CONSUMER AND BUSINESS PRODUCTS

The classification of products and services is essential to
business because it provides one of the factors for determining
the strategies needed to move them through the
marketing system. The two major classes are consumer
products and business products.
CONSUMER PRODUCTS
Consumer products are products purchased for personal,
family, or household use. They are often grouped into
four subcategories on the basis of consumer buying habits:
convenience products, shopping products, specialty products
and unsought products.
Consumer products can also be differentiated on the
basis of durability. Durable products are products that
have a long life, such as furniture and garden tools. Nondurable
products are those that are quickly used up or
worn out, or that become outdated, such as food, school
supplies, and disposable cameras.
Convenience Products. Convenience products are items
that buyers want to purchase with the least amount of
effort, that is, as conveniently as possible. Most are nondurable
products of low value that are frequently purchased
in small quantities. These products can be further
divided into three subcategories: staple, impulse, and
emergency items.
Staple convenience products are basic items that buyers
plan to buy before they enter a store, and include milk,
bread, and toilet paper. Impulse items are other convenience
products that are purchased without prior planning,
such as candy bars, soft drinks, and tabloid newspapers.
Emergency products are those that are purchased in
response to an immediate, unexpected need such as
ambulance service or a fuel pump for the car.
Since convenience products are not actually sought
out by consumers, producers attempt to get as wide a distribution
as possible through various marketing channels—
which may include different types of wholesale and
retail vendors. Convenience stores, vending machines,
and fast food are examples of retailer focus on convenience
products. Within stores, they are placed at checkout
stands and other high-traffic areas.
Shopping Products. Shopping products are purchased
only after the buyer compares the various products and
brands available through different retailers before making
a deliberate buying decision. These products are usually of
higher value than convenience goods, bought less frequently,
and are durable. Price, quality, style, and color are
typically factors in the buying decision. Televisions, computers,
lawn mowers, bedding, and appliances are all
examples of shopping products.
Because customers are going to shop for these products,
a fundamental strategy in establishing stores that
specialize in shopping products is to locate near similar
stores in active shopping areas. Promotion for shopping
products is often done cooperatively with the manufacturers
and frequently includes the heavy use of advertising in
local media, including newspapers, radio, and television.
Specialty Products. Specialty products are items that consumers
seek out because of their unique characteristics or
brand identification. Buyers know exactly what they want
and are willing to exert considerable effort to obtain it.
These products are usually, but not necessarily, of high
value. This category includes both durable and nondurable
products. Specialty products differ from shopping
products primarily because price is not the chief consideration.
Often the attributes that make them unique are
brand preference (e.g., a certain make of automobile) or
personal preference (e.g., a food dish prepared in a specific
way). Other items that fall into this category are wedding
dresses, antiques, fine jewelry, and golf clubs.
Producers and distributors of specialty products prefer
to place their products only in selected retail outlets.
These outlets are chosen on the basis of their willingness
and ability to provide an image of status, targeted advertising,
and personal selling for the product. Consistency of
image between the product and the store is also important.
Unsought Products. Unsought products are those products
that consumers are either unaware of or have little
interest in actively pursuing. Examples are new innovations,
life insurance, and preplanned funeral services.
Because of the lack of awareness of these products or the
need for them, heavy promotion is often required.
The distinction among convenience, shopping, specialty,
and unsought products is not always clear. As noted
earlier, these classifications are based on consumers’ buying
habits. Consequently, a given item may be a convenience
good for one person, a shopping good for another,
and a specialty good for a third, depending on the situation
and the demographics and attitudes of the consumer.
BUSINESS PRODUCTS
Business products are products and services that companies
purchase to produce their own products or to operate
their business. Unlike consumer products, business products
are classified on the basis of their use rather than customer
buying habits. These products are divided into six
subcategories: installations; accessory equipment; raw

140 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION
Consumer and Business Products
materials; component parts and processed materials;
maintenance, repair, and operating supplies; and business
services.
Business products also carry designations related to
their durability. Durable business products that cost large
sums of money are referred to as capital items. Nondurable
products that are used up within a year are called
expense items.
Installations. Installations are major capital items that are
typically used directly in the production process of products.
Some installations, such as conveyor systems, robotics
equipment, and machine tools, are designed and built
for specialized situations. Other installations, such as
stamping machines, large commercial ovens, and computerized
axial tomography scan machines, are built to a standard
design but can be modified to meet individual
requirements.
The purchase of installations requires extensive
research and careful decision making on the part of the
buyer. Manufacturers of installations can make their availability
known through advertising. Actual sale of installations,
however, requires the technical knowledge and
assistance that can best be provided by personal selling.
Accessory Equipment. Products that fall into the subcategory
of accessory equipment are less expensive and have
shorter lives than installations. Examples include hand
tools, computers, desk calculators, and forklifts. While
some types of accessory equipment, such as hand tools,
are involved directly in the production process, most are
only indirectly involved.
The relatively low unit value of accessory equipment,
combined with a market made up of buyers from several
different types of businesses, dictates a broad marketing
strategy. Sellers rely heavily on advertisements in trade
publications and mailings to purchasing agents and other
business buyers. When personal selling is needed, it is usually
done by intermediaries, such as wholesalers.
Raw Materials. Raw materials are products that are purchased
in their raw state for the purpose of processing
them into consumer or business products. Examples are
iron ore, crude oil, diamonds, copper, timber, wheat, and
leather. Some (e.g., wheat) may be converted directly into
another consumer product (cereal). Others (e.g., timber)
may be converted into an intermediate product (lumber)
to be resold for use in another industry (construction).
Most raw materials are graded according to quality so
that there is some assurance of consistency within each
grade. There is, however, little difference between offerings
within a grade. Consequently, sales negotiations focus
on price, delivery, and credit terms. This negotiation, and
because raw materials are ordinarily sold in large quantities,
makes personal selling the principal marketing
approach for these goods.
Component Parts and Processed Materials. Component
parts are items that are purchased to be placed in the final
product without further processing. Processed materials,
on the other hand, require additional processing before
being placed in the end product. Many industries, including
the auto industry, rely heavily on component parts.
Automakers use such component parts as batteries, sunroofs,
windshields, and spark plugs. They also use several
processed materials, including steel and upholstery fabric.
Buyers of component parts and processed materials
have well-defined specifications for their needs. They may
work closely with a company in designing the components
or materials they require, or they may invite bids
from several companies. In either case, in order to be in a
position to get the business, personal contact must be
maintained with the buyers over time. Here again, personal
selling is a key component in the marketing strategy.
Maintenance, Repair, and Operating Supplies. Maintenance,
repair, and operating (MRO) supplies are frequently
purchased expense items. They contribute
indirectly to the production of the end product or to the
operations of the business. MRO supplies include computer
paper, light bulbs, lubrication oil, cleaning supplies,
and office supplies.
Buyers of MRO supplies do not spend a great deal of
time on their purchasing decisions unless they are ordering
large quantities. As a result, companies marketing supplies
place their emphasis on advertising, particularly in
the form of catalogs, to business buyers. When large
orders are at stake, sales representatives may be used.
Business Services. Business services refer to the services
purchased by companies to assist in the operation of the
firm. They include financial, marketing research, promotional,
legal, lawn care, and janitorial services. The decision
to hire an outside business to perform needed services
is often predicated on how frequently the service is
needed, the specialized knowledge required, and the relative
costs of providing the service internally versus contracting
with an outside firm.
It is not always clear whether a product is a consumer
product or a business product. The key to differentiating
them is to identify the use the buyer intends to make of
the product. Products that are in their final form and are
ready to be purchased and consumed by individuals or
households for their personal satisfaction are classified as
consumer products. On the other hand, if they are bought

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 141
Consumer Behavior
by a business for its own use, they are considered business
products. Some items, such as flour and pickup trucks,
can fall into either classification, depending on how they
are used. Flour purchased by a supermarket for resale is
classified as a consumer good, but flour purchased by a
bakery to make pastries is classified as a business product.
A pickup truck bought for personal use is a consumer
product; if purchased to transport lawn mowers for a lawn
service, it is a business product.
SEE ALSO Business Marketing
BIBLIOGRAPHY
Boone, Louis E., and Kurtz, David L. (2005). Contemporary
marketing 2006. Eagan, MN: Thomson South-Western.
Hoffman, K. Douglass (2006). Marketing principles and best
practices (3rd ed.). Mason, OH: Thomson South-Western.
Kotler, Philip, and Armstrong, Gary (2006). Principles of marketing
(11th ed.). Upper Saddle River, NJ: Pearson Prentice-
Hall.
Pride, William M., and Ferrell, O. C. (2006). Marketing concepts
and strategies. Boston: Houghton Mifflin.
Solomon, Michael R., Marshall, Greg W., and Stuart, Elnora W.
(2006). Marketing: Real people, real choices (4th ed.). Upper
Saddle River, NJ: Pearson Prentice-Hall.
Thomas R. Baird
Earl C. Meyer
Sharon K. Slick
CONSUMER BEHAVIOR
While in medical school, Laura Trice’s one major complaint
about living a vegan lifestyle and following an
animal-product-free diet was the lack of “great tasting
sweets.” Rather than sublimating her craving for junk
food, she came up with a cookie recipe that she found satisfied
her sweet tooth. After graduation from medical
school, Trice found a business partner who had been a
self-trained vegetarian chef for over twenty years and
together they started Laura’s Wholesome Junk Food in
2001 (http://www.LaurasWholesomeJunkFood.com).
The concept was to provide snacks that tasted as great as
junk food—something most people, especially the two
founders, secretly loved—that also used ingredients which
were more wholesome than those used in regular products.
In July 2002 Laura’s Wholesome Junk Food released
their first line of energy bars priced and sized to compete
with the energy bars then on the market. Their first orders
were from two small stores, a vending machine company
and a coffee chain. To provide samples to convince consumers
that something with healthful ingredients could
taste good, Laura’s Wholesome Junk Foods handed out
bite-sized samples packed in plastic resealable tubs, which
they subsequently named and trademarked Bite-lettes.
What happened next surprised both Trice and Howard
Weinthal, director of product development. “Consumers
loved the Bite-lettes and kept asking how they might buy
them. So we stopped making bars after 4 months and shut
down for 6 months to find a place that could make the
Bite-lettes for us. We didn’t know if it was going to work.
We thought we might be out of business” (Trice, 2005).
Figuring out not only what they wanted, but who
would buy it, why they would buy it, where they would
buy it, and how often they would buy it, is the cornerstone
of understanding consumer behavior. Consumer
behavior is the study of people: how we buy, consume and
dispose of products. There were approximately 295 million
people in the United States alone in 2004. Each of us
is a consumer of hundreds of products every day. As consumers,
we can benefit from a better understanding of
how we make our decisions so that we can make wiser
ones. Marketers can benefit from an understanding of
consumer behavior so that they can better predict what
consumers want and how best to offer it to them. Trice
and Weinthal listened to consumer requests, created a new
portion-controlled concept, and scrapped the full-sized
energy bar. In 2005 Laura’s Wholesome Junk Food sold
Bite-lettes to more than 180 stores nationwide.
There are two major forces that shape who we are
and what we buy. Our personal motives, attitudes, and
decision-making abilities guide our consumption behavior.
At the same time, our families, cultural background,
the ads we see on television, and the sites we visit on the
Internet influence our thoughts and actions (see Figure 1).
UNDERSTANDING CONSUMERS:
INTERNAL FACTORS
Our consumption behavior is a function of who we are as
individuals. Our thoughts, feelings, attitudes, and patterns
of behavior determine what we buy, when we buy it,
and how we use it. Internal factors have a major impact on
consumer behavior.
Consumer Motivation. A marketer’s job is to figure out
what needs and wants the consumer has, and what motivates
the consumer to purchase. Motivation is the drive
that initiates all our consumption behaviors, and consumers
have multiple motives, or goals. Some of these are
overt, such as a physiological thirst that motivates a consumer
to purchase a soft drink or the need to purchase a
new suit for an interview. Other motives are more
obscure, such as a student’s need to plug in to an iPod or
wear designer clothes to gain social approval.

142 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION
Consumer Behavior
Most consumption activities are the result of several
motives operating at the same time. Researchers specially
trained in uncovering motives often use qualitative
research techniques in which consumers are encouraged to
reveal their thoughts (cognitions) and feelings (affect)
through probing dialogue. Focus groups and in-depth
interviews give consumers an opportunity to discuss products
and express opinions about consumption activities.
Trained moderators or interviewers are often able to tap
into preconscious motives that might otherwise go undetected.
Sentence completion tasks (e.g., Men who wear
Old Spice are …) or variants of the thematic apperception
tests, in which respondents are shown a picture and asked
to tell a story surrounding it, are additional techniques
that provide insight into underlying motives.
Consumer motives or goals can be represented by the
values they hold. Values are people’s broad life goals that
symbolize a preferred mode of behaving (e.g., independent,
compassionate, honest) or a preferred end-state of
being (e.g., sense of accomplishment, love and affection,
social recognition). Consumers buy products that will
help them achieve desired values; they see product attributes
as a means to an end. Understanding the means-end
perspective can help marketers better position the product
and create more effective advertising and promotion campaigns.
Consumer Information Processing. The consumer information-
processing approach aids in understanding consumptive
behavior by focusing on the sequence of mental
activities that people use in interpreting and integrating
their environment.
The sequence begins with human perception of
external stimuli. Perception is the process of sensing,
selecting, and interpreting stimuli in one’s environment.
We begin to perceive an external stimulus as it comes into
contact with one of our sensory receptors—eyes, ears,
nose, mouth, or skin. Perception of external stimuli influences
our behavior even without our conscious knowledge
that it is doing so. Marketers and retailers understand this,
and they create products and stores specifically designed
to influence our behavior. Fast-food chains paint their
walls in “hot” colors, such as red, to speed up customer
turnover. Supermarkets steer entering customers directly
into the produce section, where they can smell and touch
the food, stimulating hunger. A hungry shopper spends
more money.
Close your eyes and think for a moment about the
hundreds of objects, noises, and smells surrounding you at
this very moment. In order to function in this crowded
environment, we choose to perceive certain stimuli while
ignoring others. This process is called selectivity. Selectivity
lets us focus our attention on the things that provide
meaning for interpreting our environment or on the
things that are relevant to us, while not wasting our limited
information-processing resources on irrelevant items.
Did you even notice that after you decide on, say,
Florida, for your vacation destination, there seems to be
Feedback
Decision Making Consumption Behavior
Feedback
Feedback
Cognitive Inputs
Including
• Motivation
• Information Processing
• Attitudes
Social Inputs
Including
• Groups
• Family
• Culture
• Subculture
Model of consumer behavior
Figure 1

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 143
Consumer Behavior
an abundance of ads for Florida resorts, airline promotions
for Florida, and articles about Florida restaurants
and attractions everywhere? Coincidence? Not really.
There are just as many now as there were before, only now
you are selectively attending to them, whereas you previously
filtered them out. Marketers continuously struggle
to break through the clutter and grab consumers’ attention.
Advertising and packaging is designed to grab our
attention through a host of techniques, such as the use of
contrast in colors and sound, repetition, and contextual
placement.
Did you watch television last night? You may have
paid attention to many of the ads you saw during the commercial
breaks; you may even have laughed out loud at a
few of them. But how many can you recall today? Consumers’
ability to store, retain, and retrieve product information
is critical to a brand’s success. When information is
processed, it is held for a very brief time (less than 1
minute) in working, or short-term, memory. If this information
is rehearsed (mentally repeated), it is transferred to
long-term memory; if not, the information is lost and forgotten.
Once transferred to long-term memory, information
is encoded or arranged in a way that provides meaning
to the individual. Information in long-term memory is
constantly reorganized, updated, and rearranged as new
information comes in, or learning takes place.
Information-processing theorists represent the storage
of information in long-term memory as a network
consisting of nodes (word, idea, or concept) and links
(relationships among them). Nodes are connected to each
other depending on whether there is an association
between concepts, with the length of the linkages representing
the degree of the association. Figure 2 illustrates a
network model of long-term memory. When Trice
cofounded Laura’s Wholesome Junk Food, part of her
challenge was to change consumers’ knowledge structures
for the concept of a healthful treat, “Healthy foods and
gourmet/comfort foods have often been thought of as separate
entities. A person allows an occasional ‘treat’ of
something with the assumption that the treat is a) not
healthy, and b) needs to be severely limited. By opening
up to the concept that being health conscious can also be
Good
tasting
Bite-lettes
Healthy
treat
Laura's
Wholesome
Junk Food
Gourmet/Comfort
snack foods
Vegan
Unhealthy
Decadent
Wheaf-free
Sweetened
with fruit
juice Can be
enjoyed
frequently
Can be
enjoyed once
in a while
High in
refined sugar
High in
unhealthy fat
Associative network for Laura's Wholesome Junk Food
Figure 2

144 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION
Consumer Behavior
decadent, consumers have a new freedom to choose to
incorporate treats and great tasting food for their families,
their activities and for entertaining” (Trice, 2005).
The complete network brought to mind when a
product is activated is called the product schema. Knowing
the set of associations that consumers retrieve from
long-term memory about a particular product or category
is critical to a successful marketing strategy. For new products
or services, marketers must first select the set of associations
they want consumers to have. This is called
positioning the product, or selecting the brand image.
Trice’s unique positioning as a “wholesome junk food”
was accomplished by establishing a link between the concepts
healthful and decadent treat. The brand position is
then translated into clever ads, reinforced on product
packaging, and integrated into all promotion and communication
strategies.
Over time, a brand’s image can fade or become
diluted. Sometimes consumers associate concepts that are
not favorable to a brand. When this occurs, marketers
reposition the brand, using advertising and other marketing
tools to help consumers create new links to positive
association and discard links to the unfavorable ones. By
rotating such catchy phrases as “Are your french fries
lonely?” and “Your fish stick improvement system” on
their ketchup labels, Heinz was able to reposition their
ketchup as a more exciting, youth-oriented, and sparky
brand.
Strategies for successful brand extensions also depend
on the brand schema. Generally speaking, a brand extension
is more likely to be successful if the set of associations
for the extension matches the set of associations of the
core product. Would Lifesavers brand toothpaste sell?
Probably not, because the associations for Lifesavers
(sweet, candy, sugar, fruity) are not the same as those for
toothpaste (mint, clean, noncandy). On the other hand, a
Lifesavers brand sugared children’s cereal with colorful,
fruity rings has a much better match of associations.
Attitude Formation and Change. The set of beliefs consumers
have stored in long-term memory provides
another critical function to marketers: It provides the basis
for a consumer’s attitude toward a brand or an ad. An attitude
is an overall evaluation of an object, idea, or action.
Attitudes can be positive or negative, and weakly or
strongly held. The statement “I love Ben & Jerry’s Vanilla
Toffee Crunch” is a strong, positively valenced attitude
toward a product. The statement “I dislike the new Toyota
ad” is a weak, negatively valenced attitude toward an
advertisement. Marketers work hard to continuously
monitor consumer attitudes toward their products.
Among other things, attitudes can indicate problems with
a product or campaign, success with a product or campaign,
likelihood of future sales, and overall strength of
the brand or brand equity.
A popular perspective is that attitude has three components:
cognitive, affective, and conative. The cognitive
component reflects the knowledge and beliefs one has
about the object (e.g., “Two pieces of Jolt chewing gum
contains as much caffeine as one cup of coffee”), the affective
component reflects feelings (e.g., “I like the energy
boost I get after chewing Jolt Gum”) and the conative
component reflects a behavioral tendency toward the
object (e.g., “I will buy Jolt Gum to take with me into my
classes for exams”). Thus, attitudes are predispositions to
behave in a certain way. If you have a favorable attitude
toward a politician, you will likely vote for him or her in
the next election. Because of this, many marketers use attitude
measures for forecasting future sales.
It is important to note, however, that the link
between attitudes and behavior is far from perfect. Consumers
can hold positive attitudes toward multiple brands
but intend to purchase only one. External economic,
social, or personal factors often alter behavioral plans.
Attitudes are dynamic, which means they are constantly
changing. As an individual learns new information,
as fads change, as time goes on, the attitudes one
once held with confidence may no longer exist. Did you
ever look at old photos of yourself and wonder “What was
I thinking wearing clothes like that? And look at my hairstyle!”
UNDERSTANDING CONSUMERS:
EXTERNAL FACTORS
In addition to the internal factors, consumer behavior is
also shaped to a large extent by social factors, such as culture,
family relationships, and other aspects of the external
environment. Awareness of these influences can help
marketers to identify groups of consumers who tend to
think, feel, or act similarly and separate them into unique
market segments. Aspects of the marketing program such
as product design, advertising, and pricing can then be
tailored to meet the unique needs, values, and goals of
these distinct groups.
Group Influences on Individual Consumer Behavior.
Group influences on consumer behavior can affect motivation,
values, and individual information processing;
they can come from groups to which consumers already
belong or from groups to which they aspire to belong.
Groups can exert a variety of influences on individuals,
including: (1) informational influences, where the group
acts as a source for expert opinions; (2) comparative influences,
such that the group provides opportunities to manage
the individual’s self-concept with respect to the group’s

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 145
Consumer Behavior
identity; and (3) normative influences, whereby the group
specifies guidelines and sanctions for appropriate or inappropriate
individual behaviors.
The influence of groups on consumer behavior tends
to vary with a variety of group- and product-related factors.
For example, the more the group is perceived to be a
credible, valued source of approval or disapproval to the
consumer, the more likely that consumer is to conform to
group values. In addition, the more frequently group
members interact, and the more outwardly visible use of
the product is to group and nongroup members, the
greater the group’s influence on individual consumption
behavior.
Family Influences on Consumer Behavior. Families have
a particularly significant influence on consumer behavior.
For example, consumption behavior often changes substantially
as family status changes over time. Thus, young
unmarried adults, who are often focused on individual
self-definition, tend to purchase products that enhance or
define their self-concepts. In contrast, couples with children
may be more interested in purchasing items or experiences
that can be shared by all family members and, as a
result, may spend less on individually oriented products.
Family membership also leads to a greater need for
joint rather than individual decision making, further complicating
consumer behavior at the household level. For
example, the person who buys a product may not be the
ultimate consumer of the product. Or perhaps the husband
and wife have differing levels of involvement with
certain product decisions, leading to different types of
separate decision processes that must be integrated before
a choice is ultimately made.
Understanding the dynamics involved in joint decision
making and which family members influence which
types of decisions has important implications for marketers
interested in directing marketing efforts to the right
person. Importantly, these family dynamics and lifestyle
transitions are complicated by the decline in traditional
households and the accompanying rise in nontraditional
family structures, such as cohabitating couples or couples
integrating families from previous marriages.
Cultural and Subcultural Influences on Consumer
Behavior. Culture comprises the common meanings and
socially constructed values accepted by the majority of
members of a society or social group. It includes such
things as shared values, beliefs, norms, and attitudes, as
well as affective reactions, cognitive beliefs, and patterns
of behavior. Typically, when we think of culture, we tend
to think of differences among individuals from different
countries or regions of the world. With the increasing
globalization of the world economy, understanding differences
and similarities in consumer behavior across cultures
becomes increasingly meaningful, with important
implications about the degree to which marketing strategies
can be standardized across countries and cultures, or
localized to reflect country- or region-specific cultural distinctions.
One important cultural difference is the degree to
which the self is defined as independent from others versus
interdependent with important others. Individualistic
societies, such as the United States, tend to foster an independent
sense of self, with the self believed to be a set of
internal attributes unique to each person. Collectivist
societies, however, such as China, foster an interdependent
sense of self, with the self believed to be inseparable
from others and the social context; person-specific attributes
are less important in self-definition than are interpersonal
relations. These differences in self-definition affect a
variety of consumer behaviors, including emotional reactions
to advertisements, the degree to which information
from others is valued when making consumption decisions,
and gift-giving behavior.
In addition to cultural differences that exist across
countries, marketers are also increasingly recognizing the
importance of subcultural differences within a society.
Subcultures are distinctive groups within a society that
share common meanings. Subcultures can often be identified
based on demographic characteristics, such as geographic
location (e.g., the southern United States),
ethnicity (e.g., Hispanic Americans), or age (e.g., baby
boomers). Subcultures can also be identified based on
common lifestyles.
The start of the twenty-first century saw a growing
emphasis on lifestyle segments based on food restrictions
and food choices. For example, vegetarians, vegans, those
who eat only organically grown food, and those who
require gluten-free food are rapidly growing segments of
the population. There are some national retailers, such as
Whole Foods Market, who serve a multitude of these specialized
segments.
There are also more targeted specialized products and
services, such as Gluten-Free Living, a national magazine for
people who follow a gluten-free diet (http://www.glutenfreeliving.
com). Importantly, identification of lifestyle subcultures,
and the corresponding development of an
inventory of shared meanings, is typically more difficult
than the development of such understanding of subcultures
based on observable demographic characteristics.
Increasingly, Internet marketers have come to realize
the value of subculture segments and have tailored product
offerings and/or Web site content to appeal to particular
subcultures, most often demographically based, and
to foster a greater sense of community and connection
among subculture members. For example, iVillage.com

146 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION
Consumer Bill of Rights
features content of particular interest to women and offers
forums for discussion of issues relevant to its users. Similarly,
Hispanic.com aims to provide services and information
to Hispanic Americans as well as to provide a virtual
meeting space for Hispanic Americans to meet and help
one another. These represent early attempts to use the
Internet to target and serve multicultural populations.
Future sites are likely to target more narrowly defined subcultures
(e.g., Hispanic Americans with an interest in
gourmet cooking) and to focus on reaching more lifestylebased
subcultures.
THE CONSUMER DECISIONMAKING
PROCESS
What consumers think and the social environment they
live in determine what they buy and how that purchase
decision is made. Typically, the decision process is
described as a series of five stages. The first stage, need
recognition, occurs when consumers perceive a difference
between their ideal and actual states. Need recognition is
often prompted by persuasive advertising. Consumers
then begin the information search process by conducting
an internal search of their own knowledge structures, followed
by an external search for information from friends,
family members, salespeople, and advertisements. This
step can clarify the problem, providing criteria to use for
assessing product alternatives and resulting in a subset, or
“consideration set,” of potential choices.
These options are then assessed more completely in
the third stage, alternative evaluation. In this stage, products
in the consideration set are compared with one
another. Sometimes a simple heuristic rule of thumb, such
as “I’m going to buy the cheapest product” is used. At
other times a more complex strategy, such as a weightedaverage
model that compensates for product strengths and
weaknesses, is used.
After examining each alternative, consumers are
ready to purchase, the fourth step in the decision process.
Finally, after buying, the consumers enter the postpurchase
phase of the process, during which the performance
of the chosen alternative is evaluated in light of prior
expectations. Consumers will be satisfied with the product
if it meets or exceeds expectations; dissatisfaction occurs if
the product does not meet expectations.
This model of consumer behavior, while very useful,
is highly simplified and does not always accurately reflect
the decision process consumers follow. Consumers may
not always proceed linearly through the five steps as
described, and sometimes they may skip certain steps
entirely. The model, however, is a close approximation of
the process for most consumers for most purchase occasions.
We are all consumers. Understanding why we behave
as we do is integral to an efficient transfer of goods and
services in a market-driven economy and helps consumer
needs get fulfilled. As Weinthal pointed out, “Since both
founders of Laura’s Wholesome Junk Food had dietary
restrictions of their own and knew many individuals with
limitations on what they could eat, we wanted to make
the Bite-lettes accessible to as many people as possible. By
making products that are all kosher, vegan, sweetened primarily
with fruit, then adding a wheat-free flavor and
three gluten-free ones, Laura’s made something for almost
every consumer” (Trice, 2005).