five generic consumer situations and provide examples of each. For each,
identify uncontrollable and controllable factors that should be considered in the
development of marketing strategies. - 1) Information Acquisition
- consumers gain information
- The two main information acquisitions
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CONSUMER BEHAVIOR AND ANALYSIS

FINAL ESSAYS

Discuss the two levels and the two dimensions of the environment. Provide examples of each. - 2 Levels:

  1. Macro: large-scale, environmental factors -economic conditions
  • politics -landscape
  1. Micro: social aspects and immediate surroundings. -people in your family
  • a particular salesperson
  • a clean store 2 Dimensions
  1. Social Environment: social interactions -two types of social interaction: -direct social interaction: someone talking to a sales-representative about which shirt they like better. -vicarious social interaction: observing what shirts other customers are buying.
  2. Physical Environment: non-human, physical aspects where human behavior occurs. 3 major environment factors
  3. Time -Consumer behavior is often influence by time. For example, a consumer may not purchase anything before 8 if their favorite stores don't open before that time.
  4. Weather -A consumer may be less likely to go out and shop if the weather is too hot or too cold
  5. Lighting
  • can change a consumers mood, behavior, or anxiety level. Discuss the five generic consumer situations and provide examples of each. For each, identify uncontrollable and controllable factors that should be considered in the development of marketing strategies. - 1) Information Acquisition
  • consumers gain information
  • The two main information acquisitions
  1. Information contact is when consumer see something like a billboard while driving on the highway (uncontrollable)
  2. Communication would be a consumer asking a sales-representative about a product (controllable)
  3. Shopping
  • consumer comes in contact with a store/product
  • social, physical, and spacial elements
  • very incontrollable factor in marketing
  1. Purchase Situations
  • funds transferred and a consumer receives product
  • consumer going to a check out line at a grocery store -marketer can control ease and availability of purchase
  1. Consumption
  • use of a product/service
  • consumption is when they drink soda
  • no control over the consumption -Dentists and hair-stylists have control (on their premises)
  1. Disposal
  • consumer disposes product or product package
  • no control when the disposal is done away from premise -If a consumer is throwing away package in grocery store, marketer could encourage the consumer recycles by providing different trash bins. This is an example of a controllable factor. Use the Wheel of Consumer Analysis to describe how affect and cognition and behaviors interact with environmental factors in an automatic-purchase situation. - The Wheel of Consumer Analysis 3 parts
  1. Consumer Behavior
  2. Consumer Environment
  3. Consumer Affect and Cognition (all parts form circle and affect each other: interrelated) -An automatic-purchase situation occurs when a purchase is made extremely convenient for the consumer. (This can be influenced by all 3 parts) EXAMPLE: -perfect purchase situation is when all factors work together harmoniously
  • if a consumer is in a good mood, has lots of energy, and it's a beautiful day out, and a farmer's market is very close by, they will be more likely to go shop and purchase there.

Define culture and compare and contrast the two approaches to cultural analysis: the content of the culture versus the cultural process. - Culture: meanings or beliefs shared by a majority of a social group. Cultural meanings: reactions, behaviors, and beliefs. -For example, a cultural behavior in the U.S. would be a handshake when meeting someone. This is a behavior that is culturally accepted and recognized by most Americans. two approaches to cultural analysis

  1. content of culture: beliefs, values, and goals held by most people in a culture. (It can also include physical objects or social institutions)
  2. The cultural process: how cultural meanings develop or are transformed from actions of organizations. ways in which these approaches differ
  3. when a marketer focusses on the content of culture, they look in depth at current culture. A marketer who focusses on the cultural process looks at how culture changes and transforms.
  4. Cultural process also looks more at how businesses influence culture rather then the meaning of culture in general. Though both of these approaches are different, they are both very important for marketers. Describe how possession rituals can transfer meaning from products to consumers. - Possession rituals refers to establishing meaning. -A consumer needs to be assured that they made a good purchase decision and they often gain this assurance through possession rituals. -An example would be someone buying a new necklace and then wearing. By wearing it and getting compliments on it, the consumer is assured that they made a good choice and the product is officially theirs. -Through possession rituals, meaning can also be transferred from products to consumers. -meaning goes from the consumer to the product. This happens through care or admiration for a product. For example, if my product is a new watch, I may routinely clean my watch and replace the battery. Though taking care of my watch, I transfer meaning to it. That meaning is then transferred back to me since I gain satisfaction from my product.

Describe a personal experience in which you performed a divestment ritual. What personal meanings did you remove through the ritual? - A divestment ritual is the opposite of a possession ritual. Rather then acquiring meaning, a consumer is removing meaning. A product may acquire meaning through personal attachment, making it hard for consumers to let go of that product at times. I once had a shirt that I had worn on a very important day. Whenever I wore that shirt, I would envision that important day. Because of this, I placed great meaning on this shirt and I became very personally attached to it due to memories. When my shirt became very old and got a hole in it, I still had trouble letting go of that product. My divestment ritual consisted of a few things. First I got my mom's opinion, which was the throw the shirt out. This reassured me. I then took a picture in the shirt so I could still remember it despite throwing it away. This is a just a simple example of both a possession ritual and divestment ritual. Discuss how the three main approaches to dealing with cross-cultural factors in international marketing could be applied to the marketing of a soft drink such as Dr. Pepper. Describe one problem with each approach. Which do you recommend and why? - 1) Adapting Strategy to Culture -traditional view

  • looks at how different consumer needs, wants, preferences, attitudes, and values are.
  • referred to as Adapting Approach
  • marketer adapts their product to best fit the international consumer.
  1. Standardizing Strategy Across Cultures.
  • also referred to as Global Marketing
  • markets the same product to all markets
  • standardize products to fit in all markets.
  • common approach to truly international companies
  • permanently engage in international business.
  • This strategy also tends to save money
  1. change the culture.
  • more proactive marketing strategy
  • seeks to change the culture to fit the product rather then changing the product to fit the culture.
  • can accomplish this through advertising that convinces the consumer of something. Define the concept of subculture, discuss stages of subcultural analysis, and provide examples of five different subcultures. - -Subculture is "distinctive groups of people in a society that share common cultural meanings." -Subcultures share certain beliefs, behaviors, and environmental factors.
  • begin to accept them more -For example, if an American lives in Canada long enough, they may come to tolerate or accept the higher prices. They also may come to appreciate the products more as they cultural understanding increases.
  1. Integration Stage -when people become fully adjusted to differences -The consumer is able to fully function in the new environment -no issues Define four social class groups in the United States and identify marketing implications of each. - Social class: a status determined by social and economical status -U.S. has 4 social classes organized into hierarchy.
  2. Upper Americans -14% of population
  • highest income -high quality, prestigious brands
  • known to favor travel, exclusive clubs, and expensive activities. A marketer could take this into account when marketing towards this group
  1. Middle Class
  • 32 % of population
  • idolize the Upper Americans
  • desire to have the brands and products that the Upper Americans favor.
  • having the Upper Americans buy and promote their products, they will encourage sales from the Middle Class Americans.
  1. Working Class
  • 38 % of population
  • dependent on economic support such as job promotions or opportunities
  • can't afford the same products as the Upper and Middle class (but desire to keep up with the times) -Marketers can target the Working Class by offering cheaper versions of products favored by the Upper and Middle class.
  1. Lower Americans -16% of population
  • people with extremely low to no incomes.
  • supported by the higher classes and the government.
  • some companies donate to homeless shelters when a consumer purchases certain items. This is a good promotional strategy. There has long been a controversy as to whether social class or income is the better variable for use in consumer analysis. Assume the role of advocate of each position and

state arguments for each (pros and cons). - -Though these are both good strategies, they have pros and cons. Social Class (not highly priced, this is more relevant) Pros: -looks at lifestyle and beliefs rather than just income -superior for products that are symbolic/visible Cons: -less relevant for efficiency and affordability items Income: Pros:

  • Not all products are meant to be seen.
  • For appliances and kitchen products, consumers tend to use their income as a rule of thumb.
  • A consumer is less concerned with looks and more concerned with efficiency and affordability. -it is generally believed that both of these factors should be combined for the best consumer analysis. Though they both have their strengths when it comes to certain products, the best overall results occur when a marketer observes both income and social class. Define the term reference group. Discuss types of reference-group influence and provide examples of each. - A reference group, typically used in marketing research, includes one or more people. These people are used as a basis for comparison or analyzation. A researcher may study the group's responses and behaviors. 3 main reason why people will choose to identify with a reference group
  1. to gain useful knowledge
  2. to obtain rewards or punishments
  3. to acquire meanings that will change or maintain their self-concept. 3 types of reference-group influence
  4. Information Reference Group Influence
  • when someone gains information about themselves, other people, products, stores, or services -obtained through verbal communication or observation
  1. Utilitarian Reference Group Influence
  • reference group controls punishments or rewards
  • group creates group norms which can result in punishment or reward when followed or rejected.

Describe the six common types of family-influence strategies. - 1) Expert Influence -one family member claims to be more knowledgable then the other and uses their expert knowledge to influence their decision. (husband knows more about cars, over-all influencing his wife's decision on what car to buy)

  1. Legitimate Influence
  • based on feelings or shared values. (husband may convince his wife that he should buy the cars because he is the "man of the household" and it is his job)
  1. Bargaining Influence
  • one person bargains or trades on order to do something (wife may let her husband buy the new car he wants if he lets her go on a shopping spree)
  1. Reward/Referent Influence
  • spouse or family member bribes another in order to get what they want (if a child really wants to go get ice cream, they may offer to do the dishes for their mother if she agrees to take them)
  1. Emotional Influence
  • someone shows or displays an emotion in order to get a response (verbal or non- verbal) (a husband refuses to get his wife a new vacuum machine, she may refuse to talk to him or she may give him the silence treatment)
  1. Impression Management Influence
  • most deceptive form of influence since it can involve lying or tricking a family member (if a mother doesn't feel like taking her children to get ice cream, she may tell her children the ice cream shop is closed) Explain the concept of family life cycle, and discuss why it is important to marketers. - The family life cycle
  • changed over the years -developed into a modern family life cycle
  • can represent single parents, young singles, older singles, and married couples with children -important in marketing analysis
  1. Helps a marketers understand how culture trends affect families and consumption behavior (if it's culturally trendy for families to buy their food at a certain grocery store, consumption behavior could be greatly affected)
  1. marketer can observe the family life cycle so they can reduce shopping time and stress -This can be done by providing information, assisting in planning, developing out-of- store selling, automating processes, and by improving delivery
  2. Use the family life cycle to segment the market, analyze the market, and choose a target market. (a marketer may choose to analyze single parents, young singles, older singles, and married couples with children. The marketer will then choose the market segment that will be most likely to adopt their product) Define market segmentation. Discuss the steps involved in the segmentation process. - Market segmentation: marketer divides a whole market into different groups or segments. -segments typically have some sort of similarities
  • goal is to create segments that will be most likely to adopt or be interested in their products or services.
  1. Analyze Consumer-Product Relationships
  • consumer behavior, values, beliefs, consumption behavior, etc. (since prestige is often a big factor, a marketer may see that their product, Lululemon pants, are mostly adopted by upperclass girls. Lululemon brand is often though of as a more prestigious brand)
  1. Investigate the Segment Bases
  • geographic segmentation, demographic segmentation, sociocultural segmentation, and cognitive segmentation. (if the product is still Lululemon pants, the basis for segments might first of all be women since Lululemon pants are made for women. The next basis might be ages 15 to ages 40 since women in this age range are most likely to wear the pants)
  1. Develop Product Positioning
  • done in relation to competing products or services.
  • can also position according to attributes, use or application, product user, product class, or competitors.
  1. Select a Segment Strategy
  2. if their product applies to no one, they may decide not to enter the market
  3. they may decide their product applies to everyone and be a mass marketer
  4. they could decide their product only applies to a small section of the market and choose just one segment
  5. a marketer may decide on more then one segment and have a different strategy for each
  6. design a marketing mix strategy
  • This is done by finishing the marketing mix for each segment.
  • when a marketer positions a product in relation to other products in the same category or class. (gluten-free snacks are in the snack category like other snacks, but they are positioned as an alternative for those with allergies)
  1. Competitors -when a marketer uses their competition to compare and contrast their product (A local coffee shop may position themselves in comparison to Starbucks by saying they use less sugar then Starbucks) What options are available to an organization after it identifies segments in the market? When would each of these options represent a reasonable choice? - 1) Not Enter the Market
  • a company may discover that there is no niche for their product and they need to start from the drawing board
  1. Target the Whole Market
  • mass marketing
  1. Target Single Market
  • product only applies to one type of segment
  1. Target More then One Segment
  • a marketer will need to design a marketing strategy for each segment Describe the process by which the consumer comes to experience satisfaction or dissatisfaction. Illustrate each result with an experience of your own. - 1) Prepurchase Performance Expectations. -A consumer may analyze a product before it is purchased and make their own conclusions. (For example, before buying gelato from a shop called Stella Luna, I had high expectations. I had heard from others that this was the best gelato and the store looked very good)
  1. Preperformance Expectations: Confirmed/ Disconfirmed. (For example, when I had Stella Luna gelato, my high expectations were met. Since my expectations were met, I was a satisfied consumer)
  2. Positive/Negative Post Purchase Performance Perception ( An example of this situation would be when I bought Aussie Full Strength Hair Spray. I had high expectations since this was a well-reviewed hairspray. After using the product, my expectations were disconfirmed. The hairspray did not work well. I was very unsatisfied and my postpurchase performance perceptions were negative) Explain the concept of adoption curve and the five categories of adopters. In general, to which adopter category do you belong? Explain. - The adoption curve
  • tool used in analyzing consumer-product relationships
  • shows the amount of purchasers of a product over a certain amount of time 5 Adopter Categories
  1. Innovators -willing to take risks. -purchase new, risky products no one has
  • little time to make a decision
  1. Early Adopters
  • less reckless -some of the first to adopt new products
  • tend to influence the early majority.
  1. Early Majority
  • avoid all risks
  • tend to purchase products that have already been purchased by the early adopters
  1. Late Majority
  • takes a bit longer to adopt products
  • skeptical and careful with purchase decisions.
  1. Laggards
  • traditional and stubborn -may eventually adopt a product
  • may not even adopt it at all
  • I would say I tend to fall into the early majority. I like to read reviews written by innovators and early adopters before I make a purchase decision. I am also somewhat cautious with my purchase decision. I love to get new products relatively soon after they come out though, which is why I would categorize myself as an early majority adopter. Discuss the importance of the package in marketing strategy. 16-3 - 4 Objectives
  1. packaging should PROTECT
  2. packaging needs to be ECONOMICAL
  3. packaging should allow convenient STORAGE
  4. packaging needs to PROMOTE Other factors: packaging size, colors, and labels.
  • Larger packages - favored since they are often viewed as being more economical.
  1. Personal Selling
  • interaction between consumer and salesperson -salesperson can motivate and encourage a consumer to become more involved with the company or product. (beer salesperson standing outside the store. salesperson may talk to potential consumers, encouraging them to try their new beer)
  1. Publicity
  • any unpaid form of promotion
  • can be both negative and positive for a company or brand (Positive post pictures of it on Instagram Negative: negative review of it on the internet) Discuss the communication process, including goals of promotion communications. - The Communication Process -procedure -communicating information to the consumer. Once the information has been communicated, the consumer then takes action. 5 Step Process
  1. Source of Information
  • deciding what information needs to be communicated.
  1. Encode Message
  • creating a brief description or image to show the consumer
  1. Transmit the Message.
  • through a channel such as the TV, radio, or newspaper
  1. Consumer Receives Message and Takes Action -buying the product or merely looking at it in the store.
  2. Feedback
  • helps marketers start the communication process over again, letting them know where they can improve. 5 Goals of Communication
  1. recognize the NEED for the product
  2. become AWARE of the brand
  3. FAVOR their product/ positive attitude towards brand
  4. WANT to purchase the brand
  5. take action and PURCHASE the brand

Describe the elaboration likelihood model (ELM). Describe how the two routes of persuasion differ, and discuss their implications for developing effective advertising strategies. - ELM, the Elaboration Likelihood Model

  • two different processes
  • goal: to persuade consumers
  1. Central Route -higher involvement with the product or brand
  • pay close attention to the advertisement
  • focus on the product-related information -The consumer will be more likely to read a whole ad on the product
  • understanding the information on a deep level
  • consumers have deeper thoughts about purchase consequences and product attributes -thoughts more elaborate -consumers have product beliefs that lead to brand attitude -The attitude then leads to purchase intention.
  1. Peripheral Route
  • low involvement with the product or message.
  • consumers have little motivation to pay close attention to the product-related information
  • consumer will focus more on peripheral aspects
  • entertainment value or eye-catching images.
  • shallower thoughts about nonproduct information. -There is also little, if any, elaboration. -consumer nonproduct beliefs lead to attitude towards an ad.
  • This then leads to a brand attitude and eventually a purchase intention. -This process is more lengthy then the central route. Explain the activities involved in managing promotion strategies. - 4 Activities
  1. Analyze Consumer-Product Relationships.
  • study consumer needs, goals, values, and product knowledge levels
  1. Determine Promotion Objectives and Budget
  • aim to meet at least one big objective
  • influencing behaviors, informing, reminding, and transforming responses
  • set a budget
  1. Design and Implement a Promotion Strategy -relies greatly on the consumer-product relationship earlier researched by the marketer -use sources such as the MECCAS model to develop an advertising strategy

-set prices that are relative to competitive prices -set prices that will generate consumer demand Explain the concept of price elasticity. - Price elasticity is the relative change of demand for a certain product depending on the change in monetary price. For example, the demand for a product may increase as the price decreases or vice versa. Price elasticity can be dependent on a few factors. For example, if consumers are very price sensitive, the amount of demand will change greatly according to product prices. On the other hand, a customer may be willing to pay a lot for a certain product. In this case, the demand is not as dependent on the price range. How can price be used to position products like tennis shoes or make- up? - Price can easily be used to position products in a few ways. When positioning tennis shoes that are more expensive then competing brands, a marketer may use the price to make their tennis shoes appear more superior. Since they are more expensive, a marketer could claim they have more benefits. On the other hand, a marketer could also use a lower price to position the tennis shoes. If the tennis shoes are cheaper than competing brands, a marketer could position them a a cheaper alternative to competing brands. This could appeal more to the lower-class that are price conscious. Makeup can be positioned the same way. More expensive makeup could be positioned as being more prestigious and high-quality due to the higher prices. Makeup could also be positioned as being cheaper then the competing brands, though offering the same benefits. Define types of pricing strategies, and provide examples of each. - There are multiple types of pricing strategies a marketer can utilize.

  1. penetration pricing (common) -when a company initially charges a low price for a brand new product. As the product stays on the market, the company will slowly raise the prices. This strategy works when the demand for a product increases over its lifetime.
  2. price skimming
  • opposite of penetration pricing -occurs when a product is introduced as a relatively high price. The price will then decrease over time.
  • This is a very common strategy. Products such as Apple iPhones and MacBook Laptops are an example of price skimming since the price declines overtime. Describe the various types of store layouts, including strengths and weaknesses of each. - 2 Basic Store Layouts
  1. Grid Layout
  • retail stores and grocery stores
  • simple and includes evenly spaced rows of products Advantages:
  • less expensive
  • allows the consumer to becomes familiar -easily locate items
  • I am able to find the products I need in any Walmart -easier to clean Disadvantages:
  • limited creativity
  • limited browsing -boring (know what to expect) -browsing may be discouraged
  1. Free-Form -less structured and more random
  • more relaxed form
  • encourages consumers to browse
  • encourages impulse purchases
  • boutiques or specialty stores Advantages:
  • flexibility and visual appeal
  • ability to create visually appealing displays Disadvantages: -loitering and potential confusion
  • easier for shoplifters to loiter and steal -Confusion may also occur -People who need certain items may get lost What specific environmental factors account for the difference in atmosphere between eating at McDonald's versus eating at an expensive, upscale restaurant? - - McDonald's has a very different atmosphere from expensive, upscale restaurants. Atmosphere: "in-store emotional state. In-store emotional state can affect things such as purchase behavior" 3 Environmental Factors (can greatly change a store's atmosphere)
  1. Store Location ( For example, McDonald's is located in areas such as malls, food courts, gas-stations, and grocery stores. More upscale restaurants, on the other hand are often located near other upscale stores and shops. Upscale restaurants may also be found in more wealthy areas)
  2. Store-Layout