Consumer and Economic Psychology
Summary Readings
Week 1
Jansson-Boyd, C. V. (2010). Consumer psychology. Open University Press.
Chapter 1 – Consumer Psychology
What it is and how it emerged
Consumption has indoctrinated Western culture and is now an integral part of society, making it
important for psychologists to have a clear understanding of how it affects human behavior.
What is Consumer Psychology?
Consumer psychology is about understanding why and how individuals and groups engage in
consumer activities, as well as how they are affected by them – focused on the cognitive processes
and behavior involved when people purchase and use products/services.
Applying scientific methods
When conducting research, Consumer Psychologists make use of a wide range of research methods,
both quantitative and qualitative – it is a scientific discipline.
Why study Consumer Psychology?
We are living in a consumer-driven society – consumption infiltrates individuals’ lives in many various
ways. The scale on which people consume makes it evident that consumption needs to be carefully
studied by all those with an interest in human behavior, whether as psychologists, marketers,
consumer behaviorists, anthropologists, or sociologists.
How consumption affect people’s lives
Consumer activities can impact upon
people’s identities;
how individuals convey their social status; and
how (wo)men choose to ‘groom’ themselves.
In addition, mainstream media can impact upon
children’s aggressiveness when exposed to aggressive media images;
people’s opinions, values, and beliefs about others – molded by what they are exposed to by
the media;
how consumers view particular products and services, and whether are not they will
purchase them.
How the science of Consumer Psychology grew in parallel with the
consumer society
In parallel with the continuous consumption growth since the Industrial Revolution (1800s), which
made it possible for the consumer-related industries to grow and change rapidly, the importance
grew to understand how the consumer society affects individuals to truly understand human beings.
1
,Some individuals and events form the underpinnings of Consumer Psychology as a discipline:
The rise of advertising and experimental psychology (1840-1920).
Due to the increase in production, competition was fierce between manufacturers.
o Opening of the first advertising agency by Volney Palmer in 1840.
o Opening of the first department store Le Bon Marché in Paris in 1852.
o Establishment of the first experimental psychology laboratory by Wilhelm Wundt in
Leipzig in 1879.
The importance of material possessions (late 1800s).
The believe emerged that possessions contribute to the understanding of who you are – an
individual’s concept would partially be dependent upon owning the right kind of possessions (William
James).
Academics become interested in advertising.
With the advertising industry growing rapidly, a string of academics also became interested in the
subject area. During the early years of advertising, experimental psychologists affirmed previous
theories that consumers were non-rational individuals who were easily influenced.
Coca-Cola is taken to court.
When the Coca-Cola Company was charged with selling a drink containing the harmful ingredient
caffeine, research evidence intended to present in court mainly consisted of physiological responses
to caffeine. Through this, studies were done that showed that caffeine had a detrimental impact on
cognitive or behavioral performance. Although Coca-Cola lost the trial in Supreme Court, research on
how advertisements affect purchase behavior continued.
The assembly line is invented (1913) and there is continued interest in advertising research.
Henry Ford invented the assembly line after which the manufacturing process became a lot easier
and quicker. Through this, competition between products and brands became even fiercer causing
the producers’ need for advertisers to ensure their products would sell.
Besides the interest of advertising for manufacturers, politicians also became interested to sell their
own ideas.
o Think of the propaganda campaigns in World War I used to encourage people to
continue fighting.
Many books were published on the effectiveness of advertising.
1920-1938
In the 1920s, a number of things happened that contributed significantly to the development of the
consumer society in which we live today.
o The first American radio station started broadcasting.
o The automobile became increasingly common.
o Opening of the first drive-in restaurant.
o Success of the mail-order catalogues.
o New products on the market (e.g. washing machines or irons).
John B. Watson, founder of behaviorism.
He was the first prominent psychologist to apply psychological methods to advertising, persuading
people to consume different type of products – his idea was that individuals could be (classically)
conditioned into being anything, so it was possible to get them to buy specific products and brands.
2
, The psychology of advertising continues to grow.
Just like Hollingworth, Poffenberg also published books about psychology in advertising. In addition,
Nixon’s research focused on the links between attention and advertising through tracking eye
movements.
Emerging diversity of consumer-related research areas.
Towards the end of the 1920s, and during the 1930s, (I) a string of publications focusing on different
consumer psychological areas emerged as scientists showed an increased interest in consumer-
related issues.
o Establishment of the Journal of Marketing.
Also (II) consumption flourished during this time. However, even though sales figures were looking
up, this ended when World War II started.
World War II.
The social psychologist Kurt Lewin settled in the USA, where he was asked by the Department of
Agriculture to help convince Americans to eat meat which was otherwise thrown away (e.g. kidneys
and livers), due to the food shortage because of the war.
He did an experiment with two groups: group I were lectured about the benefits and necessity of
eating this meat, while group II took part in a small group discussion about how to solve the food
shortage of which more served this meat at home later level of involvement could increase the
likelihood of being persuaded.
After World War II.
(I) Consumption around the world gradually started picking up again and consequently (II) a renewed
interest in advertising emerged.
o Dichter introduced Freudian concepts into the advertising industry, with the idea
that consumer spending was reflected by their unconscious desires development
of selling techniques that were not always evident to the consumer (hidden
persuaders).
o Katona pioneered the use of how to apply survey research to consumer buying.
Governments promote consumer societies.
After World War II, governments were looking at ways to strengthen their economies by increasing
consumer spending. So, in the 1950s, politicians were busy promoting the benefits of living in a
consumer society, increasing (I) advertisement and (II) research in advertisement.
o Opening of the first commercial television station (ITV) in the UK in 1955.
o Establishment of Division 23 of the American Psychological Association in 1960 (now
the Society for Consumer Psychology).
o Publishment of well-known consumer behavior books in the 1960s.
3
Summary Readings
Week 1
Jansson-Boyd, C. V. (2010). Consumer psychology. Open University Press.
Chapter 1 – Consumer Psychology
What it is and how it emerged
Consumption has indoctrinated Western culture and is now an integral part of society, making it
important for psychologists to have a clear understanding of how it affects human behavior.
What is Consumer Psychology?
Consumer psychology is about understanding why and how individuals and groups engage in
consumer activities, as well as how they are affected by them – focused on the cognitive processes
and behavior involved when people purchase and use products/services.
Applying scientific methods
When conducting research, Consumer Psychologists make use of a wide range of research methods,
both quantitative and qualitative – it is a scientific discipline.
Why study Consumer Psychology?
We are living in a consumer-driven society – consumption infiltrates individuals’ lives in many various
ways. The scale on which people consume makes it evident that consumption needs to be carefully
studied by all those with an interest in human behavior, whether as psychologists, marketers,
consumer behaviorists, anthropologists, or sociologists.
How consumption affect people’s lives
Consumer activities can impact upon
people’s identities;
how individuals convey their social status; and
how (wo)men choose to ‘groom’ themselves.
In addition, mainstream media can impact upon
children’s aggressiveness when exposed to aggressive media images;
people’s opinions, values, and beliefs about others – molded by what they are exposed to by
the media;
how consumers view particular products and services, and whether are not they will
purchase them.
How the science of Consumer Psychology grew in parallel with the
consumer society
In parallel with the continuous consumption growth since the Industrial Revolution (1800s), which
made it possible for the consumer-related industries to grow and change rapidly, the importance
grew to understand how the consumer society affects individuals to truly understand human beings.
1
,Some individuals and events form the underpinnings of Consumer Psychology as a discipline:
The rise of advertising and experimental psychology (1840-1920).
Due to the increase in production, competition was fierce between manufacturers.
o Opening of the first advertising agency by Volney Palmer in 1840.
o Opening of the first department store Le Bon Marché in Paris in 1852.
o Establishment of the first experimental psychology laboratory by Wilhelm Wundt in
Leipzig in 1879.
The importance of material possessions (late 1800s).
The believe emerged that possessions contribute to the understanding of who you are – an
individual’s concept would partially be dependent upon owning the right kind of possessions (William
James).
Academics become interested in advertising.
With the advertising industry growing rapidly, a string of academics also became interested in the
subject area. During the early years of advertising, experimental psychologists affirmed previous
theories that consumers were non-rational individuals who were easily influenced.
Coca-Cola is taken to court.
When the Coca-Cola Company was charged with selling a drink containing the harmful ingredient
caffeine, research evidence intended to present in court mainly consisted of physiological responses
to caffeine. Through this, studies were done that showed that caffeine had a detrimental impact on
cognitive or behavioral performance. Although Coca-Cola lost the trial in Supreme Court, research on
how advertisements affect purchase behavior continued.
The assembly line is invented (1913) and there is continued interest in advertising research.
Henry Ford invented the assembly line after which the manufacturing process became a lot easier
and quicker. Through this, competition between products and brands became even fiercer causing
the producers’ need for advertisers to ensure their products would sell.
Besides the interest of advertising for manufacturers, politicians also became interested to sell their
own ideas.
o Think of the propaganda campaigns in World War I used to encourage people to
continue fighting.
Many books were published on the effectiveness of advertising.
1920-1938
In the 1920s, a number of things happened that contributed significantly to the development of the
consumer society in which we live today.
o The first American radio station started broadcasting.
o The automobile became increasingly common.
o Opening of the first drive-in restaurant.
o Success of the mail-order catalogues.
o New products on the market (e.g. washing machines or irons).
John B. Watson, founder of behaviorism.
He was the first prominent psychologist to apply psychological methods to advertising, persuading
people to consume different type of products – his idea was that individuals could be (classically)
conditioned into being anything, so it was possible to get them to buy specific products and brands.
2
, The psychology of advertising continues to grow.
Just like Hollingworth, Poffenberg also published books about psychology in advertising. In addition,
Nixon’s research focused on the links between attention and advertising through tracking eye
movements.
Emerging diversity of consumer-related research areas.
Towards the end of the 1920s, and during the 1930s, (I) a string of publications focusing on different
consumer psychological areas emerged as scientists showed an increased interest in consumer-
related issues.
o Establishment of the Journal of Marketing.
Also (II) consumption flourished during this time. However, even though sales figures were looking
up, this ended when World War II started.
World War II.
The social psychologist Kurt Lewin settled in the USA, where he was asked by the Department of
Agriculture to help convince Americans to eat meat which was otherwise thrown away (e.g. kidneys
and livers), due to the food shortage because of the war.
He did an experiment with two groups: group I were lectured about the benefits and necessity of
eating this meat, while group II took part in a small group discussion about how to solve the food
shortage of which more served this meat at home later level of involvement could increase the
likelihood of being persuaded.
After World War II.
(I) Consumption around the world gradually started picking up again and consequently (II) a renewed
interest in advertising emerged.
o Dichter introduced Freudian concepts into the advertising industry, with the idea
that consumer spending was reflected by their unconscious desires development
of selling techniques that were not always evident to the consumer (hidden
persuaders).
o Katona pioneered the use of how to apply survey research to consumer buying.
Governments promote consumer societies.
After World War II, governments were looking at ways to strengthen their economies by increasing
consumer spending. So, in the 1950s, politicians were busy promoting the benefits of living in a
consumer society, increasing (I) advertisement and (II) research in advertisement.
o Opening of the first commercial television station (ITV) in the UK in 1955.
o Establishment of Division 23 of the American Psychological Association in 1960 (now
the Society for Consumer Psychology).
o Publishment of well-known consumer behavior books in the 1960s.
3
