Management and Organizational Studies 1021A/B Chapter Notes - Chapter 1: West Edmonton Mall, Hollywood Stock Exchange, Consumer Behaviour
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25 Apr 2013
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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 group 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 desirable qualities 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 diversity 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 something 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 Different 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 certain products 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 marketing 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 strategies 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 its
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 will make us feel better
Relationship Marketing: Building Bonds With Consumers