RSM353 MidTerm Exam Notes

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Rotman Commerce
Scott Hawkins

Lecture 1:Introduction to Consumer Behaviour  Consumer Behaviour = study of human consumption and the cultural, social, personal, and psychological forces that influence consumers o multi-disciplinary: anthropology, semiotics, sociology, demography, economics, psychology o use to be referred to as buyer behaviour which emphasis was on interaction between consumer & producer @ time of purchase (now about „ongoing process)  exchange = 2+ organization or people five and receive something of value  consumer = person identify or organization or desire to make a purchase, then disposes of it during 3 stages  purchase & user might not be same person  influencer =provide recommendation without buying/using actual product Role of Consumer Behaviour in Marketing  Environmental analysis → value creation → planning marketing mix → control  challenges when analyzing consumers  consumer heterogeneity (individual differences)  environment effects ( social and cultural influences)  shifting motivations, perceptions, memories, attitudes, and emotions  limits of introspection  start from managerial capitalism → shareholder value capitalism → customer capitalism Relationship Marketing: Building Bonds with customers  ads show us how we should act (ex recycling)  popculture = forms of entertainment consumed by mass market (music, movies, sports, books, celebs)  consumer-generated content = everyday people voice their opinions on social networking Meaning of Consumption  people often buy products not for what they do but for what they mean (ex. Nike Swoosh)  Role Theory = type of relationship consumers have w/ product o self-concept attachment = help establish user‟s identity o nostalgic attachment = link w/ past self o interdependence = part of user‟s daily routine o love = elicit emotional bonds of warmth, passion, or other emotions  global consumer culture = everyone around world united by common devotion to brand  consumer to consumer (C2C) sales more prominent not just B2C Marketing Strategies Shaped by CB  Segmentation = segmentation states that no brand can appeal to all customers, which implies that we must identify and satisfy one or a few groups of consumers that have relatively homogenous needs  Targeting = required clear understanding of responsiveness of consumer to various marketing stimuli  Positioning = requires an understanding of the effects of specific marketing tactics on consumers‟ perceptions and beliefs  Information Processing View of Consumers: The Process of Consumer Choice 1. Need for Recognition (motivation) → what motivates customer? ex. customer value 2. Perception → how do consumer sense, attend to, and interpret information 3. Learning & Memory → how do consumers form associations and complex knowledge? 4. Evaluations & Choices → how do consumers put information together to form judgements and make decisions? 5. Purchase, Consumption, and Disposal → what happens at the point-of-purchase? Satisfaction? Loyalty? Relationships? Consumer Activism  culture jamming = aims to disrupt effort by the corporate world to dominate our cultural landscape  green marketing = choose to protect or enhance the natural environment as they go about their business activity  social marketing= employed to encourage positive behaviour or discourage negative behaviour The Dark Side of CB  addictive consumption → consumer addiction = physiological or psychological dependency on product or service 1 | P a g e  compulsive consumption = repetitive shopping, often excessive, done as an antidote to tension, anxiety, depression or boredom  negative/destructive consumer behaviour can be characterized by the following 3 common elements; 1. behaviour not done by choice 2. gratification derived from behaviour is short-lived 3. person experiences strong feelings of regret/guilt afterwards  consumer theft → shrinkage = inventory/cash loss from shoplifting and employee theft  anti-consumption = product/service deliberately defaced or mutilated (ex. graffiti, protest) Two Perspective on Consumer Behaviour  paradigm = fundamental assumptions researchers make about what they are studying and how to study it  basic set of assumptions dominant now is „positivism‟ (modernism) = emphasizes human research is supreme and that there is a single, objective truth that can be disclosed by science  celebrate technology, regard world as rational o opposite dominant paradigm is „interpretivism (post-modern) = too much on science, technology, the world is complex social and culture not always ordered + rational emphasis on symbolic/subjective experiences Positivist Vs Interpretivist Approach to Consumer Behaviour Criteria Positivist Approach Interpretivist Approach Nature of Reality Objective, tangible Socially constructed Goal Single Multiple Knowledge generated Time free Time bound View of Causality Existence of real causes Multiple, simultaneous Research Relationship Separation between researcher and subject Interactive, cooperative, with researcher being part of the phenomenon under study Lecture 2&3: Cultural & Social Influences on Consumer Behaviour Cultural Influences on Consumers  marketing stimuli pervade our environment, and much of what we learn about the world is filtered by marketers  symbolic consumption = consumers often buy products not for what they do but for what they mean o ex. Advertisement for Brook Brothers professional, NY Setting, couple, playing on generation with slogan  consumer‟s culture determines overall priorities he/she attaches to different activities and products o mandate success/fail of specific product and service Culture: The Source of Values  culture = personality of a society, culture is the accumulation of shared values, meanings, rituals, norms, and traditions the members of an organized society o knowledge – share beliefs about the world  ex. Loonies, chips, toonies, bagged milk o values – judgements about what is “good” and “bad”  ex. “please observe good manners when smoking” – Japan o forms of expression – the symbols, language, music, and images that allow communication  ex. Gestures, greetings, body language, beavers o norms, folkways – customs for appropriate behaviour  ex. Don‟t bargain compared to other countries  exchange v. Communal relationships  sanctions for violations  enculturation = way we learn about our own cultures  acculturation = way we learn about others culture  culture mostly learnt by day to day not explicitly about rules & norms  culture system consist of 3 functional areas: 1. Ecology = way in which a system is adapted to its habitat 2. Social Structure = is the way in which orderly social life is maintained 3. Ideology = mental characteristic of people, the way they relate to their environment and social groups  core societal values = represents a commonly agreed-upon consensus about preferred ways of living within a society  5 dimensions of cultural variability – Hofstede 1. Power Distance = which less powerful members of society accept that power is distributed unequally  Ex. Korea Air 2. Individualism/Collectivism = cultures, people look after themselves and their immediate family only  Usa – individualistic, Japan – collectivist 3. Masculinity/Femininity  Defined gender roles 4. Uncertainty Avoidance = extent to which people feel threatened by uncertainty and ambiguity and try to avoid these situation 2 | P a g e 5. Long-term/Short-term  Goals now or later ex. Japan has life long mortgages  Nike [get to school ad]  o [1] low, not afraid to get in trouble, sneak in o [2] just do it, didn‟t care about others cars o [3] feminine, usually guys would do sports/jump around o [4] high uncertainty avoidance, method transportation o [5] short-term slogan  Myth = a story containing symbolic elements that express the shared experiences, emotions, and ideals of a culture o Ex. Superheroes, underdogs o Binary opposition = two opposing ends of same dimension are represented o Monomyth = myth that is common to many cultures o Function of Myths:  Metaphysical: help explain origin of existence  Cosmological: emphasize all component of universe is part of a single picture  Sociological: maintain social order  Psychological: model for personal conduct  Rituals = a set of symbolic behaviours that occur in a fixed sequence and that tend to be repeated periodically o Ex. Eating & drinking, grooming, gift giving [buy, take tag off, wrap, give] o Economic exchange = giver transfers item of value to a recipient who is obligated to return o Symbolic exchange = motivated by unselfish factors and does not expect anything in retur o Types of ritual experience: cosmology [baptism], cultural [holidays], group learning [mealtimes], individual aims/emotions [personal grooming]  Rites of Passage = marked by change in social status, stages: 1. Separation  individual detached from his/her original group 2. Liminality  person between 2 statuses 3. Aggregation  re-enters society after rite of passage complete  Scared Consumption = event permeate many aspects of consumer‟s experience  De-sacralisations = scared item/symbol is removed from its special place or is duplicated in mass quantities (ex. Souvenir of monuments or artwork)  Sacralisation = when ordinary objects, events, and people take on sacred meaning to a culture of to specified groups within a culture  Objectification = sacred qualities are attributed to mundane items The Creation & Diffusion of Culture  Culture in which we live creates meanings for everyday product and how these meanings move through a society to consumers  Food, clothes, car, work, music – all influence by popular culture and fashion  Choice driven by [1] images presented by mass media [2] observations of world [3] desire to live in fantasy world created by marketers Culture Production Systems  Culture production systems (CPS) = set of individual and organizations responsible for creating and marketing a cultural product o Help determine type of product that eventually emerges  Components of CPS 1. Creative 2. Managerial 3. Communication  Example of cultural specialist: teacher, video director, preformer Cultural Gatekeepers  Judge or tastemakers influence products that are eventually offered to consumers  Filters the overflow of information and materials intended for consumers  Thoughput section = collectively set of agents of gate keepers (ex. Car retailer, editors)  Shift from top0down to a bottom-up process is symptom of the transition away from market spaces  Consumer space where customers act as partners with companies to decide what the market place will offer now High Culture & Popular Culture  Culture production systems create many diverse kinds of products but some basic distinctions can be offered (ex. Art vs. craft)  Mass culture produces product to please average taste of undifferentiated audiences 3 | P a g e  Reality engineering = elements of popular culture are appropriated by marketers and converted to vehicle for promo strategy (ex. Vintage jeans that look used)  Media images exert significance influence on consumer‟s perceptions o Ability to distort consumer‟s perceptions of reality have shows who watch a lot of TV Stealth Marketing  Def = attempts to create “buzz” about a product or service in a subtle or surreptitious manner o Ex. Brand pushers, celebrity marketing, movie placement, embedded in video games, bait-and- tease, viral marketing  Insertion of real product in movies, tv shows, books, planes  Branded Entertainment  works when plot makes product benefit, can enhance brand attitude  Advergaming  where online games merge with interactive advertisements that let companies target specific types of consumers  Plinking = act of embedding a product or service link in a video Viral marketing = strategy of getting customers to sell a product on behalf of the company that creates it Guerrilla Marketing = promotional strategies that use unconventional locations and intensive word-of-mouth campaigns to push products Social Influences on Consumers  Word of mouth: persuasive, credible, flexible  Opinion leaders = one person influences the action of others (connectors, brand ambassadors) o 2-step flow model = propose that a small group of influences are responsible for dissemination of information o Updated Model = dynamic model connection: gatekeeper, opinion leader, mass media, recipient  Increasingly a conversation that occurs among consumers and companies  co-creation of brand meaning  Reference groups = refers to all groups which have a direct or indirect influence on a person‟s attitudes or behaviours  Types of Reference Groups o Membership groups = groups to which a person belongs o Aspirational groups = groups with which a person wishes to associate  Affected by: propinquity [physical nearness], Mere Exposure , Group Cohesiveness o Dissociative groups = groups with which a person wants to avoid association  Decision Making Unit: Initiator, Influencer, Decider, Approver, Buyer, User  Sociometrics = trace communication patters among group members, to study interactions Three Forms of Reference Group Influences  Information Influence – ex. Individual seeks info from those who work with the product in a profession  Utilitarian Influence - ex. Individual‟s decision to purchase a particular brand influenced by expectation of others  Value-Expressive Influence –individual feels that purchase or use of product will enhance other‟s image of self Groups with Stronger Influence  Normative influence = reference group helps to set and enforce fundamental standards of conduct  Comparative influence = decisions about specific brands or activities are affected The Power of Reference Group  Referent Power, Information Power, Expert Power, Legitimate Power, Reward Power, Coercive Power Factors that affect likelihood of conformity  Cultural pressures, fear of deviance, commitment, group unanimity/size/expertise, susceptibility to interpersonal influences Diffusion of Innovation  Only successful innovation spread through population, process whereby a new product, service or idea spread though a population  Early adopters similar to innovators but differ by degree of concern for social acceptance  Types of Innovators o Continues innovation = modification of existing product o Dynamically continuous innovation = pronounced choose in a existing product o Discontinuous innovation = major changes in a way we live The Fashion System  Def = people and organizations involved in creating symbolic meaning and transferring those to cultural goals 4 | P a g e  Fashi
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