Summary Customer Behaviour year 3 Business Studies. Chapters 1 to 9 and chapter 11. + all practice questions and answers. Achieved an 8 with the help of this summary.
Lecture summary Principles of Consumer Studies (MCB20806)
Summary of Chapter 11 of Consumer Behaviour - Isabelle Szmigin & Maria Piacentini (2018): Where are we going?
Summary of Chapter 8 - 10 of Consumer Behaviour - Isabelle Szmigin & Maria Piacentini (2018): Macro-view of consumption
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Consumer Behaviour
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Summary consumer behaviour
How we arrived here
Historical context and contemporary perspectives on consumption
Chapter 1: A historical context for understanding consumption
Business want to understand how and why consumers shop and consume in the way they do both to
develop products and to effectively communicate with customers.
Consumption: individuals or groups acquiring, using and disposing of products, services, ideas or
experiences.
Stages in consumption history:
- Subsistence level consumption
- Sharing and bartering
- Exchanging goods for money
- Commercialization of goods (buying from shops etc.)
- Growth of trade across borders, leading to globalization
Critiques of consumption:
- Christian and Judaic ascetism
- Puritanism
- Present day anti-consumption/ voluntary simplicity
Sumptuary laws: are laws that attempt to control and regulate permitted consumption
activities. / regulate expenditure, especially with a view to restraining excess in food, dress, equipage
etc.
Economists, philosophers and consumption:
- Adam Smith
o Producers had a responsibility to their consumers
o Consumption could help to stimulate the economy
o Luxury consumption could prevent stagnation
- John Stuart Mill
o Luxuries such as gold, lace, champagne are ‘unproductive’ consumption
o This consumption doesn’t help the working man
- Karl Marx
o Concerned that people did not recognize the value of the commodities (goederen)
they consumed
o Workers moved to factories workers sell their labour instead of their products
risk of being exploited by factory owners
Exchange value: what the value of a good is to the consumer and therefore what it could be
exchanged for, usually its price.
Use value: the value of a good to the consumer in terms of the usefulness it provides. (for a car this
might include fuel economy, performance, number of seats etc.)
Symbolic value: the symbolic meaning consumers attach to goods to construct and participate in the
social world. (designer bag)
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,Fetishism of commodities: the disguising or masking of commodities whereby the appearance of
goods hides the story of those who made them and how they made them. (Karl Marx)
Consumption function: which maps the relationship between disposable income and level of wages.
Conspicuous consumption: where goods represented a way to compete and gain social recognition.
The revolution in shopping:
- From barter to corner shops, to malls, to catalogues. Today we shop from our laptops and
mobile phones.
- What has changed is the variety of oppurtunities to shop, the variety of items available
through such different channels, and that every part of the day is now available for shopping.
From service to self-service:
- Individual service was replaced by self-service
- The shopping trolley, the location of goods and their apparent easy availability affects how
and what we buy
- Technology impacts forms of shopping (fresh food vending machines)
Customer relationships:
- Small local service shops know your customer
- Big unpersonal self-service stores owner don’t know the customers and vice versa
- Companies building strong 1-to-1 relationships with customers
Motivational research:
- Developed by Sigmund Freud
- Sigmund Freud: that people’s behaviour was often determined by irrational and unconscious
motives and by socialized inhibitions. He believed that unconscious thoughts were as
important as conscious ones. a number of researchers put Freud’s ideas and influence
into action, aiming to understand how and why consumers liked or didn’t liked certain
products and brands.
- Ernst Dichter: recognition of both the role of emotions in our choice decisions and that these
decisions could not always be analysed or explained from a rational viewpoint.
Critiques of motivational research:
In the 1950s there was increasing fear that, as the marketing industry grew, consumers were being
‘sold’ things they neither needed nor really wanted but bought only to fulfil their consumerist
lifestyle. Vance Packard:
1. Motivational research could not be a cure-all for all marketing problems.
2. Taking diagnostic tools from clinical psychiatry and applying them to consumer behaviour
was not wholly valid.
3. Motivational research relied too heavily on the person making the interpretation with few
standardized or validating testing procedures.
4. The findings of motivational researchers had not been subjected to objective confirmation by
conventional methods before they were applied to business situations.
5. Question of morality.
PP:
Motivational research
… could not be a cure-all for all marketing problems.
… lacks validity: taking diagnostic tools from clinical psychiatry and applying them to consumer
behaviour.
… relies too heavily on the person making the interpretation.
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, … delivers findings which were not subjected to objective confirmation by conventional methods
before they were applied to business situations.
… is morally questionable
Consumerism:
- Consumer rights organizations began to increase (1957 UK) later in countries like
Australia, Canada, India Ireland, Uganda. All share the goal of ensuring that consumers are
protected in their marketplace dealings.
- The focus on consumer protection subsequently became an issue of concern to both
companies and governments many countries introduced legislation to protect consumers.
o Consumer Credit Act 1974 (UK): to allow customers paying by credit to have a
periode of time in which to change their mind regarding the purchase they had
made.
o Indian Consumer Protection Act 1986, Republic of China’s Consumer Protection Law
1994, European Charter of Fundamental Rights 2000: legislation in place to protect
the interests and safety of consumers.
- Ralph Nadar: recognizing that producers and retailers have a responsibility to the consumer
not only in producing goods but in ensuring that they are safe, fair, and of the value
promised.
- Naomi Klein’s book: with an anti-corporate and ‘alter-globalization’ message.
Classifying consumers:
- Early attempts to classify consumers centred on classic variables such as age, gender,
occupation and income.
- Typologies help marketers to identify the types or segments that they may wish to target or
even avoid.
Dagevos (2005) argued that modern consumers defy traditional segmentation by age, gender, or
income, and that classical criteria to distinguish homogeneous groups have lost much of their
explanatory power. So Dagevos proposed four consumer ‘images’ which are based on 2 key
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, dimensions, materialistic/non-materialistic and individualistic/collectivist. These consumer types
capture the relations between consumers and products.
The postmodern consumer:
- Fragmented nature and multiple selves. Rather than being one ‘type’ (described in classifying
consumers), the postmodern consumer truly crosses many types and it’s difficult to tell when
he/she will be one or the other. No longer does consumption provide support to a unified
idea of a person framed by their work, gender, moral choices and achievements. Postmodern
consumers want to explore different and separate identities to match the fragmenting
markets and the proliferation of products. First and Shultz (1997) represent the
fragmentation of postmodern consumers as a result of a loss of a central core of being where
multiple selves can address the same product category.
- The ‘sign’ as represented by consumption is all important (Levi’s example)
- Breaking down the divide between production and consumption. Whereby the consumer
plays a constructive and value-creating role, not only in consumption but also in production,
by creating their own products or taking part in the production through connections with the
firm.
Approaches to studying consumers and consumption:
- Interdisciplinary perspectives on consumption:
o Anthropology: concerned with people as they live in their society and culture. Focus
on consumers’ behaviours and practices, looking at how rituals, myths and symbols
all contribute to understanding the meaning and significance of consumption to
consumers.
o Sociology: contributes insights into the social forces that influence individual and
group consumption, including the social structural concepts of social class, ethnicity,
gender and lifestyles.
o Psychology: the scientific study of mental processes and behaviours.
o Economics: classic microeconomics theory is the source of the utility-maximizing
framework used to explain some aspects of how we process information and make
decisions. Macroeconomics provides indicators of consumption behaviours that are
very useful in understanding global differences in consumption.
o History and geography: help in our understanding of the origins and development of
consumer culture, including marketing communications and advertising, and the
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