Part A: consumers in the marketplace.

An introduction to consumer behavior

Consumer behaviour : focuses on totality of consumer’s decisions with respect to the acquisition, consumption, and disposition of goods, services, time, and ideas by human decision making units over timeDemographics: descriptive characteristics of a population: age, gender, income, occupationPsychographics: a persons’ lifestyle and personalitySubcultures: smaller groups within a culture, vb. Teens, ethnic groupsMarket segmentation strategies: targeting a brand only to specitic groups of consumers

Valid segmentation process: Consumers within the segment are similar to one another in terms of product needs, and these needs

are different from consumers in other segments. Important differences among segments can be identified The segment is large enough to be profitable. The consumers in the segment will respond in the desired way to the marketing mix designed for

them.Database marketing: tracking consumers’ buying habits by computer and crafting products and information tailored precisely to people’s wants and needs.

Marketing’s impact on consumers

U-commerce: The use of ubiquitous networks. Via bv smartphone.=> je passeert aan een Mcdonalds en krijgt een mail met de promoties van de dag. Digital native: sinds 2001 : consumer grew up ‘wired’ in a highly networked, always-on world where digital technology has always existed.Web 2.0: the rebirth of the internet as a social, interactive medium from its original roots as a form of oneway transmiddian from producers to consumers. Horizontal revolution: information flows across people (social media)Biat-and –switch selling strategy: consumers are lured into the store with promises of inexpensive products with the sole intention of getting them to switch to higher-priced goods.

Do marketers manipulate consumers

Marketers do not create artificial needs, but they do contribure heavily to the socialization of people in contemporary society and thus to the establishment of the social system of needs. Economics of information (outdated): advertising is an important source of consumer information. (economic cost of the time spend searching for products.

Paradigm: the fundamental assumptions researchers make about what they are studying and how to study it.Consumer behaviour is in the middle of a paradigm shift. Current: positivism : - emphasizez that human reason is supreme and that there is a single, objective truth that can be discovered by science

- Encourage us to stress the function of objects, to celebrate technology and to regard the world as a rational, ordered place with a clearly defined past, present and future.

New: interpretivism : - stress the importance of symbolic, subjective experience, ande the idea that meaning is in the mind. There are no single right or wrong references.

Assumptions Positivist approach Interpretivist approachNature of reality Objective, tangible single Socially constructed, multipleGoal Prediction understandingKnowledge generated Time-free, context independent Time-bound, context-dependantView of causality Existence of real causes Multiple, simultaneous shaping

eventsResearch relationship Separation between researcher

and subjectInteractive, co-operative, with researcher being part of phenomenom under study

Consumer culture theory (CCT):

2. a consumer society

People often buy products not for what they do, but for what they mean. A person will choose the brand that has an image consistent with their underlying ideas

Cultural symbolism of product meanings influence physiological processes such as taste.

Four distinct types of consumption activitieso Consuming as experience : o Consuming as integration : o Consuming as classification: o Consuming a play:

Relationships a person may have with a brand:o Self-concept attachment: The product helps to establish the users’ s identityo Nostalgic attachment : The product serves as a link with a past selfo Interdependence : The product is a part of the user’s daily routine.o Love: The product elicits bonds of warmth, passion or other strong emotion.

Brand communities :vb. MG-owners in USA, nutella Experience economy: vroeger bakte men zelf een verjaardagstaart, nu is alles geregeld in bobbo’s land.

Als je gaat praten met de bank over een lening voor een huis => alles in een doos in de vorm van een baksteen.

Postmodernism: we live in a period where the modern order, with its shared beliefs in certain central values of modernism and industrialism, is breaking up. Postmodernism quentions the search for universal truths and values and the existence of objective knowledge. Pluralism: co-existence of various thruths, styles and fashion

Six key features: o Fragmentation: splitting up of what used to be simpler and more mass orientatedo De-differentiation: blurring of distinction vb. Politics and show business.o Hyperreality: making real what was just fantasy. (red apples sigarettes kill bill)o Chronology: consumers nostalgic search for the authentic and a

preoccupation with the past. Retro brands revived.o Pastiche (nabootsing). Vb the marketing code i.p.v. the da vinci code.o Anti- foundationalism : ‘anti-campain campain’

Global consumer culture

Etic perspective: focus on commonalities across cultures: universal messages will be appreciated by people in many countries

Emic perspective : attempts to explain a culture based on the cultural categories and experiences of the insiders

4 groups of customers who evaluate global brands in the same way:1. Global citizens (55%) : see the global success of a company as a signal of quality and innovation

Are concerned about responsibility on workers rights, consumer health.2. Global dreamers (23%) : see global brands as qualtity products.

Not as concerned with social responsibility as are the global citizens3. Antiglobals (13%) : skeptical that transnational companies deliver higher-quality goods

Dislike brands that preach American values + do not trust global companies to behave responsibly

4. Global agnostics (9%) : evaluate a global product by the same criteria as local brands. Globalization = glocalization: all global phenomena exist and become meaningful in a local context.

Vb 4 types of food consumption : Global food: fast food, burgers en pizza, instant coffee, found everywhere and belong

nowhere Expatriate food: authentic meals and products from other cultures Nostalgia food: search for local authenticity Creolization of food: blending various traditions in new ones.

Politics of consumption

Compulsive buying: the act of shopping itself is an addictive experience for some customers; customers in newly marketized economies are even more vulnerable.

Overconsumption is a structural problem that has evolved in our affluent, consumer society. Affluenza: negative sides of a society over-focused on its consumption Ethical customer : use their buying pattern as a weapon against companies they don’t like and in support

of the companies that reflect values similar to their own. Consumer boycotts: 4 factor predict boycott participation:

1. The desire to make a difference2. The scope for self-enhancement.3. Counterarguments that inhibit boycotting4. The cost to the boycotter of constrained consumption.

Corporate social responsibility

Motivation, value and lifestyle

Motivation: the process that cause people to behave as they do. From a psychological perspective motivation occurs when a need is aroused that the consumer wishes to satisfy.

Utilitarian: a desire to achieve some functional or practical benefit Hedonic: an experiental need, involving emotional responses or fantasies

Motivational strength

Drive theory: focusses on the biological needs that produce unpleasant states of arousal. We are motivated to reduce the tension caused by this arousal. => goal orientated behaviour => return to homeostasis (balanced state.=> runs into difficulties when it tries to explain some facets of the human behaviour that run counter to its predictions

Expectancy theory: behaviour is largely pulled by expectations of achieving desirable outcomes

Motivational direction

Biogenic need: need for certain elements necessary to maintain life: food, water, air & shelterPsychogenic need: reflect the priorities of a culture, need for status, power, affiliation,…Productivity orientation: continual striving to use time constructively.Motivation is largely driven by affect (raw emotion)Sentiment analysis: a process that scours the social media universe to collect and analyse the words people use when they describe a specific product or company.

Motivational conflict

A goal has valence: can be positive or negative. Reaching a goal avoiding negative outcome Approach-approach conflict: person must choose between 2 desirable alternatives. Hamburger of

braadworst? Theory of cognitive dissonance : a state of dissonance occurs when there is a psychological inconsistency

between 2 or more beliefs (or products) Approach – avoidance conflict: when we desire a goal but wish to avoid it at the same time . We willen ijs

maar geen dikke poep. We willen een bontmantel, maar geen dode dieren. Avoidance – avoidance conflict: choice between 2 undesirable alternatives.

How can we classify consumer needs?

Need for achievement: personal accomplishment Need for affiliation: to be in company of other people Need for power: to control one’s environment. Need for uniqueness: Maslow’s hierarchy of needs: a hierarchy of biogenic ens psychogenic needs that specifies certain leverls of

motives. The order of development is fixed: we must attain a certain level before we activate a need for the next higher one.

Maslow’s hierarchy is only helpful to marketers in so far as it reminds us that consumers may have different need priorities in differenti consumption situation,… 4C’s of social media: connect, create, consume and control.

Hidden motives: The psychoanalytical perspective on personality

Freudian theory: much of the human behaviour stems from a fundamental conflict between a persons’ desire to gratify their physical needs and te necessity to function as a responsible member of society.

o The id: is selfish and illogical. Pleasure principle: behaviour is guided by the primary desire to maximize pleasure and avoid pain.

o The superego: counterweight to the id. The conscience: It internalizes society’s rules and works to prevent the id fromm deeking selfisch gratification.

o The ego: system that mediates between id en superego. Tries to balance these two opposing forces according to the reality principle.

Motivational research: (based on Freudian interpretations): socially unacceptable needs are channeled into acceptable outlets. Product use or avoidance is motivated by unconscious forces wich are often determined in childhood. Ernest dichter. In depth interviews

Neo-freudian theories: an individual’s personality is more influenced by how he handles relationships with others than by how he resolves sexual conflicts. Vb. Alfred adles, harry stack Sullivan, carl jung.

Trait theory: focuses on the quantitative measurement of personality traitso Innovativenesso Materialismo Self-consciousnesso Need for cognition

Frugality: this personality type tends to favour cost-saving measures such as timing showers & eating leftovers.

Marketing researchers have not been able to predict consumer’s behaviour on the basis of measured personality traits:

o Many of the scales are not sufficiently valid or reliableo Personality tests are typically developed for specific populations (vB; mentally ill) => no relevance

to a more general populationo Often marketers don’t administer the tests under the appropriate conditions.o Ad hoc changes dilute the validity of the measureso Trait scales measure gros, overall tendencies

Brand personality

= the set of traits people attribute to a product as if it were a person. Dopplegänger brand image: looks like the original, but it is in fact a critique of it. Brand equity: refers to the extent to wich a consumer holds strong, favourable and unique associations

with a brand in memory

Consumer involvement

= a person’s perceived relevance of the object (product, brand, advertisement, purchase decision) based on their inherent needs, values and interests.Can be viewed as the motivation to process information. Levels of involvement:

Inertia: absolute lack of interest in a marketing stimulus Passion; when consumers are truly involved with a product, they enter a flow state

Product involvement: consumers’ level of interest in a particular product. Mass customization => personalization of products and services for individual customers at a mass-production price

Message-response involvement: refers to the consumer’s interest in processing marketing communications. (television : low-involvement medium, print : high –involvement.)

Trategies to increase involvement:o Appeal to the consumers’ hedonic needso Use novel stimuli, such as cinematography, sudden silences, unexpected movements in

commercialso Use prominent stimuli (loud music and fast action) to capture attention in commercialso Incluse celebrity endorsers to generate higher interest in commercialso Provide value that customers appreciateo Let customers make the messages . consumer generated content.

Values

= a believe about some desirable end-state that transcends specific situations and guides selection of behaviour A person’s set of values plays a very important role in their consumption activities Core values: every culture has a set of core values that it imparts to its members. Vb. Italiaanse vrouwen

kuisen 20u /week, amerikaanse 4U/week. Value systems: every culture is characterized by it’s members’ endorsement of a value system, it is usually

possible to identify a general set of core values which uniquely define a cultureo Enculturation: the process of learning the beliefs and behaviours endorsed by one’s own cultureo Acculturation: learning the value system and behaviours of another culture.o Socialization agents : parents, friends, teachers, media

In many cases, values are universal. What sets cultures apart is the relative importance, or ranking of these universal values;

Cultural values (security, happiness), consumption specific values (convenient shopping) , product-specific values (ease of use, durability)

Consumer value: value for a consumer is the consumer’s evaluation of a consumer object in terms of wich general benefit the consumer might get from consuming it.

o Efficiencyo Excellenceo Statuso (self-) esteemo Playo Aesthetics7ethicso Spirituality

The Rokeach value survey:o A set of terminal values + instrumental values (actions needed to achieve the terminal values)

Not widely used. List of values (LOV) list of 9 consumer values which can be related to differences in consumer behaviour Schwartz value survey: 56 different values organized in 10 motivational domains

More cross-culturally valid.

The means-end chain model

This approach assumes that people link very specific product attributes to terminal values: We choose amiong alternative means to attain some end state that we value.

Materialism: another perspective on the ‘why’ of consumption

Refers to the importace people attach to wordly possessions products valued by high materialists are more likely to be publicly consumed and to be more expensive.

Materialism increases from middle childhood to early adolescence and decreased from early adolescence onwards. => linked with self-esteem.

Materialism is not directly linked to affluence Materialism is a consequence of several factors 2 ways of dealing with materialism : justifiying & excusing oneself People are happier when they spend money on experiences instead of material objects. The only consumption category that was positively related to happiness involved leisure: vacation,

entertainment…. Hedonic adaptation: consumers get more ‘bang for their buck’ when they buy a bunch of smaller things

over time, rather than blowing it all on one big purchase. . Over time the rush of a major purchase will dissipate and w’re back to where we started;

Cosmopolitanism is related to materialism

Sustainability: a new core value?

= conscientious consumerism Carbon footprint Virtual water footprint: represents how much water is required to produce a produc. Greenwashing

Lifestyles and consumption choices

Lifestyle refers to a pattern of consumption that reflects a person’s choices about how they spend time and money, but in many cases it also refers to the attitudes and values attached to these behavioural patterns.

Lifestyles may be considered as group identities

Psychographics

= use of psychological, sociological and anthropological factors to determine how the market is segmented by the propensity of groups within the market – and their reasons – to make a particular decision about a product, person, ideology, or otherwise hold an attitude or use a medium/

Lifestyle profile : looks for items that differentiate between users and non-users of a product. Product specific profile: identifies a target group and then profiles these consumers on product-

revelant dimensions A general lifestyle segmentation: places a large sample of respondents into homogeneous groups

based on similarities of their overall preferences. A product specific segmentation: tailors questions to a product category

Mostcontemporary psychographic research attempts to group consumers according to some combination of 3 categories of variabels: Activities, Interests & Opinions. (AIOs) + ook nog demographics.

1st step in a psychographic analysis is to determine which lifestyle segments are producing the bulk of customers for a particular product. 80/20 rule (20% consumes 80% volume

Who uses the brand => isolate heavy, moderate and light users.

Marketers use data from psychographic surveys To define target market To create a new view of the market To position the product To better communicate product attributes

To develop product strategy To market social and political issues.

Lifestyle marketing

A lifestyle marketing perspective recognizes that people sort themselves into groups on the basis of the things they like to do, how they like to spend their leisure time and how they choose to spend their disposable income.

Psychographic segmentation typologies: Break the population up in 5 to 10 segments, each cluster is given a descriptive name and a profile

of the ‘typical’ member is provided to the client. Vb. Avant-gardians, pontificators, , chameleons, …

2 european examples : RISK & CCA RISK: reseach institute on social change

o Asks a battery of questions to identify people’s values and attitudes about a wide range of issues

o Each individual is located in a virtual space described by three axes, representing the three most discriminating dimensions in the data material

1. Exploration/stability: vertical axis2. Social/individual : horizontal axis3. Global/local

CCA socio-styles: centre de communication avanceo Questionnaires are not attitude-based but a variety of question formats & projective

techniqueso 16 lifestyles, grouped in 6 ‘mentalities’

Are exiting because they seek to provide a sort of complete sociological view of the market The assumption that these general segments have relativelu homogeneous patterns of consumer

behaviour is far from proven ! Not much predictive power Generally weak theoretical foundation, reliability and validity

Behavioural targeting Presenting people with advertisements based on their internet use.

Big companies are tracking where we go and keeping this information#privacy

Product disposal

Lateral cycling= 2e hands

10. groups and social media

Reference groups

= an actual or imaginary individual or group conceived of having significant relevance upon an individual’s evaluations, aspriations, or behaviour

Informal influence Utilitarian influence Value-expressive influence

We’re not as likely to take others’ preferences into account when we choose products:o That are not very complexo That are low in perceived risko That we can try before we buy

2 dimensions that influence the degree to wich reference groups are important:o Will we consume the item publicly or privately?o Is it a luxury of a necessity?

The social power of reference groups:o Referent power : trying to copy the referent’s behaviouro Information power: knowing something others would like to know vb. Women’s wear dailyo Legitimate power : vb uniforms, white doctor coato Expert power: vb. Stephen hawkinso Reward power vb. De geode commentaren van de jury in Holland got talento Coercive power: threathening.

Normative influence : the reference group helps to set and enforce fundamental standards of conduct. Vb. Parents

Comparative influence: vb. A Harley Davidson club or Manchester united fan club. Types of reference groups:

o Formal vs informal groups Formal: large organization that has regular meeting times and officers

Easily identifiable and accessable: marketers have more control over their influencing

High in comparative influence Informal: groups of friends, students living in the fabiola.

Exert a more powerful influence on individual consumers High in normative influence

o Membership vs aspirational reference groups Membership reference groups = people we actually know Aspirational reference groups = people we admire / can identify with

o Indentificational reference groups ‘ordinary’ people whose consumptions activities provide informational social influence

Propinquity : As physical distance between people decreases and opportunities for interaction increase, relationships are more likely to form.

Mere exposure: we come to like persons or things simply as a result of seeing them more often.

Group cohesiveness : o Positive vs negative reference groups

Avoidance or dissociative groups : a negative reference group we want to distance ourself from.

Wan be more powerful than the desire to please the positive group. Anti-brand communities:

o Brand communities and tribes Brand community = A set of consumers who share a set of social relationships based

upon usage of or interest in a product. Typically do not live near each other. Organized events = brand-fests; (vb defender meeting) = collective value creation

Consumer tribe : similar to a brand community , although often unstable and short-lived. Some companies use tribel marketing

When reference groups are important:o De-individuation: individual identities get submerged within a group, we know we can get away

with more when we are in a group. (groepsaankopen)o Social loafing: We do not devote as much effort to a task because our contribution is part of a

larger group effort. => vb. We geven minder fooi wanneer we in groep op restaurant gaan. o Risky shift effect: group members show greater willingness to consider riskier alternatives

following group discussion Gevolg van social loafing? => diffusion of responsibility (lege patronen in sommige

geweren van een vuurpeleton.o People who shop with at least one other person tend to make more unplanned purchases, buy

more and cover more areas of a store. => home shopping parties (Tupperware); botox-parties

Conformity

= refers to a change in beliefs or actions as a reaction to real or imagined group pressure Norms: unspoken rules that govern behaviour; rules about gift-giving, sex roles, personal hygiene Normative social influence: occurs when a person conforms to meet the expectations of a person of0

Group Informational social influence : refers to conformity that occurs because the group’s behaviour is

taken as evidence of reality. Volgen wat de rest doet bijvoorbeeld zitten/staan/knielen in de kerk. Reasons for conformity

o Cultural pressures: o Fear of deviance: geen teamplayer, geen promotieo Commitment: islamitische staato Group unanimity, size and expertise: harder to resist the demands of a large number of peopleo Susceptibility to interpersonal influence: the need of others thinking highly of you.

Social comparison theory: we look to the behaviour of others to provide a yardstick (maatstaf) about reality.

o Similarity between the consumer and others used for social comparison boosts confidence that the information is accurate and relevant.

Anti-conformity VS independence: Anti-conformity: defiance of the group is the actual object of behaviour. Independence: marching the beat of own drum.

Reactance: the result when we are deprived to our freedom of choice vb. Censuur van boeken, we willen dat boek

The need for uniqueness: iemand op het feest draagt hetzelfde als jij, dat is niet leuk.

Opinion leadership

Opinion leader : people who are knowledgeable about products and whose advice others take seriously, they are frequently able to influence others’ attitudes and behaviours.

Technically competent Posses knowledge power Socially active and highly interconnectec in their communities Referent power: Tend to be similar to the consumer in terms of their values and beliefs Are often among the first buyers => absorb much of the risk

Monomorphic: expert in a limited field Polymorphic: expert in several fields Two-step flow model of influence :a small group of influencers disseminate information because they can

modify the opinions of a large number of other people.BUT influence is driven less by influential and more by interaction among those who are easily

influenced. Innovative communicator: likes to try new things and likes to take risks The market raven: likes to transmit marketplace info of all tye : +/- generalized opinion leader. Surrogate comsumer: is usuale compensated for their advice (interior designers, stockbroker,…) How do we find opinion leaders:

o Professional opinion leaders: doctors, scientists vb. Nieuwe hypoallergene lotion adverteert eerst bij dokters en hoopt dat zij dan hun product aanprijzen.

o Consumer opinion leaders: exploratory studies: researchers ai mto identify the profile of a representative opinion leader and then generalize these insights to the larger market.

o The self-designated method: surveys. Problem : some people have the tendency to inflate their own importance

o Sociometry: everyone on the planet is separated by only 6 other people. By interviewing participants and asking them to whom they go for product information ,

researchers can identify those who tend to be sources of product-related information. The ‘nodes’ in a map : opinion leaders.

Most precise, but very hard and expensive; Online opinion leaders: power users.

Word-of-mouth communication

Efficiency of WOM Consumers weigh negative WOM more heavily than they do positive comments. Rumours: as information is transmitted among customers, it tends to change. The resulting message

usually does not resemble the original at all.o Assimilation: distortion tend to change from ambiguous forms to more conventional ones as

subjects try to make them consistent with pre-existing schemas.o In general, people prefer transmitting good news over bad news => not true when companies are

the topic.o Cyberbullying

Buzz building :o Guerilla marketing

The social media revolution

Misschien nog eens lezen?

11. european family structures, household decision-making and age cohorts

The family

Extended family: 3 generations living together, often included not only the grandparents, but aunts, uncles and cousins

Nuclear family: a mother, a father + one or more children Household: shared residence and common housekeeping arrangement Family lifecycle (FLC) : a lifecycle approach assumes that pivotal events alter role relationships and trigger

new stages of life which modify our priorities. Vb. Birth of a first child, departure of the last child from the house, the death of a spouse, retirement , divorce. Movement through these life stages is accompanied by significant changes in expenditures on leisure, food, durables and services.

The intimate corporation: family decision-making

2 basic types of household decisions:o Consensual perchase decision: the group agrees on the desired purchase, differing only in terms

of how it will be achieved.o Accommodative purchase decision: group members have different preferences and cannot

agree on a purchase that will satisfy the minimum expectations of all involved. Interpersonal need (a person’s level of investment in the group). A child in a family

situation may care more about what their family buys for the house than a student living op kot

Product involvement and utility (the degree to which the product in question will be used or will satisfy a need)

Responsibility (for procurement, maintenance, payment,…) vb. Getting a dog Power (the degree to which one family member exerts influence over the others in

making decisions) Autocratic decisions: made by one spouse (de man kiest de auto, de vrouw de huisdecoratie) Syncretic decisions: jointly made decisions vb. Reis Family financial officer (FFO) who keeps track of the family’s bills and decides how any surplus will be

spent. Traditionally zijn het de wijfjes, zoo ok in het middellandse zee gebied en het hoge noorden. 4 factors determine the degree to which decisions will be made jointly of by one of the other spouse.

o Sex-role stereotypes: couples who believe in traditional sex-role stereotypes tend to make Individual decisions for sex-typed product

o Spousal resources : the spouse who contributes more resources to the family has the greater influence

o Experience: individual decisios are made more frequently when the couple has gained experience as a decision-making unit.

o Socio-economic status: more joint decisions are made by middle-class families than in either higher or lower class families.

Children as decision-makers: consumers-in-training

Parental yielding occurs when a parental decision maker is influenced by a child’s request and ‘surrenders’

Consumer socialization : process by which young people acquire skills, knowledgs en attitudes relevant to their functioning in the marketplace.o 2 primary sources of socialization

Influence of parents: both direct and indirect. They try to instill their own values about consumption in their children. + determine the degree to which children will be exposed to other information sources.

Media: television: ‘the electric babysitter’ Sex-role socialization: Cognitive development.

Age and consumer identity

Age cohort : consists of people of similar ages who have undergone similar experience. They share many common cultural heroes, important hirstorical events,…

Product sales can be dramatically affected by linking a brand to vivid memories and experiences, especially for items that are associated with childhood or adolescence

The teen market: IT totally rules

61 miljard Saachi & saachi: 4 themes of conflict common to all teens

o Autonomy vs belonging: teenagers need to acquire independence so they try to break away from their families + need to attach themselves to a support structure such as peers, to avoid being alone

o Rebellion vs conformity: o Idealism vs pragmatismo Narcissism vs intimacy

Living life to the fullest is mandatory They perceive the ‘digitized’ future as one that lacks warmth Immersive and engaging technology => more stress, + more work due to blurring home/office Very visually literate, clears understanding of a commercial’s aim, clichés will not be tolerated

Baby busters: ‘generation x’

Ages between 18 -29 125 miljard Boomerang kids : you throw them out, they keep coming back. Beer, fast-food , cosmetics

Baby boomers

Born between 1946 & 1964

The grey market

Key values o Autonomy: they want to lead active liveso Connected: value the bonds they have with friends and family. o Altruism: want to give something back to the worldo Personal growth: trying new experiences

Perceived age: how old a person feels. Marketers amphasize product benefits rather than age appropriateness.

Basic guidelines fot effective advertisingo Keep language simpleo Use clear, bright pictures

o Use action to attrack attentiono Speak clearly, and keep the word count lowo Use a single message, and emphasize brand extensionso Avoid extraneous stimuli

12. Income and social class

Consumer spending and economic behaviour

Behavioural economics (economic psychology): the individual and psychological side of economic decisionsStudies how customers’ motives and their expectations about the future affect their current spending

and how these individual decisions add up to affect a society’s economic welfare. The working poor: people with employment but making less than necessary to make ends meet. Individual income shifts were linked to two factors: a shift in women’s roles and increases in educational

attainment. Woman’s work: Men are not only more concentrates in higher paid sectors and occupations, but

within these sectors and occupations they are also more likely than women to hold supervisory responsibilities and if they do so their earnings tend to be relative higher.

Education: the younger generation is better qualified than the older generations; Consumer demand for goods and services depends on both our ability and willingness to buy. Discretionary spending : the money available to a household over and above htat required for a

comfortable standard of living. Consumer confidence: the extent to which people are optimistic or pessimistic about the future health of

the economy and how they will fare in the future. Influence how much money a consumer will pump into the economy when making discretionary

purchases. Surveys to ‘take the pulse’ of the European customer : Henley center, Eurostat, euromonitor.

Social class

Determined by a complex set of variables including inwome, family background and occupation. Determines how much is spent and how it is spent

People who are grouped within the same social class are approximately equal in terms of their social standing in het community. Work in roughly similar occupationsHomogamy : we tend to marry people in a similar social class to ours. ‘assortative mating’ Social stratification: the creation of culturally instituted divisions in a society Achieved vs ascribed status:

Achieved: earned through hard work Ascribed: The royal family

Components of social class.Occupation + income + educational attainmentOccupational prestige is often considered to be the single best indicator of social class.A straightforward relationship between income and social class is not so easily established

The relative value of social class vs income in predicting consumer behaviouro Social class appears to be a better predictor of purchases that have symbolic aspects, but low-to-

moderate prices. (vb cosmetics, alcohol, …)o Income is a beter predictor of major expenditures that do not have status or symbolic aspects. ( v

b een wreed goeie wasmachine)o Social class and income data together are better predictors of purchases of expensive, symbolic

products. (vb. Cars, homes, luxury goods) Social mobility: passage of individuals from one social class to another.

o Can be upward, downward or even horizontalo Horizontal: becoming a nurse instead of a junior school teacher.

Measurement of social class:

o Problems: Most measures were designed to accommodate the traditional nuclear family ( 2-

income families, young singles, …) A person might come from a low-status ethnic group, but have a high status job. Status crystallization: the impact of inconsistency on the self and social behaviour

Vb. Overprivileged condition: people making more money than is expected of those in their social class. Income >25% over the meridian for one’s class

Underprivileged consumers. Income <15% than the meridian The traditional assumption that the man defines de family’s social class is no longer true

Marketers have failed to sue social class information as effectively as they could for the following reasons:o They have ignored status inconsistencyo They have ignored intergenerational mobilityo They have ignored subjective social class o They have ignored consumers’ aspiration to change their class standingo They have ignored the social status of working wives.

Class structure around the world.o The biggest emerging markets : BRIC(s): brazilia; Russia , india , china , (south- Africa)o China: growing middle class, buying western luxury goodso India: among the fatest growing economies in the world. o Japan: office ladies: women 25-29 live with their parents + work outside homeo Middle east

How social class affects purchase decisions

Class differences in worldview:o The world of the working class is more intimate and constricted: local heroes,

Immediate needs (vb new fridge) dictate buying behaviour More likely to be conservative and family orientated

o Higher classes Focus more on longterm goals, vb; retirement

Taste culture : differentiates people in terms of their aesthetic and intellectual preferenceso Largely refects education (also income-related)

Types of codes used whithin different social stratao Restricted codes: dominant among the working class

Focus on the content of objects, not on the relationship o eLeborated codes: middle and upper class.

Are more complex and depend upon a more sophisticated world-view Targeting the poor: Targeting the rich

o Old money: discretion is a matter of honouro The nouveau riches

Status symbols

Keeping up with the joneses Who dies with the most toys wins. Conspicuous consumption : the peoples’ desire to provide prominent visible evidence of their ability to

afford luxury goods.

o The modern potlatch: a feast where the host showed off his wealth and gave extravagant presents to the guests. Vergelijk soms gigantische trouwfeesten.

o The leisure class: the most conspicuous consumption (for Veblen) conspicuous waste.o Status symbols died in the seventies, but came back in the nineties.

Parody display: deliberately avoid status symbols, seek status by mocking it

Capital and practices: class-based lifestyles.

Bourdieu: society is a competition for different types of capital. Capital: resources that are acknowledged

Economic : money, acces to money Cultural : education, cultural knowledge also a matter of ‘manners’ Social: networks, social connections

A person’s habitus: structuring set of classifications and tastes that permeates our lives and determine our ways of behaviour as well as our judgement of different social phenomena, in short, our lifestyles.

Distinction: the driver of this whole system is the process of distinction; Used to distinguish between 4 fundamental consumer types:

o The distinction between grid and group referes to an individual’s relation to their own social group and to the general social system (or grid)

High cultural capitalHigh economic capitalLow groupHigh grid

High cultural capitalLow economic capitalLow groupLOW grid

low cultural capitalHigh economic capitalLow grouplow grid

low cultural capitallow economic capitalhigh grouphigh grid

Practice theory: like the sportsperson’s feel for the game

14. cultural change processes.

Co-optation: outsiders transform the original meanings of a cultural product. it is common for mainstream culture to modify symbols from ‘cuttin edge’ subcultures for a larger audience to consume. Vb. Rap music used to be afr-american struggles and now is mainstream.

Cultural selection Characteristics of the evolution of styles and fashions:

o Styles are a refelction of more fundamental societal trendso A style begins as a risky or unique statement by a relatively small group of people and then

spreads as others increasingly become aware of the style and feel confident about trying it.o Styles usually originate as an interplay between the deliberate inventions of designers and

businesspeople and spontaneous actions by ordinary consumers who modify styles to suit their own needs.

o These cultural products travel widely, often across countries and even continents;o Influential people in the media play a significant role in deciding which will succeedo Most styles eventually wear out as people continually search for new ways to express themselves

and marketers scramble to keep up with these desires. CPS: cultural production system: The set of individuals and organizations responsible for creating and

marketing a cultural product.o 3 subsystems=

A creative subsystem : responsible for generating new symbols and/or products A managerial subsystem: responsible for selecting, making tangible, mass producing and

managing the distribution of new symbols and/or products. A communications subsystem: responsible for giving meaning to the new product and

providing it with a symbolic set of attributes that are communicated to consumers. Cultural gatekeepers: influence the products that are eventually offered to consumers. Film, restaurant,

car reviewers, interior designers, disc jockeys, retail buyers magazine editors. Throughput sector. Cultural intermediaries.

Prosumer: the consumers contributes to the end-design of the product Art vs craft;

o Art-product: an object of aesthetic contemplation without any functional valueo Craft-product: admired because of the beauty wirh which it performs some function

High art vs low art: Reality engineering: occurs as elements of popular culture are appropriated by marketers and converted to

vehicles for promotional strategies vb. Disneyland, Product placement refers to the insertion of specific products and/or the use of brand names in film and tv

scripts. Advergaming

o Compared to a 30-second TV spot, advertisers can get viewers’ attention for a much longer timeo Physiological measures confirm that players are highly focused and stimulated when they play a

game;o Marketers can tailor the nature of the game and the products in it to the profiles of different

users. Strategy game educated user , action game younger user o The format gives advertisers great flexibility : blank spaces in to ad virtual ads.o There’s great potential to track usage and conduct marketing research

Cultivation hypothesis: relates to media’s ability to shape consumers’ perception of reality

The diffusion of innovations

Innovation: any product or service that is perceived to be nex by consumers. Vb. Crocs Diffusion of innovations refers to the process whereby a new product, service or idea spreads through a population Innovators (2,5%) are

Likely to have higher education Likely to have higher income levels Likely to be socially active.

Early adopters (13,5%) share many of the same characteristics , but are more concerned about social acceptance.

Types of innovations:o Innovations can be categorized in terms of the degree to which they demand changes in behaviour

from adopter. 3 types: Continuous innovation: modification of an existing product. Vb. Coke zero

adoption represents only minor changes in consumption habits Dynamically continuous innovation: more pronounced change in an existing product vb. Self-

focusing camera modest impact

Discontinuous innovation: creates major changes in the way we live. Vb. Airplane, computer Several factors are desirable for a new product to succeed:

o Compatibility: the innovation should be compatible with consumers’ lifestyle. Vb. Hair-removal cream for men = too feminine.

o Trialability: since an unknown is accompanied by high perceived risk, people are more likely to adopt an innovation if they can experiment with it prior to making a commitment.

o Complexity: the product should be low in complexityo Observability: an innovation that is easely oberservable is more likely to spread. o Relative advance. Most importantly. The product should offer relative advantage over alternatives;

The fashion system

= consists of all those people and organizations involved in creating symbolic meanings and transferring these meanings to cultural goods. fashion processes affect all types of cultural phenomena.Fashion ≠ a fashionFashion: the process of social diffusion by which a new style is adopted by some group of customers

Collective selection: the process by which certain symbolic alternatives are chosen over others Psychological models of fashion:

o Shifting erogenous zones: different parts of the female body are the focus of sexual interest, and clothing styles change to highlight or hide these parts.

o High-self monitors have been demonstrated to stress the brand of a consumer good more than low self-monitors who are on the other hand more positive to functional product attributes.

Economic models of fashion supply and demand: items in limited supply have high value, while those readily available are less desirable conspicuous consumption (Veblen): the whealthy consume to display their prosperityprestige-exclusivity effect: high prices create high demand. snob-effect: lower prices actually reduce demand

Sociological models of fashion The collective selection model : focus on a subculture’s adoption of a fashion and its subsequent

diffusion into society as a whole. Vb hip-hip, goth Trickle-down theory: focus on the relationship between product adoption and class structure.

There are 2 conflicting forces that drive fashion change.1. Subordinate groups try to adopt the status symbols of the groups above them

as they try to climb up the ladder of social mobility. dominant styles thus originate with the upper class and trickle down to those below2. Those people in the superordinate groups are constantly looking below them on

the ladder to ensure that they are not imitated. they respond to the attempt of lower classes to ‘impersonate’ them by adopting even newer fashions.

This approach must be modified to account for new developments in mass culture= A perspective based on class structure cannot account fot the wide range of

styles that are available simultaneously in our society Consumers tend to be more influenced by opinion leader who are similar to

them In times of individualism, standing out is just as important as fitting in. More and more consumption-based subcultures adopt their own fashions in

order to reinforce their community feeling and distinguish themselves from outsiders.

Current fashions often originate with the lower classes and trickle up. A ‘medical’ model of fashion

Meme theory: a meme is an idea or product that enters the consciousness of people over time. Meme s spread like a virus. The memes that survive tend to be distinctive and memorable

A few people initially use the product, but change happens in a hurry when the process reaches the moment of critical mass : tipping point. Faxmachine.

Cycles of fashion adoption Fashion lifecycle : see P597 1.innovation – 2.rise – 3.acceleration – 4. General acceptance -

5.decline – 6.observance. Introduction stages – acceptance stages – regression stages. Variations in fashion lifecycles:

Classic: a fashion with an extremely long acceptance cycles. It’s in a sense anti-fashion vb. Sneakers geïntroduceerd in 1917

Fad: very short-lived fashion, usually adopted by relatively few people non-utilitarian: does not perform any explicit purpose function often adopted on impulse; people do not undergo stages of rational decision-making diffuses rapidly, gains quickly acceptance, and is short-lived.

o True fad: vb. Pet rocko Cyclical fad vb. Yo-yoo Fad-to-franchise vb. barbieso Generational fad vb. Trolls

15. consumption and cultural differences

Subculture and consumer identity

Subculture: a group whose members share beliefs and common experiences that set them apart from others . These memberships can be based on age, race, ethnic background and consumption preferences.

Micro-culture: members freely choose to identify with a lifestyle or aesthetic preference. Vb. Skinheads, trekkies

Ethnicity and marketing strategies:o Members of minority groups are more likely to find an advertising spokesperson from their own

group to be more thrustworthy.o High-context cultures : are likely to infer meanings that go beyond the spoken word. Symbols and

gestures carry much of the weight of a message.o Low-context cultures: more literal.

Ethnic and racial stereotypes:o Positive: vb. Scotch tape , scotch inno Negative: move over noami, there’s a new diva in town (chocolate)

The acculturation process.

Acculturation: the process of movement and adaption to one country’s cultural environment by a person from another country.

Acculturation agents: people and institutions that teach the ways of a culture.o Culture of origin: family, friends, mosque, local businesseso Culture of immigration: state schools, dutch-language media.

Consumer acculturation outcomes:o Assimilation: adopt products, habits and values that are identified with mainstream culture.o Maintenance: of practices associated with the culture of origin.o Resistance: resenting the pressure to submerge identity and taking on new rollso Segregation: live and shop in places physically separated from the host community.

The best indicator of ethnic assimilation is the extend to which members of an ethnic group have social interactions with members of other grous in comparison with their own.

Progressive learning model: people gradually learn a new culture as they increasingly wome in contact with it.

Religious subcultures

The impact of religion on consumption

Not been studied extensively in marketing, possibly because it is seen as a taboo subject. However: the little evidence that has been accumulated indicates that religious affiliation has the potential

to be a valuable predictor of consumer behaviour. Islamic marketing:

o Halal certifications

Geographical influences on consumptionEuro-consumers

A number of trends seem to be valid for consumers markets in the eu. A tendency to more unevenly distributed income An increasing number of older people A decrease in householdsize

A growing proportion of immigrants Increase in environmental concern and consumption of ‘green’ products Relatively increasing consumption of services compared to durable goods.

Euro-consumers’ advertising preferences and European regulations

Different countries are accustomed to different forms of advertising. Vb. Comparative advertising is banned in most latin and Germanic countriesVb. In zweden mogen geen personen op de reclame voor tabakproducten staan.