Marketing an introduction canadian 6th edition armstrong solutions manual

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CHAPTER 6 UNDERSTANDING CONSUMER AND BUSINESS BUYER BEHAVIOUR General Teaching Tips for this Chapter By and large, students have not been exposed to the consumer behaviour concepts in this chapter before. If they have taken a sociology or human behaviour course, they may have learned some of the same basic concepts, but likely they were not presented in a way that allowed the students to understand them as they apply to business in general and marketing in particular. After presenting the concepts of consumer behaviour, have the students discuss the concepts in terms of their own buying habits, their backgrounds, and how they differ from others in the class.

There is a lot of material in this chapter, although it hits only the high points of consumer behaviour, which is a very complex subject. Most schools offer a separate course in consumer behaviour. If you explain that to the students, it should relieve some of their anxiety. Also helpful is continually reminding them that they are consumers! They can apply this material to more fully appreciate their own motivations for their purchases. This can improve their understanding of how a marketer could approach consumer motives in general.

Understanding business buyer behaviour and the business buying process can be especially difficult for students. Very few have ever had any experience with business purchasing decisions. This requires thorough explanation; the strategic use of personal experience in this regard is particularly helpful. If the instructor has no personal experience in business buying situations, it could be very helpful to bring in a guest speaker for this topic.

Business buying centres can be a very nebulous topic for students, particularly their dynamic nature. Discussing the importance and uses of inter-departmental teamwork in this section can be highly enlightening. This can then lead to a discussion of the different types of influencers, users, and so forth that could be found in a business buying centre, and what their functions could be in the buying decision–making process. 

40 MIN If this chapter is to be covered in one class, more than half the class should be spent on the subjects of consumer markets and consumer buyer behaviour. A thorough understanding of this section will make the business part of this chapter much easier to comprehend. It is divided up into the “why” of buying and the “how” of buying. The former is guaranteed to never have crossed the students’ mind prior to this, so lots of examples will help drive home the importance of understanding why people buy. Using their own buying history helps, particularly when really drilling down into why they really choose the school they are attending, the clothes they are wearing, etc. The actual buying process can be illustrated through examples of buying something very complex, such as a computer or a car, and then something very simple, such as salt. The new product buying decision process is also covered, and several minutes should be spent on this topic.

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20 MIN The remaining third or so of this class will then be spent on business markets and business buyer behaviour. Again, the section is divided into the “why” of buying, and then the “how.” There is also a discussion of the different market structure and demand characteristics of business markets. The terminology of business buying is different, and you should be certain the students understand the differences between straight rebuy, modified rebuy and new tasks. Also, the buying process is more complex and more likely to be followed in practice, particularly for very expensive or very large purchases. Students will need to be aware of the eight steps in the business buying process as well as all of the participants in this process and the roles they play.

More teaching tips follow below, in conjunction with each content section of this chapter.

Ideas for Activities and Assignments based on Opening Story (GoPro) As the textbook says, “The GoPro example shows that factors at many levels affect consumer buying behaviour.” This vignette naturally extends to a discussion about those factors: who buys GoPros and why. It’s also a good introduction to the idea of selling benefits over features, which will be discussed further in the product chapter (particularly page 297) and in promotions (Chapters 13-15).

Ideas for Activities and Assignments based on M@W 6.1 (Word-of-Mouth) Word-of-mouth is the social media marketing panacea for many brands: leveraging the reach and influence of influencers to make an impression on otherwise hard-to-reach consumers. As with the many other features and examples of social media marketing in the textbook, the challenge is always to get students to think about social media from the marketer’s perspective.

Your students will probably tell you with great pride that they ignore the ads on Facebook, they’ve installed ad blocking, and that they don’t engage with any marketing communications online—but they probably do. Start by asking them if they have “liked” any of their favourite brands on Facebook, Instagram, or Snapchat, or if they’ve seen “viral ads” like the Dove Campaign for Real Beauty or trials rider Danny McGaskill’s incredible bike feats for GoPro and RedBull. From there, try to draw them out about what, exactly, they do to engage with those brands. Ask if they’ve shared or liked a brand post before, thus acting as a word-of-mouth marketer for the company. What kind of content is “sharable” or entices you to talk about a brand online? Once they’ve given that some serious thought, ask them, “If you were on the marketing team at that company, what else would you do on social media to engage consumers just like you?”

Ideas for Activities and Assignments based on M@W 6.2 (Makino) The point of this story is to get students to think about the many businesses that are invisible to them, because they don’t market their products to consumers.

In-class group participation exercise: Think of a consumer product you are all familiar with.

It can be anything from a brand of shampoo to a car. Now, make a list of all the products or types of products (plastic bottles, tires) the manufacturer of your product has to buy, in order to produce the product they market to consumers.

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LO1: Understand the consumer market and the major factors that influence consumer buyer behaviour.

In this chapter, we continue our marketing journey with a closer look at the most important element of the marketplace—customers. The aim of marketing is to affect how customers think about and behave toward the organization and its market offerings. But to affect the whats, whens, and hows of buying behaviour, marketers must first understand the whys.

A good way to begin discussing this topic is to ask students what’s the difference between a consumer and a customer. You might tell them the word consumer is not a fancy word for customer; it means something different.

Consumer buyer behaviour refers to the buying behaviour of final consumers—individuals and households who buy goods and services for personal use. Everyone in the classroom is a consumer, and has been since the first day they used their own money to buy something.

All the consumers in a given market area (geographically, or however defined) combine to make up the consumer market.

Factors Affecting Consumer Behaviour Cultural factors: being Canadian, belonging to an ethnic group, coming from a part of the country that has its own distinct culture, such as Quebec, or being native Subculture: sometimes subcultures are formed based on common situations like the place you grew up in, but other times people choose to belong to a subculture such as “goths” or “gamers.”

Native Canadians might consider the particular tribe or region they belong to be a subculture.

Teenagers and other distinct age groups, particularly in the same geographic region, can also be thought of as a subculture. So can universities, which create their own student “tribes.”

Don’t let the students get too hung up on the abstract definitions; it doesn’t matter whether you refer to the group you belong to as a culture or a sub-culture, so long as you can describe it, and are able to view that group of consumers as a group, with similar characteristics.

Social class is not determined by a single factor, such as income, but is measured as a combination of occupation, income, education, wealth, and other variables.

Social Factors that affect consumer behaviour:  

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Social groups and social networks (live ones, not online); groups such as sports teams; also aspirational groups.

A person’s behaviour is influenced by many small groups, in different ways, such as by word-of-mouth, or by opinion leaders, people within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert social influence on others. This group is also called the influentials or leading adopters.

Buzz marketing involves enlisting or creating opinion leaders to serve as “brand ambassadors” who spread the word about a company’s products. (The concept of a brand ambassador is described further in chapter 9.)

Online social networks are also social groups that can influence consumer behaviour.

Family is the most important consumer buying organization in society.

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Roles and status. A role consists of the activities people are expected to perform. Each role carries a status reflecting the general esteem given to it by society.

Personal Factors that affect consumer behaviour: 

Age and life cycle stage. People change the goods and services they buy over their lifetimes. Marketers often define their target markets in terms of life-cycle stage and develop appropriate and marketing plans for each stage.

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Occupation or profession Marketers try to identify the occupational groups that have an above-average interest in their products and services.

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Economic Situation affects store choice, brand choice, and product choice.

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Lifestyle is a person’s pattern of living as expressed in his or her psychographics, and basically comprises their activities, opinions, and interests.

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Personality and self-concept; those unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment.

The idea of brand personality is introduced here, and is also expanded upon in chapter 9. At this stage, when the subject is consumer behaviour, just tell students that marketers of top brands such as Apple, Red Bull, and Toyota create personalities for their brands, and communicate those personalities through advertising and other marketing communications (chapter 12).

As consumers, we tend to favour brands whose personalities match our own.

Psychological Factors that affect consumer behaviour: 

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Motivation—many things motivate us as consumers. Freud believed that almost everything we do is motivated by something in our subconscious. We can probably all relate to having bought something without being able to explain or justify it. Maslow believed that consumers are motivated by a hierarchy of needs (p. 209) Perception—there’s a saying in marketing that perception is reality. Ask your students what they think of that. If we perceive something, and that perception influences us to favour or purchase a particular brand, does it matter whether our perception was correct or not?

Learning—there are many obvious examples of how we learn a new thing, and it then influences our consumer behaviour: we learn how to drive, we buy a car; we learn that sugar is bad for us, we buy foods that are sugar-free; and so on…

Beliefs and Attitudes: The simplest definition of belief is, it’s an opinion you hold without ever having seen any proof, and you don’t really care whether there is proof or not. Or we believe something that cannot be proven, for example that U2 is the greatest rock band in the world. There is a blurred line between beliefs and opinions, and beliefs and attitudes. We all have beliefs about a great number of things, and those beliefs can influence our behaviour as consumers.

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LO1: Assignments and Activities Individual or small group participation assignment: How did you decide on the college or university you are currently attending? Describe the factors that influenced your decision and the decision-making process you followed. Things to look for: Students should specifically mention culture, subculture, social class, social groups, reference groups, family, age/life cycle stage, economic situation, lifestyle, and personality. It might be more difficult for them to discuss motivation, perception, learning, and beliefs/attitudes, but encourage them to try. If they have read ahead to the next chapter they might describe their consumer decision in this case as high involvement, and complex buying behaviour. Even for those who simply say they are attending this school because it is close to home or that is the most affordable, they can still examine their deeper motivations.

LO2: Identify and discuss the stages in the buyer decision process.

The buyer decision process consists of five stages: 1.

2.

3.

4.

5.

Need recognition, Information search, Evaluation of alternatives, Purchase decision, and Post-purchase behaviour (which may involve cognitive dissonance)

It’s important to lead students to understand that every time we make a purchase decision, no matter how small or how large, we go through these stages. What varies is the amount of time spent in each stage. It’s helpful to go though an example with the whole class of a small, routine purchase, such as a cup of coffee. Ask student to think about the last time they made such a purchase, and consider each step.

Then have them go through the same thinking about something very expensive they purchased— like a new computer, or a car.

Cognitive dissonance, the process of “second guessing” our purchase decision, increases with the amount of money spent. That’s why buying a house, a car, or a boat is a very stressful (though also enjoyable) process.

LO2: Assignments and Activities In-class group participation exercise: Discuss how the buyer decision process for a college student would differ from that of a snowboarder in purchasing a backpack. How would you use this knowledge to develop an advertising plan?

Individual written assignment: Explain the stages of the consumer buyer decision process and describe how you or your family went through this process to make a recent purchase.

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LO3: Describe the adoption and diffusion process for new products.

The Buyer Decision Process for New Products A new product is a good, service, or idea that is perceived by some potential customers as new.

The adoption process is the mental process through which an individual passes from first learning about an innovation to final adoption. Adoption is the decision by an individual to become a regular user of the product.

Stages in the Adoption Process Consumers go through five stages in the process of adopting a new product: 1. Awareness: The consumer becomes aware of the new product, but lacks information about it.

2. Interest: The consumer seeks information about the new product.

3. Evaluation: The consumer considers whether trying the new product makes sense.

4. Trial: The consumer tries the new product on a small scale to improve his or her estimate of its value.

5. Adoption: The consumer decides to make full and regular use of the new product.

Individual Differences in Innovativeness People differ greatly in their readiness to try new products. The five adopter groups have differing values. Innovators are venturesome—they try new ideas at some risk. Early adopters are guided by respect—they are opinion leaders in their communities and adopt new ideas early but carefully. The early majority are deliberate—although they rarely are leaders, they adopt new ideas before the average person. The late majority is skeptical—they adopt an innovation only after a majority of people has tried it. Laggards are tradition bound—they are suspicious of changes and adopt the innovation only when it has become something of a tradition itself.

Influence of Product Characteristics on Rate of Adoption Five characteristics are important in influencing an innovation’s rate of adoption.

1. Relative advantage: the degree to which the innovation appears superior to existing products.

2. Compatibility: the degree to which the innovation fits the values and experiences of potential consumers.

3. Complexity: the degree to which the innovation is difficult to understand or use.

4. Divisibility: the degree to which the innovation may be tried on a limited basis.

5. Communicability: the degree to which the results of using the innovation can be observed or described to others.

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LO3: Assignments and Activities In-class group participation exercise: Name and describe the adopter categories and explain how a marketer of 3-D televisions can use this knowledge in its market targeting decision. Note: Students’ answers will vary, but they should demonstrate an understanding of the adopter categories. Innovators are defined as the first 2.5 percent of the buyers to adopt a new idea (those beyond two standard deviations from mean adoption time); the early adopters are the next 13.5 percent (between one and two standard deviations); and so forth. The five adopter groups have differing values. Innovators are venturesome—they try new ideas at some risk. Early adopters are guided by respect—they are opinion leaders in their communities and adopt new ideas early but carefully. The early majority are deliberate—although they rarely are leaders, they adopt new ideas before the average person. The late majority is skeptical— they adopt an innovation only after a majority of people has tried it. Finally, laggards are tradition bound—they are suspicious of changes and adopt the innovation only when it has become something of a tradition itself. This adopter classification suggests that an innovating firm, such as a 3-D television marketer, should research the characteristics of innovators and early adopters and should direct marketing efforts toward them.

In-class group participation exercise: Choose a high-tech product that is commonly purchased by businesses. Under what circumstances should the business behave as an innovator? An early adopter? A laggard? Answer: This question will require the students to use their imaginations, since they likely haven’t worked as a business buyer. It shouldn’t be too difficult, though, for them to imagine what types of technology products a company purchases. They’ll probably say computers right away, but what kind of computers, and how frequently? Who decides?

Critical Thinking Exercise Hemopure is a human blood substitute that still has not received Food and Drug Administration approval in the United States, but it has been used to treat surgical anemia in South Africa since 2001. The company has received FDA approval for a similar product, Oxyglobin, in the veterinary market. Visit opkbiotech.com to learn about Hemopure and explain how the product characteristics of relative advantage, compatibility, complexity, divisibility, and communicability will influence the rate of adoption of this product once FDA approval is attained.

Answer: These five characteristics are especially important in influencing an innovation’s rate of adoption: Relative advantage: the degree to which the innovation appears superior to existing products.

Hemopure offers several advantages over donated human blood that could speed the rate of adoption: It’s stable without refrigeration, compatible with all blood types, and can flow to areas of the body that red blood cells cannot.

Compatibility: the degree to which the innovation fits the values and experiences of potential consumers. Health care providers will administer the product intravenously, which is the same way they currently administered donated human blood. Therefore, it is highly compatible with how blood is transfused and should not impede the rate of adoption. However, the fact that it is derived from cattle blood may not fit with one’s values.

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Complexity: the degree to which the innovation is difficult to understand or use. Health care providers are the ones who will be administering this product, and it is not complex for them.

In fact, it will be less complex because blood-typing is not necessary.

Divisibility: the degree to which the innovation may be tried on a limited basis. While it may not seem appropriate to give “free samples” of this product, Biopure can do that once FDA approval is granted. Health care institutions can try the product before making a full adoption of the product.

Communicability: the degree to which the results of using the innovation can be observed or described to others. Health care providers can see the results of the clinical trials.

LO4: Define the business market and identify the major factors that influence business buyer behaviour.

Business buyer behaviour refers to the buying behaviour of the organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others. In the business buying process, business buyers determine which products and services their organizations need to purchase, and then find, evaluate, and choose among alternative suppliers and brands.

The main differences between business markets and consumer markets are in market structure and demand: The business marketer normally deals with far fewer but far larger buyers than the consumer marketer does. Business demand is derived demand—it ultimately derives from the demand for consumer buyers. Many business markets have inelastic demand; that is, total demand for many business products is not affected much by price changes. And business markets have more fluctuating demand.

The business-to-business market is much, much larger than the consumer market—a difficult concept for students to grasp because, as consumers, it is invisible to them. But the reality is, most of the students sitting in your classroom on any day are much more likely to end up working in a B2B organization than for a consumer products company.

Compared with consumer purchases, a business purchase usually involves more decision participants and a more professional purchasing effort. This is referred to as the buying unit.

Often, trained purchasing agents who spend their working lives learning how to buy better do business buying. The more complex the purchase, the more likely it is that several people will participate in the decision-making process. The business buying process tends to be more formalized. The buyer and seller are often much more dependent on each other.

Model of Business Buyer Behaviour (Figure 6.6 p. 220) Within the organization, buying activity consists of two major parts: the buying centre, made up of all the people involved in the buying decision, and the buying decision process. The model shows that the buying centre and the buying decision process are influenced by internal organizational, interpersonal, and individual factors as well as by external environmental factors.

The buying centre concept presents a major challenge for the vendor’s marketing team (and sales team—see chapter 13). They must figure out who participates in the decision, each participant’s relative influence, and what evaluation criteria each decision participant uses. The buying centre

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usually includes some obvious participants who are involved formally in the buying decision.

For example, the decision to buy a corporate jet will probably involve the company’s CEO, chief pilot, a purchasing agent, some legal staff, a member of top management, and others formally charged with the buying decision. It may also involve less obvious, informal participants, some of whom may actually make or strongly affect the buying decision. Sometimes, even the people in the buying centre are not aware of all the buying participants. All of this makes dealing with the customer challenging for the marketer.

There are three types of buying situations: the straight rebuy, the modified rebuy, and the new task (new purchase) Systems selling (or solutions selling): Business buyers may buy a complete solution to a problem from a single vendor (marketer) instead of buying separate products and services from several suppliers and putting them together. This is referred to (from the marketer’s perspective) as systems selling or solutions selling. In other words, the vendor says to the business customer, we’re not just selling you a product; we’re selling you a solution. An example of this is UPS, which does more than just ship packages for its business customers. It develops entire solutions to customers’ transportation and logistics problems. (And becomes a third party logistics supplier, as is described in chapter 11.)

Major influences on business buyers are economic (i.e. price, but that’s not as important as you might think), quality, delivery, sales support/customer service (both before, during, and after the sale); the vendor’s reputation; environmental considerations (in the sense of the marketing environment described in chapter 4); cultural considerations; organizational factors (i.e. the way things work in the company the buyer works for); and emotional and interpersonal factors.

LO4: Assignments and Activities Critical Thinking Exercise Companies face many challenges when conducting business abroad. Cultural differences are particularly difficult. In several emerging markets, such as parts of Asia, Africa, the Middle East, the former Soviet Union, Eastern Europe, and South America, bribery is considered “standard operating procedure” in business buying. The World Bank estimates that bribery in international trade amounts to about $1 trillion annually. Laws in both Canada and the United States prohibit North American companies from giving corrupt payments to obtain favour in business transactions, and now many more countries are joining the fight against corruption. In China, bribery is punishable by death, a sentence given to China’s former director of the State Food and Drug Administration in 2007.

1. Is it right for Canadian companies to be penalized for going along with cultural norms in other countries? Is it right for Canada and other countries to demand that businesses in other countries follow our laws?

Answer: Business buyers are heavily influenced by environmental factors, and culture is one of those factors. Some students may say that “When in Rome, do as the Romans do” applies, meaning businesses should behave according to local customs and norms.

However, others will be adamant that there is a right and a wrong in this situation and

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that bribery is wrong and should never be considered an acceptable practice. Still, while this practice is not acceptable in our culture, it is common in some other buyers’ cultures, which makes this a difficult situation for Canadian marketers.

2. What are the consequences for Canadian companies of not going along with the cultural factors influencing foreign business customers?

Answer: The main consequence to Canadian companies is that they may lose business if they do not go along with accepted bribery demands. A company from another country that is not as vigilant in prosecuting foreign corruption as Canada will likely step in and get the business. However, Canadian companies can help the government in getting more countries involved to fight global corruption, levelling the competitive playing field.

LO5: List and define the steps in the business buying decision process.

The business buying process consists of eight stages: 1. Problem recognition: recognition of a problem or need that can be met by acquiring a specific product or service.

2. General need description: describes the characteristics and quantity of the needed item.

3. Product specification: decide on the best product characteristics and specifies them accordingly.

4. Supplier search: search to find the best vendors.

5. Proposal solicitation: buyer invites qualified suppliers to submit proposals.

6. Supplier selection: review the proposals and select a supplier or suppliers.

7. Order-routine specification: the final order with the chosen supplier or suppliers and lists items such as technical specifications, quantity needed, expected time of delivery, return policies, and warranties.

8. Performance review: assess the vendor’s performance and recommend whether to continue dealing with them.

E-Procurement: Many organizations, and certainly all large companies, use the Internet in some way to conduct the “paperwork” of purchasing. Some terms the students need to be familiar with are procurement, e-procurement, reverse auctions, and trading exchanges. The term extranet is not used much anymore; it was once a term used to distinguish Internet and network connections that were confined to businesses and their partners, but today people talk about “online” or “network,” much the way we talk about “the phone”—we don’t make distinctions about how it is used, we just use it.

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LO5: Assignments and Activities Critical Thinking Exercise Performance review is one of the most critical stages in a business buying process. Perhaps nowhere is this more important than in the highly competitive aircraft manufacturing business.

Whether the planes are large or small, once a purchase is made, the buyer is tied to the manufacturer for a long time for service and parts requirements. “Air wars” are currently being fought between Europe’s Airbus Group and America’s Boeing.

1. Refer to the model of business buyer behaviour and discuss which are the most critical influences on this business buying situation Answer: The students should begin by considering the question, who are the customers?

In other words, who buys airplanes? They should be encouraged to look at the different requirements of a business jet leasing company as opposed to an airline or private buyer.

2. When and how should a performance review of the selected vendor be conducted?

Answer: Consider the length of time between determining that you need to buy an airplane, making the decision, and receiving delivery of the plane.

3. What, exactly, should be studied in the performance review?

Answer: Consider the factors listed under question 2 above.

4. If the results of the performance review were negative, what are the next steps the buyers should take?

Answer: This is a complex question, because you can’t just return a plane for a refund―but what can you do? And at what stage in the process can you do it?

Boston Pizza Comprehensive Case Students in Western Canada will note that it’s a “Case of Wings,” as a Two-Four is a Central Canadian concept.

1. Using the steps in the consumer purchase decision process, describe the thought process that a guest at Boston Pizza’s Sports Bar might go through before deciding on the Wings Two-Four.

Answer: 1. Needs recognition: The customer might have an internal stimuli—he or she is hungry or has a craving—or an external stimuli, perhaps because he or she sees another guest enjoying a snack or smells something good.

2. Information search: The customer could ask the people he or she is dining with for recommendations, particularly if he or she is sharing (personal sources), or review the menu (commercial source), or sample food from their dining companion’s plate (experiential source).

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3. Evaluation of alternatives: The customer might look at the menu items to see which best fit his or her need (how hungry? what kind of craving? sharing with a friend?) and look at prices and menu options. Once he or she has narrowed it down to wings, there are six menu options for wings. Once her or she has decided on the Two-Four or Case of Wings, he or she can choose from four types of wings, one or two of 10 or so flavours, and up to two of 15 or so dipping sauces.

[Back-of-the-napkin sets math (no pun intended) shows there are about 26,620 possible combinations. That’s a lot of decision making!]

4. Purchase decision: The guest orders the wings; perhaps a drink too, once the server mentions the special!

5. Postpurchase behaviour: Postpurchase cognitive dissonance may occur if the guest regrets their choice—wings? wing type? flavours? dips? quantity eaten?— or is dissatisfied with the product or service.

2. While the purchase decision has five known steps, a variety of decision influencers come into play as well. List these categories and provide an example as it pertains to a diner at Boston Pizza.

Answer: Decision influencers include personal sources (dining companion, fellow guests, friends), commercial sources (the menu, the server), public sources (Yelp! ratings, the advertising campaign, Instagram pics), and experiential sources (sampling, past visits to BP).

End of Chapter Materials Discussion Questions 1. Discuss the elements of culture that influence buyer behaviour and give a personal example of how each has influenced a purchase decision you or your family made.

(AACSB: Written and oral communication; Reflective thinking) Answer: Cultural factors exert a broad and deep influence on consumer behaviour.

Marketers need to understand the role played by the buyer’s culture, subculture, and social class. Culture is the most basic cause of a person’s wants and behaviour. Human behaviour is largely learned. Growing up in a society, a child learns basic values, perceptions, wants, and behaviours from his or her family and other important institutions. Each culture contains smaller subcultures, or groups of people with shared value systems based on common life experiences and situations. Subcultures include nationalities, religions, racial groups, and geographic regions. Many subcultures make up important market segments, and marketers often design products and marketing programs tailored to their needs. Examples of three such important subculture groups are Hispanic American, African American, and Asian American consumers. Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviours.

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2. What is an opinion leader? Describe how marketers attempt to use opinion leaders to help sell their products. (AACSB: Written and oral communication; Reflective thinking) Answer: Opinion leaders are people within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert social influence on others.

Some experts call this group the influentials or leading adopters. When these influentials talk, consumers listen. Marketers try to identify opinion leaders for their products and direct marketing efforts toward them. Buzz marketing involves enlisting or even creating opinion leaders to serve as “brand ambassadors” who spread the word about a company’s products. Many companies now create brand ambassador programs in an attempt to turn influential but everyday customers into brand evangelists. Newfound Internet, social media, and mobile technologies have created new opportunities to inspire, nurture, and amplify opinion-leader influence both online and offline.

3. How does the market structure and demand faced by business marketers differ from that faced by consumer marketers? (AACSB: Written and oral communication) Answer: Business marketers normally deal with far fewer but far larger buyers than the consumer marketer does. Further, business demand is derived demand—it ultimately derives from the demand for consumer goods. Many business markets have inelastic demand; that is, total demand for many business products is not affected much by price changes, especially in the short run. Finally, business markets have more fluctuating demand. The demand for many business goods and services tends to change more—and more quickly—than the demand for consumer goods and services does.

4. Explain what is meant by systems selling and discuss why it is a preferred approach to buying for many organizations. (AACSB: Written and oral communication; Reflective thinking) Answer: Many business buyers prefer to buy a complete solution to a problem from a single seller rather than buying separate products and services from several suppliers and putting them together. The sale often goes to the firm that provides the most complete system for meeting the customer’s needs and solving its problems. Such systems selling (or solutions selling) is often a key business marketing strategy for winning and holding accounts.

5. Describe how online purchasing has changed the business-to-business marketing process and discuss the advantages and disadvantages of electronic purchasing.

(AACSB: Written and oral communication) Answer: Online purchasing, often called e-procurement, gives buyers access to new suppliers, lowers purchasing costs, and hastens order processing and delivery. In turn, business marketers can connect with customers online to share marketing information, sell products and services, provide customer support services, and maintain ongoing customer relationships. Companies can do e-procurement in any of several ways. They can conduct

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reverse auctions, in which they put their purchasing requests online and invite suppliers to bid for the business. Or they can engage in online trading exchanges, through which companies work collectively to facilitate the trading process. Companies also can conduct e-procurement by setting up their own company buying sites. Or companies can create extranet links with key suppliers. B-to-B marketers can help customers who wish to purchase online by creating well-designed, easy-to-use Web sites. Finally, digital and social media marketing has rapidly become the new space for engaging business customers.

Critical Thinking Exercises 1. Form a small group of four or five students. Have each group member interview ten consumers about if and when they purchased their first smartphone. Research when smartphones were first introduced, and based on each respondent’s answer, identify which adopter category best describes that consumer. Create a chart similar to Figure 5.6 to present your results for all group members’ interviews. How far along are smartphones in their adoption cycle? (AACSB: Written and oral communication; Diverse and multicultural work environments; Reflective thinking) Answer: Smartphones have actually been around for a long time—1993—but didn’t become a mass market product until relatively recently. Students should be able to find considerable information on the Internet regarding the history of smartphones. One source they will likely use is http://en.wikipedia.org/wiki/Smartphone.

People can be classified into the adopter categories shown in Figure 5.6. Innovators are defined as the first 2.5 percent of the buyers to adopt a new idea (those beyond two standard deviations from mean adoption time); the early adopters are the next 13.5 percent (between one and two standard deviations); and so forth. The five adopter groups have differing values. Innovators are venturesome—they try new ideas at some risk.

Early adopters are guided by respect—they are opinion leaders in their communities and adopt new ideas early but carefully. The early mainstream is deliberate—although they rarely are leaders, they adopt new ideas before the average person. The late mainstream is skeptical—they adopt an innovation only after a majority of people has tried it. Finally, lagging adopters are tradition bound—they are suspicious of changes and adopt the innovation only when it has become something of a tradition itself. Students are likely to be in the early majority for smart phones because they seem to have adopted the technology easily. Whereas a few may be innovators, most likely the resources required for being the first adopters or even the early majority holds them back.

2. Malcolm Gladwell published a book entitled The Tipping Point. He describes the Law of the Few, Stickiness, and the Law of Context. Research these concepts and describe how understanding them helps marketers better understand and target consumers. (AACSB: Written and oral communication; Reflective thinking) Students’ answers will vary. Some useful Web sites include: www.stanford.edu/class/symbsys205/tipping_point.html, http://timelyideas.com/insights7.html, and www.wikisummaries.org/ The_Tipping_Point, although there are many others.

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The Law of the Few implies that only a few influential people are necessary for a message to “tip” or be passed along and accepted by others. The three important roles are connectors, who are socialites with many friends and acquaintances, mavens, who gather information and provide evaluation of that information for others, and salespeople who persuade others. Stickiness means the message has to be worth spreading among the social system. Finally, the Law of Context is based on the environment in which a message is spread. If the environment is not appropriate, the message will not be spread among the social system. Marketers can use these concepts to better understand a social system and send the right message to enough of the right people to tip the scales in their favor.

3. Business buying occurs worldwide, so marketers need to be aware of cultural factors influencing business customers. In a small group, select a country and develop a multimedia presentation on proper business etiquette and manners, including appropriate appearance, behaviour, and communication. Include a map showing the location of the country as well as a description of the country in terms of its demographics, culture, and economic history. (AACSB: Written and oral communication; Diverse and multicultural work environments; Information technology) Answer: There are several sources on the Internet where students can get information for this exercise. One good site is www.cyborlink.com. Instructors may want to assign groups to different countries to give students a better understanding of the world.

Online, Mobile, and Social Media Marketing: Mourning 2.0 1. Describe the characteristics of a new product that affect its rate of adoption. Which characteristics will impact how quickly the new digital services described above will be accepted by mourners in Canada? (AACSB: Written and oral communication; Reflective thinking) Students’ examples will vary, but they should discuss these five characteristics that are especially important in influencing an innovation’s rate of adoption: 





Relative advantage: the degree to which the innovation appears superior to existing products. The new technologically-based services, such as Web-streaming of funerals, are better than traditional funerals because people not able to attend a funeral personally can still be “present.” However, some students might argue that the event is no longer personal and many people may simply choose to watch it on the Internet and not interact personally with fellow mourners.

Compatibility: the degree to which the innovation fits the values and experiences of potential consumers. While the Internet and social media are almost second nature to younger consumers, these services are not compatible with older consumers’ values and experiences related to funerals. However, the decline of religiosity in the United States may enhance the acceptance of digital mourning.

Complexity: the degree to which the innovation is difficult to understand or use.

For younger consumers, using new technology is not a problem, but for older consumers this may not be the case. One person in the industry suggests that the younger generation will embrace this technology, and the holdouts will eventually die off and take their traditional values with them.

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 

Divisibility: the degree to which the innovation may be tried on a limited basis. It’s not likely that consumers’ can “try before they buy” for these types of services, so this characteristic will slow the rate of adoption.

Communicability: the degree to which the results of using the innovation can be observed or described to others. The services can be communicated easily, increasing the rate of adoption.

2. With new technologies, our digital lives can last much longer than our physical lives.

Discuss how marketers might use social media such as Twitter, Facebook, YouTube, and Instagram to create social sharing and remembrance among mourners long after a loved one passes on. (AACSB: Written and oral communication; Information technology; Reflective thinking) Answer: Students’ answers will vary. Recall from chapter 1 that social sharing involves getting people to talk with others and passing along their positive brand experiences.

Some examples in this context include tweeting reminders and offering virtual goods such as flowers (offered by FTD Florists, for example) and cards (offered by Hallmark) that loved ones can post on the anniversary of a loved one’s death or on their birthday or other significant date in their worldly lives.

Think Like a Marketing Manager How would you like to sell to a customer that spends millions of dollars per year on contractors?

If so, you need to learn how to crack the federal government market. The federal government purchases goods ranging from toilet paper to aircraft carriers and services from janitorial supplies to high-tech information technology (IT). This is a lucrative market—especially during economic downturns. Many companies focus their marketing solely on this market. How do businesses—big and small—find out about opportunities in this market? One way is to search the government’s website for opportunities. A great deal of the government’s buying is now done online.

The answers to the questions below will depend on your province, and upon current events and current postings. This is a great opportunity for students to investigate a real and very important website, so whatever they find, and whatever discussions ensue, will only benefit them.

1. Go to the Public Works and Government Services Canada website and review the information for businesses. Search for Tenders on buyandsell.gc.ca, the government’s electronic tendering services. Are there many opportunities in your province?

2. What types of products and services are most frequently listed?

3. Write a brief report describing the usefulness of this website for businesses desiring to sell to the government market.

Marketing Ethics—Questions and Answers 1. Was the uproar over LFTB warranted, given the fact that it is a product deemed safe for consumption by the U.S. Food and Drug Administration? Research other types of products that are included in consumer products that could face a similar fate if consumers were aware of them. (AACSB: Written and oral communication; Reflective thinking; Ethical understanding and reasoning)

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Answer: Students’ responses will vary. Some students might argue that it is warranted given the fact that an expert in the industry came up with the negative name “pink slime.”

However, the other side of the argument is that there are probably worse ingredients in the food supply and that this product was treated unfairly. An example of another product that could be considered repulsive by consumers is Premarin, a drug made from the urine of pregnant mares. Other repulsive food additives can be found at www.buzzfeed.com/ daves4/10-everyday-foods-with-disgusting-ingredients and http://webecoist.momtastic.com/2009/05/08/10-weird-and-gross-ingredients-inprocessed-food/.

2. Explain the type of buying situation faced by the companies that dropped the use of LFTB. Describe the buying decision process they likely went through to find a replacement product. (AACSB: Written and oral communication; Reflective thinking) Answer: There are three major types of buying situations. At one extreme is the straight rebuy, which is a fairly routine decision. At the other extreme is the new task, which may call for thorough research. In the middle is the modified rebuy, which requires some research. In a straight rebuy, the buyer reorders something without any modification. It is usually handled on a routine basis by the purchasing department. A company buying a product or service for the first time faces a new-task situation. In such cases, the greater the cost or risk, the larger the number of decision participants and the greater their efforts to collect information will be. The buyer makes the fewest decisions in the straight rebuy and the most in the new-task decision. In the new-task situation, the buyer must decide on product specifications, suppliers, price limits, payment terms, order quantities, delivery times, and service terms. In this situation, customers, such as grocery stores, restaurants, and institution food service providers need to find a new supplier of ground beef products, so it is not an entirely new task buying situation and is best described as a modified rebuy decision.

The business buying process consists of eight stages:        

Problem recognition: recognize a problem or need that can be met by acquiring a specific product or service.

General need description: describe the characteristics and quantity of the needed item.

Product specification: decide on the best product characteristics and specify them accordingly.

Supplier search: search to find the best vendors.

Proposal solicitation: invite qualified suppliers to submit proposals.

Supplier selection: review the proposals and select a supplier or suppliers.

Order-routine specification: make the final order with the chosen supplier or suppliers and lists items such as technical specifications, quantity needed, expected time of delivery, return policies, and warranties.

Performance review: contact users and ask them to rate their satisfaction. This review may lead the buyer to continue, modify, or drop the arrangement.

Most buyers will have already gone through these stages and now just need to find an alternative product that does not include the “pink slime” filler. However, a search for new vendors is likely.

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Extra Marketing Ethics Question VitaminWater—sounds healthy, right? Although VitaminWater does have vitamins, it also has 33 grams—that’s 2 heaping tablespoons—of sugar, making it not much better than a soda.

VitaminWater, owned by Coca-Cola, has been under fire from the Center for Science in the Public Interest (CSPI), a consumer-advocacy group that fights for safer, more nutritious foods.

The CSPI filed a class-action lawsuit against Coca-Cola, claiming names for VitaminWater flavors such as “endurance peach mango” and “focus kiwi strawberry” are misleading for two reasons: (1) the drinks contain 0 to 1 percent juice and (2) words like “endurance,” “focus,” “defense,” “rescue,” and “energy” imply health benefits. Coca-Cola’s defense was that reasonable consumers would not be misled into believing that VitaminWater is healthy for them.

1. Debate whether or not Coca-Cola is deliberately trying to deceive consumers into believing that VitaminWater is a healthy alternative to soda. Which psychological factor is most affected by the product name and ad claims and might influence consumers to purchase this product?

Answer: Students’ responses will vary. There is no doubt that marketers attempt to influence consumers’ perceptions, but whether or not this is an example of deliberate deception is debatable. Psychological factors influencing consumer behaviour include motivation, perception, learning, and beliefs and attitudes. Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world. Consumers are likely to perceive that this product is healthy because vitamins and water are both healthy. The other words, such as endurance, focus, energy, and the names of fruits convey meanings that would lead consumers to believe that the product is good for them.

2. Find two other examples of brands that use names, words, colours, package shapes, or other elements to convey potentially deceptive meanings to consumers.

Answer: Students’ examples will vary. Interestingly, another brand, marketed by Glaceau (see www.glaceau.com) is called SmartWater, a vapor-distilled water containing electrolytes. Other examples of allegedly deceptive practices are given on CSPI’s website (http://www.cspinet.org). For example, Splenda’s claim—“Made from sugar, tastes like sugar”—came under fire because it is a synthetic chemical. Capri Sun “natural” drinks, Gerber Fruit Juice Snacks, and “all natural” 7-Up drew CSPI’s ire because they include high-fructose corn syrup (HFCS). Aunt Jemima’s frozen Blueberry Waffles and Tropicana’s Peach Papaya juice were targeted because neither product contained the fruits in listed in the name.

Colours convey meaning as well. For example, a loaf of bread that is brown in colour may give the impression that it is “whole wheat” when, in fact, it may just be white bread with brown food colouring. Green colours on packaging are often used to convey a healthy product. For example, Healthy Choice (the name conveys “healthy”) brand frozen dinners contain high levels of sodium, and its ice cream products are not “health food.” Green colours may also convey an environmentally friendly product.

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Students should be aware, however, that words, shapes, packaging materials, colours, and so on can convey any type of meaning, such as sexy, masculine, strong, smart, high quality, and much more.

Marketing by the Numbers 1. Calculate the scores for Brands B and C. Which brand would this consumer likely choose? (AACSB: Written and oral communication; Analytical thinking) Answer: ScoreBrand B = (0.2 x 6) + (0.5 x 3) + (0.1 x 5) + (0.2 x 6) = 1.2 + 1.5 + 0.5 + 1.2 = 4.4 ScoreBrand C = (0.2 x 2) + (0.5 x 7) + (0.1 x 4) + (0.2 x 7) = 0.4 + 3.5 + 0.4 + 1.4 = 5.7 Based on this analysis, the consumer would probably select Brand C because it has the highest score.

2. Which brand is this consumer least likely to purchase? Discuss two ways the marketer of this brand can enhance consumer attitudes toward purchasing its brand. (AACSB: Written and oral communication; Reflective thinking; Analytical thinking) Answer: This consumer is least likely to select brand B because it has the lowest score.

The marketer can attempt to change consumer attitudes toward its brand in three ways: a. Change beliefs: If consumers believe a brand does not perform well on an attribute, then the marketer can attempt to change that belief. This consumer believes Brand B has less favorable gas mileage than the alternatives. If this brand is the same as the others, then the marketer needs to educate consumers of this fact. If the brand truly doesn’t perform well on that attribute, then the product must be improved and then beliefs must be changed as well. This is the most important attribute for consumers, so the marketer needs to address this. b. Change attribute importance: the marketer of Brand B can attempt to influence how consumers evaluate product attributes. Brand B performs very well on styling and price, but these attributes are not rated as very important. Increasing the importance weight on those attributes will help this brand considerably because it performs better than both competitors on styling and almost as well at Brand C on price. c. Add a new attribute to consider: the marketer of Brand B could attempt to get consumers to consider an attribute that is not on the list, such as environmental impact. The added attribute needs to be something that will be considered important by consumers and be one that the brand would be perceived as better than the competition for this to be successful.

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Extra Marketing Math Question The North American Industry Classification System (NAICS) code is very useful for marketers.

It is a relatively new coding system that replaces the old product-based Standard Industrial Classification (SIC) system introduced in the 1930s. The NAICS system classifies businesses by production processes; better reflecting changes in the global economy, especially in the service and technology industries. It was developed jointly by the United States, Canada, and Mexico in 1997 in concert with the North American Free Trade Agreement (NAFTA), providing a common classification system for the three countries and better compatibility with the International Standard Industrial Classification (ISIC) system. This six-digit number (in some cases, seven or ten digits) is very useful for understanding business markets.

1. What do the six digits of the NAICS code represent? What industry is represented by the NAICS code 721110? What information can a marketer obtain using this code?

Answer: The NAICS code has a hierarchical structure: XX XXX XXXX XXXXX XXXXXX

Industry sector (20 broad sectors) Industry subsector Industry group Industry National industries (U.S., Canadian, or Mexican national specific)

Students can use several websites to look up the 721110 code, such as the NAICS Association’s site (http://www.naics.com/search.htm) or the U.S. Census Bureau (http://www.census.gov/epcd/www/naics.html). The 721110 NAICS code indicates the Accommodations and Food Service sector (industry sector 72), and the specific code represents Hotels (except casinos) and Motels. There is quite a bit of information students can obtain from U.S. Census Bureau using this code (see http://www.census.gov/econ/industry/ec07/a721110.htm).

Using the 721110 NAICS code, research and create a report highlighting the trends in this industry. Suggest markets that have the greatest potential.

Answer: There is a wealth of information available at http://www.census.gov/econ/industry/current/c721110.htm and students’ reports will vary depending on how much depth they go into for this assignment.

End-of-Chapter Case: Dove Men+Care All questions are discussion questions, so students’ answers will vary based on their opinion.

To keep the discussion going, always ask a follow-up question; ask the student to explain their thinking; then ask the other students if the agree or disagree. Before beginning the discussion, you might have students do online research to find out what’s happening with the company today.

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Questions for Discussion 1. How do personal factors, discussed in the chapter, influence Dove’s ability to build strong customer relationships?

Personal factors include (1) age and life-cycle stage, (2) occupation, (3) economic situation, (4) lifestyle, and (5) personality and self-concept: Dove addresses almost all of them with Dove Men+Care. The case outlines how Unilever targets men aged 25-54, many of whom are fathers, with their Dove Men+Care subbrand. Unilver recognized these men were buying or influencing their personal care purchases, but were not typically using face wash or moisturizer. They created masculine packaging, but not hyper-masculine promotions; they emphasized the role of dads, but not as incompetent parents. Current messaging on the brand website has slogans like “Care makes a man stronger” and “Care strengthens a man,” “Man’s biggest job is maintaining his status as World’s Greatest Dad,” and “Some call them Dads. We call them heroes.”

2. How does Dove effectively guide each consumer segment through the five stages of the buyer decision process?  Needs recognition: Dove’s first campaigns showed men what their faces went through in a day, and with soap, no moisturizer, and aftershave, to identify the “problems” Dove Men+Care solved.  Information search: Most men recognized the brand, often from childhood (personal sources). Advertising campaigns (commercial source) provided additional information.  Evaluation of alternatives: The campaign comparing Dove Men+Care to their usual routine of soap, no moisturizer, and aftershave positioned Dove Men+Care as the better option.  Purchase decision: Dove leverages the attitudes of others (dads’ kids, celebrities like Dwayne Wade) in their promotions to support the purchase decision. They likely had extensive sales promotions to support intention and the decision at-shelf.  Postpurchase behaviour: There is no information in the case on how Dove influences post-purchase behaviour, but students can discuss whether the product meets the customer’s expectations and perceived performance. The Dove Men+Care website has an option to connect with a Dove representative if “your experience (was) a disappointment,” giving the brand an opportunity to address postpurchase dissonance.

3. As a new product, how can Dove ensure the success of Dove Men+Care?

Dove Men+Care would have to encourage adoption of the product through the adopter categories. Have students decide what the rate of adoption—based on relative advantage, compatibility, complexity, divisibility, communicability, initial and ongoing costs, risk and uncertainty, and social approval—is for Dove Men+Care, and which adopter category they should be targeting. (Dove Men+Care was launched in both the US and Canada in 2010; the product was in stores in January, with a Canadian brand launch at the Hockey Hall of Fame in Toronto in early February and the initial advertisement during the Super Bowl a week later.)

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This can be an interesting discussion to recall later as part of Chapter 8’s new product development and product life cycle learning objectives.

4. Can Dove and Dove Men+Care continue to succeed as side-by-side brands? Why or why not?

Students’ answers will vary. Ask students what is different about the brands (a precursor to discussions on positioning in the next chapter).

Teaching Suggestions Start by asking all the females in the class how many of them purchase skin care products.

Follow this up by asking them why, as well as asking how much they spend on such products.

Then, ask the men in the room the same questions. Use this interaction to prompt a discussion as to why the disparity exists. You might follow up by asking the women if they think men should be putting more thought into their skin care and personal hygiene.

The Dove case is the end-of-chapter case for Segmentation, Targeting, and Positioning in the American version of the textbook; discussions about this case in the context of buying behaviour will segue nicely into the focus of the next chapter.

More Ideas for In-class Activities and Assignments Based on Chapter 6 Group Activities and Assignments 1. Review the “black box” model of buyer behaviour. Which buyer characteristics that affect buyer behaviour influence you most when making a clothing purchase decision? Are these the same characteristics that would influence you when making a computer purchase? Explain.

Answer: Students’ responses regarding which characteristic(s) would have the greatest impact on their purchase decisions will vary.

2. Discuss the stages of the consumer buyer decision process and describe how you or your family used this process to make a purchase.

Answer: Students’ responses regarding how they used the buyer decision process will vary, but they should demonstrate an understanding of the five stages: need recognition, information search, evaluation of alternatives, purchase decision, and postpurchase behaviour.

3. Describe the five adopter categories for new products. Which group best describes your purchase behaviour with respect to smart phones?

Answer: Students are likely to be in the early majority for smart phones because they seem to have adopted the technology easily. Whereas a few may be innovators, most likely the resources required for being the first adopters or even the early majority holds them back.

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4. A bank used Consulting Business Intelligence Values and Lifestyles (VALS) research to profile a customer segment that did not use any automated or electronic services. Based on your knowledge of this lifestyle classification system, speculate what might be the primary and secondary VALS type for this customer segment.

Answer: Students can consult http://www.strategicbusinessinsights.com/vals/ustypes.shtml. They will likely conclude these customers are Thinkers and Survivors. Students might discuss which is the primary and which is the secondary type.

5. How does the market structure and demand faced by business marketers differ from that faced by consumer marketers?

Answer: The business marketer normally deals with far fewer but far larger buyers than the consumer marketer does. Further, business demand is derived demand—it ultimately derives from the demand for consumer goods. Many business markets have inelastic demand; that is, total demand for many business products is not affected much by price changes, especially in the short run. Finally, business markets have more fluctuating demand. The demand for many business goods and services tends to change more—and more quickly—than the demand for consumer goods and services does.

6. Search for information regarding a product you are interested in purchasing. Using one or more online comparison shopping websites, find the brand that is right for you. Discuss how long it took you to make this decision and what influenced your decision.

Answer: Comparison shopping has never been easier. Millions of bytes of information are just a click away. Shopping for a new high-definition television and would like to compare offerings? No problem! Just search “hdtv comparison guide” in an online search engine such as Google and more than a million results return. Google experimented with returning a greater number of results per page and found usage dropped off because it took a fraction of a second longer for results to appear—too long for today’s consumers.

Of course, buyers cannot go through them all, and it’s human nature to start at the top.

That spot is valuable real estate for online search results. The top result for TV comparisons was www.ConsumerReports.org. It was the same for most electronic products such as computers and digital cameras, as well as common household appliances such as washing machines and microwave ovens. Consumer Reports is not the only game in town, either. There’s PriceCanada.com, PriceGrabber.ca, Shopbot.ca, and ShoptoIt.ca, to name just a few. All of these comparison-shopping websites assist buyers in selecting the right product and brand to suit their needs and desires.

It’s almost overwhelming how much information is available for buyers—consumers and business buyers—using any number of comparison shopping websites. Students may indicate that brand name influenced them, while others may say it was the product reviews provided by other buyers that had the greatest impact. Still others may say price had the greatest influence on their decision.

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7. Discuss the benefits and drawbacks of using comparison shopping websites in making buying decisions.

Answer: Obvious benefits include the vast amount of selection and the ability to comparison shop for the best price of the same product. Buyers can learn about the products through the descriptions provided when clicking on a shopping result. Product reviews provided by other buyers also are helpful. One drawback, however, is the inability touch or try the product. Another drawback is that small pictures on a computer screen often don’t provide a good feel for what the product is really like. Buyers may be leery of purchasing from merchants or individuals they do not know. Also, the sheer number alternatives provided on these shopping comparison sites can be overwhelming.

Moreover, buyers may see something they are interested in but continue shopping only to realize they cannot find the one they were interested in.

8. Age and lifecycle changes have a dramatic impact on the many types of products we purchase and consume. Go to Jeep’s website (www.jeep.com) and examine their complete product offering. How has Jeep tried to reach consumers of all ages and stages of the lifecycle, especially mature consumers?

Some answers to look for: Over the past 20 years, Jeep has excelled at reaching a diverse customer base. From a review of their website and product offerings, it becomes evident that they design and produce vehicles to satisfy consumers of all ages and stages of the lifecycle. In addition, if you pay attention to the individual options offered on some of the vehicles, it becomes clear that certain vehicles are targeted to consumers in particular stages of the lifecycle.

Individual Assignments 1. Every culture contains smaller subcultures. In the Canada, for example, beyond the major founding cultures the Chinese market holds opportunities for many businesses.

Look around your community and make a list of those businesses that may well prosper from this increasing subculture. Why do you think this is so?

2. Within the Chinese market there exist many distinct sub segments. Research these sub segments and detail the characteristics unique to each.

3. What social class do you belong to? Why? What would it take for you to move up a class?

How does social class in Canada differ from social class in India?

4. Age and lifecycle changes have a dramatic impact on the many and type of products we purchase and consume. Go to Toyota’s website (www.toyota.com) and examine their complete product offering. How has Toyota tried to reach consumers of all ages and stages of the lifecycle?

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Book Review Assignment A very interesting book about consumer behaviour in the modern world is Trading Up: Why Consumer Want New Luxury Goods—and How Companies Create Them. As a term project (group or individual), have students read and review the book, and consider the following questions: 1. Are you a consumer who “trades up” to New Luxury Brands? Think of an item you own that is high end in its class. It might be an iPod, or a computer, or perhaps a bicycle. Do you consider this item to be a New Luxury brand? Explain why or why not.

Answer: This is an open-ended question requiring students to draw on their own experience. However, the students should be able to identify with these themes since they are facing increased pressure compared to students even 10-15 years ago. The social importance of the right smart phone the luxury clothing brand and the growing pressure on our youth beginning in their pre-teens should make this an easy topic for discussion.

2. Do you believe the authors of the book when they suggest that more and more Canadian consumers engage in “trading up” behaviour? What items do you own that you have traded up for? What product categories do you “trade down” on?

Answer: This is an opinion question that requires students to understand the basics of consumer behaviour, as well as to understand what the authors mean by “trading up” behaviour. It requires them to synthesize what they have learned and articulate and justify an answer.

3. The authors claim that modern consumers are emotionally attached to New Luxury brands. Think about some of the brands named in this case. Whether or not you own any products by those brands, are you “emotional” about any of them? What aspirational groups are associated with these New Luxury brands?

Answer: This is also an open-ended question but requires the students to demonstrate an understanding of the concept of aspirational groups.

4. Think about the most luxurious item you own. Now, describe the buyer decision process you went through when you purchased it.

Answer: This is also an open-ended question requiring the student to know what the five steps in the buyer decision process are, and be able to apply them. See Figure 6.4, page 213, for the diagram of the consumer buyer decision process.

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