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Enu consumer behaviour 260812


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Consumer Behaviour, Marketing

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Enu consumer behaviour 260812

  1. 1. Go Global !Global Economic Environment :Consumer Behaviour andCulture By Stephen Ong Edinburgh Napier University Business School Visiting Professor, College of Management, Shenzhen University 26 August 2012
  2. 2. Agenda1. Consumer Behaviour & Motivation2. Consumer Decision Making Process3. Culture & Subcultures4. Global Consumers
  3. 3. Learning Objectives To explain the significance of marketing communications in relation to consumer behaviour To identify and explain the personal factors and external factors that influence consumer behaviour To explain the decision- making process and how marketeers can influence buyer behaviour To understand the implications of culture on global marketing
  4. 4. 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.
  5. 5. To WhichSegment ofConsumers WillThis Ad Appeal? A Segment ofConsumers Who areEnvironmentally Concerned Chapter One Slide 4
  6. 6. Consumer BehaviourThe behaviour that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs. Chapter One Slide
  7. 7. Two Consumer Entities Chapter One Slide
  8. 8. Consumers Consumers use products to help them define their identities
  9. 9. Consumer Identity as an Aid toMarketers Consumers segmented by demographics and psychographics Consumers understood in part based on their consumption communities and reference groups Brands target consumers using market segmentation strategies Consumers may choose brands that match with their own identities 1-9
  10. 10. Consumer Behaviour Consumer behaviour is a process.
  11. 11. Stages in the Consumption Process1-11 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
  12. 12. Consumer MarketingMarketers need to understand the wants and needs of different consumer segments.
  13. 13. Segmenting Consumers: DemographicsDemographics: Age Gender Family structure Social class/income Race/ethnicity Geography
  14. 14. Redneck Bank Targets by Social Class Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 1-14
  15. 15. Popular CultureMusicMoviesSports Marketers influenceBooks preferences for movie and musicCelebrities heroes, fashions,Entertainment food, and decorating choices.
  16. 16. Consumer-Brand RelationshipsSelf-concept attachmentNostalgic attachmentInterdependenceLove 1-16
  17. 17. Development of theMarketing Concept
  18. 18. Marketing Concept 1950s to current - Focus on the customer! Determine the needs and wants of specific target markets Deliver satisfaction better than competition
  19. 19. Societal Marketing Concept Considers consumers’ long-run best interest Good corporate citizenship
  20. 20. The Marketing ConceptEmbracing the MarketingConcept Consumer Research  The process and tools used to study consumer behavior Segmentation Market Targeting Positioning
  21. 21. The Marketing ConceptImplementing theMarketing Concept Consumer Research  Process of dividing the market into subsets of consumers Segmentation with common needs or Market Targeting characteristics Positioning Chapter One Slide
  22. 22. The Marketing ConceptImplementing theMarketing Concept Consumer Research Segmentation The selection of one or more of the segments identified to Market Targeting pursue Positioning
  23. 23. The Marketing ConceptImplementing theMarketing Concept  Developing a distinct image for the product in the mind of the consumer  Successful positioning • Consumer Research includes: • Segmentation  Communicating the benefits of the • Market Targeting product • Positioning  Communicating a unique selling proposition
  24. 24. The Marketing Mix
  25. 25. Customer Value, Satisfaction,Trust, and Retention
  26. 26. Successful RelationshipsValue, Satisfaction,Trust, and Retention  Defined as the ratio between the customer’s perceived benefits and the resources used to obtain those benefits  Customer Value  Perceived value is relative and subjective  Customer Satisfaction  Developing a value proposition is critical  Customer Trust  Customer Retention
  27. 27. Discussion QuestionsHow does McDonald’s create value for the consumer?How do they communicate this value?
  28. 28. Successful RelationshipsValue, Satisfaction,Trust, and Retention  The individuals perception of the performance of the product or service in relation to his or her expectations.  Customer Value  Customer groups based on loyalty  Customer include loyalists, apostles, Satisfaction defectors, terrorists, hostages, and mercenaries  Customer Trust  Customer Retention
  29. 29. Successful RelationshipsValue, Satisfaction,Trust, and Retention • Establishing and maintaining trust is essential. • Trust is the • • Customer Value Customer foundation for Satisfaction maintaining a long- • Customer Trust • Customer Retention standing relationship with customers.
  30. 30. Successful Relationships  The objective of providing value is to retain highly satisfied customers.Value, Satisfaction,  Loyal customers are keyTrust, and Retention They buy more products They are less price sensitive Servicing them is  Customer Value  Customer Satisfaction cheaper  Customer Trust They spread positive  Customer Retention word of mouth
  31. 31. Top 10 Ranked U.S. Companies in Terms ofConsumers’ Trust and Respect of Privacy Top 10 Companies • American Express • eBay • IBM • Amazon • Johnson & Johnson • Hewlett-Packard • U.S. Postal Service • Procter and Gamble • Apple • Nationwide
  32. 32. Customer Profitability-Focused Marketing• Tracks costs and revenues of individual consumers• Categorizes them into tiers based on consumption behavior• A customer pyramid groups customers into four tiers
  33. 33. THE TRADITIONAL VALUE- AND RETENTION- MARKETING CONCEPT FOCUSED MARKETINGMake only what you can sell instead Use technology that enablesof trying to sell what you make. customers to customize what you make.Do not focus on the product; focus on Focus on the product’s perceivedthe need that it satisfies. value, as well as the need that it satisfies.Market products and services that Utilize an understanding of customermatch customers’ needs better than needs to develop offerings thatcompetitors’ offerings. customers perceive as more valuable than competitors’ offerings.Research consumer needs and Research the levels of profitcharacteristics. associated with various consumer needs and characteristics.Understand the purchase behavior Understand consumer behavior inprocess and the influences on relation to the company’s product.consumer behavior.Realize that each customer Make each customer transaction parttransaction is a discrete sale. of an ongoing relationship with the customer.
  34. 34. Impact of Digital Technologies
  35. 35. The Mobile Consumer Penetration of Internet Usage Among Mobile Subscribers in 16 Countries - FIGURE 1.3• Wireless Media Messages will expand as: – Flat-rate data traffic increases – Screen image quality is enhanced – Consumer-user experiences with web applications improve
  36. 36. Consumer and the InternetThe Web is changing consumer behaviour.
  37. 37. Social Media Social media are the online means of communication, conveyance, collaboration, and cultivation among interconnected and interdependent networks of people, communities, and organizations enhanced by technological capabilities and mobility. 1-37
  38. 38. For Reflection Did you know  If you were paid $1 for every time an article was posted on Wikipedia, you’d earn $156.23/hour?  80% of companies use LinkedIn as their primary recruiting tool?  More than 1.5 billion pieces of content are shared on Facebook daily?
  39. 39. A Simple Model of Consumer Decision Making -Figure 1.4
  40. 40. Consumer Beliefs and ActionsOur beliefs and actions as consumers strongly connect to other issues in our lives.
  41. 41. Marketing Ethics and Public Policy Business ethics are rules of conduct that guide actions in the marketplace There are cultural differences in what is considered ethical. 1-42
  42. 42. Do Marketers Create Artificial Needs? Objective of marketing: create awareness that needs exist, not to create needs versus  Want: one way that  Need: a basic society has taught us biological motive that the need can be satisfied 1-43
  43. 43. Are Advertising & Marketing Necessary?Does advertising foster materialism?Products are designed to meet existing needs;Advertising only helps to communicate their availability 1-44
  44. 44. Do Marketers Promise Miracles?Advertisers simply do not know enough about people to manipulate them
  45. 45. Perspectives on Consumer Behaviour There are two major perspectives on consumer behavior: Positivist approach Interpretivist approach 1-46
  46. 46. Table 1.3Positivist versus Interpretivist ApproachesAssumptions Positivist Approach Interpretivist ApproachNature of reality Objective, tangible Socially constructed Single MultipleGoal Prediction UnderstandingKnowledge Time free Time-boundgenerated Context-independent Contest dependentView of Existence of real causes Multiple, simultaneouscausality shaping eventsResearch Separation between Interactive, cooperativerelationship researcher and subject with researcher being part of phenomenon under study
  47. 47. What Kind of ConsumerDoes This Ad Target? This Ad Targets Runners Who Are Physically Active People and Also Relish the Outdoors.
  48. 48. Why Segmentation is Necessary Consumer needs differs Differentiation helps products compete Segmentation helps identify media
  49. 49. Positioning The value proposition, expressed through promotion, stating the product’s or service’s capacity to deliver specific benefits.
  50. 50. Criteria for Effective Targeting
  51. 51. Which Distinct Benefit DoesEach of the Two Brands Shownin This Figure Deliver?The Dentyne Ad’s Benefit is FreshBreath and the Nicorette Ad isWhitening and Smoking Cessation
  52. 52. Bases for Segmentation
  53. 53. Consumer-Rooted SegmentationBases
  54. 54. Demographic Segmentation
  55. 55. Geodemographic SegmentationBased on geography and demographicsPeople who live close to one another are similar“Birds of a feather flock together”
  56. 56. One PRIZM Segment 57
  57. 57. Personality Traits People often do not identify these traits because they are guarded or not consciously recognized Consumer innovators  Open minded  Perceive less risk in trying new things
  58. 58. Lifestyles Psychographics Includes activities, interests, and opinions They explain buyer’s purchase decisions and choices
  59. 59. Two Views of Post-RetirementLifestyle
  60. 60. VALS
  61. 61. Socio-Cultural Values and Beliefs Sociological = group Anthropological = cultural Include segments based on  Cultural values  Sub-cultural membership  Cross-cultural affiliations
  62. 62. Consumption-SpecificSegmentation Bases
  63. 63. Consumption-Specific SegmentationUsage-Behaviour Usage rate Awareness status Level of involvement
  64. 64. Consumption-Specific Segmentation Usage-Behavior Usage-situation segmentation  Segmenting on the basis of special occasions or situations  Example : When I’m away on business, I try to stay at a suites hotel.
  65. 65. Which Consumption-Related Segmentation Is Featured in This Ad?This is anExample of aSituationalSpecial UsageSegmentation.
  66. 66. Benefits SegmentationBenefits sought represent consumer needsImportant for positioningBenefits of media Chapter Three Slide 28
  67. 67. Benefits Visiting Tourists Seek in NationalPark Segment Description Environmentalists Interested in an unpolluted, un-spoilt natural environment and in conservation. Not interested in socializing, entertainment, or sports. Desire authenticity and less man-made structures and vehicles in the park. Want-it-all Value socializing and entertainment more than Tourists conservation. Interested in more activities and opportunities for meeting other tourists. Do not mind the “urbanization” of some park sections. Independent Looking for calm and unpolluted environment, Tourists exploring the park by themselves, and staying at a comfortable place to relax. Influenced by word of mouth in choosing travel destinations.
  68. 68. Brand Loyalty and Relationships• Brand loyalty includes: – Behaviour – Attitude• Frequency award programs are popular• Customer relationships can be active or passive• Retail customers seek: – Personal connections vs. functional features• Banking customers seek: – Special treatment – Confidence benefits – Social benefits
  69. 69. ImplementingSegmentationStrategiesMicro- and behavioural targeting Personalized advertising messages Narrowcasting Email Mobile Use of many data sources
  70. 70. Sample Acxiom Clusters
  71. 71. Implementing Segmentation StrategiesConcentrated Marketing One segmentDifferentiated Several segments with individual marketing mixesCountersegmentation
  72. 72. Consumer Motivation It is important for marketers to recognize that products can satisfy a range of consumer needs.
  73. 73. Motivation as a Psychological Force• Motivation is the driving force within individuals that impels them to action.• Needs are the essence of the marketing concept. Marketers do not create needs but can make consumers aware of needs.
  74. 74. Model of the Motivation Process75 Chapter Four Slide
  75. 75. Needs and Motivation Needs may be utilitarian or hedonic The desired end state is the goal The degree of arousal is drive Personal and cultural factors combine to create a want – one manifestation of a need Motivation is described in terms of strength and direction
  76. 76. Motivational Strength Motivational strength: degree of willingness to expend energy to reach a goal Drive theory: biological needs that produce unpleasant states of arousal (e.g., hunger) Expectancy theory: behaviour is pulled by expectations of achieving desirable outcomes
  77. 77. What Do We Need? Biogenic Needs Psychogenic Needs Utilitarian Needs Hedonic Needs
  78. 78. Motivational Conflicts Goal valence (value): consumer will:  Approach positive goal  Avoid negative goal Example: Partnership for a Drug-Free America communicates negative consequences of drug addiction for those tempted to start
  79. 79. Types of Motivational Conflicts • Two desirable alternatives • Cognitive dissonance • Positive & negative aspects of desired product • Guilt of desire occurs • Facing a choice with two undesirable alternatives
  80. 80. Specific Needs and Buying Behavior NEED FOR ACHIEVEMENT NEED FOR AFFILIATION Value personal Want to be with other people accomplishment Focus on products that are Place a premium on products used in groups (alcoholic that signify success (luxury beverages, sports bars) brands, technology products) NEED FOR POWER NEED FOR UNIQUENESS Control one’s environment Assert one’s individual identity Focus on products that allow them to have mastery over Enjoy products that focus on surroundings (muscle cars, their unique character loud boom-boxes) (perfumes, clothing)
  81. 81. Types of Needs Innate Needs  Physiological (or biogenic) needs that are considered primary needs or motives Acquired Needs  Learned in response to our culture or environment. Are generally psychological and considered secondary needs
  82. 82. Goals The sought-after results of motivated behavior Generic goals are general categories of goals that consumers see as a way to fulfill their needs Product-specific goals are specifically branded products or services that consumers select as their goals
  83. 83. How Does this AdAppeal toOne’s Goals? It Appeals to Several Physical Appearance-related goals.
  84. 84. The Selection of Goals The goals selected by an individual depend on their:  Personal experiences  Physical capacity  Prevailing cultural norms and values  Goal’s accessibility in the physical and social environment
  85. 85. Motivations and Goals Chapter Four Slide
  86. 86. Blogger’s Motivation - Table 4.1Construct ItemsBlogging for I use my blog to free my mind when I am moody.self-expressing I express myself by writing in my blog. My blog is the place where I express what I feel.Blogging for I use my blog as my diary to document my By writing text and posting video/audio files, I keep adocumenting record of my life.Blogging for I’m willing to comment on what other bloggers say.commenting I’d like to respond to other blogs that I read (no matter if I know of the blogger or not). I’d like to receive people’s comments on what I post on my blog.Blogging for Blogging helps me to make more like-minded In my blogroll I have friends with whom I can share things.participating By blogging I interact with a set of blogs that have contents similar to what I put in my blog.Blogging for Blogging helps me extract information behind events thatinformation interest me.seeking 87 Blogging helps me explore more information about products and/or services. To me it is convenient to search for information by Chapter Four Slide
  87. 87. Rational versus EmotionalMotives Rationality implies that consumers select goals based on totally objective criteria, such as size, weight, price, or miles per gallon Emotional motives imply the selection of goals according to personal or subjective criteria
  88. 88. The Dynamics of Motivation Needs are never fully satisfied New needs emerge as old needs are satisfied People who achieve their goals set new and higher goals for themselves Chapter Four Slide
  89. 89. Substitute Goals Are used when a consumer cannot attain a specific goal he/she anticipates will satisfy a need The substitute goal will dispel tension Substitute goals may actually replace the primary goal over time Chapter Four Slide
  90. 90. Frustration Failure to achieve a goal may result in frustration. Some adapt; others adopt defense mechanisms to protect their ego. Chapter Four Slide
  91. 91. Defense Mechanisms- Table 4.2 (excerpt)Construct ItemsAggression In response to frustration, individuals may resort to aggressive behavior in attempting to protect their self-esteem. The tennis pro who slams his tennis racket to the ground when disappointed with his game or the baseball player who physically intimidates an umpire for his call are examples of such conduct. So are consumer boycotts of companies or stores.Rationaliza People sometimes resolve frustration by inventingtion plausible reasons for being unable to attain their goals (e.g., not having enough time to practice) or deciding that the goal is not really worth pursuing (e.g., how important is it to achieve a high bowling 92 score?).Regression An individual may react to a frustrating situation with Chapter Four childish or Slide
  92. 92. Arousal of Motives Physiological arousal Emotional arousal Cognitive arousal Environmental arousal
  93. 93. How Does This AdArouse One’s Needs? The Ad Is Designed to Arouse One’s Yearning for an Adventurous Vacation by Appealing to the Sense of Touch Chapter Four 94 Slide
  94. 94. Philosophies Concerned with Arousal of Motives Behaviourist School  Behaviour is response to stimulus  Elements of conscious thoughts are to be ignored  Consumer does not act, but reacts Cognitive School  Behaviour is directed at goal achievement  Needs and past experiences are reasoned, categorized, and transformed into attitudes and beliefs
  95. 95. Types and Systems of NeedsHenry Murray’s 28 psychogenic needsAbraham Maslow’s hierarchy of needsA trio of needs Chapter Four Slide
  96. 96. Murray’s List of Psychogenic Needs97
  97. 97. Murray’s List of Psychogenic Needs (continued)98
  98. 98. Maslow’s Hierarchy of Needs Chapter Four Slide
  99. 99. To Which ofMaslow’sNeeds Does ThisAd Appeal? Both Physiological and Social Needs Chapter Four 100 Slide
  100. 100. To Which ofMaslow’sNeeds DoesThis Ad Appeal?Egoistic Needs Chapter Four 101 Slide
  101. 101. To Which of Maslow’sNeeds Does This Ad Appeal? Self-Actualization Chapter Four 102 Slide
  102. 102. Levels of Needs in the Maslow Hierarchy Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 4-103
  103. 103. A Trio of NeedsPower individual’s desire to control environmentAffiliation need for friendship, acceptance, and belongingAchievement need for personal accomplishment closely related to egoistic and self- actualization needs 104
  104. 104. To Which of the Trioof Needs Does This Ad Appeal? The Affiliation Needs Of Young, Environmentally Concerned Adults Chapter Four 105 Slide
  105. 105. To Which of the Trio of Needs Does This Ad Appeal?Power And Achievement Needs Chapter Four 106 Slide
  106. 106. Consumer Involvement Involvement: perceived relevance of an object based on one’s needs, values, and interests We get attached to products:  “All in One” restaurant tattoo on consumer’s head  Lucky magazine for women who obsess over shopping  A man tried to marry his car when his fiancée dumped him
  107. 107. Figure 4.3 Conceptualizing Involvement Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 4-108
  108. 108. Levels of Involvement: From Inertia to Passion Inertia is consumption at the low end of involvement; decisions made out of habit (lack of motivation) Flow state occurs when consumers are truly involved  Sense of control  Concentration  Mental enjoyment  Distorted sense of time
  109. 109. Table 4.1 Measuring Involvement To me (object to be judged) is: 1. important _:_:_:_:_:_:_ unimportant 2. boring _:_:_:_:_:_:_ interesting 3. relevant _:_:_:_:_:_:_ irrelevant 4. exciting _:_:_:_:_:_:_ unexciting 5. means nothing _:_:_:_:_:_:_ means a lot 6. appealing _:_:_:_:_:_:_ unappealing 7. fascinating _:_:_:_:_:_:_ mundane 8. worthless _:_:_:_:_:_:_ valuable 9. involving _:_:_:_:_:_:_ uninvolving 10. not needed _:_:_:_:_:_:_ needed
  110. 110. Purchase Situation Involvement Purchase situation involvement: differences that occur when buying the same object for different contexts. Example: wedding gift  For boss: purchase expensive vase to show that you want to impress boss  For cousin you don’t like: purchase inexpensive vase to show you’re indifferent
  111. 111. Consumer Decision Making Extensive Problem Solving  A lot of information needed  Must establish a set of criteria for evaluation Limited Problem Solving  Criteria for evaluation established  Fine tuning with additional information Routinized Response Behavior  Usually review what they already know
  112. 112. What Would a Pet Owner Need to Know in Order to Make a Decision About Buying Pet Insurance?Do I Need It? How Do IGet More Information?
  113. 113. Models of Consumers: Four Viewsof Consumer Decision Making An Economic View A Passive View A Cognitive View An Emotional View Chapter Fifteen Slide
  114. 114. Consumer115 Decision Making
  115. 115. Process - Need Recognition Usually occurs when consumer has a “problem” Need recognition styles  Actual state  Desired state
  116. 116. Prepurchase Search Begins with internal search and then moves to external search The impact of the Internet There are many factors that increase search  Product factor  Situational factors  Social acceptability  Consumer factors
  117. 117. Evaluation of Alternatives Evoked set Criteria used for evaluating brands Consumer decision rules Decisions by functionally illiterate population Going online for decision-making assistance Lifestyles as a consumer decision strategy Incomplete information Applying decision rules Series of decisions Decision rules and marketing strategy
  118. 118. The Evoked Set 119
  119. 119. Issues in Alternative Evaluation• Evoked Set• Criteria used for evaluating brands• Consumer decision rules and their application• Decisions by functionally illiterate population• Going online for decision-making assistance• Lifestyles as a consumer decision strategy• Incomplete information• Applying Decision Rules• Series of decisions• Decision rules and marketing strategy Chapter Fifteen Slide
  120. 120. Consumer Decision Rules• Compensatory – evaluates each brand in terms of each relevant attribute and then selects the brand with the highest weighted score.• Noncompensatory – positive evaluation of a brand attribute does not compensate for a negative evaluation of the same brand on some other attribute – Conjunctive, disjunctive, or lexicographic Chapter Fifteen Slide
  121. 121. Hypothetical Use of Decision RulesDecision Rule Mental StatementCompensatory I selected the netbook that came out bestrule when I balanced the good ratings against the bad ratingsConjunctive rule I selected the netbook that had no bad featuresDisjunctive rule I picked the netbook that excelled in at least one attributeLexicographic rule I looked at the feature that was most important to me and chose the netbook that ranked highest on that attributeAffect referral I bought the brand with the highest overallrule rating Chapter Fifteen 122 Slide
  122. 122. Issues in Alternative Evaluation• Evoked Set• Criteria used for evaluating brands• Consumer decision rules and their application• Decisions by functionally illiterate population• Going online for decision-making assistance• Lifestyles as a consumer decision strategy• Incomplete information• Applying Decision Rules• Series of decisions• Decision rules and marketing strategy
  123. 123. The Decision Process forFunctionally Illiterate Consumers
  124. 124. Issues in Alternative Evaluation• Evoked Set• Criteria used for evaluating brands• Consumer decision rules and their application• Decisions by functionally illiterate population• Going online for decision-making assistance• Lifestyles as a consumer decision strategy• Incomplete information• Applying Decision Rules• Series of decisions• Decision rules and marketing strategy
  125. 125. Coping with Missing Information Delay decision until missing information is obtained Ignore missing information and use available information Change the decision strategy to one that better accommodates for the missing information Infer the missing information Chapter Fifteen Slide
  126. 126. Issues in Alternative Evaluation• Evoked set• Criteria used for evaluating brands• Consumer decision rules and their application• Decisions by functionally illiterate population• Going online for decision making assistance• Lifestyles as a consumer decision strategy• Incomplete information• Applying Decision Rules• Series of decisions• Decision rules and marketing strategy
  127. 127. Output of Consumer Decision Making Purchase behaviour  Trial purchases  Repeat purchases  Long-term commitment Postpurchase evaluation
  128. 128. Postpurchase Evaluation Actual Performance Matches Expectations  Neutral Feeling Actual Performance Exceeds Expectations  Positive Disconfirmation of Expectations Performance Is Below Expectations  Negative Disconfirmation of Expectations Chapter Fifteen Slide
  129. 129. Gifting BehaviorGifting is an act of symboliccommunication, with explicit andimplicit meanings ranging fromcongratulations and love, toregret, obligation, anddominance. Chapter Fifteen Slide
  130. 130. Reported Circumstances and Motivations forSelf-Gift Behavior CIRCUMSTANCES MOTIVATIONS Personal accomplishment To reward oneself Feeling down To be nice to oneself Holiday To cheer up oneself Feeling stressed To fulfill a need Have some extra money To celebrate Need To relieve stress Had not bought for self in a while To maintain a good feeling Attainment of a desired goal To provide an incentive toward a goal Others Others
  131. 131. Gifting RelationshipsGIFTING DEFINITION EXAMPLERELATIONSHIPIntergroup A group giving a gift A Christmas gift from one family to to another group another familyIntercategory An individual giving a A group of friends chips in to buy a gift to a group or a new mother a baby gift group giving a gift to an individualIntragroup A group giving a gift A family buys a VCR for itself as a to itself or its Christmas gift membersInterpersonal An individual giving a Valentine’s Day chocolates presented gift to another from a boyfriend to a girlfriend individualIntrapersonal Self-gift A woman buys herself jewelry to cheer herself up
  132. 132. Consuming and Possessing Consumers find pleasure in possessing, collecting, or consuming Products have special meanings and memories 133
  133. 133. A Model of Consumption134
  134. 134. Marketing aimed at creating strong, lasting relationships with a core group of customers by makingRelationship them feel good about Marketing the company and by giving them some kind of personal connection with the business.
  135. 135. Relationship Marketing Success Chapter Fifteen 136 Slide
  136. 136. The sum total of learned beliefs, values, and customs that serve toCulture regulate the consumer behavior of members of a particular society. Chapter Eleven Slide
  137. 137. To Which Cultural Value or Values IsThis Product’s Advertising Appealing?Convenience in Food Preparation
  138. 138. A Theoretical Model of Culture’s Influence onBehaviour Chapter Eleven Slide
  139. 139. The Invisible Hand of CultureEach individual perceives the world through his own cultural lens 140
  140. 140. Lifestyle Matrix for Global Youth 141
  141. 141. Culture Satisfies NeedsFood and ClothingNeeds vs. Luxury Chapter Eleven 142 Slide
  142. 142. In Terms of “Culture,” Do You Consider ThisProduct to Be a “Good Morning” Beverage?Why or Why Not? Many Will Say “NO” Due to Lack ofNutritional Value and Competing Products (Coffee). 143
  143. 143. Culture Is LearnedIssues  Enculturation Enculturation and  The learning of one’s own acculturation culture Language and symbols  Acculturation Ritual  The learning of a new or foreign culture Sharing of culture
  144. 144. Culture Is LearnedIssues  Without a common language ,shared meaning could not exist  Marketers must choose appropriate symbols in advertising Enculturation and  Marketers can use “known” acculturation symbols for associations Language and symbols Ritual Sharing of culture
  145. 145. How Does a Symbol Conveythe Product’s AdvertisedBenefits? They Provide Additional Meaning to the Ad. Chapter Eleven Slide
  146. 146. Culture Is Learned Issues  A ritual is a type of symbolic activity consisting of a series of steps  Rituals extend over the human life  Enculturation and cycle acculturation  Marketers realize that rituals often  Language and symbols involve products (artifacts)  Ritual  Sharing of culture 147Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Eleven Slide
  147. 147. Selected Rituals and Associated Artifacts SELECTED RITUALS TYPICAL ARTIFACTS Wedding White gown (something old, something new, something borrowed, something blue) Birth of child U.S. Savings Bond, silver baby spoon Birthday Card, present, cake with candles 50th Wedding anniversary Catered party, card and gift, display of photos of the couple’s life together Graduation Pen, U.S. Savings Bond, card, wristwatch Valentine’s Day Candy, card, flowers New Year’s Eve Champagne, party, fancy dress
  148. 148. Culture Is LearnedIssues  To be a cultural characteristic, a Enculturation and belief, value, or practice must be acculturation shared by a significant portion of the society Language and symbols  Culture is transferred through Ritual family, schools, houses of Sharing of Culture worship, and media Chapter Eleven Slide
  149. 149. Facial Beauty Ritual of a Young TVAdvertising Sales Representative1. I pull my hair back with a headband.2. I take all of my makeup off with L’Oreal eye makeup remover.3. Next, I use a Q-tip with some moisturizer around my eyes to make sure all eye makeup is removed.4. I wash my face with Noxzema facial wash.5. I apply Clinique Dramatically Different Lotion to my face, neck, and throat.6. If I have a blemish, I apply Clearasil Treatment to the area to dry it out.6. Twice weekly (or as necessary) I use Aapri Facial Scrub to remove dry and dead skin.7. Once a week, I apply Clinique Clarifying Lotion 2 with a cotton ball to my face and throat to remove deep-down dirt and oils.8. Once every three months, I get a professional salon facial to deep-clean my pores. Chapter Eleven Slide
  150. 150. Culture is Dynamic Evolves because it fills needs Certain factors change culture  Technology  Population shifts  Resource shortages  Wars  Changing values  Customs from other countries 151
  151. 151. The Measurement of Culture Content Analysis Consumer Fieldwork Value Measurement Instruments Chapter Eleven Slide
  152. 152. A method for systematically analyzing the content of verbal and/or pictorialContent communication. TheAnalysis method is frequently used to determine prevailing social values of a society. Chapter Eleven Slide
  153. 153. Which Cultural Value IsPortrayed, and How So? Progress – The Fridge has Superior Design Chapter Eleven Slide
  154. 154. Which CulturalValue Fitness andIs This Ad Health –Stressing, andHow So? Low Calorie
  155. 155. American Core ValuesCriteria for Value SelectionThe value must be pervasive.The value must be enduring.The value must be consumer- related. Chapter Eleven Slide
  156. 156. American Core Values
  157. 157. American Core Values
  158. 158. Consumer Values Value: a belief that some condition is preferable to its opposite  Example: looking younger is preferable to looking older Products/services = help in attaining value-related goal We seek others that share our values/ beliefs  Thus, we tend to be exposed to information that supports our beliefs
  159. 159. Core Values  Core values: values shared within a culture  Enculturation: learning the beliefs and values of one’s own culture  Acculturation: learning the value system and behaviors of another culture
  160. 160. Hofstede’s Cultural Dimensions Power distance Individualism Masculinity Uncertainty avoidance Long-term orientation
  161. 161. Table 4.2 Terminal and InstrumentalValues (Milton Rokeach) Instrumental Value Terminal Value Ambitious A comfortable life Capable A sense of accomplishment Self-controlled Wisdom
  162. 162. List of Values (LOV) Identifies nine consumer segments based on values they endorse; and Relates each value to differences in consumption behaviors Example: those who endorse sense of belonging read Reader’s Digest and TV Guide drink and entertain more, and prefer group activities
  163. 163. Means-End Chain Model Very specific product attributes are linked at levels of increasing abstraction to terminal values Alternative means to attain valued end states Laddering technique uncovers consumers’ associations between specific attributes and general consequences
  164. 164. Figure 4.4 Hierarchical Value Maps forVegetable Oil in Three Countries Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 4-165
  165. 165. SubculturesOur identification with microcultures that reflect a shared interest in some organization or activity influences what we buy.
  166. 166. Subcultures, Microcultures,and Consumer Identity Consumers’ lifestyles are affected by group membership within the society-at-large  Subcultures of age, race/ethnicity, place of residence Microcultures share a strong identification with an activity or art form  Have own unique set of norms, vocabulary, and product insignias
  167. 167. Ethnic and Racial Subcultures An ethnic subculture is a self-perpetuating group of consumers who share common cultural or genetic ties where both its members and others recognize it as a distinct category. In countries like Japan, ethnicity is synonymous with the dominant culture because most citizens claim the same cultural ties.
  168. 168. The Context of Culture High-Context Low-Context
  169. 169. Is Ethnicity a Moving Target? Defining/targeting an ethnic group is not always so easy (“melting pot” society) Deethnicization occurs when a product we associate with a specific ethnic group detaches itself from its roots and appeals to other groups as well
  170. 170. What is Acculturation? Acculturation occurs, at least in part, with the influence of acculturation agents  Family  Friends  Church organizations  Media
  171. 171. The Progressive Learning Model Assumes that people gradually learn a new culture as they increasingly come into contact with it When people acculturate they will blend their original culture and the new one Consumers who retain much of their original ethnic identity differ from those who assimilate
  172. 172. African Americans  Overall spending patterns of blacks and whites are roughly similar  Household income and educational levels rising for African Americans  Differences in consumption behaviors subtle but important
  173. 173. Hispanic Americans “Hispanic” = many different backgrounds Hispanics are:  Brand loyal  Highly concentrated geographically by country of origin (easy to reach)
  174. 174. Distinguishing Characteristics ofthe Hispanic Market Looking for spirituality, stronger family ties, and more color in their lives Large family size of Hispanic market  Spend more on groceries  Shopping is a family affair  Regard clothing children well as matter of pride  Convenience/saving time is not important to Hispanic homemaker
  175. 175. Asian Americans  Most affluent, best educated  Most brand-conscious but least brand loyal  Made up of culturally diverse subgroups that speak many different languages/dialects
  176. 176. Religion and Consumption Organized religion and product choices Born-again consumers Islamic marketing
  177. 177. Generational Categories The Interbellum Generation The Silent Generation The War Baby Generation The Baby Boom Generation Generation X Generation Y Generation Z
  178. 178. Nostalgia ScaleScale ItemsThey don’t make ‘em like they used to.Things used to be better in the good old days.Products are getting shoddier and shoddier.Technological change will ensure a brighter future (reverse coded).History involves a steady improvement in human welfare (reverse coded).We are experiencing a decline in the quality of life.Steady growth in GNP has brought increased human happiness (reverse coded).Modern business constantly builds a better tomorrow (reverse coded).
  179. 179. The Youth Market “Teenage” first used to describe youth generation in 1950s Youth market often represents rebellion $100 billion in spending power
  180. 180. Teen Values, Conflicts, andDesires Four basic conflicts common among all teens:  Autonomy versus belonging  Rebellion versus conformity  Idealism versus pragmatism  Narcissism versus intimacy
  181. 181. Getting to Know Gen Y  “Echo Boomers” = “millennials” = Gen Yers  Make up one-third of U.S. population  Spend $170 billion a year  First to grow up with computers in their homes, in a 500-channel TV universe
  182. 182. Rules of Engagement Rule #1: Don’t talk down Rule #2: Don’t try to be what you’re not Rule #3: Entertain them. Make it interactive and keep the sell short Rule #4: Show that you know what they’re going through but keep it light
  183. 183. Tweens Children ages 8 to 14 Spend $14 billion a year on clothes, CDs, movies (“feel- good” products) Exhibit characteristics of both children and adolescents Victoria Secret’s Pink lingerie line for younger girls (“Team Pink”)
  184. 184. Big (Wo)Man on Campus College market is attractive  Many students have extra cash/free time  Undeveloped brand loyalty College students are hard to reach via conventional media  Online advertising is very effective  Sampler boxes  Wall media  Spring break beach promotions
  185. 185. Baby Busters: “Generation X”  Consumers born between 1966 and 1976  Today’s Gen Xer is both values-oriented and value-oriented  Desire stable families, save portion of income, and view home as expression of individuality
  186. 186. Baby Boomers Consumers born between 1946 and 1965 Active and physically fit Currently in peak earning years  Food, apparel, and retirement programs  “Midlife crisis” products 13-187
  187. 187. Perceived Age: You’re Only as Old as You Feel Age is more a state of mind than of body Perceived age: how old a person feels as opposed to his or her chronological age  “Feel-age”  “Look-age” The older we get, the younger we feel relative to actual age
  188. 188. Values of Older Adults  Autonomy: want to be self-sufficient  Connectedness: value bonds with friends and family  Altruism: want to give something back to the world 13-189
  189. 189. The Imperative to Be Multinational• Global Trade Agreements – EU – NAFTA• Winning Emerging Markets• Acquiring Exposure to Other Cultures• Country-of-origin Effects
  190. 190. Under WhatCircumstances WouldThis English-Language Ad AttractAffluent Consumersfrom LargelyNon-EnglishSpeaking Countries? If They Frequently Visit the United States and Regularly Read American Upscale Magazines
  191. 191. The Best Global Brands 1. Coca-Cola 2. IBM 3. Microsoft 4. GE 5. Nokia 6. Toyota 7. Intel 8. McDonald’s 9. Disney 10.Google
  192. 192. Country of Origin Effects: Positive Many consumers may take into consideration the country of origin of a product. Country-of-origin commonly:  France = wine, fashion, perfume  Italy = pasta, designer clothing, furniture, shoes, and sports cars  Japan = cameras and consumer electronics  Germany = cars, tools, and machinery
  193. 193. Country of Origin Effects: Negative Some consumers have animosity toward a country  People’s Republic of China has some animosity to Japan  Jewish consumers avoid German products  New Zealand and Australian consumers boycott French products
  194. 194. Other Country-of-Origin EffectsMexican study uncovered: Country-of-design (COD) Country-of-assembly (COA) Country-of-parts (COP)
  195. 195. Conceptual Model of COD and COM 196 Chapter Thirteen 196 Slide
  196. 196. The effort to determine to whatCross-Cultural extent the Consumer consumers of two Analysis or more nations are similar or different.
  197. 197. Cross-Cultural Consumer Analysis Issues Similarities and differences among people  The greater the similarity between nations, the more The growing global middle feasible to use relatively similar class marketing strategies The global teen market  Marketers often speak to the Acculturation same “types” of consumers globally
  198. 198. Comparisons of Chinese andAmerican Cultural Traits Chinese Cultural Traits  American Cultural Traits Centered on Confucian  Individual centered doctrine  Emphasis on self-reliance Submissive to authority  Primary faith in Ancestor worship rationalism Values a person’s duty to  Values individual family and state personality
  199. 199. Cross-Cultural Consumer AnalysisIssues Similarities and differences among people The growing global middle  Growing in Asia, South class America, and Eastern Europe The global teen market  Marketers should focus on these markets Acculturation
  200. 200. Cross-Cultural Consumer Analysis Issues  There has been growth in an affluent global teenage and young adult market. Similarities and differences among people  They appear to have The growing global middle similar interests, class desires, and The global teen market consumption behavior Acculturation no matter where they live. Chapter Thirteen Slide
  201. 201. Cross-Cultural Consumer Analysis Issues Similarities and differences among people  Marketers must learn The growing global middle everything that is relevant class about the usage of their The global teen market product and product Acculturation categories in foreign countries
  202. 202. Research Issues in Cross-Cultural AnalysisFACTORS EXAMPLESDifferences in language and Words or concepts may notmeaning mean the same in two different countries.Differences in market The income, social class, age,segmentation opportunities and sex of target customers may differ dramatically in two different countries.Differences in consumption Two countries may differpatterns substantially in the level of consumption or use of products or services.Differences in the perceived Two nations may use orbenefits of products and services consume the same product in Copyright 2010 Pearson Education, 203 Inc. Publishing as Prentice Hall very different ways. Chapter Thirteen Slide
  203. 203. Table (continued)FACTORS EXAMPLESDifferences in the criteria for The benefits sought from aevaluating products and services service may differ from country to country.Differences in economic and The “style” of family decisionsocial conditions and family making may vary significantlystructure from country to country.Differences in marketing The types and quality of retailresearch and conditions outlets and direct-mail lists may vary greatly among countries.Differences in marketing The availability of professionalresearch possibilities consumer researchers may vary considerably from countryEducation, Copyright 2010 Pearson to 204 country. Inc. Publishing as Prentice Hall Chapter Thirteen Slide
  204. 204. Alternative Multinational Strategies:Global Versus Local Favouring a World Brand Are Global Brands Different? Multinational Reactions to Brand Extensions Adaptive Global Marketing Frameworks for Assessing Multinational Strategies 205
  205. 205. Products that are manufactured, packaged, andWorld positioned the sameBrands way regardless of the country in which they are sold.
  206. 206. Cross-Border Diffusion of Popular Culture
  207. 207. Are Global Brands Different?According to a survey – yesGlobal brands have: Quality signal Global myth Social responsibility
  208. 208. Multinational Reactions toBrand ExtensionsA global brand does not always have success with brand extensionsExample Coke brand extension – Coke popcorn • Eastern culture saw fit and accepted the brand extension • Western culture did not see fit
  209. 209. Adaptive Global Marketing Adaptation of advertising message to specific values of particular cultures McDonald’s uses localization  Example Ronald McDonald is Donald McDonald in Japan  Japanese menu includes corn soup and green tea milkshakes Often best to combine global and local marketing strategies
  210. 210. Framework for AssessingMultinational StrategiesGlobalLocalMixed
  211. 211. A Framework for Alternative Global MarketingStrategies COMMUNICATON STRATEGY STANDARDIZED LOCALIZEDPRODUCT COMMUNICATIONS COMMUNICATIONSSTRATEGYSTANDARDIZED Global strategy: Mixed Strategy:PRODUCT Uniform Product/ Uniform Uniform Product/ Customized Message MessageLOCALIZED Mixed strategy: Local Strategy:PRODUCT Customized Product/ Uniform Customized Product/ Message Customized Message
  212. 212. Cross-Cultural Psychographic SegmentationThe only ultimate truth possible is that humans are both deeply the same and obviously different.
  213. 213. Six Global Consumer Segments
  214. 214. Conscientious Consumerism Conscientious consumerism is a focus on personal health merging with a growing interest in global health LOHAS (lifestyles of health and sustainability)  Worry about the environment  Want products to be produced in a sustainable way 4-215
  215. 215. Carbon Footprint Breakdown
  216. 216. Materialism Materialism: the importance people attach to worldly possessions “The good life”...“He who dies with the most toys, wins” Materialists: value possessions for their own status and appearance Non-materialists: value possessions that connect them to other people or provide them with pleasure in using them
  217. 217. Conclusion
  218. 218. Casestudy : SAB-MILLER1. Read and prepare the Casestudy on SAB MILLER (Johnson, Whittington & Scholes (2011)) for discussion and presentation next week.2. Identify and evaluate the global marketing challenges facing SAB MILLER by conducting External Environment, Industry, Competitor analysis, SWOT, global Marketing Mix strategies and Gap Analysis.
  219. 219. Core Reading Juleff, L, Chalmers, A.. and Harte, P. (2008) Business Economics in a Global Environment, Napier University Edinburgh Keegan, W.J. and Green, M.C. (2013) Global Marketing, 7th edition, Pearson Solomon, M. (2013) Consumer Behaviour, 10th Edition, Pearson Schiffman, L. and Kanuk,L. (2010) Consumer Behaviour, 10th Edition, Pearson