(8) JUDGMENT AND DECISION-MAKING BASED Imagery

ON HIGH EFFORT • Imagining an event in

order to make
judgments.
You evaluate things based on your personal characteristics

Mental Accounting
• Categorizing spending and saving decisions into
accounts mentally designated for specific
consumption transactions, goal, or situations

Emotional Accounting
• Intensity of positive or negative feelings associated
Judgment Process with each mental account for saving or spending
• It is a process of associating feelings with each
Judgment mental account for saving or spending.
• Evaluation of an object or estimation of likelihood of
an outcome or event.

Decision Making
• Making a selection among options or activities.
• Estimation of likelihood of goodness and badness
• Based on judgement of goodness or badness.

Example
• Demographics:
o Ana Dela Cruz
o 26 years old
o IT Officer 7 Biases in Judgment Process
o P27,000 monthly income 1. Confirmation Bias – focus on judgments that confirm
• Ana’s trip to Boracay is coming soon. However, as what they already believe and will hold those
someone who always wants to be ready in photos, judgments with more confidence.
what do you think is the first thing that she will 2. Self-Positivity
prepare? 3. Negativity – give negative information more weight
o OOTDs than positive information when they are forming
o Jewelries judgments.
o Swimwears 4. Mood – positive; comfort
5. Prior brand evaluations
6. Prior experience Difficulty of Mental Calculations –
you don’t need to think about the price
Cruz, P. 1
 Consumer Decisions Deciding what brand to choose

Cognitive Decision-Making Model

• Consumers combine items of information about
attributes to reach a decision

Affective Decision-Making Model

• Consumers base their decision on feelings and
emotions

Attraction Effect
• Addition of inferior brands to a consideration set
increases the attractiveness of dominant brands
Considering the Options

Inept Set
• Those that are unacceptable
• Does not like; not preference

Inert Set
• Those who treat with indifference

Consideration Set Deciding whether to decide now

• Those who want to choose among Deciding when alternatives cannot be compared

Thought Based Decisions

Types of Cognitive Choice Models

• Cognitive decision-making models can be classified
along two major dimensions: (a) whether processing
occurs one brand at a time or one attribute at a
time, and (b) whether they are compensatory (bad
attributes can be compensated for by good ones) or
noncompensatory (a bad attribute eliminates the
brand).

Deciding what is important to the choice

Goals
• Evaluation would depend on it. Compensatory
• Mental cost-benefit analysis model
Time • Negative features can be compensated for by
• Is it urgent or not? positive ones

Decision Framing Multiattributes Models

• The initial reference point or anchor in the decision • Type of brandbased compensatory model
process.
Additive Difference Model
• Brands are compared by attribute, two brands at a
time

Cruz, P. 2
 Noncompensatory
• Simple decision model
• Negative information leads to rejection of option

Conjunctive Model
• Sets minimum cutoffs to reject bad options

Disjunctive Model
• Sets acceptable cutoffs to find options that are good
Additional High-Effort Decisions
Lexicographic Model
• Compares brands by attributes, one at a time in Decision Delay
order of importance • Occurs if the decision is risky, uncertain, or involves
an unpleasant task.
Elimination-by-aspects Model • Also applicable for low-effort situation.
• Similar to lexicographic model but adds the notion of
acceptable cutoffs Noncomparable Decision
• Making decisions about products or services from
different categories

Alternative-based Strategy
• Choice based on overall evaluation

Attribute-based Strategy
• Choice based on abstract representations of
comparable attributes

Endowment Effect
• We attribute the object with more meaning, quality,
and value
• People value an object they possess much more than
the one they don’t

Feeling Based Decisions

• Consumers tend to be more satisfied after making a
feeling-based decision
• Emotions aid thought-based decisions Consumer Characteristics & Decisions
• Brands can be associated with positive or negative
emotions Expertise
• Detailed consumption vocabularies
Appraisal Theory
• Examines how our emotions are determined by the Good Mood
way that we think about or “appraise” the situation • Allows one to process information and more time to
• Is it worth it? Do I really need this? make a decision

Affective Forecasting Time Pressure

• Affective forecasting occurs when consumers try to • Leads to consumers’ failure to make intended
predict how they will feel in a future consumption purchases
situation. Specifically, they try to predict what
feelings they will have, how strongly these feelings
will be, and how long the feelings will last.

Cruz, P. 3
 Goal Classes that Affect Consumer Decision-Making (9) JUDGMENT AND DECISION-MAKING BASED
• Consumers are not always able to achieve both ON LOW EFFORT
individual-alone and individual-group goals when
making decisions in the context of a group. Trying to
achieve individual-group goals can result in either
group variety or group uniformity, while trying to
achieve individual-alone goals allows the consumer
to satisfy his or her own taste through the decision.

Unconscious

Types of Decision that Consumers Face in High-Effort

Situations

• Note: In cases where informational social influence is

present during the decision process, an outcome of
group uniformity or variety seeking can result.

• In low effort, choice is dominant

• The sequence of decision making in low-effort is
Cognitive-Behavior-Affective

Example
• Demographics
o James Santos
o 35 years old
o Business Analyst
o P45,000 monthly income
o Lives in Manila
o Goal-oriented, Enthusiast, Outgoing,
Impulsive
• Recently, James was able to experience an airsoft
game with his friends. Apparently, he enjoyed it and
wants to buy his own gear and airsoft gun with his
friends.
• What will you do if you’re not an expert on the items
that you want to buy?

Cruz, P. 4
Recommendations
• Based on location: Tuk’s Hobby Shop
• Based on price: Avoid Vincent’ Hobby Shop
• Based on variety: Neknek’s Airsoft Shop
Two Types of Heuristics
Availability Heuristics
• Basing judgments on events that are easier to recall
Representative Heuristics
• Comparing a stimulus with the category
prototype/exemplar
Unconscious Low-Effort Decision-Making
1. Customer decisions are affected by visual aspects
2. Influenced by environmental stimuli
3. Automatic goal-related behavior
Is it possible to say that:
Environmental Stimuli
• Friends' reviews
Cruz, P.
Virtual Aspects
• Previous and ongoing review information
Automatically Goal-Oriented
• Eagerness to decide immediately
Conscious
Hierarchy of Effects for Low-Effort Situations
Choice Tactics
The Learning Process
• This diagram shows how the outcome of a decision
can help consumers learn which choice tactic to
apply in a given situation. After consumers apply one
of the seven basic types of tactics to make a choice,
they take the brand home and use it. During
consumption, they can evaluate the brand, an action
that results in one of three basic outcomes:
reinforcement (satisfaction leading to positive
attitude and repurchase), no reinforcement (leading
to tactic reinforcement, but no attitude toward the
brand), or punishment (leading to a negative
attitude, no repurchase, and tactic reevaluation).
5
 Thought-Based Choice Tactics
Performance-related
• Based on benefits, features, or evaluations of a
brand
• Used when the outcome of the consumption process
is positive reinforcement
• Evaluation can be general or focused on a specific
attribute or benefit
• Sample problem (James): Choose what range he will
be playing.
Habit
• Doing the same thing time after time
• Makes life simpler and manageable
• Characterized by:
o Little or no information seeking
o Little or no evaluation of alternatives
• Sample problem (James): Choose a brand with the
highest reviews (other experience) or a brand that
provides good (personal) experience
Brand Loyalty
• Buying the same brand repeatedly because of a
strong preference for it
• Cognitive lock-in - Consumers remain loyal to a
brand because of the learning curve required to
switch to another brand
• Affects the choice of retail outlets
• Multibrand loyalty: Buying two or more brands
repeatedly because of a strong preference for them
• More prone to confirmation bias
• Sample problem (James): Based on Experience and
Evaluation
Price-related
• Zone of acceptance: Acceptable range of prices for
any purchase decision
• Customer’s price perceptions play an important role
• Techniques used to target deal-prone customers
(Coupons, price-offs, rebates, and two-for-ones)
• Note: Price consciousness is not static
• Sample problem (James): Choose the not-so-
expensive brand that can provide his goal
Normative
• Other individuals can influence consumers’ low-
elaboration decision-making
• Result from direct or indirect influences or vicarious
observation
• Common among inexperienced consumers
• Sample problem (James): Based his decision on the
reviews of those who have more expertise on the
subject matter.
Cruz, P.
Feeling-Based Choice Tactics
Affect-related
• Based on feelings
• Affect does not necessarily result from a conscious
recognition of need satisfaction
• Affect referral: Tactic whereby people simply
remember their feelings for the product or service
• Sample problem (James): Based on experience
Brand Familiarity
• Brands with which you already have previous
experience
• Brands that are referred to you
• Least applicable to a beginner in a particular brand
category.
• Sample problem (James): Based on experience
Variety Seeking
• Consumers seek variety due to satiation or boredom
• Motivated to relieve their boredom because their
level of arousal falls below the optimal stimulation
level (OSL)
• Can be sensation seekers or vicarious explorers
• Not expressed in every product category
• Sample problem (James): Based on one’s level of
involvement.
Impulse Buying
• Characterized by:
o Intense feeling to buy the product
o Disregard for negative purchase
consequences
o Feelings of euphoria and excitement
o Conflict between control and indulgence
• Sample problem (James): Based on one’s character
and the urgency of the purchase
Marketing Implication
1. Developing repeat purchase behavior by shaping
2. Marketing to habitual purchasers
Shaping
• A procedure used to establish a behavior that is not
presently performed by an individual
Operant Conditioning
• By Burrhus Frederic (BF) Skinner
• Shaping/molding behavior through reinforcement
and punishment
Reinforcement
• Retain; increase chance of behavior to be repeated
6
Punishment (10) POST DECISION PROCESS
• Eliminate: decrease bad behavior or likelihood of
repeating bad behavior
Dissonance and Regret

Post-Decision
• What makes you satisfied or dissatisfied with your
shoe purchase?

Dissonance
• Feeling of discomfort about whether or not the
correct decision was made.

Regret
• Negative feeling that one should have made
Marketing Implication another purchase, consumption, or disposition
decision than one actually did

Give Alternatives (ex. Learning from Experience

Promos & Discounts
Decrease price
Customer Services
(Remove stress)
Free Shipping, tickets, etc.
Zone of Acceptance
• Other term for budget
Online shopping from
traditional)
Improve product with
A Model of Learning from Experience
negative reviews • Consumers can acquire much information about
products and services by actually experiencing them.
Remove defective This entire process is influenced by consumer
products
familiarity, motivation to process, and the ambiguity
Remove service charge
of the information. It is also influenced by processing
biases, specifically the confirmation bias and
overconfidence on the part of the consumer.

Growth
• To increase sales, higher the chance of
shaping/influencing the behavior of consumers,
which will positively affect the brand.
• Limited growth = lower sales, thus lower budget for
marketing (low recognition & brand loyalty)

Factors Affecting Learning from Experience

a. Consumer familiarity with the domain
b. Consumer motivation to learn
c. Ambiguity of the information environment

Cruz, P. 7
 Marketing Implication of Processing Bias disconfirmation occurs when the movie is less
entertaining than expected, and this leads to
Top Dog Strategies dissatisfaction.
• Market leader or brand with a large market share
• Limitation on learning new information during low
motivation is beneficial
• Blocking exposure to evidence to avoid consumers
from getting new information
• Explaining experience by reinforcing the messages
and encouraging consumers to try the brand

Underdog Strategies
• Lower-share brand
• Instigating learning through comparison during low Be true to your promise
motivation
• Creating expectations and using promotion to
provide actual experience for consumers

Satisfaction or DIssatisfaction

Customer Judgement
• Refers on how consumers evaluate the outcomes
after making acquisition, consumption, or disposition
decisions.

Critical Consumer
• Whether consumers' beliefs and expectations about
the offering are confirmed or disconfirmed by its
actual performance

Dissatisfaction
• Decision falls short of one’s expectations. It is
sometimes the result of a positive or negative feeling. Equity Theory and Attribution Theory

Satisfaction Equity Theory

• Decision meets or exceeds one’s expectations • Concerns about the fairness of exchanges between
individuals.
Expectation • Fairness in exchange:
• Belief about the performance of a brand, product, or o Perception that the inputs and outputs of
service people involved in an exchange are equal.

Attribution Theory
• Describes how individuals find explanations for
events that is based on stability, focus, and
controllability.

The Disconfirmation Paradigm

• The disconfirmation paradigm shows how
satisfaction or dissatisfaction can occur. Using an
example of a new Steve Carell movie, the consumer
enters the situation with expectations ("Steve Carell
movies are entertaining"). Once the consumer sees
the movie, she can evaluate its performance.
Positive disconfirmation occurs when the movie is as
entertaining or more entertaining than expected,
and this leads to satisfaction. Negative
Cruz, P. 8
 Marketing Implication (11) SOCIAL INFLUENCES ON CONSUMER
• Ways to increase consumers' positive post-decision BEHAVIOR
feelings
o Providing value-added services
o Using promotions and special deals Sources of Influence

Post-decision Emotions
• Emotions experienced while using or disposing of the
acquired brands, products, or services
• Dissatisfied consumers need to cope with feelings of
stress

Affective forecasting
• Consumers tend to be more dissatisfied when a
product: General
o Fails to perform as they thought it would
o Makes them feel worse than they forecasted Marketing
it would • Influence delivered from a marketing agent
o Advertising
Responses to Dissatisfaction o Personal Selling
• Complaining
• Responding to service recovery Non-Marketing
• Engaging in negative word-of-mouth • Influence delivered from an entity outside a
communication marketing organization
o Friends
Types of Complainers o Family
1. Passive o Media
2. Irate
3. Voicers Source of Influence
4. Activists • Social influence can come from marketing or
nonmarketing sources and can be delivered via the
Steps to Retain Customers mass media or in person. Nonmarketing sources
1. Caring about customers tend to be more credible. Information delivered via
2. Remembering customers between sales the mass media can reach many people but may not
3. Building trusting relationships allow for a two way flow of communication.
4. Monitoring service-delivery process
5. Providing extra effort

Disposition

Disposing of Meaning Objects

Physical Detachment
• Physical disposal of an item

Emotional Detachment
• Emotional disposal of a possession

Cruz, P. 9
 Special
Opinion Leaders
• Individuals who act as information brokers between
the mass media and the opinions
Gatekeepers
• Source that controls the flow of information
Market Maven
• Consumer on whom others rely for information
about the marketplace (ex. Influencers)
Group Attractiveness
• When members perceive a group as being very
attractive, they illicit consumption behavior
Density
• Those in which group members all know one
another. Ex. Extended Family
Degree of Identity
• The influence that a group has on an individual’s
behavior is affected by the extent to which he or she
identifies with it.

Marketing Implication Tie Strength

• Tactics: Influence opinion leaders
o use them in marketing communications, and
referring consumers
Tie Strength and Social Influence
Reference Group: Types
Aspirational
• Group that one admires and desires to be like
Associative
• Group to which one currently belongs
• Brand Community
o Consumers with a structured set of
relationships involving a particular brand
• Extent to which a close, intimate relationship
connects people
• The more connection, the more influence
• The thick red line shows that Anne has strong ties to
three school friends: Maria, Kyeung, and Keshia. The
blue line indicates that Anne is less closely tied to
Jeff, someone she knows from her health club.
Another blue line indicates that Maria does not have
a close relationship with her distant cousin Tyrone. If
you were a marketer, whom would you target in this
network? Why?

Dissociative
• Group one does not want to emulate

Consumer Socialization
• Process by which one learns to become a consumer
• We cannot be part of a group without socializing
• Socializing Agents
• Anne and Maria can influence the most people
o People - Family and friends
o Media and marketplace - TV programs,
Marketing Implication
movies and videos, music, video games, the
1. Understanding information transmission
Internet, and ads
2. Targeting formal reference groups, homophilous
consumers, and the network
Reference Group: Characteristics
3. Understanding strength of weak ties
a. Embedded market: Social relationships
Degree of Group Contact
among buyers and sellers change the way
1. Primary reference group
the market operates
- Physical face-to-face interaction
2. Secondary reference group
- No direct contact
Exert Influence
Formality
Normative Influence
• Groups like fraternities, athletic teams, clubs, and
classes are formally structured. Norms
• Collective decision about what constitutes
Homophily
appropriate behavior
• Similarity among members

Cruz, P. 10
Brand-Choice Congruence Marketing Implication for Word of Mouth
• Tendency to behave in an expected way 1. Engineering favorable word of mouth
o Targeting opinion leaders and using
Conformity networking opportunities at conferences
• Purchase of the same brand as members of a group and public events
2. Preventing and responding to negative word of
Compliance vs Reactance mouth
• Compliance 3. Handling rumors and scandals
o Doing what the group or social influencer asks 4. Tracking word of mouth
• Reactance
o Doing the opposite of what the individual or
group wants us to do.

Social-Relational Theory
• Your relationship with someone can highly influence
your decision.
• Consumers conduct their social interactions
according to:
o Rights and responsibilities of their
relationship with a group
o Balance of reciprocal actions with a group
o Relative status and authority
o Value placed on different objects and
activities
• Note: Strength of normative influence depends on:
o (1) the characteristics of the product,
o (2) the consumer, and
o (3) the consumer’s group

Informational Influence

Information Influence
• Extent to which sources influence consumers by
providing information
• Affects how much time and effort consumers devote
to information search and decision-making
• Influenced by:
o Product characteristics
o Consumer and influencer characteristics
o Group characteristics

Descriptive Dimensions of Information

1. Valence
- Describes information as positive or negative
- Note: People pay more attention to and give
weight to negative information than positive
information
2. Modality
- Whether the information is verbal or
nonverbal
3. Word of Mouth
- Pervasive and persuasive
- Disseminated via online and social media

Cruz, P. 11
 (12) CONSUMER DIVERSITY Generation X

Social Media
Age
• 80% are knowledgeable on how to use social media
Generation
Pandemic Effect
• They become open to the idea of online shopping
Teens
• Shop more frequently than consumers in other
Post Content
segments
• Advisable at night
Age Cohorts
Advertisement
• Group of consumers who are born in the same
• TV Programs, Commercials, Newspapers, Magazines
period
Behavior
Boomerangers
• Easier to gain trust and loyalty
• Consumers who move back with their parents after
college or after being on their own • Stick to products that have been around or used for
years
Sandwich Generation
Generation Y/Millennials
• Born in between 2 generations
Social Media
• Has a deeper level of knowledge
• Infancy at the internet era

Pandemic Effect
• Maximize social media capacity

Post Content
• Advisable at night

Advertisement
• Social Media, Broadcasting programs and magazines

Behavior
Marketing Implication of the Teen Market • Enjoys looking back at the old days and
remembering the simple times (Nostalgia Marketing)
Brand Loyalty
Generation Z
• Brand awareness and preference are built early in
life
Social Media
Positioning • Heavily take advantage of social media
• Products that help deal with establishment of • Online purchasing/e-Commerce
identity, rebellion, and peer acceptance
Pandemic Effect
Advertising • Heavily use social media
• Incorporate symbols, issues, and language of teens
Post Content
Traditional & Social Media • Active at day but even more so at night
• Certain TV networks and programs, magazines, radio
stations, and the Internet Advertisement
• Social Media Platforms
Recreation or Special Events
• Showcase the brand or product in a lifestyle or Behavior
sports setting • Wants interactive programs

Cruz, P. 12
 Gender
• Female and male roles have been evolving
Men
• Men process information selectively
Women
• Women engage in a detailed and thorough
examination of a message
Sexual Orientation
• Person’s preference toward certain behaviors -
Masculine, feminine, and androgynous
• LGBTQ+
Diversity
• Presence of differences
Equity
• Fair access, opportunity, and support
Inclusion
• Genuine sense of belonging and value
64% of consumers said they took some sort of action after
seeing an ad that they considered to be diverse or
inclusive (Think With Google, 2019). This percentage is
higher among specific consumer groups including Latinx+
(85%), LGBTQ (85%), Black (79%), Asian/Pacific Islander
(79%), Millennial (77%), and teens (76%).
Regional
• Penetrate areas that have low percentage on online
buyings
• Despite efforts from the government and
ecommerce platforms, sales in Philippine provinces
are still catching up.
• Of the regions, Cavite has the next largest customer
base at 9%, Cebu has 6%, and Pampanga, Davao, and
Rizal have 3% each.
• While it makes sense to focus on selling to the
largest audience, it might be wise to begin selling to
provinces.
Cruz, P.
• Because they’re underutilized, they might be an
eager audience to receive your business.
Ethnic
• Affect how consumers think, feel, and act
Ethnic Group
• Sub-culture with a similar heritage and values
Acculturation
• Learning how to adapt to a new culture
How consumer acquire knowledge, skills and behavior?
• By modeling the behavior of others (Social Learning
Theory by Albert Bandura)
• Through social interaction and reinforcement or
receipt of rewards for certain behaviors (Operant
Conditioning by BH Skinner)
Racism
• and ethnocentrism prompt acculturated consumers
to avoid products associated with particular ethnic
groups
Multicultural Marketing
• Strategies used to appeal to a variety of cultures at
the same time
Religion
• Marketers can segment the market by:
o Focusing on religious affiliation
o Delivering targeted messages and
promotions
o Using certain media to deliver them
• Marketing tactics should demonstrate
understanding and respect for the targeted group’s
beliefs and customs
13
 (13) HOUSEHOLD AND SOCIAL CLASS
INFLUENCE

Household Influences

Families & Household

Family
1. Nuclear
- Father, mother, and children
2. Extended
• Single Empty Nest – when children left home
- Nuclear family plus relatives
Structure of Household
Household
1. Group of individuals living together
Factors Changing Household Structure & Characteristics
2. Single person living alone
a. Delayed marriage and cohabitation
b. Dual-career families
Family Life Cycle
c. Divorce
• Stages of family life, depending on the age of the d. Smaller families
parents and the number of children living at home e. Same-sex couples
• In a specific stage in the family life cycle, we would
know the capacity for expenses/spending limits Household Decision Roles
o What specific products we can offer for an
individual/couple/family Gatekeeper
• Household members who collect and control
information important to the decision

Influencer
• Household members who try to express their
opinions and influence the decision

Decider
• The person or persons who actually determine which
product or service will be chosen.

Household Life Cycles in the United States
• This chart depicts how households change as the
family life cycle changes. Each box represents a stage
in the family life cycle; each line and arrow
represents a type of change (marriage, divorce,
death, children entering or leaving, aging). Note that
this diagram accounts for numerous possibilities
(divorce, becoming a single parent, being a childless
couple, never marrying). What stage is your family in
right now?
Buyer
• The household member who purchases or acquires
the product or service
User
• The household members who consume the product
Buyers and Users
• Household purchase decisions can be made by one,
some, or all members of the family. Acquired
products and services may be consumed by one,
some, or all members. Here is an example of three
cells that result from crossing these two factors. Can
you think of examples that would fit into the other
six cells?

Cruz, P. 14
 2. Parents
- Make buying decisions to help the child
improve self-control.
- Act as a socializing influence on a child’s
consumption decisions and actions.

Social Class Influences

Social Class Hierarchy

• For example:
o Mom and Dad go to buy a new tennis racket
for Mom. Dad advises Mom on her
purchase. Some members are decision
makers and one member is a consumer: cell
2.
o Mom goes to the grocery store to buy Sugar
Pops cereal for her children. She'll never eat
the stuff. One member is a decision maker
and some members are consumers: cell 4.
o Mom, Dad, and the kids go to the
department store to buy a refrigerator. All
members are decision makers and all are
con- sumers: cell 9.

Socio-Economic Classes

Spouses and Decision

• Couples make equitable decisions through
bargaining and concession processes.

a. Husband-dominant decision
- Made by male head-of-household
b. Wife-dominant decision
- Made by female head-of-household
c. Autonomic decision
- Likely to be made by husband or wife but not
by both Trickle-down effect
d. Syncratic decision • Lower classes copy trends of upper classes
- Made jointly by husband and wife
Status Float
Roles of Children and Parents • Trends that start in the lower and middle classes and
1. Children move upward
- Are more likely to influence child-related • Various social classes can interact in complex ways in
products. terms of consumption
- Exert more influence as they get older. • Higher class wants to try trends of lower class

Cruz, P. 15
Class Structure by Culture
• The relative sizes and structures of social classes vary
by culture. Japan and Scandinavia, for example, are
characterized by a large middle class with few
people above or below it. India and Latin America,
on the other hand, have a greater proportion of
individuals in the lower classes. The United States
has a large middle class but also has significant
proportions in the upper and lower classes.

Social Class & Consumption

Voluntary Simplicity
• Limiting acquisition and consumption to live a less
material life
• Ex. Homemade coffee

Conspicuous Consumption
• Acquisition and display of goods and services to
show off one's status
• Ex. Coffee shop

Status Symbol
Determinants of Social Class • Product or service that tells others about someone's
social class standing
Social Class • Parody display and fraudulent symbol
• Better predictor of consumption when it reflects
lifestyles and values Compensatory Consumption
• Indicators: • Attempt to offset deficiencies by devoting attention
o Occupation to consumption
o Education A
o Area of Residence Price
o Possessions • Common marketing strategy that we can associate
o Family Background with social class
o Social Interactions
Special Social Classes
Status Crystallization
• When consumers are consistent across indicators of Consumption Patterns by Social Classes
social class income, education, and occupation 1. Upper Class
o Aristocracy
Changes in Social Class over time o Old money of inherited wealth
o New social elite (nouveax riches)
Upward Mobility o Upper-middle class
• Raising one’s status level 2. Middle Class
Downward Mobility o White-collar workers
o Gray-collar job (both office and fieldwork)
• Losing one’s status standing
3. Working Class
• Status Panic
o Blue-collar workers
4. Homeless
Social Class Fragmentation
o Unemployed or underemployed
• Blurred class divisions of upward and downward
o Drug and alcohol abusers
mobility
o Mentally ill
• Increased availability of mass media o Members of female-headed households
• Advances in communication technology o People with financial setbacks

Cruz, P. 16
 (14) PSYCHOGRAPHICS: VALUES, Values that Characterize Consumption
PERSONALITY, AND LIFESTYLES
Materialism
• Can be positive or negative
Psychographics vs Demographics
Health
• We become more knowledgeable about health

Hedonism
• Provides pleasure

Family
• “is it good for family?”

Sustainability
• Garment Collecting – "reworn, reused, or recycled“

Influences on Values
1. Culture
2. Ethnicity
3. Social Class
4. Age
a. Age Gap – between parents & child

Marketing Implication
1. Market Segmentation
2. Consumptions Patterns
3. New Product Ideas
4. Ad Development Strategy
5. Ethical Considerations

An Example of Means-End Chains

• According to the means-end chain analysis, product
and service attributes (e.g., fewer calories) lead to
benefits (e.g., I won't gain weight) that reflect
Values instrumental values (e.g., helps make me healthy)
• Enduring beliefs about abstract outcomes and and terminal values (e.g., I feel good about myself).
behaviors that are good or bad This analysis helps marketers identify important
• These could be part of your values as an individual. values and the attributes associated with them. Can
you develop a means-end chain for toothpaste or
deodorant?

Determining/Measuring Values

Rokeach Value Survey (RVS)

• Variable Measures:
o Terminal - Highly desired end states
o Instrumental - Needed to achieve the desired
end states

Cruz, P. 17
 • Personality – distinctive
patterns of behaviors,
tendencies, qualities, or
personal dispositions that
make an individual
different.

Research Approaches to Personality

Psychoanalytic
• Personality arises from a
set of dynamic,
unconscious internal
struggles within the mind.

Trait Theories
• Personality is
composed of a set of
List of Values (LOV) characteristics
• Variables Measures: • Describes how an
o Survey instrument that measures nine individual's
principal values driving consumer behavior. characteristics can be
different or similar to
others.

Phenomenological
• Locus of control: People's tendency to attribute the
cause of events to the self or not the self

Social-Psychological
• Behavior can be characterized as compliant,
aggressive, or detached

Behavioral
• Individuals are more likely to engage in behaviors for
Personality
which they have been rewarded.
• Mostly used in marketing can be applied to influence
and shape the behavior of individuals in the present.

A Trait Conception of Personality Types

• Consumers can be classified according to whether
Personality Traits vs Character Traits
• Your personality traits are the handful of character
traits that define “who” you are (e.g., openness,
conscientiousness, extraversion, agreeableness, and
neuroticism)
Cruz, P.
they have introverted or extroverted personality
traits. These traits can lead to the identification of
various personality types (e.g., moody, peaceful,
lively, and aggressive). Interestingly, these traits can
be collected into four major groups that correspond
to the basic temperaments identified by the ancient
Greek physician Hippocrates centuries ago. How
would you classify your personality according to this
scheme?
18
 (15) INNOVATIONS & (16) SYMBOLIC
CONSUMER BEHAVIOR

Innovation
• Product, service, or idea that consumers within a
market segment perceive as new. It has an effect on
existing consumption patterns

Innovations Characterized by Degree of Novelty

1. Continuous
- Limited effect on existing consumption
patterns
2. Dynamically Continuous
- Pronounced effect on consumption practices
3. Discontinuous
Behavior into Specific Actions, Habitual Responses, - Offering that is so new that one has never
Traits, and Types known anything like it before

Cocreation
• Involving consumers in creating value through
participation in new product development
• Benefits:
o Innovations fit better with consumer needs
o Gathering ideas from consumers is relatively
fast and inexpensive
o Strengthens the relationship with the
company

Adoption
Five-Factor Model of Personality • Purchase of an innovation
• Variables Measures by (Neo-Pi-R):
Resistance
• Desire not to buy an innovation

Diffusion of Innovation Model

Product Positioning Map

• Positioning product with its competitors
Lifestyle
• Lifestyle tells a lot your Habit Symbolic Consumer Behavior
1. Activities 3. Opinions
2. Interests
Symbolic Meaning
• After the COVID-19 pandemic, sense of introspection • Derived from culture:
and a reevaluation of values and lifestyle choices. o Cultural categories: Grouping of objects that
o Health o A greater sense of
reflect one’s culture
o Finance and savings self-care
o Cultural principles: Ideas or values that
o Quality time with o Acceptance of a
specify how aspects of one’s culture are
loved ones blended life
organized

Cruz, P. 19
 • Derived from customer:
o Individual meanings developed through
associations
o Can define a consumer as a member of
group or as a unique individual
Development of Consumer Self-Concepts
• You must create a problem with the self-concept of
consumers, associate them, and use it as a strategy.
A Model of the Gift-Giving Process
• The process of gift giving consists of three stages: (1)
the gestation stage, at which we think about and buy
the gift; (2) the presentation stage, at which we
actually give the gift; and (3) the reformulation
stage, at which we reevaluate our relationship based
on the nature of the gift- giving experience. At each
stage we can identify several issues that affect the
gift-giving process.

Special Possessions

Types of Special Possessions

1. Pets
2. Achievement Symbols
3. Memory-laden objects
4. Collections

Characteristics of Special Possessions

a. Few/no substitutes – limited
b. Price elasticity – regardless of the price
c. Not discarded
d. Not always used for original purpose
e. Frequently personified

Reasons for Disposing of Special Possessions

• Life transitions
• Periods of crisis
• Giving an object will invoke memories, express love,
or lead to a symbolic immortality
Marketing Implication of Gift Giving
Sacred Meaning • Promoting products/services as gifts
• We give respect to the product because there is a • Technology and gift shopping
significant value to it. • Alternatives to traditional gifts
• Made profane through commercialization

Sacred entities
• People, things, and places that are set apart and
treated with great respect

Profane things
• Ordinary with no special powers

Characteristics
• Involve mystery or myth
• Strong approach to create a feeling of power
• Maintained by scarcity and exclusivity

Gift Giving
• Gives meaning and value to receiver
• Culturally determined and timed
• Ad hoc – giving gifts whenever you will ask for a
favor
• Some occur at a time that is specific to each
individual

Cruz, P. 20