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Chapter 6: Analyzing Consumer Markets6 ANALYZING CONSUMER MARKETSC H A P T E R LEARNING OBJECTIVESAfter reading this chapter, students should:q Know how consumer characteristics influence buying decisionsq Know what major psychological processes influence consumer responses to the marketing programq Know how consumers make purchasing decisionsq Know how marketers analyze consumer decision-makingCHAPTER SUMMARY Consumer behavior is influenced by three factors: cultural (culture, subculture, and social class); social (reference groups, family, and social roles and statuses); and personal (age, stage in the life cycle, occupation, economic circumstances, lifestyle, personality, and self-concept). Research into all these factors can provide marketers with clues to reach and serve consumers more effectively. Four main psychological processes affect consumer behavior: motivation, perception, learning and memory. To understand how consumers actually make buying decisions, marketers must identify who makes and has input into the buying decision; people can be initiators, influencers, deciders, buyers, or users. Different marketing campaigns might be targeted to each type of person. The typical buying process consists of the following sequence of events: problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior. The marketers job is to understand behavior at each stage. The attitudes of others, unanticipated situational factors, and perceived risk may all affect the decision to buy, as will consumers levels of post-purchase satisfaction and post-purchase actions on the part of the company. OPENING THOUGHTThis chapter perhaps might be the most difficult one for some students to grasp as it delves into psychological thinking and theory. It can be however, an interesting one for class discussions as it opens up and fosters student participation (as consumers). This is a good chapter for such discussions on how students buy, what they buy, how they buy, and so forth. Students new to marketing or new to psychology as a science need a full and comprehensive review of the theories and ideas expressed in this chapter. The instructor is encouraged to spend a great deal of class time with the four main psychological processes outlined in this chapter: motivation, perception, learning, and memory. Repeated review of the key terms and definitions presented in this chapter is necessary for complete student understanding and knowledge of these concepts. The second challenge found in this chapter is that of the consumer buying process. It has been shown to be helpful to have the students talk about their buying processes for goods or services that are of interest to them and to then outline these processes on the blackboard. Having the students “talk through” how they buy and then relating these actions to the steps in the consumer buying process seems to make these concepts easier for them to understand and accept. The instructor is encouraged to spend a great deal of class time on the concepts of the consumer buying process and the necessity of marketers to fully understand their consumers preferences and motivations as it forms the basis of all marketing strategies and concepts. TEACHING STRATEGY AND CLASS ORGANIZATIONPROJECTS1. At this point in the semester-long marketing project, students should present their definitive data on the consumer for the product/service including all demographic and other pertinent information obtained and ready for instructors approval. 2. A consumer products company “knows” its consumersit has to in order to be competitive and to market successfully. During the course of the semester, students should choose a consumer product (one sold in supermarkets, mass-merchants, or in drugstores) and contact the manufacturer regarding their definitions, characteristics, demographics, etc. of their consumer. Students should identify themselves as students working on a marketing research project and for this assignment, it may be necessary for the instructor to write an introduction letter on official school letterhead. Students should be ready to present their findings during the latter part of the semester. 3. Sonic PDA Marketing Plan Every company has to study customer markets and behavior prior to developing a marketing plan. Marketers need to understand who constitutes the market, what and why they buy, who participates in and influences the buying process, and how, when, and where they buy. You are responsible for researching and analyzing the consumer market for Sonics PDA. These are the questions Sonic needs to answer: What cultural, social, personal, and psychological factors have the most influence on consumers buying PDAs? What research tools will help you better understand the effect of these factors on buyer attitudes and behavior? What consumer buying roles and buying behaviors are particularly relevant for PDA products? What kind of marketing activities should Sonic plan to coincide with each stage of the consumer buying process?Document your findings and conclusions in a written marketing plan or type them into the Market Demographics and Target Markets sections of Marketing Plan Pro.ASSIGNMENTSSmall Group Assignments1. The Marketing Insight entitled, Marketing to Cultural Market Segments includes examples of how companies are capitalizing on these markets. Students should be assigned to survey their local business environment (city, town, campus area) and collect examples of how local area businesses are trying to capture these cultural market segments. For example, the students should collect information regarding the number of cultural restaurants in the area and then compare these numbers to the total amount of eating establishments and the percentage of the population that is of that ethnicity. How do the numbers compare, contrast, and what marketing strategies do they hint at? 2. The Marketing Insight entitled, Consumer Trends for the Future, gives an idea of what marketers can expect to encounter in the year 2025. Assign the students one of the three headings found in this article and ask them to expand upon what specific products and services these trends will impact. For example, the Mighty Mature Market, if the prediction is correct, will mean changes in the way certain companies design products, new product development, and the repositioning of many products and services to this market. Students should not only provide a list of products/services that will be impacted, but should also expand upon the “how” or “what” changes that will be needed by these firms. Individual Assignments1. Consumers often choose and use brands that have a brand personality consistent with their own actual self-concept, ideal self-concept, or others self-concept. Have the students review their recent purchases of a car, computer, furniture, or clothing and ask them to comment on, why they purchased this product, who influenced their purchases, and what does this purchase say about their own self-concept ideas. What is their definition of the “brand personality” of this recent purchaseas compared to the definitions stated in the chapter by Stanfords Jennifer Aaker? 2. Figure 6.1 defines the model of consumer behavior. In an examination of each of these segments, ask the students to rank the importance of each of these characteristics in their purchase behavior. For example, under the box entitled, Marketing Stimuli, some students will rank price ahead of products and services as their primary stimulus. Think-Pair-Share1. It has been estimated that the average person may be exposed to over 1,500 ads or brand communications per day. In a group setting, ask the students to keep diaries of all of the ads, commercials, billboards, pop-ups, “spam” messages they receive in one week. After the collection process has been completed, ask the students to go back over their notes, and ask them to reflect upon which messages they remember, which ones they acted upon (purchased), and which ones had no effect on themand why. Each group of students should share these experiences in a class setting. 2. We all belong to some sort of reference group. Students that are members of fraternities, sororities, and clubs are influenced by their members and through their participation. Students should investigate (within their own reference group) who the opinion leaders are, how these opinion leaders affect the overall dynamics of the group, and most importantly, how these opinion leaders affect consumption decisions. Answers should be specific in their definitions of how these opinion leaders influence specific consumption/ purchase decisions and students should share their observations with the class. MARKETING TODAYCLASS DISCUSSION TOPICSTo be better marketers, we must have an understanding of consumers and to study how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences. As a result, we touch upon the disciplines of psychology and sociology. The instructor is encouraged to invite faculty members from the Departments of Psychology and Sociology to speak to the class regarding how their disciplines define “consumers” and how their disciplines describe the “forces” affecting consumer choices. If time permits, students should comment on how these two disciplines views of consumers intersect with, compliment, or contradict marketing assumptions about consumer behavior. What additional information might be necessary for the marketer to know about their consumers before putting together a marketing plan? Finally, ask students to comment on which of these two disciplines they found contains more information applicable to marketing. END-OF-CHAPTER SUPPORT MARKETING DEBATEIs Target Marketing Ever Bad? As marketers increasingly develop marketing programs tailored to certain target market segments, some critics have denounced these efforts as exploitative. For example, the preponderance of billboards advertising cigarettes, alcohol, and other voices in low-income urban areas is seen as taking advantage of a vulnerable market segment. Critics can be especially harsh in evaluation marketing programs that target African Americans and other minority groups, claiming that they often employ clichd stereotypes and inappropriate depictions. Others counter with the point of view that targeting and positioning is critical to marketing and that these marketing programs are an attempt to be relevant to a certain consumer group. Take a position: Targeting minorities is exploitative versus targeting minorities is a sound business practice. Suggested Responses:Pro: When marketers use their advance knowledge of specific target markets, such as minorities that preys upon the target markets weaknesses and lack of information, then marketing can be said to be exploiting the said target market for gains. Marketers should always be aware that information is a powerful tool that has to be used responsibly and prudently. Products and services that cater to minorities that cause adverse health effects or pejorative social action(s) because of their usage need to be marketed in a socially responsible way. Just because a marketer has information on the buying habits, social styles, motivation, perception, and purchase criteria specific to a target market does not automatically permit the marketer to use this information freely. Con: Marketers do not create social systems nor does marketing create social ills. Marketers cannot assume the responsibility for lack of personal choice, lack of information or knowledge, and the lack of personal responsibility. It is the role of marketing to deliver to the target market the goods and services they want and need. Marketing is “amoral” in its delivery of information to target markets and the target markets must decide for themselves the use or non-use of the products marketed. Using advanced research methods to uncover motivation, purchase intent, post-purchase usage, and the like is sound business practice and the marketer owes its stakeholders the responsibility to use this information that increases sales. MARKETING DISCUSSIONWhat Are Your Mental Accounts? What mental accounts do you have in your mind about purchasing products and services? Do you have any rules you employ in spending money? Are they different from what other people do? Do you follow Thalers four principles in reacting to gains and losses? Suggested Response: Each students answer will differ in these areas. It is important however, to get the students to realize that each buyer goes through the buying process whether or not they are actually cognizant of it. Thalers four principles are to: segregate gains, integrate losses, integrate smaller losses with larger gains, and segregate small gains from large losses. MARKETING SPOTLIGHTDisney Discussion QuestionsStudent answers may vary but all should include the following points:1) What have been the key success factors for Disney?a. Marketing family entertainment, products, and services targeted to specific age groups within the family.2) Where is Disney vulnerable? a. Claims of exploitation of products to the very young, and uninformed consumers (children). 3) What should they watch out for?a. Societal changes regarding marketing to children as expressed by protest groups, churches, and local or national laws.4) What recommendations would you make to their senior marketing executive going forward? a. Monitoring societal opinions regarding marketing to children. b. Monitor the proliferation of Disney co-branding so as not to over saturate the brands exposure. 5) What should Disney be sure to do with its marketing? a. Continue to understand the culture of its target markets (especially the growing Hispanic community).b. Continue to understand consumer buying decision-making and consumer behavior.c. Continue to understand the buying processes of its target market(s) especially the post-purchase use and disposal of their products.DETAILED CHAPTER OUTLINEThe aim of marketing is to meet and satisfy target customers needs and wants better than competitors. Consumer behavior is the study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants. Gaining a thorough indepth consumer understanding helps to make sure that the right products are marketed to the right consumers in the right way. Review Key Definition here: consumer behaviorWHAT INFLUENCES CONSUMER BEHAVIOR?A consumers buying behavior is influenced by cultural, social, and personal factors. Cultural factors exert the broadest and deepest influence. Table 6.1 includes some interesting facts about the American consumer in 2001.Cultural Factors Culture is the fundamental determinant of a persons wants and behaviors. Review Key Definition here: culture Each culture consists of smaller subcultures that provide more specific identification and socialization for their members. A) Subcultures include nationalities, religions, racial groups, and geographic regions.B) Multicultural marketing grew out of careful marketing research that revealed that different ethic and demographic niches did not always respond favorable to mass-market advertising.C) Virtually all human societies exhibit social stratification. Social stratification sometimes takes the form of a caste system where members of different castes are reared for certain roles and cannot change their caste membership.D) More frequently, it takes the form of social classes, relatively homogeneous and enduring divisions in a society that are hierarchically ordered and whose members share similar values, interests, and behavior.E) One class depiction of social classes in the United States defined seven ascending levels:1) Lower lowers.2) Upper lowers.3) Working class.4) Middle class.5) Upper middles.6) Lower uppers.7) Upper uppers.Review Key Definitions here: multicultural marketing, social stratification, and social classes. F)Social classes have several characteristics:1) Those within a class tend to behave more alike than persons from two different social classes.2) Persons are perceived as occupying inferior or superior positions according to social class.3) Social class is indicated by a cluster of variables (occupation, income, etc.) rather than by any single variable.4) Individuals can move up or down the social-class ladder. G) Social classes show distinct product and brand preferences in many areas.H) Social classes differ in media preferences.I) There are language differences among the social classes.Social Factors In addition to cultural factors, a consumers behavior is influenced by such social factors as reference groups, family, and social roles and statuses. A) A persons reference groups consists of all the groups that have a direct (face-to-face) or indirect influence on his/her attitudes or behavior. 1) Groups having a direct influence on a person are called membership groups.a. Some memberships groups are primary groups such as family, friends, neighbors, and co-workers with whom the person interacts fairly continuously and informally.b. Some membership groups are secondary groups such as religious, professional groups that tend to be more formal.Review Key Definitions here: reference groups, membership groups, primary groups and secondary groups. B) People are significantly influenced by their reference groups in at least three ways:1) Reference groups expose an individual to new behavi

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