Consumer Behavior

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					CONSUMER BEHAVIOR
            BUAD 307
    MARKETING FUNDAMENTALS
Why does Staples
sell Starbucks
coffee?
  BUAD 307   CONSUMER BEHAVIOR   Lars Perner, Instructor   2
Influences on and of Consumer Behavior


    PERCEPTION/           MARKET
     SENSATION                                  INFO
                         RESEARCH              SEARCH

     COGNITION

                         STRATEGY             CHOICES

         AFFECT

                                        PREFERENCES

        BELIEFS
                        CONSUMER
                                        COMMUNICATION
    SOCIAL AND
  OTHER INFLUENCE
    BUAD 307        CONSUMER BEHAVIOR    Lars Perner, Instructor   3
Learning Outcome Objectives
• Understand how consumer
  cognitive (thinking) processes and
  limitations, affect, beliefs, social
  influences, and other contextual
  factors influence consumer
  decision making, choices, and
  behavior
• Appreciate how these insights can
  be used to design and implement
  effective marketing strategies
• Appreciate individual and segment
  differences in process and
  outcome
     BUAD 307           CONSUMER BEHAVIOR   Lars Perner, Instructor   4
                True or False?
1. If you have bad breath, you cannot smell it
   yourself.
2. If you eat a balanced diet, you do not need
   vitamin supplements.
3. Using a razor with five blades will reduce the
   likelihood of cutting yourself and will result in
   less skin irritation.
4. Dell Computers tend to be of higher quality
   than those made by HP and Sony.
5. Rust stains on clothes can be removed with
   the use of lemon juice. Bleach actually
   makes these stains worse.
     BUAD 307            CONSUMER BEHAVIOR             Lars Perner, Instructor   5
            Questions Faced By
               Consumers
• Are veggie burgers actually healthy?
• What makeup should you use to get an
  “even” skin tone?
• Do I get any useful benefits from spending
  more than $125 on a digital camera?
• Should I get a “make-over?” What am I
  looking for? What should I do?
• Is my mechanic honest?
• Which tie should I wear for a job interview?
• Should I give my wife roses, chocolate, or
  software?

     BUAD 307           CONSUMER BEHAVIOR        Lars Perner, Instructor   6
Consumer Problems and
     Recognition
                • Consumer problem:
                   Discrepancy between ideal and
                   actual state--e.g., consumer:
                    – Has insufficient hair
                    – Is hungry
                    – Has run out of ink in his or
                      her inkjet cartridge
                • Problems can be solved
                  in several ways--e.g., stress
                   reduction <----- vacation, movie, hot
                   bath, medication



BUAD 307   CONSUMER BEHAVIOR            Lars Perner, Instructor   7
CONSUMER DECISIONS:
 Theory and Reality in Consumer Buying




             PROBLEM
           RECOGNITION
                                         INFORMATION
                                            SEARCH

           EVALUATION OF
            ALTERNATIVES
                                          PURCHASE
           POSTPURCHASE
            EVALUATION/                                        Theory
             BEHAVIORS
                                                               Complications
BUAD 307          CONSUMER BEHAVIOR        Lars Perner, Instructor   8
Approaches to Search for
   Problem Solutions


     INTERNAL
 Memory
 Thinking



     EXTERNAL
 Word of mouth, media,                 CATALOG
 store visits, trial
BUAD 307           CONSUMER BEHAVIOR     Lars Perner, Instructor   9
Options Identified and Considered

                              UNIVERSAL SET
All possible options

                              RETRIEVED SET
Options that readily
come to mind


                               EVOKED SET
Options that will be
considered by the
consumer



Note: Retrieved and
evoked sets will vary
among different
consumers


    BUAD 307            CONSUMER BEHAVIOR     Lars Perner, Instructor   10
               REMINDER
• For low involvement
  products, efforts aimed at
  affecting internal search
  tend to be more
  effective—the consumer
  is usually not willing to
  expend energy on
  external search.
• External search is more
  likely for higher
  involvement products.
    BUAD 307        CONSUMER BEHAVIOR   Lars Perner, Instructor   11
      Decision Making Issues

• Involvement level
   – Temporary
   – Enduring
• Consumer locus of control
   – Internal
   – External
• Product category complexity
• Consumer knowledge




     BUAD 307         CONSUMER BEHAVIOR   Lars Perner, Instructor   12
           Evaluation Type

       IMPORTANT
                       – Compensatory: Decision based on overall
                         value of alternatives (good attribute can
                         outweigh bad ones)
                       – Non-compensatory: Absolutely must meet
                         at least one important criterion (e.g., car
                         must have automatic transmission)
                       – Hybrid: Combination of the two (e.g., one
                         non-compensatory measure, then
                         compensatory tradeoffs on other attributes
                       – Abandoned strategy: Consumer finds initial
                         criteria unrealistic and proceeds to less
                         desirable solution
           LESS
BUAD 307
           IMPORTANT   CONSUMER BEHAVIOR          Lars Perner, Instructor   13
 Heuristics—Low Involvement
        Decision Rules
• If either Coke or Pepsi is on
  sale, buy that brand;
  otherwise, buy Coke
• The larger the navels, the
  better the orange
• The larger package is likely to
  offer a lower unit price (not
  true in reality)



    BUAD 307        CONSUMER BEHAVIOR   Lars Perner, Instructor   14
       Attitudes―components


                                          AFFECT
           BELIEFS
                                         (FEELING)




                       BEHAVIORAL
                       INTENTIONS




BUAD 307             CONSUMER BEHAVIOR       Lars Perner, Instructor   15
     Attitude Components
           • Beliefs                       • Behavioral
             – Can be positive,              Intentions
               negative, or neutral
                                             – An individual’s plan or
             – May or may not be               expectations of what he
               accurate                        or she will do
             – May contradict other          – May appear inconsistent
               beliefs held by the other       with beliefs
               person
                                             – May not predict well what
           • Affect                            the individual will do in
                                               reality
             – May be positive or
               negative
             – May take on specific
               dimension (e.g.,
               pleasure, disgust)


BUAD 307          CONSUMER BEHAVIOR                Lars Perner, Instructor   16
  Generating Beliefs Through
         Advertising
• Statements must be
  – Perceived
  – Comprehended
  – Remembered
  – Believed (at least in part)




    BUAD 307         CONSUMER BEHAVIOR   Lars Perner, Instructor   17
 Positioning Through Creating
            Beliefs
• “It’s not delivery; it’s De Journo!”
• “Wal-Mart. Always low prices.
  Always.”
• “I just saved a bunch of money on
  my auto insurance.”
• “U-um Good!” (Campbell’s Soup)




    BUAD 307         CONSUMER BEHAVIOR   Lars Perner, Instructor   18
    Multiattribute Models of
             Attitude
 • Attitude computed as a
   function of multiple attributes
   weighted for importance:


Ab  i 1WiXib
               n

 Ab= attitude toward brand b
 Wi: weight of attribute I
 Xib: belief about brand b’s
    performance on attribute I
 • Model assumes rationality
  Calculations will not be required on the
  exam. You should know conceptually what
  this involves conceptually—i.e., weighing
  importance and intensity of feeling.

   BUAD 307                       CONSUMER BEHAVIOR   Lars Perner, Instructor   19
           Multiattribute Models
• Caveats                                        • Applications
  – Different segments exist that will weight       – Determining
    factors differently—thus, overall                  • Overall performance
    averages can be misleading. Separate               • Areas of strength and weakness
    analyses should be done for different
    segments of interest. (Segments can be          – Comparison to competitors
    identified by certain statistical                  • Overall
    techniques).                                       • Areas of strength and weakness
  – Individual differences exist in scale
    intensity—for some, it is much “easier” to
    be extremely good or extremely bad.
  – Prior research may be needed to identify                 REMINDER:
    issues (dimensions) to be weighted.                PERCEPTIONS ARE NOT
  – Some factors may be intangible—What              NECESSARILY ACCURATE. We
    are the substantive differences between           are looking to work with what
    Windows and Apple computers?                           consumers believe.
  – Non-compensatory factors—“must-
    haves”—may determine final result.

     BUAD 307                    CONSUMER BEHAVIOR                  Lars Perner, Instructor   20
           Affect
                        • Based on
                            – past emotional
                              associations of product
                            – emotional effect of beliefs




BUAD 307     CONSUMER BEHAVIOR          Lars Perner, Instructor   21
  Attitude Characteristics
• Availability/
  accessibility



• Constructed
  vs. natural



• Strength

 BUAD 307         CONSUMER BEHAVIOR   Lars Perner, Instructor   22
    Measurement of Attitude
        Components
• Beliefs
  – Semantic Differential Scales
               – Good -------------------Bad
               – Fast --------------------Slow
               – Reliable-----------------Unreliable

• Feelings
  – Likert Scales (Strongly agree … Strongly Disagree)
               – “This product makes me happy.”




    BUAD 307                       CONSUMER BEHAVIOR   Lars Perner, Instructor   23
               Measurement
• Behavioral Intention
  – Rating of likelihood of
    purchase
  – May need projection if
    social desirability affects
    willingness to admit to
    product use




    BUAD 307         CONSUMER BEHAVIOR   Lars Perner, Instructor   24
 Attitude Change Strategies, Part I
• Change Affect
  – Classical conditioning
     • “Pairing” the brand or product
        with desired stimulus—e.g., a
        car with a beautiful woman
  – Attitude toward the ad
     • A likable ad for a brand in a
        mundane product category—
        e.g.,
               – Energizer Bunny
               – Snuggles (fabric
                 softener)
  – Mere exposure


    BUAD 307                CONSUMER BEHAVIOR   Lars Perner, Instructor   25
 Attitude Change Strategies II
• Change behavior (e.g.,
  sampling)
  – Attitudes are inferred from
    behavior (e.g., I buy the product
     I must like it or It must be
    good)
• Change Belief Component
  – Change existing beliefs
      • Difficult
      • Advertiser’s motives are suspect
  – Change importance of attributes
  – Add beliefs
  – Change ideal (fashion)
    BUAD 307              CONSUMER BEHAVIOR   Lars Perner, Instructor   26
   Adding Beliefs (True or Not):
           Examples
• Brushing and flossing do
  not reach all areas of the
  mouth
• People under stress need
  more vitamins
• Baking soda will reduce
  odor of refrigerators
• Fragmented hard drives
  may cause computer
  errors
    BUAD 307        CONSUMER BEHAVIOR   Lars Perner, Instructor   27
               REMINDER
• Changing currently held
  beliefs tends to be
  difficult—people know the
  marketer has an ulterior
  motive
• Adding new beliefs that
  are not inconsistent with
  what is already believed
  may be more effective


    BUAD 307       CONSUMER BEHAVIOR   Lars Perner, Instructor   28
     One-sided vs. two sided
            appeals
• One-sided: only saying
  what favors your side
• Two-sided: stating your
  case but also admitting
  points favoring the other
  side
   – Why is this effective?




     BUAD 307          CONSUMER BEHAVIOR   Lars Perner, Instructor   29
Potential Family Life Cycle
          Stages


 YOUNG         YOUNG            EMPTY NEST
 SINGLE        COUPLE               I/II


             FULL NEST
                I/II/III
SINGLE                                OLDER
PARENT                                SINGLE
               BLENDED
 BUAD 307   CONSUMER BEHAVIOR   Lars Perner, Instructor   30
  Economic/Marketing Implications of
         Household Cycles
• Income tends to                            • Product demand
  increase with time                           due to
• But children/                                 – singles with low
  obligations add cost                            expenses
• Divorce                                       – new couples
   – increases costs                            – divorced
   – may change                                   families
     income                                     – children
     distribution                               – empty nesters
     marriage                                     --> more income


     BUAD 307            CONSUMER BEHAVIOR         Lars Perner, Instructor   31
  Household Decision Making
• Roles/influence
   –   Information gatherers/holders
   –   Influencers
   –   Decision makers
   –   Purchasers
   –   Users




       BUAD 307            CONSUMER BEHAVIOR   Lars Perner, Instructor   32
                   The Means-End Chain

    Aim promotion/
  positioning at higher                                Self-esteem
    levels of chain!

                    Values                         Feeling of power

          Consequences
                                                 Performance
Attributes
                                        Fast acceleration

                                   Large engine
    BUAD 307                 CONSUMER BEHAVIOR            Lars Perner, Instructor   33
Subliminal Perception: A
Diabolical Marketing Tool?
                       • Subliminal messages in ads
                         are illegal in U.S.
                       • Some research support for
                         modest effects
                          – Probably limited to one
                            syllable words
                          – Complex messages can
                            probably not be
                            processed subliminally




 BUAD 307   CONSUMER BEHAVIOR       Lars Perner, Instructor   34
               Message Framing
• Many tradeoffs
  can be stated in
  two,
  mathematically
  equivalent
  ways—e.g.,
  – “80% lean” vs.
    “20% fat”
  – $49.00 per
    person per night
    based on double
    occupancy
    BUAD 307           CONSUMER BEHAVIOR   Lars Perner, Instructor   35
Some Consumer Behavior Issues That Will
   Come Up Elsewhere in the Course

• Demographics
  (segmentation)
• Lifestyle (segmentation)
• Culture/subculture
  (segmentation, international
  marketing)
• Diffusion of innovation
  (product)
• Attention (promotion)

    BUAD 307        CONSUMER BEHAVIOR   Lars Perner, Instructor   36
       Organizational Buyers
• Types                                     • Characteristics
  – Industrial                                 – Greater involvement
  – Reseller                                   – Bureaucracy
  – Government and                             – Long term
    non-profit                                   relationships
    organizations                              – Price is important but
• Purchase types                                 may not be the most
                                                 important factor
  – Straight rebuy
  – Limited decision
    making
  – Extended decision
    making


    BUAD 307            CONSUMER BEHAVIOR           Lars Perner, Instructor   37

				
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