Communication and Consumer Behavior

LEARNING OBJECTIVES

After studying this chapter, students should be able to:

1. Understand the role of the message’s source in the communication process.
2. Understand the role of the message’s audience (receivers) in the communication process.
3. Learn about advertising media and how to select the right media when sending
promotional messages targeting selected consumer groups.
4. Learn how understanding consumers enables marketers to develop persuasive messages.
5. Understand how marketers measure the effectiveness of their promotional messages.

CHAPTER SUMMARY

This chapter has described how the consumer receives and is influenced by marketing
communications. The five components of communication are: the sender, the receiver, the
medium, the message, and feedback (the receiver’s response). In the communications
process, the sender encodes the message using words, pictures, symbols, or spokespersons
and sends it through a selected channel (or medium).The receiver decodes (interprets) the
message based on his or her personal characteristics and experience, and responds (or does
not respond) based on such factors as selective exposure, selective perception,
comprehension, and psychological noise.

There are two types of communications: interpersonal and impersonal (or mass)
communications. Interpersonal communications occur on a personal level between two or
more people and may be verbal or nonverbal, formal or informal. Consumers’ comparative
and normative reference groups are key sources of their informal, interpersonal
communications. In mass communications, there is no direct contact between source and
receiver. Interpersonal communications take place in person, by telephone, by mail, on the
Web, or by e-mail; mass communications occur through such impersonal media as television,
radio, newspapers, and magazines. Feedback is an essential component of all types of
communications because it provides the sender with some notion as to whether and how well
the message has been received.

The credibility of the source, a vital element in message persuasiveness, often is based on the
source’s perceived intentions. Informal sources and neutral or editorial sources are considered
to be highly objective and, thus, highly credible. Informal, interpersonal communications are
called word of mouth (WOM). Consumers generally perceive WOM as highly credible, and
marketers must devise strategies that stimulate positive WOM about their offerings. The
growth of online communications and social networks has significantly widened the WOM
environment and also provided marketers with more opportunities to use such networks to
promote their products. The credibility of a commercial source is more problematic and
usually is based on a composite evaluation of its reputation, expertise, and knowledge and
that of the medium in which it advertises the retail channel, and company spokespersons.
Media selection depends on the product, the audience, and the advertising objectives of the
campaign. Each medium has advantages and shortcomings that must be weighed in the
selection of media for an advertising campaign. In addition to mass media, marketers now
have access to new media that are more dynamic and interactive and enable developing more
customized communications that can reach consumers via media with narrowcasting, rather
than broadcasting, capabilities. Also, branded advertising has been growing significantly and
is now part of most electronic communications.

The manner in which a message is presented influences its impact. The major structural
aspects of advertising messages are framing, one-sided versus two-sided messages, and
advertising resonance. The major advertising appeals used include humor, fear, sex,
comparative advertising, audience participation, abrasive advertising, and using celebrities.

The feedback of interpersonal communications is immediate and direct while the impact of
impersonal communications is delayed, indirect, and often inferred. The impact of
promotional messages includes exposure, persuasion, and sales effects. The primary methods
of communications feedback are measures of media and audience exposure, message
attention, interpretation and recall, and recently developed methods gauging the impact of
addressable advertising.

CHAPTER OUTLINE

INTRODUCTION

1. Communication is the transmission of a message from a sender to a receiver via a

medium of transmission.
2. The five basic components of communications are: sender, receiver, medium, message
and feedback.
3. Communications are the link between the individual and society.

THE SOURCE AS THE MESSAGE INITIATOR

1. A company’s marketing communications are designed to make the consumer aware of the
product or service, induce purchase or commitment, create a positive attitude toward the
product, or show how it can solve the consumer’s problem better than a competitive
product.
2. The sender is the initiator of the communication and can be a formal or informal source.
3. A formal communications source represents either a for-profit or not-for-profit
organization.
4. An informal source might be a parent or a friend who gives product information or
advice.
5. Informal sources also include people who influence one’s consumption via online social
networks and other Web forums.
6. Informal word-of-mouth communication tends to be highly persuasive.

IMPERSONAL AND INTERPERSONAL COMMUNICATIONS

1. Communications can be either impersonal or interpersonal.

2. The sources of impersonal communications are organizations that develop and transmit
appropriate messages through their marketing departments, advertising or public relations
agencies and spokespersons.
3. The sources of interpersonal communications can be either formal or informal.
4. The key factor underlying the persuasive impact of a personal or interpersonal message is
the source’s credibility.

Source Credibility

1. The perceived honesty and objectivity of the sponsor of the communication have
enormous influence on how the communication is accepted by the receiver(s).

Reference Groups
1. Reference groups are groups that serve as frames of reference for individuals in their
consumption decisions because they are perceived as credible sources
2. Reference groups influencing broadly defined values or behavior are called normative
reference groups.
3. Reference groups serving as benchmarks for specific or narrowly defined attitudes or
behavior are called comparative reference groups.
4. A group to which a person either belongs or would qualify for membership is called a
membership group.
5. There are groups in which an individual is not likely to receive membership, despite
acting like a member by adopting the group’s values, attitudes, and behavior. This is
called a symbolic group.

THE CREDIBILITY AND DYNAMICS OF INFORMAL SOURCES AND WORD OF

MOUTH

1. Originally, sociologists who studied the informal communications process named it

opinion leadership.
2. Opinion leadership was defined as the process by which one person informally
influences the actions or attitudes of to others, who may be opinion seekers or opinion
recipients.
3. The key characteristic of the influence is that it is interpersonal and informal and takes
place between two or more people, none of who represents a commercial selling source
that would gain directly from the sale of something.
4. Later on, marketers realized that informal communications are a two-way process and
names such interactions word-of-mouth (WOM).
5. An opinion leader may become an opinion receiver later on.
6. Opinion leadership tends to be category specific.
7. Although the term word-of-mouth implies personal, or face-to-face communication, it
may also take place in a telephone conversation or online.

THE WORD-OF-MOUTH ENVIRONMENT AND e-WOM

1. Constantly emerging new technologies allow people to compile and post increasingly
sophisticated, appealing, and attention-getting materials online and vividly share their
consumption experience with others.
2. Word of mouth taking place online is called e-WOM.
3. e-WOM occurs online in social networks, brand communities, blogs, and consumer
message boards.

Social Networks
1. Online social networks are virtual communities where people share information about
themselves with others.
2. A recent study identified three dimensions underlying consumers’ engagement in e-WOM
in online social networks: (1) Tie strength, (2) Similarity and (3) source credibility.

Brand Communities

1. Brand communities are online forums that focus on particular products or brands.

Consumer Message Boards and Weblogs

1. Many Web portals enable people to post information on about anything and everything
online.
2. A blog is a personal online journal initiated and managed by a blogger, which includes
comments from the reader.
3. These online journals are now probably the most powerful platform for the exchange of
consumption-related information.
4. Marketers have virtually no control over the information exchanged in these forums.

STRATEGIC MARKETING APPLICATIONS OF WORD OF MOUTH

1. Word-of-mouth is often more effective than paid promotional messages initiated by

manufacturers.
2. Stimulating WOM is not a new strategy, but the emergence of e-WOM brought upon a
huge surge in the amount of money and creativity devoted to campaigns and strategic
initiatives centered on WOM, including using buzz agents, viral marketing, e-referrals
and recommendations, and responding effectively to negative rumors.

Buzz Agents

1. Many firms enlist typical consumers to serve as their buzz agents; these agents agree to
promote products by bringing them to family gatherings, read books while riding on mass
transit, etc.
2. These “agents” typically do not receive payment but are motivated by being called upon
to serve as opinion leaders.
Viral Marketing

1. Viral marketing consists of encouraging individuals to pass on an e-mail message to

others, thus creating the potential for exponential growth in the message’s exposure and
influence.
2. Another effective form of viral marketing is online referrals and recommendations.
a) Highly successful e-merchants attach links encouraging users to send notices of their
selections to their friends.

Tackling Negative Rumors

1. Markets realize it is impossible to control word-of-mouth communications.

2. The Web is a prolific ground for spreading rumors. Persistent critics of marketers who
initiate bad publicity online are called determined detractors.
THE CREDIBILITY OF FORMAL SOURCES, SPOKESPERSONS, AND
ENDORSERS

1. Consumers judge commercial source credibility on such factors as past performance,

reputation, the kind and quality of products and service they are known to render, the
image and attractiveness of the spokesperson used, the type of retail outlets through
which they sell, and the media carrying their promotions.
2. Marketers use institutional advertising, which is designed to promote a favorable
company image rather than to promote specific products.
3. Not-for-profit sources generally have more credibility than for-profit sources.
4. Publicity is valuable to a manufacturer as citations in an editorial context give the reader
more confidence in the message.
5. Consumers sometimes regard the spokesperson delivering the product message as the
source of the message.
6. Marketers often use celebrities as endorsers of their offerings, and a given celebrity’s
persuasive power is a function of a consumers’ awareness and likeability of the person.
7. Key findings related to the relationship between the effectiveness of the message and the
spokesperson or endorser employed include:
a) The effectiveness of the spokesperson is related to the message itself.
b) The synergy between the endorser and the type of product or service advertised is
very important, because according to associative learning theory celebrities are
conditioned with the products they promote.
c) Endorsers who have demographic characteristics that are similar to those of the
target audience are viewed as more credible and persuasive than those that do not.
d) The endorser’s credibility is not a substitute for corporate credibility.
e) Marketers who use celebrities to give testimonials or endorse products must be sure
that the specific wording of the endorsement lies within the recognized competence
of the spokesperson.
8. In formal interpersonal communications, consumers are more likely to be persuaded by
salespersons who engender confidence and who give the impression of honesty and
integrity.

Vendor Credibility

1. The reputation of the retailer who sells the product has a major influence on message
credibility.
2. The consumer’s previous experience with the product or the vendor has a major impact
on the credibility of the message.

Medium Credibility

1. The reputation of the medium that carries the advertisement also enhances the credibility
of the message.
2. There is no single answer as to which medium has the most credibility.

Effects of Time on Source Credibility: The Sleeper Effect

1. When information is transferred from the short-term memory to the cerebral cortex, over
time, it is separated from the context in which it was learned.
2. This phenomenon is called source amnesia or the sleeper effect.
3. Though a high-credibility source is initially more influential than a low-credibility source,
research suggests that both positive and negative credibility effects tend to disappear after
six weeks or so.
4. The theory of differential decay suggests that the memory of a negative cue simply
decays faster than the message itself, leaving behind the primary message content.
5. Reintroduction of the same or similar message by the source serves to jog the audience’s
memory, and the original effect re-manifests itself; that is, the high –credibility source
remains more persuasive than the low-credibility source.

THE RECEIVERS AS THE TARGET AUDIENCE

The Receiver

1. The receiver is the targeted prospect or a customer.

2. There are also intermediary audiences for a message, such as wholesalers, distributors,
and retailers who receive trade.
3. There are also unintended audiences, which include everyone who is exposed to the
message, whether or not they are specifically targeted by the source.
4. The message’s source must encode the message in such a way that its meaning is
interpreted by the targeted audience in precisely the intended way.
5. The message’s receivers decode the messages they receive on the basis of their personal
experiences, characteristics and motives
6. The factors affecting the decoding and comprehension of persuasive messages include the
receiver’s personal characteristics and motives, involvement with the product or product
category, the congruency of the message with the medium, and the receiver’s mood.