Consumer Behavior: Trust, Culture, and Ethics

• These are study notes which summarize various aspects of consumer behavior, including trust-building, cultural influences, perception, psychological tactics, ethical concerns, and historical figures.

Measuring and Building Customer Trust

• The HX TrustID Survey measures customer trust using four factors which are humanity, transparency, capability, and reliability.
• Humanity includes empathy and fairness.
• Transparency means clear communication.
• Capability refers to quality delivery.
• Reliability means consistency.
• Tailored interventions involve empathy-driven customer support for low humanity scores.
• Consistent performance means meeting expectations with timely delivery.
• Transparency initiatives embody clear policies and proactive communication.
• Error compensation means providing meaningful remedies for service failures.
• Trust scores can be predicted using behavioral analytics, A/B testing, and personalized content to address trust gaps.

Understanding China’s Young Consumers

• Young Chinese consumers drive markets and trends, and not just trends alone.
• Their spending power is rooted in intergenerational financial fluidity, exemplified by the 4-2-1 family structure.
• Consumerism reflects family aspirations and economic change.
• Marketing tactics include micro-generation segmentation, family-oriented messaging, and aspirational branding.

Provenance Paradox and Emerging Markets

• Origin bias impacts product perception.
• Heritage promotion leverages traditional strengths. Colombian coffee exemplifies this.
• Long-term branding establishes trust through quality over time. Toyota's reliability positioning exemplifies this.
• Shifting the focus from origin to experience. Corona's beach lifestyle branding exemplifies this.
• Digital Influence uses influencers to reshape perceptions.

Consumer Behavior Fundamentals

• Consumer behavior is the study of how individuals select, use, and dispose of products.
• Stages of consumption include: Pre-purchase (need recognition, research), Purchase (decision, transaction), Post-purchase (evaluation, satisfaction, disposal).
• Marketing impacts product design, pricing strategies, and targeted promotions.

Perception in Consumer Choices

• Stages of perception include exposure, attention, and interpretation.
• Exposure is the contact with stimuli.
• Attention is the focus on stimuli.
• Interpretation is the meaning assignment to stimuli.
• Sensory marketing involves sight (color, design), sound (music tempo), smell (ambient scents), touch (texture), and taste (sampling).
• Perceptual biases include selective attention, perceptual defense, and adaptation.
• Selective attention means focusing on needs.
• Perceptual defense means blocking discomforting ads.
• Adaptation refers to ad fatigue.
• Subliminal messaging is the controversial use of stimuli below conscious awareness.

Learning and Memory

• Classical conditioning associates stimuli (e.g., jingles with brands).
• Reward-based behavior reinforcement uses operant conditioning (e.g., loyalty programs).
• Observational learning occurs through influencers and reviews.
• Memory processes include encoding, storage, and retrieval.
• Encoding is the method of storing input.
• Storage is retaining infomation.
• Retrieval means recalling information during purchase decisions.
• Brand schemata are mental frameworks linking brands to attributes (e.g., Apple = innovation).

Psychological Tactics in Marketing

• Emotional branding sells feelings. Nike evoking empowerment exemplifies this.
• Fear-based marketing triggers urgency and fear. ADT home security ads exemplify this.
• Lifestyle association sells identity. Rolex symbolizing success exemplifies this.
• Planned obsolescence creates product cycles that drive repeat purchases.

Ethical Concerns in Marketing

• Privacy and data use require transparent data collection practices.
• Sustainability initiatives require authentic eco-friendly efforts while avoiding greenwashing.
• Psychological manipulation raises ethical issues with FOMO, urgency tactics, and emotional exploitation.

Key Figures, Issues, and Tactics in Consumer Behavior History

• Sigmund Freud introduced psychoanalysis and explored the role of unconscious desires.
• Freud addressed the issue that human behavior is driven by subconscious fears and desires.
• Freud's tactic was the analysis of unconscious motivations.
• Edward Bernays is known as the father of public relations and he applied Freud’s theories to advertising.
• Bernays addressed the issues of mass persuasion and shaping consumer habits.
• Bernays' tactic was emotional advertising. Linking cigarettes to women's empowerment via 'Torches of Freedom' is an example.
• Anna Freud studied defense mechanisms in consumer behavior.
• Anna Freud addressed the issues of emotional consumption patterns.
• Anna Freud's tactic was using nostalgia and childhood memories in marketing.
• Ernest Dichter pioneered motivational research.
• Dichter addressed the issue of uncovering hidden consumer motivations.
• Dichter's tactic was focus groups and psychological triggers. Adding an egg to cake mix to simulate involvement is one example.
• Paul Mazur promoted consumerism as a way of life.
• Mazur addressed the issue of the transition from needs-based to desires-based economy.
• Mazur's tactic was positioning products as symbols of status.
• Joseph Goebbels mastered propaganda techniques.
• Goebbels addressed the issue of public opinion manipulation.
• Goebbels' tactic was repetition, symbolism, and fear-based messaging.

Additional Concepts and Terms

• Consumer segmentation divides markets based on demographics, psychographics, geography, and behavior.
• Perceived value is the customer's evaluation of product benefits versus cost.
• A/B testing compares two marketing approaches to determine which is more effective.
• Micro-moments are brief moments where consumers turn to a device to act on a need. Google searches for 'near me' results exemplify this.
• Neuromarketing uses brain science to understand consumer responses to stimuli.
• Influencer marketing leverages social media personalities to drive brand engagement.
• Social proof is the influence of peer actions and reviews on purchase decisions.

Study notes summarizing consumer behavior. Includes trust-building with HX TrustID, cultural influences in China, perception biases, psychological tactics, ethical concerns in neuromarketing, and the history of consumerism.