CHAPTER 6 FAMILY AND HOUSEHOLD CONSUMPTION BEHAVIOR

LEARNING OBJECTIVES
1. 2. 3. 4. Realize the importance of the household to marketers in its role as the basic consumption unit for consumer goods in most societies. Understand the concept of the household life cycle (HLC), and know the various stages of that cycle and the relevant marketing implications for using it. Understand how consumption decisions are made within the household unit. Understand the role that households play in child socialization.

SUMMARY
The household is the basic purchasing and consuming unit and is, therefore, of great importance to marketing managers of most products. Family households also are the primary mechanism whereby cultural and socialclass values and behavior patterns are passed on to the next generation. The family household consists of two or more related persons living together in a dwelling unit. Nonfamily households are dwelling units occupied by one or more unrelated individuals. The household life cycle (HLC) is the classification of the household into stages through which it passes over time based on the age and marital status of the adults and the presence and age of children. The household life cycle is a valuable marketing tool because members within each stage or category face similar consumption problems. Thus, they represent potential market segments. The household life cycle/social stratification matrix is a useful way to use the HLC to develop marketing strategy. One axis is the stages in the HLC (which determines the problems the household will likely encounter) and the other is a set of social strata (which provide a range of acceptable solutions). Each cell represents a market segment. Family decision making involves consideration of questions such as who buys, who decides, and who uses. Family decision making is complex and involves emotion and interpersonal relations as well as product evaluation and acquisition. Marketing managers must analyze the household decision process separately for each product category within each target market. Household member participation in the decision process varies by involvement with the specific product, role specialization, personal characteristics, and ones culture and subculture. Participation also varies by stage in the decision process. Most decisions are reached by consensus. If not, a variety of conflict resolution strategies may be employed. Consumer socialization deals with the processes by which young people learn how to become consumers. Childrens learning abilities slowly evolve with experience over time. Consumer socialization deals with the learning of both directly relevant purchasing skills (budgeting, shopping) and indirectly relevant skills (symbols of quality and prestige, for example). Families influence consumer socialization through direct instrumental training, modeling, and mediation. Consumers appear to go through five stages of learning how to shop. This learning takes place primarily in the retail outlet in interaction with the parent. Marketing to children is fraught with ethical issues. The main source of ethical concern is the limited ability of children to process information and make sound purchase decisions or requests. There are also concerns about the role of advertising in forming childrens values, influencing their diets, and causing family conflict. However, ethical and effective marketing programs can be developed for children.

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Student Handout 1 Toys and Child Socialization

While not extensively studied, there is evidence that toys are an important way that children learn appropriate behaviors, including gender roles. However, a recent study concluded that childrens toys and their presentation in mass media send clear and consistent messages that affirm cultural values and preserve traditional relations between the sexes. Likewise, commercials shown on childrens television depict boys as being more knowledgeable, aggressive, active, and instrumental than girls.

To what extent do you think toys influence child socialization? What ethical responsibilities do toy marketers have with respect to the types of toys they market and how they market them? To what extent, if any, should toys targeting young children be regulated?

G. E. Pennell, Babes in Toyland, Advances in Consumer Research XXI, ed. C. T. Allen and D. R. John (Provo, UT: Association for Consumer Research, 1994), pp. 35964. See also R. H. Kolbe and D. Muehling, Gender Roles and Childrens Television Advertising, Journal of Current Issues and Research in Advertising, Spring 1995, pp. 4964.B. A. Browne, Gender Stereotypes in Advertising on Childrens TV in the 1990s, Journal of Advertising, Spring 1998, pp. 83-96.

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CHAPTER 7 GROUP INFLUENCES ON CONSUMER BEHAVIOR

LEARNING OBJECTIVES
1. 2. Understand the nature and importance of reference group influence. Know the nature of consumption subcultures and their implications for marketing strategy. 3. 4. 5. 6. Understand the nature of group communications and its importance for marketing strategy. Understand opinion leadership and how marketers can utilize it. Understand the diffusion process. Be able to develop a marketing strategy based on an innovation analysis.

SUMMARY
A group in its broadest sense includes two or more individuals who share a set of norms, values, or beliefs and have certain implicit or explicit relationships such that their behaviors are interdependent. Some groups require membership; others (e.g., aspiration groups) do not. The nature of contact is based on the degree of interpersonal contact. Groups that have frequent personal contact are called primary groups, while those with limited interpersonal contact are called secondary groups. Attraction refers to the degree of positive or negative desirability the group has to the individual. Norms are general expectations about behaviors that are deemed appropriate for all persons in a social context, regardless of the position they hold. Norms arise quickly and naturally in any group situation. The degree of conformity to group norms is a function of (1) the visibility of the usage situation, (2) the level of commitment the individual feels to the group, (3) the relevance of the behavior to the functioning of the group, (4) the individuals confidence in his or her own judgment in the area, and (5) the necessity/no necessity nature of the product. A consumption subculture is a group that self-selects on the basis of a shared commitment to a particular product or consumption activity. These subcultures also have (1) an identifiable, hierarchical social structure, (2) a set of shared beliefs or values, and (3) unique jargon, rituals, and modes of symbolic expression. Consumption subcultures are important to marketers because (1) the groups often require products to perform the activities on which they are based and to signal membership and status, (2) these products sometimes become appropriated by the mass market, and (3) the consumption of some products are or can become part of the consumption ritual for other products or for specific situations. A brand community is a non-geographically bound community, based on a structured set of social relationships among owners of a brand and the psychological relationship they have with the brand itself, the product in use, and the firm. A community is characterized by consciousness of kind, shared rituals and traditions, and a sense of moral responsibility. Brand communities can add value to the ownership of the product and build intense loyalty. Brand communities seem most relevant for highinvolvement, activity based products and for brands with a degree of uniqueness. Both Jeep and Harley-Davidson have benefited from strong brand communities. Group influence varies across situations. Informational influence occurs when individuals simply acquire information shared by group members. Normative influence happens when an individual conforms to group expectations to gain approval or avoid disapproval. Identification influence exists when an individual identifies with the group norms as a part of his or her self-concept and identity.

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Communication within groups is a major source of information about certain products. It is a particularly important source when an individual has a high level of purchase involvement and a low level of product knowledge. In such cases, the consumer is likely to seek information from a more knowledgeable group member. This person is known as an opinion leader. Opinion leaders are sought out for information, and they also volunteer information. Of course, substantial product information is exchanged during normal group interactions. Opinion leaders are product-category or activity-group specific. They tend to have greater product knowledge, more exposure to relevant media, and more gregarious personalities than their followers. They tend to have demographics similar to their followers. A situational variable, product dissatisfaction, motivates many individuals to become temporary opinion leaders. The term market maven is used to describe individuals who are opinion leaders about the shopping process in general. Many consumers engage in market helping behavioractively helping others acquire goods or services. Others serve as purchase palsa person who accompanies another on a shopping trip primarily to aid in the purchase process. Marketers attempt to identify opinion leaders primarily through their media habits and social activities. Identified opinion leaders then can be used in marketing research, product sampling, retailing/personal selling, advertising, and in creating buzz. Groups greatly affect the diffusion of innovations. Innovations vary in degree of behavioral change required and the rate at which they are diffused. The first purchasers of an innovative product or service are termed innovators; those who follow over time are known as early adopters, early majority, late majority, and laggards. Each of these groups differs in terms of personality, age, education, and reference group membership. These characteristics help marketers identify and appeal to different classes of adopters at different stages of an innovations diffusion. The time it takes for an innovation to spread from innovators to laggards is affected by several factors: (1) nature of the group involved; (2) type of innovation decision required; (3) extent of marketing effort; (4) strength of felt need; (5) compatibility of the innovation with existing values; (6) relative advantage; (7) complexity of the innovation; (8) ease in observing usage of the innovation; (9) ease in trying the innovation; and (10) perceived risk in trying the innovation.

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CHAPTER 8 PERCEPTION
LEARNING OBJECTIVES
1. 2. 3. 4. 5. Understand the nature of perception and be familiar with its determinants and effects. Understand the nature of exposure and how marketers can use this knowledge to develop communications strategies. Understand the nature of attention and how marketers can use this knowledge to develop communications strategies. Understand the nature of interpretation and how marketers can use this knowledge to develop communications strategies. Fully appreciate the critical importance of perception in the development of retail strategy, brand names and logos, media strategy, advertising and package design, warning labels and posters, and advertising evaluation.

SUMMARY
Perception consists of those activities by which an individual acquires and assigns meaning to stimuli. Perception begins with exposure. This occurs when a stimulus comes within range of one of our primary sensory receptors. We are exposed to only a small fraction of the available stimuli, and this is usually the result of self-selection. Attention occurs when the stimulus activates one or more of the sensory receptors, and the resulting sensations go into the brain for processing. Because of the amount of stimuli we are exposed to, we selectively attend to those stimuli that physically attract us (stimulus factors) or personally interest us (individual factors). Stimulus factors are physical characteristics of the stimulus itself, such as contrast, size, intensity, color, movement, position, isolation, format, and information quantity. Individual factors are characteristics of the individual, such as interests and needs. Both these factors are moderated by the situation in which they occur. Program involvement, the degree of interest the consumer has in the program or magazine in which the advertisement is embedded, is a situational factor of particular interest to marketers. Nonfocused attention occurs when we take in information without deliberate effort. Hemispheric lateralization is a term applied to activities that take place on each side of the brain. The left side of the brain is concerned primarily with those activities we typically call rational thought and the ability to be conscious and report what is happening. The right side of the brain deals with pictorial, geometric, timeless, and nonverbal information without the individual being able to verbally report it. A message presented so fast or so softly or so masked by other messages that one is not aware of seeing or hearing it is called a subliminal message. Subliminal messages have generated a great deal of interest but do not affect brand choice or other aspects of consumer behavior in a meaningful way. Interpretation is the assignment of meaning to stimuli that have been attended to. Interpretation is a function of individual as well as stimulus and situation characteristics. Cognitive interpretation appears to involve a process whereby new stimuli are placed into existing categories of meaning. Affective interpretation is the emotional or feeling response triggered by the stimulus. Interpretation is largely a function of individual learning and expectations that are triggered by the stimulus and moderated by the situation. Marketers are particularly interested in how consumers differentiate between brands, how they interpret images, and how they form inferences about missing information. Both marketing managers and regulators are concerned with the amount of information that is misinterpreted. Marketing managers use their knowledge of information processing in a variety of ways. The fact that media exposure is selective is the basis for media strategy. Retailers can enhance their operations by viewing their outlets as information environments. Both stimulus and personal interest factors are used to attract attention to advertisements and packages. Characteristics of the target market and the message are studied to ensure that

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accurate interpretation occurs. The meaning that consumers assign to words and parts of words is the basis for selecting brand names. Information processing theory guides a wide range of advertising evaluation techniques. Likewise, information processing theory is a basis for developing warning labels and posters. Finally, marketers need to be sensitive to the host of ethical issues that arise when developing marketing messages.

Student Handout 1 USING WEBERS LAW

STIMULUS PITCH (at 2,000 cycles per second) DEEP PRESSURE (at 400 grams) VISUAL BRIGHTNESS (at 1,000 photons) LIFTED WEIGHTS (at 300 grams) LOUDNESS (.100 decibels, 1,000 cycles/second) SMELL OF RUBBER (at 200 olfacties) SKIN PRESSURE (at 5 grams per sq. millimeter) TASTE (saline at 3 moles per liter)

WEBERS RATIO (K) .0030 .0130 .0160 .0200 .0909 .1000 .1428 .2000

The following illustration of the j.n.d. for weight may be useful: Webers Law: k = I/I For lifting weights, k = .020 Therefore, a. If the original weight were 10 pounds (I), the change in weight needed for one to detect a weight change is: I = (I) x (k) = (10) x (.020) = .20 pounds. b. If the original weight were 100 pounds (I), the change in weight needed to detect a change would be: I = (I) x (k) = (100) x (.020) = 2 pounds. c. Therefore, if one changed a 100-pound weight to a 99-pound or 101-pound weight, a person lifting the weight could not detect the change. More than 2 pounds would have to be added or taken away for one to detect the weight change.
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Student Handout 2 CHARACTERISTICS OF INFOMERCIAL USERS

Viewed in Past Year Gender Male Female Age 1824 2534 3549 5064 51+ Income <$15,000 $1520,000 $2030,000 $3040,000 $40,000+ Region Northeast North Central South West Total 57% 54 70 63 58 55 33 53 52 62 63 60 56 52 57 55 55

Ever Purchased from Using 800 Number 8% 9 4 9 12 10 3 5 11 8 9 11 7 9 8 10 8

Ever Purchased in Store Due to Infomercial 20% 19 19 19 20 26 13 23 24 21 25 16 24 14 21 17 19

Source: K. Haley, The Infomercial Begins a New Era, Advertising Age, January 25, 1993, p. M-3.

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CHAPTER 9 LEARNING, MEMORY, AND PRODUCT POSITIONING

LEARNING OBJECTIVES
1. 2. 3. 4. 5. 6. Understand the basic theories of learning and how they relate to each other in terms of the learning situations they explain. Know what factors determine the strength of learning. Understand the characteristics and role of low-involvement learning versus high-involvement learning. Know the nature and functioning of memory. Understand how marketers use learning and memory theories to develop product positioning strategies. Understand the meaning and importance of brand equity and brand leverage.

SUMMARY
Consumers must learn almost everything related to being a consumerproduct existence, performance, availability, values, preference, and so forth. Marketing managers, therefore, are very interested in the nature of consumer learning. High-involvement learning occurs when an individual is motivated to acquire the information. Lowinvolvement learning occurs when an individual is paying only limited or indirect attention to an advertisement or other message. Low-involvement learning tends to be limited due to a lack of elaborative activities. Learning is defined as any change in the content or organization of long-term memory and/or behavior. Consumers use two basic types of learning, conditioning and cognition. There are two forms of conditioned learningclassical and operant. Classical conditioning refers to the process of using an existing relationship between a stimulus and response to bring about the learning of the same response to a different stimulus. In operant conditioning, reinforcement plays a much larger role than it does in classical conditioning. No automatic stimulus-response relationship is involved, so the subject must first be induced to engage in the desired behavior and then this behavior must be reinforced. The cognitive approach to learning encompasses the mental activities of humans as they work to solve problems, cope with complex situations, or function effectively in their environment. It includes iconic rote learning (forming associations between unconditioned stimuli without rewards), vicarious learning/modeling (learning by imagining outcomes or observing others), and reasoning. The strength of learning depends on four basic factors: importance, reinforcement, repetition, and imagery. Importance refers to the value that the consumer places on the information to be learnedthe greater the importance, the greater the learning. Reinforcement is anything that increases the likelihood that a response will be repeated in the futurethe greater the reinforcement, the greater the learning. Repetition or practice refers to the number of times that we are exposed to the information or that we practice a behavior. Repetition increases the strength and speed of learning. Imagery is the degree to which concepts evoke well-defined mental images. High-image concepts are easier to learn. Remembering a fact or specific event is known as explicit memory. Knowing something without awareness of the source or exact nature of the knowledge is referred to as implicit memory. Both forms of memory are important to marketers but implicit memory is particularly important for understanding how consumers form and use brand images.

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Stimulus generalization is one way of transferring learning by generalizing from one stimulus situation to other, similar ones. Stimulus discrimination refers to the opposite process of learningresponding differently to somewhat similar stimuli. Extinction, or forgetting, is also of interest to marketing managers. Extinction is directly related to the strength of original learning, modified by continued repetition. Memory is the result of learning. Most commonly, information goes directly into short-term memory for problem solving or elaboration where two basic activities occurelaborative activities and maintenance rehearsal. Elaborative activities are the use of stored experiences, values, attitudes, and feelings to interpret and evaluate information in current memory. Maintenance rehearsal is the continual repetition of a piece of information in order to hold it in current memory. Long-term memory is information from previous information processing that has been stored for future use. It undergoes continual restructuring as new information is acquired. Information is retrieved from retention for problem solving, and the success of the retrieval process depends on how well the material was learned and the match between the retrieval and learning environment. Brand image, a market segment or individual consumers schematic memory of a brand, is a major focus of marketing activity. Product positioning is a decision by a marketer to attempt to attain a defined brand image, generally in relation to specific competitors. A brand image that matches a target markets needs and desires will be valued by that market segment. Such a brand is said to have brand equity because consumers respond favorably toward it in the market. In addition, these consumers may be willing to assume that other products with the same brand name will have some of the same features. Introducing new products with the same name as an existing product is referred to as brand leverage or brand extension.

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