Consumer Behavior Exam Review Notes PDF

Consumer Behavior Exam 1 Review Notes Chapter 1: **Consumer Behavior** is the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impact that these processes have on the...

Consumer Behavior Exam 1 Review Notes Chapter 1: **Consumer Behavior** is the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impact that these processes have on the consumer and society - *Who*? Individuals, groups, and organizations - *What*? Their behaviors, the way they select, secure, and use the product, as well as dispose of the product, service, experience, or idea - *Why*? To satisfy their needs, solve a problem, or have a positive impact, and by doing so, society benefits **Marketing Strategy:** always starts with consumer, study the market needs and industry, 4P's of marketing or marketing mix (the solution), select a target market and bring value to it **Regulatory Policy:** must understand the consumer, is it good or bad for a consumer? **Social Marketing:** creating a new behavior or altering it, taking the same things from the consumer and modifying behaviors to create a positive impact and NEW behaviors **Informed individuals:** becoming a better consumer [Value] is the total benefit by total cost, benefits/total cost **Question: \_\_\_\_\_ is the application of marketing strategies and tactics to alter or create behaviors that have a positive effect on the targeted individuals or society as a whole** A. **Social Marketing** B. **Consumer Behavior** C. **Regulation** D. **Proactive Marketing** E. **Ethical Marketing** **Market analysis** components 1. The consumers 2. The company 3. The competitors 4. The conditions **Market segmentation** involves four steps, it is a portion of a larger market whose needs differ from the larger market 1. Identifying product-related need sets 2. Grouping customers with similar need sets 3. Describing each group 4. Selecting an attractive segment(s) to serve **Marketing strategy** is the answer to the question: How will we provide superior customer value to our target market? Requires consistent **marketing mix**: 1. Product 2. Communications 3. Price 4. Distribution, and 5. Service **Question: Which of the following is NOT an application of consumer behavior?** A. **Marketing strategy** B. **Human resource management** C. **Regulatory police** D. **Informed consumers** E. **Social marketing** Outcomes 1. Firm outcomes: profit, employee satisfaction, cash on hand, shareholder wealth increasing 2. Individual outcomes 3. Society outcomes Creating Satisfied customers: Our total product and Competitors' total products consumer decision process superior value expected sales perceived value delivered customer satisfaction People buy products, not so much for what they do, but **how it makes you feel** **Self-concept** is the totality of an individual's thoughts and feelings about oneself. **Lifestyle** is how one lives, including the product one buys, how one uses them, what one thinks about them, and how one feels about them **Consumer decisions** results from perceived problems and opportunities Consumer problems arise in specific situations and the nature of the situation influences the resulting [consumer behavior] **Consumption** has meaning beyond satisfaction of minimum or basic consumer needs **Symbolic needs** - **Status** - **Identity** - **Group acceptance** **Question: Laurie saved for six months to have enough money to buy a new designer outfit to wear to a special party. She had to travel to a larger city to purchase this outfit, but it was worth it to her because it made her feel beautiful and confident. The difference between the benefits Laurie perceived from this purchase and the cost to her to acquire these benefits describes her \_\_\_.** A. **Consumer behavior** B. **Customer value** C. **Motivation** D. **Equity difference** E. **Perceptual field** Chapter 2: [4 components of culture] - Language - Demographics - Values - Nonverbal communications = consumer behavior = marketing strategy Values form cultural values consumption (consumer behavior) **VALUE** **AFFECTS CONSUMPTION** [4 major world citizens] **Global citizens** - Positive to international products - High quality - Corporate social responsibility (CSR) **Global dreamers** - Positive to international products - High quality - Don't really care for CSR **Anti-globals** - People who hate anything international **Global agnostics** - Nothing special about international products, treated as local products **Culture** is the complex whole that includes knowledge, belief, art, law, morals, customs, and any other capabilities and habits acquired by humans as members of society. It is **our experience**! **Cultural values are widely held beliefs**, they give rise to norms and associated sanctions, which in turn influence consumption patterns Cultures are NOT STATIC, they typically evolve and change slowly over time Norms = specify ranges of appropriate behavior Sanctions = penalties for violating norms **Question: Violation of cultural norms results in \_\_\_\_, or penalties ranging from mild social disapproval to banishment from the group** A. **Norms** B. **Sanctions** C. **Proclamations** D. **Ostracization** E. **Sentencing** **[Other orientated values]**, relationship between individuals and their groups - Individual/collective - Youth/age - Extended/limited family - Masculine/feminine - Competitive/cooperative - Diversity/uniformity **[Environment-oriented values]**, society's view of the economy, environment, and technology - Cleanliness - Performance/status - Tradition/change - Risk taking/security - Problem solving/fatalistic - Nature **[Self-oriented values]**, what do individual members find most desirable (you and me) - Active/passive - Sensual gratification (5 senses)/abstinence - Material/nonmaterial - Hard work/leisure - Postponed gratification/immediate gratification - Religious/secular CULTURE LEADS TO CONSUMPTION!!!! The meaning of **time** varies between cultures in two major ways - [Time perspective] is **monochronic** (one) = *Time is money!* - [Time interpretations] are **polychronic** (many) = *Time is relationship!* **Space** is the [overall use] and meanings assigned to [space vary widely among different cultures] Failure to recognize the meaning assigned to **Symbols** can cause a serious problem - Colors - Animals - Shapes - Numbers (8) - Music The cultural meaning of **Things** leads to [purchase patterns that one would not otherwise predict] - Different meanings that cultures attach to things, including products **Question: Ralph is very prompt. If he says he will be there at 10:00 a.m., he will be there exactly at that time. Furthermore, he will not begin another task until he is completely done with the one, he is currently working on. Which time perspective does Ralph have?** A. **Polychronic** B. **Monochronic** C. **Linear** D. **Parallel** E. **Priority** **Demographics** describe a population in terms of its size, structure, and distribution - [Structure is usually dependent on age, occupation, income, education] - [Distribution is the density of its population] - Are [usually a result and a cause of cultural values] Income = ***Purchasing Parity Power (PPP),*** is [based on the cost of a standard market basket of products bought in each country] ***Glocalization***: adapt product and services to local consideration **Question: As a global operations manager for Starbucks, Isabella makes a sincere effort to adapt the products and services of Starbucks to local consumers' preferences, considerations, and needs. Which one of the following terms best describes Starbucks' adaptation?** A. **Standardized marketing** B. **Glocalization** C. **Local strategy** D. **Global strategy** E. **International Innovations** Chapter 3: **Cultural Values** are widely held beliefs that affirm what is desirable. They are NOT static, they are dynamic A shift in values (**a value shift**) leads to a shift in the culture (**a culture shift**), and should lead to a shift in consumption (**consumption shift**) Observable *shifts in behavior*, including [consumption behavior], often reflect underlying *cultural values* It is necessary to understand the *underlying value shifts* to understand current and future consumer behavior Shifts in values are called **trends** Which direction is the shift happening? Where are the values shifting? - Traditional, past - Current, now - Emerging, future - TCE Emerging is the most important one! **[Environment-oriented values]** prescribe a society's relationship to its economic and technical as well as its physical environment **[Other-oriented values]** reflect a society\'s view of the appropriate relationships between individuals and groups within that society **Question: \_\_\_\_ are widely held beliefs that affirm what is desirable.** A. **Norms** B. **Cultural values** C. **Precepts** D. **Prescriptions** E. **Orientations** Marketing strategy and value are: - Green marketing - Cause-related marketing - Marketing to gay and lesbian consumers - Gender-based marketing **Green Marketing** is 1. Developing products whose production, use, or disposal is less harmful to the environment than the traditional versions of the product; 2. Developing products that have a positive impact on the environment; or 3. Tying the purchase of a product to an environmental organization or event The [FTC has updated its Green Guides] that include - Qualifying claims - Third-party certifications and seals Firms must avoid *greenwashing* -- promoting environmental benefits that are unsubstantiated and on which they don't deliver! **Cause-related Marketing (CRM)** is marketing that ties a company and its products to an issue or cause with the goal of improving sales or corporate image while providing benefits to the cause 4 consumer types - **Skeptic**, people who doubt the sincerity of... - **Balancer**, someone who acts on CRM out of convenience, best vs. worse - **Attribution-oriented**, question the motives of companies who do CRM, support good moves, not bad - **Socially concerned**, support even if it is inconvenient **Question: When did Americans begin to place increased emphasis on leisure, immediate gratification, and sensual gratification?** A. **After the end of the Civil War** B. **After the end of World War I** C. **During the depression** D. **After the end of World War II** E. **After the Vietnam War** [Gender-based marketing] - Gender identity versus gender roles - Ascribed versus achievement roles - Traditional versus modern gender orientation **Gender Roles** determine which traits are for men and women. It is what is expected in our society, **Gender Identity** is one's personal sense of gender **Ascribed Identity** is what society tells you it should be, they are very difficult to change, **Achievement Role** is based on one's performance, a way to change something with education **Traditional** means the old way of doing things, and **modern** is changing on a day-to-day basis [Market segmentation] - Traditional housewife - Trapped housewife - Trapped working woman - Career working woman **Product Strategy** means rather than adapting colors to fit stereotypes (e.g., pink power tools), companies are adapting their features in ways that make their products more functional **Retail Strategy** means men and women have different purchasing habits. Differences in loyalty, brand switching, coupon usage, and shopping style must be considered **Question: Which group of consumers doubts the sincerity or effectiveness of cause-related marketing programs?** A. **Skeptic** B. **Balancer** C. **Attribution-oriented** D. **Socially concerned** E. **Apathetic** Chapter 4: **Self-concept and lifestyle** are how you feel about yourself, whether it is demographic or social status. It expresses that through purchases, people buy feelings Demographics and social status personal values are formed consumption (CR) - Population and size - Occupation - Education - Income - Age **Values** change with all these factors above **Size**, **structure**, and **distribution** of our population **Structure** is defined as occupation, education, income, and age. They are interrelated **Distribution** is the density of population, higher in cities and lower in rural areas (sparse) Products, media, shopping. Numbers over 100, big numbers! **Chronological age** is purely based on date of birth, "look" age **Cognitive age** is based on how you behave, "feel" age (actions reveal age) WE CATER TO **COGNITIVE AGE** IN MARKETING!!! A **generation** or ***age cohort*** is a group of people who have experienced a common social, political, historical, and economic environment **Cohort analysis** is the process of describing and explaining the attitudes, values, and behaviors of an age group as well as predicting its future attitudes, values, and behaviors ***[Gerontographics]*** (gerontology and demographics) has identified the following four segments of the mature market: - Healthy indulgers - Ailing outgoers - Healthy hermits - Frail recluses **Question: A(n) \_\_\_\_ is a group of people who have experienced a common social, political, historical, and economic environment?** A. **Census age cohort** B. **Age cohort** C. **Cognitive group** D. **Chronological group** E. **Demographic group** **Baby Boom Generation**, 1946-1964 - Higher income, higher education - More tech savvy than previous generations - Defining retirement differently, self-sufficient - Strong market for anti-aging products, travel, and financial services - Often alienated by overly "youth oriented" appeals in ads **Generation X**, 1965-1976 - Smaller than previous generations - Single parent households, divorces - Highly educated, with more college attendance and graduated than previous generations; Xer women more highly educated than men - Entrepreneurial in approach to jobs; less prone to devote life to a large corporation - More **diverse** and **open to diversity** than previous generations - Both cynical and sophisticated about products, ads and shopping - Tech savvier than previous generations **Generation Y**, 1977-1994 (millennials) - Really two Sub-Markets: young gen y and old gen y - Expected to have at least as high of education level as previous generation - Factors believe make their generation unique: technology use, music and pop culture, tolerance, intelligence, and clothes (apparel, alcohol, music, technology) **Generation Z,** 1995-2008 (feel good) - Known as digital natives, generation @, net generation - \$200 billion purchase power - Buying patterns formed as young teen will follow through life - Reaching Gen Z can be challenging for brands, as they easily get bored; they use more digital platforms than older generations, and are known to switch among five screens simultaneously **Question: \_\_\_\_ are born between 1977 and 1994.** A. **Generation X** B. **Generation Y** C. **Tweens** D. **Generation Z** E. **Baby Boomers** **Societal rank** is one's position relative to others on one or more dimensions valued by society, social class and social standing A **social class system** is the entire ladder, entire hierarchy in respect to attitudes, values, and lifestyles Social standing is derived and influences behavior - [Socioeconomic factors] like occupation, education, ownership, income, heritage - [Social standing] is upper class, middle class, working class, lower class - [Unique behaviors] are preferences, purchases, consumption, and communication **Upper Americans** - Upper-upper (0.3%). The "capital S society" world of inherited wealth, aristocratic names - Lower-upper (1.2%). The newer social elite, drawn from current professional, corporate leadership - Upper-middle (12.5%). The rest of college graduate managers and professionals; lifestyle centers on careers, private clubs, causes, and the arts **Middle Americans** - Middle class (32%). Average pay white-collar workers and their blue-collar friends; live on "the better side of town," try to "do the proper things" - Working class (38%). Average pay blue-collar workers; lead "working-class lifestyle" whatever the income, school, background, and job Middle class aspirations to belong to upper-middle class prefer products consumer by upper-middle class positioning upper-class symbolism for middle-class products There are two measurements of social class - Single-item index (direct influencers), education, occupation, income, and is generally less accurate than - Multi-item index, Hollingshead Index of Social Position (ISP) **Question: Harriet wants to describe the population of a new market in which her firm wishes to enter. She wants to describe the population in terms of its size, distribution, and structure. Which of the following should she use?** A. **Psychographics** B. **Behaviorgraphics** C. **Censographics** D. **Demographics** E. **Geographics** Chapter 5 A **subculture** is a segment of a larger culture whose members share distinguishing values and patterns of behavior Subculture subcultural values consumption Individuals identification with core culture/ identification with a subculture core culture values and norms/ subculture values and norms mass market behaviors/ unique market behaviors **Question: Many companies develop special marketing mixes for a segment of a larger culture whose members share distinguishing values and patterns of behavior. These segments are known as \_\_\_\_.** A. **Subsegments** B. **Subgroups** C. **Secondary markets** D. **Subcultures** E. **Reference groups** **Ethnic subcultures** are those subcultures whose members' unique shared behaviors are based on a common racial, language, or nationality background [African Americans] 4 segments: - New Middle Class are younger, highest education and income, very positive about the future - Broadcast Blacks are middle aged, single parents, female, income is less than \$25,000, live in urban areas - Black is Better are middle aged, upper-middle income, values are family, religion, prefers to be with their own ethnic groups - Black Onliners are younger, middle to upper income, values are education, work, and family Media, products, communications, and retail (must have ethnic products, must employ African Americans, expect respect when they come into the stores) [Hispanic Americans,] **majority** are Mexican American Income, education, language, and identification with Hispanic culture change across generations Roughly 34% of growth in the Hispanic population is due to *immigration*, the level of acculturation plays a major role in the attitudes and behaviors of Hispanic consumers Generational groups also exist which drive differences in language, national identity, and values - First generation, parents born outside the US, then immigrated to US - Second generation, the children of first gen - Third (+) generation, parents born in US and children as well **Acculturation** is how you adapt adopt the new culture, highly related to language use; and both are strongly influenced by generational factors Media: television, Univision, unimax, Products: values are family, food purchases for gatherings, children, Communications and retail: Hispanic malls [Asian Americans]**, majority** are Chinese American Highest educated and highest income group Estimated purchase power is \$1.2 trillion and is expected to grow to \$1.6 trillion by 2024 Most diverse group, with numerous nationalities, languages, and religions Media: satellite tv for older, streaming for younger, Products:, As of 2025 Chinese are still largest, second group is south Asians [Native Americans] Approximately 570 native American tribes, each with its own language and traditions. Many have reservations and quasi-independent political status Have limited incomes, varies widely by tribe Media, product, communication: [ ] Talk about their heritage, they are proud. Less tolerant of stereotypes. Marketers using Native American names or portrayals must ensure accurate and appropriate use [Arab Americans] Well-educated, business-oriented Community support, funding from within 66% are Christians More than 80% are U.S. citizens 24% are Muslim **Question: Which of the following represents the largest national background of Asian Americans?** A. **Chinese** B. **Filipino** C. **Japanese** D. **Korean** E. **Vietnamese** **[Secular]** means not of religion or controlled by a religious group America is a secular society **Religious subcultures** exist: [Christian] subcultures 63% - Roman catholic 21% - Protestant 42% - Born-again Christian [Non-Christian] subcultures - Jewish 2% - Muslim 1% - Buddhist 0.6% **Regional Subcultures** arise because of the following: - Climate conditions - Natural environment and resources - Characteristics of the various immigrant groups that have settled in each region, and - Significant social and political events **Question: According to the Bureau of the Census, a person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin regardless of race is defined as a(n)** A. **African American** B. **Asian American** C. **Hispanic** D. **Native American** E. **Subculture** Chapter 6 Marketing strategy = household purchase and consumption behavior = structure of household unit stage of household life cycle household decision process **Household** consists of all the people who occupy a housing unit (house, apartment, group of rooms, or single room designed to be occupied as separate living quarters) **Family household** consists of those who occupy the unit are related by birth, marriage, or adoption, and someone pays rent **Non-family household** consists of those who live together for pure economic purposes, saving money on rent, etc. **Question: According to the Census Bureau, all the people who occupy a housing unit is defined as a \_\_\_\_.** A. **Buying unit** B. **Blended family** C. **Family household** D. **Household** E. **Traditional family** **[Traditional family]** refers to a married opposite-sex couple and their own or adopted children living at home **[Stepfamily]** is a married couple-family household with at least one child under the age of 18 who is a stepchild The evolving American household includes - Single parent families - Cohabitation with children involved - Blended families - Family size - Multipartner fertility - Mothers in workforce - Mothers as the breadwinner American households follow much more complex and varied cycles today, **Household Life Cycle (HLC)** - Each HLC stage presents unique needs and wants as well as financial conditions and experiences - HLC provides marketers with relatively homogeneous household segments that share similar needs with respect to household related problems/purchases Stages of HLC - Younger \64 An important *segmentation* variable!!!! **[Family decision making]** is the process by which decisions that directly affect or indirectly involve two or more family members are made **Family purchases** are often compared to organizational buying decisions. There is usually *less explicit criteria* and *most* *directly affect the other members of the family* - Inherently emotional - Affect relationships between family members **Question: The family member who first recognizes a need or starts the purchase process is known as the** A. **Initiator** B. **Information gatherer** C. **Influencer** D. **Decision maker** E. **User** Initiators can be parents or children Decision makers can be parents or children Purchases are parents, users are children All of these play a role in family purchase roles/decisions: - Culture and subculture - Role specialization - Degree of involvement - Personal characteristics of the family members Conflict resolution: - **Reasoning**: using logical argument to win - **Playing on emotion**: using the silent treatment or withdrawing from the discussion - **Additional information**: getting additional data or a third-party opinion ***Consumer socialization*** is the process by which young people acquire skills, knowledge, and attitudes relevant to their functioning as consumers in the marketplace Understanding the content and the process of consumer socialization **content** means, *what* do you pass on? **process** means, *how* do you pass it on? Piaget's stages of cognitive development **[Stage 1]**: **[The period of sensorimotor intelligence (0-2 yrs.)]** - Behavior is not primarily motor - The child does not yet "think" conceptually, though cognitive development is seen Three categories: 1. **[Consumer skills]** -- are those capabilities necessary for purchases to occur such as understanding money, budgeting, product evaluation, etc. 2. **[Consumption-related preferences]** -- are the knowledge, attitudes, and values that cause people to attach differential evaluations to products, brands, and retail outlets 3. **[Consumption-related attitudes]** -- are cognitive and affective orientations toward marketplace stimuli such as advertisements, salespeople, warranties, etc. *Consumer socialization* occurs primarily through family 1. **Instrumental training** -- occurs when a parent or sibling specifically and directly attempts to bring about certain responses through reasoning or reinforcement 2. **Modeling** -- occurs when a child learns appropriate, or inappropriate, consumption behaviors by observing others 3. **Mediation** -- occurs when a parent alters a child's initial interpretation of, or response to, a marketing or other stimulus **Question: A major basis for concern about marketing to children is their inability to fully process and understand commercial messages. Much of the theory and research in this area is based on \_\_\_.** A. **Asche's diffusion theory** B. **Weber's intellect enhancement theory** C. **Piaget's stages of cognitive development** D. **Pavlov's process acquisition stages** E. **The Tantrum theory**