Consumer Behavior: The Marketing View
Marketing professionals have a job to do: they want to influence consumers toward purchasing their organization’s product. To do their jobs, they have to have a good idea about what makes people want to buy and consume. Most often, their focus is on why a consumer would choose a particular brand of a product, at a particular time and place. Social science research, primarily from psychology and sociology, forms the basis for the standard marketing view of consumer behavior.
The Decision-making Process
The marketing view portrays consumers as going through a five-step decisionmaking process:
- Problem recognition. In this stage, the consumer perceives that he has a want or need. The consumer compares his situation to some situation he would consider to be better, and his desire to move to the better situation is aroused. For example, the consumer might feel hungry or feel unsatisfied with her current athletic shoes, which are shabby compared to those in advertisements.
- Information search. In this stage, the person seeks information about how this want might be met. She may search her own experience, looking for ways she has satisfied it in the past. Or she might consult external sources of information, like friends, family, newspapers, advertising, packaging, etc. For example, he might be attracted by the photos on the packages of frozen dinners in the supermarket. The packages give him information about the product inside. Since humans have a limited availability to absorb information and can only assess a limited number of options, this process is likely to be very incomplete—the consumer will generally move on to the next stage knowing only some things about some alternatives.
- Evaluation of alternatives. After gathering information, the consumer compares the various alternatives about which he or she has gathered information. Goods and services are said to have attributes (or characteristics) that are the real items of interest to the consumer. The consumer will lean toward the alternative that has the bundle of attributes that most meets his or her desires. For example, the consumer might be interested in how a dinner tastes, in its nutritional value in terms of calories and fat content, and in whether it will satisfy his desire to try new things (or stick to old ones). She will compare brands and decide which one fits her priorities best. If she is deciding on athletic shoes, the fashionableness of various brands may weigh heavily—or even be the overwhelming factor—in his choice.
- Purchase decision. Having developed an intention to buy something, the consumer will (barring interference or unforeseen events) follow through and make the purchase.
- Postpurchase behavior. After the purchase, the consumer will decide whether he or she is satisfied or dissatisfied with the good or service. Consumption, in the marketing view, is seen as something of a trial-and-error process.
Marketing professionals are interested in all aspects of this process, since each step gives them opportunities to try to sway consumer choices toward their organization’s products. They may try to create new desires, for example, or try to better inform the public about the value of their product. They may improve web sites, to make sure customers aren’t frustrated in making their intended purchases. Or they may inform their own organization of changes in design that could improve customer satisfaction (and thus bring more repeat business).
Consumer Motivation and Behavior
Why do consumers want what they want? Why do they buy what they buy? The standard marketing view draws on a wide variety of research concerning individual motivations and social influences to answer these questions.
Psychological theories of motivation can shed light on why people come to desire certain things. One frequently used categorization breaks down human perceived needs into five categories:
- Physiological needs, such as hunger and thirst.
- Safety needs, for security and protection.
- Social needs, for a sense of belonging and love.
- Esteem needs, for self-esteem, recognition, and status.
- Self-actualization needs, for self-development and realization.
A consumer’s recognition of a need—step 1 of the decision process—can include one or many of these categories.
Psychological theories can also shed light on why people sometimes consume in unpredictable, even seemingly irrational ways. It is no secret that sex is used to sell everything from cars to magazines or that soft drink ads appeal more to a desire for a sense of belonging and self-esteem than to a desire to relieve thirst. People know, at a conscious level, that the tie between such advertising campaigns and what they actually will get by buying the product is tenuous at best. But that doesn’t stop such campaigns from being successful!
Psychologists have noted that the degree to which people perceive a need is clearly related to two important factors: our own past experience, and the experience of groups to which we compare ourselves. These create reference points and reference groups, in light of which people evaluate their own well-being and state of need.
Humans seem to be more tuned in to changes in our perceived satisfaction than to the absolute level of satisfaction we experience. We take as our reference point, in judging what we want and need, any situation to which we have become accustomed. If we are used to eating out once a week, that seems normal to us. We may not feel any particular joy in eating out once a week. If we change, and start eating out three times a week, we will feel a surge of pleasure. But once we have adapted to the new situation, the pleasure tapers off and we come to think of the new situation as normal. (We will even feel deprived if cut back to “only” twice a week!) For this reason, as marketers well know, to the extent that we seek jolts of happiness, we can be continually attracted by stimuli that promise us something more, new, or different.
The picture of consumer behavior that comes out of the marketing synthesis of social science research is one that sees consumption behavior as very much a social behavior, in far-reaching ways. Reference groups are particular groups of people who influence the behavior of a consumer, because the consumer compares himself or herself with them. Membership groups are groups to which the person belongs, such as families, student communities, and groups of co-workers. Membership groups are important sources of information and also sources of pressure to conform to group practices and norms. Another kind of reference group, an aspirational group, is a group to which a consumer wishes he or she could belong. People often buy, dress, and behave like the group—management personnel, rock stars, sports teams, or whoever—with whom they would like to identify.
The Consumer Society
Having explored how social context may (or may not) be included in the marketing and utility theory views of individual consumer behavior, we now switch gears and look more directly at long-term historical and social factors influencing consumption.
The modern consumer is not an isolated individual making purchases in a vacuum. Rather, we are all participants in a contemporary phenomenon that has been variously called a consumerist culture and a consumer society. To say that some people have consumerist attitudes or values means that they always want to consume more, and that they find meaning and satisfaction in life, to a large extent, through the purchase of new consumer goods. Consumerism has emerged as part of a historical process that has created mass markets, industrialization, and cultural attitudes that ensure that rising incomes are used to purchase an ever-growing output.
The Birth of the Consumer Society
Look back into history and you will find patterns of consumption very different from those that exist today. Turn the clock back just a few centuries, and almost no one in any country spent a significant amount of time or resources on shopping for goods produced far from home. Before the Industrial Revolution–that is, before the late 18th century in England, or the middle of the 19th century in the rest of Western Europe and North America–the vast majority of each country's population lived in rural areas and worked in agriculture. Their clothing and household possessions were extremely limited by today's standards and were typically made by household members or by artisans from the same village. Fashions, technological change, and social pressure did not drive people constantly to make new purchases; rather, individual material goods were used, with repairs if needed, for decades. Major items such as winter coats were expected to last a lifetime and more and were often passed from one generation to the next.
A small elite, of course, had long enjoyed higher consumption standards and habitually bought luxury goods and services. Elite consumption created employment for small numbers of artisans and merchants, often clustered around the courts and trading centers of each country. However, purchases by the elite were not large enough to transform a predominantly agrarian economy. Rather, elite consumption depended on the existence of agriculture, since upper-class incomes were directly or indirectly derived from rents, taxes, or other payments extracted from rural areas.
The Industrial Revolution clearly transformed production. It is less obvious, but equally true, that it transformed consumption. Large-scale industrialization began in the British textile industry; the amount of cotton used in that industry rose from less than 3 million pounds in 1760 to more than 360 million pounds annually in the 1830s. Within one lifetime, that is to say, the production of textiles in Britain was multiplied more than 100-fold. Luxury consumption by the English upper class did not grow nearly that rapidly. Who, then, bought and used the vast outpouring of cloth?
In the early 19th century, roughly two-thirds of the increased output was sold to other countries around the world. Much of it went to less developed areas such as India, which was rapidly becoming a British colony (and where the British conquest was followed by the destruction of India's formerly thriving textile industry), and to the newly independent states of Latin America, where British merchants displaced the earlier commercial connections to Spain and Portugal.
There were limits, however, to the possibility of growth through expansion into foreign markets. As other industries followed textiles, and other countries followed Britain's example of industrialization, much of the growing output was inevitably sold at home or to other relatively developed countries. Thus mass production required mass consumption. (Even when two-thirds of England's burgeoning textile output was sold abroad, the domestic absorption of the remaining one-third involved sweeping changes in English patterns of consumption.) Over the course of the 19th century, both the growing middle class and the working class became consuming classes as well.
Workers Become Consumers
At the dawn of industrialization, it was not at all clear that workers could or would become consumers. Early British industrialists complained that their employees would work only until they had earned their traditional weekly income and then stop until the next week. Leisure, it appeared, was more valuable to the workers than increased income. This attitude, widespread in pre-industrial, pre-consumerist societies, was incompatible with mass production and mass consumption. It could be changed in either of two ways.
At first, employers responded by lowering wages and imposing strict discipline on workers, to force them to work longer hours. Early textile mills frequently employed women, teenagers, and even children, because they were easier to control, and could be paid less, than adult male workers. Due to such draconian strategies of labor discipline, living and working conditions for the first few generations of factory workers were worse than in the generations before industrialization.
Over time, however, agitation by trade unions, political reformers, and civic and humanitarian groups created pressure for better wages, hours, and working conditions, while rising productivity and profits made it possible for business to respond to this pressure. A second response to the pre-industrial work ethic gradually evolved: as workers came to see themselves as consumers, they would no longer choose to stop work early and enjoy more leisure; rather, they would prefer to work full-time, or even overtime, in order to earn and spend more.
The "worker as consumer" worldview was fully entrenched, in the United States, by the 1920s, when the labor movement stopped advocating a shorter work week and instead focused on better wages and working conditions. The old philosophy was never entirely displaced by the new; both repressive and consumerist approaches to motivating workers continue to exist today, with the former particularly prevalent in low-skill, low-wage industries. But mass consumption, and the consumerist attitudes that support it, became increasingly important to the economic system.
Notice that, if workers are also important as consumers, the attitude of employers toward wages may become more complex. Under the old model, where workers had to be strictly controlled and most products were sold to elite or foreign customers, business owners had an unambiguous interest in keeping wages as low as possible, to stay profitable and competitive. Under the new model, where the same people are workers and consumers, should business owners favor low wages to limit production costs, or high wages to create more consumer demand? The answer is both: if an individual business could arrange the whole world solely to maximize its own profits, it would pay its own employees as little as possible – while everyone else would be paid, and would spend, as much as possible.
This change in the economic interests of businesses was only occasionally recognized in explicit terms by business leaders themselves. Henry Ford, the founder of Ford Motor Company and developer of the assembly line, made a point of keeping wages high enough, and the price of his cars low enough, that his employees could afford to buy cars. The owners and managers of beer and liquor companies have sometimes backed liberal, pro-union politicians, perhaps reflecting an awareness that higher wages are good for their line of business. But for the most part, businesses continued well into the era of the consumer society to struggle against wage gains for their own and for other workers – not realizing how ironically essential it was for them to periodically lose some ground in that battle.
The bifurcation in the business view of people as workers and consumers is mirrored throughout society. Work is associated with an ascetic, prudent, saving, and rational ideology – what was referred to by the sociologist Max Weber as "the Puritan ethos." At the same time, the ethos of consumerism includes a focus on pleasure and a conviction that it is right to seek the satisfaction of selfish desires. In the modern economy, the same person is often expected to combine both roles.
Institutions of the Consumer Society
Many of the institutions that sustain and promote mass consumption first took shape near the end of the 19th century—in the same period, it turns out, when economic theory first gave consumers a central role to play. Department stores appeared in the big cities of England, France, and the United States, creating comfortable semi-public spaces in which consumers could contemplate many different purchases. New packaging technologies were developed, allowing distribution of goods in bags, cans, and bottles. This technological advance made it possible for the first time to create nationally and internationally known "brand names" in the marketing of foods, beverages, cosmetics, and other goods.
Advertising. Above all, advertising emerged as an essential component of the marketing and distribution of goods. Although advertising has existed as a specialized profession for only about a century, it has become a force rivaling education and religion in shaping public values and aspirations. In the U.S. today, the amount of money spent annually on advertising exceeds total U.S. public expenditures (by federal, state, and local governments) on police protection, natural resources, and higher education combined.
Advertising is often justified by economists as a source of information about products and services available in the marketplace. While it certainly plays that role, it does much more as well. Advertising appeals to many different values, to emotional as well as practical needs, to a range of desires and fantasies. The multitude of advertisements that we encounter all carry their own separate messages; yet on a deeper level, they all share a common message – they are selling the joys of buying, promoting the idea that purchasing things is, in itself, a pleasurable activity.
The presentation of consumption as pleasurable and ever-expandable helped to address the nagging question of a growing industrial economy: What would happen to the producers, with their continuously growing production capacity, if people were to decide that they had enough? This was considered a serious question in the first half of the 20th century, particularly during and after the Great Depression of the 1930s. It became possible to foresee a situation in which all the basic needs of an entire population could be met – and to forecast a disastrous end to economic activity as we know it, if people therefore stopped buying more stuff. For example, an American retailing analyst named Victor Lebow proclaimed,
Our enormously productive economy... demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfaction, our ego satisfaction, in consumption... We need things consumed, burned up, worn out, replaced, and discarded at an ever increasing rate. (Journal of Retailing, Spring 1955, p. 7)
John Kenneth Galbraith, a prominent U.S. economist and social critic, argued that advertising by producers is increasingly needed to make affluent consumers keep buying their products – and therefore it is no longer socially important to satisfy consumer desires, since they do not originate within the consumer:
If production creates the wants it seeks to satisfy, or if the wants emerge pari passu [at an equal pace or rate] with the production, then the urgency of the wants can no longer be used to defend the urgency of the production. Production only fills a void that it has itself created. (The Affluent Society, Chapter XI)
Consumer Credit. Another institution created to support the consumer society was expanded consumer credit. Cultural values about spending in the U.S. up through the early 1900s emphasized thrift, prudence, and living within your income. Poorer households were forgiven for using installment purchasing (payments over time) and small loan agencies only if they needed the funds to purchase the necessities of life. Middle-class households borrowed for buying homes and furniture, but other spending for immediate pleasure was frowned upon.
With mass production of automobiles and household appliances, however, came a large expansion of institutions of consumer credit. By the 1920s, department stores were issuing charge cards, and automobile financing was common. Economist E.R.A. Seligman was a key figure in convincing the public that consumer credit was a sound idea. In a study funded by the head of General Motors, he argued that credit purchases were vital to stimulating economic growth and that condemning luxury purchases was not possible because the definition of a luxury varied from individual to individual. In the 1950s the first general-purpose credit cards were issued by banks.
By 1998, about three-fourths of U.S. households had at least one credit card. While some cardholders use them only for convenience, paying off their balances in full each month, other cardholders use them as a form of borrowing by carrying unpaid balances, on which they pay interest. In 1998, about 40% of families carried unpaid credit card balances. The average amount of credit card debt among households with at least one credit card was $8,367 by the end of 2001. In that year, total outstanding consumer credit in the U.S. topped $1.5 trillion.
Changes in Other Institutions
Beside creating new institutions of mass advertising and consumer credit, the consumer society also changed how people thought about households, and about the infrastructure for public consumption.
Households as Consumers. When everyone in a family pulled together for survival in primarily agricultural societies, households were often recognized as important locations of production. With the rise of consumerism, however, the work of women in households came to be portrayed as managing the “consumption” behavior of their families. Many of the new goods and services being marketed were substitutes for goods formerly produced using household labor, usually the labor of adult women, perhaps aided by children. Factory-manufactured clothing replaced home-sewn, for example, and bakery bread replaced home-baked. Other new goods, such as gas or electric stoves replacing coal or wood for cooking, made home production more efficient.
While you might think that such innovations would reduce the hours of labor spent on housework, economic historians have found that the facts are otherwise. The average number of hours devoted to homemaking by full-time homemakers stayed constant, at over 50 per week, from 1900 into the 1960s. The new goods were accompanied by pressure to raise household consumption standards. With access to a refrigerator, stove, and supermarket, women were expected to prepare more elaborate and varied meals; with access to washing machines, standards of clothing cleanliness rose. Labor effort in household production remained high, even though such work was commonly referred to as “consumption.”
Displacement of Public Consumption. The growth of consumerism has altered the balance between private and public consumption. Public infrastructure has been shaped by the drives to sell and consume new products, and the availability of public and private options in turn shapes individual consumer choices.
In the early 1930s, for example, many major U.S. cities—including Los Angeles—had extensive, relatively efficient, and nonpolluting electric streetcar systems. Then, in 1936, a group of companies involved in bus and diesel fuel production, led by General Motors, formed a group called the National City Lines (NCL). They bought up electric streetcar systems in 45 cities, dismantled them, and replaced them with bus systems. U.S. government support for highway construction in the 1950s further hastened the decline of rail transportation, enabled the spread of suburbs far removed from workplaces, and encouraged the purchase of automobiles.
Many of the choices you have, as an individual, depend on decisions made for you by businesses and governments. In some cases, like public transportation, consumption possibilities display the phenomenon of “path dependence”—that is, economic developments depend on the historical development of events. Los Angeles would look much different today—more like the older sections of many East Coast and European cities—if it had been built up around streetcar lines rather than cars and buses. Even today one can see tradeoffs between public (or publicly accessible) infrastructure and private consumption. As more people carry cell phones and bottles of spring water, pay telephones and drinking fountains are less well-maintained in some cities…leading to more people needing to carry cell phones and bottles of spring water.
- Global Development And Environment Institute at Tufts University