Summary for the first midterm of Consumer and Marketing (323623-B-6). It includes chapters 1 through 6 of the book Consumer Behaviour 3rd Edition Isabelle Szmigin and Maria Piacentini. ISBN: 9780198862567.
Chapter 1 – A context for understanding consumption
How consumption became a part of everyday life
An early history of consumers and consumption
Consumer = originated from the Latin consumere, began to be used in Europe from the twelfth
century onwards to refer to the using up of something such as food, candles, and
firewood.
The growth of trade, and more latterly globalization, has been a key element in the development of
consumption.
Locavores = one is part of a movement which aims to connect food producers and food
consumers in the same geographic region, in order to develop more self-reliant and
resilient food networks. It can improve local economies and can have a positive
impact on the health environment, community, and society of a particular place.
When consumption became part of everyday life
One of the most significant developments for consumption came during the first half of the
nineteenth century. The Industrial Revolution of the eighteenth century was a major economic
disruption, it led to the increased production of goods. At the same time, the marketing environment
began to develop, with improved forms of distribution, retailing, and advertising.
Conspicuous (=opvallend) consumption
Theory of the = book written by American economist Thorstein Veblen.
Leisure Class
Important aspect of Veblen’s analysis: ability to be extravagant and wasteful: those who belonged to
it could pay huge amounts of money for clothes that they would rarely wear or food that they would
not consume.
Conspicuous = the purchasing of luxury items to publicly display wealth to enhance identity and/or
consumption prestige.
Shopping: from service to self-service
Department stores, such as Harrods in London, came into their own in the nineteenth century. After
that, catalogue shopping became particularly popular in the United States at the end of the
nineteenth century. Through catalogues, department stores could be brought directly into their
customers’ homes. The 1930s saw the introduction of the self-service supermarket in the US. The
suburban shopping mall, as we recognize it today, appeared after the Second World War and was
designed to overcome customers’ problems with parking and the weather. Developments have
continued in self-service through vending machine technology and pop-up shops (fashion, shoes).
From consumers to consumerism: the politics of consumption
Consumer = coined in the 1930s, came to represent the exercise of freedom that people could
sovereignty have through consumption.
Consumer = 1974 in the UK, introduced to allow consumers paying by credit to have a period of
Credit Act time in which to change their mind regarding the purchase they had made.
,Consumer = protect the interests and safety of consumers -> Republic of China’s Consumer
legislation Protection Law (1994), Indian Consumer Protection Act (1986), European Charter of
fundamental Rights (2000).
Ralph Nader = one of the most famous consumer activists, US-born, wrote in 1959 ‘The safe car
you can’t buy’.
Caveat emptor = (i.e. buyer beware) recognizing that producers and retailers have a responsibility to
the consumer not only in producing goods but also in ensuring that they are safe,
fair, and of the value promised.
Sustainable = adopted by world leaders at a historic UN summit in 2015. Over the next 15 years,
Development these will fight inequalities and tackle climate change.
Goals (SDGs)
The postmodern consumer
An important feature of postmodern consumers is their fragmented nature. No longer does
consumption provide support to a unified idea of a person framed by their work, gender, moral
choices, and achievements. Postmodern consumers want to explore different and separate identities
to match the fragmenting markets and the proliferation of products.
Karl Marx = was concerned about the real value of commodities consumed.
Exchange value= can be said to represent what the value of a good is to the consumer and therefore
what it could be exchanged for, usually its price.
Use value = the value of a good to the consumer in terms of the usefulness it provides.
For example: you might decide not to buy a jacket because it is too expensive, meaning that the
exchange value is higher than its use value to you.
After postmodernism: experiential consumption and consumer culture theory
Experiential = increasingly important target for marketing.
consumer
The experiential consumer
The experiential perspective emerged in the 1980s. The purpose of Morris Holbrook and Elizabeth
Hirschmann (introduced the idea of experiential marketing), was to shift emphasis from the
consumer as rational decision-maker to a model where the consumer was viewed as an experience-
seeker.
Consumer culture theory
Consumer = a term first proposed by Eric Arnould and Craig Thompson in 2005, aims to capture
Culture an approach to the study of consumers that emphasized the social and cultural
Theory (CCT) aspects of consumption. Places customers in a wider context than previous research.
Arnould and Thompson (2005) organized key studies from consumer culture research over the past
20 years into four main strands of research:
1. Consumer identity projects = how consumers seek to develop their identity through their
consumption behaviour.
2. Marketplace cultures = how consumers interact with the marketplace, how their particular
consumption needs are served by it, and how consumers become influencers and producers
of culture.
3. Socio-historic patterning of consumption = how the institutions and social structures in our
lives influence consumption, drawing on more sociological understandings of consumer lives.
, 4. Mass-mediated marketplace ideologies and consumers’ interpretive strategies = how
consumers make sense of marketing messages and develop responses to them.
Companies using experiential and CCT approaches
Etnography = a qualitative research method often used in experiential research, aiming to
understand the cultural phenomena reflecting the knowledge and meaning systems
associated with the everyday life of a cultural group. It aims for deep immersion in
the culture of interest.
Behavioural insights
Traditionally, economists presented consumers as rational and logical, making decisions about their
consumption based on factors such as price and quality. However, behavioural economists and
psychologists increasingly recognize that human behaviour is more complex in terms of how we
assess the costs and benefits of our choices.
Contexts of = placing emphasis on the environment within which consumption choices take
decisions place (for example: you are on a diet, but on a dinner party you eat more, because of
the social nature of the occasion and because you do not want to offend your host).
Automatic and reflective modes
2 nodes of thinking:
- Automatic
- Reflective
Automatic = you are operating routinely with little effort and no feeling of voluntarily being in
mode control (for example: you smile when you see a baby, you jump when you hear a
sudden loud sound, you may pick up a bar of chocolate almost without thinking
about it, even though you may wish to lose weight).
Reflective = you give effortful attention to a mental activity, and this is often associated with
mode considered choice and concentration (if you were working out the relative price per
gram of two different-sized packs of pasta, would it take some effort and
concentration).
We can conclude that the automatic mode is more involved with the context of a situation, whereas
the reflective mode represents the cognitive, information-processing aspect of decision-making.
Researchers consider the context of a decision to nudge people towards a particular behaviour. This
requires only minor changes to the environment or context in which the behaviour takes place.
Choice = how the way a choice is presented influences the choice made.
architecture
Other important aspects of behavioural economics that can affect consumer behaviour include
mental accounting, loss aversion, and norms.
Mental accounting
Mental = when individuals allocate assets into separate, non-transferable groupings to which
accounting they may assign different levels of utility (for example savings at different bank
accounts, it can help consumers evaluate specific decisions).
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