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OE104 Customer Behavior Consumer Behaviour Summary and Notes
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Summary and notes of chapter 1, 2, 3, 4, 5, 6, 7, 8, 9 and 11 of Consumer Behaviour by Isabelle Szmigin & Maria Piacentini.
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Chapter 1 A Historical Context for Understanding ConsumptionDefinition of consumption
Consumption is the acquiring, using and disposing of products, services, ideas or
experiences by individuals or groups.
Value of consumption goods
A common concept of value for a good or service is exchange value, which in most
circumstances is the same as the market price. It represents what the value of a
good is to the consumer and therefore what it could be exchanged for, usually its
price. Use value means the satisfaction we get from a good or service, which is
usually thought of as being determined by a set of attributes that define its quality. It
is the value of a good to the consumer in terms of the usefulness it provides. Most
homeowners do not have their house on the market. The use value is higher to them
than the exchange value is.
The sign of symbolic value is the symbolic meaning consumers attach to goods to
construct and participate in the social world. They consume the idea of the good to
signal identity in social relationships. A higher price signals that a good is exclusive
and make purchase attractive even if in traditional functional terms its use value may
be similar to an alternative that is cheaper or has lower exchange value. It can be
important because it sends a social message about how you want to be seen in
society.
The exchange value of a designer handbag does not represent its use value, but the
sign value is probably higher than cheaper alternatives.
Consumption becomes part of everyday life
The Industrial Revolution led to increased production of goods and quicker ways to
produce, which meant prices dropped and more people could purchase. Distribution,
retailing and advertising started to develop as well. Goods were now displayed in
shop windows to entice customers into shops. Manufacturers and shop owners
realized they could persuade people to buy more than they needed, such as new
fashions. These increased were influenced by industrial innovations in all aspects.
Some were in materials. Transport also started to develop an mail-order companies
emerged. Food and cooking were revolutionized by inventions such as canning and
freezing. Technology such as computers and mobile phones have built a new need
to be continually connected with another and this has led to different modes of
working, shopping and keeping in touch with people.
Products also have more limited lifespans and are more regularly replaced with new
versions. The changes are usually superficial but to encourage people to feel that
their car or product was out of date and needed replacing. This now is common in
our consumer behaviour. Today, many of us are not only able to more types of
goods, but we buy the same item many more times than previous generations.
Conspicuous consumption
Thornstein Vebled introduced Conspicuous Consumption, where goods
represented a way to compete and gain social recognition. He also was concerned
about the very wealthy’s ability to be extravagant and wasteful. Today, we are
encouraged not to be wasteful. Today, people in countries where there is a lot of
poverty, might see the ‘West’ as a modern day equivalent of Veblen’s leisure class.
However, these people are now told to not consume excessively when so many of us
have been able to do so for so long.
,Key trends in the development of shopping
New ways to shop
When department stores opened, an important feature was that the customer
became anonymous. Shop assistants were not encouraged to develop personal
relationships with the customers, so they stayed anonymous.
Catalogue shopping became popular in the USA at the end of the nineteenth century.
What has changed is the variety of opportunities 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
Increased personal distance between customer and retailer found its most extreme
form with the introduction of self-service in the US Supermarkets in the 1930s.
Trolleys instead of baskets were introduced, which stimulates customers to buy
more. The location of goods became more accessible for customers, so they didn’t
have to ask an assistant to help. More women were in the workforce so people
became time poor and grocery shopping was more facilitated by the car, so parking
and malls became more important.
Buying online often lacks the visual experience of being in a store. Some companies
have introduced virtual stores where customers wear a VR headset and can browse
products in a 3D setting before purchasing.
Pop-up shops and breads appeared in the late 1990s and they still offer consumers
surprise and novelty.
Motivational research – from the rational to the emotional
After WWI in Europe the horse-drawn carriage was still a means of travel, while in
the USA the car was taking over the roads. US companies first embraced the latest
thinking from Europe of Sigmund Freud and his followers. Freud’s research made
them understand why customers did or did not buy their products. Freud suggested
that people’s behaviour was often determined by irrational and unconscious motives
and by socialized inhibitions. He believed unconscious thoughts were as important as
conscious ones.
The rise of motivational research
Ernst Dichter developed so-called motivational research to help companies
understand some of the more irrational motives for choice.
Critiques of motivational research
In the 1950s there was an increasing fear that consumers were being sold things
they neither needed nor really wanted but bought only to fulfil their consumerist
lifestyle.
Critiques:
1. Motivational research could not be a cure-all for 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.
Consumer Types
There are different types of consumers:
, Consumer Type Description
Chooser The rational problem-solving consumer, requiring genuine
options, finance options, and information.
Communicator Uses goods to communicate. Material objects are used for the
messages they convey, often relating to status or taste.
Explorer Consumers increasingly have places to explore, and often we
explore with little idea of what, or even if, we wish to buy.
Identity-seeker Creating and maintaining personal and social identity through
consumption.
Hedonist/artist Consumption as pleasure: consumption can fulfil needs for
emotional aesthetic pleasure and fantasy.
Victim The exploited consumer: the consumer may lack knowledge or
be unaware of choices, or they may have limited choice because
of their socio-economic situation.
Rebel Using products in new ways as a conscious rebellion: this can
include consuming differently, or less, or boycotting, and can
also refer to active rebellion (joyriding, looting, taking over
consumption spaces).
Activist Presented historically from the cooperative movement, the value-
for-money movement, especially fighting against corporate greed
and political activism, seeking more ethical consumption.
Citizen Consumers are also citizens with rights and responsibilities,
awareness that consumerism encroaches on areas such as
housing, healthcare, and education as well as consumer goods.
Individualistic
Calculating Unique
Materialistic Non-materialistic
Traditional Responsible
Collectivistic
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