Marketing 4th Edition - ( Chapter 4 Consumer behaviour) PDF

Preview

Summary

Download Marketing 4th Edition - ( Chapter 4 Consumer behaviour) PDF

Description

CHAPTER 4

Consumer behaviour LEA RNING OBJECT IVES After studying this chapter, you should be able to: 4.1 explain why marketers require a thorough understanding of consumer behaviour and its major influences 4.2 understand the major group factors that influence consumer behaviour

Copyright © 2017. Wiley. All rights reserved.

4.3 analyse the major individual factors that influence consumer behaviour 4.4 explain the general steps in the consumer decision‐making process.

Elliott, Greg. Marketing, 4th Edition, Wiley, 2017. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/uts/detail.action?docID=5049568. Created from uts on 2021-02-27 16:00:25.

CASE ST UDY

Online retailers yet to harness big social data JYOTIRMOYEE BHATTACHARJYA AND ADRIAN B. ELLISON, UNIVERSIT Y OF SYDNEY Around the world, social media is giving consumers far greater visibility into supply chain processes and problems. For better or worse, manufacturing locations and labour conditions, warehouses, warehouse systems, packing processes, logistics partners and their delivery drivers have increasingly become associated with a retailer’s brand image. At the same time, retailers and their logistics partners have set up virtual helpdesks on Twitter. To work out whether these have been effective, we analysed data collected from Twitter over the past two years. And the answer at this stage is: only partially. Our database currently contains more than 12 million tweets from companies based in predominantly English speaking countries and their customers around the world. The data is spatially distributed as shown in the figure below. Social data is being co‐created by retailers, logistics service providers and end consumers as part of everyday business practice in the supply chain, with customers approaching retailers on Twitter at all stages of the e‐retail logistics process. This includes problems with online shopping carts, order processing delays, issues with tracking information, delivery delays, service provided by the relevant logistics/parcel shipping company, damaged packages/items, missing items and reverse logistics processes. Parcel shipping companies are generally approached regarding tracking information availability, accuracy and clarity as well as delivery issues including delays, driver behaviour, missing/damaged packages, missed deliveries and pickup locations. We found conversations tended to be of varying lengths with two tweets (one from the customer and another from the company) being the shortest length of a conversation. Longer conversations could involve other companies as well as other customers, and included everything from the good, the bad and the ugly.

Copyright © 2017. Wiley. All rights reserved.

The good Good conversations included positive feedback for the retailer, the logistics service provider or both. These are generally short conversations. Good conversations are also those where the problems raised by customers are resolved by the companies over the Twitter platform and the positive outcomes are visible to followers of both the companies and the customers. These conversations provide value to the customer and reflect positively on the brand. In a small number of cases both retailers and their shipping partners were found to get involved in resolving issues for customers. We think there is considerable scope for joint customer service to become common practice amongst retailers and logistics service providers. The bad Bad conversations are those where the problems raised by customers are referred to Twitter’s direct messaging service platform or traditional channels (email, phone numbers) and the outcomes are not visible to other customers, thus generating little value for the brand. Our research suggests customers rarely return to Twitter to thank a company for a problem resolved via another channel. However, customers do use Twitter to complain about not receiving timely responses via either the social media platform or traditional channels. Another issue was the infrequency of involvement of parcel shipping carriers when they were specifically mentioned in customers’ complaints to retailers. We think the problem with this lack of involvement from shipping companies is the message it conveys to the consumer about the strength of the supply chain relationship.

116 Marketing

Elliott, Greg. Marketing, 4th Edition, Wiley, 2017. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/uts/detail.action?docID=5049568. Created from uts on 2021-02-27 16:00:25.

The ugly Ugly conversations were those unintentionally initiated by promotional tweets that reminded customers of recent or current frustrations with a retailer or logistics provider’s services. These trigger the sharing of experiences between multiple customers and often place customer service staff in damage control mode. Consumer experiences with delivery delays around Christmas and confusion over information available on relevant websites in relation to order processing and shipping times contributed to the backlash. Customer service conversations = big social data A large volume of social media data gets created on a daily basis from these customer service interactions. Companies need to be examining both the volumes of unstructured social media data created by their own processes as well as by their competitors for a better understanding of necessary process improvements. Managers need to ask themselves if their current big social data analytics platforms and capabilities are providing them with the necessary insights for improving their supply chains and brand building efforts. Our analysis of the data from Twitter suggests companies are failing to respond to customers with the speed allowed by the platform. While UPS responds in a matter of minutes — albeit usually to redirect to other channels — many others take hours and sometimes days to respond to customers. Following up with a customer on the public platform after an issue has been resolved via DM or email would be a positive from a brand perspective. This is only happening in a limited number of cases. Supply chain partners also need to better coordinate their Twitter‐based customer service strategies so they are able to jointly resolve issues for customers and provide them with a seamless experience. Big social data can be harnessed to identify a range of process improvement opportunities but retailers and their supply chain partners need to be ready for change. Source: Originally published on The Conversation.

QUESTION Do you think the value of good conversations outweighs the negatives of bad conversations on social media? Why or why not?

Copyright © 2017. Wiley. All rights reserved.

Introduction In the introduction to marketing chapter, we defined marketing and introduced the concept that those organisations that adopt a market orientation tend to be more successful than organisations that do not. In the chapter on the marketing environment and market analysis, we looked at the marketing environment and how organisations can analyse it. The chapter on market research involved a more in‐depth examination of how organisations go about understanding the environment, including the individuals and groups within it. By now we understand something about marketing, the marketing environment, and the individuals and organisations that make up the marketplace. This begs the question, ‘How do we formulate a marketing mix to best serve our potential customers?’ Clearly, we need to know the reasons behind the decisions buyers and consumers make — the what, why, how, when and where of their behaviours. This is the focus of our study of buyer, or consumer, behaviour. Consider the example of consumers and online shopping, discussed in the chapter opener. The associated opportunities and challenges this presents to modern marketers is just another instance of the changes that have swept across modern societies in recent years. For individual firms, such changes may have a positive, negative or neutral effect. The challenge to the marketer is to understand such changes, and how they might affect the firm’s established business model — the products that it creates, how it communicates with the market, and the distribution channels through which buyers will access the product. The modern marketing concept suggests that the customer should be at the heart of the business. Consequently, understanding customers and their behaviour is at the heart of modern marketing.

CHAPTER 4 Consumer behaviour

Elliott, Greg. Marketing, 4th Edition, Wiley, 2017. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/uts/detail.action?docID=5049568. Created from uts on 2021-02-27 16:00:25.

117

In this chapter we will focus on consumer buying behaviour; not business buying behaviour. It is often assumed that consumer buying behaviour is different from, and perhaps less rational than, business (or industrial) buying behaviour. While this sweeping statement is difficult to test, it will be explored further in the chapter on business buying behaviour. In this chapter, we will examine the influences on the buyer and how these influences might impact the buyer’s choice of product category, brand, price, distribution outlet and their response to advertising messages. Taken together, the buyer’s decision processes, their choices and how they manifest themselves in actual purchase and product usage behaviours constitute the field of consumer behaviour, the core topic of this chapter. The chapter explores a range of models of buyer behaviour, based on varying levels of consumer involvement.

4.1 What is consumer behaviour? LEARNING OBJECTIVE 4.1 Explain why marketers require a thorough understanding of consumer behaviour and its major influences.

To formulate a marketing mix that best serves our potential customers, we need to know the reasons and motivations behind the decisions consumers make. Consumer behaviour is the term used to describe the analysis of the behaviour of individuals and households who buy goods and services for personal consumption. As mentioned earlier, it is the what, why, how, when and where of consumers’ behaviours. Recall that the marketing mix refers to all the elements of the offering that the organisation makes to potential customers. An understanding of consumer behaviour informs every decision made about the marketing mix, including: • what product attributes will appeal to customers • how much value a product has for consumers and hence how much they will be willing to pay for it • the likely response to various promotional options • where the consumer is likely to want to purchase the offering • how the consumer evaluates the purchase • what the consumer expects from dealing with the organisation. Generally speaking, consumers purchase products to satisfy their needs and wants. These needs and wants vary in nature and the ways that consumers go about satisfying them varies as well. The range of possible consumer behaviours is almost limitless; however, we can identify a range of consumer decision‐making behaviour along a continuum from simple habitual decision‐making behaviours at one end to highly complex extended decision‐making behaviours at the other. For example, few consumers devote much time to choosing their next tube of toothpaste, but most consumers spend a lot of time deciding on a destination and itinerary for an overseas holiday. The ways in which consumers recognise their needs and wants, find out about how to satisfy them, choose among the options, and think and feel about their decision are subject to numerous influences.

Copyright © 2017. Wiley. All rights reserved.

Influences on consumer behaviour The range of factors that may influence a consumer is virtually limitless and studying them systematically and comprehensively is a mammoth task. The key to this task is to develop an awareness and sensitivity to the range of issues that may influence an organisation’s target buyers. These influences may be: • specific to a situation in which the consumer finds themself • related to group (social or cultural) factors • unique to the individual. These broad categories of influences and some of the contributing factors are summarised in figure 4.1 and discussed in detail throughout this chapter. Situational influences on consumer behaviour are perhaps the easiest to understand. They are simply the circumstances consumers find themselves in when they are making purchasing decisions and/or 118 Marketing

Elliott, Greg. Marketing, 4th Edition, Wiley, 2017. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/uts/detail.action?docID=5049568. Created from uts on 2021-02-27 16:00:25.

consuming the product. Some circumstances prompt immediate purchasing decisions; for example, a person who has a headache will often respond by purchasing Nurofen, Panadol or Herron paracetamol. Situational influences can also prompt people to decide not to make a purchase; for example, a couple who decide at the last minute to go to their favourite restaurant for a romantic, candle‐lit dinner may change their minds if they see that the restaurant is crowded and noisy. FIGURE4.1

Factors influencing consumer behaviour

Situational

Physical Social Time Motivational Mood

Group Cultural Cultural Subcultural Social class

Individual Social

Personal

Reference groups Family Roles and status

Demographics: ● age ● occupation ● income Lifestyle Personality and self-concept

Psychological Motivation Perception Beliefs and attitudes Learning

The principal situational influences may be classified as: • physical — the characteristics of the location in which the purchase decision is made (e.g. fashion retailers should install flattering lighting in the fitting rooms) • social — the interactions with others at the time the purchase decision is made (e.g. the product knowledge and/or persuasiveness of a salesperson or ‘competition’ with other shoppers during post‐ Christmas sales); not to be confused with social influences on consumer behaviour, discussed later in this chapter • time — the time available for a purchase decision (e.g. a person who has left all of their Christmas shopping until Christmas Eve may not have the time to contemplate many options) • motivational — the reasons for the purchase (e.g. a person choosing a bottle of wine to bring to a dinner party is likely make a different decision based on different criteria than when choosing a bottle to consume at home over the evening meal) • mood — the mood of a person at the time of the purchase decision (e.g. a person in a tired or emotional state may make a more impulsive decision). In the following sections, we will turn our attention to the group and individual factors that influence consumption decisions.

Copyright © 2017. Wiley. All rights reserved.

SPOT LIGHT

US election: what impact do celebrity endorsements really have? NIVES ZUBCEVIC‐BASIC, SWINBURNE UNIVERSIT Y OF TECHNOLOGY Celebrities are always part of the show in the US presidential election. This is by no means a new trend. Historians have traced the role of celebrities in politics back to the 1920 election, when Warren Harding wasendorsed by film starsincluding Lillian Russell. In 1960, John F. Kennedy wasendorsed by Rat Pack membersSammy Davis Jr. and Dean Martin. More recently,Oprah Winfrey, George Clooney, will.i.am, Brad Pitt and Samuel L. Jackson supported Barack Obama. ActorClint Eastwood, however, endorsed Republicans John McCain in 2008 and Donald Trumpthis time around. The 2016 election is no different. So how much of a difference, if any, do high‐profile endorsements make? And to which demographics?

CHAPTER 4 Consumer behaviour

Elliott, Greg. Marketing, 4th Edition, Wiley, 2017. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/uts/detail.action?docID=5049568. Created from uts on 2021-02-27 16:00:25.

119

Who’s endorsing who? Both Hillary Clinton and Donald Trump have been endorsed by an army of celebrity supporters. Some of Clinton’s high‐profile endorsers include LeBron James, Amy Schumer, Katy Perry, Meryl Streep, Jamie Lee Curtis, Lady Gaga, Ellen DeGeneres, Drew Barrymore, George Clooney, Khloe Kardashian, Kerry Washington, Viola Davis, Britney Spears, John Legend, Richard Gere, Salma Hayek, Lena Dunham, Jennifer Lopez,Beyoncé and Snoop Dogg. In contrast, some of Trump’s supporters include Azealia Banks, Sarah Palin, Kirstie Alley, Tom Brady, Charlie Sheen, Dennis Rodman, Kid Rock, Mike Tyson, Donnie Wahlberg, Gary Busey, Hulk Hogan, Tim Allen and Chuck Norris. If we simply look at the Twitter power behind some of the celebrities listed above, Clinton’s camp — with Katy Perry endorsed Hillary Clinnton in the 2016 DeGeneres, Spears, James, Lopez and Beyoncé — US presidential election. has a combined 195.6 million followers, compared to Trump’s camp — Sheen, Tyson, Palin, Hogan and Alley — with a combined 21 million followers. Celebrities often go beyond simple endorsements and make powerful statements such as Elizabeth Banks’Fight Songor the star‐studded Avengers cast’s oblique but powerfulstatement against Trump.

Copyright © 2017. Wiley. All rights reserved.

Celebrities sell Advertisements featuring celebrities are a popular marketing strategy. In fact, one in five ads globally features a celebrity. Undoubtedly, endorsements are big business. Some well‐known campaigns include Beyoncé and Pepsi (worth US$50 million), Justin Bieber and OPI nail polish ($12.5 million) andBrad Pitt and Chanel No. 5($6.7 million). Marketers happily spend millions on celebrity endorsers as they are able to leverage ‘secondary brand associations’ — that is, people transfer their opinions and feelings about a celebrity to the brand. In a cluttered world where myriad messages fight for the attention of time‐starved consumers, celebrity endorsers serve as arbiters of public opinion. And so, marketing organisations rely on symbolic and emotional features to generate ‘sociopsychological associations’. Some celebrities are seen to be so aspirational that even a glimpse of them in an ad conveys positive meaning, like athletesCristiano Ronaldo and Roger Federer. It’s important to understand the traits a celebrity, also referred to as a source, should have in order to transfer positive meaning to a brand. These are broken down intothree categories: • source attractiveness (physique, intellect, athleticism, lifestyle) • source credibility (expertise, trustworthiness) • meaning transfer (compatibility between brand and celebrity). Quite often, celebrities use their high profile to encourage people, world organisations and politicians to support their cause, like singer Bono’s‘One’ campaignagainst poverty. Actors Jack Black and Neil Patrick Harris encouraged Californians tovote againstthe California Marriage Protection Act. Not‐for‐ profit and world organisations are aware of the power of celebrities and create connections in order to garner publicity, awareness and donations. This includes the United Nations and Angelina Jolie, andDeGeneres and the Ice Bucket Challenge. Celebrity endorsements in politics makes sense We know celebrities grab and hold consumer attention. They also improve ad recall. People are more likely to think positively about a product because they are familiar with the celebrity. However, expertise is an important element when wanting to influence consumers. Credibility is another crucial factor that tells us not all celebrities are equal. Those considered to be more credible have a higher influence on people’sopinions and decisions. Celebrities with prior political activism, like Martin Sheen and George Clooney, are more likely to have a stronger influence. Interestingly, people consider celebrities to be morecredible and trustworthythan politicians. A negative comment by a ...