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Management and Organizational Studies
Management and Organizational Studies 1021A/B
Kevin Thompson

Consumers in the Marketplace 2013-01-10 12:26 PM Introduction • Demographics – categorize in terms of age, sex, income, or occupation • Psychographics – categorize in terms of a person’s lifestyle or personality • The growth of the web has created thousands of online consumption communities where members share views and product recommendations about anything • Bonds among peer groups are cemented by the products they use in common • Using market segmentation strategies means targeting a brand only to a specific grou p of consumers rather than to everybody • People often choose a product because they like its image or because they feel that its personality somehow corresponds to their own • Consumers may believe that when they buy and use a product or service its desirqualities will magically “rub off” onto them • When a product succeeds in satisfying a consumer’s specific needs or desires, it may be rewarded with many years of brand loyalty, a bond between product and consumer that is very difficult for competitors to break o Often a change in the consumer’s life situation or self -concept is required to weaken this bond • In today’s global culture, consumers often prize products and services that “transport” them to different places and allow them to experience the diversit y of other cultures What Is Consumer Behaviour? • Consumer Behaviour: 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 Consumer Behaviour Is A Process • Consumer behaviour was often referred to as buyer behaviour o Reflects an emphasis on the interaction between consumers and producers at the time of purchase • The exchange, in which two or more organizations or people give and receive someth ing of value, is an integral part of marketing • The expanded view of consumer behaviour emphasizes the entire consumption process, which includes the issues that influence the consumer before, during, and after a purchase Consumer Behaviour Involves Many D ifferent Actors • 3 stages of the consumption process: o Prepurchase issues o Purchase issues o Post purchase issues • Purchaser and user of the product might not be the same person • A person may act as influencer, providing recommendations for or against certaiproducts without actually buying or using them • Consumers may be organizations or groups in which one person may make the decisions involved in purchasing products that will be used by many • Purchase decisions may be made by a large group of people - for example, company accountants, designers, engineers, sales personnel, and others • One type of important organization is the family Consumers’ Impact On Marketing Strategy • A basic marketing concept states that firms exist to satisfy consumers’ needs o Needs can be satisfied only to the extent that marketers understand the people or organizations that will use the products and services they are trying to sell – and do so better than their competitors • Consumer response is the ultimate test of whether or not a marke ting strategy will succeed • The purpose of understanding consumer behaviour is to predict the future Segmenting Consumers • Market Segmentation – identifies groups of consumers who are similar to one another in one or more ways and then devises marketing str ategies that appeal to one or more groups • Sometimes companies define market segments by identifying their most faithful customers or heavy users • In the fast-food industry the loyal user accounts for one of five customers but for about 60% of all visits to fast food restaurants Age • People of the same age group tend to share a set of values and common cultural experiences that they can carry throughout life • In some cases marketers initially develop a product to attract one age group and then try to broaden i ts appeal later on o E.g. Red Bull Gender • Differentiating by gender starts at a very early age Family Structure • Family and marital status have a big effect on consumer’s spending priorities • Young singles and newlyweds are the most likely to exercise; go to bars, concerts, and movies; and consume alcohol • Families with young children are big purchasers of health foods and fruit juices • Single-parent households and those with older children buy more junk food • Home maintenance services are most likely to be used by older couples and dual-career couples Social Class and Income • People who are grouped within the same social class are approximately equal in terms of their incomes and social standing in the community o Roughly similar occupations o Similar tastes in music, clothing, art, etc. o Socialize and share ideas and values regarding the way life should be lived Ethnicity • Canada accepts nearly 1 million immigrants and refugees every 4 years o Highest per capita rate of immigration in the world • English is a minority language in Vancouver Geography • More snow blowers and fur coats are sold east of the Rocky Mountains; more umbrellas and rain coats are sold to the west • Humidifiers and dehumidifiers are a must in regions around the Great Lakes • On the Prairies, it is not unusual for people to have 2 or more freezers • New Brunswick has the highest consumption of sliced white bread • Alberta leads in bubble -gum sales • More corn flakes are sold on the Prairies • Linguini has its highest sales in Toronto • Quebecers consume the least amount of frozen French fries, preferring the real thing Lifestyles: Beyond Demographics • The way we feel about ourselves, the things we value, the things we like to do in our spare time determine which products will push our buttons, or even those that wi ll make us feel better Relationship Marketing: Building Bonds With Consumers • A key to success is building relationships that will last a lifetime between brands and customers • Marketers who believe in relationship marketing are making an effort to interacwith customers on a regular basis, giving them reasons to maintain a bond with the company over time • Database marketing involves trakcing consumers’ buying habits very closely and crafting products and messages tailored precisely to people’s wants and nee ds based on this information • Wal-Mart collects information about the 100 million people who visit its stores each week, and the company uses this data to fine-tune its offerings o When major hurricanes were predicted in the southern United States sales ofstrawberry Pop- Tarts increased by about 700% and the top selling product was beer Marketing’s Impact On Consumers • Much of what we learn about the world is filtered by marketers • In many ways we are “at the mercy” of marketers, since we rely on them to sell us products that are safe and that perform as promised, to tell us the truth about what they are selling, and to price and distribute these products fairly Marketing and Culture • Popular culture, consisting of the music, movies, sports, books, celebrities, and other forms of entertainment consumed by the mass market, is both a product of and an inspiration for marketers • Consumer-generated content, where everyday people voice their opinions about products, brands, and companies on blogs, podcasts, and social networking sites, and even film their own commercials, is probably the biggest marketing phenomenon in this decade o The ad a pair of brothers created for Doritos that ran during the 2009 Super Bowl scored top honours as the ad that the post vie wers remembered • Web 2.0 – the rebirth of the Internet as an interactive medium from its original roots as a one -way transmission from producers to consumers • Increasingly, we see ourselves not just as consumers of culture, but also as producers of culture o One-third of young people who use social media consider themselves to be broadcasters in addition to audience members The Meaning of Consumption • People often buy products not for what they do but for what they mean • A person will choose the brand that has a n image (or even a personality) consistent with his or her underlying needs • Role Theory – takes the view that much of consumer behaviour resembles actions in play o As in a play, each consumer has lines, props, and costumes necessary to put on a good performance o The criteria used to evaluate products and services in one of their roles may be quite different from those they use in other roles • Types of relationships consumers can have with a product: o Self-concept attachment: The product helps to establis h the user’s identity o Nostalgic attachment: The product services as a link with a past self o Interdependence: The product is a part of the user’s daily routine o Love: The product elicits emotional bonds of warmth, passion, or other strong emotions The Global Consumer • Majority of people on Earth live in urban centres • Megacity – an urban centre of 10 million people or more • The number of megacities is projected to grow to 26 in 2015 o Already, China boasts 4 shopping centres that are larger than West Edmonton Mall, and within 5 years it will be home to 7 of the world’s largest malls • Global Consumer Culture – people around the world are united by their common devotion to brand - name consumer goods, movie stars, and celebrities • U-Commerce – the use of ubiquitous networks that will slowly but surely become a part of us, whether in the form of wearable computers or customized advertisements beamed to us on our cell phones • RFID Tag – contains a computer chip and a tiny antenna that lets the chip communicate with a network o Grocery items will tell the store what needs to be restocked and which items are past their expiration dates, and your house will know when you’re pulling in the driveway Virtual Consumption • Electronic marketing has increased convenience by breaking down many of the barriers caused by time and location • B2C Commerce – businesses selling to consumers • C2C Commerce – consumer-to-consumer activity • Virtual Brand Communities – people with a shared passion for sports memorabilia, Barbie dolls, refrigerator magnets, etc. • Hollywood Stock Exchange – this website offers a simulated entertainment stock market where traders predict the four-week box office take for each film • In a recent month, 26 million people visited onlin e dating sites • encourages shoppers to write reviews of books • More than one-third of respondents who have access to the Internet reported that they were online at least 5 hours a week o 60% of Internet users said they had reduced their TV viewing, while one-third said they spent less time reading newspapers o Reports show that more than one -half of users surveyed felt that email strengthened family ties o Extroverts tend to make even more friend son the web, while introverts feel even more cut off from the rest of the world  This has been termed the “rich get richer” model of Internet use Blurred Boundaries: Marketing and Reality • It’s sometimes hard to tell where marketing efforts leave off and “the real world” begins o One result of these blurred boun
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