Management Consulting/CONSUMER BEHAVIOUR

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Question
1.   Why it is important for markets to understand consumer behaviour.
2.   Discuss two situations, with examples, that show the influence of culture / subculture on consumer purchase behavior.

Answer
1. Why it is important for markets to understand consumer behaviour.


The relationship between the firm and its potential consumers. The firm communicates with consumers through its marketing messages (advertising), and the consumers react to these messages by purchasing response. Looking to the model we will find that the firm and the consumer are connected with each other, the firm tries to influence the consumer and the consumer is influencing the firm by his decision.    
     Field 1


         
         Attitude          


         Field 2: Search
         And evaluation
         Of mean/end(s)          Experience          relation(s)
         (Preaction field)          
         Motivation
         Field 4:
         Feedback
         
         Field 3: Act of
         Purchase   
         Purchasing   
         Behavior

The PROCESS is divided into four major fields:
Field 1: The consumer attitude based on the firms’ messages.
The first field is divided into two subfields.
The first subfield deals with the firm’s marketing environment and communication efforts that affect consumer attitudes, the competitive environment, and characteristics of target market. Subfield two specifies the consumer characteristics e.g., experience, personality, and how he perceives the promotional idea toward the product in this stage the consumer forms his attitude toward the firm’s product based on his interpretation of the message.   
Field 2: search and evaluation  
The consumer will start to search for other firm’s brand and evaluate the firm’s brand in comparison with alternate brands. In this case the firm motivates the consumer to purchase its brands.
Field 3: The act of the purchase
The result of motivation will arise by convincing the consumer to purchase the firm products from a specific retailer.
Field 4: Feed back
This model analyses the feedback of both the firm and the consumer after purchasing the product. The firm will benefit from its sales data as a feedback, and the consumer will use his experience with the product affects the individuals attitude and predisposition’s concerning future messages from the firm.

THE internal factors, which may affect the personality of the consumer, and how the consumer develops his attitude toward the product. For example, the consumer may find the firm’s message very interesting, but virtually he cannot buy the firm’s brand because it contains something prohibited according to his beliefs. Apparently it is very essential to include such factors in the model, which give more interpretation about the attributes affecting the decision process.   
THE CONSUMER BEHAVIOR DATA HELPS TO SEGMENT THE
MARKET, WHICH IN TURN HELPS TO POSITION THE PRODUCT.

PRODUCT POSITIONING IN THE SELECTED MARKET SEGMENT.
FIRST STEP -- DO THE RESEARCH
The first step in the positioning process is to do the research. The good news is that product marketing managers already have done most of the research as part of their job. To successfully position a product, you need a thorough understanding of customer problems, channel issues, and how competitors are positioned. The answers to these and other questions become part of a rationale document for your positioning strategy:
What is your target market (size, type of company, etc.)?

Who is the decision maker you want to target your message to, and what keeps that decision maker awake at night?

What pressing problem does your product solve for your prospective customer?

How is your prospect solving that problem today?

What specific benefit does your product deliver?

Why is your product better than the current solution and competitive alternatives?

Who are your key competitors; why and when do you win or lose to them?

How do your competitors position themselves in their marketing communications, including ads, direct mail campaigns, brochures, and web sites?

What makes your product unique in a way that is relevant to your prospect?

Are there any problems, unique challenges, or special needs of your channel?

What do prospects and customers like and dislike about your product?

Do prospects and customers share your belief of why your product is better than the competition’s?

Are there any characteristics of a sales situation that indicate whether or not your product or service will be selected?

Now incorporate the answers to these questions in a rationale document. By doing so, all product knowledge is captured in one place and can be used as a reference guide when marketing and sales need it. The rationale document should be three to five pages and should include this information:
Product Category—Define the product’s key features, advantages, and benefits. A matrix can help clarify these items.

Product Line Fit—Describe how the product fits into the overall company product strategy.

Situation Analysis—Describe the conditions that justify the release of this product, including why the company believes it can be successful.

Market Analysis—Profile target market(s) by size, revenue, market segment, operational type, or other relevant categories.

Audience Analysis—Profile key prospects within the target market(s), including job titles and functions (demographics) and their concerns, attitudes, and behaviors (psychographics).

Distribution—Describe how the product will be distributed and the impact of distribution on product communications.

Competitive Positioning—Describe the key competitors, their targets, and how they position their products.

Positioning Statement and Rationale—Evaluate the product positioning statement against the following four criteria: Is it important, unique, believable, and usable?

Support Points—Describe how the three support points make the positioning statement unique, believable, and important. If multiple markets or audiences require unique support points, explain why.
A rationale document transfers important product knowledge to those who need to know, but who don’t have the time or expertise to find the information themselves. It’s especially useful when creating a product message strategy that includes a positioning statement (number 8 in the rationale document) and three or four support points (number 9).

A MESSAGE STRATEGY IS A TIME SAVER
Your positioning statement becomes the central idea and theme underlying all marketing activities. It is a short, compelling, declarative sentence that states just one benefit and addresses the target market's number one problem. It must be unique, believable, and important, or the target market will ignore the message. Once you have found the right message, your product marketing managers won’t need to be involved in every planning session for every marketing campaign.
Supporting benefit statements tell the story in more detail. They also provide a structure for product demonstrations. While the positioning statement articulates a high-level benefit, the claims made in the supporting statements should be readily demonstrable. That is, in just a few steps, you should be able to show how the product delivers concrete benefits.
Make sure your message strategy has enough detail to support the creation of a standard product demonstration. This helps your product marketing managers to create a demo quickly. And there’s another benefit—the product detail in the support points answers a lot questions before marketing and sales ask them.
A message strategy also facilitates delivery of the same message across all marketing media, including web sites, brochures, advertisements, and presentations to investors, industry analysts, and prospects. A standard outline format makes it easy for writers and other communicators to see the message strategy's benefit hierarchy, and to take full advantage of it.
A Rationale Document Captures All the Product Knowledge
In addition to documenting product knowledge, the positioning process improves marketing without intense, time-consuming input from product marketing. A message strategy is like the recipe for how to talk about your product. Follow the recipe rather than ask product marketing, and your marketers can create a compelling, accurate story about your product.
This does not mean that your product marketing managers no longer need to be involved in the planning and creation of marketing materials. They should provide input when appropriate. It’s just that the process won’t take up nearly as much of their time. That’s because marketing gets most of its infusion of product knowledge by referencing the rationale document and message strategy. And that means your product marketing managers have successfully cloned themselves; they’ll have more time for other competing priorities.
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IF YOU APPLY THESE PRINCILPES TO A CINEMA HOUSE.

Product Category—Define the product’s key features, advantages, and benefits.
[the type of movies you will select for the local population ]
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Product Line Fit—Describe how the product fits into the overall company product strategy.
[ match the product with overall marketing/ product category ]
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Situation Analysis—Describe the conditions that justify the release of this product, including why the company believes it can be successful.
[ analysis of the local market and how your product selection fits the scene]
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Market Analysis—Profile target market(s) by size, revenue, market segment, operational type, or other relevant categories.
[ total analysis of the marketing operation data]
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Audience Analysis—Profile key prospects within the target market(s), including demographics and their concerns, attitudes, and behaviors (psychographics).
[ determine the niche target market ]
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Distribution—Describe how the product will be distributed and the impact of distribution on product communications.
[ develop the action plan for release of the programs for the target market ]
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Competitive Positioning—Describe the key competitors, their targets, and how they position their products.
[ use the consumer data for positioning the program for the target market ]
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Positioning Statement and Rationale—Evaluate the product positioning statement against the following four criteria: Is it important, unique, believable, and usable?
Support Points—Describe how the three support points make the positioning statement unique, believable, and important. If multiple markets or audiences require unique support points, explain why.
[ develop a total marketing plan, outlining the detail launch activities]
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A rationale document transfers important product knowledge to those who need to know, but who don’t have the time or expertise to find the information themselves. It’s especially useful when creating a product message strategy that includes a positioning statement and the support points .
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Explain the concept of culture and subculture. Discuss the relevance of sub cultural segmentation in case of the following.
(a)   Food chains (Restaurants)
(b)   Women apparels

Culture , generally refers to patterns of human activity and the symbolic structures that give such activity significance.
Key components of culture
A common way of understanding culture sees it as consisting of four elements that are "passed on from generation to generation by learning alone":
-VALUES
-NORMS
-INSTITUTIONS
-ARTIFACTS

1.Values comprise ideas about what in life seems important. They guide the rest of the culture.
2. Norms consist of expectations of how people will behave in various situations. Each culture has methods, called sanctions, of enforcing its norms. Sanctions vary with the importance of the norm; norms that a society enforces formally have the status of LAWS.
3. Institutions are the structures of a society within which values and norms are transmitted.
4.Artifacts—things, or aspects of material culture—derive from a culture's values and norms.
In general, it refers to human activity;  culture reflect  understanding, or criteria for valuing, human activity.
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CULTURE  REFLECTS

1."the total way of life of a people"
2. "the social legacy the individual acquires from his group"
3. "a way of thinking, feeling, and believing"
4. "an abstraction from behavior"
5. a theory  about the way in which a group of people in fact behave
6. a "storehouse of pooled learning"
7. "a set of standardized orientations to recurrent problems"
8. "learned behavior"
9. a mechanism for the  NORMATIVE  regulation of behavior
10. "a set of techniques for adjusting both to the external environment and to other men"
11. "a PRECIPILATE  of history"
12. a behavioral map, sieve, or matrix
==========================




For the purposes of the MARKETING , culture is defined as the shared patterns of behaviors and interactions, cognitive constructs, and affective understanding that are learned through a process of socialization. These shared patterns identify the members of a culture group while also distinguishing those of another group.

WHEN  WE  APPLY   THE  MARKETING  CONCEPT  TO   ORGANIZATION /BUSINESS,
STUDY  OF  CULTURE    BECOMES   NECESSARY /  ESSENTIAL  BECAUSE  IT
GIVES   THE  MARKETER   A   BETTER  UNDERSTANDING   OF  
PEOPLE'S  

-VALUES
-NORMS
-HABITS
-NEEDS   
-WANTS
-SOCIAL  BEHAVIORS
-LIFE STYLE BEHAVIORS
ETC  ETC

WHICH   INFLUENCES   THE  BUYING  DECISIONS

WHICH  IN  TURNS HELPS  THE  MARKETER   A  BETTER  UNDERSTANDING  OF

WHAT  THE  BUYERS   WANT
WHEN THEY WANT
HOW  DO  THEY  WANT
WHERE  DO  THEY  WANT
WHICH  PLACE  DO THEY WANT
HOW  MUCH  DO  THEY  WANT
ETC ETC

AND  HENCE  HELPS   TO  CREATE  CONSUMER  SATISFACTION.

THIS IS  HOW  STUDY  OF  CULTURE  HELPS  MARKETING.

CULTURE   IS   THE   FULL  RANGE   OF  LEARNING  HUMAN
BEHAVIOR  PATTERNS.
=================
What is culture?
In relation to international marketing, culture can be defined as “the sum total of learned beliefs, values and customs that serve to direct consumer behaviour in particular country market” . Culture is made up of three essential components:
• Beliefs which is a large number of mental and verbal processes which reflect our knowledge and assessment of products and services.
• Values which are the indicators consumers use to serve as guides for what is appropriate behaviour, they tend to be relatively enduring and stable over time and widely accepted by members of a particular market
• Customs which are modes of behaviour those constitute culturally approved or acceptable ways of behaving in specific situations. Customs are evident at major events in one‟s life like birth, marriage, death, and at key events in the year like Christmas or Easter .

Beliefs, values and customs are the three components of culture which influence the international marketing . These three components affect consumption behaviours and the purchase pattern of the individual. Each individual buy products thanks to some references in his own culture. Beliefs, values and customs send direct and indirect messages to consumers regarding the selection of goods and services; it is the cultural message . The culture a customer live determines and affects its decision process. Companies must adapt their product and promotion to suit their area of operation.

However, there are also eight characteristics of culture  as you can see in the figure 1 which form a convenient framework for examining a culture from a marketing perspective. For explaining the impact of these factors on international marketing, we are going to explain some of the eight characteristics of culture. For the characteristic education is easy to understand that the degree of literacy play an important role on the labeling of product. For the characteristic aesthetics, a firm needs to ensure that use of
colour, music, architecture or brand names in their product and communications strategies is sympathetic and acceptable to the local culture .

A  CULTURE  FRAMEWORK

When we define culture, it seems to be easy to identify, characterize and differentiate a culture from another one. In reality, culture is more complex and composed of a “visible and invisible part of the culture”. Indeed, culture can be described like an iceberg. The part of the iceberg that you see above the water is only a small fraction of what is there. What you cannot see are the values and assumptions that can sink your ship if you mistakenly run into them. Daily behaviour is influenced by values and social morals which work closer to the surface than the basic cultural assumptions. The iceberg model of culture implies that the visible parts of culture are just expressions of its invisible parts. It also highlights the difficulty of understanding people from different cultural backgrounds because although we may see the visible parts or their “iceberg” we cannot immediately realize what the foundations are (Selfridge & Sokolik, 1975). So, it can be difficult for marketers to find immediately the real needs of a particular culture. Indeed, if the major part of the culture is “under the water” marketers don‟t have other solutions than learn about the culture of their customers to target their fundamental needs. Take time to know and understand the culture is the only way to access a better level in the iceberg.
Having identified what is culture, we need to interpret it in relation to marketing. This requires a clearly understanding of what basics assumptions are and in this way the use of two cultural frameworks. The first one is Hofstede‟s five cultural dimensions; he presents four plus one cultural dimensions which are relevant for understanding the influence of culture on international marketing.

In international business it is sometimes amazing how different people in others cultures behave. We tend to have a human instinct that deep inside “all people are the same”, but they are not. Therefore, when a businessman works into another country and makes decisions based on how (s)he operates in her/his own country, the chances are (s)he will make some very bad decisions .
Geert Hofstede‟s research gives us insights into others cultures so that we can be more effective when interacting with people in others countries. Moreover, he gives the edge of understanding which translates to more successful results. According to Hofstede (1980), the way people in different countries perceive and interpret their world varies along four plus one dimensions:
• Power Distance Index (PDI) that is the extent to which the powerless members of organizations and institutions (like the family) accept and expect that power is distributed unequally (Hofstede, 1980).
• Uncertainty Avoidance Index (UAI) deals with a society‟s tolerance for uncertainty and ambiguity; it ultimately refers to man‟s search for Truth. It indicates how members of a culture fell uncomfortable or comfortable in unstructured situations (novel, unknown, surprising, different from usual) .
• Individualism (IDV) on the one side versus its opposite, collectivism, that is the degree to which individuals are integrated into groups. On the individualist side we find societies in which the ties between individuals are loose: everyone is expected to look after him/herself and his/her immediate family .
• Masculinity (MAS) versus its opposite, femininity refers to the distribution of roles between the genders .
• Long-Term Orientation (LTO) versus Short Term Orientation: This cultural dimension has been criticized by Fang (2003), it is argued that there is a philosophical flaw inherent in

this “new” dimension. Given this fatal flow and other mythological weaknesses, the usefulness of Hofstede‟s fifth dimension is doubted. It can be said to deal with Virtue regardless of Truth. Values associated with Long-Term Orientation are thrift and perseverance; values associated with Short-term Orientation are respect for tradition, fulfilling, social obligations, and protecting one‟s face (Hofstede, 1980).
The study of Dwyer, Mesak, and Hsu‟s (2005) outcomes provide additional tactical implications with respect to the marketing mix—the “how” of product launch decisions—to facilitate the adoption of innovations by consumers. Marketing management efforts, particularly with respect to promotion, should be focused on and should communicate to the core cultural values that each target country possesses, whether it is individualism, masculinity, power distance, long-term orientation, or some combination of these cultural dimensions. By focusing on these core values, marketing efforts can be leveraged to achieve more rapid consumer adoption of the newly introduced product. Each population of each country is characterized by Hofstede‟s four plus one cultural dimensions. The study of these cultural dimensions can give very important information to marketers for the standardization or the adaptation of the marketing mix. Indeed, the behaviour of the customers change depending of this cultural dimensions and an adaptation of the marketing mix is in this way needed or not (Dwyer, Mesak, & Hsu, 2005). In this regard, Dwyer, Mesak, and Hsu (2005) conclude by providing global marketers specific marketing examples linked to each of the cultural dimensions as you can see in the table 2. Collectivism influences innovativeness, service performance and advertising appeals. Uncertainty avoidance impacts information exchange behaviour, innovativeness and advertising appeals. Power distance affects advertising appeals, information exchange behaviour, innovativeness and service performance. Masculinity impacts sex role portrays, innovation and service performance. Finally, long-term orientation influences innovativeness.
Table 2: Influence of the four plus one Hofstede‟s dimensions
----------------innovativeness----service..--------advertising—information—sex role
         Performance       appeals         behavior

Collectivism---------X----------------X-------------------X
Uncertainty
Avoidance--------------X--------------------------------------X---------------X
power
distance------x------------x-----------x----------x
Masculinity-----------X------------------X-----------------------------------------------X
Longterm
Orientation------------X

Another important framework to explain is high/low context approach because he stresses that the communication and therefore the promotion of the product is influenced by cultural aspects.

Edward T.Hall (1960) introduced the concept of high and low contexts as the way of understanding different cultural orientation between societies.
• Low-context cultures rely on spoken and written language for meaning. Senders of messages encode their messages, expecting that the receivers will accurately decode the words used to gain a good understanding of the intended message
• High-context cultures use and interpret more of the elements surrounding the message to develop their understanding of the message. In high-context cultures, the social importance and knowledge of the person and social setting add extra information, and will be perceived by the message-receiver.
Managing cultural differences
Having identified the most important factors and components of cultures, thanks to the two models above, we can now understand the difficulties for marketers to manage with cultural differences.

James Lee (1966) used the terms self-reference criterion (SRC) to characterize our unconscious reference to our own cultural values. This author suggested a four-step approach to eliminate SRC.
• 1-Define the problem or goal in terms of home country culture, traits, habits and norms.
• 2-Define the problems or goals in terms of the foreign culture, traits, habits and norms.
• 3-Isolate the SRC influence in the problem and examine it carefully to see how it complicates the problem
• 4-Redefine the problem without the SRC influence and solve for the foreign market situation

It is therefore of crucial importance that the culture of the country is seen in the context of that country. It is important to regard the culture as different from, rather than better or worse than, the home culture. In this way, differences and similarities can be sought and explained.



Every Culture contains some variables important to consider while conducting marketing research.
1. Individualism
a. Supplier’s motivation to get the product finished correctly
Supplier’s understanding of your research need
2. Collectivism
Communication with supplier
Developing representative samples
Abilities of moderators or interviewers
Interpretation of results
Translation of research instruments
Governmental regulation
3. Power Distance
Language/translation
Unfamiliarity with research techniques
Unwillingness to respond
Giving the expected response
Understanding the rating scales
Functional equivalence
Conceptual equivalence
Taboos against discussion of certain subjects
4. Masculinity
Adapted techniques for maximum respondent comfort in research technique (RT).
Adapted techniques for maximum respondent comfort in respondent-related problems (RRP).
5. Femininity
Lengthened scheduled in RT.
Developed personal relationships in RT.
Lengthened schedule in RRT.
Developed personal relationships in RRT.
6. Uncertainty Avoidance
More selective recruiting of respondents: RT.
Reworded discussion guides for questionnaires: RT
Listened more carefully to in-country suppliers of consultants: RT
Counteracted research bias through training: RT.
More selective recruiting of respondents: RRP.
Reworded discussions guides to in-country suppliers of consultants: RRP.
Listened more carefully to in-country suppliers of consultants:
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RESTUARANTS   AND  DRESSES
Socio-sub cultural segmentation divides consumers on the basis of culture, sub-culture, cross-culture, religion, social class, and family life cycle. Use-related segmentation divides consumers on the basis of usage rate, awareness status, and brand loyalty. Use-situation segmentation involves segmenting consumers on the basis of time, objective, location, and person. Benefit segmentation segments consumers on the basis of the benefit they seek like prestige, confidence, health, nutrition etc.

Multi-segmentation involves combining segmentation various variables to effective segmentation. Some popular multi-segmentation tools are psychographic-demographic segmentation, geodemographic segmentation, and SRI Consulting’s Values and Lifestyle System (VALS). Segmentation yields positive results only if the right segment is chosen. While choosing a target segment care should be taken that the segment is measurable (quantifiable in terms of market size), substantial (commercially viable), accessible (easy to reach and address to), and differentiable (different in some way from the other segments).

After selecting the relevant segment(s), the marketer has to formulate a marketing mix. The marketers may choose to cater to a single segment or multiple segments, with single or multiple products – single product-single segment strategy (concentration strategy); single product-multiple segments (product specialization strategy); single segment-multiple products (market specialization strategy); and multiple products-multiple segments (selective segmentation strategy).

Big marketers, at times, may also employ a full market coverage strategy, which may further be differentiated (different marketing mix for different products) or undifferentiated (single marketing mix for all products). Sometimes marketers adopt too many micro segments, which later become redundant. In such a case, all segments are clubbed together with a single marketing mix (counter segmentation).
Cultural and subcultural influences on consumer behavior
How do Culture and Subculture Affect Consumer Behavior?
How does culture affect the needs we recognize, how we search, our evaluation of alternatives, our shopping habits, consumption habits, how we dispose of products?
Parts of Culture
Culture: norms, roles, beliefs, values, customs, rituals, artifacts
Culture classifies things into discontinuous units of value in society
Codes classified units, develops behaviors, specifies priorities, legitimizes and justifies the classifications
Consumer socialization - the process by which people develop their values, motivations, and habitual activity
Culture creates meanings for everyday products
We study how the use and/or collections of products and their meanings move through a society
Nature of Culture—Components
Norms: rules that designate forms of acceptable and unacceptable behavior
Customs: behaviors that lasted over time and passed down in the family setting
Mores: moral standards of behavior
Conventions: practices tied to the conduct of everyday life in various settings
Ethnocentrism: the tendency to view one’s own culture as better or superior to others
Key Points about Culture
It is learned: transmitted from generation to generation
It rewards acceptable behaviors
It stays the same, yet can change
Family, Religion, School and Peers: what is the relative influence of each?
Values Transfusion Model shows how these combine
Will any become more, less relevant?
Consumer socialization: the acquisition of consumption-related cognitions, attitudes, and behaviors.
What is similar about . . .
Marriage
Birth
Death
Shelter
Food
Age grading
Division of labour
Property rights
Family / kinship groups
Status differences
Magic / luck superstitions
Hospitality
Greetings
Joking
Cooking
Personal names
Language
Gestures
Body adornment
Courtship
Music and dance
Incest taboos
Cleanliness training
These are called “cultural universals”

Cultural Generalizations
Culture is pervasive
It’s in most every corner of people’s lives
High-context style—it is where the communication has most of the information in either the physical way it’s presented or the person receiving it already knows the meaning
Low-context style—the knowledge of the ins and outs of the society is not as widespread
Culture is functional
The “Languages” of Culture
Colors
Color choice that signifies death varies across regions of the world
The color red
Bright colors
Colors and fashion
Time
Self-time, interaction time, institutional time
Time styles:
Approaches: economic, socio-cultural, psychological, measurement, physiological
Orientation: a person’s perception of the importance of the past, present, or future
Activity level: monochronic versus polychronic behavior – see PAI
Time processing: economic or linear, procedural, circular or cyclical

Other “Languages” of Culture
Space
What is the acceptable personal space across cultures?
Distance
Gestures, postures, or body positions
Symbols—signifiers
Friendship and agreements
Government and Laws
Certain Dimensions of Culture are Relevant to Consumer Behavior
Power distance: equality and informality vs. distance and formality
Uncertainty avoidance: comfort with not knowing
Masculine vs. feminine: are there rules of behavior related to being a man? Being a woman? Are their nurturing behaviors that are valued? Aggressive behaviors?
Individualism vs. collectivism: does country X emphasize the growth and rights of the individual or of the group?
What Myths and Old Wives Tales Do You Know?
Throw salt over your _____ shoulder when _____
Always eat ____________ on New Year’s Day
Always ______________for someone’s birthday
Always give _____________ for Valentine’s day
When sending wedding invitations, how many envelopes are used? __________
Eat __________ when you have a cold
How do these Myths relate to Consumer Behavior?
People may just use products because they think that they have to
People may not understand if there is a reason for such use - is chicken soup really good for a cold?
People may not accept your product if there is a better alternative, even if it’s not in the same product class – we find this in bringing innovations to new markets
There may be certain expected behavior for the giver and for the receiver
For instance. . .
What determines a “hot” lunch and why it is desirable
What determines holiday foods?
What is a breakfast food? Colors of foods?
Correct clothing for various events
Why do you turn around when entering an elevator?
Why do men wear ties and women do not?
Why do people shake hands, and not touch elbows?
Why do you know what constitutes “good” vs. “bad” manners?
Function, form, and meaning are defined by one’s culture
What does the product do for us? What are the benefits?
What should the product look like? What should it be made of?
When should it be used? By whom? Can it be given as a gift?
Who shops? Who is exposed to ads? Who traditionally uses the product?
Core Values in Marketing
What are the basic food groups? For Whites? Blacks? Hispanics? etc?
What about the aspects of consumer behavior? Consumer research?
EG - Is the decision process carried out the same way?
Are the structure of attributes the same? Compensatory vs. Noncompensatory?
Does someone’s membership in a cultural group affect their consumer behavior?
Let’s consider the “Core American Values
Do you agree with these?
Will they continue?
What do they mean for marketers?
What would they mean for food, clothing, entertainment?
Core values define how products are used in a society
Core values provide positive and negative valences for brands and communication programs
Core values define acceptable market relationships
Core values define ethical behavior

Do you belong to any Subcultural Groups?
Subculture is a distinct cultural group which exists as an identifiable segment within a larger, more complex society
Ethnic subcultures – Blacks, Hispanics, Asian Americans, Euro Americans, Native Americans, etc
Religious subcultures
Disabilities subcultures
Age subcultures
Any others?

Some Hard Facts
It is difficult to discuss common needs and practices in subcultural groups without sounding stereotypical and biased.
Summaries just reflect commonly-held behaviors, practices, and norms
Oftentimes various ethnic minorities live in areas where there is low income, little shopping opportunities, and great inequality - look at Camden
Regardless, people who belong to a specific group are likely to have identifiable preferences and needs
Key Concepts
Acculturation: measures the degree to which a consumer has learned the ways of a different culture compared to how they were raised
“Consumer acculturation”- how people learn consumer behaviors in another culture



Consumer behaviour is the dynamic interaction of affect and cognition, behaviour and environmental events by which human beings conduct the exchange aspects of their lives.” Companies are interested in consumer behaviour because they can develop marketing strategies to influence consumers to purchase their products based on consumer analysis. The success of a company’s marketing strategy will depend on how buyers react to it. To find out what satisfied customers, marketers must examine the main influences on what, where, when and how customers buy goods and services . By understanding these factors better, marketers are better able to predict how consumers will respond to marketing strategies. Ultimately, this information helps companies compete more effectively in the marketplace and leads to more satisfied customers.
Consumer decisions can be classified into three categories (1) routine response behaviour, (2) limited decision-making and (3) extensive decision-making.
A consumer uses
routine response behaviour when buying frequently purchased, low cost, low risk items that require very little search and decision effort
Which elements of consumer behaviour do Morrison need to understand?
For the food retail industry, market segmentation is one of the most important factors in consumer behaviour analysis. Market segmentation is the process of dividing markets into groups of similar consumers and selecting the most appropriate groups and individuals for the firm to serve . Consumers vary in terms of product knowledge, involvement and purchasing behaviour.
The Five-Stage Model of the Consumer Buying Process as a model of the 'typical buying process' and is a way to explain how consumers make their purchases.
The five-stage process includes
-problem recognition,
-information search,
-evaluation of alternatives,
-purchase and
-post-purchase evaluation.
However, a consumer does not necessarily go through all the steps and can in some cases even reverse the order . When a consumer buys a low-involvement product that is considered to have a low risk s/he usually has a preferred brand and will stick to this, even though there might be a broad selection of other brands. In that case the consumer goes straight from the problem recognition stage direct to make the purchase decision, skipping the information search and evaluation of alternatives . There are also several other situations where this model does not fully apply, such as when consumers make spontaneous purchases, are under a time constraint or have a certain attitude towards the product. Companies find it difficult to control the consumer buying decision process, however, they can get hints from consumer segmentation analysis because marketers’ group consumers are similar in some dimensions therefore a particular product will appeal to and satisfy them better. also identified five major types of segmentation including geographic segmentation with bases including city size and population. Companies can research areas in order to find out the social make – up of the area then select suitable products to match the social make – up.
If the company knows the number of people living in particular area, it will help it in considering whether to open a new branch or not as the case may be. Demographic factors such as age, sex, race, ethnic origin and family life cycle can also be considered. Socio-cultural segmentation can be categorized into four major areas (1) roles and family, (2)reference group, (3) social class and (4) culture and sub-culture. Psychographic segmentation includes motives, learning and attitudes. Behavioural segmentation looks at brand loyalty and usage rates. Morrisons have to link all these elements when considering their marketing strategies.
Consumer needs and wants change all the time in context with the issues raised above. The next stage for the company is to analyse the marketing mix based on consumer segmentation analysis. The marketing mix consists of product, price, promotion and channels of distribution. These are primary elements marketing managers can control to serve consumers. The aim is to develop a consistent mix where all the elements work together to serve the target market. Selecting target markets and developing marketing mixes are related various tasks.
These are the important elements that one should be considering if it wants to improve
Product
Ø How many variations, models and sizes of the product are needed to satisfy the various target customers.
Ø In order to launch new own label products, what types of packaging and labelling information would best serve consumers and attract them to purchase the product.
Price
Ø How much are consumers in a target market willing to pay for a particular product?
Ø What kind of price range is needed for that particular area.
Promotion
Ø In order to achieve a successful advertising campaign, the company need to know which would be the best media format for reaching the target market.
Ø What image should advertising try to create about the company.
Distribution
Ø What types of distribution channels would the consumer prefer to purchase a product in? Stores or other channels?. Morrisons is not currently offering online shopping. However, competitors such as Tesco, Sainsbury and Waitrose all offer online shopping and their sales of ecommerce are rapidly increasing.
Ø What kind of atmosphere might influence consumer preferences? Store layout, signs and display formats all influence consumer cognition.
Conclusion
There are two main reasons companies to issue loyalty cards. The first reason is consumers who have loyalty cards literally become more loyal and therefore become repeat customers. The research shows that when consumers were given a choice between two stores, they were more likely to shop at the one where they could earn rewards. The second reason is that companies can analyse consumer behaviour via the loyalty card database. Each time the card is swiped, companies get information about what customers bought, where and how customers paid. All this goes into a databank profile of individual purchase history. The data gained from each transaction can turn companies into “customer-centric” businesses. In addition, when the people signed up for the card, they gave personal information about their address, how many people live in the house, employment status, number of children and so on. Companies can analyse consumer segmentation based on this database.
In addition, retailers use loyalty card knowledge to find new markets, such as planning new range rollouts and managing fresh food. In the process they can save a fortune in costs. Another benefit is companied may save in advertising and outsourcing market research costs because now the company has its own database to analyse the individual customer.
Recommendation
The focus of customer relationship management has evolved from customer satisfaction to the creation of values for the customer. It is important to look at customers from the customers’ point viewpoint and not from the product or multiple channels.
Consumer behaviour is affected by many uncontrollable factors therefore issuing loyalty cards can help in understanding consumer behaviour.
However, it is now believed that the combination of added value for consumers and the useful data that can be gathered has persuaded the supermarket to introduce a loyalty scheme. Secondly, using this database to analyse consumer segmentation can help match consumer needs and wants. Thirdly, this database can be used to create a new marketing mix strategy in terms of the right product at the right price through the right channels and promoted in the right way
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Leo Lingham

Expertise

management consulting process, management consulting career, management development, human resource planning and development, strategic planning in human resources, marketing, careers in management, product management etc

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18 years working managerial experience covering business planning, strategic planning, corporate planning, management service, organization development, marketing, sales management etc

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24 years in management consulting which includes business planning, strategic planning, marketing , product management,
human resource management, management training, business coaching,
counseling etc

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PRINCIPAL -- BESTBUSICON Pty Ltd

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MASTERS IN SCIENCE

MASTERS IN BUSINESS ADMINSTRATION

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