Chapter-19: Consumerism

Chapter-19: Consumerism

The Roots of Consumerism: The word consumerism has many connotations, depending on who is using the term. Business, government, consumer groups, and academic researchers have each developed. Consumerism is a social movement of citizens and government to enhance the rights and powers of buyers in relation to sellers.

There are numerous underlying roots of consumerism in the USA: (i) Disillusionment with the system. (ii) The performance gap. (iii) The consumer information gap. (iv) Antagonism toward advertising. (v) Impersonal and unresponsive marketing institutions. (vi) Intrusions of privacy. (vii) Declining living standards. (viii) Special problems of disadvantaged. (ix) Different views of the marketplace.

Consumer’s bills of rights: In 1962, President John F. Kennedy presented a message to Congress with the following fundamental rights of the consumer. (i) The right to safety: to be protected against the marketing of goods which are hazardous to health. (ii)  The right to be informed: to be protected against fraudulent, deceitful, or grossly misleading information, advertising, labeling, or other practices, and to be given the facts needed to make an informed choice. (iii) The right to choose: to be assured, wherever possible, access to a variety of products and services at competitive prices; and in those industries in which competition is not workable and government regulation is substituted, an assurance of satisfactory quality and service at fair prices. (iv) The right to be heard: to be assured that consumer interest will receive full and sympathetic consideration in the formulation of government policy, and fair and expeditious treatment in its administrative tribunals.

Consumer Information: Consumer rights which regard to information related to the marketer’s provision of adequate information which neither deceives nor misleads. (i) Deception of consumers: If an advertisement (or advertising campaign) leaves the consumer with an impression(s) and/or belief(s) different from what would normally be expected if the consumer had reasonable knowledge, and that impression(s) and/or belief(s) is factually untrue or potentially misleading, then deception is said to exists. In this case the government has also adopted the position of requiring corrective advertising, in which past advertising transgression are corrected. Affirmative disclosure is designed to eliminate the potential for deception in promotional material by providing consumer information on negative attributes of some products and services. Affirmative disclosure specifically requires a company to disclose in its advertising labeling the deficiencies or limitations of its product or service. (ii) Availability of sufficient information: It is felt by many in legislative, regulative, and judicial circle that consumers does not have adequate information on which to base decisions.

Environmental Concerns: A consumer right not enumerated by Kennedy but which should be added is the right to a clean environment: to be assured that the environment the consumer lives in is free from pollution. Widespread and large-scale pollution seems to be a by-product of an economically developed society, but it is also an area of great concern for many consumers. The green movement is growing significantly and marketers are seeking to cash in on an environmental awakening. The world forests are being destroyed at the rate of one football field-sized area each seconds. Plant and animals species are abolishing. People are suffering damaged to their health as a result of poor air quality, ozone depletion, or exposure to hazards materials.

Consumer Privacy: A sixth consumer right related to privacy, information, data banks, and similar emerging issues. Consumer information collected, merged, and exchanged through computer and communication technologies has become the main resource that business and government use to facilitate the millions of daily transactions engaged in by consumers. (i) Only relevant and socially-approved personal information should be collected by private or public organizations to determine people’s access to rights, benefits, and opportunities. (ii) Individual should be informed what information about them is to be collected and how it will be used. (iii) Individuals should have practical procedures for inspecting their records and for raising issues as to the accuracy, completeness, and propriety of information used to make evaluative decisions about them. (iv) Sensitive personal information should be circulated within the collecting organization only to those with a need to see it for legitimate purpose.

Consumers’ Responsibilities: It has been suggested that consumer rights can only be achieved when accompanied by consumer responsibilities. Thus consumers have the obligation to choose wisely, keep informed, sound off, put safety first, and help protect their environment. Consumers must establish an appropriate ethical framework to handle decisions that confront them. It may be surprising to you, but consumers, just as businesspeople face moral dilemmas quite often in the marketplace.

Marketer Responsibilities: Marketers face twofold challenge in dealing with the issue. First, they must increase their level of knowledge of the nature of the issues. Many marketers are not aware of the issues and just how unfavorable situations are perceived to be by some consumers. Second, they must design organizational elements to respond to consumers effectively. The company should realize that the consumer in not a threat but an opportunity to them. In this regard the marketers need to Understanding what consumers experience, establishing a consumer advisory board, listening to consumers and responding effectively, establishing a corporate consumer affairs unit, and educating consumers.

Chapter-17/18: Purchasing Process and Post Purchase Behavior

Chapter-17/18: Purchasing Process and Post Purchase Behavior

Why Do People Shop:

The obvious answer is that they need to purchase something may not reflect the consumer’s actual motivation in each circumstance. It has been suggested that both personal and social motives influence consumer’ shopping activities.

(A) Personal motives: (i) Role-playing- shopping activities are learned behavior and are expected or accepted as part of one’s position or role, such as mother or housewife. (ii) Diversion- shopping can offer a diversification from the routine of daily life and is a form of recreation. (iii) Self-gratification- shopping may be motivated not by the expected utility of consuming, but by the utility of the buying process itself. Thus, emotional states or moods may explain why and when someone goes shopping. (iv) Learning about new trends- Shopping provides consumers with information about trends and movements and product symbols reflecting attitudes and lifestyle. (v) Physical activity- Shopping can provide a considerable amount of exercise. (vi) Sensory stimulation- Shopping can provide sensory benefits such as looking at and handling merchandise, listening to the sounds (noise, silence, and soft background music) and smelling the cents.

(B) Social motives: (i) Social experience outside the home- Shopping can provide opportunities for seeking new acquaintances, encounters with friends or just people watching. (ii) Communication with others having a similar interest- Shopping often affords an opportunity to interact with customers or salespeople having similar interests. (iii) Peer group attraction- Certain stores provide a meeting place where members of a peer group may gather. (iv) Status and authority- Shopping may provide an opportunity to attain a feeling of status and power by being waited on. (v) Pleasure of bargaining- Shopping may offer the enjoyment of gaining a lower price through bargaining, or visiting special sales.  

Choosing a Store:

Basically, the consumer has certain evaluative store criteria established in her mind and compares these with her perception of a store’s characteristics. As a result of this process, stores are categorized as either acceptable or unacceptable and hence, will be patronized on this basis. If the resulting shipping experience is favorable, the consumer is reinforced in her learning experience and the matter of store choice will become largely routinized over a period of time.

Factors determining store choice: There are several important factors that influence consumer store-choice behavior. Although the influence of these elements differs, depending on such variables as the type of product purchased, the type of store, and the type of consumer, have found to exert general influence on store choice. They include store location, physical design, assortment, prices, advertising, sales promotion, personnel and service. 

(i) Store location: Generally, the closer consumers are to a store, the greater their likelihood to purchase from that store. The further away are consumers are from a store, the greater the number of intervening alternatives, and thus the lower the likelihood to patronize that store. Intercity, intra-city and intra-store may be the choices for the store location.

(ii) Store design and physical facilities: The design characteristics of a store visibility reflect its image and can dramatically influence patronage. Many consumers appear to size up a store based on its outward appearance of architecture and sings and hence are drawn to the store or repelled by it, based on their perception of whether this store looks right for them.

(iii) Merchandise: There are five attributes considered to be important here: quality, selection or assortment, styling or fashion, guarantees, and pricing. Consumers prefer stores that offer either a wide variety of product lines, brands, and prices or substantial depth to their assortment such as sizes, colors, and styles.

(iv) Advertising and sales promotion: Advertising can be important in fulfilling any of the three goals such as (a) to inform consumers such as for a new store opening, (b) to persuade consumers that they should patronize a certain store or buy a particular brand, and (c) to remind customers of the store that they are appreciated. As we also learned, advertising can be highly influential in cultivating a store image in consumers’ mind. 

(v) Personnel: Employees of a retailer also are very instrumental in influencing the store’s image. Consumers generally desire to trade where store personnel, particularly salespeople, are perceived as helpful, friendly, and courteous.

(vi) Customer service: Retail stores may offer numerous services in order to attract customers. Increase product satisfaction (credit, alteration, installation and shopper information), increase convenience (delivery, telephone ordering, parking) and provide special benefits (gift wrapping, product returns, and complaint offices). Relationship retailing or merchandising focuses on convincing focused on converting customers into clients through providing better services to existing shoppers, there by having them concentrate their purchases with the retailer. 

(vii) Clientele: Consumer will tend to patronize those stores where persons similar to themselves are perceived to be shopping. Store choices have much to do with their social-class membership. Thus, an important matching process occurs between the consumer’s self-image and the store image to influence where people shop, with choices being made of stores that possess images which are similar to the images that consumers perceive themselves.

In-Store Purchasing Behavior:

Once consumers have selected the stores they will patronize, they must then proceed to consummate the purchase. A number of factors influence consumers’ behavior within the store environment. 

Merchandising techniques: (i) Store layout and traffic patterns: a store’s interior is organized in such a manner as to accomplish the firm’s merchandising strategy. Traffic patterns are popular to determine where good or bad sales areas are within the store. (ii) Point-of-Purchase media: an effective combination of good store layout and attractive displays can change a retail environment into one not only is more exciting but also more sales. (iii) Product shelving: both the height at which products are displayed and the number of rows presented can influence sales of products. (iv) Pricing strategy: Price awareness, promotional prices, and couponing are important issues. (v) Packaging: including graphics, product information contained on the package, and the physical package. (vi) Brand choice: for a number of years, there has been a battle between manufacturer’ of national brands and distributors’ private brands for their dominance.

Non-store Purchasing Process: There is a growing tendency of in-home shopping and marketers usually refer to this approach as non-store marketing or direct marketing. It includes ordering via direct response TV, catalogues, door to door selling, direct mail, and many other developing electronic technologies.

Characteristics of purchasers: (i) Upscale households: in many cases in-home shoppers are described as above average in socioeconomic status. (ii) Racial patterns: Blacks do less mail order buying than do whites at similar income levels. (iii) Working wives: Working wives have restricted time for shopping. (iv) Geographic location: geographical location may not be convenient for in-store shopping. (v) Other characteristics: Households characteristics may influence non-store shopping. 

In-home shopping motivations: (i) Convenience: shopping convenience is probably the most important motivator in consumer decisions to shop at home and is the one so often stressed by the industry (time factor, flexibility, saves physical effort). (ii) The risk of buying: In spite of the obvious advantages of shopping at home, the higher perceived risk that may be associated with buying by description partially explains why many consumers are hesitate to use in home shopping. (iii) 

Lifestyle: Active in-home buyers are more style and value conscious, convenience-oriented, and generally are more demanding shoppers than are other consumers. They are more flexible in shopping style, often impulse and convenience oriented, and they use a variety of in-home buying methods and sources.

Purchasing Patterns: (i) Brand loyalty: Every company seeks to have a steady group of unwavering customers for its product or service. Customers may be undivided loyal buying A A A A A A., divided loyal buying A B A B A B., unstable loyal buying A A A B B B., and no loyal buying A B C D E F. Factors explaining brand loyalty include socioeconomic, demographic, psychographic, informal group influence, store loyalty, perceived risk and market structures. (ii) Impulse purchasing: some marketers prefers to call it unplanned purchasing. Pure impulse breaks normal buying pattern, suggestive impulse having no previous knowledge of a product, reminder impulse may be recall advertising and planned impulse where a shopper enters the store with the expectation and intention of making some purchases on the basis of price specials, coupons, and the like.

Post-purchase evaluation: The consumer also engages in an evaluation of the purchase decision. The consumer rethinks his decision in the post-purchase stage. First, it serves to broaden the consumer’s set of experiences stored in memory. Second, it provides a check on how well he is doing as a consumer in selecting products, stores and so on. Third, the feedback that the consumer receives form this stage helps to make adjustments in future purchasing strategies.

Consumer satisfaction and dissatisfaction: Satisfaction is an important element in the evaluation stage. Satisfaction refers to the buyer’s state of being adequately rewarded in a buying situation for the sacrifice he has made. Adequacy of satisfaction is a result of matching actual past purchase and consumption experience with the experience with the expected reward form the brand in terms of its anticipated potential to satisfy the consumer’s motives. Consumers form certain expectations prior to the purchase. These expectations may be about (i) the nature and performance of the product or service, (ii) the costs and efforts to be expended before obtaining the direct product or service benefits, and (iii) the social benefits and costs accruing to the consumer as a result of the purchase.

The result of satisfaction to the consumer from the purchase of a product or service is that more-favorable post-purchase attitudes, higher purchase intentions, and brand loyalty are likely to be exhibited. On the other hand, if consumers are dissatisfied, they are likely to exhibit less favorable post-purchase attitudes, lower or nonexistent purchase intentions, brand switching, complaining behavior, and negative word-of-mouth.

Consumer complaint behavior: What happens when consumers experience dissatisfaction? There are several negative outcomes possible. Consumer may exhibit unfavorable word-of-mouth, may not repurchase the brand, and the consumer may complain. It is important for the marketer to listen to consumers, which tremendously boosts brand loyalty.

Chapter-16: Search and Evaluation

Chapter-16: Search and Evaluation

Once consumers have recognized the existence of a problem, and assuming there are no constraints preventing further behavior, they move to the next stage in the decision–making process. Unless it is known what information they need in their decision-making that which is provided may be inappropriate and ineffective.

Types of Consumer Search Activity:

The term search refers to mental as well as physical information–seeking and processing activities which one engages in to facilitate decision-making regarding some goal-object in the marketplace. Consequently, search may be undertaken in order to find out about products, prices stores and so on, related to the product.

(i) Pre-purchase Search: This is the typical form of search we associate within the purchasing context. If the consumer has recognized a problem, then, pre-purchase search would be engaged.

(ii) Ongoing Search: This is characterized as search activities independent of specific needs or decisions; that is, it does not occur in order to solve a recognized and immediate purchase problem. Thus if consumer were searching with an interest in a product but with no demand for the product, the search would be ongoing rather than pre-purchase.

(iii) Internal Search: This is the first stage to occur after the consumer experiences problem recognition. It is a mental process of recalling and reviewing information stored in memory that may relate to the purchase situation. For example, a consumer may recall that a friend made very negative comments about a particular brand of coffee maker (which the consumer is now buying) while playing cards several months ago.

The result or outcome of internal search and alternative evaluation may be that a consumer: (a) makes a decision and proceeds to engage in purchase behavior, (b) is constrained by certain environmental variables (such as a determination that his checking account cannot stand the purchase), or (c) determines that insufficient or inadequate information exists in his memory to make a decision now, so that external search is undertaken.

(iv) External Search: This refers to the process of obtaining information from other sources in addition to that, which can be recalled from memory. Some sources from which such information might be obtained are advertisements, friends, salespeople, store displays, and product–testing magazines.

Types and Sources of Information:

A great variety of information of potential interest to consumers exists in the external environment. Three general categories are: (i) information about the existence and availability of various product and service offerings, (ii) information useful in forming evaluative criteria-the standards which are employed to evaluate alternatives, and (iii) information on the properties and characteristics of alternatives. In general it appears that the type of information sought depends upon what the consumer already knows. For example, when the consumer has little knowledge about available offerings, search effort tends to focus on learning about the existence of alternatives in forming appropriate evaluative criteria.

In addition to the direct experience of using products themselves, consumers gain information from three major areas: (i) marketer-dominated sources, (ii) consumer sources, and (iii) neutral sources. Information in marketer-dominated channels stems from salespeople, packaging, and other sources under the control of the marketer. Consumer sources include all those interpersonal communications not under the control of the marketer. Neutral sources include a portion of the mass media, government reports and publications from independent product testing agencies. This group is not under the control of the marketer.

Amount of External Search Activity:

Many studies have examined the amount of external search that consumers actually undertake. Consumers typically consult few information sources (friends, articles, advertisements, and so on) before making a purchase. In terms of outlets visited, various studies suggest that generally shoppers visit only one store before making a purchase. The amount of external search that consumers engage in varies considerably across individuals and different purchase situations.

Market conditions: Characteristics of the marketplace can have a significant effect on external-search behavior. Availability of information, the number of alternatives to consider, and the location of outlets are among the influencing factors. In addition, many market conditions lead consumers to attach importance to the purchase situations or to perceive differences between available alternatives.

Buying strategies: Consumers often adopt various strategies, which reduce the amount of external search. For example, patterns of brand and store loyalty can develop through purchase experience over time. Evidence suggests that when the purchase decision is complex, or when available information is difficult to process, consumers tend to adopt simple choice rules (such as pick the middle priced one) and significantly curtail their external search.

Individual factors: Of course many of the consumer’s own characteristics influence the degree of external-search activity. (i) Greater market experience with a product is associated with a lower degree of external search. (ii) Open-mindedness and self-confidence of consumers have been found to be positively related to greater search activity. (iii) Socio-economic characteristics have been related to search. (iv) Consumers differ in their ability to process information. (v) Consumer market beliefs are important because they serve to simplify consumer decision-making by directing search and evaluation activities.

Situational factors: A number of factors unique to the specific situation can also influence external search. Search may be reduced when: (i) The urgency of a need or the amount of available time exert pressure on the purchase decision, (ii) Store conditions are perceived as being crowded, and (iii) Special opportunities arise to purchase at an especially attractive price.

Perceived risk: Risk or uncertainty regarding the most appropriate purchase decision or the consequences of the decision is a significant variable influencing the total amount of information gathered by consumers. There are several situations that influence the consumer’s perception of uncertainty (regarding consumers buying goal, regarding which alternative will best match or satisfy the purchase goal, and possible undesirable consequences) or consequences.

One may expect several kinds of risks: (i) Monetary or financial risk- the consumer may loss money if the brand doesn’t work at all or cost more than it should to keep it in good shape; (ii) Functional or performance risk- the brand may not work properly; (iii) Physical risk- the brand may be or become harmful or injurious to one’s health; (iv) Social risk- the brand may negatively affect the way others think of the consumer; (v) Psychological risk- the brand may not fit in well with the consumer’s self image or self-concept.

Because most purchase behavior appears to involve at least some risk, consumers may take various steps to handle the problem. Strategies to reduce perceived risk include: (i) buy the brand whose advertising has endorsements or testimonials from typical consumers, from a celebrity, or from an expert on the product, (ii) buy the brand that the consumer has used before and has found satisfactory, (iii) buy a major well-known brand and relay on its reputation, (iv) buy the brand offering a money-back guarantee with the product, (v) buy the brand that has been approved by the government.

The Information Evaluation Process:

As the consumer is engaged in search activity, he or she is also actively engaged in information evaluation. Evaluation involves those activities undertaken by the consumer to appraise carefully, on the basis of certain criteria, alternative solutions to market-related problems. The search process determines what the alternatives are, and in the evaluation process they are compared so that the consumer is readily to make a decision.

Evaluative or Choice Criteria: A consumer evaluates a brand on the basis of a number of choice criteria. These criteria are the standards and specifications the consumer uses in evaluating products and brands. They define the preferred product/brand features that a consumer seeks in a purchase and may be either objectives or subjective in nature. Evaluation criteria may vary from one consumer to another. No matter how many criteria are evaluated by the consumer, they are likely to differ in their importance.

The marketer should be careful in assuming, however, that a certain feature ranked as most important by consumers is actually determinant. For example, an airlines company may think about departure and arrival times, fares, past experience, itinerary routing, frequent-flyer program, terminal location and safety records.

The number and type of evaluative criteria may very by product. Consumers use few evaluative criteria when purchasing most grocery items. However, when one is purchasing a home, car or other major durable item, more evaluative criteria would typically be used in the evaluation process. This means that consumers would tend to use more evaluative criteria for high-involvement products that for low-involvement products. Evaluative criteria may also change over time. As consumers gain experience and information, their evaluative criteria may shift.

Factors influencing the amount of evaluation: A numbers of factors affect to determine the amount of evaluation that occurs. (i) The more urgent the need, the less evaluation will take place. (ii) The more significant the product is to the buyer (for example, a house, car, boat) the grater the amount of evaluation. (iii) The more complex the alternatives, the more evaluation will take place.

Marketing Implications: There are number of marketing implications that flow from this expansion of search and alternative evaluation processes.

(i) The marketers need to determine the sources of information. In this regard they may use warranty cards and in-depth research.

(ii) One of the variables that need to be assessed to determine its strength or weakness is the influence of information sources on brand-purchase intentions and fulfillment.

(iii) It is also beneficial for the marketer to determine whether his brand is perceived as being in the consumer’s evoked, inert, or inept set.

(iv) In order for the marketer to develop a successful marketing mix, there must be an understanding of what criteria are used by consumers in making purchase decision.

(v) The marketer may decide to change his brand’s image upon finding that his brand suffers from continued existence in consumer’s inept or inert sets.