 |  Consumers Eric Arnould,
University of Nebraska
George Zinkhan,
University of Georgia
Linda Price,
University of Nebraska
Overview of Consumer Behavior: Production, Consumption, and Disposition
ELearning Session- Learning Objectives
After completing this chapter, you should be able to: - Define the domain of consumer behavior, including some areas of interest to consumer behavior researchers, policymakers, and marketers.
- Describe many examples of consumer behavior in people's daily lives.
- Explain why knowledge of consumer behavior is of value to you.
- Discuss the circle of consumption and how consumption relates to other technological and economic processes.
- Understand that consumer behavior is driven by general human motivation.
- Know the plan of the book.
- Chapter Overview
- What is Consumer Behavior?
- Why Study Consumer Behavior?
- If you plan on going into business, understanding consumer behavior is critical.
- In market economies, companies stay in business by attracting and retaining customers.
- Marketers can benefit from understanding what problems consumers have and how consumers' themselves solve these problems.
- As the world grows smaller, and the global reach of businesses expands, the job of attracting and retaining customers grows ever more challenging.
- Companies may have a hint that their customers are dissatisfied (e.g., sales may be declining), but they may not know the exact nature or content of this dissatisfaction.
- Consumer behavior research is dedicated to deciphering, explaining, and predicting human needs and wants, and measuring and understanding people's satisfaction (see Chapter 17) with various consumption activities-everything from buying a car, donating to a local charity, visiting church or selecting a university to attend.
- By studying and understanding consumers, organizations can establish and maintain a competitive advantage in the marketplace.
- An understanding of consumer behavior can also be useful in business-to-business (B2B) marketing.
- Thus, some of the same tools that are used to understand behavior in consumer markets can also be applied to organizational markets.
- Knowledge of consumer behavior helps non-profit organizations understand donors' motivations, produce effective communication programs, and change behaviors (e.g., public service announcements that encourage the use of seat belts).
- Further, thousands of organizations and organizational groups work hard to persuade people to consume in ways beneficial to their goals.
- After completing this course, you will be better informed and prepared to exercise effective control over your own consumer behavior, because you will know more about the strategies and tactics marketers use to influence your behavior in the marketplace.
- An Introduction to this Book
- Consumer Activities in Daily Life
- To be successful, marketers need to understand the role of consumption activities in the daily lives of consumers and increasingly they need to have a broader understanding of consumption. For example, Wolfgang Schmitt, chairman and CEO of Rubbermaid, Inc., stresses this very thing: the need to understand consumer trends in their broadest sense, including more than just demographics or lifestyle, but also fashion, color, technology, government, and law. He also emphasizes the necessity of firms to gain real insight into consumers' lives. Rubbermaid doesn't just use marketing communication tools to sell products--how consumers might organize their kitchen or solve space problems in their child's room. Visit their website featuring lots of stories about consumers' novel experiences with Rubbermaid products.
www.rubbermaid.com - It is also important for marketers to understand customers' needs and wants in a B2B setting including their needs for low cost, high quality, prompt delivery time, inventory management, and profit maximization.
- If B2B marketers have a good understanding of their customers, they have a better chance to build a relationship that will last a long time and be mutually beneficial to buyer and seller.
- Consumer Behavior as it Relates to the Organizationof this Book
- The study of consumer behavior includes focusing on relationships between what people think, feel and do and the role of marketing strategies in molding these processes.
- Brand loyalty is more than just repeat purchase behavior. It also includes a preference for a particular brand and a positive emotional response to the brand.
- Attitudes and behaviors are not formed in isolation and very often other people influence our attitudes and behaviors.
- It's important to observe that even a simple behavior like shampooing is tied to gender,
social class, ethnicity and age.
- Like culture, we often take for granted attitudes, feelings and behaviors that reflect our own gender, social class, ethnic background, or age.
- Grooming rituals are important because they prepare us to enter the outside world and allow us to communicate specific messages about ourselves.
- Grooming rituals also reflect variations in household
structures and stage in the family
life
cycle.
- Many consumers and organizations are concerned with creating innovative solutions to consumption problems.
- The diffusion and adoption of innovative products in consumer and industrial contexts is an important field within consumer behavior.
- Diffusion
refers to the spread of a new product through a population.
- An Expanded Overview of Consumer Behavior
- Consumer Culture
- Consumer culture reflects a general shift in the basic emphasis of economic and social systems from exchange or production to consumption.
- A consumer orientation is associated with a model of well-being that measures economic health in terms of consumer confidence and spending.
- Consumer culture refers to an organized social and economic arrangement in which markets govern the relationship between meaningful ways of life and the symbolic and material resources on which they depend.
- At the dawn of the new millennium, the existence of a developed consumer culture dictates that organizations must adapt.
- A consumer culture perspective contrasts with past ways of thinking about economic affairs.
- The production orientationis a model of wealth and well being measured in stocks of productive assets, and ownership of machinery and factories.
- The production orientation is also associated with the emergence of the Protestant ethic, that is a worldview that emphasized individual initiative, hard work, and self-perfection.
- Consumer Behavior around the World
- One of the dramatic events of the closing decades of the twentieth century is the sudden and recent globalization of markets and marketing.
- By globalization, we mean that the constraints of geography on consumption and social and cultural arrangements are rapidly lessening.
- As the definition implies, the world is becoming more homogeneous, and the variation among national markets is decreasing.
- Due to globalization, many companies are finding it necessary to design their marketing strategy across cultures.
- When developing a global marketing strategy, organizations should consider several factors including market, cost, competitive, and environmental factors.
- Geography is becoming much less important in determining where people shop and what they buy. Take one simple example. Cosmopolitan claims to be more than a magazine; it's a lifestyle. The message is targeted at the young, career-oriented woman, and consumers can access Cosmopolitan from just about anywhere in the world. Cosmopolitan aims to expand to 50 different editions. Of course, if you can't find it at your local newsstand, you can check it out on the magazine's website.
www.cosmomag.com - A number of consumer goods are beginning to acquire a global meaning. Thus, brands like Levi's, SONY, Benneton, Coke, Royal Dutch Shell, and McDonald's are recognized the world over.
- The nature and dynamics of consumer behavior vary widely around the world because the factors that influence production, acquisition, consumption and disposal vary widely from place to place.
- The Internet and its multimedia component (the World Wide Web) serve to quicken the pace of consumer globalization.
- In the newly industrialized countries (NICs) of Japan and East Asia, so-called because they have entered industrial manufacturing age in the last 50 years, the desire for foreign goods is notable.
- Adoption refers to the decision of consuming units to purchase new products and services regularly.
- In the less affluent world (LAW), including many of the countries of Asia, Africa, and Latin America, the spread of Western-style consumer culture is encouraged by the extension of media access via satellite transmission and an accelerated movement of migrants to the developed world, and back again.
- Nonetheless, the spread of consumer culture in the LAW tends to be limited by stagnant economic growth, unequal income distribution, and sometimes conflicts with traditional consumption values. In many of these countries, as the photo of a Milian family and their possessions suggests, consumption of basic necessaries remains a challenge for many, while the few enjoy a luxurious consumption style on par with the most developed countries.
 Consumer Culture in the Less Affluent World: Mali (50.0K)
- Traditional economies include the former socialist bloc countries of Eastern Europe and other economies that were formerly dominated by the public sector.
- In such economies, consumers sometimes express ambivalent (both positive and negative) attitudes towards consumption and marketing.
- For eastern Europeans who grew up under communism, the availablity of many different products and brands creates a fundamental tension between the individualism and self-expression offered by consumption and the communist ideological goals of equality and classlessness. They long to express their identity with the new clothes, perfumes, toys, and automobiles that surround them, but still feel guilt and shame about these longings. In addition, the economic hardships faced by most eastern Europeans like the Russian family pictured below, makes Western shopping malls more like museums than places to purchase products.
Consumer Culture in Transitions Economies: Russia (50.0K) - Although satellite TV familiarizes eastern Europeans with Western brands and lifestyles, for many these consumer goods are unattainable and this is very frustrating.
- Organizational cultures can be unique. In different corporations, organizational culture can differ with respect to dress, communication, learning, and decision-making styles, ethics, and so forth.
- Just as consumer marketers strive to understand the cultural forces that influence the behavior of their customers in the developed world, transitional economies and the LAW, so do B2B marketers attempt to take into account the influence of corporate cultures on the organizational buying process.
- The Circle of Consumption
- The circle of consumption refers to the fact that the production and acquisition of goods and services, their consumption, and the disposal of used goods are part of a cycle of managerial and socio-economic activities.
- Consumption is a thing that people do, along with productive work, exchange, and non-economic activity. Consumption typically involves using things, and sometimes using them up, rather than making them or transferring them.
- The process of production, acquisition, consumption, and disposal are universal. In every society, consumption is organized into behavioral systems involving varying constellations of goods and services. As illustrated in Exhibit 1.2, the order in which the processes of production, acquisition, consumption, and disposal occur, and the participants in the processes, vary widely both within and between societies. Some are commercial processes and some are not.
Exhibit 1.2: Circle of Consumption (50.0K) - In marketing, we ordinarily think of the circle of consumption as moving from production by a manufacturer to the acquisition by an industrial buyer or end consumer, who then consumes the product in industrial production or in final consumption.
- Much of the attention of marketers has focused on acquisition as the critical phase in the circle of consumption. In fact, marketers have focused mostly on one kind of acquisition-purchase decisions. They have studied how consumers and organizational buyers gather information, and evaluate and decide which products, services, and ideas to buy. A basic model of purchase decision making is provided in Exhibit 1.3.
Exhibit 1.3: A Basic Model of Purchase Decisions (50.0K) - This model suggests that consumers purchase products to solve identified consumption problems. Consumers engage in search and evaluation of alternatives and judge their purchase decisions in terms of how well the purchases solved their consumption problems.
- In the last few years, managerial focus has evolved to include the full circle of consumption.
- Understanding acquisition, which is very important to marketers, requires an understanding of the other steps because consumer beliefs, values, and attitudes are affected by these links.
- By understanding the links between these phases, managers can implement strategies to influence the timing and sequence of these phases, which, in turn, can affect demand for their products.
- Disposal refers to those processes by which consumers divest themselves of consumer goods.
- By looking at disposal, the circle of consumption highlights the importance of "thinking green," and the value to organizations of developing sustainable marketing practices (e.g., practices that are environmentally friendly and do not necessarily deplete the planet's resources). The following examples are presented to help you understand the full implications of the circle of consumption.
*From Disposal to Acquisition. Young married couples often put new households together from extra and leftover wares retrieved from their parents' garages and basements. *From Disposal to Production. In West Africa, empty kerosene tins are used to deliver water from public pumps to home storage jars. In Senegal, craftsmen mold empty tuna fish and beer cans into attaché cases. *From Disposal to Consumption. Cast-off rubber tires are used as planters and children's swings in the U.S. and as hoops in children's games in the LAW. *From Production Consumption. Farmers in the LAW produce and consume an important fraction of their own food, shelter, and clothing. *From Acquisition to Consumption. Hunter-gatherer groups in the Arctic, South America, Africa, Australia, and South Asia harvest natural products for immediate consumption, as do amateur game hunters and mushroom gatherers in the developed world. *From Acquisition to Disposal. Some impulse shoppers purchase expensive clothing for the thrill of the purchase and later return the goods unused to the retail store or even hide them away in drawers and closets unused.
- Motivational Dynamics in Consumer Culture
- The Plan of the e-Learning (course) Book
|
|
The Domain of Consumer Behavior (50.0K)
Consumer Culture in the Less Affluent World: Mali (50.0K)
Consumer Culture in Transitions Economies: Russia (50.0K)
Exhibit 1.2: Circle of Consumption (50.0K)
Exhibit 1.3: A Basic Model of Purchase Decisions (50.0K)
Exhibit 1.4: Motivational Dynamics (50.0K)
Exhibit 1.5 - The Circle of Consumption and the Plan of the e-Learning course book (34.0K)
2002 McGraw-Hill Higher Education