Consumer Behaviour, Marketing

1. Go Global !
Global Economic Environment :
Consumer Behaviour and
Culture
By
Stephen Ong
Edinburgh Napier University Business School
chong@mail.tarc.edu.my
Visiting Professor, College of Management, Shenzhen
University
26 August 2012

2. Agenda
1. Consumer Behaviour & Motivation
2. Consumer Decision Making Process
3. Culture & Subcultures
4. Global Consumers

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. 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. To Which
Segment of
Consumers Will
This Ad Appeal?
A Segment of
Consumers Who
are
Environmentally
Concerned
Chapter One Slide
4

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. Two Consumer Entities
Chapter One Slide

8. Consumers
Consumers use
products to help them
define their identities

9. Consumer Identity as an Aid to
Marketers
 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. Consumer Behaviour
 Consumer behaviour is a
process.

11. Stages in the Consumption Process
1-
11 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

12. Consumer Marketing
Marketers need to
understand the
wants and needs
of different
consumer
segments.

13. Segmenting Consumers:
Demographics
Demographics:
 Age
 Gender
 Family structure
 Social class/income
 Race/ethnicity
 Geography

14. Redneck Bank Targets by Social Class
Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
1-14

15. Popular Culture
Music
Movies
Sports Marketers influence
Books preferences for
movie and music
Celebrities heroes, fashions,
Entertainment food, and decorating
choices.

16. Consumer-Brand Relationships
Self-concept
attachment
Nostalgic attachment
Interdependence
Love
1-16

17. Development of the
Marketing Concept

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. Societal Marketing Concept
Considers
consumers’
long-run best
interest
Good corporate
citizenship

20. The Marketing Concept
Embracing the Marketing
Concept
 Consumer Research  The process and tools used to
study consumer behavior
 Segmentation
 Market Targeting
 Positioning

21. The Marketing Concept
Implementing the
Marketing 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. The Marketing Concept
Implementing the
Marketing Concept
 Consumer Research
 Segmentation The selection of one or more of
the segments identified to
 Market Targeting pursue
 Positioning

23. The Marketing Concept
Implementing the
Marketing 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. The Marketing Mix

25. Customer Value, Satisfaction,
Trust, and Retention

26. Successful Relationships
Value, 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. Discussion Questions
How does
McDonald’s create
value for the
consumer?
How do they
communicate this
value?

28. Successful Relationships
Value, Satisfaction,
Trust, and Retention
 The individual's 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. Successful Relationships
Value, 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. Successful Relationships
 The objective of providing value is
to retain highly satisfied customers.
Value, Satisfaction,  Loyal customers are key
Trust, 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. Top 10 Ranked U.S. Companies in Terms of
Consumers’ 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. 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. THE TRADITIONAL VALUE- AND RETENTION-
MARKETING CONCEPT FOCUSED MARKETING
Make only what you can sell instead Use technology that enables
of 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 perceived
the need that it satisfies. value, as well as the need that it
satisfies.
Market products and services that Utilize an understanding of customer
match customers’ needs better than needs to develop offerings that
competitors’ offerings. customers perceive as more valuable
than competitors’ offerings.
Research consumer needs and Research the levels of profit
characteristics. associated with various consumer
needs and characteristics.
Understand the purchase behavior Understand consumer behavior in
process and the influences on relation to the company’s product.
consumer behavior.
Realize that each customer Make each customer transaction part
transaction is a discrete sale. of an ongoing relationship with the
customer.

34. Impact of Digital Technologies

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. Consumer and the Internet
The Web is
changing
consumer
behaviour.

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

39. 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?

40. A Simple Model of Consumer Decision Making -
Figure 1.4

41. Consumer Beliefs and Actions
Our beliefs and actions as
consumers strongly connect to other
issues in our lives.

42. 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

43. 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

44. Are Advertising & Marketing
Necessary?
Does advertising foster materialism?
Products are designed to meet
existing needs;
Advertising only helps to
communicate their availability
1-44

45. Do Marketers Promise Miracles?
Advertisers simply do not know enough
about people to manipulate them

46. Perspectives on Consumer Behaviour
There are two major
perspectives on
consumer behavior:
Positivist approach
Interpretivist approach
1-46

47. Table 1.3
Positivist versus Interpretivist Approaches
Assumptions Positivist Approach Interpretivist Approach
Nature of reality Objective, tangible Socially constructed
Single Multiple
Goal Prediction Understanding
Knowledge Time free Time-bound
generated Context-independent Contest dependent
View of Existence of real causes Multiple, simultaneous
causality shaping events
Research Separation between Interactive, cooperative
relationship researcher and subject with researcher being part
of phenomenon under
study

48. What Kind of Consumer
Does This Ad Target?
This Ad Targets
Runners Who Are
Physically Active
People and Also
Relish the
Outdoors.

49. Why Segmentation is Necessary
 Consumer needs differs
 Differentiation helps products
compete
 Segmentation helps identify
media

50. Positioning
The value proposition,
expressed through
promotion, stating
the product’s or
service’s capacity to
deliver specific
benefits.

51. Criteria for Effective Targeting

52. Which Distinct Benefit Does
Each of the Two Brands Shown
in This Figure Deliver?
The Dentyne Ad’s Benefit is Fresh
Breath and the Nicorette Ad is
Whitening and Smoking Cessation

53. Bases for Segmentation

54. Consumer-Rooted Segmentation
Bases

55. Demographic Segmentation

56. Geodemographic Segmentation
Based on
geography and
demographics
People who live
close to one
another are
similar
“Birds of a feather
flock together”

57. One PRIZM Segment
57

58. 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

59. Lifestyles
 Psychographics
 Includes activities, interests,
and opinions
 They explain buyer’s purchase
decisions and choices

60. Two Views of Post-Retirement
Lifestyle

61. VALS

62. Socio-Cultural Values and Beliefs
 Sociological = group
 Anthropological = cultural
 Include segments based on
 Cultural values
 Sub-cultural membership
 Cross-cultural affiliations

63. Consumption-Specific
Segmentation Bases

64. Consumption-Specific Segmentation
Usage-Behaviour
Usage rate
Awareness status
Level of involvement

65. 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.

66. Which Consumption-
Related Segmentation
Is Featured in This
Ad?
This is an
Example of a
Situational
Special Usage
Segmentation.

67. Benefits Segmentation
Benefits sought represent
consumer needs
Important for positioning
Benefits of media
Chapter Three Slide
28

68. Benefits Visiting Tourists Seek in National
Park
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.

69. 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

70. Implementing
Segmentation
Strategies
Micro- and behavioural
targeting
Personalized advertising
messages
Narrowcasting
Email
Mobile
Use of many data sources

71. Sample Acxiom Clusters

72. Implementing Segmentation Strategies
Concentrated Marketing
One segment
Differentiated
Several segments with
individual marketing
mixes
Countersegmentation

73. Consumer Motivation
It is important
for marketers
to recognize
that products
can satisfy a
range of
consumer
needs.

74. 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.

75. Model of the Motivation Process
75
Chapter Four
Slide

76. 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

77. 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

78. What Do We Need?
Biogenic Needs
Psychogenic Needs
Utilitarian Needs
Hedonic Needs

79. 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

80. 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

81. 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)

82. 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

83. 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

84. How Does this Ad
Appeal to
One’s Goals?
It Appeals to Several
Physical
Appearance-related
goals.

85. 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

86. Motivations and Goals
Chapter Four
Slide

87. Blogger’s Motivation - Table 4.1
Construct Items
Blogging 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 life.
life By writing text and posting video/audio files, I keep a
documenting 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 friends.
forum 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 that
information 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

88. Rational versus Emotional
Motives
 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

89. 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

90. 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

91. Frustration
 Failure to achieve a goal may result in frustration.
 Some adapt; others adopt defense mechanisms to protect
their ego.
Chapter Four
Slide

92. Defense Mechanisms- Table 4.2 (excerpt)
Construct Items
Aggression 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 inventing
tion 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

93. Arousal of Motives
 Physiological arousal
 Emotional arousal
 Cognitive arousal
 Environmental arousal

94. How Does This Ad
Arouse 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

95. 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

96. Types and Systems of Needs
Henry Murray’s 28
psychogenic needs
Abraham Maslow’s
hierarchy of needs
A trio of needs
Chapter Four
Slide

97. Murray’s List of Psychogenic Needs
97

98. Murray’s List of Psychogenic Needs
(continued)
98

99. Maslow’s Hierarchy of Needs
Chapter Four
Slide

100. To Which of
Maslow’s
Needs Does This
Ad Appeal?
Both Physiological
and Social Needs
Chapter Four
100
Slide

101. To Which of
Maslow’s
Needs Does
This Ad Appeal?
Egoistic
Needs
Chapter Four
101
Slide

102. To Which of Maslow’s
Needs Does This Ad Appeal?
Self-Actualization
Chapter Four
102
Slide

103. Levels of Needs in the Maslow Hierarchy
Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
4-103

104. 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

105. To Which of the Trio
of Needs Does This Ad Appeal?
The Affiliation Needs Of Young,
Environmentally Concerned
Adults
Chapter Four
105
Slide

106. To Which of the Trio of
Needs Does This Ad
Appeal?
Power And Achievement
Needs
Chapter Four
106
Slide

107. 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

108. Figure 4.3 Conceptualizing Involvement
Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
4-108

109. 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

110. 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

111. 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

112. 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

113. What Would a
Pet Owner
Need to Know
in Order to
Make a
Decision
About Buying
Pet
Insurance?
Do I Need It? How Do I
Get More Information?

114. Models of Consumers: Four Views
of Consumer Decision Making
 An Economic View
 A Passive View
 A Cognitive View
 An Emotional View
Chapter Fifteen
Slide

115. Consumer
115
Decision
Making

116. Process - Need Recognition
 Usually occurs when consumer has a “problem”
 Need recognition styles
 Actual state
 Desired state

117. 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

118. 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

119. The Evoked Set
119

120. 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

121. 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

122. Hypothetical Use of Decision Rules
Decision Rule Mental Statement
Compensatory I selected the netbook that came out best
rule when I balanced the good ratings against
the bad ratings
Conjunctive rule I selected the netbook that had no bad
features
Disjunctive rule I picked the netbook that excelled in at
least one attribute
Lexicographic rule I looked at the feature that was most
important to me and chose the netbook
that ranked highest on that attribute
Affect referral I bought the brand with the highest overall
rule rating
Chapter Fifteen
122
Slide

123. 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

124. The Decision Process for
Functionally Illiterate Consumers

125. 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

126. 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

127. 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

128. Output of Consumer Decision Making
 Purchase behaviour
 Trial purchases
 Repeat purchases
 Long-term commitment
 Postpurchase evaluation

129. 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

130. Gifting Behavior
Gifting is an act of symbolic
communication, with explicit and
implicit meanings ranging from
congratulations and love, to
regret, obligation, and
dominance.
Chapter Fifteen
Slide

131. Reported Circumstances and Motivations for
Self-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

132. Gifting Relationships
GIFTING DEFINITION EXAMPLE
RELATIONS
HIP
Intergroup A group giving a gift A Christmas gift from one family to
to another group another family
Intercategory 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 individual
Intragroup A group giving a gift A family buys a VCR for itself as a
to itself or its Christmas gift
members
Interpersonal An individual giving a Valentine’s Day chocolates presented
gift to another from a boyfriend to a girlfriend
individual
Intrapersonal Self-gift A woman buys herself jewelry to
cheer herself up

133. Consuming and Possessing
 Consumers find
pleasure in
possessing,
collecting, or
consuming
 Products have
special meanings
and memories
133

134. A Model of Consumption
134

135. Marketing aimed at
creating strong,
lasting relationships
with a core group of
customers by making
Relationship
them feel good about
Marketing
the company and by
giving them some
kind of personal
connection with the
business.

136. Relationship Marketing Success
Chapter Fifteen
136
Slide

137. The sum total of learned
beliefs, values, and
customs that serve to
Culture
regulate the consumer
behavior of members of
a particular society.
Chapter Eleven Slide

138. To Which Cultural Value or Values Is
This Product’s Advertising Appealing?
Convenience in Food Preparation

139. A Theoretical Model of Culture’s Influence on
Behaviour
Chapter Eleven Slide

140. The Invisible Hand of Culture
Each individual
perceives the
world through
his own
cultural lens
140

141. Lifestyle Matrix for Global Youth
141

142. Culture Satisfies Needs
Food and Clothing
Needs vs. Luxury
Chapter Eleven 142
Slide

143. In Terms of “Culture,” Do You Consider This
Product to Be a “Good Morning” Beverage?
Why or Why Not?
Many Will Say “NO” Due to Lack of
Nutritional Value and Competing Products
(Coffee).
143

144. Culture Is Learned
Issues
 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

145. Culture Is Learned
Issues
 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

146. How Does a Symbol Convey
the Product’s Advertised
Benefits?
They Provide Additional
Meaning to the Ad.
Chapter Eleven Slide

147. 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
147
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Eleven Slide

148. 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

149. Culture Is Learned
Issues
 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

150. Facial Beauty Ritual of a Young TV
Advertising Sales Representative
1. 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

151. 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

152. The Measurement of Culture
 Content Analysis
 Consumer Fieldwork
 Value Measurement Instruments
Chapter Eleven Slide

153. A method for
systematically analyzing
the content of verbal
and/or pictorial
Content
communication. The
Analysis
method is frequently
used to determine
prevailing social values
of a society.
Chapter Eleven Slide

154. Which
Cultural
Value
Is
Portrayed,
and How
So? Progress –
The Fridge has
Superior Design
Chapter Eleven Slide

155. Which Cultural
Value
Fitness and
Is This Ad Health –
Stressing, and
How So? Low Calorie

156. American Core Values
Criteria for Value Selection
The value must be pervasive.
The value must be enduring.
The value must be consumer-
related.
Chapter Eleven Slide

157. American Core Values

158. American Core Values

159. 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

160. 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

161. Hofstede’s Cultural Dimensions
 Power distance
 Individualism
 Masculinity
 Uncertainty avoidance
 Long-term orientation

162. Table 4.2 Terminal and Instrumental
Values (Milton Rokeach)
Instrumental Value Terminal Value
Ambitious A comfortable life
Capable A sense of
accomplishment
Self-controlled Wisdom

163. 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

164. 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

165. Figure 4.4 Hierarchical Value Maps for
Vegetable Oil in Three Countries
Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
4-165

166. Subcultures
Our identification
with microcultures
that reflect a shared
interest in some
organization or
activity influences
what we buy.

167. 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

168. 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.

169. The Context of Culture
High-Context
Low-Context

170. 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

171. What is Acculturation?
 Acculturation occurs, at least in part, with the influence
of acculturation agents
 Family
 Friends
 Church organizations
 Media

172. 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

173. 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

174. Hispanic Americans
 “Hispanic” = many different
backgrounds
 Hispanics are:
 Brand loyal
 Highly concentrated geographically by
country of origin (easy to reach)

175. Distinguishing Characteristics of
the 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

176. 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

177. Religion and Consumption
 Organized religion and
product choices
 Born-again consumers
 Islamic marketing

178. Generational Categories
 The Interbellum Generation
 The Silent Generation
 The War Baby Generation
 The Baby Boom Generation
 Generation X
 Generation Y
 Generation Z

179. Nostalgia Scale
Scale Items
They 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).

180. The Youth Market
 “Teenage” first used to describe youth
generation in 1950s
 Youth market often represents rebellion
 $100 billion in spending power

181. Teen Values, Conflicts, and
Desires
 Four basic conflicts common among
all teens:
 Autonomy versus belonging
 Rebellion versus conformity
 Idealism versus pragmatism
 Narcissism versus intimacy

182. 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

183. 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

184. 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”)

185. 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

186. 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

187. 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

188. 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

189. 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

190. The Imperative to Be Multinational
• Global Trade Agreements
– EU
– NAFTA
• Winning Emerging Markets
• Acquiring Exposure to Other
Cultures
• Country-of-origin Effects

191. Under What
Circumstances Would
This English-
Language Ad Attract
Affluent Consumers
from Largely
Non-English
Speaking Countries?
If They Frequently Visit the
United States and Regularly
Read American Upscale
Magazines

192. 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

193. 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

194. 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

195. Other Country-of-Origin Effects
Mexican study
uncovered:
Country-of-design (COD)
Country-of-assembly
(COA)
Country-of-parts (COP)

196. Conceptual Model of COD and COM
196
Chapter Thirteen
196
Slide

197. The effort to
determine to what
Cross-Cultural
extent the
Consumer
consumers of two
Analysis
or more nations are
similar or different.

198. 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

199. Comparisons of Chinese and
American 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

200. Cross-Cultural Consumer Analysis
Issues
 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

201. 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

202. 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

203. Research Issues in Cross-Cultural Analysis
FACTORS EXAMPLES
Differences in language and Words or concepts may not
meaning 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 differ
patterns substantially in the level of
consumption or use of products
or services.
Differences in the perceived Two nations may use or
benefits 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

204. Table (continued)
FACTORS EXAMPLES
Differences in the criteria for The benefits sought from a
evaluating products and services service may differ from country
to country.
Differences in economic and The “style” of family decision
social conditions and family making may vary significantly
structure from country to country.
Differences in marketing The types and quality of retail
research and conditions outlets and direct-mail lists may
vary greatly among countries.
Differences in marketing The availability of professional
research possibilities consumer researchers may vary
considerably from countryEducation,
Copyright 2010 Pearson
to
204
country. Inc. Publishing as Prentice Hall
Chapter Thirteen
Slide

205. 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

206. Products that are
manufactured,
packaged, and
World
positioned the same
Brands
way regardless of the
country in which they
are sold.

207. Cross-Border Diffusion of Popular Culture

208. Are Global Brands Different?
According to a survey –
yes
Global brands have:
Quality signal
Global myth
Social responsibility

209. Multinational Reactions to
Brand 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

210. 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

211. Framework for Assessing
Multinational Strategies
Global
Local
Mixed

212. A Framework for Alternative Global Marketing
Strategies COMMUNICATON
STRATEGY
STANDARDIZED LOCALIZED
PRODUCT COMMUNICATIONS COMMUNICATIONS
STRATEGY
STANDARDIZED Global strategy: Mixed Strategy:
PRODUCT Uniform Product/ Uniform Uniform Product/ Customized
Message Message
LOCALIZED Mixed strategy: Local Strategy:
PRODUCT Customized Product/ Uniform Customized Product/
Message Customized Message

213. Cross-Cultural
Psychographic Segmentation
The only ultimate
truth possible is
that humans are
both deeply the
same and
obviously different.

214. Six Global Consumer Segments

215. 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

216. Carbon Footprint Breakdown

217. 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

218. Conclusion

219. Casestudy : SAB-MILLER
1. 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.

220. 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