Consumer Behaviour Narrative Essay

C H A PTE R CONSUMER BEHAVIOUR AND TARGET AUDIENCE DECISIONS 3 Chapter Objectives • To understand the consumer decision-making process and how it varies for different types of purchases. • To understand various internal psychological processes, their influence on consumer decision making, and implications for advertising and promotion. • To understand the similarities and differences of target market and target audience. • To understand the various options for making a target audience decision for marketing communication. Marketers Seeking 50-Plus Consumers Nintendo is famous for its video games.

DaimlerChrysler features a wide selection of car brands. Tabi is known for its classic women’s clothing. While seemingly unrelated, these brands have recently shared a similar strategy. As these established companies expanded beyond their current customer base, each brand attempted new marketing communication programs containing a more emotional message aimed at the 50-plus demographic. The 50-plus crowd not only is a sizable market, but also is a very lucrative one; they control 55 percent of all discretionary spending in Canada due to their relatively high net worth.

And while the brands all looked toward the fifty-plus market, additional segmentation based on an understanding of consumer behaviour revealed subtle differences in their approach. For Nintendo, the saturated youth market proved to be a no-growth avenue. With industry sales hitting the billion-dollar level, penetration levelling off at 30 percent of Canadian homes, and research indicating that 75 percent of teens perceived lower interest in gaming, Nintendo looked to new users.

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However, convincing 50-plus consumers of the value of buying a device to play “brain-training” games like Sudoku on a hand-held device appeared to be a significant communication challenge because these consumers use iPods, cell phones, and PDAs. DaimlerChrysler marketed its new vehicles— the Chrysler 300, Dodge Magnum, and Dodge Charger—to the older crowd as well, but diverged the communication plans according to different consumer behaviour considerations. For example, its Dodge ads conveyed the benefits of value and distinctive styling, while Chrysler expressed a luxurious styling.

Moreover, despite both brands targeting the 50-plus market, alternate media appeared promising as Chrysler consumers leaned toward talk radio, theatre, and dramas, while Dodge consumers yearned for classic rock, movies, and sitcoms. Tabi took the targeting in its own direction by breaking the older age demographic into several different “personality cohorts” reflecting many lifestyles. As this influenced product selection in the store, Tabi used this approach in its advertising and other promotional tools.

Tabi sought to find new fashion models, and ran a contest in conjunction with Canadian Living with the intention of selecting three women who represented Tabi customers. Sources: Lisa D’Innocenzo, “Boom Goes Your Brand,” Strategy Magazine, May 2006, p. 33; Michelle Halpern, “Mind Games,” Marketing Magazine, April 10, 2006; and Sylvain Desofosses, “Shifting Values,” Marketing, September 11, 2006. Questions 1. Why do marketers tend to overlook older consumers? 2. Explain some reasons why older consumers are good markets.

Part 1 Understand Integrated Marketing Communications The companies described in the opening vignette reveal that the development of effective marketing communication programs begins with understanding why consumers behave as they do. This understanding helps marketers to know how to encourage new consumers to buy a product (e. g. , Nintendo), what to emphasize in communications to specific audiences (e. g. , DaimlerChrysler), and which types of IMC tools might be used (e. g. , Tabi).

These types of communication problems or opportunities, and others, can be addressed with a thorough understanding of consumer behaviour. It is beyond the scope of this text to examine consumer behaviour in depth. However, promotional planners need a basic understanding of consumer decision making, factors that influence it, and how this knowledge can be used in developing promotional strategies and programs. This chapter addresses these topics and concludes with a summary of the options a promotional planner has for the initial decision, the target audience for an ad or promotional campaign.

CONSUMER DECISION-MAKING PROCESS Consumer behaviour can be defined as the process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and desires. The conceptual model in Figure 3–1 will be used as a framework for analyzing the consumer decision-making process. We will discuss what occurs at the various stages of this model and how advertising and promotion can be used to influence decision making.

The five-stage decision process model of Figure 3–1 views the consumer as a problem solver and information processor who engages in mental processes to evaluate alternative brands and determine the degree to which they might satisfy needs or purchase motives. This model is a form of cognitive learning. Consumer learning has been defined as “the process by which individuals acquire the purchase and consumption knowledge and experience they apply to future related behaviour. ”1 There are other perspectives regarding how consumers acquire the knowledge and experience they use in making purchase decisions.

However, this model is the most widely accepted and managerially useful. 62 NEED RECOGNITION Figure 3–1 shows that the first stage in the consumer decision-making process is need recognition, which occurs when the consumer perceives a need and becomes motivated to enter a decision-making process to resolve the felt need. Marketers are required to know the specific needs consumers are attempting to satisfy and how they translate into purchase criteria. This information allows markets to accurately portray the need in promotional messages or place messages in an appropriate location.

Need recognition is caused by a difference between the consumer’s ideal state and actual state. A discrepancy exists between what the consumer wants the FIGURE 3–1 A basic model of consumer decision making A. Stages in the Consumer Decision-Making Process Need recognition Information search Alternative evaluation Purchase decision Postpurchase evaluation B. Relevant Internal Psychological Processes Motivation Perception Attitude formation Integration Satisfaction Chapter 3 Consumer Behaviour and Target Audience Decisions situation to be like and what the situation is really like.

A goal exists for the consumer, and this goal may be the attainment of a more positive situation from a neutral state. Or, the goal could be a shift from a negative situation, and the consumer wishes to be at a neutral state. The causes of need recognition may be very simple or very complex and may result from changes in the consumer’s current and/or desired state. These causes may be influenced by both internal and external factors. Out of Stock Need recognition occurs when consumers use their existing supply of a product and must replenish their stock.

The purchase decision is usually simple and routine and is often resolved by choosing a familiar brand or one to which the consumer feels loyal. Dissatisfaction Need recognition is created by the consumer’s dissatisfaction with the current state of affairs and/or the product or service being used. For example, a consumer may think her ski boots are no longer comfortable or stylish enough. Advertising may be used to help consumers recognize when they have a need to make a purchase. The Energizer ad shown in Exhibit 3–1 helps users realize that some batteries are superior. Exhibit 3–1 This Energizer ad shows how its batteries last longer

New Needs/Wants Changes in consumers’ lives often result in new needs and wants. For example, changes in one’s financial situation, employment status, or lifestyle may create new needs. As you will see, when you graduate from college or university and begin your professional career, your new job may necessitate a change in your wardrobe. (Good-bye blue jeans, hello business suits. ) Not all product purchases are based on needs. Some products or services sought by consumers are not essential but are nonetheless desired. A want has been defined as a felt need that is shaped by a person’s knowledge, culture, and personality. Many products sold to consumers satisfy their wants rather than their basic needs. Related Products/Purchases Need recognition can also be stimulated by the purchase of a product. For example, the purchase of a new camera may lead to the recognition of a need for accessories, such as additional lenses or a carrying case. The purchase of a personal computer may prompt the need for software programs or upgrades. 63 Marketer-Induced Need Recognition Another source of need recognition is marketers’ actions that encourage consumers not to be content with their current state or situation.

Ads for personal hygiene products such as mouthwash, deodorant, and foot sprays may be designed to create insecurities that consumers can resolve through the use of these products. Marketers change fashions and clothing designs and create perceptions among consumers that their wardrobes are out of style. Marketers also take advantage of consumers’ tendency toward novelty-seeking behaviour, which leads them to try different brands. Consumers often try new products or brands even when they are basically satisfied with their regular brand.

Marketers encourage brand switching by using advertising and sales promotion techniques that encourage consumers to reconsider their current consumption habits. The BlackBerry ad in Exhibit 3–2 on page 64 demonstrates the need for communication when out of the office. New Products Need recognition can also occur when innovative products are introduced. For example, the Rogers ad shown in Exhibit 3–3 on page 64 introduces a new camera phone that allows the user to do more than ever before. Marketers’ Part 1 Understand Integrated Marketing Communications 64

Exhibit 3–2 The importance of communication is featured in this BlackBerry ad Exhibit 3–3 Rogers introduces a camera phone attempts to create need recognition among consumers are not always successful. Consumers may not see a need for the product the marketer is selling. A main reason why many consumers were initially reluctant to purchase a personal computer was that they failed to see how it fulfilled their needs. One way PC manufacturers successfully activated need recognition was by stressing how a computer helps children improve their academic skills and do better in school.

CONSUMER MOTIVATION While need recognition is often a basic, simple process, the way a consumer perceives a purchase situation and becomes motivated to resolve it will influence the remainder of the decision process. For example, one consumer may perceive the need to purchase a new watch from a functional perspective and focus on reliable, low-priced alternatives. Another consumer may see the purchase of a watch as more of a fashion statement and focus on the design and image of various brands.

To better understand the reasons underlying consumer purchases, marketers devote considerable attention to examining motives—that is, those factors that compel a consumer to take a particular action. One of the most popular approaches to understanding consumer motivations is based on the classic theory of human motivation popularized many years ago by psychologist Abraham Maslow. 3 His hierarchy of needs theory postulates five basic levels of human needs, arranged in a hierarchy based on their importance. As shown in Figure 3–2, the five needs are (1) physiological—the basic level of primary needs for things required to ustain life, such as food, shelter, clothing, and sex; (2) safety—the need for security and safety from physical harm; (3) social/love and belonging—the desire to have satisfying relationships with others and feel a sense of love, affection, belonging, and acceptance; (4) esteem—the need to feel Chapter 3 Consumer Behaviour and Target Audience Decisions FIGURE 3–2 Maslow’s hierarchy of needs Selfactualization needs (self-development and realization) Esteem needs (self-esteem, recognition, status) Social needs (sense of belonging, love) Safety needs (security, protection) Physiological needs (hunger, thirst) sense of accomplishment and gain recognition, status, and respect from others; and (5) self-actualization—the need for self-fulfillment and a desire to realize one’s own potential. According to Maslow’s theory, the lower-level physiological and safety needs must be satisfied before the higher-order needs become meaningful. Once these basic needs are satisfied, the individual moves on to attempting to satisfy higher-order needs such as self-esteem. In reality, it is unlikely that people move through the needs hierarchy in a stairstep manner.

Lower-level needs are an ongoing source of motivation for consumer purchase behaviour. However, since basic physiological needs are met in most developed countries, marketers often sell products that fill basic physiological needs by appealing to consumers’ higher-level needs. For example, in marketing its wipes, Huggies focuses on the love between parent and child (social needs) in addition to the gentleness of the product (Exhibit 3–4). While Maslow’s needs hierarchy has flaws, it offers a framework for marketers to use in determining what needs they want their products and services to be shown satisfying.

Advertising campaigns can then be designed to show how a brand can fulfill these needs. Marketers also recognize that different types of consumers have different need levels. For example, a young single person may be attempting to satisfy social or self-esteem needs in purchasing a car, while a family with children will focus more on safety needs. Chrysler used ads like the one in Exhibit 3–5 on Exhibit 3–4 Huggies appeals to needs for page 66 to communicate that its cars meet the security needs of love and belonging in this ad consumers with children. 5 INFORMATION SEARCH The second stage in the consumer decision-making process is information search. Once consumers perceive a need that can be satisfied by the purchase of a product, they begin to search for information needed to make a purchase decision. The initial Part 1 Understand Integrated Marketing Communications search effort often consists of an attempt to scan information stored in memory to recall past experiences and/or knowledge regarding various purchase alternatives. 4 This information retrieval is referred to as internal search.

For many routine, repetitive purchases, previously acquired information that is stored in memory (such as past performance or outcomes from using a brand) is sufficient for comparing alternatives and making a choice. If the internal search does not yield enough information, the consumer will seek additional information by engaging in external search. External sources of information include: • Personal sources, such as friends, relatives, or co-workers. • Marketer-controlled (commercial) sources, such as information from advertising, salespeople, or point-of-purchase displays and the Internet. Public sources, including articles in magazines or newspapers and reports on TV. • Personal experience, such as actually handling, examining, or testing the product. Determining how much and which sources of external information to use involves several factors, including the importance of the purchase decision, the effort needed to Exhibit 3–5 Chrysler uses an appeal to acquire information, the amount of past experience relevant, security needs the degree of perceived risk associated with the purchase, and the time available.

For example, the selection of a movie to see on a Friday night might entail simply talking to a friend or checking the movie guide in the daily newspaper. A more complex purchase such as a new car might use a number of information sources—perhaps a review of Road & Track, Motor Trend, or Consumer Reports; discussion with family members and friends; and test-driving of cars. At this point in the purchase decision, the information-providing aspects of advertising are extremely important. The Internet influences consumers’ external search patterns significantly for many products.

For the travel industry, 60 percent indicated in 2006 that the Internet is very or extremely important for making travel plans, compared to one-third in 2002. TNS Canadian Facts research also noted that website satisfaction reached 36 percent, compared with 27 percent previously. The type of information sought involved significant moves from simple things like researching the weather or the destination to more complex comparisons of travel costs and accommodations. 5 66 PERCEPTION Knowledge of how consumers acquire and use information from external sources is important to marketers in formulating communication strategies.

Marketers are particularly interested in (1) how consumers sense external information, (2) how they attend to various sources of information, (3) how this information is interpreted and given meaning, and (4) how the information is retained. These four processes are all part of perception, the process by which an individual receives, attends to, interprets, and stores information to create a meaningful picture of the world. 6 Perception is an individual process; it depends on internal factors such as a person’s beliefs, experiences, needs, moods, and expectations.

The perceptual process is also influenced by the characteristics of a stimulus (such as its size, colour, and intensity) and the context in which it is seen or heard. Selectivity occurs throughout the four stages of the consumer’s perceptual process. Perception may be viewed as a filtering process in which internal and external factors influence what is received and how it is processed and interpreted. The sheer number and complexity of the marketing stimuli a person is exposed to in any given day require that this filtering occur. Selective perception may occur within all four stages of the perceptual process, as shown in Figure 3–3.

Chapter 3 Consumer Behaviour and Target Audience Decisions FIGURE 3–3 The selective perception process Selective attention Selective comprehension Selective retention Selective exposure Sensation Sensation is the immediate, direct response of the senses (taste, smell, sight, touch, and hearing) to a stimulus such as an ad, package, brand name, or pointof-purchase display. Perception uses these senses to create a representation of the stimulus. Marketers recognize that it is important to understand consumers’ physiological reactions to marketing stimuli.

For example, the visual elements of an ad or package design must be designed so that consumers sense their existence. This is one reason why many TV ads start with a particular sound effect or visual movement. Marketers sometimes try to increase the level of sensory input so that their advertising messages will get noticed. For example, marketers of colognes and perfumes often use strong visuals as well as scent strips to appeal to multiple senses and attract the attention of magazine readers. Some advertisers have even inserted microcomputer chips into their print ads to play a song or deliver a message.

Selective exposure occurs as consumers choose whether or not to make themselves available to information. For example, a viewer of a television show may change channels or leave the room during commercial breaks. Selecting Information Sensory inputs are important but are only one part of the perceptual process. Other determinants of whether marketing stimuli will be attended to and how they will be interpreted include internal psychological factors such as the consumer’s personality, needs, motives, expectations, and experiences.

These psychological inputs explain why people focus attention on some things and ignore others. Two people may perceive the same stimuli in very different ways because they select and attend to messages differently. An individual’s perceptual processes usually focus on elements of the environment that are relevant to his or her needs and tune out irrelevant stimuli. Think about how much more attentive you are to advertising for personal computers, tires, or stereos when you are in the market for one of these products.

Selective attention occurs when the consumer chooses to focus attention on certain stimuli while excluding others. One study of selective attention estimates the typical consumer is exposed to nearly 1,500 ads per day yet perceives only 76 of these messages. 7 Other estimates range as high as 3,000 exposures per day. This means advertisers must make considerable effort to get their messages noticed. Advertisers often use the creative aspects of their ads to gain consumers’ attention. For example, some advertisers set their ads off from others by showing their products against a vibrant colour background (Exhibit 3–6).

Marketers also place ads in certain times or locations so that consum- Exhibit 3–6 Tropicana uses colour to focus attention on ers will notice them more easily. For example, a orange juice 67 Part 1 Understand Integrated Marketing Communications consumer may pay more attention to a commercial that is heard alone at home than to one heard in the presence of friends, at work, or anywhere distractions may be present. If advertisers can isolate a particular time when the listener is likely to be attentive, they will probably earn his or her undivided attention.

Interpreting the Information Once a consumer selects and attends to a stimulus, the perceptual process focuses on organizing, categorizing, and interpreting the incoming information. This stage of the perceptual process is very individualized and is influenced by internal psychological factors. The interpretation and meaning an individual assigns to an incoming stimulus also depend in part on the nature of the stimulus. For example, many ads are objective, and their message is clear and straightforward. Other ads are more ambiguous, and their meaning is strongly influenced by the consumer’s individual interpretation.

Even if the consumer does notice the advertiser’s message, there is no guarantee it will be interpreted in the intended manner. Consumers may engage in selective comprehension, interpreting information on the basis of their own attitudes, beliefs, motives, and experiences. They often interpret information in a manner that supports their own position. For example, an ad that disparages a consumer’s favourite brand may be seen as biased or untruthful, and its claims may not be accepted. Retaining the Information The final stage of the perceptual process involves the storage of the information in short-term or long-term memory.

Consumers may make mental notes or focus on some aspect of an advertising message to ensure that they will not forget, thus permitting easy retrieval during the information search stage. Selective retention means consumers do not remember all the information they see, hear, or read even after attending to and comprehending it. Advertisers attempt to make sure information will be retained in the consumer’s memory so that it will be available when it is time to make a purchase. Mnemonics such as symbols, rhymes, associations, and images that assist in the learning and memory process are helpful.

Many advertisers use telephone numbers that spell out the company name and are easy to remember. Energizer put pictures of its pink bunny on packages to remind consumers at the point of purchase of its creative advertising. 68 Subliminal Perception Advertisers know consumers use selective perception to filter out irrelevant or unwanted advertising messages, so they employ various creative tactics to get their messages noticed. One controversial tactic advertisers have been accused of using is appealing to consumers’ subconscious.

Subliminal perception refers to the ability to perceive a stimulus that is below the level of consciousness. Psychologists generally agree it is possible to perceive something without any knowledge of having seen it. The possibility of using hidden persuaders such as subliminal audio messages or visual cues to influence consumers might be intriguing to advertisers but would not be welcomed by consumers. The idea of marketers influencing consumers at a subconscious level has strong ethical implications. The use of subliminal techniques is not a creative tactic we would recommend to advertisers.

ALTERNATIVE EVALUATION After acquiring information during the information search stage of the decisionmaking process, the consumer moves to alternative evaluation. In this stage, the consumer compares the various brands he or she has identified as being capable of solving the consumption problem and satisfying the needs or motives that initiated the decision process. The brands identified as purchase options to be considered during this stage are referred to as the consumer’s evoked set. The evoked set is generally only a subset of all the brands of which the consumer is aware.

The consumer reduces the number of brands to be reviewed during the alternative evaluation stage to a manageable level. The exact size of the evoked set varies from one consumer to another and depends on such factors as the importance Chapter 3 Consumer Behaviour and Target Audience Decisions of the purchase and the amount of time and energy the consumer wants to spend comparing alternatives. The goal of most advertising and promotional strategies is to increase the likelihood that a brand will be included in the consumer’s evoked set and considered during alternative evaluation.

Marketers use advertising to create top-of-mind awareness among consumers so that their brands are part of the evoked set of their target audiences. Popular brands with large advertising budgets use reminder advertising to maintain high awareness levels and increase the likelihood they will be considered by consumers in the market for the product. Marketers of new brands or those with a low market share need to gain awareness among consumers and break into their evoked sets. Once consumers have identified an evoked set and have a list of alternatives, they must evaluate the various brands.

This involves comparing the choice alternatives on specific criteria important to the consumer. Evaluative criteria are the attributes of a product that are used to compare different alternatives. Evaluative criteria can be objective or subjective. For example, in buying an automobile, consumers use objective attributes such as price, warranty, and fuel economy as well as subjective attributes such as image or styling. Many marketers view their products as bundles of attributes, but consumers also tend to think about products or services in terms of their consequences or bundles of benefits.

J. Paul Peter and Jerry Olson define consequences as specific events or outcomes that consumers experience when they purchase and/or consume a product. 8 Functional benefits are concrete outcomes of product usage that are tangible and directly related to product performance. The taste of a soft drink or a potato chip, the acceleration of a car, and the clarity of a fax transmission are examples of functional consequences. Experiential benefits are related to how a product makes the consumer feel while consuming the product.

These emotions can be feelings of happiness or joy, for example, as seen by some car ads illustrating consumers enjoying the drive in a particular brand. Psychological benefits can refer to the status a consumer encounters when associated with a brand. Marketers should distinguish between product attributes and benefits because the importance and meaning consumers assign to an attribute are usually determined by its consequences for them. Moreover, advertisers must be sure consumers understand the link between a particular attribute and a benefit.

For example, the Ping ad in Exhibit 3–7 focuses on the benefit of using the new Ping golf club. Product attributes and the benefits consumers think they will experience from a particular brand are very important, for they are often the basis on which consumers form attitudes and decide among various choice Exhibit 3–7 This ad emphasizes the positive benefits of using a Ping G2 driver alternatives. 69 ATTITUDES Attitudes are one of the most heavily studied concepts in consumer behaviour. According to Gordon Allport’s classic definition, “attitudes are learned redispositions to respond to an object. ”9 More recent perspectives view attitudes as a summary construct that represents an individual’s overall feelings toward or Part 1 Understand Integrated Marketing Communications evaluation of an object. 10 Consumers hold attitudes toward a variety of objects that are important to marketers, including individuals (celebrity endorsers such as Tiger Woods or Michael Jordan), brands (Cheerios), companies (Microsoft), product categories (beef, pork, tuna), retail stores (The Bay, Sears), or even advertisements (the Energizer bunny ads).

Attitudes are important to marketers because they theoretically summarize a consumer’s evaluation of an object (or brand or company) and represent positive or negative feelings and behavioural tendencies. Marketers’ keen interest in attitudes is based on the assumption that they are related to consumers’ purchase behaviour. Considerable evidence supports the basic assumption of a relationship between attitudes and behaviour. 11 The attitude–behaviour link does not always hold; many other factors can affect behaviour. 2 But attitudes are very important to marketers. Advertising and promotion are used to create favourable attitudes toward new products/services or brands, reinforce existing favourable attitudes, and/or change negative attitudes. PURCHASE DECISION At some point in the buying process, the consumer must stop searching for and evaluating information about alternative brands in the evoked set and make a purchase decision. As an outcome of the alternative evaluation stage, the consumer may develop a purchase intention or predisposition to buy a certain brand.

Purchase intentions are generally based on a matching of purchase motives with attributes or characteristics of brands under consideration. Their formation involves many of the personal subprocesses discussed in this chapter, including motivation, perception, and attitude formation. A purchase decision is not the same as an actual purchase. Once a consumer chooses which brand to buy, he or she must still implement the decision and make the actual purchase. Additional decisions may be needed, such as when to buy, where to buy, and how much money to spend.

Often, there is a time delay between the formation of a purchase intention or decision and the actual purchase, particularly for highly involved and complex purchases such as automobiles, personal computers, and consumer durables. For nondurable products, which include many low-involvement items such as consumer package goods, the time between the decision and the actual purchase may be short. Before leaving home, the consumer may make a shopping list that includes specific brand names because the consumer has developed brand loyalty— a preference for a particular brand that results in its repeated purchase.

Marketers strive to develop and maintain brand loyalty among consumers. They use reminder advertising to keep their brand names in front of consumers, maintain prominent shelf positions and displays in stores, and run periodic promotions to deter consumers from switching brands. Maintaining consumers’ brand loyalty is not easy. Competitors use many techniques to encourage consumers to try their brands, among them new product introductions and free samples. Marketers must continually battle to maintain their loyal consumers while replacing those who switch brands.

Purchase decisions for nondurable, convenience items sometimes take place in the store, almost simultaneous with the purchase. Marketers must ensure that consumers have top-of-mind awareness of their brands so that they are quickly recognized and considered. These types of decisions are influenced at the actual point of purchase. Packaging, shelf displays, point-of-purchase materials, and promotional tools such as on-package coupons or premium offers can influence decisions made through constructive processes at the time of purchase. 70 INTEGRATION PROCESSES

A key part of the purchase decision stage is the way consumers combine information about the characteristics of brands. Integration processes are the way product Chapter 3 Consumer Behaviour and Target Audience Decisions knowledge, meanings, and beliefs are combined to evaluate two or more alternatives. 13 Analysis of the integration process focuses on the different types of decision rules or strategies consumers use to decide among purchase alternatives. Consumers often make purchase selections by using formal integration strategies or decision rules that require examination and comparison of alternatives on specific attributes.

This process involves a very deliberate evaluation of the alternatives, attribute by attribute. When consumers apply such formal decision rules, marketers need to know which attributes are being considered so as to provide the information the consumers require. Sometimes consumers make their purchase decisions using more simplified decision rules known as heuristics. Peter and Olson note that heuristics are easy to use and are highly adaptive to specific environmental situations (such as a retail store). 4 For familiar products that are purchased frequently, consumers may use price-based heuristics (buy the least expensive brand) or promotion-based heuristics (choose the brand for which I can get a price reduction through a coupon, rebate, or special deal). One type of heuristic is the affect referral decision rule,15 in which consumers make a selection on the basis of an overall impression or summary evaluation of the various alternatives under consideration. This decision rule suggests that consumers have affective impressions of brands stored in memory that can be accessed at the time of purchase.

How many times have you gone into a store and made purchases based on your overall impressions of the brands rather than going through detailed comparisons of the alternatives’ specific attributes? Marketers selling familiar and popular brands may appeal to an affect referral rule by stressing overall affective feelings or impressions about their products. Market leaders, whose products enjoy strong overall brand images, often use ads that Exhibit 3–8 Market leaders such as Labatt can appeal to consumer affect promote the brand as the best overall (Exhibit 3–8). 71 POSTPURCHASE EVALUATION

The consumer decision process does not end with the purchase. After consumption, the consumer assesses the level of performance of the product or service. The postpurchase evaluation process is important because the feedback acquired from actual use of a product will influence the likelihood of future purchases. Positive performance means the brand is retained in the evoked set and increases the likelihood it will be purchased again. Unfavourable outcomes may lead the consumer to form negative attitudes toward the brand, lessening the likelihood it will be purchased again or even eliminating it from the consumer’s evoked set.

Consumers engage in a number of activities during the postpurchase evaluation process. They may seek out reassurance and opinions from others to confirm the wisdom of their purchase decision, lower their attitudes or opinions of the unchosen alternative, deny or distort any information that does not support the choice they made, or look for information that does support their choice. An important source of supportive information is advertising; consumers tend to be more attentive to advertising for the brand they have chosen. 6 Thus, it may be important for companies to advertise to reinforce consumer decisions to purchase their brands. SATISFACTION The most significant psychological concept during the postpurchase evaluation process is satisfaction. A leading expert in satisfaction research has recently defined Part 1 Understand Integrated Marketing Communications 72 satisfaction as a judgment that consumers make with respect to the pleasurable level of consumption-related fulfillment. 17 The notion of fulfillment implies that a consumer’s goal has been achieved (i. . , needs met), and that the fulfillment is “judged with reference to a standard. ” Thus, consumers make a comparison between the consumption outcome and some other referent. Consumers can make many comparisons. One is to compare the level of product performance to the expectations of the product that consumers had prior to purchase. Satisfaction can occur when the consumer’s expectations are either met or exceeded, whereas dissatisfaction results when performance is below expectations. Consumers can also compare the roduct performance to some absolute standard of quality to perceive satisfaction or dissatisfaction. Another aspect of satisfaction is cognitive dissonance, a feeling of psychological tension or postpurchase doubt that a consumer experiences after making a difficult purchase choice. Dissonance is more likely to occur in important decisions where the consumer must choose among close alternatives (especially if the unchosen alternative has unique or desirable features that the selected alternative does not have).

Marketers must recognize the importance of the postpurchase evaluation stage. Dissatisfied consumers not only are unlikely to repurchase the marketer’s product but also may spread negative word-of-mouth information that deters others from purchasing the product or service. The best guarantee of favourable postpurchase evaluations is to provide consumers with a quality product or service that always meets their expectations. Marketers must be sure their advertising and other forms of promotion do not create unreasonable expectations their products cannot meet.

Marketers have come to realize that postpurchase communication is also important. Some companies send follow-up letters and brochures to reassure buyers and reinforce the wisdom of their decision. Many companies have set up toll-free numbers for consumers to call if they need information or have a question or complaint regarding a product. Marketers also offer liberalized return and refund policies and extended warranties and guarantees to ensure customer satisfaction. Some have used customers’ postpurchase dissatisfaction as an opportunity for gaining new business.

VARIATIONS IN CONSUMER DECISION MAKING We have reviewed the consumer decision-making process with respect to individual purchases. However, variations in this process arise depending upon the type of purchase and whether the individual is making the decision with other people. We now discuss these two variations in the consumer decision-making process. TYPES OF DECISION MAKING The preceding pages describe a general model of consumer decision making. But consumers do not always engage in all five steps of the purchase decision process or proceed in the sequence presented.

They may minimize or even skip one or more stages if they have previous experience in purchasing the product or service or if the decision is of low personal, social, or economic significance. To develop effective promotional strategies and programs, marketers need some understanding of the problem-solving processes their target consumers use to make purchase decisions. 18 Many of the purchase decisions we make as consumers are based on a habit known as routine problem solving or routine response behaviour.

For many lowpriced, frequently purchased products, the decision process consists of little more Chapter 3 Consumer Behaviour and Target Audience Decisions than recognizing the need, engaging in a quick internal search, and making the purchase. The consumer spends little or no effort engaging in external search or alternative evaluation. Marketers of products characterized by a routine response purchase process need to get and/or keep their brands in the consumer’s evoked set and avoid anything that may result in their removal from consideration.

Established brands that have strong market share position are likely to be in the evoked set of most consumers. Marketers of these brands want consumers to follow a routine choice process and continue to purchase their products. This means maintaining high levels of brand awareness through reminder advertising, periodic promotions, and prominent shelf positions in retail stores. Marketers of new brands or those with a low market share face a different challenge. They must find ways to disrupt consumers’ routine choice process and get them to consider different alternatives.

High levels of advertising along with sales promotion efforts in the form of free samples, special price offers, high-value coupons, and the like may encourage consumers to reconsider their habit or routine choice. A more complicated decision-making process may occur when consumers have limited experience in purchasing a particular product or service and little or no knowledge of the brands available and/or the criteria to use in making a purchase decision. They may have to learn what attributes or criteria should be used in making a purchase decision and how the various alternatives perform on these dimensions.

For products or services characterized by limited problem solving or extended problem solving marketers should make information available that will help consumers decide. Advertising that provides consumers with detailed information about a brand and how it can satisfy their purchase motives and goals is important. Marketers may also want to give consumers information at the point of purchase, through either displays or brochures. Distribution channels should have knowledgeable salespeople available to explain the features and benefits of the company’s product or service and why it is superior to competing products.

The Fidelity Investments ad in Exhibit 3–9 is a good example of how advertising can appeal to consumers who may be engaging in extended problem solving when considering retirement investing. Notice how the ad communicates with consumers who know little about how to purchase this product. The ad also makes more detailed information available by offering a toll-free number and a website. Exhibit 3–9 This ad for Fidelity Investments shows how marketers can appeal to consumers engaging in extended problem solving 73 Part 1 Understand Integrated Marketing Communications

GROUP DECISION MAKING Think about the last time you attended a party. As you dressed for the party, you probably asked yourself (or someone else) what others would be wearing. Your selection of attire may have been influenced by those likely to be present. This simple example reflects one form of impact that groups may exert on your behaviour. A group has been defined as “two or more individuals who share a set of norms, values, or beliefs and have certain implicitly or explicitly defined relationships to one another such that their behavior is interdependent. 19 Groups are one of the primary factors influencing learning and socialization, and group situations constitute many of our purchase decisions. A reference group is “a group whose presumed perspectives or values are being used by an individual as the basis for his or her judgments, opinions, and actions. ” Consumers use reference groups as a guide to specific behaviours, even when the groups are not present. 20 In the party example, your peers—although not present—provided a standard of dress that you referred to in your clothing selection. Likewise, your ollege classmates, family, and co-workers, or even a group to which you aspire, may serve as referents, and your consumption patterns will typically conform to the expectations of the groups that are most important to you. Global Perspective 3–1 highlights the influence of group norms. Marketers use reference group influences in developing advertisements and promotional strategies. The ads in Exhibits 3–10 and 3–11 are examples of aspirational reference groups (to which we might like to belong) and disassociative groups (to which we do not wish to belong), respectively.

In some instances, the group may be involved more directly than just as a referent. Family members may serve as referents to each other, or they may actually be involved in the purchase decision process—acting as an individual buying unit. As shown in Figure 3–4 on page 76, family members may assume a variety of roles in the decisionmaking process. 21 As the example indicates, there can be group interaction at every stage of the consumer decision-making process since various members take on a role. 74 Exhibit 3–10 These ads are examples of aspirational reference groups Exhibit 3–11 This ad represents a disassociative reference group

GLOBAL PERSPECTIVE 3–1 Axe Slices through the Deodorant Market In the highly lucrative and competitive deodorant market, companies are always looking for the edge that will give them an advantage over competitors. Unilever may just have found it, and they call it ethnography. The Europeanbased company hired a U. S. -based research organization specializing in cultural anthropology to observe young males between the ages of 18 and 22 and their friends in their everyday environs to learn more about their likes, dislikes, activities, and decision-making behaviours. The 28 young men—from Los Angeles and Pittsburgh—were videotaped, and then the apes were analyzed to gain insights through the participants’ own descriptions of their activities while being observed in everyday facets of their lives. Once the tapes were finished, executives from Unilever, their advertising and public relations agencies, and their event specialist agency met to take a “deep dive” into the young men’s psyches. More specifically, the executives wanted to understand the participant’s mating life, that is, what he is about, why he does what he does, what excites him, and what he fears. Not surprisingly, much of the young men’s lives focused on sex.

Their interest was not just dating: They preferred to go to parties with other male friends and “hook up. ” Relationships were avoided whenever possible, as were the words boyfriends and girlfriends. They just wanted to have sex. The anthropologists even typed the males into groups based upon their characteristics into classifications such as “pimp daddy,” “player,” “sweetheart,” and “shy guy. ” So what does this have to do with marketing deodorant? A lot! Based upon these findings the basis for the integrated marketing campaign theme was developed—“Wear this deodorant and you’ll pick up chicks! Simply put, using AXE products (deodorant, body spray, shower gel, and more) will help you in your mating attempts. (In Ireland and Australia, the product is called Lynx, though the same theme is used. ) The television commercials focus on spontaneous sexual encounters and the need to be ready at any time, while protected (and enhanced) by AXE. The AXE man is always ready. The commercials have won the Gold Lion—the top award given at the Cannes Film Festival for international advertising quality—two of the past four years, and 10 times overall.

The advertising campaign theme is also maintained through other integrated strategies. In Colombia, female AXE patrols visit bars and nightclubs, frisking guys and spraying them with body spray. The “AXE angels” (also female) pass out samples at various events including the MTV Video Awards. The viral marketing campaign launched a fake website including videos, fake recordings of phone calls, and pictures. Axe produced a one-hour TV program, The AXE House Party: Hundreds of Girls, Rock Stars, and a Beach House.

Invitations to the party were passed out by street teams, through public relations activities, and via an ad campaign that directed consumers to the website for a chance to win an invitation. The promotion won a Promotional Marketing Association Reggie Award for excellence. Print and online promotions were also used to promote the seduction skills used in an online digital fantasy game called Mojo Master. The game, which cost over a million dollars to produce, challenges young men armed with AXE deodorant body spray, shower gel, deodorant stick, and invisible solid to pick up girls.

Each time one of the products is used it enhances the male’s “mojo,” and helps him enhance his “attraction meter. ” If one is good enough, he qualifies to use the AXE fragrance. What are the girls in the game like? “Absolutely stunning,” says the director of the company that developed the game. But can ethnography lead to successful product marketing? Consider the following: The AXE House Party generated attention from MTV, VH-1, Rolling Stone, and Jimmy Kimmel Live. In the four weeks following the promotion, brand awareness among 11–24-year-olds increased 22 percent, and market share jumped from 3 percent to 3. percent. In regard to the bottom line, the campaign’s results are equally impressive: (1) First launched in 1983, the products are now marketed in more than 60 countries; (2) the AXE brand is number one in several European and Latin American markets as well as in Asia and the United States, where it has been marketed only since 2003; (3) sales are almost seven times those of the competitive Old Spice brand introduced at the same time; and (4) sales of the body spray in the United States in 2004 were over $60 million, making it the category leader.

In this case, ethnography and IMC seem to have produced a winning combination. Sources: Ian Herbert, “Spray It, Don’t Say It,” U. S. News & World Report, May 30, 2005, p. 58; Kris Oser, “AXE’s Latest Sex Ad Is a Digital Game,” www. Adage. com, May 20, 2005, pp. 1–3; Christine Bittar, “Bringing Down the House: AXE Shakes Its Groove Thang,” Brandweek, March 22, 2004, p. R4; Jack Neff, “Analyzing AXE Man,” Advertising Age, June 21, 2004, pp. 4–5. Questions: 1. What is your opinion regarding the promotional activities used by Axe? 2. Did the research arrive at a reasonable conclusion about young men? 5 Part 1 Understand Integrated Marketing Communications FIGURE 3–4 Roles in the family decision-making process The initiator. The person responsible for initiating the purchase decision process; for example, the mother who determines she needs a new car. The information provider. The individual responsible for gathering information to be used in making the decision; for example, the teenage car buff who knows where to find product information in specific magazines or collects it from dealers. The influencer. The person who exerts influence as to what criteria will be used in the selection process.

All members of the family may be involved. The mother may have her criteria, whereas others may each have their own input. The decision maker(s). That person(s) who actually makes the decision. In our example, it may be the mother alone or in combination with another family member. The purchasing agent. That individual who performs the physical act of making the purchase. In the case of a car, a husband and wife may decide to choose it together and sign the purchase agreement. The consumer. The actual user of the product. In the case of a family car, all family members are consumers.

For a private car, only the mother might be the consumer. 76 Each role has implications for marketers. First, the advertiser must determine who is responsible for the various roles in the decision-making process so that messages can be targeted at that person (or those people). These roles will also dictate media strategies, since the appropriate magazines, newspapers, or TV or radio stations must be used. Second, understanding the decision-making process and the use of information by individual family members is critical to the design of messages and choice of promotional program elements.

In general, to create an effective promotional program, a marketer must have an overall understanding of how the decision process works and the role that each group member plays. TARGET AUDIENCE DECISION We reviewed the consumer decision-making process since marketers need to thoroughly understand the behaviour they are trying to influence through their promotional plans. Marketers also try to understand consumers as much as possible since an IMC plan, IMC program (e. g. advertising campaign), or ad is directed to a particular target audience, which is usually a primary decision made prior to any other communication decision. Recall that the information and decisions of a marketing plan are key inputs for all promotional plan decisions. Futhermore, the direction of the target audience decision is derived from the segmentation and target market decisions of the marketing plan. In this section, we review the target market process to understand the context of promotional planning. Next, we summarize approaches for market segmentation and identify how it is used for target market selection.

Finally, we explore how these marketing decisions provide direction for target audience options. TARGET MARKET PROCESS The process of developing and implementing the target market decision is summarized in Figure 3–5. This model consists of four major components: the organization’s situation analysis, the target market process, the marketing program development (which includes the promotional mix), and the target market. As the model shows, the marketing process begins with the development of a marketing strategy and analysis in which

Chapter 3 Consumer Behaviour and Target Audience Decisions FIGURE 3–5 Marketing and promotions process model Target Market Process Segment the market Marketing Program Development Product decisions Promotion to final buyer Promotional decisions • Advertising Select a target market Pricing decisions • Direct marketing • Interactive marketing • Sales promotion Determine the market positioning strategy Channel of distribution decisions • Public relations Promotion to trade Resellers Purchase Ultimate consumer • Consumer • Businesses Target Market

Situation Analysis Market analysis Consumer analysis Competitive analysis Environmental analysis Internal company analysis the company decides the product areas and particular markets where it wants to compete. The company must then coordinate the various elements of the marketing mix into a cohesive marketing program that will reach the target market effectively. Note that a firm’s promotion program is directed not only to the final buyer but also to the channel or “trade” members that distribute its products to the ultimate consumer.

These channel members must be convinced there is a demand for the company’s products so they will carry them and will aggressively merchandise and promote them to consumers. Promotions play an important role in the marketing program for building and maintaining demand not only among final consumers but among the trade as well. The target market is the focus of the firm’s marketing effort, and specific sales, market share, and profitability objectives are set according to where the company wants to be and what it hopes to accomplish in this market.

The method by which marketers do this (presented in Figure 3–6) is referred to as the target market process and involves three basic steps: segment the market, select a target market, and determine the market positioning strategy of one’s product or service. The selection of the target market (or markets) in which the firm will compete is an important part of its marketing strategy and has direct implications for its advertising and promotional efforts. Specific communication objectives are derived and the promotional mix strategies are developed to achieve these objectives.

Thus, different objectives may be established, different budgets may be used, and the promotional mix strategies may vary, depending on the market selected. As we introduced this section, we used the terms target market and target audience. We concur with a recent perspective that suggests promotional planners should make a careful distinction between these concepts since an advertising plan or IMC plan is one part of the overall marketing plan. 22 The target market is the 77 Segment the market Select a target market Determine the market positioning strategy FIGURE 3–6

The target market process Part 1 Understand Integrated Marketing Communications 78 group of consumers toward which an overall marketing program is directed. The target audience is a group of consumers toward which the advertising campaign, for example, is directed. Conceptually, these targets are interdependent but their distinction allows promotional planners the ability to make more effective communication decisions with enhanced precision. The difference between target audience and target market can be seen in a recent campaign for Imodium Quick Dissolve tablets, a diarrhea remedy.

The campaign tried to reach Canadian vacationers to foreign countries who do not want to be inconvenienced with this unfortunate gastronomic ailment. The secondary target audience was frequent business travellers who may have overlooked being prepared for their discomfort and who could not afford to miss important meetings. Combined together, it appears that Imodium is trying to reach new category users. Imodium used humour to cleverly point out the need for the product with a message, “Visit the country, not just its restrooms,” and visuals of various facilities used throughout the world.

Naturally, the product has other consumers, and how this product is positioned in the marketplace versus competing products is relevant, but clearly Imodium has selected a certain part of the market to speak within this campaign that is a sub-set of the overall target market. 23 Opportunities in the environment often lead to firms developing selective promotional programs beyond their normal target market. For example, tea represents the fourth most consumed drink after coffee, milk, and tap water.

With many types of tea and different kinds of tea drinkers, tea brands need to approach specific audiences with their communication efforts. The health benefits perceived with tea have recently attracted many young Canadian consumers toward specialty teas. In particular, sales for green, red, and white teas rose substantially in 2006; however, herbal and black tea dropped slightly. Although the main tea consumer is women over 40, according to Twinings tea, the well-established brand developed its latest campaign toward newer consumers (i. . , younger) with a strong emphasis to teach the less experienced more about tea and the various types. Its communication consisted of door-hangers and samples to specific locations and in displays for select retailers, as seen in the next two examples. MARKET SEGMENTATION To identify a target market, the marketer identifies the specific needs of groups of people (or segments), selects one or more of these segments as a target, and develops marketing programs directed to each.

This approach has found increased applicability in marketing for a number of reasons, including changes in the market (consumers are becoming much more diverse in their needs, attitudes, and lifestyles); increased use of segmentation by competitors; and the fact that more managers are trained in segmentation and realize the advantages associated with this strategy. Perhaps the best explanation, however, comes back to the basic premise that you must understand as much as possible about consumers to design marketing programs that meet their needs most effectively.

Furthermore, as marketers establish a common ground with consumers, the more effective they will be in addressing these requirements in their communications programs and informing and/or persuading potential consumers that the product or service offering will meet their needs. Marketers competing in nearly all product categories are constantly searching for ways to segment their markets in an attempt to better satisfy customers’ needs (Exhibit 3–12). The remainder of this section discusses ways to approach this task and make the final segmentation decision.

As shown in Figure 3–7 on page 80, several methods are available for segmenting markets. Marketers may use one of the segmentation variables or a combination of approaches. Consider the market segmentation strategy that might be employed to market snow skis. The consumer’s lifestyle—active, fun-loving, enjoys outdoor sports—is certainly important. But so are other factors, such as age, income, and marital status. Let us review the basis for segmentation and examine some promotional strategies employed in each. Chapter 3 Consumer Behaviour and Target Audience Decisions

Geographic Segmentation In the geographic segmentation approach, markets are divided into different geographic units. These units may include nations, provinces, states, counties, or even neighbourhoods. Consumers often have different buying habits depending on where they reside. To address this, advertisers might use different IMC tools or advertising messages. Demographic Segmentation Dividing the market on the basis of demograp

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