Consumer Behaviour

Eighth Canadian Edition

Chapter 1
An Introduction to Consumer
Behaviour

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Chapter Objectives (1 of 2)
When you finish reading this chapter, you will understand
why:
1.1 Consumer behaviour is a process.
1.2 Marketers must understand the wants and needs of
different consumer segments.
1.3 Our choices as consumers relate in powerful ways to the
rest of our lives.
1.4 Marketers must be aware of consumer trends.
1.5 Ethical issues in marketing and consumer behaviour are
important.

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Chapter Objectives (2 of 2)
1.6 There is a “dark side” to some behaviours that can have
negative impacts on consumers and society.
1.7 Many different research methodologies can be used to
understand consumer behaviour.

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Consumer Behaviour: People in the
Marketplace!
• You are a business student, a friend and a consumer with
needs; making choices from competing brands
• Demographic impact: gender, income, occupation
• Psychographic impact: lifestyle and personality
• Consumption communities: sharing opinions and
recommendations

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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.

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Consumers Behaviour is a Process
• Consumer behaviour is more than just a purchase.
• It involves the issues that influence the consumer before,
during, and after the purchase.

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Consumer Behaviour is a “Process”

FIGURE 1-1 Some Issues That Arise during Stages in the Consumption Process

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Consumers’ Impact on Marketing Strategy
• Understanding consumer behaviour is good business
• This is because the marketing concept is all about
understanding consumer needs
• Data about consumers help marketers define the market
• The purpose of understanding consumer behaviour is to
predict the future

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Segmenting Consumers (1 of 3)
Market Segmentation
Identifying 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.
• Our diverse culture stresses a segmentation strategy be
employed
• Importance of the 80/20 rule

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Segmenting Consumers (2 of 3)
Demographics
Statistics that measure observable aspects of a population,
such as birth rate, age distribution, and income.
• Statistics Canada is a major source of demographic data
on families.

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Segmenting Consumers (3 of 3)
Psychographics
Differences in consumers’ personalities, attitudes, values,
and lifestyles
• The way we feel about ourselves
• Our attitudes to things and others around us
• The things we value
• The things we do in our spare time

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Segmenting Consumers
Important Demographic Dimensions
The following are important demographic dimensions which
influence strategic marketing decisions:
• Age
• Gender
• Family structure and Life Style
• Social Class and Income
• Ethnicity
• Geography
• Lifestyles: Beyond Demographics
• Segmenting by Relationship and Big Data

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Segmenting Consumers Relationship
Marketing (1 of 2)
Relationship Marketing
Involves making an effort to interact with customers on a
regular basis, giving them reasons to maintain a bond with
the company over time.
– One way to create relationships with customers is through
database marketing…..
Database Marketing
Database Marketing tracks specific consumers’ buying
habits very closely and crafts products and messages
tailored precisely to people’s wants and needs based on this
information..

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Segmenting Consumers Relationship
Marketing (2 of 2)
• Some other types of relationships a person might have
with a product include
– Self-concept attachment
– Nostalgic attachment
– Interdependence
– Love

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Marketing and Culture
• Popular culture
– Inspirational and an influential
– Tweeting, Boxing day shopping, Stanley Cup Playoffs are all
examples
– As are movie heroes, sports hero, product usage
• Consumer generated content
– Opinions on brands and products
– Social networking

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The Meaning of Consumption
• People often buy products not for what they do, but for
what they mean
– Brands…
 …convey image/personality
 …help us to form bonds with others who share similar
preferences

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The Global Consumer
Global consumer culture has united people around the globe
by common devotion to:
– Brand name consumer goods
– Movie stars
– Celebrities

This has influenced by:

– U-commerce – the use of Ubiquitous networks
– RFID tags – communication chips
– Companies expanding overseas

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Virtual Consumers (1 of 2)
• Impact of the Web on consumer behaviour
• 24/7 shopping without leaving home
• Handheld devices & wireless communications
• Not just B2C, now C2C (consumer to consumer) sharing
interests around the world
• A new generation of digital natives
• Horizontal Revolution
• Culture of participation

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Virtual Consumers (2 of 2)
• A revolution in M2M (machine to machine communication)
• Artificial intelligence (AI) applications improve precision of
ad placements
• Computer engineering is moving into directions of robot
companions

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Consumer Trends
• Consumer trends are underlying values
• These values drive consumers toward certain products
and services and away from others
• Consumer trend forecasting is big business; organizations
devote massive resources towards consumer behavior
• In many ways our basic assumptions about how
companies and people relate to one another are being
disrupted.

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Keep Ahead to Keep Up
• Important consumer trends that will impact marketing
strategies in the near future:
– Sharing economy
– Authenticity and personalization
– Blurring of gender roles
– Diversity and multiculturalism
– Social shopping
– Healthy and ethical living
– Simplification
– Anonymity

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Marketing Ethics and Public Policy
Business Ethics
To conduct business honestly and ethically, rules of conduct
that guide the marketplace
• Knowing right from wrong
• Various cultures and organizations may conduct
themselves differently in certain situations

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Ethical Standards of Conduct
• Prescribed code of ethics guidelines:
– Disclosure of substantial risks with a product
– Identifying added features that will increase the cost
– Avoiding false or misleading advertising
– Avoiding selling or fundraising under the guise of market
research
• Think about it: Are you willing pay a bit more for fair trade
coffee that helps various cultures?

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Needs and Wants: Do Marketers
Manipulate Consumers? (1 of 2)
Do marketers give people what they want or, do they tell
people what they should want?
• Do Marketers Create Artificial Needs?
– Hedonistic pleasures – secular humanism?
– Not materialistic enough?
• Are advertising and Marketing Necessary?
– Goods are arbitrarily linked to desirable social attributes

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Needs and Wants: Do Marketers
Manipulate Consumers? (2 of 2)
Do marketers give people what they want or, do they tell
people what they should want?
• Public Policy and Consumerism
– The welfare of the consumer is protected by many laws at
various levels of government.
• Consumer Activism and Its Impact on Marketing
– Cause Related Marketing
– Green Marketing
– CSR (Corporate Social Responsibility)
– Social Marketing

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Chapman Ice Cream Example:
Cause-Related Marketing

In 2019, Chapman’s Ice Cream launched a cause-related marketing campaign in which it donates 25 cents
from each box of Chapman’s Yukon Caribou Bars to the Canadian Parks and Wilderness Society (CPAWS)
to aid in protection efforts for the Caribou.

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The Dark Side of Consumer Behaviour
Additive and Compulsive Consumption
• Consumer addiction: psychological dependency on
products or services
• Drinking alcohol, smoking cigarettes, drugs
• Addiction to technology
• Compulsive Consumption
• Gambling in Canada is an example of compulsive
consumption

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The Dark Side of Consumer Behaviour
Additive and Compulsive Consumption

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Illegal Activities
• In North America a retail theft takes place every 5 seconds
• Shrinkage is the industry term for shoplifting and employee
theft
• Fraudulent abuse of exchange policies in retail
– Wear the item once then return it
– Change price tags on the items

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Anti-Consumption
Anti-consumption
Product tampering, graffiti and political protests where
property is destroyed.

Abercrombie & Fitch grassroots movement emerged,

encouraging consumers to donate.

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How Do We Find Out About Consumers?
The Role of Consumer Research
• Primary Research
– When the data is collected by the researcher specifically for
the research question at hand, this called primary research.
• Secondary Research
– When the marketer finds the information needed by going to
a pre-existing source of information collected for another
purpose. When the researcher uses pre existing data to
answer a new research question this is called secondary
research.

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Primary Research
• Survey Research
• Focus Groups
• Interviews
• Observational Research
• Qualitative Research
• Experimental Research

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Wheel of Consumer Behaviour

FIGURE 1-2 The Wheel of Consumer Behaviour

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