Consumer Behavior Summary PDF

SECTION 1: FOUNDATIONS OF CONSUMER BEHAVIOR CHAPTER 1 – BUYING, HAVING AND BEING (2Q) Consumer Behavior: the study of the processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas or experiences to satisfy needs and des...

SECTION 1: FOUNDATIONS OF CONSUMER BEHAVIOR CHAPTER 1 – BUYING, HAVING AND BEING (2Q) Consumer Behavior: the study of the processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas or experiences to satisfy needs and desires and to define and express their identities. What is Consumption? Consumption refers to all facets of the consumer behavior process, which include how we observe and make sense of the world around us. It’s an ongoing process formed by three stages: pre-purchase, purchase, post-purchase. Our consumption choices help us define our Identity, which is a multilayered concept that involves our personal self and our social self. A Brand enables consumers to identify a particular company, product, or individual. We buy things for what they mean, not for what they do. Consumers, society and Technology: A moving target We can divide Consumers by Demographics (age, income, family…), by Lifestyle (hobbies) or by Behavior (buying habits). They have a natural in-group bias: they prefer culturally related brands that meet their desire to connect with “home” and their home culture. A consumer trend is a thing that evolves over time and shows experiential purchases provide greater happiness and satisfaction because they allow us to connect with others. It is important to track where consumers “going” so you can meet there. The 80/20 Rule is a guideline that says that marketers know that 20% of consumers amount to 80% of sales. Social media have created a horizontal revolution: communications flow across regular users. We also witnessing a revolution in M2M (machine-to-machine communication). The collection and analysis of extremely large datasets is called Big Data. In user-generated content (UGC) everyone can voice their opinions about products, brands and companies. An important development is the shift from traditional media to the more integrated system called transmedia that refers to the web of media from traditional media platforms to digital ones. Consumption: from problem to solution? A Role Theory states that Consumer Behavior is like actors in a play where we seek props and costumes to perform a role and we alter consumption decision on what “play” we’re acting. - SELF-CONCEPT ATTACHMENT: the product helps to establish your identity - NOSTALGIC ATTACHMENT: the product serves as a link to a past self - INTERDEPENDENCE: the product is part of your daily routine - LOVE: the product elicits emotional bounds of passion A need is something a person must have to live or to achieve a goal, a want is a specific manifestation of a need that personal and cultural factors determine. Multiple perspectives on the study of consumer behavior Researchers identify how we process information or how messages of different types change our opinions and behavior: - COGNITIVE PSYCHOLOGY: study of internal mental processes inside your brain - NEUROSCIENCE: more deeply inside the brain and the nervous system - JUDGMENT AND DECISION MAKING (JDM): complexities of human judgments and decisions - BEHAVIORAL ECONOMICS: a branch of economics that extends from classical and neoclassical economics - SOCIAL PSYCHOLOGY: focus on the social factors that affect individual or group behavior On a Macro focus, researchers who regard consumption from a social and cultural point of view: - SOCIOLOGY: study of group behavior - ANTHROPOLGY: analyze human difference from the perspective of the individual embedded in a collective On a diverse focus, there are some others disciplines: - SEMIONTICS AND LITERALY CRITICISM: the study of meanings and symbols - COMPUTER SCIENCE: the study of computers and computational systems - HISTORY: studies the past and examines these sources material We also have two different currents of thought: Positivist where human reason is supreme and consumer is a rational decision-maker, and Interpretivist (CCT) where the world we live is culturally and socially complex and experience is subjective. SECTION 2 – MAKING SENSE OF THE WORLD CHAPTER 3 – PERCEIVING AND MAKING MEANING (3Q) Sensations Sensation refers to the biochemical signal that our senses send to our brain for processing. Our sensory receptors (eyes, ears, nose, mouth, fingers and skin) capture basic stimuli such as light color, sound, odor and send those responses to our brain. Perception is the process by which people select, organize and interpret these sensations. The inputs that our brain receives can generate internal sensory experiences. In the era of Sensory Marketing companies think carefully about the impact of sensations on our product experiences: - VISION: five elements of visual perception are essential to marketers. 1. Illuminance: refers to the amount of light we perceive on a object  2. Shape: the perceived space occupied by an object in the perceptual field 3. Surface color: affects how people perceive an object 4. Materiality: refers to the visual texture 5. Location: the positioning, orientation, spacing and movement of an object An aesthetic bias tells that product designs that are deemed more attractive lead us to think the product will also be more useful - DOLLARS AND SCENTS: odors invoke memories or relieve stress. - SOUND: music and other sounds affect people’s feelings and behaviors. The pitch-size effect occurs because we tend to visualize what we hear. Sound symbolism is the way a word sound influences our assumptions about what it describes and attributes, such as size. - TOUCH: we tend to touch objects. The endowment effect is the effect of encourage shoppers to touch a product let them imagine they own it. This shows the importance of the haptic touch. The contamination effect shows that people like a product less and are less likely to buy it if another person has touched it earlier - TASTE: our test receptors contribute to our experience of many products. Gastrophysics is the science of eating considers how psychics, chemistry and perception influence what we put in our mouth. The hedonic escalation is the effect that every more bite of food give us more pleasure (and not less) The stages of perception Like computers, we undergo stages of information processing in which we put input and store stimuli. Everyone interprets the meaning of a stimulus in a manner consistent with their own unique biases, needs and experience. STAGE 1: EXPOSURE Exposure occurs when a stimulus comes within the range of someone’s sensory receptors. - What people is capable of perceiving is call sensory threshold. - The absolute threshold refers to the minimum amount of stimulation a person can detect on a given sensory channel. In contrast. - The differential threshold refers to the ability of a sensory system to detect changes in differences between two stimuli. The stronger the initial stimulus, the greater change must be for us to notice it: Weber’s Law Shrinkflation is a term to describe the continuous cycle where at some point the smallest package offered becomes so small that they’re phased out and replaced by the medium-size Ø THE MYTH: Most marketers want to create messages above consumers’ thresholds so people will notice them. Subliminal perception refers to a stimulus below the level of the consumer’s awareness.  Ø THE TRUTH: We are able to process information and develop positive brand responses even when we are not directly or deliberately paying attention to a brand message (Pre-attentive processing) STAGE 2: ATTENTION Attention refers to the extent to which processing activity is devoted to a particular stimulus. Consumers often experience sensory overload, we are exposed to far more information that we can process. The fight for your attention (eyeball economy) gets tougher every day. Metacognitive inference is when advertising distract us from another activity. Rich media is another practice such as the use of animated GIF files or video clips to grab viewers’ attention. The process of perceptual selection means that people attend only a small portion of the stimuli to which they are exposed. Ø GETTING ATTENTION: In general, we are more likely to notice stimuli that differ from others around them and create contrast in several ways: - SIZE: proportion size of the ad - COLOR: distinct identity - POSITION: places where we’re more likely to look - NOVELTY: ad in a unconventional places to grab attention Ø LOSING ATTENTION: adaption is the process that occurs when we no longer pay attention to a stimulus because is so familiar. - INTENSITY: less intense stimuli habituate because they have less sensory impact - DISCRIMINATION: habituate because not require attention to detail - EXPOSURE: habituate as the rate of exposure increases - RELEVANCE: habituate because they fail to attract attention STAGE 3: INTERPRETATION The meaning we assign to a stimulus depends on a schema, or a set of beliefs, to which we assign it. The interpretation of two people can be different. One factor that determines how we will interpret a stimulus is relational processing: this happens when we process a stimulus in relation to the relationships it has with other events, sensations (Gestalt psychology). The Gestalt perspective provides several principles that relate to the way our relate to the way our brains organize stimuli: - THE CLOSURE PRINCIPLE states that people tend to perceive an incomplete picture as complete, we will fill the blanks based on our prior experience - THE SIMILARITY PRINCIPLE tells us that consumers tend to group together objects that share similar physical characteristics - THE FIGURE-GROUND PRINCIPLE states that one part of a stimulus will dominate (the figure) and other parts recede into the background (the ground) - JOINT VS SEPARATE refers to whether products are presented as a group or independently of one another  Semiotics: the meaning of the meaning The field of semiotics studies the correspondence between signs and symbols, and their role in how we assign meaning. Every marketing message has three basic components: 1. OBJECT: the product that is the focus of the message 2. SIGN: the sensory image that represents the intended meanings of the object 3. INTERPRETANT: the meaning we derive from the sign An icon is a sign that resembles the product in some way (Ferrari and horse). A index is a sign that connects to a product because they share some property. A symbol is a sign that relates to a product by either conventional or agreed-on association. CHAPTER 4 – LEARNING, REMEMBERING AND KNOWING (3Q) How do we Learn? Learning refers to the acquisition of information, behaviors or abilities. We can also learn even if there is an unintentional acquisition of knowledge: incidental learning. Psychologist advance several theories to explain the learning process. These theories range from those that focus on simple stimulus-response connections (behavioral theories) to perspectives that regard learning as a set of internal mental process that acquire and construct knowledge from observing what others say and do (cognitive theories). Behavioral Learning theories Behavioral learning theories assume that learning take place as the result of responses to external events. They approach the mind as a “black box”, with things that go into the box (stimuli) and things that go out of the box (responses). It can be divided by: - CLASSICAL CONDITIONING: occurs when a stimulus that elicits a response is paired with another stimulus that initially does not elicit a response on its own. Over time, this second stimulus causes a similar response because we associate it with the first stimulus. It can be explained with an example about dogs: when you pay a neutral stimulus (a bell) with a stimulus known to cause a salivation response in dogs. The powder was an unconditioned stimulus (UCS) because it was naturally capable of causing the response. Over time, the bell became a conditioned stimulus (CS) because the dog learned to associate the bell with the meat powder and began to salivate at the sound of the bell only. The response was a conditioned response (CR). Repetition of conditioning effects increases the strength of stimulus-response associations and prevents the decay of these associations in memory. In marketing, these associations are crucial to many marketing strategies that rely on the creation and perpetuation of brand equity, in which a brand has strong positive associations in a consumer’s memory and commands a lot of loyalty. Any more than three exposures to a marketing communication are wasted. It can be possible to have “too much” of a good thing and no longer pay attention to it (advertising wear-out) and consumer can react even more negatively and become less interested in the brand (advertising weariness). This could lack to some effects:  Ø Stimulus Generalization: stimuli similar to a CS may evoke similar responses, the generalization is called halo effect. The application of it can happen with: - Family Branding: many products capitalize on the reputation of a company name - Product line extension: marketers add related products to an established brand - Licensing: companies often “rent” well-known names - Look alike packaging: putting their products in packages like those of popular brands Ø Stimulus Discrimination: your dog differentiate when it hears that you open the door vs when it hears someone opens Ø Extinction: conditions may disappear over time when a UCS does not does not follow a CS - INSTRUMENTAL CONDITIONING: occurs when we learn to perform behaviors that produce positive outcomes and avoid those that yield negative outcomes. It can be explained with an example about pigeons: it can be teaches them to dance and play Ping- Pong and then rewarding them for desired behaviors. We may learn the desired behavior over a period of time as shaping process rewards our intermediate actions. It occurs in one of three ways: Ø When the environment provides positive reinforcement in the form of a reward, this strengthens the response, and we learn the appropriate behavior Ø Negative reinforcement also strengthens responses so that we learn the appropriate behavior Ø Punishment occurs when unpleasant events follow a response In marketing, marketers rewards or punishes a consumer for a purchase or a consumption decision. Frequency marketing is a popular technique that rewards regular purchasers with prizes that get better as they spend more. Cognitive Learning theories Cognitive Learning theory approaches learning as a set of internal mental processes. - OBSERVATIONAL LEARNING: occurs when we watch the actions of others and note the reinforcements they receive for their behaviors. This is a complex process where people store these information in memory as they accumulate knowledge, and then they use this information at a later point to guide their own behavior. Modeling is the process of imitating behavior of others. Theory of mind is a cognitive skill that refers to knowing and being aware of one’s own and of other people’s mental states. This skill allows children to become better negotiators to get things they want. This pass through distinct stages of cognitive development: 1. LIMITED: children younger than age 6 do not employ storage and retrieval strategies 2. CUED: children between the ages of 6-12 employ these strategies but only when prompted to do so 3. STRATEGIC: children 12 and older spontaneously employ storage and retrieval strategies In marketing it can be shown what happens to desirable models that use or do not use their products, because they know that consumers often will imitate these actions later.  Remembering Memory is a process of acquiring information and storing it over time so that it will be available when we need it. The mind is like a computer: data are input processed, and output for later use in revised form. 1. In the encoding stage, information enters in a way the system will recognize 2. In the storage stage, we integrate this knowledge with what is already in memory 3. During the retrieval stage, we access the desired information The way we encode information helps to determine how our brain will store this information. Ø Episodic memories relate to events that are personally relevant and that we have personally experienced Ø Sensory memory stores the information we receive from our senses, it is temporary Ø Short-term memory (STM) also stores information for a limited period of time. We store this information as we combine small pieces into larger ones in a process called chunking, where a chunk is a configuration that is familiar to the person and that they can think about as a unit Ø Long-term memory (LTM) allows us to retain information for a long period of time. A cognitive process of elaboration allows information to move from STM to LTM - WHAT MAKES US FORGET? In a process of decay, the structural changes that learning produces in the brain simply go away. Forgetting also occurs because of interference: as we learn additional information, it displaces the previous information. Consumers may forget stimulus response associations if they subsequently learn new responses to the same or similar stimuli (retroactive interference) or prior learning can interfere with new learning (proactive interference). - WHAT HELPS US TO REMEMBER? Most of the information that enters LTM does not go away. The salience of a brand refers to its prominence or level of activation in memory. The von Restorff Effect shows that almost any technique that increases the novelty of a stimulus also improves recall. Memory markers can encapsulate certain time period and serve as reminders of personal or collective experiences (photos on social media), and photos can also serve as a form of memory preservation. - HOW DO MEASURE CONSUMERS’ MEMORIES FOR MARKETING MESSAGES? Two basic measures of impact are recall asking consumers to independently think of what they have seen without any prompt at all (free test), and recognition asking if consumers recognize a brand from a list (multiple test). A problem of this could be response bias, a contamination where people give the response based on what they think they are supposed to give. Willfully ignorant memory is a form of remembering only those things we like about the brand How do we organize what we know? The brain is organized as an associative network and the knowledge structures are like a complex spider webs filled with pieces of data: links form between nodes. When a node link with other nodes, the process is called spreading activation and allows us to shift back and forth among levels of meaning: - Brand-specific: knowledge is stored in terms of claims the brand makes  - Communication-specific: knowledge is stored in terms of the marketing communication - Brand identification: knowledge is stored in terms of the brand name - Product category: knowledge is stored in terms of how the product works - Evaluate reactions: knowledge is stored as positive or negative emotions A relevant type of schema is a script: a sequence of events an individual expects to occur. For instance, the superordinate level is choosing the dessert, the basic level is choosing which type of dessert and the subordinate level is choosing the precise dessert. Hybrid products feature characteristics from two distinct domains The networks of brands alongside all the associations we make with them are called consumption constellations (if they own this, they must own that). For becoming an expert we need embodied knowledge: we develop and grow our knowledge through our own actions and by witnessing others’ actions. - MARKETING APPLICATIONS OF CONSUMERS’ KNOWLEDGE STRUCTURES: If a product is a really good example of a category, it is a category exemplars tend to exert a disproportionate influence on how people think of the category in general. First entrants in a product category (like Tesla in electric vehicles) are called pioneer brands, in contrast they have follower brands SECTION 3 – BUYING AND HAVING: CHOOSING AND USING PRODUCTS CHAPTER 6 – ATTITUDES AND HOW TO CHANGE THEM (4Q) The power of attitudes An attitude is a lasting (because it tends to endure over time), general evaluation of people (it applies to more than a momentary event), objects, advertisements or issues. We call anything toward which one has an attitude an attitude an attitude object (AO). It is formed by three components: 1. Affect = feeling 2. Behavior = doing 3. Cognition = knowing The functional theory of attitudes explains how attitude facilitate behavior: The UTILITARIAN FUNCTION relates to the basic principles of reward and punishment (pleasure or pain) The VALUE-EXPRESSIVE FUNCTION relate to the consumer’s self-concept (what the product say about the person) The EGO-DEFENSIVE FUNCTION is an attitude we perform to protect ourselves from external threats A KNOWLEDGE FUNCTION applies when a person is in an ambiguous situation or when they want to confront new product We refer to these two distinct ways of deciding as slow thinking (type 1) and fast thinking (type 2). Marketing researchers may use multiattribute attitude models to understand our beliefs. It contains three specific elements: 1. Attributes are characteristics of the AO (certain characteristic) 2. Beliefs are cognitions about the specific AO (specific attribute) 3. Importance weights reflect the relative priority of an attribute to the consumer Mood involves temporary positive or negative affective states not linked to a particular event, emotions tend to be more intense and they are relating to a certain event. Mood congruency refers to the idea that our moods tend to shape our judgments. This is studied by neuromarketing. There are some messy factors: - AMBIVALENCE: both positive and negative components are simultaneously accessible - EXPLICIT AND IMPLICIT ELEMENTS: explicit are those attitudes that consumer is conscious of, implicit those that occur outside of our awareness - SOCIAL PRESSURE How do we form attitudes? Consumers vary in their commitment to an attitude. There are three (increasing) level of commitment: 1. Compliance: we form an attitude because it helps us to gain rewards or avoid punishment (superficial, likely to change when others no longer monitor our behavior) 2. Identification: occurs when we form an attitude to conform to another person’s or group’s expectations 3. Internalization: deep-seated attitudes that become part of the value system (difficult to change because they are so important to us) The Consistency Principle tells that we value harmony among our thoughts, feelings and behaviors and a need to maintain uniformity among these elements motivate us. If necessary, we change our thoughts to make them consistent with other experiences. It is correlated with the theory of cognitive dissonance where people take some action (eliminate, adding, changing) to resolve the dissonance when is confronted with inconsistencies. This theory focuses on situations in which two cognitive elements clash (es. I know smoking cause cancer -> I smoke) The Balance Theory considers how people perceive relations among different attitude objects, and how they alter their attitudes so that these remain balanced. It involves relations among three elements: (1) a person and their perception, (2) an attitude object, (3) some other person or object. We call the resulting attitude structures triads. Persuasion: how do marketers change attitudes? Persuasion is an active attempt to create or change attitudes. The Elaboration Likelihood Model (ELM) assumes that: Ø Under conditions of high involvement (system 2 processing) like something with a lot of perceived risk, we take the central route to persuasion (the steak): SLOW PERSUASION. People can offer counterargument in response to a message. This responds to “What? – quality of the argument”  Ø Under conditions of low involvement (system 1 processing) we take a peripheral route, where we tend to focus on the more superficial components of a brand: FAST PERSUASION. This highlights the paradox of low involvement: when we don’t care as much about a product, the way it’s presented increases in importance. This responds to “How? – no argument” The term narrative transportation describes the extent to which someone feels immersed in a story and is thus “transported” into an action. This is a very powerful way to convey a message because it’s like to create a story. Consumers immersed in the story are more likely to believe that the narrative is real without questions or counterarguments. The persuasion knowledge model is that consumers develop knowledge about persuasion attempts and then call upon this experience whenever they believe someone is trying to change their mind. Crafting Persuasive Communications Strategies The communications model captures all the elements marketers need to consider when they want to connect with their customers: 1. SOURCE: where the communication originates 2. MESSAGE: the structure of the message has a significant effect 3. MEDIUM: the way the message is conveyed (TV, social media…) 4. RECEIVERS: who receive and interpret the message 5. FEEDBACK: reactions 6. CONSUMER-TO-CONSUMER: exchanges around the source A popular strategy called permission marketing acknowledges that a marketer will be more successful when they communicate with consumers who have already agreed to listen to them. 1. THE SOURCE: credibility and attractiveness are two particularly important characteristics. Credibility refers to a communicator’s expertise, objectivity and the consumer’s beliefs that this person is competent. Knowledge bias implies that a source’s knowledge about a topic is not accurate: the issues of this are the fake news. After a while, people appear to “forget” about the negative source and change their attitudes anyway: this is called sleeper effect. Attractiveness refers to the social value recipients attribute to a communicator and relates to the person’s physical appearance, personality. The most convincing sources are the other consumers. 2. THE MESSAGE: this variable includes how we say the message and what we say. There are some types of message appeals. Rational Appeal -> engage cognitive processes, make you think -> Slow persuasion. - Comparative advertising: refers to a message that compares two or more recognizable brands and weighs in terms of one or more specific attributes - Two-Sided appeals: present both positive and negative information Emotional Appeal -> engage affective processes, make you feel -> Fast persuasion - Sex appeals: for products like perfumes to autos feature heavy doses of erotic suggestions - Humor appeals: funny advertisement  - Fear appeals: emphasize the negative consequences that can occur unless the consumer changes a behavior on an attitude Appeals that use narrative devices are also so effective. Many ads take the form of an allegory, which a story about an abstract trait or concept that advertisers tell in the context of a person, animal, vegetable. Resonance combines a play on words with a relevant picture and employs an element that has a double meaning. SHOULD WE REPEAT THE MESSAGE? – Psychologist calls this the mere exposure phenomenon, where advertisers find positive effects for repetition even in mature product categories. The two-factor theory explains the fine line between (1) familiarity and (2) boredom: it proposes that two separate psychological processes operate when we repeatedly show an ad to a viewer. 3. THE MEDIUM: the message is placed before or after the medium. The new world of advertainment (fusion between advertising and entertainment) can take many forms: - Native advertising: refers to digital messages - Product placement: the insertion of real products in movies, TV series… - Advergaming: online games merge with interactive advertisements - Reality engineering: occurs when marketers appropriate elements of popular culture and use them as promotional vehicles CHAPTER 7 – DECIDING (3Q) Fast or slow thinking? We have two different ways of deciding as slow thinking (system 2) where processes are slow, deliberative, analytic, and fast thinking (system 1) where processes are fast, autonomous, and intuitive. Rational (slow) decision making When we think slow, consumers approach decision making from a rational and cognitive perspective. The steps are: Ø STEP 1 - PROBLEM RECOGNITION: significant difference between our current situation and some state we desire Ø STEP 2 – INFORMATION RESEARCH: the process by which we survey the environment for appropriate data to make a reasonable decision. We find an inverted-U relationship between knowledge and search effort. A filter bubble occurs when websites and social platforms we consult serve up answers based upon what they “think” we want to see Ø STEP 3 - EVALUATE ALTERNATIVES: we call the alternatives a consumer knows about the evoked set and the ones they seriously consider the consideration set. When we look to products, we focus on some specific features: evaluate criteria are the dimensions we use to judge the merits of competing options. To choose between options, consumers may use compensatory rules and noncompensatory rules.  A compensatory rule allows a product to make up for its shortcomings on one direction by excelling on another (slow thinking - type 2): ü The simple additive rule: leads to the option that has the largest number of positive attributes. If one product has 5 positive attributes and the second one 4, the consumer will choose the first one. ü A weighted additive rule: allows the consumer to consider the relative importance of the attributes by weighing each one. If price is more important than quality, a product with a lower price will carry more weight in the decision than one with higher quality. The final choice takes these weights into account, and the product with the highest total score is chosen When we make habitual decisions, we use a noncompensatory rule (fast thinking - type 1): ü The lexicographic rule: select the brand that is the best on the most important attribute. If quality is the top priority, they will choose the product with the best quality, ignoring other factors. ü The elimination-by-aspects rule: the consumer prioritizes attributes and evaluates products based on them, eliminating options that don’t meet the required standard on each attribute. If a product falls short on an important attribute, it is excluded. ü The conjunctive rule: established cut-offs for each attribute. If a product doesn’t meet the minimum requirement for any attribute, it’s eliminated, even if it performs well in other areas. Ø STEP 4 – PRODUCT CHOICE: we must choose the product. This spiral of complexity is called feature creep. The condition of having too many choices is called choice overload (hyperchoice), forces us to make repeated decision that may drain psychological energy while decreasing our abilities to make smart choices. Ø STEP 5 – POSTPURCHASE EVALUATION: it occurs when we experience the product or service we selected and decide whether it meets our expectations. In social scoring both customers and service providers rate one another’s performance. Fast thinking and Rules of thumb Habitual decision making describes the choices we make with little or no conscious effect. When we buy the same brand over and over could mean inertia, which means that it involves less effort to throw a familiar package into the cart, or brand loyalty that describes a pattern of conscious decision to continue buying the same brand. The homo economicus (“economic man”) regard us ideal decision makers with complete rationality and complete access to all the information we need to make an informed decision. Is not possible for our brains to process all that detailed information about everything, so sometimes we are more homo ludens, that regard the emotional aspects of consumption. System 1 processing, because it is a lot faster and less rational, can lead to behavioral biases. The best possible result is a maximizing solution. This “good enough” perspective is called bounded rationality: it recognizes that many decisions aren’t worth agonizing over, so long as the end result is adequate. Mental accounting is a concept that explains how people categorize, evaluate, and keep track of their financial decisions in different mental “accounts,” which are often separate and context-dependent. We often do certain assumptions instead of conducting an extensive information search: these shortcuts are called heuristics. These “mental rules of thumb” range from the general (“higher-priced products are higher-quality products”) to the specific (“buy Domino’s pizza”). The unseen power of context effects: framing, priming and nudging The sensations we experience are context effects that influence how we think about products we encounter. 1. Framing: how we pose the question to people or what exactly we ask them to do. Researchers who work on prospect theory analyze how the value of a decision depends on gains or losses and how the choice is communicated to the buyer 2. Priming: is a stimulus that encourages people to focus on some specific aspect of their lives to shift people attention. Temporal priming refers to a start/end of a time period (es. start/end of summer sales) 3. Nudging: how a nudge – a deliberative change by an organization that intends to modify behavior – can result in dramatic effects CHAPTER 8 – BUYING, USING AND DISPOSING (2Q) The shopping experience Consumers vary in terms of their shopping orientation depending on the product categories and store types we consider. A key distinction is shopping for purpose (utilitarian – functional or tangible) or shopping for fun (hedonic – pleasurable or intangible). The hedonic shopping motives include the following: - GRATIFICATION SEEKING: shopping for stress relief, to alleviate a negative mood - IDEA SHOPPING: the desire to keep up with trends and new fashions - ADVENTURE SEEKING: seeking stimulation, excitement, adventure - SOCIAL SHOPPING: enjoyment of shopping with friends and families - ROLE PLAY: imagining how friends and relatives will accept the gift - VALUE SHOPPING: the thrill of purchasing items on sale and hunting for bargains and discounts The process of design thinking identifies a series of steps the designer should take to make interacting with a product service beginning with empathy for the customer’s experience. For this reason, marketers are taking a close look at the consumer journey, the steps before, during and after the shopping experience, with the approach to total quality management (TQM). Many stores creates imaginative environments that transport shoppers to fantasy worlds with the strategy called retail theming: ü Landscape themes: images of nature, earth, animals ü Marketscape themes: associations with manufactured places ü Cyberspace themes: images of information and communication technology ü Mindscape themes: abstract ideas and concepts, fantasy Designers pay a lot of attention to atmospherics, the conscious designing of space and its various dimensions to evoke certain effects in buyers. IN STORE SHOPPING - When a shopper decides to buy something in the store, one of two different processes explains why: 1. They engage in unplanned buying when they are unfamiliar with a store’s layout or they are under time pressure 2. They engage in impulse buying when they experience a sudden, irresistible urge The importance of point-of-purchase (POP) stimuli explains why product packages increasingly play a key role in the marketing mix. A buyer-seller situation is like many other dyadic encounters (two-person groups): it’s a relationship in which both parties must reach some agreement about the roles of each participant during a process of identity negotiation. Our overall reactions are what researchers call consumer satisfaction/dissatisfaction (CSD). Satisfaction is more than a reaction to how well a product or service performs. Dissonance in shopping, often referred to as post-purchase dissonance, is the feeling of uncertainty, anxiety, or regrets that consumers experience after making a purchase. This psychological discomfort arises when there’s a conflict between a consumer’s expectations or values and the reality of the purchase, leading them to question if they made the right choice. E-commerce and the digital world When a shopper visits a store in real life and then buys the product online is called showrooming The bitcoin system uses peer-to-peer technology to operate with no central authority or banks and relies upon a technique called blockchain. A pretailer is a technique that provides exclusive styles by prodding manufacturers to produce runway pieces they wouldn’t otherwise make because store buyers weren’t sure anyone would pay the money for them. Researchers define liquid consumption in terms of three core attributes: 1. Ephemeral: people can have liquid relationship to products and brands, in which they value those objects only in certain contexts and for limited lengths of time (ex. Instagram stories) 2. Access-based: liquid products are accessed rather than owned outright (ex. subscription to Netflix) 3. Dematerialized: liquid products use fewer materials in order to deliver their desired functionality (from physical to digital products) New ways to have and use: ownership and the sharing economy A new economic model is called collaborative consumption, created by the rising of sharing economy. People rent or borrow instead of buying it. Doing business with other consumers rather than with companies goes by the name P2P (peer-to-peer) commerce. Thrifting is the activity where people replace some of their purchases of brand-new products with items they find in these venues. The climate crisis Product disposal refers to how we get rid of a product once we’re done with it. During lateral cycling, one consumer exchanges something they own for something the other person owns The dark side of buying and using Maladaptive consumption refers to substance-related addictions like alcohol, tobacco… Compulsive shopping refers to the repetitive and often excessive shopping performed as an antidote to tension, anxiety and depression. The consumer has little or no control over their consumption ü Gambling: exhibit a classic addictive cycle ü Hoarding: the acquisition of possessions without disposing of them ü Tech and social media addiction: refers to the compulsive overuse of digital experiences, dark design are interfaces that are intentionally designed to trick the user SECTION 4 – BEING: USING PRODUCTS TO CREATE AND COMMUNICATE IDENTITY CHAPTER 9 – IDENTITY AND THE SELF (2Q) The self The self-concept summarizes the beliefs a person holds about their own attributes and how they evaluate the self on these qualities. Some parts are stable, but each of us modifies some elements of it as we make our way through life. Self-esteem refers to the positivity of a person’s self-concept. Each element that contributes to our self-concept is an identity: any category label with which a consumer self-associates that is amenable to a clear picture of what a person in that category looks like, thinks, feels and does. There are three form of the self: 1. The ideal self is a person’s conception of how they would like to be 2. The actual self refers to our more realistic appraisal of the qualities we do and don’t have 3. Our avoidance self influences what we choose to buy and use THE SELF AND THE OTHERS We often engage in a process of impression management in which we work hard to “manage” what others think of us. The process of imagining others’ reactions is called looking-glass self. We tend to pattern our behavior on the perceived expectations of other, as a form of self-fulfilling prophecy, so we behave in a certain way. Exposure to ads can trigger a process of social comparison, in which the person tries to evaluate their appearance by comparing it to the people in these images. Self-construal describes the degree to which we think of our self as independent form others versus felling independent with them: - People who grew up in Western cultures tend to focus on the independent self, thinking of themselves in terms of unique traits and attributes and de-emphasizing others - People who grew up in Eastern cultures tend to focus on the interdependent self, defining their identities by their relationships with others Consumers who score high on a scale of public self-consciousness express more interest in clothing than consumers who have lower. Similarly, high self-monitors are attuned to how they present themselves in their social environment. THE MALLEABLE SELF The dramaturgical perspective views people as actors who play different roles. The self has different components called role identities. How can we decide which role use? The sociological tradition of symbolic interactionism tells that we assign meaning to any situation or object when we interpret the symbols in this environment. Self-image congruence models suggest that we choose products when their attributes match some aspect of the self and we think that is aesthetically pleasing, this choice makes us feel better about ourselves. Consumers perceive customized products more positively because they allow more alignment with their self- image: self-image-consistent product perceptions. The choices we make in terms of what brands we buy, what we consume are more valuable to us when they link to an identity we desire: this process is called self-signaling and it’s a message to ourselves that our choices sync with how we want to think about ourselves We consume to express our identities Consumers actively assemble consumption practices, products and brands to express themselves as part of their identity project The external objects that we consider a part of us constitute the extended self. We describe four levels: 1. INDIVIDUAL LEVEL: personal possessions like jewelry, cars, clothing… 2. FAMILY LEVEL: consumer residence 3. COMMUNITY LEVEL: sense of belonging from the town or residence 4. GROUP LEVEL: consumer subcultures  New ways to express identity A consumer that has a very clear and confident picture of their identity is called self-concept clarity. Compensatory consumption is a way for consumers to respond to threats to their self-esteem by consuming products that link to that aspect of the self-concept. It is important when you have yet to completely form a social identity. Symbolic self-completion theory suggests that people who have an incomplete self-definition tend to complete this identity when they acquire and display symbols they associate with that role (ex. professors who were relatively unsuccessful were more likely to hang a lot of awards and diplomas on their office) Sometimes consumers (especially adolescents) avoid certain products or brands because they would not fit in a specific social group. The practice of avoiding products is called anti-consumption. The theory of embodied cognition is a way to explain that “states of the body modify states of the mind”. Our behavior and observations of what we do and buy shape our thoughts rather than vice versa. Standing in a confident way even if you don’t feel confident (power posing) affects brain activity. Our digital selves represent our identity via social media profiles. Gender and consumer behavior Expectations about how people based on their gender should act, dress or speak are called gender roles. Many commercial sources like girls’ dolls or boys’ toy guns are examples of gender socialization. The differences of agentic orientation, that emphasizes instrumentality and independence (boys: playing war) and communal orientation, that values inclusiveness and interdependence (girls: playing house with dolls) are represented by genders. Sex-typed products feature shapes and color our culture associates with one gender or the other, even if the product itself is pretty much gender-neutral. In contrast with this, androgyny products are neither specifically masculine nor feminine – it may include characteristics we associate with both traditional gender categories. Some companies that sell exclusively to one gender may decide to test the water with the other gender when they promote gender-bending products. The body Body image refers to a consumer’s subjective evaluation of their physical self. Decorating the physical serf serves many purposes: - TO SEPARATE GROUP MEMBERS FROM NONMEMBERS - TO PLACE THE INDIVIDUAL IN THE SOCIAL ORGANIZATION - TO PLACE THE PERSON IN A GENDER CATEGORY - TO ENHANCE SEX-ROLE IDENTIFICATION - TO INDICATE DESIRED SOCIAL CONDUCT - TO INDICATE HIGH STATUS OR RANK - TO PROVIDE A SENSE OF SECURITY  CHAPTER 10 – PERSONALITY, VALUES AND LIFESTYLES Personality Personality refers to our unique psychological makeup and describes the consistent pattern in which we respond our environment. It stabilizes by the age of 30 years old. In the Freud’s Theory the id, the primal part of human mind, operates according to the pleasure principle that is our basic desire to maximize pleasure and avoid pain guides our behavior. The superego (the counterweight of the id) is the person’s conscience: it internalizes society’s rules and tries to prevent the id from seeking selfish gratification. The ego is the system that mediates and tries to balance these opposing forces according to the reality principle, which means it finds ways to gratify the id that the outside world will find acceptable. This Freud’s theory highlights the potential importance of unconscious motives that guide our purchases. Carl Jung developed his own method called analytical psychology, where the cumulative experiences of past generation shape who we are today. These shared memories create archetypes, ideas and behavior patterns. Motivational research borrowed Freudian ideas to understand the deeper meanings of products and advertisements. This technique used depth interviews with consumers to probe deeply into their motivation. The Zaltman Metaphor Elicitation Technique (ZMET) is a market research tool based on our tendency to think about something in terms of the images and metaphors that represents qualities. Personality traits are the identifiable characteristics that define a person. The most widely recognized approach to measuring personality traits is the Big Five Inventory, a set of five dimensions that form the basis of personality: 1. Openness to experience: the degree to which a person is open a new ways of doing things 2. Conscientiousness: the level of organization and structure a person needs 3. Extroversion: how well a person tolerates stimulation from people 4. Agreeableness: the degree to which a person feels sympathy, kindness and consideration toward other people 5. Neuroticism: how well a person copes with stress One important personality trait is whether we believe that humans and general phenomena are changeable versus fixed: entity theorists view things as fixed and unchanging meanwhile incremental theorists view things as more flexible and dynamic. - NEED FOR TOUCH: use the haptic system, or sense of touch, to transmit and understand information. It includes a facet that is autotelic which reflect the pleasurable aspect of touch, and a facet that is instrumental which reflect the usefulness aspect of touch - NEED FOR PERFECTION: perfectionist are driven by dichotomous thinking, a type of black and white cognitive thinking style - REACTANCE: is an individual predisposition to resist and oppose any influence perceived as a restriction on one’s autonomy - FRUGALITY: frugal people choose to resourcefully use what they already own Values A value reflects what is important to us or what we consider good or bad. A belief system is a structured set of principles, ideas, or convictions that guide a person’s understanding of the world, shaping their attitudes, behaviors, and perceptions. The set of rankings constitutes a culture’s value system. However, it is possible to identify a general set of core values that uniquely define a culture. VALUE RELATED TO THINGS The value related to things is materialism that refers to the importance people attach to worldly possessions. According to cultivation theory, another powerful source of influence is cumulative exposure to television and the lifestyles we observe on fictional shows. The affluent characters we see on TV have a big impact on what we expect to encounter in real life. One important trend that runs counter to materialism is minimalism: it describes a simple lifestyle, with an emphasis of getting rid of things you don’t need. VALUE RELATED TO MONEY Compared with those with a spending orientation, individuals with a saving orientation are naturally motivated to exercise self-control to save money and monitor spending. A phenomenon called lifestyle-based depletion is the feeling that one cannot keep up with the responsibilities and expectations placed upon them. VALUE RELATED TO TIME In the online marketing, the open rates (the percentage of people who open an email message from a marketer) vary throughout the day. Marketers think this is related to time with a feeling called time poverty. A person’s priorities determine their timestyle. The researchers identified four dimensions of time: 1. Social dimension: refers to individuals’ categorization of time 2. Temporal orientation dimension: depicts the relative significance individuals attach to past, present or future 3. Planning orientation dimension: alludes to different time management style 4. Polychronic orientation dimension: distinguishes between people who prefer to do one thing at a time from those who have multitasking timestyles Our experience of time is subjective, it’s important to marketers to understand psychological time because we’re more likely to be in a consuming mood in a certain times than we are in others. People can seek out experiences like deceleration: slow down the experience of time by decreasing the travel distance, technology.. For understanding values, we can look them with a psychological approach which includes a set of terminal values, desired and states, and a set of instrumental values, actions we need to take to achieve our terminal values. The means-end chain model assumes that people link specific product attributes (indirectly) to terminal values. We choose among alternative means to attain some end state that we value, such as freedom or safety. It involves a technique called laddering to uncover consumers’ associations between specific attribute and general consequences. Lifestyles and consumer identity Lifestyle defines a pattern of consumption that refers how a person chooses to spend time and money: these choices play a key role in defining consumer identity. A lifestyle marketing perspective recognizes that people sort themselves into groups based on the things they like to do, how to spend their leisure time. Psychographics involves the use of psychological, sociological and anthropological factors to determine how the market is segmented by the propensity of groups within the market to make particular decision about a product, person and ideology. Demographics describe who buys, but psychographics describes why they buy. Marketers often develop products that appeal to different lifestyle subcultures. It’s common to create a “core costumer” who inspires product design: these profiles are called buyer personas. You write a “story” about your ideal customer based on market research and real data about your existing customer. Researchers attempts to group consumers according to combination of three categories of variables: activities, interests and options (AIOs). Marketers use the results of the study to: - Define the target market - Create a new view of the market - Position the product - Better communicate product attributes - Develop product strategy - Market social and political issues To meet these needs, they develop their own lifestyle segmentation typologies where respondents answer questions that allow the researchers to cluster them into a set of distinct lifestyle group. The best known is the Values and Lifestyle System (VALS2tm), and these are the characteristics: Ø INNOVATORS: the top, successful consumers with many resources The next three groups also have sufficient resources but differ in their outlooks on life: Ø THINKERS: satisfied, reflective and comfortable Ø ACHIEVERS: career-oriented and prefer predictability to risk or self-discovery Ø EXPERIENCERS: impulsive, young The next four groups have fewer resources: Ø BELIEVERS: strong principles and favor proven brand Ø STRIVERS: like achievers but fewer resources Ø MAKERS: action-oriented to tend to focus their energies on self-sufficiency Ø STRUGGLERS: the bottom of the economic ladder, concerned with meeting the needs of the moment The roles brands play in our lives A brand personality is the set of traits people attribute to a product as if it were a person. We often think about brands in terms of personality dimension. Consumers absorb brands’ meaning through a meaning transfer process, where brand themselves gather cultural meaning by borrowing from cultural systems. Marketers who can create brand resonance cement a bond with the consumer that is really difficult to break. This bond occurs when a brand truly speaks to some aspect of a consumer’s individual life or culture. Self-congruity occurs when a consumer sees their self-concept reflected in a brand. The meshing of objects from many different categories to express a single lifestyle is a relationship called co-branding strategies where they team up with other companies to promote two or more items. Product complementarity occurs when the symbolic meanings of different products relate to one another. Consumers use these sets of products we call consumption constellation to define, communicate and perform social rules. Authenticity is one of the most important criteria for many consumers. Brand storytelling is based on a long tradition of brand narrative research, which has documented the immersive power of stories and the ability for readers of the stories to engage with and participate in the story. SECTION 5 - BELONGING CHAPTER 12 – HOW GROUPS DEFINE US (2Q) Sources of group influences According to the social identity theory each of us has several “selves” that relate to groups. Is so important that we think at ourselves not only as I, but as we. Minimal group paradigm is a method by which researchers can show that even when they arbitrarily assign subjects to one group or another, people favor those who wind up in the same group. People who simply eat the same things (incidental good consumption IFC) like, trust and cooperate more with another more than those who don’t. A reference group is an actual or imaginary group that significantly influences an individual’s evaluation, aspirations or behavior. The group is a socially category that reflects his lifestyle and values. - Associative reference group: consist of people we know, integral part of our social identity - Aspirational reference group: consist of a group of people we admire (ex. athletes, actors) In some cases we do the opposite if we want to distance ourselves from dissociative groups. The perceived typicality of an influencer, that is the extent to which they conform to the stereotypical consumer of the brand, can change the strength of a brand’s associated reference group. It follows a “U shape”. For society to function, their members develop norms or informal rules that govern behavior. There are two main types of norms:  1. DESCRIPTIVE NORMS: refer to our perceptions of what others are doing and then we are more likely to engage in the behavior (that could be good like recycling or bad like vaping) 2. PRESCRIPTIVE NORMS: refer to our beliefs about what other think we should do But there are also different types of norms: Ø ASSOCIATIVE NORMS: refer to our beliefs about a group we belong Ø DISSOCIATIVE NORMS: norms that are associated with a dissociative reference group Conformity is a change in beliefs or actions as a reaction to real or imagined group pressure. The red sneaker effect is the assumption that someone who makes unconventional choices is more powerful or competent, so he can afford to go out on a limb. Conformity operates on an unconscious level: social default is a phenomenon where a person imitates others without even thinking about it. It is especially influent in situations where consumers don’t have strong preferences. Word of mouth Word-of-mouth (WOM) is the product information that individual transmit to other individuals. It tends to be more reliable and trustworthy than messages from more formal marketing channels because we get the word from people we know. Stimulate WOM to build buzz (an aura of excitement) around a product or a service. Viral marketing occurs when an organization motivates visitors to forward online content to their friends. Negative word-of-mouth is weighted more heavily by the consumer than positive comments: especially when we consider a new product or service, we’re more likely to pay attention to the negative information than to positive. The buzz can also turn into a negativity spiral, a process through which negative messages inspire others to add to the conversation. This spiral can trigger social media firestorms, a sudden increase in negative WOM. Serial reproduction is a method to examine how content mutates. You can compare it to a game of “telephone” give a sentence to one person and they have to reproduce the sentence to the next person and so on (often a while other sentence comes out) INFORMATION FLOWS IN SOCIAL NETWORK Sociometric methods trace communication patterns among members of a network, these techniques allow researchers to map out the interactions among people. Social networks consist of a set of socially relevant nodes connected by one or more relations: nodes are members of the network who are connected to one other and the ties are the connections among nodes. Flows occur between nodes and are exchanges of resources (ex. shares). Information flows differently as a function of tie strength that refers to the nature of the bond between people: it can range from strong primary (ex. family) to weak secondary (ex. colleagues). The original framework of social network called two-step flow model of influence proposed that a small group of influencers disseminates information because they can modify the opinions of many people. These conversations in turn create information cascades that occur when a piece of information triggers a sequence of interactions. One of the motivations that drive us to share is the motivation for social empowerment, the desire to feel an impact on others. WHO INFLUENCE US An opinion leader is a person who is knowledgeable about certain products and whose advice others take seriously. They possess social power, the capacity to alter the actions of others: ü Referent power: if a person admires the qualities of a person or a group, he tries to copy the referent’s behavior ü Information power: if a person know something others would like to know ü Legitimate power: power that comes by virtue of social agreements such as the authority we give to police officers, professors.. ü Expert power: power because someone is expert on a certain subject or content area ü Reward power: a person or group with the means to provide positive reinforcement ü Coercive power: when we influence someone because of social or physical intimidation The viral marketing explosion highlights the power of the megaphone effect: the web makes a huge audience available to everyday consumers. A similar effect is the dispreferred marker effect, where online posts that are really negative may make the writer look judgmental. The surrogate consumer is a third part that provides input into our purchase decisions. Unlike the opinion leader, we often compensate the surrogate for the advice (ex. interior decorators, professional shoppers…) The product curators are those who assemble merchandise on behalf of manufacturers or store. These often include recommendations about how to use the items. Who influences us: collective decision making The collective decision making process often includes two or more people who may not have the same level of investment in the outcome, the same preferences or the same priorities. Different group members play important roles: - INITIATOR: the person who brings up the idea - GATEKEEPER: the person who conducts the information search and controls the flow of information available to the group - INFLUENCER: the person who tries to sway the outcome of the decision - BUYER: the person who make the purchase - USER: the person who consumes the product or service There are also some factors that influence group decisions: - Interpersonal need: a person’s level of investment in the group (ex. longtime member) - Product involvement and utility: the degree to which a person will use the product - Responsibility: for procurement, maintenance and payments - Power: the degree to which one member of the group exerts influence over others COLLECTIVE DECISION IN HOUSEHOLDS In households and in particular in a family there should be synoptic ideal for the members to make decision jointly, for example to assign well-defined roles. The oppositional brand choice is the choice of a brand you know the partner doesn’t like because you have less power than him. COLLECTIVE DECISION IN ORGANIZATIONS Organizational buyers are people who purchase goods and services for the companies use in manufacturing, distribution or resale. These individuals buy from business-to-business (B2B) marketers that must satisfy the needs of organizations such as corporations, hospitals. The classic buyclass theory of purchasing divides organizational buying decisions into three types that range from the least to the most complex: 1. A straight rebuy is a habitual decision, automatic choice 2. A modified rebuy situation involves limited decision making 3. A new task involves extensive problem solving Who influences us: consumer communities Consumer collectives are networks of social relations centered on a brand (ex. Nike), a practice (ex. online skating) or a digital platform (ex. Twitter). Collectivities can be of all sizes, visibility and longevity. Some, called brand secret microcollectives are very small. Consumers also rally in movements toward or against causes they care about. Social media platforms enable a culture of participation: a democratic internet. A brand community is a group of consumer who share a set of social relationships based on usage of or interest on a product. These members create a collective value creation. KEY CHARACHERISTICS OF ONLINE COMMUNITIES ü Standards of behavior: rules that specify what members can and can’t do ü Members contribution: users that contribute content ü Degree of connectedness: members are motivated to stay connected ü Network affects: the quality of the site improves the number of users increases CHAPTER 14 – CULTURE (2Q) Cultural system Culture is a society’s personality that includes both abstract ideas, such as values and ethics, and material objects and services, such as the automobiles, clothing and food. Consumer researchers in the consumer theory movement study consumer behavior with ethnography, which is a longitudinal inquiry from the inside of a cultural phenomenon or group to unravel insights into the cultural process. Culture is not static, but evolves continually as it synthesizes old ideas with new ones. A cultural system consists of:  Ø Ecology: the way a system adapts to its habitat Ø Social structure: the way people maintain an orderly social life Ø Ideology: the mental characteristics of a people and the way they relate to their environment and social group HOW WE LEARN ABOUT OUR CULTURE The process of learning the values, beliefs and behaviors in our own culture is called enculturation; in contrast, acculturation refers to the learning that occurs when we travel to a new culture and learn that culture’s value system and ways of doing things. It’s helpful to compare and contrast cultures to isolate specific dimensions that might make them similar or different from your own. One of the most widely used measures of cross-cultural values is Hofstede’s dimensions of national culture, which scores a culture in terms of its standing on six dimensions: 1. POWER DISTANCE: the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally 2. INDIVIDUALISM: the degree to which people’s self-image is defined in terms of “I” (individualism) or “we” (collectivism) 3. MASCULINITY: the extent to which a society stresses achievement, ambition and differentiated gender roles (masculinity) versus caring and nurturing behaviors, and more fluid gender roles (femininity) 4. LONG-TERM ORIENTATION: these values are thrift and perseverance 5. INDULGENCE VERSUS RESTRAINT: the extent to which a society allows relatively free gratification of basic and natural human drives related to enjoying life and having fun These dimensions are useful to marketers that want to understand how members of specific cultures may respond differently when they encounter the same situations or marketing messages. We don’t form our tastes and product preferences in a vacuum: the many images mass media present to us drive our choices. The meaning transfer model captures the movement of cultural meaning and explains that brands gain meaning in fashion and advertising system from being associated with values and symbols that have a strong cultural meanings. Then, these meaning transfers to consumers when they use those brands. The judges or “tastemakers” that have a say in products are called cultural gatekeepers. A myth is a story with symbolic elements that express a culture’s value. When we analyze them, we notice that many stories involve binary opposition, which represents two opposing ends of some dimension (ex. good vs evil). Some people create their own consumer fairy tales, stories that include magical agents, donors and helpers to overcome villains and obstacles. Consumption rituals A ritual is a set of multiple, symbolic behaviors that occurs in a fixed sequence and is repeated periodically. Brands whose products we use to perform our rituals fortress brands because once their products become embedded in our ceremonies we’re unlikely to replace them. Extraordinary beliefs – beliefs that either cannot be affirmed by science or that even contradict established science – are an important part of consumer rituals. Many businesses benefit from supplying ritual artifacts to consumers: these are items we need to perform rituals (ex. wedding rice, birthday candies). We often follow a ritual script to identify the artifacts we need, the sequence in which we should use them and who uses them. Grooming rituals are ceremonies that help us to transition from our private-self to our public-self (ex. shower, skincare). In a gift-giving ritual we procure the perfect object, remove the price tag, wrap the object and deliver it to the recipient. It proceeds in three distinct stages: 1. Gestation: the giver procures an item to mark some event 2. Presentation: process of gift exchange 3. Reformulation: both giver and receiver redefine the bond between them to reflect their new relationship after the exchange Holiday rituals are festivities like Christmas, but for instance Halloween is an antifestival, an event that distorts the symbol we associate with other holidays. Rites of passage are rituals we perform to mark a change in social status (ex. death, getting divorced) 1. Giving away the bride: years ago it was common for fathers to use daughters as currency to pay off a debt or to appease a member of a more powerful tribe. The bride wore a veil so that the payee would not refuse her as payment in case she turned out to be less attractive 2. The best man: a man that the job was to stand next to the couple to be sure the bride wasn’t kidnapped 3. The tossing of the garter: the bride and the groom were expected to conclude the marriage and retire immediately to a nearby room to close the deal 4. Throwing rice: this action is supposed to encourage the newlyweds to get busy and start producing offspring Products are vessels of cultural meanings Sacred consumption occurs when we set apart objects and events from normal activity and treat them with respect (more special). In contrast, profane consumption describes objects and events that are ordinary or everyday (less special). Sacralization occurs when ordinary objects, events and even people take on sacred meaning. An item is sacralized as soon as it enters a collection, and it takes on special significance to collectors (ex. sneakerheads). Desacralization occurs when we remove a sacred item or symbol from its special place or duplicate it in mass quantities so that it loses its “specialness” and becomes profane. Objectification occurs when we attribute sacred qualities to mundane items. One way to this process occurs via contamination, whereby the objects we associate with sacred events or people become sacred in their own right. Collecting refers to the systematic acquisition of a particular object or set of objects. We distinguish this from hoarding which reflects a reluctance to discard used objects. Many multinational firms are household names, widely recognized by literally billions of people. The dominance of these marketing powerhouses creates a global consumer culture that unites people around the world by their common devotion to brand-name consumer goods. The diffusion of innovations The diffusion of innovations refers to the process whereby a new product, service, or practice spreads through society. An innovation is any product or service that consumers perceive to be new. Adoption rates of an innovation can go exponential when the process reaches the moment of critical mass, what one author calls the tipping point. TYPES OF ADOPTERS - One-sixth of the populations (laggards) are slow. - The other two-thirds (late adopters) are somewhere in the middle. - Innovators are always on the lookout for novel products or services, and tend to be a risky taker. - Early adopter shares many of the same characteristics of innovators, but an important difference is their high degree of concern for social acceptance. The Gartner hype cycle is a widely used approach to help analysts chart the progress of a technological innovation. This model describes five key phases of a technology’s life cycle: 1. Innovation trigger: a potential technology breakthrough sparks interest 2. Peak of inflated expectations: the excitement is at its highest. A few success stories attention create buzz 3. Though of disillusionment: companies begin to recognize the technology’s limitation 4. Slope of enlightenment: companies begin to understand the technology’s realistic applications 5. Plateau of productivity: the technology matures and becomes mainstream TYPES OF INNOVATIONS Researchers identify three major types of innovations: 1. A CONTINUOUS INNOVATION is a modification of an existing product, where the company makes small changes to position the product 2. A DYNAMICALLY CONTINUOUS INNOVATION is a significant change to an existing product (ex. transition to gas station to charging stations) 3. A DISCONTINUOUS INNOVATION creates really big changes in the way we live (ex. airplanes, tv, cars) What determines whether an innovation will diffuse? A successful innovation should possess these attributes: ü Compatibility: the innovation should be compatible with consumers’ lifestyles ü Trialability: the innovation should be tried by the consumers before ü Complexity: the product should be low in complexity ü Observability: innovations that are readily apparent are more likely to spread because we can learn about them more easily  ü Relative advantage: the product should offer relative advantage to over alternatives THE DIFFUSION OF CONSUMPTION PRACTICES Practices are “routinized things people do, say and understand” that are situated within a larger system of social structures. These practices often move from one context to another, acquiring new “carries” taking new meanings: this process is called practice diffusion. Ø Demarcation: elements of a practice are set apart from both the origin context in which the practice developed and the new context to which the practice is moving Ø Imitation: others start to replicate certain elements of the practice Ø Acculturation: parts of the practice start to become integrated with the dominant culture Ø Innovation: elements of the practice are unbundled from one another and recombined with elements of other practices, transforming the practice One used approach to predicting whether people will adopt a new form of technology or information system is the technology acceptance model (TAM). It suggests that the likelihood of change is based on two factors: the perceived usefulness of the new option and its perceived ease of use. THE FASHION SYSTEM The fashion system includes all the people and organizations that create symbolic meanings and transfer those meanings to cultural goods. A meme is an idea or product that enters the consciousness of people over time: they travel fast, make fun of brands. Some marketers have figured out that their consumers are the best source for new product idea: this is crowdsourcing, which describes the growing practice of soliciting ideas for new products by user community. Under this model, companies no longer market to consumer, they mark with them. The process of value co-creating emphasizes the involvement of consumers both in the production and design process and in the product use process. The wisdom of crowds perspective argues that under the right circumstances groups are smarter than the smartest people in them.