Consumers have different roles in purchasing products and services, and these roles can influence their buying behavior.
Describe the different types of consumer roles
- Influencers are people who have a relatively large audience in which to tout their beliefs. In the consumer world, influencers can impact the success or failure of a product by using it or shunning it.
- A prosumer is usually a serious hobbyist, with similar interests and skills of professionals. The prosumer generally uses professional (or nearly professional) equipment and has a relatively high disposable income.
- Marketers often create a ” persona ” for their products and services in order to represent the different user types in a target market.
- persona: A social role.
- prosumer: A serious, enthusiastic consumer: not professional (earning money), but of similar interest and skills to a (generally lower level) professional, or aspiring to such. The target market of prosumer equipment.
- influencer: A person who or a thing which influences.
The Influence of Roles on Consumer Purchasing
Consumers have different roles in purchasing products and services. Here, a role is defined as the expected behavior of an individual in a society. These roles can be as part of the consumer’s family, employment, or social status, among other things. For example, the role of father can be different than the role of mother in purchasing consumer goods. Although there are many different roles that can influence how a consumer behaves, three in particular are presented here: influencers, prosumers, and personas.
Influencers are people who have a relatively large audience in which to tout their beliefs. In the consumer world, influencers can impact the success or failure of a product by using it or shunning it. A marketer often targets influencers rather than the entire target market, because these influencers can alter the behavior of other people. Influencers can be influential buyers, retailers, or people, such as journalists or industry professionals (among others). Influencers are sometimes ranked according to six criteria: market reach (how many people the influencer will connect with), independence (no vested interest in product), frequency of impact, expertise, persuasiveness, and thoroughness (the extent to which influence is exerted across the decision lifecycle).
In its most common usage, a prosumer is usually a serious hobbyist, with similar interests and skills of professionals. For example, the availability and relatively low cost of photography equipment have given rise to many people who are serious about photography but are not usually paid for their work. This is an important role for marketers to consider, as the prosumer generally uses professional (or nearly professional) equipment and has relatively high disposable income. Other examples of prosumers are found in home improvement and cooking segments.
A persona is a social role. Marketers often create a “persona” for their products and services in order to represent the different user types in a target market. A marketer may decide his product is best suited for a specific demographic and will define that demographic as clearly as possible. For example, “soccer mom” might be the target market for minivans. A persona may be created to capture the “soccer mom,” perhaps by giving her a name or other defining characteristics. A persona simply helps a marketer get a clearer picture of who will be buying his product.
Families have a tremendous influence on consumer purchasing.
Describe how family dynamics and the family life cycle can influence purchasing decisions
- One way to understand the consumer behavior of a family is to identify the decision maker for a purchase.
- Families’ influence on buying habits includes how parents play a significant role and, eventually, how a spouse and children play an even more significant role.
- People go through a family life cycle composed of different stages of purchasing patterns.
- life cycle: The useful life of a product or system; the developmental history of an individual or group in society.
Many factors influence purchasing. A consumer’s family is one of the most significant factors because a family helps shape an individual’s attitudes and behaviors. One way to understand the family’s impact on consumer behavior is to identify the decision maker for a purchase. A decision maker for a purchase can be a husband, wife, or even a child, and sometimes decisions are made in collaboration. Often, the decision maker changes based on the type of purchase or the size of the purchase. A new refrigerator, for example, is likely to be a joint decision, while a week’s groceries might be selected by a single member of the family.
Influence of Family on Consumer Behavior
Families influence purchases in many ways. At first, the influence of parents is significant because of how parents help their children to develop political and religious beliefs, lifestyle choices, and consumer preferences. Most people are who they are because of their parents. A spouse and children, however, can exert an even more significant force on a consumer’s purchases. Interaction between spouses and the number and ages of children play a particularly powerful role on buying behaviors. These family influences affect how consumers look at purchases more directly than most other social influences on consumer purchasing.
Family Life Cycle
Another aspect of understanding the impact of families on buying behavior is the family life cycle. Most, though certainly not all, individuals and families pass through an orderly sequence of life stages that can be used to understand their purchasing patterns. A typical adult starts in the bachelor stage of being young and single and then moves to being part of a married couple without children. Then the married couple transition to Full Nest stages, where the family has dependent children living at home. Once the children leave, the family enters the Empty Nest Stage, which is typically where older married couples (working or retired) no longer have dependent children living with them. Finally, the individual reaches the “solitary survivor” stage of being an older single person. Consumer behavior and purchasing is different in each of these stages. Understanding the family life cycle is beneficial for marketers because it helps in defining target customers.
Reference groups are groups that consumers will look to for help in making purchasing decisions.
Distinguish between an opinion leader and reference group
- Reference groups are groups that consumers compare themselves to or associate with. They can heavily influence purchasing patterns.
- Friends, clubs, religious groups, and celebrities can all act as reference groups.
- If a reference group endorses a product, either through use or statements about the product, those that look to the group will often purchase that product.
- target market: A group of people whose needs and preferences match the product range of a company and to whom those products are marketed.
- opinion leader: The agent who is an active media user and who interprets the meaning of media messages or content for lower-end media users.
Reference groups are groups that consumers compare themselves to or associate with. Reference groups are similar to opinion leaders in that they can have a profound influence on consumer behavior. Reference groups are considered a social influence in consumer purchasing. They are often groups that consumers will look to to make purchasing decisions. So if a reference group endorses a product, either through use or statements about the product, those that look to the group will often purchase that product. On the other hand, if a reference group disapproves of a product, those that associate with that group will probably not purchase the product.
Types of Reference Groups
Reference groups can be either formal or informal. Schools, friends, and peers are examples of informal reference groups. Clubs, associations, and religious organizations are usually formal reference groups. Individuals can also be reference groups (usually known as opinion leaders). Additionally, celebrities can be used as a reference group. A company might use a celebrity it feels will match its target market to get that market to purchase its product. For example, a few years ago Shaquille O’Neal was used to endorse Pepsi because Pepsi felt he represented the spirit of teenagers of the time.
Influence of Reference Groups
Reference groups can and do have a tremendous influence on purchasing decisions. This is evident in a number of ways, such as through roles. Everyone is expected to behave in a certain way based on the reference group we belong to. Students act like students. In keeping with this idea, people will often modify their own behavior to coincide with group norms (even those that profess non-conformity are in some ways conforming with other people who want the same thing). Reference groups communicate through opinion leaders, who influence what others do, act, and buy. In the consumer world, this means that if a reference group purchases a product, those that associate with the group likely will as well.
Opinion leaders are people consumers look to for guidance in making purchase decisions, usually someone with more knowledge of the subject.
Discuss the importance of opinion leaders in marketing and how they can influence the success of a product or service
- Consumers seek out help in making consumer purchases. One source of help is an opinion leader.
- Opinion leaders are usually seen as being honest and impartial. They have the standing to be able to influence others.
- Finding opinion leaders can be vital to the success of a marketing plan, as they can then influence others to purchase the product or service.
- Celebrities are often used as opinion leaders in promoting a product.
- reference group: A reference group refers to a group to which an individual or another group is compared.
- clout: Influence or effectiveness, especially political.
Our purchase decisions are influenced by any number of people or groups. We often look to opinion leaders for help in our consumer decisions. Opinion leaders are usually people who are more knowledgeable about a certain product or service than the average consumer. As such, opinion leaders can shape how a product is viewed. Consumers are constantly seeking out the advice of knowledgeable friends or acquaintances who can provide information, give advice, or actually make the decision. For some product categories, there are professional opinion leaders who are quite easy to identify–for instance, auto mechanics, beauticians, stock brokers, and physicians. All these professionals can influence the decisions consumers make within their area of expertise. Sometimes, these opinion leaders can actually be groups, known as reference groups.
Characteristics of Opinion Leaders
Opinion leaders are generally people who have the ability to influence others. They usually have deeper expertise in a certain area, and are often looked to for help in making consumer decisions. For example, a local high school teacher may be an opinion leader for parents in selecting colleges for their children. Often, an opinion leader is among the first to use a new product or service, and can then pass on his or her opinions of the product to others. Opinion leaders are often trusted and unbiased and have the social network of friends, family, and coworkers necessary to disperse information.
Opinion Leaders in Marketing
Opinion leaders are particularly useful in marketing. If a marketer can identify key opinion leaders for a certain group, she can then direct her efforts towards attracting these individuals. In marketing, celebrities are often used as opinion leaders. Although they may not actually know more about a product or service, there is usually the perception that they do. Celebrity endorsements in marketing are a way to give clout to a product or service. Opinion leaders can have a profound influence on the success of a product, and on one’s own consumer purchases.
Marketers should understand that a person’s social class will have a major influence on the types and quantity of consumer goods purchased.
Illustrate how social class impacts consumer behavior and buying patterns
- People are usually grouped in social classes according to income, wealth, education, or type of occupation.
- There is a major difference in the consumer behavior of different social classes. The upper class, for example, has more disposable income and can thus spend more on most products.
- Each social class has distinct characteristics and approaches to consumer purchases. A marketer should understand the dynamic of the social class he or she is targeting.
- disposable income: The amount of a person’s or group’s monetary income which is available to be saved or spent (on either essential or non-essential items), after deducting all taxes and other governmental fees.
- social class: A class of people, based on social power, wealth or another criterion.
A major influence on one’s purchasing habits and consumer behavior is the social class in which one finds him or herself. Social class is considered an external influence on consumer behavior because it is not a function of feelings or knowledge. Social class is often hard to define; in fact, many people dispute the existence of social classes in the United States. Usually, however, people are grouped in social classes according to income, wealth, education, or type of occupation. Perhaps the simplest model to define social class is a three-tiered approach that includes the rich, the middle class, and the poor. Other models have as many as a dozen levels. People in the same social class tend to have similar attitudes, live in similar neighborhoods, dress alike, and shop at the same type of stores.
Influence on Consumer Behavior
Social class can have a profound effect on consumer spending habits. Perhaps the most obvious effect is the level of disposable income of each social class. Generally, the rich have the ability to purchase more consumer goods than those with less income, and those goods are of higher quality. There is also a distinction in the type of goods purchased. For example, the upper class tend to be the primary buyers of fine jewelry and often shop at exclusive retailers. The lower class, in contrast, are much more concerned with simply getting by; they focus more on necessities.
Effect on Marketing
Marketers must be very aware of the social class of their target market. If a marketer wishes to target efforts toward the upper classes, then the market offering must be designed to meet their expectations in terms of quality, service, and atmosphere. A marketer should understand the dynamic of the social class as well. For example, the upper-middle class are generally ambitious, future-oriented people who have succeeded economically and now seek to enhance their quality of life. Material goods often take on major symbolic meaning for this group. Effective marketers will understand that and be able to tailor their approach accordingly.
Culture can have a profound effect on consumer behavior and purchasing, and can affect how a product is marketed.
Discuss the three components of a culture and how they impact consumer behavior.
- There are three components of a culture: beliefs, values, and customs. Each plays a role in influencing consumer purchasing.
- Culture can be further divided into subcultures. One’s race, religion and class are all ways subcultures can be established.
- The marketing strategy should show the product or service as reinforcing the beliefs, values and customs of the targeted culture.
- socio-economic: Of or pertaining to a combination of social and economic factors.
Culture can have a profound effect on consumer behavior and impact how a product is marketed. In this sense, culture is defined as the distinct way peoples’ experiences, customs and beliefs define how they behave. American culture, for example, values hard work, thrift and achievement. There are generally three components of a culture: beliefs, values, and customs.
- A belief is a proposition that reflects a person’s particular knowledge and assessment of something.
- Values are general statements that guide behavior and influence beliefs. The function of a value system is to help a person choose between alternatives in everyday life.
- Customs are modes of behavior that constitute culturally approved ways of behaving in specific situations. For example, taking one’s mother out for dinner and buying her presents for Mother’s Day is an American custom.
Culture can be further divided into subcultures. One’s race, religion and class are all ways subcultures can be established. For example, a person can be a part of the larger “American” culture and still be a member of other subcultures based on his or her socio-economic background. Each of these subcultures will have specific influences on consumer behavior.
Culture as an Influence on Consumer Behavior
Culture is considered an external factor in influencing consumer behavior. Since different cultures have different values, they will have different buying habits. Marketing strategies should reflect the culture that is being targeted. The strategy should show the product or service as reinforcing the beliefs, values and customs of the targeted culture. Failing to do so can result in lost sales and opportunities.
Consumer misbehavior refers to the common occurrence of consumers acting outside the norm.
Give examples of common types of consumer misbehavior and common retailer tactics for addressing consumer misbehavior issues.
- Consumer misbehavior is specifically related to retail and other markets, and includes things from cutting in line to fights between customers to credit card fraud.
- Common types of consumer misbehavior include shoplifting, abusive behavior, credit card fraud, and black markets.
- Since the cost of consumer misbehavior can be very high, many retailers feel it is worth fighting, and use a variety of tactics to do so.
- credit card fraud: A wide-ranging term for theft and fraud committed using a credit card or any similar payment mechanism as a fraudulent source of funds in a transaction. The purpose may be to obtain goods without paying, or to obtain unauthorized funds from an account.
- Black Friday: The day following Thanksgiving Day in the United States, traditionally the beginning of the Christmas shopping season.
Consumer misbehavior refers to the common occurrence of consumers acting outside the norm. It is generally recognized that there are social behaviors that are acceptable in a given situation. Anything outside of those accepted behaviors is considered misbehavior. Consumer misbehavior is specifically related to retail and other markets, and includes things from cutting in line to fights between customers to credit card fraud. Combating consumer misbehavior is an expensive, time-consuming activity. Some economists estimate the total monetary value of consumer misbehavior to be in the hundreds of billions of dollars.
Common Types of Consumer Misbehavior
Shoplifting is the theft of goods from a retail establishment. Although a very common crime, it is still considered consumer misbehavior. Researchers divide shoplifters into two categories: “boosters,” professionals who resell what they steal, and “snitches,” amateurs who steal for their personal use. Researchers generally agree that shoplifters are driven by either economic or psychosocial motives. Psychosocial motivations may include peer pressure, a desire for thrill or excitement, impulse, intoxication, or compulsion.
Credit Card Fraud
Credit card fraud is a wide-ranging term for theft and fraud committed using a credit card or any similar payment mechanism as a fraudulent source of funds in a transaction. The purpose may be to obtain goods without paying, or to obtain unauthorized funds from an account. Estimates put the cost of credit card fraud to billions of dollars.
Black & Grey Market Economies
A black market or underground economy is a market in goods or services which operates outside the formal one supported by the established state power. It often involves illegal, smuggled, or counterfeit goods. In many parts of the world, black markets operate side by side with legal markets, sometimes openly. Worldwide, the underground economy is estimated to have provided 1.8 billion jobs. Similar is a gray market economy where a company makes their products available even they are not authorized to do so.
Combating Consumer Misbehavior
Although fairly expensive to do, many retailers have begun fighting consumer misbehavior. Retailers often employ more security and staff during times where the propensity for consumer misbehavior increases, such as during “Black Friday” sales. Many also use electronic tracking devices on products and closed-circuit television to fight shoplifting and fraud. Since the cost of consumer misbehavior can be so high, many retailers feel it is worth fighting.