Understanding consumer behavior module 1, Appunti di Comportamento del Consumatore

Scarica Understanding consumer behavior module 1 e più Appunti in PDF di Comportamento del Consumatore solo su Docsity! Understanding consumer – Module 1 Why does understanding consumer matter?  People we target  Understand how to interact with people  Behavior is irrational  Understand needs and wants of the people  Consumers are different from each other  “We are all consumers” What does it mean to study consumer behavior? To study set of value seeking activities that take place as people go about addressing their realized needs. Consumer behavior = totality of all the decision that you made like acquisition, consumption, and dispositions of offerings (e.g., goods, services, time, and ideas) by decision making units over time. (it involves more than buying) NEEDS  DECISIONS in order to satisfy the needs  VALUE by satisfying our needs Consumption = process by which goods, services or ideas are used and transformed into value Marketers and consumers interact to produce value. Consumption outcomes affect consumers’ well-being by affecting quality of life. Consumption process = NEED  WANT  EXCHANGE (ex. Laptop I exchange my time to see all the alternatives in the market place)  COST AND BENEFIT  REACTION  VALUE If I’m happy with my decision I stop, otherwise the consumption process stat again. What is between depends on the consumption style. Major purchase  we go through all these steps Ex. Consumption of the master program Minor purchase  it an automatic behavior Ex. Drink water MARKETING  BLACK BOX OF THE CONSUMER  RESPONSE (it is impossible to have a conceptual model for consumer behavior, we are all different, one idea could not fit for everyone) Understanding consumer is important for all these stakeholders: Recall: Marketing 101 Framework Understanding consumer is important to give value to the consumer and to bring back this value to the company by revenues. Best global brands 2017: Apple, Google, Microsoft, Coca Cola, Amazon, Samsung  they bring value to the individuals and so they bring back value  high marketing activities 2. Developing the Research Plan Secondary data: (they don’t have these because it never happened before)  internal database  outside suppliers  commercial online databases Primary data: (they have to use these)  qualitative research  discover ideas, get insights  quantitative research  more objective analysis, based on numbers ex. Scale from 0 to 5 the impact that the video has on your idea of Domino’s Qualitative research:  Focus group : 6-10 people, moderator, free and easy discussion, gaining fresh insights ex. Video organic ingredients commercial to show people in order to change the perception of people  Depth interview : investigating motivation, associations, explanation, no peer pressure, intense probing, NO scaled response questions  it becomes a survey while they are free talk  Observation : watching what people do, recording behavioral patterns, no questions, researches as a customer, placing cookies on user browsers.  Projective technique : sentence completion, sketching, guided fantasy Quantitative research:  Surveys : most widely used method, mail, phone, personal, online (most), different types of questions (open ended, closed ended, scaled-response)  Platforms : qualtrics, online databases where to buy, amazon  Experiments : cause and effect relationship, independent variables manipulated, effect of independent variable on the dependent variable is observed. Ex. Do how you look affect how you are treated? Video: The Halo effect Domino’s has to change all the position of the brand  they change the logo Who is your population? - Representative sample: probability sample - Non-representative sample: convenience sample SONY case-study How a brand could use a marketing research? Problem: too much data They used a study that segmented consumers at a global level How do consumers perceive Sony globally? • A “statement computer” and a “high-end niche product that attracted consumers for whom style and design were a top priority” • Distinguished by its software, particularly multimedia software • A premium offering • A computer for individuals, rather than an enterprise brand • Attractive to those who highly value not only functional attributes but also more intangible benefits How do consumers in China perceive Sony Vaio? • Some Chinese consumers place particular value on foreign/Japanese brands • Some Chinese consumers prefer knockoffs, while others prefer the real thing • The Sony brand is viewed as being “young and trendy” • The VAIO brand is much less well-known than Sony; VAIO is called a “Sony computer” How did they get Consumer Insights? Three market research reports, including a study on consumer values, qualitative interview data, and a segmentation study. Recently the vice president of global marketing had encouraged all product managers to utilize a new corporate study that segmented consumers at a global level. EXPOSURE & ATTENTION Satisfy the needs and build relationship is important: marketing provides value and builds relationship. To understand consumers, we have to understand their needs. Understanding consumers help to segment them, choose our target and make corrective intervention. We have to understand how consumers behave and, most of the time, change their behaviour. Change is a result of learning process, so consumers have to learn your offer and provide value to it. So, in order to understand consumers’ learning process, we have to understand how consumers perceive. The process of perception is composed by three elements:  Exposure  Attention  Comprehension Perception, in a very basic definition, is the interpretation of the reality. There’s one reality but each one of us interprets it in its own way (e.g. in high-end restaurant, most of the food is served in big place with small amount of food, therefore people demand more food because they perceive that their need of hungriness isn’t satisfied yet and in order to satisfy their need, the consumption process is going to start again). Another example is given by the preference to drink hot chocolate in a ceramic mug instead of a glass one: most people prefer drink hot chocolate in ceramic mug because they perceive the ceramic mug transfer the idea of a warm drink, that’s why most of the consumers prefer drink hot chocolate in a ceramic mug. How companies use this perception of differences? For example, coca cola started offer their drinks in smaller cans. They came out with this strategy of offering the same product in smaller cans because 1) if someone wants to reduce its sugar income, drinking coke from a smaller can would make the consumer more satisfied 2) this satisfy the need of convenience to carrying coke 3) perception of drinking less From company point of view, they want consumers to drink less coke? Of course, no! But they were okay to change their packaging in order to satisfy the need of consumer because people, by the satisfaction of their needs through the smaller can (drink less coke, drink a smaller amount compared to the regular can, a packaging easier to carry etc), will ask for more coke. Consumer perception process starts with exposure and ends with comprehension, how to make sense, how to understand the stimuli that market provide you. Exposure is bringing the stimulus (which, in marketing context, is the offering that market provide you) as near as possible to the consumer. The perception process starts immediately after your senses enjoy the stimuli (by seeing, by touching, by smelling etc), the perception starts as soon as the stimuli is offered to yours sense. Exposure can be first hand or second hand:  first hand experiences are the one who allow the consumer to interact directly with the product one-to-one (touch it, experience it directly)  second hand experiences information is the most popular kind of exposure nowadays thanks to the increase of technology and social media: consumers read reviews and they are exposed to the product in this way, without touching the product or smelling the offering. So, perception starts with exposure and exposure can be first hand or second hand. But, then, the question is: how do we process the stimuli that we’ve been exposed to? Firstly, there is the immediately response. Once you’ve become aware that there is something that is going on, that we’re exposed to, we start to organize information in our mind: in most of the cases, this is an automatic process, we do not go through it, we’re not aware of the organization process, is an automatic response that we have in our mind, except if the stimuli concern something that we’ve been already exposed to, we’re familiar to. After we put the information that we’ve organized in their place, we give a response (e.g. this is something I know, something I’ve never been exposed before etc). Once our sense received the stimuli, we make sense of it and finally – by organizing the stimuli – we give a reaction. How do we organize? Once we have sensed the stimuli, we start organizing. There are three ways to organize the stimuli: 1. Assimilation  the product shares the same characteristics and it fits to the category (e.g. coffee with morning drinks) 2. Accommodation  the product shares some but not all characteristics and it needs an adjustment for fit (e.g. iced coffee doesn’t perfectly fit because people usually drink something warm in the morning, but because is coffee and share some of the characteristics of morning drinks, someone would accommodate that product) 3. Contrast  the product does NOT share any characteristic and it not fit to the category (e.g. wine) One of the problems with exposure is that it is selective, consumers own and control this process, people select what want to get exposed to. For example, FedEx has started with a different logo, but the actual logo expresses the expedition service that FedEx does. Also, Google has changed its logo many times, but the changes have always been just noticeable and only by comparing the first logo and the actual one we can see the difference, in order to doesn’t confuse the association that consumers have of the company. Fedex instead wanted to change the perception so they’ve had a bold noticeable difference, for what concern google and Starbucks they didn’t want to confuse their consumers, so the difference is just noticeable. JCPenney twice confused consumers, first time with their logo and the second time through their new store layout. Consumers couldn’t associate the new store layout with the old one, this create confusion and individuals doesn’t like confusion and complication. But why JCP come out with this new store layout? They came out with this store layout from apple, but they’re not apple! People doesn’t have any associations between apple and jcp, so trying to make jcp like apple isn’t successful. If we want to have an evident change, we must make sure that people notice the change because they suffer change blindness (cfr the door experiment) The marketing implications of the change blindness is that consumer don’t recognize small changes (e.g. for a consumer there’s no difference between 24.49€ and 24.99€), they have preferences about what they perceive, so we don’t assume people see what we do. All these elements of the perception process have implications for what concern pricing, quantity changes, quality improvement and change in product design. Attention can be defined as devoting cognitive resources to the stimuli. English readers tend to start at the upper left of a figure, so elements in that position tend to receive more attention. Each culture has its own attention process. Second basic is that picture tent to get more attention rather than words. Also, large elements draw takes more attention. Colours and motions get noticed too. People pay more attention on the upper left corner. Attention is selective, individuals select what to pay attention. It is also limited, that’s why teachers give breaks and there are commercial breaks between movies, people can’t give the same amount of attention for three hours. But attention can be divided. All these things mean that is difficult to take attention in consumers. We have to know tricks to attract attention by consumers. Attention can be voluntary or involuntary. Voluntary one means that you yourself decide to pay attention. But attention can also be involuntarily (e.g. if somebody starts screaming we give him involuntary attention). Voluntary attention can be grabbed by make it personal and connect it with needs. But, most of the time, in the market place is took involuntary attention through increase of salience and the increase of vividness. Visual perception is described by a set of rules  gestalt Proximity  Elements that are close together tend to be viewed as part of the same object; those farther apart tend to be viewed as part of different objects Similarity  Elements that physically resemble each other tend to be viewed as part of the same object; those that are physically dissimilar tend to be viewed as different objects Continuity  Incomplete or partially hidden objects tend to be viewed as whole or completed patterns Figure/ground contrast Figure is the dominant or focal element in a visual field. Ground is the perceptually non-focal elements in a visual field, the background. Visual properties Design:  Visual properties of the product  Colour, composition, images etc Display  is difficult to take attention because the product is displayed with similar ones so how can we make sure that our product is different from the other who are next to the ours?  Visual properties of the surrounding environment  Location, placement, orientation, etc Gestalt rules in grocery aisle 1. What consumers buy depends on where they stop 2. Where they stop depends on how we’ve defined the categories 3. How define the category depends on how we visually group items together Benefit of grouping is that consumer can easily define the category and when they look at the category they can understand that there are different products. But the cost of grouping is that is harder to make a choice for the consumer. A possible solution to this struggle is to make a gestalt grouping within groups, it’s the consumer again that take the control on the choice behaviour. One way to get attention is violate visual expectations and previous knowledge, conventions or norms (by using different packaging that consumers don’t expect to find). Biological response doesn’t always work (see the Reebok campaign) but sometimes it works (Sunsilk campaign). Location and its relationship with attention Usually locations display products for 4, 8 and 12 units, in order that consumers process information in left, centre and right and they’re put in the top of the shelf, the middle and the bottom. Which position takes more attention? Noting is when you became aware of the product, re-examination is the moment you pay attention, you are aware of the product: it has been proved that having more facing is more beneficial for the companies. Also, being at the centre get more attention and get more noticed: for a company is better to have a lot of facings, being in the centre and in the middle of the shelf. But, the horizontal position doesn’t influence the choice of the consumer! They notice the product, they re-examinate it, but it doesn’t influence the choice. Same with the vertical position. Getting attention isn’t sufficient to change consumer behaviour and convince him to buy our product. So visual attention matters for what concerns automatic responses, but for what concern more complex cognition and behaviour, not so much. It depends also on how familiar consumers with that product are (familiarity matters!). if you’re somewhat familiar with that product, the visual prominence will influence. How do we test perception? Perceptual maps help companies through graphs that allows to visualize how our products are related to competitive offerings in the marketplace. The assumptions behind perception maps are that consumer evaluate the product only with the attributes chosen by the company, that are the most important of all possible attributes. They collect rating s for each product for each possible attribute, generally using Likert scale survey instrument. Usually the number of questions is measured by N (number of products) x M (number of attributes). Distance between the points represents how similar products are perceived according to consumers. Memory and knowledge comprehension What does it mean if people in the marketplace perceive your offer as the same of your alternative offer? Remember: consumption process starts when understanding the need, so consumers understand that they have a certain need. If several behaviours satisfy the same needs and provide the same value, it means that we should do our job in perceptual differentiate our offer. So, if there’s no other behaviour that can provide the same benefit, our job is easy, we have only to convince to change behaviour, but there are no alternatives in the market, we’re the only one able to satisfy that particular need. So, perceptual maps are good tools to understand how consumers perceive our offering and alternative offering in marketplace, however, when we use them we should also consider the limitations that they have. Attention is important in the perception process because is the time in the marketplace that consumers decide to cognitively put their brain to try to understand your offering. visual properties activate our memories, and therefore visual properties are so important, because they trigger our cognisant and they activate our memories. What are memories? We have told that visual triggers What was previously stored in memory can be experience, object, evaluations, so anything that we’ve exposed to is stored in our memory one way or another way. Retrieval is the process you start remembering and accessing what was previous stored in your memory. The bigger is better: big things take attention, but not all times big is better. When prices are written in big numerals, they’re perceived as low prices and therefore they’re associated to low quality. More neutral is the font more positive is the personality, because consumers like simple things. Numbers are Colors are the most important visual characteristics to give means to consumers. The meaning of a colour changes with cultures. Red is commonly associated with energy, power, vitality arousal, aggression, “stop” and it strategically used in different advertise. Green is associated with nature, health, environment, harmony, freshness, “go”, so the consumers drive meaning in this way when they see this colour. All companies related to healthy living and freshness use green. Also, coca cola doesn’t use red in the coca cola life because want to associate it with something healthy. Blue is associated with refreshing, purity, serenity, intellect, precision, elegance  water. Yellow is associated with happiness, cheerful, energetic, youthful. They don’t use red because it is associated more with aggressive, red drives different meanings instead yellow gives a unique message of happiness and cheerful. Purple is associated with elegance, luxury, regal, that’s why we see fashion advertisement most in purple. Colors play a main role in visual cues. Message congruity:  Characteristics of the message receiver: Intelligence: e.g., not everybody has knowledge of finance (see ad about loan on slide). Prior knowledge: if we don’t have knowledge about cars, a detailed advisory will not be understood. Involvement: consumers should be involved to give meaning to the message Expectations: what do we expect from a brand influence the way we give meaning to their product and service Brain dominance: right brain focuses more on visual information, instead left brain focus more on verbal ones. For this reason, image and verbal information are mixed together: left brain could read all the information written in the mc Donald ad!  Characteristics of the environment:  Information intensity (amount of information in the environment)  Framing (how the information is presented) “we” and “you and I” are different  Timing amount of time that the consumer has and point in time at which the consumer receives the message Inference: disorganization as a cue. What would consumers infer from seeing just few items of a particular type in a disorganized display? The positive answer is that this items must be really popular, but the negative one is that other customers have touched that items and this is disgusting At the end, you use your information to master your environment and, as marketing manager, we have to find a way to influence how our consumers perceive our messages. Motivations and emotions Inferences that consumers make are important because through the inferences that individuals made, they drive meaning, so inferences are related to comprehension, element of perception, and they really much influence the way that individuals in the marketplace drive meaning. Image location as a weight cue: packaging can seem heavier or lighter. For some products is better to be heavier (e.g. you want to eat chocolate biscuit and you’re not on diet, so you will prefer the box which look heavier. Instead, if you’re looking for a web-cam to put on your computer, you’ll prefer to have a lighter one, so your evaluation as consumer will be more positive if the package with the image of the product in the upper left corner). argument, instead, low motivation requires simple messages with strong visuals. They don’t have to be separated into two different communication, they can be putted together in the same communication, in the same message we can target both low and high motivation people. Why motivation is important? Because if you’ve got high motivation it means that you’re paying attention, instead if you’re low motivated you will not pay attention to the message. That’s why tries to perceive people with high motivation is so important. Extrinsic vs intrinsic motivation is a way to categorize motivation. Extrinsic motivation is what happens when a behaviour is performed based on the expectation of an outside reward (or consequence), such as money or praise (or punishment). Some examples: frequent flier programs  free flights, better seats; retail store credit cards  sales, exclusive offers, expected punishment  laws, regulation. Intrinsic motivation is what happens when a behaviour is driven by an internal incentive; based on the expectation of enjoyment, pleasure, or curiosity satisfaction. Examples: Spa treatments → Relaxation; hobbies → Enjoyment, fun; Movies → Entertainment The performance of an individual decreases overtime if it acts with extrinsic motivation. That’s why we have to engage people with intrinsic motivation. If you’re someone who is prevention focus, when you’re buying a care you might be more interested in the feature like airbag or abs. but if you’re promotion focus and you’re looking for your ideals and your expression, you might be looking for a sunroof, a dvd player or a turbo charger, something that improves your aspiration. Because of we have approach goals and avoidance goals, we can live motivational conflicts, which are approach-approach conflict, we want to approach a goal, but there are two items that satisfy the goals (e.g. pizza and hamburger). Sometimes there are approach-avoidance conflict, e.g. we want pizza but we don’t want to get fat. What are emotions? Emotions are psychobiological (involves both psychological processing and physical responses) reaction to appraisals. Emotions are NOT mood. Mood is related to something temporary and changing (transient) and general feeling state often characterized with simple descriptions. E.g. people who are anxious, prefer safe options  if you’re anxious you want to prevent the negative consequences of a not safe choice. In order to increase motivation, we have to make people involved and one of the better ways to make people feel involved is to use emotions. Any individual can experience positive and negative emotions at the same time, so the job of marketing become more complicate. Emotions can be primary and automatic (no thinking belong) like anger, happiness, sadness, fear etc. but there are also some secondary emotions that we feel after cognitive process, like gratitude or feeling guilty because of the things that you’ve done. It’s not an automatic feeling but it requires a cognitive process and also positive and secondary emotions can be experienced at the same time. Because of all these complications is difficult to make people emotionally involved. How to measure emotions? According to research is possible to use i-tracker and it’s what most of the marketers use right now to measure people emotions. Is possible to use sweat measure by using galvanic skin response (when you feel certain emotions you get more sweat, you have physical reaction, so you have more sweat). It is also possible to use eye scan, because certain emotions activate eye motion. So most of the time company measure emotions by scale. The problem with PANAS (Positive Affect Negative Affect Scale) is that is difficult to understand the meaning of each emotion, their meaning isn’t very clear and it’s hard to communicate the particular type of emotion that someone is experiencing, and emotions are subjective, so each person emotionally react in different way in front of an ad. Moreover, emotions are more than twenty, there’s a huge number of emotions! Subjects charted moment-to-moment positive and negative emotions to 30 ads and then and overall evaluation of each ad at the end of the study.  Overall evaluations were largely affected by the peak emotion and ending emotion of each ad.  Overall evaluations were largely insensitive to duration of the ad people judge an experience largely based on how they felt at its peak (i.e., its most intense point) and at its end, rather than based on the total sum or average of every moment of the experience Campbell soup ad: putting the spoon  metal makes feel the package like “cold”, so they changed the package and they put the steam of the soup to make the package “hotter” Personality and lifestyle The core of brand storytelling is the use of authentic and emotional stories to connect with customers. What we mean when we talk about storytelling is the process of creation personal and unique customer experiences, because each customer is unique therefore we have to get them this personal and unique experience and in order to do this we have to target them through emotions  brand storytelling. In the case of hunger games, they have used the people in their movie to keep customers engaged. Perception is subjective reality due to emotions, so we cannot expect that people will experience the same emotions that we experience  one of the most important difficult when we try to engage people through emotions. In the case of hunger games, they let people experience emotions freely. But if we have a pre-determined number of emotions, it’s harder to do. Depending on the motivation level it can be easier or harder to convey to the emotion. Advertisement are static, so there’s no story going on and they create less excitement, so is difficult to convey emotion, but emotional engagement is one of the strongest methods to make people motivated to process information.  AirBnB commercial example What was effective in their commercial? For NYE 2015 they’ve shown that approximately 550.000 travellers had spent NYE in one of their many rentals across 20.000 cities – a jump from just 2.000 guests five years before. By showing places that maybe people have been to or want to visit, they create a connection with customers.  Google “year in search” commercial example 2 minutes video when for each year they show the most searched topic. They make people engaged by creating unique consumer experience: any of us will be able to find something that is related with us and experience any emotion that they want us to be experience, they left people free to think about their own experience, but the ending point is that people experience emotions and, therefore, they get engaged with Google.  Huggies commercial example They’re the main competitor of Pampers in the US. The commercial is focused about “hug” MIN 24 is very difficult to use emotions and to try to convey to a certain emotion, but we have to keep in mind that not any consumer will convey to the emotion that we’re trying to make them convey to, there are many tools to do this, but each tool got its limitations. the most widely used method to define consumers is the VALS (Value And Lifestyles). This model helps to come up with consumers’ segment to target. Demographics are also important. Not all of companies try to target consumers by lifestyle but everyone targets in some way consumers demographics. What we understand from demographics is related with age: by the age changes the behavior in the marketplace. Also the gender changes the behavior in the marketplace. Depending on the income, the behavior in marketplace change. In defining our target customers, we should not only consider lifestyle but also demography. Lifestyle is much related to behaviors: consumers’ preferences changes with the occasion (e.g. Christmas time), the benefit sought (mountain bike or city bike?), the user status (e.g. diapers and age), the usage rate (basic, pro or business?) and the loyalty status. 1. Cue or trigger : as marketers, we provide people with stimuli (product, services, price) 2. Routine or behavior : if we want to change it, we have to wait for the cue to be interrupted. One option is to wait for the triggers to be interrupted so we can bring the product or service in front of the consumers and create a certain habit in the consumers. But cues are interrupted only in big events that are not part of the everyday life (e.g. when we go out for vacation, when we graduate, when we move, when we have a baby). What we should do as marketers to try change consumers’ habits? We can create the interruption of the cue rather than waiting for something to change in someone else life, we can – as marketers – change the cue, disrupt the cue. For example, by offering discount we take attention and we change the situation. Also, by offering something new we change the situation, because consumers don’t know how to behave in front of the new product and we can create a new behavior through the new product. 3. Reward : we have to signal to the consumer that we are the reward. What we mean saying “we are the reward”? Example of Febreze BEFORE: 1. Cue: bad smell 2. Behavior: use Febreze! 3. Reward: bad smell eliminated But this was what all the other competitors offered to the consumers so why should consumers change their habits and start using this product? No reason! They’ve changed their positioning through the way they communicate. 1. There’s a clutter 2. Tidy up the room 3. Spray Febreze as a way of making the room smell as nice as it looks By changing marketing communication, their sales doubled within two months and one year later sales reached $230 million. They not only satisfied the needs that consumers have, but they also offered something extra. One of the reasons why is difficult to change habits is the consistency treadmills. They don’t like any difference in their behavior. We have certain beliefs and these beliefs lead to certain behaviors. So, most of the time we would like a coherence btw our beliefs and our behavior. But then, our beliefs can be reinforced, and the behavior became habits and the behavior become a self-perception of ourselves, we think that the behavior reflects our personality and if we change the behavior we could be perceived as different. Self-concept is the totality of thoughts and feelings that one has about him or herself. Ideal self is how you would like to see yourself. Social self is how you are seen by others. Ideal social self is a combination of both, how you would lie others to have about you. Groupon was born with a wrong concept: they believed that people after having experienced a service at half of its price, would like to come back and pay full price. This is because they didn’t consider self-perception! If the coupon requires low effort to be get, the loyalty percentage dramatically decrease. In a low effort situation, if you give people discount, their loyalty level decreases, instead this don’t happen with high effort coupons, loyalty level stays the same. Dissonant behavior is what happens when beliefs and behavior are incoherent. When people feel incomplete or insecure about a certain important aspect of their life, they surround themselves of symbol that complete the image of themselves (by purchasing product or service). Social influence When we behave in the market place, we’re not isolate. What is social influence? Groups are the most important thing related to social influence. Each one of us is part of a group. When we talk about groups, we talk about people that share common goals and interests. They communicate with each other and as a result of this communication, individuals influence one another. They share set of expectations, rules and roles. Each member of the group views itself as a member of a common social unit. Groups can be classified according to: 1. Membership  Ingroup: person identifies with as a member  Outgroup: group with which person does not identify  any group shares a set of expectations, rules and roles. So you have an expected behavior from your ingroup. Instead, if we’re talking about outgroup, outgroup can be a group that you might really want to be a member of the outgroup and change your behavior to become a member of the outgroup. 2. Strength of social tie : closeness and intimacy of the group linkages  Primary groups are the ones that you have really close and intimate relationship (i.e. family) and is the most influent on your behavior as individual. When you have frequently and direct contact and strong social ties, we’re talking about primary groups.  Secondary groups don’t need a very direct contact, you might have it but you don’t have to necessarily have it. Secondary group’s influence is not really strong. They’re both part of your ingroup, the difference is the influence they have on you as individual and as a consumer in the market. Another classification based on the strength of social tie is the one between o Formal groups are the group of whom you’re a formally member and there’s a certain application process behind o Informal groups haven’t a formal membership and there’s no application required 3. Type of contact : whether the interaction is direct or indirect. 4. Attraction : desirability that membership in a given group has for the individual  Aspirational groups are groups that you really want to be member. You’re not a member yet, but you desire to become a member.  Dissociative groups are the one that you don’t want to be identify with. NB these are the outgroups, we’re not a member, with the first we want to become a member and with the second one we don’t want to become a member. Reference groups are groups of individuals who have a significant relevance for a consumer (motivation  engagement  something relevant that satisfy our needs) and have an impact on the consumer’s evaluations, aspirations and behavior. In the literature there are three different types of reference group  Informational influence: the reference group that we rely on to give some information to make a decision (opinion leaders, expert etc).  Normative influence  Identification influence Culture & context effects What culture is? Culture is a very important topic in marketing and many companies try to transfer value in their customer through target’s culture. By culture we influence their behavior. Why culture influence behavior of individuals? E.g. the way we dress. For any culture there socially acceptable and socially unacceptable behavior. Culture is another social influence source: commonly held societal beliefs that define what is socially gratifying within a specific society  adapt yourself to what is socially acceptable to a certain culture. Culture gives us meaning  something is meaningful for a culture can be super meaningless for another e.g. Dunkin’ donuts: America runs on dunkin  Indian people wouldn’t understand the message Cultures are defined based on six values:  Individualism vs collectivism: is the extent that people expect individuals to take and share responsibility whether to don’t do it  share responsibility or take it by its own. US and most of Europe are defined as individualistic country, where everybody is expected to take its responsibility and is less likely to share responsibility among people of the group. Instead majority of the world has a collectivistic culture. How this description of collectivistic and individualistic cultures influences consumers’ behavior in marketplace? In collectivistic countries there’s more social influence, group influence on individual’s behavior, meaning that people in collectivistic countries is more influenced by world-of- mouth, will be more looking for reviews, pay more attention to what other buys and how others evaluate product, opinion leaders are more important. While looking at individualistic countries is less likely to follow others opinion because they prefer to come up with their own decision. People who belongs to collective countries are the ones who looks for different alternatives and relies on other people opinions.  Power distance: is the acceptance of social inequality. In US and north America, there is little power distance, so culturally is less acceptable the fact that exists social differences among people. In southern America instead, it seems to be more acceptable power distance. The more power distance a culture has, the more luxury consumption there will be in a country: power distance is related to self-expression. Large power distance means higher materialism in the country in order to reflect the identity and show itself.  Masculinity vs femininity: in feminine culture there is the acceptance of control while male cultures want to have more control, more authority. How do this reflect the behavior in marketplace? There will be more gender discrimination: the more a certain culture is defined as either masculine either feminine (extremes), the more gender discrimination there will be in that culture, more defined roles there are in that culture.  Uncertainty avoidance: is the except of people in a certain culture to avoid uncertainty, meaning that a culture is more prevention orientated, they try to avoid negative consequences of a behavior, they would not take risks. High uncertainty avoidance is correlated to risk avoidance and is prevention orientated. Insurance companies are favorite in uncertainty avoidance cultures, while stock investments, innovations, are favorite in cultures with uncertainty toleration  Long-term vs short-term orientation: long term orientation is diffused almost only in northern Africa while the rest of the world looks more long term orientated. Having a culture short-term orientated means having a culture who lives in the present, who isn’t too much worried about future  they save less, and they spent more in the present time. What kind of products they buy? People who belong to short-term culture is more likely to buy non-durable goods (they don’t look for products who last during time), while people who belong to long-term culture is more likely to buy durable goods.  Indulgence: indulgent cultures have more hedonic motivation and therefore they do more experiential purchases, buy luxury product, impulsive purchases. Can brands have culture? We have seen that brand have a personality, can position themselves in consumers’ minds by their personalities. But do they have culture? And, if yes, how do we define brand culture? Yes, they try to have a culture. For example, Nutella reflects Italian culture, especially in its marketing communication. But have brands create culture? Yes Coca cola fifa world cup’s marketing campaigns  What do music and sports have in common?  excitement, engagement (in both engagements is higher when the experience is live).  What do music, sports and soda have in common? All the coca cola campaign since 1971 are focused on anthem: every country has an anthem and coca cola tries to come up with an anthem that people share and sing together, an anthem that reflect the culture. The reason why coca cola ads in Russia 2018 hasn’t been successful is that they didn’t enter in the Russian culture. But coca cola is trying to create its own culture by connecting people. All these discussions lead us to the fact that culture is one of the most influential features that affect individuals’ market behavior. Contextual effects The first one is having a reason-based choice. As individuals, we like to provide justifications for our decisions, whatever culture we belong to, we like to justify our choice to ourselves and to the others. We try to come up with reason to justify the choice of one option rather than another one. One of the contextual factors is that reasons come up with a decision. When we try to justify our behavior with a reason, our reason does not have to be good at all, it’s okay if we’re able to find just one reason to justify our behavior. In reason-based choice there are different effects that influence consumer behavior. Let’s assume that we want to buy a car and there are brand A and brand B. Let’s assume that ride quality and MPG are the two main factors that affect our decision. Brand A is better than brand B for what concern ride quality while brand B is better than brand A for what concern Miles per Gallon. In this 1989 study, only the 39% of individuals who participate in the study choose brand B. But, if we assume that there is a brand C which enter in your consideration set and the bran C is the worst among all the three brands in terms of riding quality and in terms on MPG is the same of brand B and is the better than brand A. Just by introducing this third option, which has a feature equal valuated and another feature which is worse, the percentage of people who choose brand B is increased to 62%. The decoy effect is what happens when there are two brands, one better than the other for one feature, and we introduce a new brand which is worse than both old brands. This increase the preferences for the old brand. An inferior option can provide a reason to choose, if it is asymmetrically dominated by only one of the other options  reason for choice: asymmetric dominance  Consumers will tend to have a specific change in preference between two options when also presented with a third option that is asymmetrically dominated.  An option is asymmetrically dominated when it is inferior in all respects to one option; but, in comparison to the other option, it is inferior in some respects and superior in others. Extremeness aversion is a tendency to avoid choosing options that are at one extreme or the other  choosing the middle option give more justification to the reason why they have made that choice. Majority of the people choose option C. how the choices do change when we have a certain kind of information? Now that we know whether we failed or passed the exam, if we assume that we have pass the exam we would probably buy the vacation package and almost none would buy the fee to delate the vacation. Vice versa none would buy the vacation package if he hasn’t pass the exam. NB: extremeness aversion is also - for some scholars - considered as a type of choice set composition effect, so it’s not wrong to think that extremeness aversion is a choice set composition effect, but the majority of scholar doesn’t consider it as this. Order influences our decisions: Although are the same questions, by changing the order it changes the correlation between dating life and life in general Scholars provided participants with 24 jams on display. In the other set there are only 6 (one is a consideration set composed by 24 products that can satisfy the considered need and the other one consideration set is composed by 6 products). The more option there are in the row, the more people will stop in front of the aisle in the supermarket  the more items are displayed the more people stop and look at the product BUT stop and looking doesn’t necessarily mean that consumers will purchase the product, because having too many options, like the case of 24 jams, only 3% of people who stopped in front of the row purchased the product. Choice set composition: too many options are likely to decrease the percentage of people who buys. When they reduced their items options by 54% they realized that sales went up of 11% and the 75% of households increased overall expenditures in supermarket, because providing too many options create decision difficulty and because of that it leads to lower purchases, lower decision making and lower consumption. Because of decision difficulty in having too many options in bigger cities, this create a raise of expectations and researchers showed that is more difficult to find love in bigger city rather than in smaller ones. Having too few options also influences our behavior as individuals in the marketplace. Let’s assume you have only one option: the Sony dvd player or the option to delay your choice and look for other option, e.g. in another store. You go to the other store and there’s only one from Philips or, again, the option to delay the choice and look for other option. The 91% of people prefer to delay their choice to look for other alternative because there are too few options and this leads consumers to delay their choices and these are all contextual effects. But, when there are both sony and Philips, The fact that we have the option not-to-choose affects our choices. Assume that we have two types of cameras and we have the option to buy one of them. We will choose it according to our evaluation about which one is better. When we are provided with a third option, the one to delay the choice, we start wondering either is option worth choosing, we stop making in-between comparison and start to make evaluation within each brand and decide either options is worth choosing. In this case, when is provided the third option to not choose, consumers can finally see that brand B is good in some aspects that they were looking for, so the choice share of brand B increase.