Consumer Behavior Study Guide

Consumer Behavior- the totality of consumer’s decisions with respect to the acquisition, consumption and disposition of goods, services, time, and ideas by human decision-making units (over time).

Consumer Psychology- the study of psychological factors which underlie and determine consumer behavior, it uses psychology concepts, theories and methods to understand consumption in the marketplace.

Veblen’s notion of conspicuous consumption- the spending of money on and the acquiring of luxury goods and services to publicly display economic power- either the buyer’s income or the buyer’s accumulated wealth. Basically, rich people showing off by buying nice shit.

(Business Orientation and Marketing Concepts):

Acquisition

Consumption

Disposition

Overt – observable

Covert- not openly displayed

In marketing, the goals of psychology is to understand, predict, and control.

Product Orientation- focus is on making products available and affordable. There is little consideration to marketing research and product planning.

Sales Orientation- Focus is on volume, and not profit. Customer’s will not buy unless there is an aggressive sales effort. Customers want product quality and willing to pay more for it. Give customers what they want, regard of cost to the business.

Marketing Orientation- Focus I on the marketplace: the customers, competition, and distribution. Change is inevitable but manageable. Focus is on profit, not just volume.

The Marketing Concept- to satisfy a set of needs and wants of a defined group of customers. Ongoing research is needed to identify those wants. Satisfaction generates loyalty, repeat business and favorable word-of-mouth.

3 Bold Assumptions about Consumer Behavior

1. Individual possess complete perfect information about a products alternatives
2. Consumer make decision from #1
3. We can never spend than we make

(High and Low Involvement Model):

• High Involvement includes value relevant, outcome relevant, impression relevant. These occur when product is too costly, category reflect person’s self-image, and strong reference group pressure exists.
• Low Involvement- have limited information processing capacity reduces cost of thinking, seek small amounts of information. Susceptible to social influence. These occur when product category is unrelated to person’s self-image, product is inexpensive, or reference group pressure is minimum.

Levels of Problem Solving Effort

• Extensive decision making is substantial search, comparison and contrast, many alternatives
• Limited Decision Making has low to moderate amounts of search, with few choices alternatives are considered
• Routinized Choice Behavior has relatively automatic processes –little or no cognitive processing. Activation of previously learned decision plans such as heuristics.

(Johnson & Eagly):

Value relevant involvement – a psychological state that is created by the activation of attitudes that are linked to important values. (environmental issues)

Outcome relevant involvement – is supposed to lead to message-relevant thinking. The quality of presented arguments moderates the relationship of outcome relevant involvement and attitude change. (Want the glue to stick)

Impression relevant involvement – can be viewed as a concern with holding a position of what other people think of her/him (fashion).

(Freud’s Motivation):

Research- discover the most effective means of exploiting hidden or inner impulses of consumer, to trigger Id-dominated behavior.

Mainsprings (The Essence of Man) – the irrational forces in man’s life were so strong that rational forces had little change of success

Marketing Misuse of Freud – most human motives are unconscious, but behave purposely. Hence our subconscious dictates our behavior and our conscious mind has no chance for dominance.

Id- a primary process that releases or discharges quantities of energy or excitation. Childlike, immature, etc. Omnipotent fulfills wishes by imagination, fantasy, dreams

Ego- secondary process that maintains equilibrium between the environment and the impulsiveness of the Id. Reality Principle states that delays discharge of energy until appropriate.

SuperEgo- Moral or judicial branch of personality. Results from parental and societal standards. It enforces its moral rules by rewards and punishments. It regulates uncontrolled impulses that threaten society; namely, sex, and aggression.

1. Personality results from psychic energy- the source of this psychic energy is instinct, which contains bodily processes, needs, or impulses. The aim of the instinct is to eliminate a bodily need.
2. The seat of instincts is the id, the original reservoir of psychic energy. Freud believed the id was all-powerful. Ego and superego were unsuccessful with struggle with id.
3. Man’s life centers around compulsive desire for sex. Superego punishes ego. Ego resolves its frustration by adapting defense mechanism such as identification and sublimation.

Postdictive- not predictive

Iceberg Model of Mind –

1. Conscious (small) is the part of mind that holds what you’re aware of.

2. Preconscious (small to medium)- ordinary memory. Things stored here aren’t in the conscious, they can be readily brought into conscious.

3. Unconscious (large)-  dump box for urges, feelings, and ideas that are tired to emotion and state of being. These feelings do not disappear but exert influence on our actions and conscious awareness. Id, Ego, and Superego take place here.

Maslows’s Hierachy of Needs- Psychological > Security > Love and Belonging > Self Esteem > Experience Purpose > Self-actualization