Consumer Behaviour
Eighth Canadian Edition
Chapter 1
An Introduction to Consumer Behaviour
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Copyright © 2021 Pearson Canada Inc.
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Chapter Objectives (1 of 2)
When you finish reading this chapter, you will understand why:
1.1 Consumer behaviour is a process.
1.2 Marketers must understand the wants and needs of different consumer segments.
1.3 Our choices as consumers relate in powerful ways to the rest of our lives.
1.4 Marketers must be aware of consumer trends.
1.5 Ethical issues in marketing and consumer behaviour are important.
Copyright © 2021 Pearson Canada Inc.
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Chapter Objectives (2 of 2)
1.6 There is a “dark side” to some behaviours that can have negative impacts on consumers and society.
1.7 Many different research methodologies can be used to understand consumer behaviour.
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Consumer Behaviour: People in the Marketplace!
You are a business student, a friend and a consumer with needs; making choices from competing brands
Demographic impact: gender, income, occupation
Psychographic impact: lifestyle and personality
Consumption communities: sharing opinions and recommendations
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L.O 1.1 Consumer behaviour is a process.
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What is Consumer Behaviour?
Consumer behaviour: the study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires.
Copyright © 2021 Pearson Canada Inc.
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L.O 1.1 Consumer behaviour is a process.
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Copyright © 2021 Pearson Canada Inc.
Copyright © 2021 Pearson Canada Inc.
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Copyright © 2021 Pearson Canada Inc.
Copyright © 2021 Pearson Canada Inc.
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Consumers Behaviour is a Process
Consumer behaviour is more than just a purchase.
It involves the issues that influence the consumer before, during, and after the purchase.
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L.O 1.1 Consumer behaviour is a process.
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Consumer Behaviour is a “Process”
FIGURE 1-1 Some Issues That Arise during Stages in the Consumption Process
Copyright © 2021 Pearson Canada Inc.
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Copyright © 2021 Pearson Canada Inc.
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L.O 1.1 Consumer behaviour is a process.
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Consumers’ Impact on Marketing Strategy
Understanding consumer behaviour is good business
This is because the marketing concept is all about understanding consumer needs
Data about consumers help marketers define the market
The purpose of understanding consumer behaviour is to predict the future
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L.O 1.2 Marketers must understand the wants and needs of different consumer segments.
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Segmenting Consumers (1 of 3)
Market Segmentation
Identifying groups of consumers who are similar to one another in one or more ways and then devises marketing strategies that appeal to one or more groups.
Our diverse culture stresses a segmentation strategy be employed
Importance of the 80/20 rule
Copyright © 2021 Pearson Canada Inc.
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L.O 1.2 Marketers must understand the wants and needs of different consumer segments.
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Segmenting Consumers (2 of 3)
Demographics
that measure observable aspects of a population, such as birth rate, age distribution, and income.
Canada is a major source of demographic data on families.
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L.O 1.2 Marketers must understand the wants and needs of different consumer segments.
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Segmenting Consumers (3 of 3)
Psychographics
Differences in consumers’ personalities, attitudes, values, and lifestyles
The way we feel about ourselves
Our attitudes to things and others around us
The things we value
The things we do in our spare time
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L.O 1.2 Marketers must understand the wants and needs of different consumer segments.
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Segmenting Consumers
Important Demographic Dimensions
The following are important demographic dimensions which influence strategic marketing decisions:
Age
Gender
Family structure and Life Style
Social Class and Income
Ethnicity
Geography
Lifestyles: Beyond Demographics
Segmenting by Relationship and Big Data
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L.O 1.2 Marketers must understand the wants and needs of different consumer segments.
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Segmenting Consumers Relationship Marketing (1 of 2)
Relationship Marketing
Involves making an effort to interact with customers on a regular basis, giving them reasons to maintain a bond with the company over time.
One way to create relationships with customers is through database marketing…..
Database Marketing
Database Marketing tracks specific consumers’ buying habits very closely and crafts products and messages tailored precisely to people’s wants and needs based on this information..
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L.O 1.2 Marketers must understand the wants and needs of different consumer segments.
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Segmenting Consumers Relationship Marketing (2 of 2)
Some other types of relationships a person might have with a product include
Self-concept attachment
Nostalgic attachment
Interdependence
Love
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L.O 1.2 Marketers must understand the wants and needs of different consumer segments.
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Marketing and Culture
Popular culture
Inspirational and an influential
Tweeting, Boxing day shopping, Stanley Cup Playoffs are all examples
As are movie heroes, sports hero, product usage
Consumer generated content
Opinions on brands and products
Social networking
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L.O 1.3 Our choices as consumers relate in powerful ways to the rest of our lives.
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The Meaning of Consumption
People often buy products not for what they do, but for what they mean
Brands…
…convey image/personality
…help us to form bonds with others who share similar preferences
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L.O 1.3 Our choices as consumers relate in powerful ways to the rest of our lives.
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The Global Consumer
Global consumer culture has united people around the globe by common devotion to:
Brand name consumer goods
Movie stars
Celebrities
This has influenced by:
U-commerce – the use of Ubiquitous networks
RFID tags – communication chips
Companies expanding overseas
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L.O 1.3 Our choices as consumers relate in powerful ways to the rest of our lives.
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Virtual Consumers (1 of 2)
Impact of the Web on consumer behaviour
24/7 shopping without leaving home
Handheld devices & wireless communications
Not just B2C, now C2C (consumer to consumer) sharing interests around the world
A new generation of digital natives
Horizontal Revolution
Culture of participation
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L.O 1.3 Our choices as consumers relate in powerful ways to the rest of our lives.
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Virtual Consumers (2 of 2)
A revolution in M2M (machine to machine communication)
Artificial intelligence (AI) applications improve precision of ad placements
Computer engineering is moving into directions of robot companions
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L.O 1.3 Our choices as consumers relate in powerful ways to the rest of our lives.
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Consumer Trends
Consumer trends are underlying values
These values drive consumers toward certain products and services and away from others
Consumer trend forecasting is big business; organizations devote massive resources towards consumer behavior
In many ways our basic assumptions about how companies and people relate to one another are being disrupted.
Copyright © 2021 Pearson Canada Inc.
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L.O 1.4 Marketers must be aware of consumer trends.
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Keep Ahead to Keep Up
Important consumer trends that will impact marketing strategies in the near future:
Sharing economy
Authenticity and personalization
Blurring of gender roles
Diversity and multiculturalism
Social shopping
Healthy and ethical living
Simplification
Anonymity
Copyright © 2021 Pearson Canada Inc.
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L.O 1.4 Marketers must be aware of consumer trends.
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Marketing Ethics and Public Policy
Ethics
To conduct business honestly and ethically, rules of conduct that guide the marketplace
Knowing right from wrong
Various cultures and organizations may conduct themselves differently in certain situations
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L.O 1.5 Ethical issues in marketing and consumer behaviour are important.
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Ethical Standards of Conduct
Prescribed code of ethics guidelines:
Disclosure of substantial risks with a product
Identifying added features that will increase the cost
Avoiding false or misleading advertising
Avoiding selling or fundraising under the guise of market research
Think about it: Are you willing pay a bit more for fair trade coffee that helps various cultures?
Copyright © 2021 Pearson Canada Inc.
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L.O 1.5 Ethical issues in marketing and consumer behaviour are important.
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Needs and Wants: Do Marketers Manipulate Consumers? (1 of 2)
Do marketers give people what they want or, do they tell people what they should want?
Do Marketers Create Artificial Needs?
Hedonistic pleasures – secular humanism?
Not materistic enough?
Are advertising and Marketing Necessary?
Goods are arbitrarily linked to desirable social attributes
Copyright © 2021 Pearson Canada Inc.
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L.O 1.5 Ethical issues in marketing and consumer behaviour are important.
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Needs and Wants: Do Marketers Manipulate Consumers? (2 of 2)
Do marketers give people what they want or, do they tell people what they should want?
Public Policy and Consumerism
The welfare of the consumer is protected by many laws at various levels of government.
Consumer Activism and Its Impact on Marketing
The act of “culture jamming”
Green Marketing
CSR
Social Marketing
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L.O 1.5 Ethical issues in marketing and consumer behaviour are important.
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Chapman Ice Cream Example:
Cause-Related Marketing
In 2019, Chapman’s Ice Cream launched a cause-related marketing campaign in which it donates 25 cents from each box of Chapman’s Yukon Caribou Bars to the Canadian Parks and Wilderness Society (CPAWS) to aid in protection efforts for the Caribou.
Copyright © 2021 Pearson Canada Inc.
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Copyright © 2021 Pearson Canada Inc.
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L.O 1.5 Ethical issues in marketing and consumer behaviour are important.
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The Dark Side of Consumer Behaviour
Additive and Compulsive Consumption
Consumer addiction: psychological dependency on products or services
Drinking alcohol, smoking cigarettes, drugs
Addiction to technology
Compulsive Consumption
Gambling in Canada is an example of compulsive consumption
Copyright © 2021 Pearson Canada Inc.
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L.O 1.6 There is a “dark side” to some behaviours that can have negative impacts on consumers and society.
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The Dark Side of Consumer Behaviour Additive and Compulsive Consumption
Copyright © 2021 Pearson Canada Inc.
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Copyright © 2021 Pearson Canada Inc.
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L.O 1.6 There is a “dark side” to some behaviours that can have negative impacts on consumers and society.
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Illegal Activities
In North America a retail theft takes place every 5 seconds
Shrinkage is the industry term for shoplifting and employee theft
Fraudulent abuse of exchange policies in retail
Wear the item once then return it
Change price tags on the items
Copyright © 2021 Pearson Canada Inc.
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L.O 1.6 There is a “dark side” to some behaviours that can have negative impacts on consumers and society.
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Anti-Consumption
Anti-consumption
Product tampering, graffiti and political protests where property is destroyed.
Abercrombie & Fitch grassroots movement emerged, encouraging consumers to donate.
Copyright © 2021 Pearson Canada Inc.
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L.O 1.6 There is a “dark side” to some behaviours that can have negative impacts on consumers and society.
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How Do We Find Out About Consumers?
The Role of Consumer Research
Primary Research
When the data is collected by the researcher specifically for the research question at hand, this called primary research.
Secondary Research
When the marketer finds the information needed by going to a pre-existing source of information collected for another purpose. When the researcher uses pre existing data to answer a new research question this is called secondary research.
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L.O 1.7 Many different research methodologies can be used to understand consumer behaviour.
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Primary Research
Survey Research
Focus Groups
Interviews
Observational Research
Qualitative Research
Experimental Research
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L.O 1.7 Many different research methodologies can be used to understand consumer behaviour.
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Wheel of Consumer Behaviour
FIGURE 1-2 The Wheel of Consumer Behaviour
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Copyright © 2021 Pearson Canada Inc.
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L.O 1.7 Many different research methodologies can be used to understand consumer behaviour.
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