CONSUMER BEHAVIOR

CHAPTER CONTENTS
PAGE
MATERIALS AVAILABLE FOR LECTURE AND DISCUSSION....................................5-2
STUDENT LEARNING OBJECTIVES.................................................................................5-3
KEY TERMS AND CONCEPTS............................................................................................5-3
LECTURE NOTES

Savvy Automakers Know Thy Custom(h)er...................................................................5-4

Consumer Purchase Decision Process............................................................................5-4

Psychological Influences on Consumer Behavior..........................................................5-8

Sociocultural Influences on Consumer Behavior..........................................................5-12

ANSWERS TO APPLYING MARKETING CONCEPTS AND PERSPECTIVES.....5-16

ANSWERS TO INTERNET EXERCISE..........................................................................5-18
SUPPLEMENTAL LECTURE NOTES (SLN)

SLN 5-1: Tomorrows Consumers Today......................................................................5-19

SLN 5-2: Mistakes Muy Grande....................................................................................5-20

IN-CLASS ACTIVITY (ICA)

ICA 5-1: Buying Process for Starbucks Coffee.............................................................5-21

VIDEO CASE 5 TEACHING NOTE (TN)

Ken Davis Products, Inc: Barbeque Sauce for Nonimprovisors................................5-24

POWERPOINT THUMBNAILS...........................................................................................5-27

5-1

Chapter 5

MATERIALS AVAILABLE FOR LECTURE AND DISCUSSION

PowerPoint
Slides1

Transparencies2

Handouts3

Textbook Figures
Figure 5-1

Purchase decision process........................................

Figure 5-2

Consumer Reports evaluation of portable

compact disc players...............................................

Figure 5-3

Comparison of problem-solving variations..............

Figure 5-4

Influences on the consumer purchase

decision process.......................................................

Figure 5-5

Hierarchy of needs...................................................

Figure 5-6

VALS

psychographic segments............................

Supplemental Figures and Advertisements

Figure 5-A

What new car buyers consider most important

in deciding what new car to buy..............................

Figure 5-B

Consumer involvement, knowledge, and

problem-solving variations......................................

Figure 5-C

Selective perception filters.......................................

Figure 5-D

Brand loyalty tendency by product category............

Figure 5-E

Word of mouth influence..........................................

Figure 5-F

Where children between the ages of 6 and 12

spend their money...................................................

Figure 5-G

Ownership of consumer electronics among

African-Americans, Hispanics, and
Asian-Americans.....................................................

PowerPoint Slides are available on a CD-ROM and appear as PowerPoint Thumbnails within this
chapter of the Instructors Manual.
100 Transparencies are available to textbook adopters by request of their local McGraw-Hill/Irwin sales
representative.
Instructors may choose to reproduce some figures and hand them out to each student in the class to enhance
discussion. These Handouts are shown with a check in the right column.

Chapter 5

5-2

STUDENT LEARNING OBJECTIVES

After reading this chapter students should be able to:

Outline the stages in the consumer decision process.

Distinguish among three variations of the consumer decision process: routine, limited,
and extended problem solving.

Explain how psychological influences affect consumer behavior, particularly purchase

decision processes.

Identify major sociocultural influences on consumer behavior and their effects on

purchase decisions.

Recognize how marketers can use knowledge of consumer behavior to better understand
and influence individual and family purchases.

KEY TERMS AND CONCEPTS

attitudes

opinion leaders

beliefs

perceived risk

brand loyalty

perception

consumer behavior

personality

family life cycle

purchase decision process

involvement

reference groups

learning

subcultures

motivation

word of mouth

5-3

Chapter 5

LECTURE NOTES
Chapter Opening
Photo 1

CHAPTER OPENING EXAMPLE

Savvy Automakers Know Thy Custom(h)er

Slide 5-8
Chapter Opening
Photo 2

Slide 5-9

Women buy about 60% of new cars and light trucks and influence 80%
of all vehicle buying decisions. Women spend more than $85 billion on new
and used cars and trucks and automotive accessories.
Automakers research has identified five important differences between
men and women as purchasers of vehicles: (1) definition of sporty appeal;
(2) a vehicles feel; (3) approach to car buying, usage, and maintenance;
(4) different priorities on such factors as dependability, low price, and safety;
and (5) the car-buying process, which 78% of women dislike.
Recognition of women as purchasers and influencers has also altered the
behavior of dealers: many now use a one-price policy and have stopped
negotiating a vehicles pricepleasing men as well, since 68% of all buyers
dread the price negotiation.
Consumer behavior can be defined as the actions a person takes in purchasing
and using products and services, including the mental and social processes that
precede and follow these actions. The behavioral sciences help answer
questions, such as why people choose one product or brand over another, how
they make these choices, and how companies use this knowledge to provide
value to consumers.

Figure 5-1
Purchase decision
process

Slide 5-11, T

ICA 5-1:
Buying
Process for
Starbucks
Coffee

I. CONSUMER PURCHASE DECISION PROCESS

The purchase decision process is the stages a buyer passes through in
making choices about which products and services to buy. The process
consists of 5 stages: (1) problem recognition, (2) information search,
(3) alternative evaluation, (4) purchase decision, and (5) post-purchase
behavior.
A. Problem Recognition: Perceiving a Need
1. Problem recognition occurs when a person realizes a difference
between what he or she has and what he or she would like to
have is big enough to actually do something about it.
2. In marketing, advertisements or salespeople can activate a
consumers decision process by showing the shortcomings of
competing or currently owned products.

Chapter 5

5-4

B. Information Search: Seeking Value

After recognizing a problem, a consumer begins to search for
information about what product or service might satisfy the need.
1. An internal search involves scanning ones memory for previous
experiences with products or brands. Internal search is often
sufficient for frequently purchased products.
2. An external search may be necessary when past experience or
knowledge is insufficient, the risk of making a bad decision is
high, and the cost of gathering information is low. The primary
sources of external information are:

Figure 5-2
Consumer Reports
CD player ratings

Personal sources, such as friends and family whom the

consumer trusts.

Public sources, including various product-rating

organizations such as Consumer Reports or the government.

Marketer-dominated sources, such as information from

sellers that include advertising, company websites,
salespeople, and point-of-purchase displays in stores.

Slide 5-13

Figure 5-A
New car
buying factors

Slide 5-15

C. Alternative Evaluation: Assessing Value

1. The information stage clarifies the problem for consumers by:

Suggesting criteria, or points to consider, for the purchase.

Providing brand names that might meet the criteria.

Developing consumer value perceptions.

2. A consumers evaluative criteria represent both the objective

attributes of a brand and the subjective ones used to compare
different products and brands. These criteria are often
mentioned in advertisements.
3. These criteria establish the consumers evoked setthe group of
brands that a consumer would consider acceptable from among
all the brands in the product class of which he or she is aware.
D. Purchase Decision: Buying Value
Having examined the alternatives, two choices remain:
1. From whom to buy, which is determined by the sellers location,
past purchase experience, return policy, etc.
5-5

Chapter 5

2. When to buy, which is determined by whether the product is on

sale or the manufacturer offers a coupon/rebate and/or the
sellers store atmosphere, shopping experience, salesperson
persuasiveness, financial terms, etc.
3. The Internet adds a technological dimension to the consumer
decision process by allowing consumers to gather information,
evaluate alternatives, and make buying decisions.
E. Postpurchase Behavior: Value in Consumption or Use
After buying a product, the consumer compares it with expectations
and is either satisfied or dissatisfied.
1. Satisfaction or dissatisfaction affects consumer value
perceptions, consumer communications, and repeat-purchase
behavior.
2. Satisfied buyers tell three other people about their experience,
while dissatisfied buyers complain to nine people.
3. Satisfied buyers tend to buy from the same seller each time a
purchase decision arises.
4. Many firms work to produce positive postpurchase
communications among consumers and contribute to
relationship building between sellers and buyers.
MARKETING NEWSNET
The Value of a Satisfied Customer
The question, How much is a satisfied customer worth? has prompted
firms to calculate the financial value of a satisfied customer over time. For
example, Frito-Lay reports that a loyal customer in the southwestern United
States eats 21 pounds of its salty snack chips each year and will spend $52.50
annually on Lays, Ruffles, Doritos, and Tostitos.
Such calculations have focused marketers attention on customer
satisfaction and retention. Why? Research shows that a 5% improvement in
customer retention can increase a companys profits by 70%-80%.
Figure 5-3
Problem-solving
variations

F. Involvement and Problem-Solving Variations

1. Consumers may skip or minimize one or more steps in the
purchase decision process depending on the level of
involvement, which depends on the personal, social, and
economic significance a particular purchase has to the consumer.

Slide 5-17, T

Chapter 5

5-6

2. High-involvement purchase occasions typically have at least one

of three characteristics: the item to be purchased:

Figure 5-B
Consumer
involvement &
knowledge

3. There are three general problem-solving variations in the

consumer purchase decision process based on consumer
involvement and product knowledge:

Routine problem solving. Is virtually a habit and involves

little effort seeking external information and evaluating
alternatives. Routine problem solving is typically used for
low-priced, frequently purchased products.

Limited problem solving. Involves the use of moderate

information seeking efforts. It is often used when the buyer
has little time or effort to spend.

Extended problem solving. Means that each stage of the

consumer purchase decision process is used, including
considerable time and effort on external information search
and in identifying and evaluating alternatives. It is used in
high-involvement purchase situations.

Slide 5-18, T

Figure 5-4
5 situational
influences

Slide 5-19, T

is expensive;
can have serious personal consequences; or
could reflect on ones image.

G. Situational Influences
Five situational influences impact the purchase decision process:
1. The purchase task, the reason for engaging in the decision.
Information search and evaluation alternatives may differ if the
purchase is a gift or for the buyers own use.
2. Social surroundings, including other people present when a
purchase decision is made.
3. Physical surroundings, such as decor, music, and crowding in
retail stores.
4. Temporal effects, such as time of day or the amount of time
available.
5. Antecedent states, which include the consumers mood or
amount of cash on hand.

5-7

Chapter 5

CONCEPT CHECK
1. What is the first step in the consumer purchase decision process?
Answer: problem recognition
2. The brands a consumer considers buying out of the set of brands in a
product class of which the consumer is aware is called the
.
Answer: evoked set
II. PSYCHOLOGICAL INFLUENCES ON CONSUMER BEHAVIOR
Psychology helps marketers understand why and hw consumers behave
as they do. Concepts such as motivation and personality; perception;
learning; values, beliefs and attitudes are useful for interpreting buying
processes and directing marketing efforts.
Figure 5-5

A. Motivation and Personality

Hierarchy of needs

Motivation and personality are used to describe why people do some

things and not others.
Slide 5-23

1. Motivation is the energizing force that stimulates behavior to

satisfy a need. Because consumer needs are the focus of the
marketing concept, marketers try to arouse these needs, which
are hierarchical, ranging from basic to learned needs:

Physiological needs, such as water, food, and shelter, are

basic to survival and must be satisfied.

Safety needs involve self-preservation and physical wellbeing.

Social needs are concerned with love and friendship.

Personal needs are represented by the need for achievement,

status, prestige, and self-respect.

Self-actualization needs involve personal fulfillment.

2. Personality refers to a persons consistent behaviors or

responses to recurring situations.

Chapter 5

Key traits include assertiveness, extroversion, compliance,

dominance, and aggressiveness.

5-8

Figure 5-C
Selective perception
filters

Slide 5-25

ESRA
Subliminal
message?

Personality characteristics are often revealed in a persons

self-concept, which is the way people see themselves and the
way they believe others see them.

Marketers recognize that people have an actual (how they

see themselves) and ideal self-concept (how they want to see
themselves). These two images are reflected in the products
and brands a person buys.

B. Perception
Perception is the process by which an individual selects, organizes,
and interprets information to create a meaningful picture of the
world.
1. Selective perception is a process which filters the information so
that only some of it is understood or remembered or even
available t the conscious mind.

Selective exposure occurs when people pay attention to

messages that are consistent with their own attitudes and
beliefs and ignore messages that are inconsistent.

Selective comprehension involves interpreting information so

that it is consistent with a persons attitudes and beliefs.

Selective retention means that consumers do not remember

all the information they see, read, or hear, even minutes after
exposure to it.

ETHICS AND SOCIAL RESPONSIBILITY ALERT

The Ethics of Subliminal Messages

Slide 5-26

Fresh Step ad
Why Good
Housekeeping?

Although there is no substantive scientific support for subliminal

perception, the Federal Communications Commission (FCC) has denounced
subliminal messages as deceptive. While not illegal in the U.S., consumers
spend $50 million a year for audiotapes with subliminal messages designed to
help them stop smoking, lose weight, or raise self-esteem. Student are asked to
consider whether attempts to implant subliminal messages are a deceptive
practice and unethical, regardless of their intent.
2. Perceived risk represents the anxieties felt because the consumer
cannot anticipate the outcomes of a purchase but believes that
there may be negative consequences.

Slide 5-27

Perceived risk affects the information stage of the consumer

purchase decision process. The greater the perceived risk,
the more extensive the external search is likely to be.
5-9

Chapter 5

Velocity ad
Why a free sample?

Marketers try to reduce a consumers perceived risk and

encourage purchases by using one or more strategies.

B. Learning
Slide 5-28

Much consumer behavior is learned, such as information sources

about products, the evaluative criteria used to assess alternatives,
and how to make purchase decisions.

Learning refers to those behaviors that result from (1) repeated

experience and (2) reasoning.

1. Behavioral Learning.

Behavioral learning is the process of developing automatic

responses to a type of situation built up through repeated
exposure to it.

A drive is a need that moves an individual to action.

A cue is a stimulus or symbol that one perceives.
A response is the action taken to satisfy the drive.
A reinforcement is the reward.
A negative reinforcement is a reward that is unpleasant.

Marketers use two concepts from behavioral learning theory:

Stimulus generalization occurs when a response elicited

by one stimulus (cue) is generalized to another stimulus.

Stimulus discrimination refers to ones ability to perceive

differences among similar products.

2. Cognitive Learning.
Cognitive learning involves making connections between two
or more ideas or simply observing the outcomes of others
behaviors and adjusting ones own behavior accordingly.
An example is the use of repetitive advertising.
Figure 5-D
Brand loyalty by
product category

Slide 5-1, T

Chapter 5

3. Brand Loyalty.

Developing habits means that a consumer is solving

problems routinely and consistently without much thought.

Brand loyalty is a favorable attitude toward and consistent

purchase of a single brand over time. It results from positive
reinforcement.

5-10

C. Values, Beliefs, and Attitudes

These play a central role in consumer decision making.
1. Attitude Formation.

An attitude is a learned predisposition to respond to an

object or class of objects in a consistently favorable or
unfavorable way.

Beliefs are ones perception of how a product or brand

performs on different attributes.

Colgate ad
How attitudes were
changed?

2. Attitude Change.
Marketers use three approaches to try to change consumer
attitudes toward products and brands:

Slide 5-32
Bayer ad

Changing beliefs about the extent to which a brand has

certain attributes.

Changing the perceived importance of attributes.

Adding new attributes to the product.

How attitudes were

changed?

Slide 5-33

D. Lifestyle
1. Lifestyle is a way of living that is identified by how people:

Spend their time and resources (activities);

Consider what is important in their environment

(interests); and

Think of themselves and the world (opinions).

2. Psychographics, which is the analysis of consumer lifestyles,

and is useful in segmenting and targeting consumers for new
and existing products.
Figure 5-6
VALS segments

Slide 5-35

3. VALS Program was developed by SRI International and is

based on a persons:

Self-orientation, or the patterns of attitudes and activities

that help a person reinforce his/her self image; and

Resources, which range from minimal to abundant, and

include income, education, self-confidence, health, etc.

Consists of eight lifestyle types, each of which exhibit

different buying behavior and media preferences.
5-11

Chapter 5

CONCEPT CHECK
1. The problem with the Toro Snow Pup was an example of
selective
.
Answer: comprehension
2. What three attitude-change approaches are most common?
Answer: problem recognition
3. What does lifestyle mean?
Answer: Lifestyle is a way of living that is identified by how people
spend their time and resources (activities), what they consider important
in their environment (interests), and what they think of themselves and the
world around them (opinions).
III. SOCIOCULTURAL INFLUENCES ON CONSUMER BEHAVIOR
Sociocultural influences evolve from a consumers formal and informal
relationships with other people. These influences include:
A. Personal Influence
Aspects of personal influence important to marketing are:
1. Opinion leaders are individuals who have social influence over
others.
Omega Pierce ad

Omega Anna ad

Opinion leader?

Opinion leader?

Slide 5-40

Slide 5-41

Figure 5-E
Word of mouth

2. Word of mouth is people influencing each other during

conversations.
Slide 5-42

B. Reference Groups
Reference groups are people to whom an individual looks as a basis
for self-appraisal or as a source of personal standards. They have an
important influence on the purchase of luxury products but not of
necessities. Three groups have marketing implications:

Chapter 5

5-12

1. Membership group is one to which a person actually belongs,

such a fraternities and sororities, social clubs, etc.
2. Aspiration group is one hat a person wishes to be a member of or
identified with, such as a professional society.
3. Dissociative group is one from ht a person wishes to maintain a
distance from because of differences in values or behaviors.
C. Family Influence
Family influences on consumer behavior result from three sources:
Figure 5-F
Where 6-12 yrs old
spend money

Slide 5-44

SLN 5-1
Tomorrows
Consumers
Today

Haggar ad
What decision
making style?

Slide 5-45

SLN 5-2
Mistakes Muy
Grande

1. Consumer socialization, which is the process by which people

acquire the skills, knowledge, and attitudes necessary to function
as consumers. Children learn how to purchase by:

interacting with adults in purchase situations.

engaging in their own purchasing and usage experiences.

2. Family life cycle, which is the concept that describes the distinct
phases that a family progresses through from formation to
retirement, each phase bringing with it identifiable purchasing
behaviors.

Young marrieds without children purchase furniture and

housewares.

Young marrieds with children represent a sizable market for

childrens products and home furnishings.

The older married and older unmarried stages are a market

for vacation trips and medical services.

3. Family Decision Making.

Two decision-making styles exist: spouse-dominant and joint

decision making.

Five roles of individual family members in the purchase

process exist: (1) information gatherer, (2) influencer,
(3) decision maker, (4) purchaser, and (5) user.

D. Culture and Subculture

Culture refers to the set of values, ideas and attitudes that are learned
and shared among the members of a group.
5-13

Chapter 5

Figure 5-G
Electronics owned
by subculture

Slide 5-47, T

Bonne Bell ad
Different buying
patterns?

Subcultures are subgroups within the larger, or national, culture

with unique values, ideas, and attitudes. The three largest
racial/ethnic subcultures in the U.S are Hispanics, AfricanAmericans, and Asian-Americans.

They annually spend about $1 trillion for goods and services.

Each of these groups exhibits sophisticated social and cultural

behaviors that affect their buying patterns.

1. African American Buying Patterns. African-Americans have

the largest spending power of the three racial/ethnic subcultures
in the U.S.

While price conscious, they are motivated by product quality

and choice.

They respond to products and advertising that appeal to their

African-American pride and heritage as well as address their
ethnic features and needs.

Slide 5-48

Mountain Dew ad
Different buying
patterns?

Slide 5-53

Chapter 5

Adidas print ad

McChicken TV ad

SoftSheen print ad

Sears TV ad

Different buying
patterns?

Different buying
patterns?

Different buying
patterns?

Different buying
patterns

Slide 5-49

Slide 5-50

Slide 5-51

Slide 5-52

2. Hispanic Buying Patterns. Hispanics represent the largest

racial/ethnic subculture in the U.S in terms of population. About
50% are immigrants, and the majority is under the age of 25.

They are quality and brand conscious.

They prefer buying American-made products, especially

those offered by firms that cater to Hispanic needs.

Their buying preferences are influenced by family and peers.

They consider advertising a credible product information

source, and U.S. firms spend $2.5 billion annually on
Spanish-language ads.

5-14

Chevy Venture print

ad
Different buying
patterns?

Slide 5-56
Chevy Impala

Hispanic subculture is diverse and differences among

nationalities often affect product preferences.
HBO print ad

Pepsi TV ad

Different buying
patterns?

Different buying
patterns?

Slide 5-54

Slide 5-55

3. Asian American Buying Patterns. The Asian subculture in the

United States is the fastest growing racial/ethnic subculture.

About 70% of Asians are immigrants, and most are under the
age of 30.

Asians represent a diverse subculture, including Chinese,

Japanese, Filipinos, Koreans, Asian- Indians, people from
Southeast Asia, and Pacific Islanders.

Two groups of Asian-Americans have been identified:

TV ad
Different buying
patterns?

Assimilated Asians are conversant in English, highly

educated, and exhibit buying patterns very much like
typical American consumers.

Non-assimilated Asians are recent immigrants who cling

to their native languages and customs.

Slide 5-57

CONCEPT CHECK
1. What are the two primary forms of personal influence?
Answer: opinion leadership and word of mouth
2. What two challenges must marketers overcome when marketing to
Hispanics?
Answer: diversity of this subculture and the language barrier

5-15

Chapter 5

ANSWERS TO APPLYING MARKETING CONCEPTS

AND PERSPECTIVES
1.

Review Figure 52 in the text, which shows the CD player attributes identified by
Consumer Reports. Which attributes are important to you? What other attributes
might you consider? Which brand would you prefer?
Answer: CD player attributes that may be considered important include:
Price
Style
Bump immunity
Warranty
Ease of use

Sound quality
Manufacturers reputation
Service availability
Battery life

Based on the attributes shown in Figure 5-2, the Panasonic SL-CT 490 may be chosen.
2.

Suppose research at Panasonic reveals that prospective buyers are anxious about
buying high-definition television sets. What strategies might you recommend to the
company to reduce consumer anxiety?
Answers: Strategies Panasonic might adopt in order to reduce uncertainty perceptions by
prospective buyers include:

3.

a.

Focus promotional activities on the benefits of better picture, higher quality, and
greater enjoyment from watching in the comfort of your own home.

b.

Create ads showing ease of operation to produce a higher-quality picture.

c.

Provide high customer service at point of purchase.

Assign one or more levels of the hierarchy of needs and the motives described in
Figure 5-5 to the following products: (a) life insurance, (b) cosmetics, (c) The Wall
Street Journal, and (d) hamburgers.
Answers: See below:
a.

Product
Life insurance

Need
Safety needs

b.

Cosmetics

Social needs

c.

Wall Street Journal

Personal needs

d.

Hamburgers

Physiological needs

Chapter 5

5-16

4.

With which stage in the family life cycle would the purchase of the following
products and services be most closely identified: (a) bedroom furniture,
(b) life insurance, (c) a Caribbean cruise, (d) a house mortgage, and
(e) childrens toys?
Answers: See below:
a.

Product
Bedroom furniture

Stage in Life Cycle

Young married without children

b.

Life insurance

Young married with children

c.

Caribbean cruise

Older married, empty nest, or older unmarried

d.

House mortgage

Young married with or without children

e.

Childrens toys

Young married with children

5-17

Chapter 5

ANSWERS TO INTERNET EXERCISE

Census 2000 &
Selig Center for
Economic Growth

Slide 5-61

The size and economic significance of racial/ethnic subcultures in

the United States has been documented by the 2000 Census. Population
statistics supplied by the U.S. Census are readily accessible at
www.census.gov. These statistics, coupled with data useful for marketing
purposes, offer valuable insights into the growing diversity of the U.S.
population.
The Selig Center for Economic Growth at the University of Georgia
provides useful information on the buying power of African-Americans,
Hispanics, and Asian-Americansthe three largest racial/ethnic
subcultures in the United States. Visit the Centers website at
www.selig.uga.edu for answers to the following questions.

1.

What is the most recent estimate of the buying power of African-Americans,

Hispanics, and Asian-Americans in the United States?
Answers: Estimates of buying power are (in $ billions):

2.

a.

Subculture
African-Americans

1990
$316.5

2002
$645.9

2007
$852.8

b.

Hispanics

$223.0

$580.5

$926.1

c.

Asian Americans

$117.6

$296.4

$454.9

In which states is African-American buying power the highest? Which states have
the highest Hispanic and Asian-American buying power?
Answers: The top 5 states with the largest share of total buying power are:

1.

AfricanAmerican
District of Columbia

Hispanic
New Mexico

AsianAmerican
Hawaii

2.

Mississippi

California

California

3.

Maryland

Texas

New Jersey

4.

Louisiana

Arizona

New York

5.

Georgia

Nevada

Washington

Source: Humphreys, Jeffery M., The Multicultural Economy 2002Minority Buying Power in the New Century.
Georgia Business and Economic Conditions, Vol. 62, No. 2, Selig Center for Economic Growth, Terry College of
Business, The University of Georgia, pp. 1-7.

Chapter 5

5-18

SLN 5-1: SUPPLEMENTAL LECTURE NOTE

Tomorrows Consumers Today
Who spends $150 billion and influences another $750 billion of purchases per year?
Answer: young people between the ages of 6 and 18. Youngsters aged 6 to 12 spend $25 billion
annually for products ranging from toys to fast food to sports equipmenta fact noted by Toys
Us, McDonalds, and Reebok. When not shopping for themselves, they influence what their
parents buy, including their own (kids) clothes, video movies, cereals, soft drinks, TVs, and
radios in the amount of $300 billion per year.
Teenagers dwarf their younger siblings when it comes to financial muscle and buying
enthusiasm. Teens aged 13 to 18 spend $125 billion annually for products like personal care
items, cameras, and apparel. They influence another $450 billion in family purchases of VCRs,
CD players, personal computers, cars, and food. Research shows that many parents consider
their children to be more knowledgeable about some products than they are themselves! For
good measure, teens spend over $33 billion of their parents money on supermarket items for the
family and themselves. Campbell USA, Colgate-Palmolive, Sony, and Polaroid have capitalized
on this phenomenon by introducing items attractive to teens.
The buying power and influence of children and teens are expected to reach a new high in
2002, when 49 percent of males and 50 percent of females under the age of 18 will hold jobs of
some kind. To marketers, the future is now! According to the president of a consumer goods
company, The appeal isnt simply satisfying kids now but also developing them as users of our
products so theyll buy as adults.

Source: Call it Kid-fluence, U.S. News & World Report (July 30, 2001), pp. 32-33 Special Report: Superstars
of Speeding, Advertising Age (February 20, 2001), pp. S1, S10.

5-19

Chapter 5

SLN 5-2: SUPPLEMENTAL LECTURE NOTE

Mistakes Muy Grande
Efforts to communicate with Hispanic consumers have produced numerous bloopers in
recent years. Chapter 5 provided several examples. However, others further illustrate the
challenge facing marketers.
1.

A large U.S. airline ran an advertisement showing one passenger leaning over to another
and apparently sharing a secret. The headline in Spanish was meant to say, I fly sitting
in leather. However, translated to idiomatic Spanish, it said, I fly naked.

2.

A Spanish-language television ad for Jack-in-the-Box featured a flamenco dancer

accompanied by three mariachi musicians. What's the problem? Flamenco comes from
Spain and mariachi from Mexico, and the music is utterly different. According to a
Hispanic marketing consultant, the ad was the Anglo equivalent of Michael Jackson
moonwalking while Willy Nelson sang.

3.

A Spanish-language comic book designed to promote safety for children was prepared by
a California consumer safety group. Its title was Nine Lives of the Cat. In Hispanic
lore, a cat has only seven lives.

4.

A consumer products firm decided to call its burrito Burrado. Hispanics found this
name humorous, since burrado translates to big ass in Spanish.

Source: A Little Latin Logic, Brand Week (July 20, 1998), p. 12; Marketing to Hispanics, Advertising Age
(August 24, 1998), pp. S1-S27; Habla English? American Demographics (April 2001), pp. 54-57.

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ICA 5-1: IN-CLASS ACTIVITY

Buying Process for Starbucks Coffee
Learning Objective. To illustrate the consumer buying process when buying coffee.
Definitions. The following marketing terms are referred to in this in-class activity (ICA):

Evaluative Criteria: Factors that represent both the objective attributes of a brand and
the subjective ones a consumer uses to compare different products and brands.

Evoked Set: The group of brands a consumer would consider acceptable from among
all brands in the product class of which he or she is aware.

Purchase Decision Process: The stages a buyer passes through in making choices
about which products and services to buy.

Nature of the Activity. To relate the consumer buying process to purchasing a cup of
Starbucks coffee.
Estimated Class Time. 20 minutes.
Materials Needed.

The Core05.ppt file from the Core PowerPoint CD in the Core Instructors Box.

A transparency of ICA 5-1, Figure 1: Purchase Decision Process.

Blackboard or blank transparency to record student ideas.

Preparation Before Class. Make a transparency or use Slide 5-68 of ICA 5-1,
Figure 1: Purchase Decision Process.
1. Make a transparency or use Slide 5-68 of ICA 5-1, Figure 1: Purchase Decision
Process.
2. Review the PowerPoint slides.

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Instructions. Follow the steps below to conduct this ICA:

1. Give students this background mini-lecture:
Starbucks Coffee Company is the leading retailer, roaster, and
brand of specialty coffee in the world. For 2002, Starbucks had
sales of $3.3 billion. As of mid-2003, Starbucks had over 6,200
company-owned and franchised stores in North America, South
America, Europe, the Pacific Rim, and the Middle East. The firm
plans to open over 1,200 more stores in the near future, both in
existing and new markets.1
Coffee is a commodity. People can buy a cup of coffee almost
anywhere in the world or make it themselves. With most
commodities, firms cannot charge a premium price. However,
Starbucks does charge a higher price for its cup of coffee because it
has created and delivered a brand promise to serve only the finest
coffee. As a result, it has captured almost 7 percent of the U.S.
coffee market.2
Starbucks Card

2. Show Slide 5-67 and continue to give students this background

mini-lecture:
Starbucks recently introduced the Starbucks Card. This smart
card, which comes in denominations of $5 to $500, is designed to
improve customer service by shortening checkout lines. These cards
also enable Starbucks to obtain advanced sales, allowing the firm to
earn interest on the unused balances. Moreover, customers will be
able to order their coffees by cell phone or via the Internet, thus
eliminating any wait time.3 Finally, some businesses are using it to
reward employees.

Slide 5-67

3. Tell the students that you would like to get their ideas on the
decision process they use to buy a cup of coffee. Ask each student
(or teams of students) to rank the top three factors that influence
their decision to buy a cup of coffee. You may ask students to write
these down and turn them in or just solicit their ideas orally. Write
these down on the blackboard or a blank transparency for the entire
class to see.
ICA 5-1, Fig. 1
Purchase decision
process

4. Show Slide 5-68 or transparency ICA 5-1, Figure 1. Call on

students to describe their coffee purchase decision process based on
the following questions:

Slide 5-68
1
2
3

Question 1: What triggers the decision to buy a cup of coffee? Is it a

need? A want?

Information obtained from Starbucks website.

Shirley Leung, Starbucks Plans Mexican Stores by End of Year, The Wall Street Journal, February 26, 2002.
Stanley Holmes, Starbucks Card Smarts, Business Week, March 18, 2002, p. 14.

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Answers: Thirsty, saw an ad, part of a routine, etc.

Question 2: How do you seek information about the purchase of a

cup of coffee, knowing that coffee is a commodity?
Answers: Use past experiences recalled from memory (internal
search). Also may ask family and friends, consult a product-rating
organization (Consumer Reports, local newspaper review, etc.),
and/or ads or store signage (external search).

Question 3: What evaluative criteria do you use when deciding to

purchase a particular coffee brand?
Answers: Taste, price, location, convenience (wait time),
atmospherics (comfortable), service, etc.

Question 4: What is your evoked set of coffee brands?

Answers: Make at home: Folgers, etc. Buy at retailer: Starbucks,
Caribou Coffee, etc.

Question 5: When and where do you buy a cup of coffee?

Answers: Multiple responses and use situations possible.

Question 6: With respect to the purchase of your last cup of coffee,

did you experience any cognitive dissonance? If dissatisfied, what
was deficient? Did you tell anyone? Will you go back? What
marketing activities could be undertaken to reduce this?
Answers: Marketers have several options regarding the kinds of
activities they can do, such as redesigning the product, reworking
the advertising message or retraining salespeople if the product is
being oversold, improving customer service, offering refunds, etc.

Question 7: Do any of you use a Starbucks Card now? What are the
benefits to you? What are the benefits to Starbucks?
Answers: The principal benefit to consumers is convenience, since
the card is designed to speed up the check out process. For
Starbucks, the card encourages repeat purchases and brand loyalty
(less likely to go to Caribous) and Starbucks receives consumers
money in advance in the face amount of the card.

Marketing Lesson. Marketers must understand each step in the consumer purchase
decision process as it applies to their products or services. By doing so, they can develop better
marketing programs with which to target their customers more effectively.
Website. To view Starbucks current product line of coffees and other products and
services, go to www.starbucks.com.
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TN: VIDEO CASE 5

Ken Davis Products, Inc.: Barbeque Sauce for Nonimprovisors
Synopsis:

Barbara Davis
photo

Slide 5-70
Ken Davis Products

A homespun product made good (in every sense of the word), Ken
Davis Products, Inc. offers barbecue sauces and marinades to consumers
through local grocery stores. Marketing activities include: consumer testing
and focus groups, in-store sampling, kitchen tours, the owners speeches and
conversations, newsletters, free-standing inserts in Sunday newspapers, and
radio ads. Owner and president Barbara Jo Davis believes that word of mouth
is critical in selling the product. The video also shows her joys and frustrations
in being a small business entrepreneur. The case asks students to identify
evaluative criteria consumers might use in buying a barbecue sauce and how
this small business might do marketing research on consumers.

Slide 5-71

Teaching Suggestions:
Many of todays students have dreams of owning and running their own
small businessa dream at least partly driven by the downsizing in large U.S.
corporations resulting in layoffs of loyal employees with 20 or 30 years at their
firm. Before the case discussion, pose the question to the class, What do you
see as the pros and cons of owning and operating your own small business as
Barbara Jo Davis is doing? Some answers appear in the video and in the
discussion for Question 5 below.
Answers to Questions:
1. In what ways have American eating habits changed over the past decade that
affects a barbecue sauce manufacturer?
Answers: Americans are eating less red meat and more chicken and fish. Barbecue
sauces have traditionally been positioned as a red meat sauce, but Ken Davis Products
now produces a newsletter with chicken and fish recipes in it to show the consumer
the multiple uses of the sauces. Also, Americans have become more concerned with
the caloric and fat content as well as the nutritional value of the food products they
eat. Ken Davis sauces have always been low in sodium, but Barbara Davis now
actively promotes this nutritional benefit.

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2. What are the two or three main (a) objective evaluative criteria and
(b) subjective evaluative criteria consumers of Ken Davis barbecue sauces
might use?
Answers:
a.

Consumers might use (1) the nutritional content (low sodium) and (2) the cost
(high-cost) as objective criteria to evaluate the product.

b.

Consumers might use (1) the taste (not too spicy) and (2) the brand image (the
local brand) as subjective criteria to evaluate the product.

3. How can Ken Davis Products do marketing research on consumers to find out
what they eat, to learn how they use barbecue sauces, and to get ideas for new
products?
Answer: Barbara Davis currently conducts focus groups with Ken Davis Products
consumers, conducts informal Q and A sessions in supermarkets with barbecue
sauce consumers, and receives feedback from supermarket shoppers at taste tests.
She might also consider sending out surveys to current Ken Davis users or to users of
competing brands.
4. (a) Do you think a small local company such as Ken Davis Products should have
entered the market as a premium-priced product or a low-priced product?
(b) What should its pricing strategy be today?
Answers:
a.

Ken Davis Products entered the market in 1972 as a premium-priced product.

At that time, the only barbecue sauces on the market were low-priced
products, so Ken Davis Products was the first to differentiate based on
superior taste.

b.

Today, of course, there are numerous premium-priced barbecue sauces, but

Ken Davis Products chooses to continue to compete in the premium-priced
segment. Consumers have come to expect a superior product from Ken Davis
and are willing to pay for it.

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5. What do you see as the (a) satisfactions and (b) concerns of being in business for
yourself?
Answers:
a.

b.

Barbara Davis sees some of the satisfactions as being able to make her own
decisions, being involved in all aspects of the business, and being a role model
for the community. Studies among small business owners identify the
following attractions, several of which overlap with those of Barbara Davis:

Sense of independence.

Immediate chance for higher income.

Long-run pride in and benefits of ownership.

Opportunity to be a jack-of-all-trades.

Operating advantages compared with large competitors.

Some of the concerns she sees are working long hours and having no financial
guarantees. Other potentially serious drawbacks include:

Less independence than the small businessperson expects.

Sole responsibility for the business.

Continual need to meet financial obligations.

Lack of expertise across many functional areas, such as marketing,

finance, operations, etc.

Operating disadvantages compared with large competitors.

Note that some of these drawbacks are the opposite side of the attractions coin. For
example, a small business has the advantage being able to make fast decisions by
being small, but this smallness may mean that important economies of scale are not
available to it.
Epilogue:
In 2002, the three core barbecue sauces of Ken Davis Products, packaged in 20-ounce
plastic bottles, were:

Original Bar-B-Q Sauce. Sweet and slightly smoky.

Bold n Spicy Barb-B-Q Sauce. Hot, but without the bite.

Smooth n Spicy Bar-B-Q Sauce. A touch of cumin and jalapeno for a southwestern
flavor.

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