Chapter 1: Buying, having, and Being: An introduction to Consumer Behavior
This book concerns the products and services we buy and use and the way these fit into our lives
Consumption communities: place where members share opinions and recommendations about
anything (from Barbie dolls to Iphone apps)
The use of Market segmentation strategies: an organization targets its product, service, or idea
only to specific groups of consumers rather than to everybody (even if this means that other
consumers who don’t belong to this target market aren’t attracted to it)
brands often have clearly defined images, or “personalities”, that advertising, packaging,
branding and other marketing elements help to shape
- example: choice for favorite website (says a lot about your interests and personality)
Brand loyalty: a bond between product and consumer that is difficult for competitors to break
(this happens when a particular product satisfies our specific needs or desire!)
Consumer Behavior: the study of processes involved when individuals or groups select, purchase,
use, or dispose of products, services, ideas, or experiences to satisfy needs and desires
involves everything that can satisfy people’s needs or wishes!
Buyer behavior: the interaction between consumers and producers at the time of purchase (how
it was referred to in the early stages of development
Process consumer behavior (=ongoing process):
- Exchange: a transaction in which two or more organizations or people give and receive something of
value (=integral part of marketing)
- Consumer: person who identifies a need or desire, makes a purchase, and then disposes of the product
during the three stages of consumption process
- Consumers may take the form of organizations and groups (one or more persons use the bought good
and it is supplied from another external company)
Marketeers have to understand the wants and needs of different consumer segments
Segmenting the market to create brand loyalty is a good marketing strategy
this is to identify the heavy users
Rule of thumb 80/20 rule 20% of the users account for 80% of the sales (= a guideline!)
,Other dimensions to divide up a large market demographics (age, gender, income, etc)
these demographics are very important for marketeers because with this data the marketer can
locate and predict the size of markets for many products
The (most important) demographics discussed in the book:
Age
- depending on the age, people have different needs and wants (although people from the same
age group differ in many other ways, they commonly share cultural experiences they carry
through life)
- Example: Glossier’s eyebrow targeted young women through social media (directly talked to
the customers, she found the gap in the market she created brand loyalty through her casual
way of communicating with her customers
Gender
- Gender distinctions are made at an early age (pink diapers for girls and blue for boys)
- Example: microwaves. First this product was targeted to men because producers believed it was
a male product (it was positioned next to the televisions, etc) the sales were bad they
replaced the microwaves to ‘white products’ for women sales rised (women want to spare
time in the kitchen)
Family structure
- large effect on spending priorities
- Exmaple: youngsters consume alcohol and go to bars/cinemas, elderly consume with regard to
home maintanance services
Social class and income
- people with same social class are approx. equal in terms of income and social standing in
society
- they socialize with each other, have in general same taste in music, clothing, etc.
in interest for marketeers because they can determine who has the largest buying power
Race and ethnicity
- our society becomes more multicultural new opportunities arise to introduce people to new
offering and create offerings specialized for the types of race
Geography
- same product with different name to different places
Lifestyles
- also determines our consumption choices
- Example: reckless people consume much insurance
Segmenting by behavior: relationships and big data:
- relationship marketing: building relationships between brand and customers that will last a lifetime
when times are tough, people tend to rely on what they are known with and trust (Covid-19
crisis!)
- database marketing: tracks specific consumer’s buying habits closely and tailors products and
messages precisely to people’s wants and needs based on this information
uses Big Data: the collection and analysis of extremely large datasets
- marketeers now have to deal with the high volume and speed (before big data, it took ages to
investigate certain things)
Companies, non-profits, political parties and even governments now have the ability to sift
through massive quantities of information that enables them to make precise predictions about what
we will consume
,User-Generated Content (UGC):
everyone can voice their opinions about products, brands, companies, etc.
UGC helps to define the era of Web 2.0: the rebirth of the internet from its original roots as a form
of one-way transmission form producers to consumers to a social, interactive medium
Popular Culture is Marketing is Popular Culture …
consumers rely on marketeers that they sell us products that are safe and that perform as
promised
Popular Culture: forms of entertainment that the mass market produces and consumes (music,
books, sports, etc.)
- is a product of and an inspiration for marketers
- affects our lives in more far-reaching ways (form marriage and death to gambling and addiction)
we increasingly live in a branded world where marketers play an important role: they determine
how we see the products and the world we live in
All the world is a stage:
role theory: much of consumer behavior resembles actions in a play
- it is the task of marketers to provide us in our necessities to play our role (geek, hipster, gangster,
etc)
- relationships with brands evolve over time (loyal, short-time loyal, etc)
some types of relationships a person might have with a product:
What does it mean to consume:
people often buy products not for what they do, but for what they mean
- implies that roles products play in our lives extend well beyond the tasks they perform (basic
function is still important!)
we choose a product that is consistent with our underlying needs
people buy products because of their brand image
What do we really need?
distinction between happy and meaningful brings up the question:
- What is the difference between needing something and wanting it?
Need: something a person must have to live or achieve a goal (example: food)
Want: specific manifestation of a need that personal and cultural factors determine
Megacity: a metropolitan area with a total population of more than 10 million people
Digital native: consumers who grew up “wired” in a highly networked, always-on world where digital
technology had always existed (term arose in 2001)
Lifelog: make report of each event we experienced at a day
there is little doubt that digital revolution is one of the most significant influence on consumer
behavior influence of internet will increase more and more
Internet of Things (IoT): the growing network of interconnected devices embedded in objects that
speak to one another (from smartphones to autonomous cars to “smart home devices”)
, We are experiencing a revolution in M2M (machine-to-machine communication) !
- self-driving cars
- Artificial Intelligence (AI)
- Robot Companions
- Sexbots
Consumer Behavior as a field of study:
We find consumers researchers everywhere we find consumers!
There are diverse methods to investigate consumer behavior
Pyramid of consumer behavior:
- closer to the top concentrate on the individual
consumer (micro issues)
- closer to the base are more interested in
collective activities that occur among larger
groups of people (such as consumption patterns
members of a culture or subculture share (macro
issues)
