Customer Trust & Consumer Behavior

• Study notes for measuring customer trust, understanding consumers, and influence on consumer behavior

Measuring and Building Customer Trust

• The HX TrustID survey measures Humanity, Transparency, Capability, and Reliability.
• The Wall Street Journal builds trust by improving transparency, highlighting subscription benefits, and offering personalized content.
• Reliability is the trust factor most likely to drive customers to spend more, even if competitors have similar offers.
• A/B testing predicts trust scores by measuring the trust-building effectiveness of different messages with customer segments.
• NPS measures loyalty, while HX TrustID diagnoses trust drivers.

Understanding China’s Young Consumers

• Western brands often misunderstand Chinese youth by assuming Western generational trends apply and ignoring China's rapid social changes.
• Intergenerational financial fluidity increases young consumers’ spending power because the 4-2-1 family structure funnels wealth to the single child.
• In China, purchases reflect shared family success rather than individual preference.
• Rapid cultural shifts require segmenting marketing strategies by five-year age groups or micro-generations.
• Western brands should reconsider assumptions that youth spending is tied to income and that young consumers universally reject parental values.

The Provenance Paradox and Emerging Market Brands

• The provenance paradox describes consumers doubting quality based on a product's country of origin.
• Two branding strategies for breaking into high-end pricing are flaunting the country of origin or downplaying it in favor of lifestyle branding.
• Corona beer overcame negative perceptions about its origin by promoting a beach lifestyle instead of emphasizing its Mexican heritage.
• Digital marketing and influencers overcome origin bias by showcasing quality directly, bypassing stereotypes tied to origin.
• Flaunt the country of origin when it is a strength, and hide it when it creates bias.

Consumer Behavior Fundamentals

• Consumer behavior is the study of how individuals select, purchase, use, and dispose of goods; its stages are Pre-purchase, Purchase, and Post-purchase.
• Understanding consumer needs is important for product development, targeted marketing, customer satisfaction, and competitive advantage.
• Marketing creates value beyond selling products through value creation, relationship building, and community engagement.
• The three stages of consumption are pre-purchase, purchase, and post-purchase.
• During the pre-purchase stage, consumers decide what to purchase through need recognition, information search, and evaluation of alternatives.

Freud, Bernays, and Goebbels – Influence on Consumer Behavior

• Sigmund Freud believed that human behavior is driven by unconscious desires and fears.
• Edward Bernays applied Freud’s theories to advertising by linking products to emotions and identity rather than practical needs.
• "Engineering consent" is the use of psychological techniques to shape public opinion without people realizing it, as introduced by Bernays.
• Bernays marketed Lucky Strike cigarettes to women by branding them as symbols of female empowerment (“Torches of Freedom”).
• Id (impulses), Ego (rationality), and Superego (morality) influence consumer decisions.
• Anna Freud explained emotional purchases as people buying products to cope with anxiety and boost self-esteem.
• Defense mechanisms justify emotional purchases through rationalization or projection.
• Joseph Goebbels used repetition and emotional narratives to control public perception through propaganda.
• Both Bernays’ advertising techniques and Goebbels’ propaganda methods used emotions, repetition, and media saturation to influence behavior.
• Modern digital marketing reflects Bernays' and Goebbels' techniques through algorithm-driven repetition, personalized ads, and emotional triggers.

Study notes on measuring customer trust using the HX TrustID survey, understanding young Chinese consumers, and the influence on consumer behavior. HX TrustID measures Humanity, Transparency, Capability, and Reliability. Also looks into reliability as a key driver for increased customer spending.