MARKETING MANAGEMENT: CONSUMER BEHAVIOUR, Summaries of Marketing Management

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CB-A4-engb 1/2013 (1009)

Consumer

Behaviour

Jane Priest

Stephen Carter

David A. Statt

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First Published in Great Britain in 2001.

Original edition © David A. Statt 2001, 2003

Revised edition © David A. Statt, Jane Priest, Stephen Carter 2013

The rights of Jane Priest, Stephen Carter and David A. Statt to be identified as Authors of this Work has been asserted in accordance with the Copyright, Designs and Patents Act 1988.

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Consumer Behaviour Edinburgh Business School v

Contents

Preface xii

Contents

Contents

Contents

Contents

• Module 1 People as Consumers 1/ PART 1 THE CONSUMER IN CONTEXT
  • 1.1 Introduction 1/
  • 1.2 Buyers, Customers and Consumers 1/
  • 1.3 Consumer Behaviour 1/
  • 1.4 The Consumer Environment 1/
  • 1.5 The Consumer and the Marketplace 1/
  • 1.6 Markets and Marketing 1/
  • Learning Summary 1/
  • Review Questions 1/
  • Further Reading 1/
• Module 2 Consumer Society 2/
  • 2.1 Introduction: Consumer Society in the Twenty-first Century 2/
  • 2.2 Globalisation and Consumer Behaviour 2/
  • 2.3 Alternative Markets 2/
  • 2.4 Marketing and Social Responsibility 2/
  • Learning Summary 2/
  • Review Questions 2/
  • Further Reading 2/
• Module 3 Market Segmentation 3/
  • 3.1 Introduction: The Origin of Segmented Markets 3/
  • 3.2 Why Use Market Segmentation and Target Marketing? 3/
  • 3.3 Geographic Segmentation 3/
  • 3.4 Demographic Segmentation 3/
  • 3.5 Psychographic Segmentation 3/
  • 3.6 Behavioural Segmentation 3/
  • 3.7 Segmenting Business Markets 3/
  • 3.8 Positioning 3/
  • Learning Summary 3/
  • Review Questions 3/
  • Further Reading 3/
• Module 4 New Products and Innovations 4/ vi Edinburgh Business School Consumer Behaviour
  • 4.1 Introduction 4/
  • 4.2 Developing New Products 4/
  • 4.3 The Product Life Cycle 4/
  • 4.4 The Effects of Personal Influence 4/
  • 4.5 The Diffusion of New Products and Innovations 4/
  • 4.6 The Adoption of New Products and Innovations 4/
  • 4.7 Cultural and Social Implications for Innovations 4/
  • Learning Summary 4/
  • Review Questions 4/
  • Further Reading 4/
• Module 5 Perception 5/ PART 2 THE INDIVIDUAL PERSPECTIVE
  • 5.1 Introduction: Can We Trust Our Senses? 5/
  • 5.2 Using Our Senses 5/
  • 5.3 Common Properties of the Senses 5/
  • 5.4 Perception: Processing Sensory Information 5/
  • 5.5 Organising Perceptual Cues 5/
  • 5.6 Subliminal Perception 5/
  • 5.7 Self-images, Symbolism and Consumer Behaviour 5/
  • 5.8 Perceiving Risk 5/
  • Learning Summary 5/
  • Review Questions 5/
  • Further Reading 5/
• Module 6 Personality and the Self 6/
  • 6.1 Introduction: How Does Our Personality Affect What We Buy? 6/
  • 6.2 What Is Meant by Personality? 6/
  • 6.3 Formal Theories of Personality 6/
  • 6.4 Freudian Psychoanalysis 6/
  • 6.5 Neo-Freudian Psychoanalysis 6/
  • 6.6 Trait Theory 6/
  • 6.7 Self Theory 6/
  • Learning Summary 6/
  • Review Questions 6/
  • Further Reading 6/
• Module 7 Learning, Memory and Thinking 7/ Consumer Behaviour Edinburgh Business School vii
  • 7.1 Introduction: How Do We Learn? 7/
  • 7.2 What Is Learning? 7/
  • 7.3 The Behaviourist Approach 7/
  • 7.4 The Cognitive Approach 7/
  • 7.5 Modelling 7/
  • Learning Summary 7/
  • Review Questions 7/
  • Further Reading 7/
• Module 8 Motivation 8/
  • 8.1 Why Do People Buy What They Buy? 8/
  • 8.2 What Is Meant by Motivation? 8/
  • 8.3 Defining Motivation 8/
  • 8.4 The Fulfilment of Needs 8/
  • 8.5 The Motivational Mix 8/
  • 8.6 Unconscious Motivation 8/
  • Learning Summary 8/
  • Review Questions 8/
  • Further Reading 8/
• Module 9 Family Influences 9/ PART 3 THE SOCIAL PERSPECTIVE
  • 9.1 Introduction: How Does Our Upbringing Affect Us as Consumers? 9/
  • 9.2 What Is a Family? 9/
  • 9.3 Socialisation 9/
  • 9.4 Family Buying Decisions 9/
  • 9.5 Life-cycle Effects 9/
  • 9.6 Non-family Households 9/
  • 9.7 Age and Consumer Identity 9/
  • Learning Summary 9/
  • Review Questions 9/
  • Further Reading 9/
• Module 10 Social and Developmental Influences 10/ viii Edinburgh Business School Consumer Behaviour - Affect Our Consumer Behaviour? 10/ 10.1 Introduction: How Does Our Psychological Development
  • 10.2 Maturation 10/
  • 10.3 Stages of Development 10/
  • 10.4 Development of Economic Concepts 10/
  • 10.5 External Influences on Consumer Socialisation 10/
  • Learning Summary 10/
  • Review Questions 10/
  • Further Reading 10/
• Module 11 The Influence of Small Groups 11/
  • 11.1 What Are the Effects of Group Pressure on the Individual Consumer? 11/
  • 11.2 Types of Group 11/
  • 11.3 Properties of Group Life 11/
  • 11.4 Reference Groups and Consumer Behaviour 11/
  • Learning Summary 11/
  • Review Questions 11/
  • Further Reading 11/
• Module 12 The Influence of Social Class 12/
  • 12.1 How Does Our Social Class Affect What We Buy? 12/
  • 12.2 Social Stratification 12/
  • 12.3 Social Status and Symbols 12/
  • 12.4 Life Chances and Lifestyles 12/
  • 12.5 Measuring Social Class 12/
  • 12.6 Social Class Categories 12/
  • 12.7 Changing Social Class 12/
  • 12.8 Marketing and Consumer Behaviour 12/
  • Learning Summary 12/
  • Review Questions 12/
  • Further Reading 12/
• Module 13 Cultural Influences 13/
  • 13.1 How Does Our Culture Affect What We Buy? 13/
  • 13.2 Similarities across Cultures 13/
  • 13.3 Differences between Cultures 13/
  • 13.4 Cultural Values 13/
  • 13.5 Subcultures 13/ Consumer Behaviour Edinburgh Business School ix
  • 13.6 Changes in Culture 13/
  • Learning Summary 13/
  • Review Questions 13/
  • Further Reading 13/
• Module 14 Attitudes 14/
  • 14.1 Where Do Our Attitudes Come From and How Do They Change? 14/
  • 14.2 What Are Attitudes? 14/
  • 14.3 Characteristics and Components of Attitudes 14/
  • 14.4 Forming Attitudes 14/
  • 14.5 Theories of Attitudes 14/
  • 14.6 Changing Attitudes 14/
  • 14.7 Attitudes and Behaviour 14/
  • Learning Summary 14/
  • Review Questions 14/
  • Further Reading 14/
• Module 15 Communication and Persuasion 15/ PART 4 CONSUMER DECISION MAKING
  • 15.1 How does Advertising Affect Our Behaviour? 15/
  • 15.2 The Importance of Advertising 15/
  • 15.3 The Process of Communication 15/
  • 15.4 Feedback and Evaluation 15/
  • 15.5 Cultural Factors in Advertising 15/
  • Learning Summary 15/
  • Review Questions 15/
  • Further Reading 15/
• Module 16 Approaching a Decision 16/
  • 16.1 How People Make Decisions 16/
  • 16.2 Heuristics 16/
  • 16.3 The Consumer Decision Process 16/
  • 16.4 Marketing Implications 16/
  • Learning Summary 16/
  • Review Questions 16/
  • Further Reading 16/
• Module 17 The Decision and Its Consequences 17/ x Edinburgh Business School Consumer Behaviour
  • 17.1 Introduction 17/
  • 17.2 Stage IV: Purchasing Processes 17/
  • 17.3 Stage V: Post-purchase Processes 17/
  • Learning Summary 17/
  • Review Questions 17/
  • Further Reading 17/
• Module 18 Models of Consumer Behaviour 18/ PART 5 ADDITIONAL DIMENSIONS IN CONSUMER BEHAVIOUR
  • 18.1 Approaches to the Study of Consumer Behaviour 18/
  • 18.2 Economic Viewpoints of Consumer Behaviour 18/
  • 18.3 Contemporary Models in Consumer Behaviour 18/
  • 18.4 Why Consumer Behaviour Models? 18/
  • Learning Summary 18/
  • Review Questions 18/
  • Further Reading 18/
• Module 19 The Future Consumer 19/
  • 19.1 The Changing Consumer Experience 19/
  • 19.2 The Producer 19/
  • 19.3 The Marketplace 19/
  • 19.4 The Consumer 19/
  • Learning Summary 19/
  • Review Questions 19/
  • Further Reading 19/
• Appendix 1 Practice Final Examinations A1/
  • Practice Final Examination 1 1/
  • Practice Final Examination 2 1/
• Appendix 2 Answers to Review Questions A2/
  • Module 1 2/
  • Module 2 2/
  • Module 3 2/
  • Module 4 2/
  • Module 5 2/
  • Module 6 2/
  • Module 7 2/ Consumer Behaviour Edinburgh Business School xi
  • Module 8 2/
  • Module 9 2/
  • Module 10 2/
  • Module 11 2/
  • Module 12 2/
  • Module 13 2/
  • Module 14 2/
  • Module 15 2/
  • Module 16 2/
  • Module 17 2/
  • Module 18 2/
  • Module 19 2/
• Index I/

Consumer Behaviour Edinburgh Business School

PART 1

The Consumer in Context

Module 1 People as Consumers

Module 2 Consumer Society

Module 3 Market Segmentation

Module 4 New Products and Innovations

Part 1

Edinburgh Business School Consumer Behaviour

In Part One of the text we place the consumer within his or her recognised social

context, that is in relation to the producer and to the marketplace in which buying

and selling takes place.

In doing so we follow Peter Drucker’s view that a business has only two important

functions: marketing and innovation. We deal with the way producers market their

products to consumers in Module 3, and the way they develop and market new

products and innovations in Module 4. But before that we set the scene for the

psychological approach to understanding the consumer in Module 1, where we

discuss the importance that being a consumer has to our lives. Module 2 expands

on this by putting the study of consumer behaviour into a specifically global context,

illustrating its far-reaching implications for both business and society.

Module 1 / People as Consumers

1/2 (^) Edinburgh Business School Consumer Behaviour

In brief, a central goal of marketing is to satisfy customer needs, so marketers must

have a good understanding of what their customers’ needs are if they are to satisfy

them better than the competition. A thorough understanding of why and how people

buy things helps marketers identify appropriate people to target and design and

communicate attractive offerings. In other words, every element of the marketing plan

benefits from an understanding of the customer and, with the rapid pace of change in

consumer markets today, this is only going to become more important.

It is also worth making a distinction at this stage between consumer buying behaviour

and organisational buying behaviour , as some important differences exist between the

two. For instance, people within governments and businesses who are responsible

for buying goods and services tend to work closely with colleagues to make collec-

tive decisions. Often formal procedures are in place, there is a heavier reliance on

specifications, and purchases tend to be larger in nature. In addition, the demand for

organisational goods essentially derives from the demand for consumer goods, and

this can make forecasting quite difficult. While these sorts of differences are

important to bear in mind, this text focuses on consumer behaviour, in other words

the purchasing processes of individual consumers.

1.1.1 Studying People as Consumers

Research on people as consumers dates only from the mid-1980s. The main impetus

for this research was practical: marketing managers wanted to know how the social

and behavioural sciences could help them find the specific causes of consumer actions

and, in particular, consumer buying decisions. Why did people choose Brand X as

opposed to Brand Y or Z? Most importantly, how would the consumer react to a new

and improved Brand X? This focus on predicting what the consumer would do under

certain specified conditions was known as a positivist approach to research.^1

The positivist approach is the traditional form in which scientific research has

been conducted. It makes several assumptions about what is being studied, the most

important of which are:

 All behaviour has objectively identifiable causes and effects, which can be

isolated, studied and measured.

 When faced with a problem or a decision, people process all the relevant

information available to deal with it.

 After processing this information, people make a rational decision about the best

choice to take or decision to make.

As all the other social and behavioural sciences have found, one of the limitations

of this practical approach is that it leaves a large amount of human behaviour totally

unaccounted for.

Precisely because consumption is such a universal and frequent activity, there is a

temptation to see virtually all human activity in consumer terms and to view all

consumer activity with a positivist lens. Thus the relationship between a doctor and

a patient may be discussed in terms of the provision (by the doctor) and the

consumption (by the patient) of health care, even where the health care may be free

Module 1 / People as Consumers

Consumer Behaviour Edinburgh Business School 1/

at the point of delivery and there is no direct buying and selling, as in the British

National Health Service. Similarly, the relationship between teacher and student may

be characterised as the provision and consumption of education.

This is known as a reductionist view of the doctor–patient and teacher–student

relationships, because it reduces the content of these relationships to the buying and

selling of services, just like plumbing or piano tuning. What is missing from this

view is the psychological content of the relationships that are involved. It does not

explain, for example, why so many doctors and teachers do so much more than they

are paid to do. It does not tell us how a doctor’s care and concern, and a patient’s

appreciation of it, may do more healing than the impersonal use of expensive

medical equipment.

To the extent that people have some relationship with each other, therefore, the act

of consuming is an infinitely more complex one than that of simply buying and

selling. Indeed, the people involved at either end of the process may not even see it

as the provision and consumption of a service at all, but as an important social or

professional role in their lives. The nature and quality of the relationships that occur

are often regarded as essential parts of the job for the professionals involved and

also as unquantifiable.

But the element of relationship in the act of consumption is much more wide-

spread even than this. Think of the sitcom Cheers , for instance, where a complex

web of human interaction revolved around the buying and selling of alcohol. These

kinds of relationships are also found in every local pub in the UK and every local

café in France or Italy. They are important to us in understanding the consumer

because they affect the buying decisions and consumption patterns of everyone

involved. Consumer activity, in other words, has to be understood within the

context of human interaction, and that is the perspective of the more recent

interpretivist school of research. In contrast to the positivists, the interpretivists base

their approach on three key assumptions: 2

 Cause and effect cannot be isolated because there is no single objective reality

everyone can agree on.

 Reality is an individual’s subjective experience of it, so each consumer’s experi-

ence is unique.

 People are not simply, or always, rational information processors or decision

makers, because this view takes no account of an individual’s emotional life

(what has been called fantasies, feelings and fun).^3

As a consequence of these assumptions, the interpretivist school would therefore

regard the act of buying as only a small part (however important) of a consumer’s

activities, this buying behaviour having to be interpreted in the light of a person’s

entire consumer experience – and indeed their entire life experience. Many com-

mentators in this field now regard the positivist and interpretivist approaches as

complementary to each other. They see the need for prediction and control in trying

to isolate cause and effect in buying behaviour, while emphasising the importance of

understanding the life of the consumer in all its symbolic and messy complexity – the

view we shall adopt here.

Module 1 / People as Consumers

Consumer Behaviour Edinburgh Business School 1/

In between these two phases consumer behaviour deals with many other issues.

For instance:

 How do we get information about products?

 How do we assess alternative products?

 Why do different people choose or use different products?

 How do we decide on value for money?

 How much risk do we take with what products?

 Who influences our buying decisions and our use of the product?

 How are brand loyalties formed, and changed?

To summarise, a typical definition of consumer behaviour might be the following:

The mental, emotional and physical activities that people engage in when

selecting, purchasing, using and disposing of products and services so as to

satisfy needs and desires. 4

We will spend the rest of this text analysing that definition.

1.4 The Consumer Environment

We have already noted how prevalent the act of consumption is. This is not, of course,

accidental. Indeed, the whole of our economy is based on it. Continued, and in fact

ever-increasing , consumption is generally considered essential to our prosperity. Every

year, for example, the figures for the sales of new cars are greeted with satisfaction and

approval if the trend is upward and with widespread gloom if it is downward. A fall in

sales is taken to be unequivocally bad because of falling profits – and decreasing share

values – for the companies that make cars and car components and the threat of job

losses for their workers that is always linked to such a trend.

Car sales are considered to be a barometer of economic performance and there-

fore especially important, but they mirror public attitudes about virtually every other

product. That is why we are bombarded by many hundreds of advertisements every

day of our lives, on radio and television, 5 in newspapers and magazines, on buildings

and billboards, in buses and trains; with bright colours, flashing lights, loud music

and, everywhere, smiling faces. All encouraging us to buy more.

The most important feature of the consumer environment, therefore, is the uni-

versal and all-encompassing value that buying is not just a necessary activity but an

attractive and highly approved way of behaving; a good in itself, as philosophers

would put it. Until recent years this way of viewing consumer behaviour has been

virtually an unquestioned assumption. If it produces an ever-higher standard of

living for more and more people, what could possibly be wrong with it?

We will deal with this issue in some detail in Module 2 and Module 19 of this text.

For the moment, however, we should simply mention some basic questions – now

being asked about this scenario of ever-increasing consumption – that are themselves

beginning to have an effect on the consumer environment. Perhaps the most immedi-

ate of these questions is the one dealing with the Earth’s resources. For example, fossil

Module 1 / People as Consumers

1/6 (^) Edinburgh Business School Consumer Behaviour

fuels like oil and coal are a finite resource, unlike, say, wave power or solar energy.

When they are used up, there will not be any more manufactured. They will not be

used up tomorrow, of course, but they will be one day in the foreseeable future. When

that happens, what will we run our cars on? Or our electricity power stations?

Allied to this practical question are the economic, political and moral questions,

lying behind the fact that the vast majority of the Earth’s resources are consumed,

either directly, like energy, or indirectly, like food and manufactured goods, by a

handful of the world’s richest countries. Is this the most morally just/politically

stable/economically viable way to organise the world?

These kinds of questions have prompted a different kind of accounting that

figures out the hidden costs, or the real costs, of goods and services, other than the

purchase price to the consumer. What is the unit price of cigarettes, for instance,

when the cost of the resulting ill health – to both smokers and passive smokers – in

terms of medical care and lost workdays is added in? How much should a new car

cost to take account of the environmental damage it will do?

1.5 The Consumer and the Marketplace

There has been trade between producers and consumers ever since people discov-

ered that the folks in the next valley made some very interesting firewater but lacked

their own suregrip axe handles. It has always been an integral part of the relations

between different groups of people, from the Stone Age family to the modern

nation state. This trading nexus is a necessary condition for the growth of small

groups into complex societies with their systems of law, government, finance,

education, administration and so on.

At the heart of the trading nexus is the act of exchange between producer and con-

sumer for their mutual benefit. Originally this took the form of bartering goods, a

form of exchange that still exists today, particularly at international level, where, for

instance, a country might exchange oil for aeroplanes. As trading centres were

established historically and grew into ports and cities, certain metals like gold and

silver came into use as a medium of exchange by consumers that were acceptable to

producers. This medium of exchange developed into coinage of various denomina-

tions – originally made out of the metals in question, like silver or bronze. As larger

amounts were traded, paper money was introduced. Plastic cards came into use in the

middle of the twentieth century as a safer and more convenient medium of exchange.

By the end of the century they had taken the place of many cash transactions.

1.6 Markets and Marketing

All the activity of the trading nexus described above is usually referred to as the

operation of the marketplace. However, the modern marketplace is often vastly more

complex than the simple historical examples we have been considering. Individual

producers and consumers do sometimes still trade directly with each other, as when

we buy handmade goods from stallholders in open-air markets, or when florists buy

their stock directly from a greenhouse.